Civ Promine

7/29/2019 Civ Promine

1/42

2. Golden Country v. Sanvar

THIRD DIVISION[G.R. No. 58027. September 28, 1992.]THE GOLDEN COUNTRY FARMS, INC., petitioner, vs. SANVAR DEVELOPMENTCORP., respondent.B.C. De los Santos & Associates Law Offices for petitioner.Yolando F. Busmente for respondent.SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; SERVICE UPONPRIVATE CORPORATION; RULE WHEN EFFECTED THROUGH A CLERK-TYPIST. In G & G Trading Corp. vs. Court of Appeals, (158 SCRA 466, 469), wehad occasion to rule: "Although it may be true that the service of summons was madeon 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 receivedby the corporation through its said clerk, the Court finds that there was substantialcompliance with the rule on service of summons. Indeed the purpose of said rule asabove stated to assure service of summons on the corporation had thereby beenattained. The need for speedy justice must prevail over a technicality." There was,substantial compliance with the rules on service of summons since it appears that thesummons and complaint were actually received by the petitioner corporation throughits clerk, thereby satisfying the purpose of notice (Rebollido vs. Court of Appeals, 170

SCRA 800, 811).2. ID.; ID.; DEFAULTS; MAY BE ORDERED FOR FAILURE TO FILE ANANSWER WITHIN THE REGLEMENTARY PERIOD. We do not agree withpetitioner's claim that it cannot be declared in default for not filing an answer whileresolution of its joint motion for reconsideration of the order denying its motion todismiss was held in abeyance by the lower court. Petitioner received the denial orderof its motion to dismiss on May 15, 1980; hence, by mathematical computation, the15-day period to file an answer provided in Section 1, Rule 77 of the Revised Rules ofCourt expired on May 30, 1980. However, on May 30, 1980, which was the last day tofile its answer, petitioner filed a joint motion for reconsideration, instead of filing ananswer. In this regard, we share the opinion of the lower court that petitioner's jointmotion for reconsideration which merely reiterated the grounds in its motion todismiss was pro forma and did not toll the running of the period to file an answer. Inthe case of PCIB vs. Escolin (67 SCRA 202) this Court rule that a motion for

reconsideration which does not make out a new matter sufficiently persuasive toinduce modification of judgment will be denied and that a repetition of arguments orgrounds already discussed in prior incidents may properly be categorized as merelyfor purposes of delay.3. ID.; ID.; ID.; RELIEF FROM ORDER OF DEFAULT; RULE. As we haveruled in the case of Philippine Bank of Commerce vs. Jose M. Aruego (102 SCRA530, 537): "It has been held that to entitle a party to relief from a judgment takenagainst him through his mistake, inadvertence, surprise or excusable neglect, hemust show to the court that he has a meritorious defense. In other words, in order toset aside the order of default, the defendant must not only show that his failure toanswer was due to fraud, accident, mistake or excusable negligence but also that hehas a meritorious defense." In the case of Development Insurance Corp. vs.Intermediate Appellate Court (143 SCRA 62), this Court also ruled that a default

judgment will not be lifted if defendant has no valid defense.D E C I S I O N

MELO, J p:Before us is an appeal by certiorari from the decision of the then Court of FirstInstance of Rizal, Branch XX, Pasig, Metro Manila, at that time Presided over by theHonorable Celso L. Magsino, and the order dated February 16, 1981 denyingpetitioner's and its co-defendant's joint motion for reconsideration wherein petitionerGolden Country Farm, Inc. (GCFI, for short) was declared in default.The factual background of this case may be stated as follows:On February 28, 1980, respondent Sanvar Development Corporation (Sanvar, forshort) sued petitioner GCFI and its President, Armando T. Romualdez, for a sum of

money representing the unpaid balance of construction materials purchased bypetitioner from respondent.Per return of the sheriff, summons and copy of the complaint were served on March5, 1980 upon petitioner at its principal office through a certain Miss I.E. Lagrimas,clerk-typist of petitioner. On March 20, 1980, petitioner filed a motion to dismiss onthe ground that summons was not properly served in accordance with Section 13,Rule 14 of the Revised Rules of Court. Petitioner's motion to dismiss was denied bythe lower court on May 2, 1980 and copy of the denial order was received bypetitioner on May 15, 1980. On May 30, 1980, petitioner, together with its president,filed a joint motion for reconsideration, the resolution of which was held in abeyanceby the lower court. Subsequently, respondent filed an omnibus motion praying thatthe joint motion for reconsideration be denied and that petitioner be declared indefault. On February 16, 1981, the lower court issued an omnibus order denying thejoint motion for reconsideration and declaring petitioner in default for failure to file an

answer within the reglementary period.Pursuant to the order of default, respondent Sanvar presented its evidence ex-parteand based on said evidence, the lower court adjudged petitioner GCFI liable torespondent Sanvar in the principal sum of P105,362.50. The complaint againstpetitioner's president was, however, dismissed because he was sued in his capacityas president of petitioner. A copy of the decision was received by petitioner on August14, 1981.Hence, the instant appeal wherein petitioner raises the following issues:1) Whether or not summons directed to petitioner corporation which wasserved through Miss Lagrimas, clerk-typist of the petitioner, is sufficient service for thetrial court to acquire jurisdiction over said corporation.2) Whether or not petitioner can be declared in default for not filing an answerto the complaint while its joint motion for reconsideration of the order denying its

motion to dismiss remained pending for the court's consideration.Service of process on a corporation is controlled by Sec. 13, Rule 14 of the RevisedRules of Court, thus "SECTION 13. Service upon private domestic corporation or partnership. If thedefendant is a corporation organized under the laws of the Philippines or apartnership duly registered, service may be made on the president, manager,secretary, cashier, agent, or any of its directors."Petitioner claims that the foregoing enumeration is exclusive and service of summonsis without force and effect unless made upon any one of those enumerated. So in thecase at bar, it is argued, the lower court did not acquire jurisdiction over petitioner-corporation since service of summons was effected through a mere clerk, a personwho is not one of those authorized officers mentioned in the aforequoted Section 13upon whom valid service of summons can be made. LibLexWe cannot accept the strict and literal interpretation of petitioner. Thus, in G & G

Trading Corp. vs. Court of Appeals (158 SCRA 466, 469), we had occasion to rule:


2/42

"Although it may be true that the service of summons was made on a person notauthorized to receive the same in behalf of the petitioner, nevertheless since itappears that the summons and complaint were in fact received by the corporationthrough its said clerk, the Court finds that there was substantial compliance with therule on service of summons. Indeed the purpose of said rule as above stated toassure service of summons on the corporation had thereby been attained. The needfor speedy justice must prevail over a technicality."In the case at bar, the fact that summons was received by petitioner through MissLagrimas, is not disputed; rather, petitioner admits that on March 18, 1980, the

corporation and its legal counsel were informed by Miss Lagrimas of the summonsshe received (pp. 8 and 9, Rollo). And indeed, by virtue of the receipt of thesummons, petitioner even filed a motion to dismiss.We, therefore, agree with the lower court's findings that:". . . The actual receipt by the clerk-typist of the correct address of the corporationmust be construed as receipt on behalf of the officer of the corporation holding officeat that address. Mr. Romualdez, the general manager was holding office at thataddress, he received the summons, and that summons must be binding on himpersonally and on the corporation of which he is the general manager. It is to beobserved that the law firm of Avila, de los Santos and Associates is the same counselfor both defendants, and it is simply absurd to split the personality of defendantRomualdez between himself as general manager of defendant corporation and thedefendant corporation of which he is the general manager for purposes of service ofsummons." (Annex H, pp. 38-39, Rollo)

The court a quo thereupon concluded:". . . inasmuch as the spirit and purpose of the rule is 'to bring home to the corporationnotice of the filing of the action' . . . and it appearing that said defendant had actuallyreceived the summons and a copy of the complaint albeit thru its clerk-typist MissIluminada E. Lagrimas, and in fact has filed this instant motion, the Court herebyconsiders the same as substantial compliance with the rules and therefore denies theaforesaid motion." (Annex B, p. 22, Rollo).There was, therefore, substantial compliance with the rules on service of summonssince it appears that the summons and complaint were actually received by thepetitioner corporation through its clerk, thereby satisfying the purpose of notice(Rebollido vs. Court of Appeals, 170 SCRA 800, 811).We do not agree with petitioner's claim that it cannot be declared in default for notfiling an answer while resolution of its joint motion for reconsideration of the order

denying its motion to dismiss was held in abeyance by the lower court. cdrepPetitioner received the denial order of its motion to dismiss on May 15, 1980; hence,by mathematical computation, the 15-day period to file an answer provided in Section1, Rule 77 of the Revised Rules of Court expired on May 30, 1980. However, on May30, 1980, which was the last day to file its answer, petitioner filed a joint motion forreconsideration, instead of filing an answer. In this regard, we share the opinion of thelower court that petitioner's joint motion for reconsideration which merely reiteratedthe grounds in its motion to dismiss was pro forma and did not toll the running of theperiod to file an answer.In the case of PCIB vs. Escolin (67 SCRA 2023 this Court ruled that a motion forreconsideration which does not make out a new matter sufficiently persuasive toinduce modification of judgment will be denied and that a repetition of arguments orgrounds already discussed in prior incidents may properly be categorized as merelyfor purposes of delay.

An answer, not a motion for reconsideration of the order denying its motion todismiss, should have been filed within the reglementary period. The record does not

disclose that the proper answer was in fact filed. Withal, there can be no seriouschallenge to the reception of evidence for the plaintiff thereafter.Moreover, notwithstanding its receipt of the order of default on March 6, 1981,petitioner did not even bother to take any steps to lift said order of default, but itsimply folded its arms for five months until the decision was handed down on July 15,1981. Further weakening the position of the petitioner is the absence of a viabledefense against the documented claims of respondent for unpaid constructionmaterials purchased by petitioner.As we have ruled in the case of Philippine Bank of Commerce vs. Jose M. Aruego

(102 SCRA 530, 537): prLL"It has been held that to entitle a party to relief from a judgment taken against himthrough his mistake, inadvertence, surprise or excusable neglect, he must show tothe court that he has a meritorious defense. In other words, in order to set aside theorder of default, the defendant must not only show that his failure to answer was dueto fraud, accident, mistake or excusable negligence but also that he has a meritoriousdefense."In the case of Development Insurance Corp. vs. Intermediate Appellate Court (143SCRA 62), this Court also ruled that a default judgment will not be lifted if defendanthas no valid defense.It is to be noted in this regard that not even once, not in its motion to dismiss and notnow in its appeal has there been the least intimation on petitioner's part that the claimof respondent has been paid. All that petitioner can harp at is the alleged defectiveservice of summons.

WHEREFORE, the decision and order appealed from are hereby affirmed, with costsagainst petitioner.SO ORDERED.


3/42

3. E.B. Villarosa v. Benito

THIRD DIVISION

[G.R. No. 136426. August 6, 1999.]

E.B. VILLAROSA & PARTNER CO., LTD., petitioner, vs. HON. HERMINIO I.BENITO, in his capacity as Presiding Judge, RTC, Branch 132, Makati City andIMPERIAL DEVELOPMENT CORPORATION, respondent.

SYNOPSIS

In this instant petition, E.B. Villarosa and Partner Co., Ltd. contended that the trialcourt did not acquire jurisdiction over its person because the summons intended for itwas improperly served on its Branch Manager. cDTSHE

The Court agreed with petitioner. Designation of persons or officers who areauthorized to accept summons for a domestic corporation or partnership is nowlimited and more clearly specified in the 1997 Rules of Civil Procedure. The rule mustbe strictly observed, service must be made to one named in the statute.

Petitioner's filing of a motion to dismiss, precisely objecting to the jurisdiction of thecourt over the person of the defendant, can by no means be deemed a submission tothe jurisdiction of the court.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; "AGENTS" NOLONGER AUTHORIZED TO RECEIVE SUMMONS FOR CORPORATION. Earliercases have uphold service of summons upon a construction project manager; acorporation's assistant manager; ordinary clerk of a corporation; private secretary ofcorporate executives; retained counsel; officials who had charge or control of theoperations of the corporation, like the assistant general manager; or the corporationsChief Finance and Administrative Officer. In these cases, these persons were

considered as "agent" within the contemplation of the old rule. Notably, under the newRules, service of summons upon an agent of the corporation is no longer authorized.

2. ID.; ID.; ID.; DESIGNATION OF PERSONS OR OFFICERS AUTHORIZEDTO RECEIVE SUMMONS FOR DOMESTIC CORPORATIONS, LIMITED. Thedesignation of persons or officers who are authorized to accept summons for adomestic corporation or partnership is now limited and more clearly specified inSection 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states"general manager" instead of only "manager"; "corporate secretary" instead of"secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of itsdirectors" is conspicuously deleted in the new rule, . . . It should be noted that evenprior to the effectivity of the 1997 Rules of Civil Procedure, strict compliance with therules has been enjoined. (Delta Motor Sales Corporation vs. Mangosing, 70 SCRA

598 [1976])

3. ID.. ID.; ID.; JURISDICTION NOT ACQUIRED WHERE SERVICE OFSUMMONS WAS MADE ON BRANCH MANAGER. Accordingly, we rule that theservice of summons upon the branch manager of petitioner at its branch office atCagayan de Oro, instead of upon the general manager at its principal office at DavaoCity is improper. Consequently, the trial court did not acquire jurisdiction over theperson of the petitioner.

4. ID.; ID.; ID.; INEFFECTIVE SERVICE OF SUMMONS; FILING OF MOTIONTO DISMISS DOES NOT CONSTITUTE VOLUNTARY APPEARANCE. The fact

that defendant filed a belated motion to dismiss did not operate to confer jurisdictionupon its person. There is no question that the defendant's voluntary appearance inthe action is equivalent to service of summons. Before, the rule was that a party maychallenge the jurisdiction of the court over his person by making a special appearancethrough a motion to dismiss and if in the same motion, the movant raised othergrounds or invoked affirmative relief which necessarily involves the exercise of thejurisdiction of the court, the party is deemed to have submitted himself to thejurisdiction of the court. This doctrine has been abandoned in the case of La NavalDrug Corporation vs. Court of Appeals, et al.; which became the basis of the adoptionof a new provision in the former Section 23, which is now Section 20 of Rule 14 of the1997 Rules, Section 20 now provides that "the inclusion in a motion to dismiss ofother grounds aside from lack of jurisdiction over the person of the defendant shallnot be deemed a voluntary appearance." The emplacement of this rule clearlyunderscores the purpose to enforce strict enforcement of the rules on summons.Accordingly, the filing of a motion to dismiss, whether or not belatedly filed by thedefendant, his authorized agent or attorney, precisely objecting to the jurisdiction ofthe court over the person of the defendant can by no means be deemed a submissionto the jurisdiction of the court. There being no proper service of summons, the trialcourt cannot take cognizance of a case for lack of jurisdiction over the person of thedefendant. Any proceeding undertaken by the trial court will consequently be null andvoid. cDCaHA

D E C I S I O N

GONZAGA-REYES, J p:

Before this Court is a petition for certiorari and prohibition with prayer for the issuanceof a temporary restraining order and/or writ of preliminary injunction seeking to annuland set aside the Orders dated August 5, 1998 and November 20, 1998 of the publicrespondent Judge Herminio I. Benito of the Regional Trial Court of Makati City,Branch 132 and praying that the public respondent court be ordered to desist fromfurther proceeding with Civil Case No. 98-824. LLjur

Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with principaloffice address at 102 Juan Luna St., Davao City and with branch offices at 2492 BayView Drive, Tambo, Paraaque, Metro Manila and Kolambog, Lapasan, Cagayan deOro City. Petitioner and private respondent executed a Deed of Sale withDevelopment Agreement wherein the former agreed to develop certain parcels ofland located at Barrio Carmen, Cagayan de Oro belonging to the latter into a housing

subdivision for the construction of low cost housing units. They further agreed that in


4/42

case of litigation regarding any dispute arising therefrom, the venue shall be in theproper courts of Makati.

On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach ofContract and Damages against petitioner, as defendant, before the Regional TrialCourt of Makati allegedly for failure of the latter to comply with its contractualobligation in that, other than a few unfinished low cost houses, there were nosubstantial developments therein. 1

Summons, together with the complaint, were served upon the defendant, through itsBranch Manager Engr. Wendell Sabulbero at the stated address at Kolambog,Lapasan, Cagayan de Oro City 2 but the Sheriff's Return of Service 3 stated that thesummons was duly served "upon defendant E.B. Villarosa & Partner Co., Ltd. thru itsBranch Manager Engr. WENDELL SABULBERO on May 5, 1998 at their new officeVilla Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the signature on theface of the original copy of the summons."

On June 9, 1998, defendant filed a Special Appearance with Motion to Dismiss 4alleging that on May 6, 1998, "summons intended for defendant" was served uponEngr. Wendell Sabulbero, an employee of defendant at its branch office at Cagayande Oro City. Defendant prayed for the dismissal of the complaint on the ground ofimproper service of summons and for lack of jurisdiction over the person of the

defendant. Defendant contends that the trial court did not acquire jurisdiction over itsperson since the summons was improperly served upon its employee in its branchoffice at Cagayan de Oro City who is not one of those persons named in Section 11,Rule 14 of the 1997 Rules of Civil Procedure upon whom service of summons may bemade.

Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare Defendant in Default5 alleging that defendant has failed to file an Answer despite its receipt allegedly onMay 5, 1998 of the summons and the complaint, as shown in the Sheriff's Return.

On June 22, 1998, plaintiff filed an Opposition to Defendant's Motion to Dismiss 6alleging that the records show that defendant, through its branch manager, Engr.

Wendell Sabulbero actually received the summons and the complaint on May 8, 1998as evidenced by the signature appearing on the copy of the summons and not onMay 5, 1998 as stated in the Sheriff's Return nor on May 6, 1998 as stated in themotion to dismiss; that defendant has transferred its office from Kolambog, Lapasan,Cagayan de Oro to its new office address at Villa Gonzalo, Nazareth, Cagayan deOro; and that the purpose of the rule is to bring home to the corporation notice of thefiling of the action.

On August 5, 1998, the trial court issued an Order 7 denying defendant's Motion toDismiss as well as plaintiff's Motion to Declare Defendant in Default. Defendant wasgiven ten (10) days within which to file a responsive pleading. The trial court statedthat since the summons and copy of the complaint were in fact received by thecorporation through its branch manager Wendell Sabulbero, there was substantial

compliance with the rule on service of summons and consequently, it validly acquiredjurisdiction over the person of the defendant. cdasia

On August 19, 1998, defendant, by Special Appearance, filed a Motion forReconsideration 8 alleging that Section 11, Rule 14 of the new Rules did not liberalizebut, on the contrary, restricted the service of summons on persons enumeratedtherein; and that the new provision is very specific and clear in that the word"manager" was changed to "general manager", "secretary" to "corporate secretary",and excluding therefrom agent and director.

On August 27, 1998, plaintiff filed an Opposition to defendant's Motion forReconsideration 9 alleging that defendant's branch manager "did bring home" to the

defendant-corporation the notice of the filing of the action and by virtue of which amotion to dismiss was filed; and that it was one (1) month after receipt of thesummons and the complaint that defendant chose to file a motion to dismiss.

On September 4, 1998, defendant, by Special Appearance, filed a Reply 10contending that the changes in the new rules are substantial and not just generalsemantics.

Defendant's Motion for Reconsideration was denied in the Order dated November 20,1998. 11

Hence, the present petition alleging that respondent court gravely abused its

discretion tantamount to lack or in excess of jurisdiction in denying petitioner'smotions to dismiss and for reconsideration, despite the fact that the trial court did notacquire jurisdiction over the person of petitioner because the summons intended for itwas improperly served. Petitioner invokes Section 11 of Rule 14 of the 1997 Rules ofCivil Procedure.

Private respondent filed its Comment to the petition citing the cases of KanlaonConstruction Enterprises Co., Inc. vs. NLRC 12 wherein it was held that service upona construction project manager is valid and in Gesulgon vs. NLRC 13 which held thata corporation is bound by the service of summons upon its assistant manager.

The only issue for resolution is whether or not the trial court acquired jurisdiction overthe person of petitioner upon service of summons on its Branch Manager.

When the complaint was filed by Petitioner on April 3, 1998 , the 1997 Rules of CivilProcedure was already in force. 14

Section 11, Rule 14 of the 1997 Rules of Civil Procedure provides that:

"When the defendant is a corporation, partnership or association organized under thelaws of the Philippines with a juridical personality, service may be made on thepresident, managing partner, general manager, corporate secretary, treasurer, or in-house counsel." (underscoring supplied).

This provision revised the former Section 13, Rule 14 of the Rules of Court which

provided that:


5/42

"SECTION 13. Service upon private domestic corporation or partnership. If thedefendant is a corporation organized under the laws of the Philippines or apartnership duly registered, service may be made on the president, manager,secretary, cashier, agent, or any of i ts directors." (underscoring supplied).

Petitioner contends that the enumeration of persons to whom summons may beserved is "restricted, limited and exclusive" following the rule on statutory constructionexpressio unios est exclusio alterius and argues that if the Rules of Court RevisionCommittee intended to liberalize the rule on service of summons, it could have easily

done so by clear and concise language.

We agree with petitioner.

Earlier cases have uphold service of summons upon a construction project manager15 ; a corporation's assistant manager 16; ordinary clerk of a corporation 17; privatesecretary of corporate executives 18; retained counsel 19; officials who had charge orcontrol of the operations of the corporation, like the assistant general manager 20; orthe corporation's Chief Finance and Administrative Officer 21. In these cases, thesepersons were considered as "agent" within the contemplation of the old rule. 22Notably, under the new Rules, service of summons upon an agent of the corporationis no longer authorized. cdrep

The cases cited by private respondent are therefore not in point.

In the Kanlaon case, this Court ruled that under the NLRC Rules of Procedure,summons on the respondent shall be served personally or by registered mail on theparty himself; if the party is represented by counsel or any other authorizedrepresentative or agent, summons shall be served on such person. In said case,summons was served on one Engr. Estacio who managed and supervised theconstruction project in Iligan City (although the principal address of the corporation isin Quezon City) and supervised the work of the employees. It was held that asmanager, he had sufficient responsibility and discretion to realize the importance ofthe legal papers served on him and to relay the same to the president or otherresponsible officer of petitioner such that summons for petitioner was validly served

on him as agent and authorized representative of petitioner. Also in the Gesulgoncase cited by private respondent, the summons was received by the clerk in the officeof the Assistant Manager (at principal office address) and under Section 13 of Rule 14(old rule), summons may be made upon the clerk who is regarded as agent within thecontemplation of the rule.

The designation of persons or officers who are authorized to accept summons for adomestic corporation or partnership is now limited and more clearly specified inSection 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states"general manager" instead of only "manager"; "corporate secretary" instead of"secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of itsdirectors" is conspicuously deleted in the new rule.

The particular revision under Section 11 of Rule 14 was explained by retired SupremeCourt Justice Florenz Regalado, thus: 23

". . . the then Sec. 13 of this Rule allowed service upon a defendant corporation to 'bemade on the president, manager, secretary, cashier, agent or any of its directors.' Theaforesaid terms were obviously ambiguous and susceptible of broad and sometimesillogical interpretations, especially the word 'agent' of the corporation. The Filoil case,involving the litigation lawyer of the corporation who precisely appeared to challengethe validity of service of summons but whose very appearance for that purpose wasseized upon to validate the defective service is an illustration of the need for thisrevised section with limited scope and specific terminology. Thus the absurd result inthe Filoil case necessitated the amendment permitting service only on the in-housecounsel of the corporation who is in effect an employee of the corporation, asdistinguished from an independent practitioner." (underscoring supplied)

Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court RevisionCommittee, stated that "(T)he rule must be strictly observed. Service must be made toone named in (the) statute . . .". 24

It should be noted that even prior to the effectivity of the 1997 Rules of CivilProcedure, strict compliance with the rules has been enjoined. In the case of DeltaMotor Sales Corporation vs. Mangosing, 25 the Court held:

"A strict compliance with the mode of service is necessary to confer jurisdiction of thecourt over a corporation. The officer upon whom service is made must be one who is

named in the statute; otherwise the service is insufficient. . . . .

The purpose is to render it reasonably certain that the corporation will receive promptand proper notice in an action against it or to insure that the summons be served on arepresentative so integrated with the corporation that such person will know what todo with the legal papers served on him. In other words, 'to bring home to thecorporation notice of the filing of the action.' . . . .

The liberal construction rule cannot be invoked and utilized as a substitute for theplain legal requirements as to the manner in which summons should be served on adomestic corporation. . . . ." (underscoring supplied).

Service of summons upon persons other than those mentioned in Section 13 of Rule14 (old rule) has been held as improper. 26 Even under the old rule, service upon ageneral manager of a firm's branch office has been held as improper as summonsshould have been served at the firm's principal office. In First Integrated Bonding &Ins. Co., Inc. vs. Dizon, 27 it was held that the service of summons on the generalmanager of the insurance firm's Cebu branch was improper; default order could havebeen obviated had the summons been served at the f irm's principal office.

And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen Bautista Ricafort, etal. 28 the Court succinctly clarified that, for the guidance of the Bench and Bar,"strictest" compliance with Section 11 of Rule 13 of the 1997 Rules of Civil Procedure(on Priorities in modes of service and filing) is mandated and the Court cannot ruleotherwise, lest we allow circumvention of the innovation by the 1997 Rules in order to

obviate delay in the administration of justice. cdtai


6/42

Accordingly, we rule that the service of summons upon the branch manager ofpetitioner at its branch office at Cagayan de Oro, instead of upon the generalmanager at its principal office at Davao City is improper. Consequently, the trial courtdid not acquire jurisdiction over the person of the petitioner.

The fact that defendant filed a belated motion to dismiss did not operate to conferjurisdiction upon its person. There is no question that the defendant's voluntaryappearance in the action is equivalent to service of summons. 29 Before, the rule wasthat a party may challenge the jurisdiction of the court over his person by making a

special appearance through a motion to dismiss and if in the same motion, themovant raised other grounds or invoked affirmative relief which necessarily involvesthe exercise of the jurisdiction of the court, the party is deemed to have submittedhimself to the jurisdiction of the court. 30 This doctrine has been abandoned in thecase of La Naval Drug Corporation vs. Court of Appeals, et al., 31 which became thebasis of the adoption of a new provision in the former Section 23, which is nowSection 20 of Rule 14 of the 1997 Rules. Section 20 now provides that "the inclusionin a motion to dismiss of other grounds aside from lack of jurisdiction over the personof the defendant shall not be deemed a voluntary appearance." The emplacement ofthis rule clearly underscores the purpose to enforce strict enforcement of the rules onsummons. Accordingly, the filing of a motion to dismiss, whether or not belatedly filedby the defendant, his authorized agent or attorney, precisely objecting to thejurisdiction of the court over the person of the defendant can by no means be deemeda submission to the jurisdiction of the court. There being no proper service ofsummons, the trial court cannot take cognizance of a case for lack of jurisdiction overthe person of the defendant. Any proceeding undertaken by the trial court willconsequently be null and void. 32

WHEREFORE, the petition is hereby GRANTED. The assailed Orders of the publicrespondent trial court are ANNULLED and SET ASIDE. The public respondentRegional Trial Court of Makati, Branch 132 is declared without jurisdiction to takecognizance of Civil Case No. 98-824, and all its orders and issuances in connectiontherewith are hereby ANNULLED and SET ASIDE.

SO ORDERED.


7/42

4. Citizens Surety v. Melencio-Herrera

EN BANC[G.R. No. L-32170. March 31, 1971.]CITIZENS' SURETY & INSURANCE COMPANY, INC., petitioner, vs. HON. JUDGEA. MELENCIO-HERRERA, SANTIAGO DACANAY, and JOSEFINA DACANAY,respondents.Dayos, Tesoro & Gloria, Jr. for petitioner.Respondent Judge for and in his own behalf.SYLLABUS

1. REMEDIAL LAW; JURISDICTION; ACTION IN PERSONAM; PERSONALSERVICE OF SUMMONS REQUIRED. We agree with respondent Judge that theaction of plaintiff petitioner, being in personam, the Court could not validly acquirejurisdiction on a non-appearing defendant, absent a personal service of summonswithin the forum. We have explicitly so ruled in Pantaleon vs. Asuncion, 105 Phil. 765,pointing out without such personal service, any judgment on a non-appearingdefendant would be violative of due process. In the aforecited case this Court,through Justice Roberto Concepcion, now Chief Justice, ruled as follows: . . . "It is awell-settled principle of Constitutional Law that, in an action strictly in personam, likethe one at bar, personal service of summons, within the forum, is essential to theacquisition of jurisdiction over the person of the defendant, who does not voluntarysubmit himself to the authority of the court. In other words, summons by publicationcannot consistently with the due process clause in the Bill of Rights confer uponthe court jurisdiction over said defendants. 'Due process of law requires personalservice to support a personal judgment, and, when the proceeding is strictly inpersonam 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 tothe acquisition of jurisdiction so as to constitute compliance with the constitutionalrequirement of due process. . . . 'Although a state legislature has more control overthe form of service on its own residents than nonresidents, it has been held that inactions in personam . . . service by publication on resident defendants who arepersonally within the state and can be found therein is not "due process of law," andstatute allowing it is unconstitutional.' (16A C.J.S., pp. 786, 789; Emphasis our)"2. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CREDITORS; REMEDYAGAINST ABSCONDING DEBTORS. The proper recourse for a creditor in thesame situation as petitioner is to locate properties, real or personal, of the residentdefendant debtor with unknown address and cause them to be attached under Rule

57, Sec. l(f), in which case, the enactment converts the action into a proceeding inrem or quasi in rem and the summons by publication may then accordingly bedeemed valid and effective But because debtors who abscond and concealthemselves are also quite adept at concealing their properties, the dismissal of thecase below by respondent Judge should be set aside and the case held pending inthe court's archives, until petitioner as plaintiff succeed in determining thewhereabouts of the defendants' person or properties and causes valid summons to beserved personally or by publication as the case may be. In this manner, the tolling ofthe period of prescription for as long as the debtor remains in hiding would properlybe a matter of court record, and he can not emerge after a sufficient lapse of timefrom the dismissal of the case to profit from his own misdeed and claim prescription ofhis just debt.D E C I S I O NREYES, J.B.L., J p:

Petitioner Citizens' Surety & Insurance Company, Inc. seeks review of an order ofrespondent Judge in Civil Case No. 77134 of the Court of First Instance of Manila,Branch XVII, entitled "Citizens' Surety & Insurance Co., Inc. vs. Santiago Dacanayand Josefina Dacanay," dismissing the complaint for lack of proper service ofsummons 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 Companyhad issued its Surety Bonds Nos. 4942 and 4944, the first, in favor of GregorioFajardo to guarantee payment of a P5,000-promissory note executed by saidDacanay, and the second, in favor of Manufacturers Bank & Trust Co., to guaranteepayment of another promissory note in like amount; that in consideration of saidbonds, Santiago and Josefina Dacanay executed Indemnity Agreements, bindingthemselves jointly and severally to indemnify plaintiff for any losses, costs andexpenses which it might sustain in connection with the issuance of the bondsaforesaid, with interest at 12% per annum; that as additional security, the Dacanaysmortgaged to plaintiff a parcel of land in Baguio City, covered by Certificate of TitleNo. T-8116, the mortgage having been duly recorded; that the promissory notes werenot paid .and as a result, plaintiff Surety was compelled to pay P5,000.00 to GregorioFajardo and P4,081.69 to the Manufacturers' Bank; that the Dacanays failed toreimburse the Surety for such payments, whereupon the Surety caused theextrajudicial foreclosure of the mortgage to pay its claim of P12,941.69 representingits 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 fromdefendants Dacanay, plus 10% thereof as attorneys' fees, and the costs.At petitioner's request, respondent Judge caused summons to be made by publicationin the newspaper Philippines Herald. But despite the publication and deposit of aprepaid copy of the complaint at the Manila post office, defendants did not appearwithin 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, byorder of May 16, 1970, asked it to show cause why the action should not bedismissed, the suit being in personam and defendants not having appeared. Then, onMay 29, 1970, respondent Judge dismissed the case, despite plaintiff Surety'sargument that the summons by publication was sufficient and valid under section 16of 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-appearingdefendant, absent a personal service of summons within the forum. We haveexplicitly so ruled in Pantaleon vs. Asuncin, 105 Phil. 765, pointing out without suchpersonal service, any judgment on a non-appearing defendant would be violative ofdue 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 anaction strictly in personam, like the one at bar, personal service of summons, withinthe forum. is essential to the acquisition of jurisdiction over the person of thedefendant, who does not voluntarily submit himself to the authority of the court. Inother words, summons by publication cannot consistently with the due processclause 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


8/42

appearance in the case is essential to the acquisition of jurisdiction so as to constitutecompliance with the constitutional requirement of due process. . . .'Although a state legislature has more control over the form of service on its ownresidents than nonresidents, it has been held that in actions in personam . . . serviceby publication on resident defendants, who are personally within the state and can befound therein is not "due process of law," and a statute allowing it is unconstitutional.'(16A C.J.S., pp. 786, 789; Emphasis ours.)"The proper recourse for a creditor in the same situation as petitioner is to locateproperties, real or personal, of the resident defendant debtor with unknown addressand cause them to be attached under Rule 57, section 1(f), in which case, theattachment converts the action into a proceeding in rem or quasi in rem and thesummons by publication may then accordingly be deemed valid and effective.But because debtors who abscond and conceal themselves are also quite adept atconcealing their properties, the dismissal of the case below by respondent Judgeshould be set aside and the case held pending in the court's archives, until petitioneras plaintiff succeeds in determining the whereabouts of the defendants' person orproperties and causes valid summons to be served personally or by publication as thecase may be. In this manner, the tolling of the period of prescription for as long as thedebtor remains in hiding would properly be a matter of court records and he can notemerge after a sufficient lapse of time from the dismissal of the case to profit from hisown misdeed and claim prescription of his just debt.WHEREFORE, the order of dismissal of the case issued by the Court below is herebyset 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 ofthe defendants and/or locating properties of the same, to enable proper summons tobe issued conformably to this Opinion. No costs.


9/42

5. Magdalena v. Nieto

FIRST DIVISION[G.R. No. L-54242. November 25, 1983.]MAGDALENA ESTATE, INC., plaintiff-appellee, vs. RENE NIETO and HELENGARCIA, defendants-appellants.Abraham F. Sarmiento for plaintiff-appellee.Guevara Law Office for defendants-appellants.SYLLABUS1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; SERVICE BY

PUBLICATION; FORMER RULE. It is true that in Fontanilla vs. Dominguez, 73Phil. 579, it was held that service of summons by publication is proper in all actionswithout distinction, provided the defendant is residing in the Philippines but his identityis unknown or his address cannot he ascertained.2. ID.; ID.; ID.; ID.; THE PRESENT RULE. However, in a later case,Pantaleon vs. Asuncion, 105 Phil. 765, the Court ruled that it is a well-settled principleof 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 ofjurisdiction over the person of the defendant, who does not voluntarily submit himselfto the authority of the court. And, the latest expression of such a doctrine comes fromJustice J.B.L. Reyes in the case of Citizens' Surety and Insurance Company, Inc. vs.Melencio-Herrera, 38 SCRA 369.3. ID.; ID.; ACTION IN PERSONAM; SUMMONS; PERSONAL SERVICEWITHIN THE FORUM OR VOLUNTARY APPEARANCE; ESSENTIAL TO SATISFYTHE DUE PROCESS CLAUSE. Summons by publication cannot consistentlywith the due process clause in the Bill of Rights confer upon the court jurisdictionover said defendant. Due process of law requires personal service to support apersonal judgment and, when the proceeding is strictly in personam brought todetermine the personal rights and obligations of the parties, personal service withinthe state or a voluntary appearance in the case is essential to the acquisition ofjurisdiction so as to constitute compliance with the constitutional requirement of dueprocess. . . . Although a state legislature has more control over the form of service onits own residents than non-residents, it has been held that in actions in personam . . .service by publication on resident defendants, who are personally within the state andcan be found therein is not 'due process of law,' and a statute allowing it isunconstitutional. (16A C.J.S., pp. 786, 789)4. ID.; ID.; ID.; ATTACHMENT OF PROPERTIES, REAL OR PERSONAL,

BELONGING TO A RESIDENT DEFENDANT DEBTOR WITH UNKNOWNADDRESS; PROPER RECOURSE OF CREDITOR IN THE CASE AT BAR. Theproper recourse for a creditor in the same situation as petitioner is to locateproperties, real or personal, of the resident defendant debtor with unknown addressand cause them to be attached under Rule 57, Section 1( f ), in which case, theattachment converts the action into a proceeding in rem or quasi in rem and thesummons by publication may then accordingly be deemed valid and effective.D E C I S I O NRELOVA, J p:Appeal from the judgment of the then Court of First Instance of Rizal in Quezon City,ordering defendants-appellants Rene Nieto and Helen Garcia to pay plainti ff-appellee:"1) the sum of P11,999.00, with interest thereon at the rate of 7% per annum,beginning April 21, 1970, the date of the letter of demand, until the same shall havebeen fully paid;"2) the sum of P2,000.00 as and for attorney's fees; and

"3) the cost of the suit." (p. 41, Record on Appeal).The facts which led to the above judgment are summarized by the trial court asfollows:"The evidence shows that the defendants herein bought from the plaintiff a parcel ofland located at New Manila Subdivision, Quezon City. Even if defendants had not fullypaid the consideration for the said lot, by special arrangement with the plaintiff, theformer were able to have the title to said lot transferred in their names. They hadmade partial payments only and the balance of their account in the amount ofP12,000.00 was secured by a promissory note which they executed on November 3,1960, under the following terms and conditions to wit: (a) the defendants shall payplaintiff the sum of P12,000.00, with interest thereon at the rate of 7% per annum,said amount to be payable without demand in consecutive monthly Installments of notless than P500.00 per month, beginning December 3, 1960, and on the third day ofeach month thereafter, until fully paid; (b) in case of failure to pay any monthlyinstallment due, the total obligation, or the balance thereof, shall automaticallybecome due and immediately payable; (c) that the plaintiff shall have the right toenforce payment of the obligation, together with the corresponding interest, includingattorney's fees and the costs of suit in case of litigation to enforce collection of thesaid obligation (Exhibit `C'). Out of the aforesaid amount of P12,000.00, defendantspaid only P100.00 in two installments of P50.00 each. The first payment was made onJanuary 29, 1963 and the second payment was made on March 14, 1968, leaving abalance of P11,999.90, exclusive of interests. Plaintiff wrote defendants a letter ofdemand calling the attention of the latter about the installments in arrears under the

terms and conditions of the promissory notes; but in spite of the said letter,defendants did not comply with their obligation. Plaintiff referred the matter to its legalcounsel, who, in turn, sent defendants a letter of demand dated April 21, 1970 whichletter was received by the defendants (Exhibits `D', `D-1' & `D-2'). Despite receipt ofsaid letter, defendants did not comply and even failed to make a reply. Plaintiffpresented further a statement of account stating therein that the amount still owing toit, inclusive of interest up to September 19, 1972 is P21,876.44; P11,999.00, theamount of the principal and P9,976.44 the amount of interest from November 3, 1960up to September 19, 1972 (Exhibit `E')," (pp. 33-34, Rollo)There was an ex-parte reception of evidence because the defendants-appellants hadbeen declared in default, plaintiff having complied with the court's order allowingservice of summons and copy of the complaint upon the defendants-appellantsthrough publication of the same in a newspaper of general circulation (Daily Mirror),

pursuant to Section 16, Rule 14 of the Rules of Court.Plaintiff claims that summons could not be served personally upon the defendantsbecause they concealed themselves to avoid service upon them; and, that when thesheriff went to the Jai-Alai Corporation of the Philippines at Cebu City wheredefendant-appellant Rene Nieto holds office, as manager, he could not be foundthereat but, when the decision was served at the same address, the defendants-appellants were able to receive it. LibLexIn this appeal, defendants-appellants contend that the lower court erred: (1) inallowing service of summons by publication, and consequently, the trial court did notacquire jurisdiction over the defendants-appellants, and the decision is therefore void;(2) in granting relief to plaintiff-appellee when its cause of action is barred by laches;(3) in lifting its orders dismissing the complaint for failure to prosecute; and (4) ingranting interests from November 3, 1960.There is merit in this appeal. It is true that in Fontanilla vs. Dominguez, 73 Phil. 579, it

was held that service of summons by publication is proper in all actions withoutdistinction, provided the defendant is residing in the Philippines but his identity is


10/42

unknown or his address cannot be ascertained. However, in a later case, Pantaleonvs. Asuncion, 105 Phil, 765, the Court, speaking through then Justice RobertoConcepcion, ruled that "it is a well-settled principle of Constitutional Law that, in anaction strictly in personam, like the one at bar, personal service of summons, withinthe forum, is essential to the acquisition of jurisdiction over the person of thedefendant, who does not voluntarily submit himself to the authority of the court. Inother words, summons by publication cannot consistently with the due processclause in the Bill of Rights confer upon the court jurisdiction over said defendant."And, quoting 16A C.J.S., pp. 786, 789, as follows: "Due process of law requirespersonal service to support a personal judgment, and, when the proceeding is strictlyin 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 tothe acquisition of jurisdiction so as to constitute compliance with the constitutionalrequirement of due process . . . Although a state legislature has more control over theform of service on its own residents than nonresidents, it has been held that in actionsin personam . . . service by publication on resident defendants, who are personallywithin the state and can be found therein is not `due process of law', and a statuteallowing it is unconstitutional."The action of herein plaintiff-appellee, being in personam, the doctrine laid down inPantaleon vs. Asuncion (supra) finds application. And, the latest expression of such adoctrine comes from Justice J. B. L. Reyes in the case of Citizens' Surety andInsurance Company. Inc. vs. Melencio-Herrera, 38 SCRA 369, in these words: ". . .the Court could not validly acquire jurisdiction on a non-appearing defendant, absent

a personal service of summons within the forum . . . The proper recourse for acreditor in the same situation as petitioner is to locate properties, real or personal, ofthe resident defendant debtor with unknown address and cause them to be attachedunder Rule 57, Section 1 (f), in which case, the attachment converts the action into aproceeding in rem or quasi in rem and the summons by publication may thenaccordingly be deemed valid and effective."Inasmuch as in the case at bar the lower court did not acquire jurisdiction over theperson of the defendants-appellants, We find it unnecessary to discuss the otherassigned errors raised by them.WHEREFORE, the decision, dated October 5, 1972 of the court a quo, is hereby SETASIDE and the case is remanded to the trial court for proper service of summons andtrial.SO ORDERED.


11/42

6. Dial Corp. v. Soriano

FIRST DIVISION

[G.R. No. 82330. May 31, 1988.]

THE DIAL CORPORATION, C & T REFINERY INC., NALIN Sdn. Bhb. BERISFORDCOMMODITIES, LTD., and PACIFIC MOLASSES COMPANY, petitioners, vs. THEHON. CLEMENTE M. SORIANO, Presiding Judge, Regional Trial Court, Branch 3,MANILA PUBLIC RESPONDENT and IMPERIAL VEGETABLE OIL COMPANY,INC., respondents.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; EXTRA-TERRITORIALSERVICE THEREOF; INSTANCES. Only in four (4) instances is extraterritorialservice of summons proper, namely: "(1) when the action affects the personal statusof the plaintiffs; (2) when the action relates to, or the subject of which is, propertywithin the Philippines, in which the defendant has or claims a lien or interest, actual orcontingent; (3) when the relief demanded in such action consists, wholly or in part, inexcluding the defendant from any interest in property located in the Philippines; and(4) when the defendant non-resident's property has been attached within thePhilippines" (De Midgely vs. Ferandos, 64 SCRA 23).

2. ID.; ID.; ID.; IN PERSONAL ACTIONS, EXTRA-TERRITORIAL SERVICEDOES NOT CONFER JURISDICTION. The action is purely an action for injunction

to restrain the defendants from enforcing against Imperial Vegetable Oil company,Inc. ("abusing and harassing") its contracts for the delivery of coconut oil to thedefendants, 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 anaction in rem or quasi in rem. As Civil Case No. 87-40166 is a personal action,personal or substituted service of summons on the defendants, not extraterritorialservice, is necessary to confer jurisdiction on the court.

3. ID.; ID.; ACTION IN PERSONAM AND PERSONAL ACTION, BOTHDEFINED. An action in personam is an action against a person on the basis of hispersonal liability, while an action in rem is an action against the thing itself, instead ofagainst the person. (Hernandez vs. Rural Bank of Lucena, Inc. 76 SCRA 85). Apersonal action is one brought for the recovery of personal property, for theenforcement of some contract or recovery of damages for its breach, or for therecovery of damages for the commission of an injury to the person or property(Hernandez vs. Development Bank of the Philippines, 71 SCRA 292).

4. ID.; PROVISIONAL REMEDIES; INJUNCTION. In an action for injunction,extraterritorial service of summons and complaint upon the non-resident defendantscannot subject them to the processes of the regional trial courts which are powerlessto 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 ofsummons will not confer on the court jurisdiction or power to compel them to obey itsorders.

D E C I S I O N

GRIO-AQUINO, J p:

The petitioners are foreign corporations organized and existing under the laws of theUnited 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 thePhilippines; 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 aPhilippine corporation which through its president, Dominador Monteverde, hadentered into several contracts for the delivery of coconut oil to the petitioners. Thosecontracts stipulate that any dispute between the parties will be settled througharbitration under the rules of either the Federation of Oils Seeds and Fats Association(FOSFA) or the National Institute of Oil Seed Products (NIOP). Because IVOdefaulted under the contracts, the petitioners and 15 others, initiated arbitrationproceedings 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 thatthey were mere "paper trading in futures" as no actual delivery of the coconut oil wasallegedly intended by the parties; that the Board of Directors of IVO convened in aspecial meeting on March 21, 1987 and removed Dominador Monteverde from hisposition as president of the corporation, named in his place, Rodrigo Monteverde, anddisowned Dominador Monteverde's allegedly illegal and unauthorized acts; that thedefendants have allegedly "harassed" IVO to comply with Dominador's contracts andto 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 fromharassing IVO with their insistent demands to recognize the contracts entered into byDominador Monteverde and from portraying the IVO as one that defaults on itscontracts and obligations and has fallen into bad times and from interfering with IVO'snormal conduct of business. IVO also prayed that the defendants pay it moraldamages of P5 million, actual damages of P10 million, exemplary damages of P5million, attorney's fees of P1 million, P3,000 per appearance of counsel, and litigationexpenses. cdphil

On motion of IVO, respondent Judge authorized it to effect extraterritorial service ofsummons to all the defendants through DHL Philippines corporation (Annex B).Pursuant to that order, the petitioners were served with summons and copy of thecomplaint 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 filedmotions to dismiss the complaint against them on the ground that the extraterritorialservice of summons to them was improper and that hence the court did not acquirejurisdiction over them. On December 15, 1987, the court denied their motions todismiss and upheld the validity of the extraterritorial service of summons to them onthe ground that "the present action relates to property rights which lie in contractswithin 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 thereason that their transactions with plaintiff's former president are ultra vires."Furthermore, "as foreign corporations doing business in the Philippines without alicense, they opened themselves to suit before Philippine courts, pursuant to Sec. 133of 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


12/42

petition for certiorari with a prayer for the issuance of a temporary retraining orderwhich 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 reside andis not found in the Philippines and the action affects the personal status of the plaintiffor relates to, or the subject of which is, property within the Philippines, in which thedefendant has or claims a lien or interest, actual or contingent, or in which the relief

demanded consists, wholly or in part, in excluding the defendant from any interesttherein, 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 serviceas under section 7; or by publication in a newspaper of general circulation in suchplaces and for such time as the court may order, in which case a copy of thesummons and order of the court shall be sent by registered mail to the last knownaddress of the defendant, or in any other manner the court may deem sufficient. Anyorder granting such leave shall specify a reasonable time, which shall not be lessthan 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 actionrelates to, or the subject of which is, property within the Philippines, in which thedefendant 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 fromany 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 anyproperty in the Philippines in which the defendants have or claim an interest, or whichthe plaintiff has attached. The action is purely an action for injunction to restrain thedefendants from enforcing against IVO ("abusing and harassing") its contracts for thedelivery of coconut oil to the defendants, and to recover from the defendants P21million in damages for such "harassment." It is clearly a personal action as well as anaction in personam, not an action in rem or quasi in rem. "An action in personam is anaction against a person on the basis of his personal liability, while an action in rem isan action against the thing itself, instead of against the person." (Hernandez vs. RuralBank of Lucena, Inc., 76 SCRA 85). A personal action is one brought for the recoveryof personal property, for the enforcement of some contract or recovery of damagesfor its breach, or for the recovery of damages for the commission of an injury to theperson or property (Hernandez vs. Development Bank of the Philippines, 71 SCRA292).

As Civil Case No. 87-40166 is a personal action, personal or substituted service ofsummons on the defendants, not extraterritorial service, is necessary to conferjurisdiction on the court. The rule is explained in Moran's Comments on the Rules ofCourt thus:

"As a general rule, when the defendant is not residing and is not found in thePhilippines, the Philippine courts cannot try any case against him because of theimpossibility 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 thePhilippines, 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 orthe property of the defendant and their jurisdiction over the person of the non-residentdefendant is not essential. Venue in such cases may be laid in the province where theproperty of the defendant or a part thereof involved in the litigation is located." (5Moran's Comments on the Rules of Court, 2nd Ed., p. 105.)

In an action for injunction, extraterritorial service of summons and complaint upon thenon-resident defendants cannot subject them to the processes of the regional trialcourts 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 tocompel them to obey its orders: LLphil

Neither may the court by extraterritorial service of summons acquire jurisdiction torender and enforce a money judgment against a non-resident defendant who has noproperty in the Philippines for "the fundamental rule is that jurisdiction in personamover non-residents, so as to sustain a money judgment, must be based uponpersonal service within the state which renders the judgment" (Boudard vs. Tait, 67Phil. 170, 174).

Respondents' contention that "the action below is related to property within thePhilippines, specifically contractual rights that petitioners are enforcing against IVO" isspecious 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 enforcesaid 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 besued or proceeded against before Philippine courts or administrative tribunal on anyvalid cause of action recognized under Philippine laws." It assumed that thedefendants (herein petitioners) are doing business in the Philippines, which allegationthe latter denied. Even if they can be considered as such, the Corporation Code didnot repeal the rules requiring proper service of summons to such corporations asprovided 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 petitionershypothetically admitted the allegations of the complaint that they are doing businessin the Philippines without any license, and that they may be served with summonsand other court processes through their agents or representatives enumerated inparagraph 2 of the complaint, is contradicted by its order authorizing IVO to summonthem by extraterritorial service, a mode of service which is resorted to when thedefendant is not found in the Philippines, does not transact business here, and has noresident agent on whom the summons may be served. Cdpr

WHEREFORE, We hold that the extraterritorial service of summons on the petitionerswas improper, hence null and void.

The petition for certiorari is granted. The orders dated April 24, 1987 (Annex B) andDecember 15, 1987 (Annex II) of the respondent Judge are hereby set aside. Thecomplaint in Civil Case No. 87-40166 is hereby dismissed as against the petitionersfor failure of the court to acquire jurisdiction over them.

SO ORDERED.


13/42

7. Banco de Brasil v. CA

SECOND DIVISION

[G.R. Nos. 121576-78. June 16, 2000.]

BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS, HON. ARSENIO M.GONONG, and CESAR S. URBINO, SR. , respondents.

SYNOPSIS

On April 10, 1991, petitioner Banco Do Brasil filed, by special appearance, an urgentmotion to vacate judgment and to dismiss case on the ground that the February 18,1991 decision of the trial court ordering herein petitioner to pay private respondent theamount of $300,000.00 in damages was void with respect to it for having beenrendered without validly acquiring jurisdiction over the person of petitioner. Petitionersubsequently amended its petition to specifically aver that its special appearance wassolely for the purpose of questioning the court's exercise of personal jurisdiction. OnMay 20, 1991, the trial court issued an order acting favorably on petitioner's motionand set aside as against petitioner the decision for having been rendered withoutjurisdiction over Banco do Brasil's person. Private respondent sought reconsiderationof the order, but the trial court denied said motion. Meanwhile, a certiorari petition was

filed by private respondent before the Court of Appeals seeking to nullify the ceaseand desist order dated April 5, 1991 issued by Judge Arsenio M. Gonong. Two moreseparate petitions for certiorari were subsequently filed by private respondent. Thesecond petition sought to nullify the order setting aside the deputy sheriff's return aswell as the certificate of sale issued by deputy sheriff Camangon. The third petitionsought to nullify the order of the Court of Tax Appeals directing the Commissioner ofCustoms to place the Bureau of Customs and PNP officers and guards to secure theM/V Star Ace and its cargoes, make inventory of the goods stored in the premises asindicated to belong to the private respondent. These three petitions wereconsolidated, and on July 19, 1993, the appellate court rendered its decision grantingprivate respondent's petitions, thereby nullifying the disputed orders and effectivelygiving away to the entire decision of the RTC of Manila. Petitioner soughtreconsideration, insofar as its liability for damages was concerned. The appellatecourt denied the motion for reconsideration. Hence, this petition. ATcaID

The Court found the petition meritorious. Private respondent's suit against petitionerwas premised on petitioner's being one of the claimants of the subject vessel, M/VStar Ace. Thus, it can be said that private respondent initially sought only to excludepetitioner from claiming interest over the subject vessel. While the action is in rem, byclaiming damages, the relief demanded went beyond the res and sought a relieftotally alien to the action. Any relief granted in rem or quasi in rem actions must beconfined to the res and the court cannot lawfully render a personal judgment againstthe defendant. Clearly, the publication of summons effected by private respondentwas invalid and ineffective for the trial court to acquire jurisdiction over the person ofpetitioner, since by seeking to recover damages from petitioner for their allegedcommission of an injury to his person or property cause by petitioner's being anuisance defendant, private respondent's action became in personam. Bearing inmind that in personam nature of the action, personal, or if not possible, substituted

service of summons on petitioner and not extraterritorial service, is necessary toconfer jurisdiction over the person of petitioner and validly hold it liable to privaterespondent for damages. Thus, the trial court had no jurisdiction to award damagesamounting to $300,000.00 in favor of private respondent and as against hereinpetitioner. Accordingly, the petition was granted and the decision and resolution of theCourt of Appeals were reversed and set aside insofar as they affect petitioner Bancodo Brasil.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; SERVICE OF SUMMONS;INSTANCES WHEN EXTRATERRITORIAL SERVICE OF SUMMONS IS PROPER. When the defendant is a non-resident and he is not found in the country, summonsmay be served extraterritorially in accordance with Rule 14, Section 17 of the Rules ofCourt. Under this provision, there are only four (4) instances when extraterritorialservice of summons is proper, namely: "(1) when the action affects the personalstatus of the plaintiffs; (2) when the action relates to, or the subject of which isproperty, within the Philippines, in which the defendant claims a lien or interest, actualor 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 thePhilippines. In these instances, service of summons may be affected by (a) personal

service out of the country, with leave of court; (b) publication, also with leave of court;or (c) any other manner the court may deem sufficient.

2. ID.; ID.; ID.; EXTRAJUDICIAL SERVICE OF SUMMONS APPLY ONLYWHERE THE ACTION IS IN REM. Clear from the foregoing, extrajudicial serviceof summons apply only where the action is in rem, an action against the thing itselfinstead of against the person, or in an action quasi in rem, where an individual isnamed as defendant and the purpose of the proceeding is to subject his interesttherein to the obligation or loan burdening the property. This is so inasmuch as, in inrem and quasi in rem actions, jurisdiction over the person of the defendant is not aprerequisite to confer jurisdiction on the court provided that the court acquiresjurisdiction over the res.

3. ID.; ID.; ID.; ACTION IN PERSONAM; WHEN THE DEFENDANT IS A NON-RESIDENT, PERSONAL SERVICE OF SUMMONS WITHIN THE STATE ISESSENTIAL TO THE ACQUISITION OF JURISDICTION OVER THE PERSON. Where the action is in personam, one brought against a person on the basis of hispersonal liability, jurisdiction over the person of the defendant is necessary for thecourt to validly try and decide the case. When the defendant is a non-resident,personal service of summons within the state is essential to the acquisition ofjurisdiction over the person. This cannot be done, however, i f the defendant is notphysically present in the country, and thus, the court cannot acquire jurisdiction overhis person and therefore cannot validly try and decide the case against him. In theinstant case, private respondent's suit against petitioner is premised on petitioner'sbeing one of the claimants of the subject vessel M/V Star Ace. Thus, it can be saidthat private respondent initially sought only to exclude petitioner from claiming interest

over the subject vessel M/V Star Ace. However, private respondent testified duringthe presentation of evidence that, for being a nuisance defendant, petitioner caused


14/42

irreparable damage to private respondent in the amount of $300,000.00. Therefore,while the action is in rem, by claiming damages, the relief demanded went beyond theres and sought a relief totally alien to the action. CaDATc

4. ID.; ID.; ID.; ANY RELIEF GRANTED IN REM OR QUASI IN REM ACTIONSMUST BE CONFINED TO THE RES AND THE COURT CANNOT LAWFULLYRENDER A PERSONAL JUDGMENT AGAINST THE DEFENDANT. It must bestressed that any relief granted in rem or quasi in rem actions must be confined to theres, and the court cannot lawfully render a personal judgment against the defendant.

Clearly, the publication of summons effected by private respondent is invalid andineffective for the trial court to acquire jurisdiction over the person of petitioner, sinceby seeking to recover damages from petitioner for the alleged commission of an injuryto his person or property caused by petitioner's being a nuisance defendant, privaterespondent's action became in personam. Bearing in mind the in personam nature ofthe action, personal or, if not possible, substituted service of summons on petitioner,and not extraterritorial service, is necessary to confer jurisdiction over the person ofpetitioner and validly hold it liable to private respondent for damages. Thus, the trialcourt had no jurisdiction to award damages amounting to $300,000.00 in favor ofprivate respondent and as against herein petitioner.

5. ID.; ID.; JUDGMENT; ONLY UPON THE LAPSE OF THE REGLEMENTARYPERIOD TO APPEAL, WITH NO APPEAL PERFECTED WITHIN SUCH PERIOD,

DOES THE DECISION BECOME FINAL AND EXECUTORY. We settled the issueof finality of the trial court's decision dated February 18, 1991 in the Vlason case,wherein we stated that, considering the admiralty case involved multiple defendants,"each defendant had a different period within which to appeal, depending on the dateof receipt of decision." Only upon the lapse of the reglementary period to appeal, withno appeal perfected within such period, does the decision become final andexecutory. In the case of petitioner, its Motion to Vacate Judgment and to DismissCase was filed on April 10, 1991, only six (6) days after it learned of the existence ofthe case upon being informed by the Embassy of the Federative Republic of Brazil inthe Philippines, on April 4, 1991, of the February 18, 1991 decision. Thus, in theabsence of any evidence on the date of receipt of decision, other than the allegedApril 4, 1991 date when petitioner learned of the decision, the February 18, 1991decision of the trial court cannot be said to have attained finality as regards thepetitioner.

D E C I S I O N

DE LEON, JR., J p:

Before us is a petition for review on certiorari of the Decision 1 and the Resolution 2of the Court of Appeals 3 dated July 19, 1993 and August 15, 1995, respectively,which reinstated the entire Decision 4 dated February 18, 1991 of the Regional TrialCourt of Manila, Branch 8, holding, among others, petitioner Banco do Brasil liable toprivate respondent Cesar Urbino, Sr. for damages amounting to $300,000.00. 5

At the outset, let us state that this case should have been consolidated with therecently decided case of Vlason Enterprises Corporation v. Court of Appeals and

Duraproof Services, represented by its General Manager, Cesar Urbino Sr.6 , forthese two (2) cases involved the same material antecedents, though the main issueproffered in the present petition vary with the Vlason case.

The material antecedents, as quoted from the Vlason 7 case, are:

Poro Point Shipping Services, then acting as the local agent of Omega Sea TransportCompany of Honduras & Panama, a Panamanian Company (hereafter referred to asOmega), requested permission for its vessel M/V Star Ace, which had engine trouble,

to unload its cargo and to store it at the Philippine Ports Authority (PPA) compound inSan Fernando, La Union while awaiting transshipment to Hongkong. The request wasapproved by the Bureau of Customs. 8 Despite the approval, the customs personnelboarded the vessel when it docked on January 7, 1989, on suspicion that it was thehijacked M/V Silver Med owned by Med Line Philippines Co., and that its cargo wouldbe smuggled into the country. 9 The district customs collector seized said vessel andits cargo pursuant to Section 2301, Tariff and Customs Code. A notice of hearing ofSFLU Seizure Identification No. 3-89 was served on its consignee, Singkong TradingCo. of Hongkong, and its shipper, Dusit International Co., Ltd. of Thailand.

While seizure proceedings were ongoing, La Union was hit by three typhoons, andthe vessel ran aground and was abandoned. On June 8, 1989, its authorizedrepresentative, Frank Cadacio, entered into salvage agreement with private

respondent to secure and repair the vessel at the agreed consideration of $1 millionand "fifty percent (50%) [of] the cargo after all expenses, cost and taxes." 10

Finding that no fraud was committed, the District Collector of Customs, Aurelio M.Quiray, lifted the warrant of seizure on July 1989. 11 However, in a SecondIndorsement dated November 11, 1989, then Customs Commissioner Salvador M.Mison declined to issue a clearance for Quirays Decision; instead, he forfeited thevessel and its cargo in accordance with Section 2530 of the Tariff and Customs Code.12 Accordingly, acting District Collector of Customs John S. Sy issued a Decisiondecreeing the forfeiture and the sale of the cargo in favor of the government. 13

To enforce its preferred salvors lien, herein Private Respondent Duraproof Servicesfiled with the Regional Trial Court of Manila a Petition for Certiorari, Prohibition andMandamus 14 assailing the actions of Commissioner Mison and District Collector Sy.Also impleaded as respondents were PPA Representative Silverio Mangaoang andMed Line Philippines, Inc.

On January 10, 1989, private respondent amended its Petition 15 to include formerDistrict Collector Quiray; PPA Port Manager Adolfo Ll. Amor, Jr.; . . . VlasonEnterprises as represented by its president, Vicente Angliongto; Singkong TradingCompany as represented by Atty. Eddie Tamondong; Banco Do Brasil; DusitInternational Co.; Thai-Nan Enterprises Ltd., and Thai-United Trading Co., Ltd. 16 . . .

Summonses for the amended Petition were served on Atty. Joseph Capuyan for MedLine Philippines: Anglionto (through his secretary, Betty Bebero), Atty. Tamondong

and Commissioner Mison. 17 Upon motion of the private respondent, the trial court


15/42

allowed summons by publication to be served upon defendants who were notresidents and had no direct representative in the country. 18

On January 29, 1990, private respondent moved to declare respondents in default,but the trial court denied the motion in its February 23, 1990 Order 19 , becauseMangaoang and Amor had jointly filed a Motion to Dismiss, while Mison and Med Linehad moved separately for an extension to file a similar motion. 20 Later it rendered anOrder dated July 2, 1990, giving due course to the motions to dismiss filed byMangaoang and Amor on the ground of litis pendentia, and by the commissioner and

district collector of customs on the ground of lack of jurisdiction. 21 In another Order,the trial court dismissed the action against Med Line Philippines on the ground of litispendentia. 22

On two other occasions, private respondent again moved to declare the following indefault: [Vlason], Quiray, Sy and Mison on March 26, 1990; 23 and Banco [do]Bra[s]il, Dusit International Co., Inc., Thai-Nan Enterprises Ltd. and Thai-UnitedTrading Co., Ltd. on August 24, 1990. 24 There is no record, however, that the trialcourt acted upon the motions. On September 18, 1990, [private respondent] filedanother Motion for leave to amend the petition, 25 alleging that its counsel failed toinclude "necessary and/or indispensable parties": Omega represented by Cadacio;and M/V Star Ace represented by Capt. Nahon Rada, relief captain. Aside fromimpleading these additional respondents, private respondent also alleged in the

Second (actually, third) Amended Petition 26 that the owners of the vessel intendedto transfer and alienate their rights and interest over the vessel and its cargo, to thedetriment of the private respondent.

The trial court granted leave to private respondent to amend its Petition, but only toexclude the customs commissioner and the district collector. 27 Instead, privaterespondent filed the "Second Amended Petition with Supplemental Petition" againstSingkong Trading Company; and Omega and M/V Star Ace, 28 to which Cadacio andRada filed a Joint Answer. 29

Declared in default in an Order issued by the trial court on January 23, 1991, were thefollowing: Singkong Trading Co., Commissioner Mison, M/V Star Ace and Omega. 30Private respondent filed, and the trial court granted, an ex parte Motion to present

evidence against the defaulting respondents. 31 Only private respondent, Atty.Tamondong, Commissioner Mison, Omega and M/V Star Ace appeared in the nextpretrial hearing; thus, the trial court declared the other respondents in default andallowed private respondent to present evidence against them. 32 Cesar Urbino,general manager of private respondent, testified and adduced evidence against theother respondents, . . . .33

On December 29, 1990, private respondent and Rada, representing Omega, enteredinto a Memorandum of Agreement stipulating that Rada would write and notifyOmega regarding the demand for salvage fees of private respondent; and that if Radadid not receive any instruction from his principal, he would assign the vessel in favorof the salvor. 34

On February 18, 1991, the trial court disposed as follows:

"WHEREFORE, IN VIEW OF THE FOREGOING, based on the alle

gations, prayer and evidence adduced, both testimonial and documentary, the Courtis convinced, that, indeed, defendants/respondents are liable to [private respondent]in the amount as prayed for in the petition for which it renders judgment as follows:

1. Respondent M/V Star Ace, represented by Capt. Nahum Rada, [r]elief[c]aptain of the vessel and Omega Sea Transport Company, Inc., represented byFrank Cadacio[,] is ordered to refrain from alienating or [transferring] the vessel M/V

Star Ace to any third parties;

2. Singkong Trading Company to pay the following:

a. Taxes due the government;

b. Salvage fees on the vessel in the amount of $1,000,000.00 based on . . .Lloyds Standard Form of Salvage Agreement;

c. Preservation, securing and guarding fees on the vessel in the amount of$225,000.00;

d. Maintenance fees in the amount of P2,685,000.00;

e. Salaries of the crew from August 16, 1989 to December 1989 in the amountof $43,000.00 and unpaid salaries from January 1990 up to the present;

f. Attorneys fees in the amount of P656,000.00;

3. [Vlason] Enterprises to pay [private respondent] in the amount ofP3,000,000.00 for damages;

4. Banco [Du] Brasil to pay [private respondent] in the amount of $300,000.00

in damages; 35 and finally,

5. Costs of [s]uit."

Subsequently, upon the motion of Omega, Singkong Trading Co., and privaterespondent, the trial court approved a Compromise Agreement 36 among themovants, reducing by 20 percent the amounts adjudged. For their part, respondents-movants agreed not to appeal the Decision. 37 On March 8, 1991, private respondentmoved for the execution of judgment, claiming that the trial court Decision hadalready become final and executory. The Motion was granted and a Writ of Executionwas issued. To satisfy the Decision, Sheriffs Jorge Victorino, Amado Sevilla andDionisio Camagon were deputized on March 13, 1991 to levy and to sell onexecution the defendants vessel and personal property.


16/42

xxx xxx xxx

On March 18, 1991, the Bureau of Customs also filed an ex parte Motion to recall theexecution, and to quash the notice of levy and the sale on execution. Despite thisMotion, the auction sale was conducted on March 21, 1991 by Sheriff Camagon,with private respondent submitting the winning bid. The trial court ordered the deputysheriffs to cease and desist from implementing the Writ of Execution and from levyingon the personal property of the defendants. Nevertheless, Sheriff Camagon issuedthe corresponding Certificate of Sale on March 27, 1991.

On April 10, 1991, petitioner Banco do Brasil filed, by special appearance, an UrgentMotion to Vacate Judgment and to Dismiss Case 38 on the ground that the February18, 1991 Decision of the trial court is void with respect to it for having been renderedwithout validly acquiring jurisdiction over the person of Banco do Brasil. Petitionersubsequently amended its petition 39 to specifically aver that its special appearanceis solely for the purpose of questioning the Courts exercise of personal jurisdiction.

On May 20, 1991, the trial court issued an Order 40 acting favorably on petitionersmotion and set aside as against petitioner the decision dated February 18, 1991 forhaving been rendered without jurisdiction over Banco do Brasils person. Privaterespondent sought reconsideration 41 of the Order dated May 20, 1991. However, thetrial court in an Order 42 dated June 21, 1991 denied said motion.

Meanwhile, a certiorari petition 43 was filed by private respondent before publicrespondent Court of Appeals seeking to nullify the cease and desist Order dated April5, 1991 issued by Judge Arsenio M. Gonong. Two (2) more separate petitions forcertiorari were subsequently filed by private respondent. The second petition 44sought to nullify the Order 45 dated June 26, 1992 setting aside the Deputy Sheriffsreturn dated April 1, 1991 as well as the certificate of sale issued by Deputy SheriffCamagon. The third petition 46 sought to nullify the Order dated October 5, 1992 ofthe Court of Tax Appeals directing the Commissioner of Customs to place Bureau ofCustoms and PNP officers and guards to secure the M/V Star Ace and its cargoes,make inventory of the goods stored in the premises as indicated to belong to theprivate respondent. Likewise challenged was the Order dated August 17, 1992authorizing the sale of M/V Star Ace and its cargoes.

These three (3) petitions were consolidated and on July 19, 1993, the appellate courtrendered its Decision 47 granting private respondents petitions, thereby nullifying andsetting aside the disputed orders and effectively "giving way to the entire

Documents

Civ Promine