Republic of the
Supreme Court
FIRST DIVISION
ERLINDA
R. VELAYO-FONG, G.R. NO. 155488
Petitioner,
Present:
PANGANIBAN, C.J.
(Chairperson)
YNARES-SANTIAGO,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
SPOUSES
RAYMOND and
MARIA
HEDY VELAYO,
Respondents. Promulgated: December
6, 2006
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D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Before
the Court is a petition for review on certiorari
under Rule 45 of the 1997 Rules of Civil Procedure seeking the reversal of the
Decision[1]
of the Court of Appeals (CA) dated
The
procedural antecedents and factual background of the case are as follows:
On
August 9, 1993, Raymond Velayo (Raymond) and his wife, Maria Hedy Velayo (respondents) filed a complaint for sum of money and
damages with prayer for preliminary attachment against Erlinda
R. Velayo-Fong (petitioner), Rodolfo R. Velayo, Jr. (Rodolfo Jr.) and Roberto
R. Velayo (Roberto).[3]
Raymond is the half-brother of
petitioner and her co-defendants.
In their Complaint, respondents
allege that petitioner, a resident of 1860 Alamoana
Boulevard, Honolulu, Hawaii, USA, and her co-defendants, who are residents of
the Philippines, made it appear that their common father, Rodolfo Velayo, Sr.
(Rodolfo Sr.) and petitioner had filed a complaint against Raymond before the
National Bureau of Investigation (NBI), accusing Raymond of the crimes of
estafa and kidnapping a minor; that petitioner and her co-defendants also requested
that respondents be included in the Hold Departure List of the Bureau of
Immigration and Deportation (BID) which was granted, thereby preventing them from
leaving the country and resulting in the cancellation of respondents’ trips
abroad and caused all of respondents’ business transactions and operations to
be paralyzed to their damage and prejudice; that petitioner and her co-defendants
also filed a petition before the Securities and Exchange Commission (SEC)
docketed as Case No. 4422 entitled “Rodolfo Velayo Sr. et al. v. Raymond Velayo
et al.” which caused respondents’ funds to be frozen and paralyzed the latters’
business transactions and operations to their damage and prejudice. Since
petitioner was a non-resident and not found in the
Before respondents’ application for a
writ of preliminary attachment can be acted upon by the RTC, respondents filed on
September 10, 1993 an Urgent Motion praying that the summons addressed to
petitioner be served to her at Suite 201, Sunset View Towers Condominium, Roxas
Boulevard, Pasay City and at No. 5040 P. Burgos Street, T. Towers Condominium,
Makati.[4] In its Order dated
The Process Server submitted the
Officer’s Return, to wit:
THIS IS TO CERTIFY, that after several failed attempts to serve the copy of summons and complaint issued in the above-entitled case at the given addresses of defendant Erlinda Velayo as mentioned in the Order of this Court dated September 13, 1993, finally, on the 23rd day of September, 1993, at the instance of herein plaintiffs through counsel, undersigned was able to SERVED (sic) personally upon defendant Erlinda Velayo the copy of summons together with the thereto attached copy of the complaint, not at her two (2) given addresses, but at the lobby of Intercontinental Hotel, Makati, Metro Manila, right in the presence of lobby counter personnel by the name of Ms. A. Zulueta, but said defendant refused to sign in receipt thereof.
I
FURTHER CERTIFY, that on the 27th day of September, 1993, copy of
the same WAS SERVED personally upon the other defendant Rodolfo R. Velayo, Jr., at No. Block 57, Lots 17 and 19,
WHEREFORE, original copy of the summons is now being respectfully returned to the Honorable Court DULY SERVED.
Upon ex-parte
motions[7]
of respondents, the RTC in its Order dated
On
WHEREFORE,
premises considered, judgment is hereby rendered ordering the defendants to pay
the plaintiffs:
1.
the amount of P65,000.00 as actual damages;
2.
the amount of P200,000.00 as moral damages;
3.
Attorney’s fees in the amount of P5,000,00 it being a judgment by
default; and
4.
cost of suit.
SO
ORDERED.[9]
On
In its Order dated May 29, 1995, the
RTC denied petitioner’s Motion ruling that the presumption of regularity in the
discharge of the function of the Process Server was not sufficiently overcome
by petitioner’s allegation to the contrary; that there was no evident reason for
the Process Server to make a false narration regarding the service of summons
to defaulting defendant in the Officer’s Return.[12]
On
In its Order dated January 3, 1996,
the RTC, finding that the Decision dated June 15, 1994 and the
Order dated May 29, 1995
were indeed not furnished or
served upon petitioner, denied respondents’ motion for execution against
petitioner and ordered that petitioner be furnished the said Decision and Order.[15]
On
On
Petitioner filed an appeal with the
CA questioning the propriety and validity of the service of summons made upon
her. Respondents opposed the appeal,
arguing that the petition should be dismissed since it raised pure questions of
law, which is not within the CA’s jurisdiction to resolve under Section 2 (c)
of Rule 41 of the Revised Rules of Court; that, in any case, petitioner’s
reliance on the rule of extraterritorial service is misplaced; that the
judgment by default has long been final and executory since as early as August
1994 petitioner became aware of the judgment by default when she verified the
status of the case; that petitioner should have filed a motion for new trial or
a petition for relief from judgment and not a motion to set aside the order of
default since there was already a judgment by default.
On May 14, 2002, the CA rendered its
Decision affirming the Decision and Order of the RTC[18]
ruling that it (CA) has jurisdiction since the petition raised a question of
fact, that is, whether petitioner was properly served with summons; that the judgment
by default was not yet final and executory against petitioner since the records
reveal and the RTC Order dated January 3, 1996 confirmed that she was not
furnished or served a copy of the decision; that petitioner was validly served
with summons since the complaint for damages is an action in personam and only personal,
not extraterritorial service, of summons, within the forum, is essential for
the acquisition of jurisdiction over her person; that petitioner’s allegations that
she did not know what was being
served upon her and that somebody just hurled papers at her were not
substantiated by competent evidence and cannot overcome the presumption of
regularity of performance of official functions in favor of the Officer’s Return.
Petitioner filed a Motion for Reconsideration[19]
but the CA denied it in its Resolution dated
Hence, the present petition anchored
on the following grounds:
I
THE COURT OF APPEALS
PATENTLY ERRED IN NOT RULING THAT PETITIONER WAS NOT VALIDLY SERVED WITH
SUMMONS.
II
THE COURT OF APPEALS
PATENTLY ERRED IN NOT RULING THAT PETITIONER WAS PREVENTED FROM FILING
RESPONSIVE PLEADING AND DEFENDING AGAINST RESPONDENTS’ COMPLAINT BECAUSE OF
FRAUD, ACCIDENT AND MISTAKE.[21]
Parties filed their respective
Memoranda on September 8 and 9, 2005.
Petitioner argues that summons should
have been served through extraterritorial service since she is a non-resident;
that the RTC should have lifted the order of default since a default judgment
is frowned upon and parties should be given their day in court; that she was
prevented from filing a responsive
pleading
and
defending against
respondents’ complaint
through fraud, accident or mistake
considering that the statement in the Officer’s Return that she was personally served summons is inaccurate; that
she does not remember having been
served with summons during the said date but remembers that a man hurled some
papers at her while she was entering the elevator and, not knowing what the
papers were all about, she threw back the papers to the man before the elevator
closed; that she has a valid and meritorious defense to refute the material
allegations of respondents’ complaint.
On the other hand, respondents
contend that petitioner was validly served with summons since the rules do not
require that service be made upon her at her place of residence as alleged in
the complaint or stated in the summons; that extraterritorial service applies
only when the defendant does not reside and is not found in the Philippines;
that petitioner erred in filing a motion to set aside the order of default at
the time when a default judgment was already rendered by the RTC since the
proper remedy is a motion for new trial or a petition for relief from judgment
under Rule 38; that the issue on summons is a pure question of law which the CA
does not have jurisdiction to resolve under Section 2 (c) of Rule 41 of the 1997
Rules of Civil Procedure.[22]
The Court finds it proper to resolve
first whether the issue involved in the appeal filed with the CA is a question
of law and therefore not within the jurisdiction of the CA to resolve.
In Murillo v. Consul,[23]
which was later adopted by the 1997 Rules of Civil Procedure, the Court clarified
the three modes of appeal from decisions of the RTC, namely: (a) ordinary
appeal or appeal by writ of error, where judgment was rendered in a civil or
criminal action by the RTC in the exercise of original jurisdiction; (b)
petition for review, where judgment was
rendered by the RTC in the exercise
of appellate jurisdiction; and (c) petition for review to the Supreme Court.
The
first mode of appeal, governed by Rule 41, is taken to the Court of Appeals on
questions of fact or mixed questions of fact and law. The second mode of appeal, covered by Rule
42, is brought to the Court of Appeals on questions of fact, of law, or mixed
questions of fact and law. The third
mode of appeal, provided for by Rule 45, is elevated to the Supreme Court only
on questions of law.
A question of law arises
when there is doubt as to what the law is on a certain state of facts, while
there is a question of fact when the doubt arises as to the truth or falsity of
the alleged facts.[24]
For a question to be one of law, the same must not involve an examination of
the probative value of the evidence presented by the litigants or any of them.[25] The resolution of the issue must rest solely
on what the law provides on the given set of circumstances. Once it is clear that the issue invites a
review of the evidence presented, the question posed is one of fact.[26]
Thus, the test of whether a question is one of law or of fact is not the
appellation given to such question by the
party raising the same;
rather, it is whether the appellate
court can
determine the issue raised without
reviewing or evaluating the evidence, in which case, it is a question of law;
otherwise it is a question of fact.[27]
Respondents’ claim that the issues
raised by petitioner before the CA are pure legal questions is not tenable.
A scrutiny of petitioner’s petition
before the CA reveals that it raised two issues: (a) the propriety of the
service effected on a non-resident; and (b) the validity of the service made
upon her. The first is a question of
law. There is indeed a question as to
what and how the law should be applied. The
second is a question of fact. The
resolution of said issue entails a review of the factual circumstances that led
the RTC to conclude that service was validly effected upon petitioner.
Therefore, petitioner properly brought the case to the CA via the first mode of
appeal under the aegis of Rule 41.
How may service of summons be
effected on a non-resident?
Section 17,[28]
Rule 14 of the Rules of Court provides:
Section
17. Extraterritorial service – When
the defendant does not reside and is not found in
the
personal status of
the plaintiff or relates to, or the subject of which, is property within the
lien or interest, actual or contingent, or in which relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached in the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by publication in a newspaper of general
circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall
specify a reasonable
time, which shall not be less than sixty (60) days after notice, within which
the defendant must answer.
Under this provision, when the
defendant is a nonresident and he is not found in the country, summons may be
served extraterritorially. There are only four instances when
extraterritorial service of summons is proper, namely: (a) when the action
affects the personal status of the plaintiffs; (b) when the action relates to,
or the subject of which is property, within the Philippines, in which the
defendant claims a lien or interest, actual or contingent; (c) 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 (d) when the
defendant’s property has been attached within the Philippines. In these instances, service of summons may be
effected by (a) personal service out of the country, with leave of court; (b)
publication, also with leave of court; or (c) any other manner the court may
deem sufficient.
Thus, extrajudicial service of
summons apply only where the action is in rem, that is, an action
against the thing itself instead of against the person, or in an action quasi
in rem, where an individual is named as defendant and the purpose of the
proceeding is to subject his interest therein to the obligation or loan burdening
the property. The rationale for this is that in in rem and quasi in
rem actions, jurisdiction over the person of the defendant is
not a prerequisite to confer
jurisdiction on the court provided that the court acquires jurisdiction over
the res.[29]
Where the action is in personam,
that is, one brought against a person on the basis
of her personal
liability, jurisdiction over the
person of the defendant is necessary for
the court 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 of
jurisdiction over the person.[30]
Summons on the defendant must be served by handing a copy thereof to the
defendant in person, or, if he refuses to receive it, by tendering it to him.[31]
This cannot be done, however, if the defendant is not physically present in the
country, and thus, the court cannot acquire jurisdiction over his person and
therefore cannot validly try and decide the case against him.[32]
In the present case, respondents’
cause of action in Civil Case No. Q-93-17133 is anchored on the claim that petitioner
and her co-defendants maliciously instituted a criminal complaint before the
NBI and a petition before the SEC which prevented the respondents from leaving the
country and paralyzed the latters’ business transactions. Respondents pray that
actual and moral damages, plus attorney’s fees, be awarded in their favor. The action instituted by respondents affect
the parties alone, not the whole world. Any
judgment therein is binding only upon the parties properly impleaded.[33]
Thus, it is an action in
personam. As
such, personal service of summons upon the defendants is essential in order for
the court to acquire jurisdiction over their persons.[34]
The Court notes that the complaint filed
with the RTC alleged that petitioner is a non-resident who is not found in the
Was there a valid service of summons
on petitioner? The answer is in the
affirmative.
Petitioner’s bare allegation that the
statement in the “Officer’s Return that she was personally served summons is
inaccurate” is not sufficient. A process
server’s certificate of service is prima facie evidence of the facts as
set out in the certificate.[35] Between the claim of non-receipt of summons by
a party against the assertion of an official whose duty is to send notices, the
latter assertion is fortified by the presumption that official duty has been
regularly performed.[36]
To overcome the presumption of regularity of performance of official functions
in favor of such Officer’s Return, the evidence against it must be clear and
convincing. Petitioner having been
unable to come forward with the requisite quantum of proof to the contrary, the
presumption of regularity of performance on the part of the process server
stands.
The Court need not make a long
discussion on the propriety of the remedy adopted by petitioner in the RTC of
filing a motion to set aside the order of default at a time when there was
already a judgment by default. As aptly
held by the CA, since petitioner was not furnished or served a copy of the
judgment of default, there was no notice yet of such judgment as against her. Thus, the remedy of filing a motion to set
aside the order of default in the RTC was proper.
Petitioner’s argument that the RTC
should have set aside the order of default and applied the liberal
interpretation of rules with a view of affording parties their day in court is
not tenable. While indeed default orders
are not viewed with favor, the party seeking to have the order of default
lifted must
first show that her failure to file
an answer or any other responsive pleading was due to fraud, accident, mistake,
or excusable neglect and then she must show that she has a valid and
meritorious defense.[37]
In this case, petitioner failed to
show that her failure to file an answer was due to fraud, accident, mistake or
excusable neglect. Except for her bare
unsupported allegation that the summons were only thrown to her at the
elevator, petitioner did not present any competent evidence to justify the
setting aside of the order of default.
Moreover, when a party files a motion
to lift order of default, she must also show that she has a meritorious defense
or that something would be gained by having the order of default set aside.[38]
The term meritorious defense implies that the applicant has the burden of
proving such a defense in order to have the judgment set aside. The cases usually do not require such a
strong showing. The test employed
appears to be essentially the same as used in considering summary judgment, that
is, whether there is enough evidence to
present an issue for submission to the trier of fact, or a showing that on
the undisputed facts it is not clear that the judgment is warranted as a matter
of law. [39] The defendant must show that she has a meritorious defense otherwise the grant of her motion will prove to be a useless
exercise. Thus, her motion must be accompanied by a statement of the evidence which she
intends to present if the motion is granted and which is
such as to warrant a reasonable belief that the result of the case would
probably be otherwise if a new trial is granted.[40]
In the present case, petitioner contented
herself with stating in her affidavit of merit that the cases against
respondent Raymond were filed at the instance of her father.[41]
Such allegation is a conclusion rather than a statement of facts showing a
meritorious defense. The affidavit failed
to controvert the facts alleged
by the respondents.
Petitioner has not shown
that she has a meritorious
defense.
Thus,
since petitioner failed to show that her failure file an answer was not due to
fraud, accident, mistake, or excusable neglect; and that she had a valid and
meritorious defense, there is no merit to her prayer for a liberal interpretation
of procedural rules.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals are AFFIRMED.
Costs against petitioner.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
ARTEMIO
V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA
V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution,
it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1]
Penned by Associate Justice
Perlita J. Tria Tirona (now retired) and concurred in by Associate Justices
Buenaventura J. Guerrero (now retired) and Rodrigo V. Cosico; CA rollo, p. 95.
[2]
CA rollo, p. 125.
[3]
Original Records, p. 1.
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
CA rollo,
p. 95.
[19]
CA rollo, p. 109.
[20]
Supra, note 2.
[21]
Rollo, p. 159.
[22] Section
2. – Modes of Appeal.
x x x
c) Appeal by certiorari. – In all cases
where only questions of law are raised or involved, the appeal shall be to the
Supreme Court by petition for review on certiorari in accordance with
Rule 45.
[23]
Resolution of the Court En
Banc in UDK-9748,
[24]
Olave v. Mistas, G.R. No. 155193, November 26, 2004, 444 SCRA 479,
490; Western Shipyard Services, Inc. v.
Court of Appeals, G.R. No. 110340, May 28, 2001, 358 SCRA 257, 264.
[25]
Land Bank of the Philippines v. Monet’s Export and Manufacturing
Corporation, G.R. No. 161865, March 10, 2005, 453 SCRA 173, 184; Skippers Pacific, Inc. v. Mira, 440
Phil. 906, 920 (2002).
[26]
Cucueco v. Court of Appeals, G.R. No. 139278, October 25, 2004, 441 SCRA
290, 299; Microsoft Corporation and Lotus
Development Corp. v. Maxicorp, Inc., G.R. No. 140946, September 13, 2004, 438 SCRA 224, 231.
[27]
Crisologo v. Globe Telecom, Inc., G.R. No. 167631, December 16,
2005, 478 SCRA 433, 441; Central Bank of
the Philippines v. Castro, G.R. No. 156311, December 16, 2005, 478 SCRA
235, 244.
[28]
Now Sec. 15, Rule 14 of the 1997 Rules of Civil Procedure.
[29]
Asiavest Limited v.
Court of Appeals, 357 Phil. 536, 554 (1998); Valmonte v. Court of Appeals,
322 Phil. 96, 106 (1996).
[30]
Banco Do Brasil v.
Court of Appeals, 389 Phil. 87, 100 (2000); The Dial Corporation v. Soriano, G.R. No. L-82330,
[31]
Section 7, Rule 14 of the
Revised Rules of Court, now Sec. 15 of Rule 14 the 1997 Rules of Civil
Procedure.
[32]
Asiavest Limited v. Court
of Appeals, supra. at 554.
[33]
Paderanga v. Buissan,
G.R. No. 49475,