BIENVENIDO EJERCITO and G.R.
No. 172595
JOSE
MARTINEZ,
Petitioners, Present:
QUISUMBING,
J.*
Chairperson,
-
versus - CARPIO
MORALES,
Acting Chairperson,
TINGA,
VELASCO, JR., and
M.R. VARGAS CONSTRUCTION, BRION, JJ.
MARCIAL R. VARGAS, Sole Owner,
RENATO AGARAO,**
Project Foreman, Promulgated:
Respondents.
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Tinga, J.:
This is a petition for review on
certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the
Court of Appeals’ Decision[1]
and Resolution[2] in
CA-G.R. SP No. 89001. The appellate court’s decision dismissed the petition for
certiorari, which sought to set aside the Order[3]
dated 08 November 2004 issued by Hon. Marie Christine Jacob, Presiding Judge of
the Regional Trial Court (RTC) of Quezon City, Branch 100. The appellate court’s resolution denied
petitioners’ motion for reconsideration of the decision.
As culled from the records, the
following factual antecedents appear:
On 5 March 2004, the City Government
of Quezon City, represented by Mayor Feliciano Belmonte,
Jr., entered into a construction contract[4]
with M.R. Vargas Construction, represented by Marcial
Vargas in his capacity as general manager of the said business enterprise, for
the improvement and concreting of Panay Avenue.[5]
Pursuant to the contract, the business enterprise commenced its clearing
operations by removing the structures and uprooting the trees along the
thoroughfare. Its foreman, Renato Agarao,
supervised the clearing operations.[6]
Claiming that the clearing operations
lacked the necessary permit and prior consultation, petitioners Bienvenido Ejercito and Jose
Martinez, as well as a certain Oscar Baria, brought
the matter to the attention of the barangay authorities,
Mayor Belmonte, Senator Ma. Ana Consuelo A.S.
Madrigal, the Department of Environment and Natural Resources and the
Philippine Coconut Authority.[7]
The efforts of petitioners proved
unsuccessful. Hence, on 10 September 2004, they filed a petition for injunction
before the Quezon City RTC. The petition named “M.R. Vargas Construction Co.,
represented by herein Marcial R. Vargas and Renato Agarao,” as respondent.[8]
The Petition,[9]
docketed as Civil Case No. Q-04-53687, indicated that “Respondent M.R. Vargas
Construction, is an entity, with office address at the 4th Floor,
President Tower, Timog Avenue corner Scout Ybardaloza [sic]
St., Quezon City, represented herein by its President Marcial
Vargas and its construction foreman Renato Agarao, where they may be served with summons and other
court processes.”[10]
The petition was accompanied with an
application for a temporary restraining order (TRO) and a writ of preliminary
injunction.[11] Thus,
the Office of the Clerk of Court forthwith issued summons and notice of raffle on
10 September 2004.[12]
Upon service of the processes on the aforementioned address, they were returned
unserved on the ground that respondent enterprise was
unknown thereat.[13]
The petition was subsequently raffled
to the sala of Judge Jacob, before which petitioners’
application for a temporary restraining order was heard on 15 September 2004.[14] On the same day, when Agarao
was also present in court, Judge Jacob issued a TRO directing respondent enterprise
to desist from cutting, damaging or transferring the trees found along Panay Avenue.[15]
On 23 September 2004, the Mangoba Tan Agus Law Offices
filed a special appearance on behalf of respondent enterprise and moved for the
dismissal of the petition as well as the quashal of
the temporary restraining order on the ground of lack of jurisdiction over respondent
enterprise. The motion also assailed the raffle of the case for having been
conducted in violation of Section 4, Rule 58 of the Rules of Court; the
issuance of the TRO without requiring the posting of a bond; the failure to implead the Government of Quezon City despite its being the
real party-in-interest; and petitioners’ application for the injunctive writ which
was allegedly grossly defective in form and substance.[16]
The motion to dismiss the petition and
to quash the TRO was heard on 24 September 2004.[17]
Before the hearing, a court interpreter showed to respondent enterprise’s
counsel a copy of the summons and of the notice of raffle in which appear a
signature at the bottom of each copy, apparently indicating the receipt of the
summons.[18] On the mistaken
belief that the summons was received by respondent enterprise, at the hearing
of the motion, its counsel withdrew two of the grounds stated in the motion, to
wit, lack of jurisdiction and irregularity in the raffle of the case.[19]
At the hearing of petitioners’
application for a writ of preliminary injunction on 1 October 2004, the counsel
for respondent enterprise manifested that he was adopting the arguments in the
motion to quash the TRO.[20]
On 6 October 2004, the RTC issued an Order granting petitioners’ application
for a writ of preliminary injunction.[21]
On 7 October 2004, counsel for respondent
enterprise filed a manifestation with urgent omnibus motion to nullify the
proceedings and to cite petitioners and the process server in contempt of court.[22] He
argued that respondent enterprise failed to receive the summons, alleging that
it was herein petitioner Jose Martinez who signed as recipient thereof as well
as of the notice of raffle that was served on 10 September 2004.[23]
On 18 October 2004, the writ of
preliminary injunction was issued. Subsequently, petitioners filed a motion for
ocular inspection and another motion praying that respondent enterprise
be ordered to
restore the structures damaged by its
clearing operations.[24]
On 8 November 2004, the RTC issued
the assailed Order,[25]
nullifying the proceedings thus far conducted in the case.[26]
Petitioners sought reconsideration, but the motion was denied in an Order dated
20 December 2004.[27]
Thus, petitioners filed a petition
for certiorari before the Court of Appeals assailing the 8 November 2004 Order
issued by Judge Jacob.[28] This
time, aside from Judge Jacob and the enterprise “M.R. Vargas Construction” itself,
the petition also named Marcial R. Vargas and Renato Agarao, the enterprise’s
owner and foreman, respectively, as individual respondents. The separate
addresses of said respondents were also indicated in the initial part of the
petition.
It was argued in the petition that
Judge Jacob committed grave abuse of direction in nullifying the proceedings on
the ground of lack of jurisdiction in view of Agarao’s
presence at the hearing on petitioners’ application for TRO, in failing to act on
petitioners’ pending motions and in directing instead the issuance of new
summons on respondent enterprise.[29]
On
Hence, the instant petition
attributes the following errors to the Court of Appeals:
I.
THE COURT OF APPEALS ERRED IN RULING THAT THE REGIONAL
TRIAL COURT DID NOT OBTAIN JURISDICTION OVER THE RESPONDENTS, DEPSITE THE
RECEIPT OF COURT PROCESSES AND VOLUNTARY APPEARANCE BEFORE THE COURTS.
II.
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
WITHDRAWAL BY PRIVATE RESPONDENTS OF THE GROUND OF ABSENCE OF JURISDICTION OVER
ITS PERSON CONSTITUTED A WAIVER OF SUCH OBJECTION[31]
The instant petition¾which similarly
impleads the enterprise, M.R. Vargas Construction, Marcial R. Vargas and Renato Agarao as respondents¾raises two issues, namely: (1)
whether the trial court acquired jurisdiction over respondent enterprise and (2)
whether the defense of lack of jurisdiction had been waived.
Jurisdiction over the defendant is
acquired either upon a valid service of summons or the defendant’s voluntary
appearance in court. When the defendant does not voluntarily submit to the
court’s jurisdiction or when there is no valid service of summons, any judgment
of the court, which has no jurisdiction over the person of the defendant is null and void. In an action strictly in personam, personal service on the defendant is the
preferred mode of service, that is, by handing a copy of the summons to the
defendant in person.[32]
Citing the jurisdictional
implications of the failure of service of summons, the Court of Appeals
concluded that no grave abuse of discretion was committed by Judge Jacob in
nullifying the proceedings thus far conducted in the case based on the finding
that the summons had not been served on respondent enterprise and that Agarao, despite being present at the 15 September 2004 hearing,
was not authorized to represent respondent enterprise in said hearing.
Petitioners take exception. They
argue that the trial court acquired jurisdiction over respondent enterprise, an
entity without juridical personality, through the appearance of its foreman, Agarao, at the 15 September 2004 hearing on the TRO application.
Petitioners theorize that the voluntary appearance of Agarao
in said hearing was equivalent to service of summons binding upon respondent enterprise,
following by analogy, Section 8, Rule 14[33]
which allows the service of summons on any of the defendants associated to an
entity without juridical personality. Furthermore, they contend that the
receipt by a certain Rona Adol of the court processes
was binding upon respondent enterprise because the latter did not deny the
authority of Adol to receive communications on its behalf.
Petitioners’ argument is untenable.
At the outset, it is worthy to note
that both the Court of Appeals and the trial court found that summons was not
served on respondent enterprise. The Officer’s Return stated essentially that the
server failed to serve the summons on respondent enterprise because it could
not be found at the address alleged in the petition. This factual finding,
especially when affirmed by the appellate court, is conclusive upon this Court
and should not be disturbed because this Court is not a trier
of facts.
A sole proprietorship does not
possess a juridical personality separate and distinct from the personality of
the owner of the enterprise. The law does not vest a separate legal personality
on the sole proprietorship or empower it to file or defend an action in court.[34] Only
natural or juridical persons or entities authorized by law may be parties to a
civil action and every action must be prosecuted and defended in the name of
the real parties-in-interest.[35]
The records show that respondent
enterprise, M.R. Vargas Construction Co., is a sole proprietorship and,
therefore, an entity without juridical personality. Clearly, the real
party-in-interest is Marcial R. Vargas who is the
owner of the enterprise. Thus, the petition for injunction should have impleaded him as the party respondent either simply by
mention of his name or by denominating him as doing business under the name and
style of “M.R. Vargas Construction Co.” It
was erroneous to refer to him, as the petition did in both its caption and
body, as representing the enterprise. Petitioners
apparently realized this procedural lapse when in the petition for certiorari
filed before the Court of Appeals and in the instant petition, M.R. Vargas
Construction, Marcial R. Vargas and Renato Agaro were separately
named as individual respondents.
Since respondent enterprise is only a
sole proprietorship, an entity without juridical personality, the suit for
injunction may be instituted only against its owner, Marcial
Vargas. Accordingly summons should have been served on Vargas himself,
following Rule 14, Sections 6[36]
and 7[37]
of the Rules of Court on personal service and substituted service. In the
instant case, no service of summons, whether personal or substituted, was effected on Vargas. It is well-established that summons upon
a respondent or a defendant must be served by handing a copy thereof to him in
person or, if he refuses to receive it, by tendering it to him. Personal
service of summons most effectively ensures that the notice desired under the
constitutional requirement of due process is accomplished. If however efforts
to find him personally would make prompt service impossible, service may be
completed by substituted service, i.e.,
by leaving copies of the summons at his dwelling house or residence with some
person of suitable age and discretion then residing therein or by leaving the
copies at his office or regular place of business with some competent person in
charge thereof.[38]
The modes of service of summons
should be strictly followed in order that the court may acquire jurisdiction
over the respondents, and failure to strictly comply with the requirements of
the rules regarding the order of its publication is a fatal defect in the
service of summons. It cannot be overemphasized that the statutory requirements
on service of summons, whether personally, by substituted service or by
publication, must be followed strictly, faithfully and fully, and any mode of
service other than that prescribed by the statute is considered ineffective.[39]
Agarao was not a party respondent in the
injunction case before the trial court. Certainly, he is not a real party-in-interest
against whom the injunction suit may be brought, absent any showing that he is
also an owner or he acts as an agent of respondent enterprise. Agarao is only a foreman, bereft of any authority to defend
the suit on behalf of respondent enterprise. As earlier mentioned, the suit against
an entity without juridical personality like respondent enterprise may be
instituted only by or against its owner. Impleading Agarao as a party-respondent in the suit for injunction would
have no legal consequence. In any event, the petition for injunction described Agarao only as a representative of M.R. Vargas Construction
Co., which is a mere inconsequentiality considering that only Vargas, as its
sole owner, is authorized by the Rules of Court to defend the suit on behalf of
the enterprise.
Despite Agarao’s
not being a party-respondent, petitioners nevertheless confuse his presence or
attendance at the hearing on the application for TRO with the notion of voluntary
appearance, which interpretation has a legal nuance as far as jurisdiction is
concerned. While it is true that an appearance in whatever form, without
explicitly objecting to the jurisdiction of the court over the person, is a
submission to the jurisdiction of the court over the person, the appearance must
constitute a positive act on the part of the litigant manifesting an intention
to submit to the court’s jurisdiction.[40]
Thus, in the instances where the Court upheld the jurisdiction of the trial
court over the person of the defendant, the parties showed the intention to participate
or be bound by the proceedings through the filing of a motion, a plea or an answer.[41]
Neither is the service of the notice of
hearing on the application for a TRO on a certain Rona Adol
binding on respondent enterprise. The records show that Rona Adol received the notice of hearing on behalf of an entity
named JCB. More importantly, for purposes of acquiring jurisdiction over the
person of the defendant, the Rules require the service of summons and not of
any other court processes.
Petitioners also contend that respondent
enterprise waived the defense of lack of jurisdiction when its counsel actively
demanded positive action on the omnibus motion. The argument is implausible.
It should be noted that when the
defendant’s appearance is made precisely to object to the jurisdiction of the
court over his person, it cannot be considered as appearance in court.[42] Such
was the purpose of the omnibus motion, as counsel for respondent enterprise precisely
manifested therein that he erroneously believed that Vargas himself had received
the summons when in fact it was petitioner Martinez who signed as recipient of
the summons. Noteworthy is the fact that when the counsel first appeared in
court his appearance was “special” in character and was only for the purpose of
questioning the court’s jurisdiction over Vargas, considering that the latter
never received the summons. However, the counsel was shown a copy of the
summons where a signature appears at the bottom which led him to believe that
the summons was actually received by Vargas when in fact it was petitioner
Martinez himself who affixed his signature as recipient thereof. When the counsel
discovered his mistake, he lost no time pleading that the proceedings be
nullified and that petitioners and the process server be cited for contempt of
court. Both the trial and appellate courts concluded that the improvident
withdrawal of the defense of lack of jurisdiction was an innocuous error,
proceeding on the undeniable fact that the summons was not properly served on Vargas.
Thus, the Court of Appeals did not commit a reversible error when it affirmed
the trial court’s nullification of the proceedings for lack of jurisdiction.
WHEREFORE, the instant petition for
certiorari is DENIED. The Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 89001 are AFFIRMED in toto.
Costs against petitioners.
The temporary restraining order
issued in this case is DISSOLVED.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
(On official leave)
LEONARDO
A. QUISUMB
Associate Justice
Chairperson
CONCHITA CARPIO MORALES PRESBITERO J. VELASCO, JR.
Associate Justice
Associate Justice
Acting Chairperson
ARTURO D. BRION
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
CONCHITA CARPIO MORALES
Associate Justice
Acting Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Acting Chairperson’s Attestation, it is
hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1]Rollo, pp. 8-19; dated
[33]SEC. 8. Service upon entity without juridical personality. ¾When persons associated in an entity without juridical personality are sued under the name by which they are generally or commonly known, service may be effected upon all the defendants by serving upon any one of them, or upon the person in charge of the office or place of business maintained in such name. But such service shall not bind individually any person whose connection with the entity has, upon due notice, been severed before the action was brought.
[36]SEC. 6. Service in person on defendant.–¾Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.
[37]SEC. 7. Substituted service.–¾If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving copies at defendant’s office or regular place of business with some competent person in charge thereof.
[41]See Domingo
v. Reed, G.R. No. 157701, 9 December 2005, 477 SCRA 227; Herrera-Felix
v. Court of Appeals, id.; Villareal v.
CA, 356 Phil. 826 (1998).