Republic of the
Supreme Court
FIRST DIVISION
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ATIKO TRANS,
INC. and |
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G.R. No. 167545 |
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CHENG LIE
NAVIGATION |
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CO., LTD., |
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Present: |
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Petitioners, |
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LEONARDO-DE
CASTRO, |
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- versus - |
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BERSAMIN, |
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VILLARAMA, JR.,
JJ. |
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PRUDENTIAL
GUARANTEE |
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AND ASSURANCE,
INC., |
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Promulgated: |
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Respondent. |
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August 17,
2011 |
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D E C I S I O N
Where service of summons upon the
defendant principal is coursed thru its co-defendant agent, and the latter
happens to be a domestic corporation, the rules on service of summons upon a
domestic private juridical entity[1]
must be strictly complied with.
Otherwise, the court cannot be said to have acquired jurisdiction over
the person of both defendants. And
insofar as the principal is concerned, such jurisdictional flaw cannot be cured
by the agents subsequent voluntary appearance.
This Petition for Review on Certiorari assails the December 10, 2004
Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 82547
which affirmed the April 8, 2003 Decision[3] of the Regional Trial Court (RTC), Branch 150, Makati
City. Said Decision of the RTC affirmed
the August 6, 2002 Decision[4] of the Metropolitan Trial Court (MeTC), Branch 63,
Makati City, which disposed as follows:
WHEREFORE,
judgment is rendered declaring defendants Cheng Lie Navigation Co., Ltd. and
Atiko Trans, Inc. solidarily liable to pay plaintiff Prudential Guarantee &
Assurance, Inc. the following amounts:
1.
P205,220.97
as actual damages with interest of 1% per month from 14 December 1999 until
full payment;
2.
P10,000.00 as
Attorneys fees; and
3.
Costs of suit.
SO ORDERED.[5]
Likewise assailed is the CAs
Resolution[6]
dated March 16, 2005 which denied the Motion for Reconsideration of the said
December 10, 2004 Decision.
Factual
Antecedents
On December 11, 1998, 40 coils of
electrolytic tinplates were loaded on board M/S Katjana in
On December 14, 1998, M/S Katjana arrived in the
Oriental then filed its claim against the policy. Satisfied that Orientals claim was
compensable, Prudential paid Oriental P205,220.97 representing the
amount of losses it suffered due to the damaged cargo.
Proceedings
before the Metropolitan Trial Court
On December 14, 1999, Prudential filed with the MeTC of Makati City a
Complaint[8] for sum of money against Cheng Lie and Atiko Trans, Inc.
(Atiko). In addition to the above
undisputed facts, Prudential alleged that:
1.
Plaintiff (Prudential)
is a domestic insurance corporation duly organized and existing under the laws
of the
2.
Defendant Cheng Lie
Navigation Co. Ltd., is [a] foreign shipping company doing business in the
Philippines [thru] its duly authorized shipagent defendant Atiko Trans Inc. which is a
domestic corporation duly established and created under the laws of the
Philippines with office address at 7th Floor, Victoria Bldg., United
Nation[s] Ave., Ermita, Manila, where both defendants may be served with
summons and other court processes;
3.
At all times
material to the cause of action of this complaint, plaintiff was and still is
engaged in, among others, marine insurance business; Whereas Defendant Cheng
Lie Navigation Co. Ltd. was and still is engaged in, among others, shipping,
transportation and freight/cargo forwarding business, and as such, owned,
operated and/or chartered the ocean going vessel M/S Katjana as common
carrier to and from any Philippine [port] in international trade [thru] its
duly authorized shipagent defendant Atiko Trans Inc. (Both defendants are
hereinafter referred to as the CARRIER);
x x x x
9. Plaintiff, as cargo-insurer
and upon finding that the consignees insurance claim was in order and
compensable, paid the latters claim in the amount of P205,220.97 under
and by virtue of the aforesaid insurance policy, thereby subrogating herein
plaintiff to all the rights and causes of action appertaining to the consignee
against the defendants;[9]
On March 20, 2000, Prudential filed a Motion to Declare Defendant in
Default,[10] alleging among others that on March 1, 2000 a copy of
the summons was served upon petitioners thru cashier Cristina Figueroa and that
despite receipt thereof petitioners failed to file any responsive
pleading. Acting on the motion, the MeTC
issued an Order[11] declaring Cheng Lie and Atiko in default and allowing
Prudential to present its evidence ex-parte.
On August 6, 2002, the MeTC rendered its judgment by default. Atiko then filed a Notice of Appeal[12] dated November 4, 2002.
Proceedings
before the Regional Trial Court and the Court of Appeals
In its Memorandum of Appeal,[13] Atiko argued that Prudential failed to prove the material
allegations of the complaint. Atiko
asserted that Prudential failed to prove by preponderance of evidence that it
is a domestic corporation with legal personality to file an action; that Cheng
Lie is a private foreign juridical entity operating its shipping business in
the Philippines thru Atiko as its shipagent; that Cheng Lie is a common
carrier, which owns and operates M/S Katjana; that Prudential was subrogated to
the rights of Oriental; and, that Atiko can be held solidarily liable with
Cheng Lie.
Although assisted by the same counsel, Cheng Lie filed its own
Memorandum of Appeal[14] maintaining that the MeTC never acquired jurisdiction
over its person.
On April 8, 2003, the RTC rendered its Decision dismissing the appeal
and affirming the Decision of the MeTC.
Atiko and Cheng Lie challenged the RTC Decision before the CA via a Petition for Review[15] under Rule 42 of the Rules of Court but the appellate
court affirmed the RTCs Decision.
Hence, this petition.
Issues
In their Memorandum,[16] petitioners raised the following issues:
1.
WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS AFFIRMED BY MAKATI
RTC AND THE COURT OF APPEALS IS NULL AND VOID FOR FAILURE TO ACQUIRE
JURISDICTION OVER THE PERSONS OF THE PETITIONERS-DEFENDANTS CONSIDERING THAT
THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS REQUIRED BY RULE 14 OF THE
RULES OF COURT.
2.
WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO PROVE THE MATERIAL
ALLEGATIONS IN THE COMPLAINT EVEN IN DEFAULT JUDGMENT OR WHETHER OR NOT IN
DEFAULT JUDGMENT, ALL ALLEGATIONS IN THE COMPLAINT ARE DEEMED CONTROVERTED,
HENCE, MUST BE PROVED BY COMPETENT EVIDENCE.
2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE ITS LEGAL
PERSONALITY TO SUE EVEN IN DEFAULT JUDGMENT.
2.2. WHETHER X X X RESPONDENT-PLAINTIFF
IS OBLIGED TO PROVE THAT PETITIONER-DEFENDANT ATIKO IS THE SHIPAGENT OF
PETITIONER-DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT.
2.3. WHETHER X X X THE
TESTIMONIES OF THE WITNESSES AND THE DOCUMENTARY EXHIBITS CAN BE CONSIDERED FOR
PURPOSES OTHER THAN THE PURPOSE FOR WHICH THEY WERE OFFERED.
2.4. WHETHER X X X A
MOTION TO DECLARE DEFENDANT IN DEFAULT ADDRESSED AND SENT TO ONLY ONE OF THE
DEFENDANTS WOULD BIND THE OTHER DEFENDANT TO WHOM THE MOTION WAS NOT ADDRESSED
AND NOT SENT.[17]
Our Ruling
The petition is partly meritorious.
We shall first tackle the factual matters involved in this case, then
proceed with the jurisdictional issues raised.
Petitioners raised
factual matters which are not the proper subject of this appeal.
Petitioners contend that the lower courts grievously erred in granting
the complaint because, even if they were declared in default, the respondent
still has the burden of proving the material allegations in the complaint by
preponderance of evidence. Petitioners
further argue that respondent miserably failed to discharge this burden because
it failed to present sufficient proof that it is a domestic corporation. Hence, respondent could not possibly maintain
the present action because only natural or juridical persons or entities
authorized by law can be parties to a civil action. Petitioners also claim that respondent failed
to present competent proof that Cheng Lie is a foreign shipping company doing
business in the
Respondent, for its part, assails the propriety of the remedy taken by
the petitioners. It posits that petitioners
advanced factual matters which are not the proper subject of a petition for
review on certiorari. Besides, the lower courts consistently held
that the allegations in respondents complaint are supported by sufficient
evidence.
We agree with respondent.
A cursory reading of the issues raised readily reveals that they involve
factual matters which are not within the province of this Court to look into.
Well-settled is the rule that in petitions for review on certiorari under Rule 45, only questions of law can be raised. While there are recognized exceptions to this
rule,[18] none is present
in this case. [A]s a matter of x x x procedure,
[this] Court defers and accords finality to the factual findings of trial
courts, [especially] when such findings were [affirmed by the RTC and the CA.
These] factual determination[s], as a matter of long and sound appellate
practice, deserve great weight and shall not be disturbed on appeal x x x. [I]t is not the function of the Court to
analyze and weigh all over again the evidence or premises supportive of the
factual holding of the lower courts.[19]
MeTC properly acquired
jurisdiction over the person of Atiko.
Petitioners also argue that the MeTC did not acquire jurisdiction over
the person of Atiko as the summons was received by its cashier, Cristina
Figueroa. They maintain that under
Section 11, Rule 14 of the Rules of Court, when the defendant is a domestic
corporation like Atiko, summons may be served only upon its president, general
manager, corporate secretary, treasurer or in-house counsel.
We are not persuaded. True, when
the defendant is a domestic corporation, service of summons may be made only
upon the persons enumerated in Section 11, Rule 14 of the Rules of Court.[20] However,
jurisdiction over the person of the defendant can be acquired not only by
proper service of summons but also by defendants voluntary appearance without
expressly objecting to the courts jurisdiction, as embodied in Section 20,
Rule 14 of the Rules of Court, viz:
SEC. 20. Voluntary
appearance. The defendants voluntary appearance in the action shall be
equivalent to service of summons. The
inclusion in a motion to dismiss of other grounds aside from lack of
jurisdiction over the person of the defendant shall not be deemed a voluntary
appearance.
In the case at bench, when Atiko filed its Notice of Appeal,[21] Memorandum of Appeal,[22] Motion for Reconsideration[23] of the April 8, 2003 Decision of the RTC, and Petition
for Review,[24] it never questioned the jurisdiction of the MeTC over
its person. The filing of these
pleadings seeking affirmative relief amounted to voluntary appearance and,
hence, rendered the alleged lack of jurisdiction moot. In Palma
v. Galvez,[25] this Court reiterated the oft-repeated rule that the filing of motions
seeking affirmative relief, such as, to admit answer, for additional time to
file answer, for reconsideration of a default judgment, and to lift order of
default with motion for reconsideration, are considered voluntary submission to
the jurisdiction of the court.
Moreover, petitioners contention is a mere afterthought. It was only in their Memorandum[26] filed with this Court where they claimed, for the first
time, that Atiko was not properly served with summons. In La
Naval Drug Corporation v. Court of Appeals,[27] it was held that the issue of jurisdiction over the
person of the defendant must be seasonably raised. Failing to do so, a party who invoked the
jurisdiction of a court to secure an affirmative relief cannot be allowed to
disavow such jurisdiction after unsuccessfully trying to obtain such relief.[28]
It may not be amiss to state too that in our February 13, 2006 Resolution,[29] we reminded the parties that they are not allowed to
interject new issues in their memorandum.
MeTC did not acquire
jurisdiction over the person of Cheng Lie.
Petitioners likewise challenge the validity of the service of summons
upon Cheng Lie, thru Atiko. They claim
that when the defendant is a foreign private juridical entity which has
transacted business in the
On this score, we find for the petitioners. Before it was amended by A.M. No. 11-3-6-SC,[30] Section 12 of Rule 14 of the Rules of Court reads:
SEC. 12. Service upon foreign private juridical
entity. When the defendant is a
foreign private juridical entity which has transacted business in the
Philippines, service may be made on its resident agent designated in accordance
with law for that purpose, or, if there be no such agent, on the government
official designated by law to that effect, or on any of its officers or agents
within the Philippines.
Elucidating on the above provision of the Rules of Court, this Court declared
in Pioneer International, Ltd. v. Guadiz,
Jr.[31] that when the defendant is a foreign juridical entity, service of summons may be made upon:
1.
Its resident agent designated in accordance with law for that purpose;
2.
The government official designated by law to receive summons if the
corporation does not have a resident agent; or,
3.
Any of the corporations officers or agents within the
In the case at bench, no summons was served upon Cheng Lie in any manner
prescribed above. It should be recalled
that Atiko was not properly served with summons as the person who received it
on behalf of Atiko, cashier Cristina Figueroa, is not one of the corporate
officers enumerated in Section 11 of Rule 14 of the Rules of Court. The MeTC acquired jurisdiction over the
person of Atiko not thru valid service of summons but by the latters voluntary
appearance. Thus, there being no proper
service of summons upon Atiko to speak of, it follows that the MeTC never
acquired jurisdiction over the person of Cheng Lie. To rule otherwise would create an absurd
situation where service of summons is valid upon the purported principal but
not on the latters co-defendant cum putative
agent despite the fact that service was coursed thru said agent. Indeed, in order for the court to acquire
jurisdiction over the person of a defendant foreign private juridical entity
under Section 12, Rule 14 of the Rules of Court, there must be prior valid service
of summons upon the agent of such defendant.
Also, the records of this case is bereft of any showing that cashier
Cristina Figueroa is a government official designated by law to receive summons
on behalf of Cheng Lie or that she is an officer or agent of Cheng Lie within
the Philippines. Hence, her receipt of
summons bears no significance insofar as Cheng Lie is concerned. At this point, we emphasize that the
requirements of the rule on summons must be strictly followed,[32] lest we ride roughshod on defendants right to due
process.[33]
With regard to Cheng Lies filing of numerous pleadings, the same cannot
be considered as voluntary appearance.
Unlike Atiko, Cheng Lie never sought affirmative relief other than the
dismissal of the complaint on the ground of lack of jurisdiction over its
person. From the very beginning, it has
consistently questioned the validity of the service of summons and the
jurisdiction of the MeTC over its person.
It does not escape our attention though that Cheng Lies pleadings do
not indicate that the same were filed by way of special appearance. But these, to our mind, are mere inaccuracies
in the title of the pleadings. What is
important are the allegations contained therein which consistently resisted the
jurisdiction of the trial court. Thus,
Cheng Lie cannot be considered to have submitted itself to the jurisdiction of
the courts.[34]
In fine, since the MeTC never acquired jurisdiction over the person of
Cheng Lie, its decision insofar as Cheng Lie is concerned is void.[35]
Cheng Lie was
improperly declared in default.
Applying the above disquisition, the MeTC likewise erred in declaring
Cheng Lie in default. Settled is the rule that a defendant cannot be declared
in default unless such declaration is preceded by a valid service of summons.[36]
WHEREFORE, the instant petition is PARTIALLY
GRANTED. The assailed December 10, 2004 Decision of
the Court of Appeals in CA-G.R. SP No. 82547 is AFFIRMED with the MODIFICATION that the judgment insofar as Cheng
Lie Navigation Co., Ltd. is concerned is declared VOID for failure to acquire jurisdiction over its person as there
was improper service of summons.
SO
ORDERED.
MARIANO C.
Associate
Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
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TERESITA J. LEONARDO-DE CASTRO Associate
Justice |
LUCAS P. BERSAMIN Associate
Justice |
MARTIN
S. VILLARAMA, JR.
Associate
Justice
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, 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 Courts Division.
RENATO C.
CORONA
Chief
Justice
[1] Rules
of Court, Rule 14, Section 11. It reads:
Section 11. Service upon domestic private juridical entity. When the
defendant is a corporation, partnership or association organized under the laws
of the Philippines with a juridical personality, service may be made on the
president, managing partner, general manager, corporate secretary, treasurer,
or in-house counsel.
[2] CA rollo, pp. 160-181; penned by Associate
Justice Monina Arevalo-Zenarosa and concurred in by Associate Justices Remedios
A. Salazar-Fernando and Danilo B. Pine.
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16] Rollo,
pp. 204-225.
[17]
[18] [S]uch as when:
(1) the conclusion is grounded on speculations, surmises or conjectures; (2)
the inference is manifestly mistaken, absurd or impossible; (3) there is grave
abuse of discretion; (4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting; (6) there is no citation of specific
evidence on which the factual findings are based; (7) the findings of absence
of facts are contradicted by the presence of evidence on record; (8) the
findings of the [Court of Appeals] are contrary to those of the trial court;
(9) the [Court of Appeals] manifestly overlooked certain relevant and
undisputed facts that, if properly considered, would justify a different
conclusion; (10) the findings of the [Court of Appeals] are beyond the issues
of the case; and (11) such findings are contrary to the admissions of both
parties. (International Container Terminal Services, Inc. v. FGU Insurance Corporation,
G.R. No. 161539, June 27, 2008, 556 SCRA 194, 199.)
[19] Tapuroc
v. Loquellano Vda. de Mende, G.R. No. 152007, January 22, 2007, 512 SCRA
97, 105-106.
[20] Supra note 1.
[21] CA rollo,
p. 51.
[22]
[23]
[24]
[25] G.R. No. 165273, March 10, 2010, 615 SCRA
86, 99.
[26] Rollo,
pp. 204-225.
[27] G.R. No. 103200,
August 31, 1994, 236 SCRA 78, 91.
[28] Tijam
v. Sibonghanoy, 131 Phil. 556, 564 (1968).
[29] Rollo,
pp. 202-203.
[30] AMENDMENT OF SECTION 12, RULE 14 OF THE
RULES OF COURT ON SERVICE UPON FOREIGN PRIVATE JURIDICAL ENTITY. As amended, said provision of the Rules of
Court now reads:
SEC. 12. Service upon foreign private juridical entity. When the defendant
is a foreign private juridical entity which has transacted business in the Philippines,
service may be made on its resident agent designated in accordance with law for
that purpose, or, if there be no such agent, on the government official
designated by law to that effect, or on any of its officers or agents within
the Philippines.
If
the foreign private juridical entity is not registered in the Philippines or
has no resident agent, service may, with
leave of court, be effected out of the Philippines through any of the following
means:
a)
By personal service coursed through the appropriate court in the foreign
country with the assistance of the Department of Foreign Affairs;
b)
By publication once in a newspaper of general circulation in the country where
the defendant may be found and by serving a copy of the summons and the court
order by-registered mail at the last known address of the defendant;
c) By facsimile or any recognized
electronic means that could generate proof of service; or
d)
By such other means as the court may in its discretion direct.
[31] G.R. No. 156848, October 11, 2007, 535 SCRA
584, 601.
[32]
[33] Pascual
v. Pascual, G.R. No. 171916, December 4, 2009, 607 SCRA 288, 291.
[34] See also the similar case of Hongkong and Shanghai Banking Corporation
Limited v. Catalan, 483 Phil. 525 (2004).
[35] Pascual
v. Pascual, supra at 306.
[36] Vlason
Enterprises Corporation v. Court of Appeals, 369 Phil. 269, 307 (1999).