Ellice Agro-Industrial Corp v. Young

Facts:

Respondents and (EAIC), represented by its alleged corporate secretary and attorney-in-fact, Domingo, entered into a Contract to Sell wherein EAIC agreed to sell to the respondents a 30,000 square-meter portion of a parcel of land located in Lutucan, Sariaya, Quezon. Pursuant to the Contract to Sell, respondents paid EAIC, through Domingo, the partial payment for the acquisition of the subject property. Despite such payment, EAIC failed to deliver to respondents the owners duplicate certificate of title of the subject property and the corresponding deed of sale as required under the Contract to Sell. Respondents had their Affidavit of Adverse Claim and then filed a Complaint for specific performance against EAIC and Domingo before the RTC. Consequently, respondents caused the annotation of a Notice of Lis Pendens. The initial attempt to serve the summons and a copy of the complaint and its annexes on EAIC, through Domingo, on Rizal Street, Sariaya, Quezon, was unsuccessful as EAIC could not be located in the said address. Another attempt was made to serve the alias summons on EAIC at 996 Maligaya Street, Singalong, Manila, the residence of Domingo. The second attempt to serve the alias summons to Domingo was, this time, successful. EAIC, represented by Domingo, filed its Answer with Counterclaim.

Respondent Wee sent Gala, EAICs Chairman and President, a letter, seeking a conference with the latter relating to the execution of an absolute deed of sale pursuant to the Contract to Sell entered into between EAIC and respondents. In response, the Robles Ricafrente Aguirre Sanvicente & Cacho Law Firm, introducing itself to be the counsel of EAIC, sent Wee a letter informing him of Domingos lack of authority to represent EAIC.

On the scheduled pre-trial conference, neither Domingo nor her counsel appeared. As a result of EAICs failure to appear in the pre-trial conference, respondents were allowed to present their evidence ex parte, pursuant to Section 5, Rule 18 of the Rules of Court.

Following the presentation of evidence ex parte, the RTC rendered its Decision ordering EAIC to deliver the owners duplicate copy of the TCT and to execute a final deed of sale in favor of respondents. No motion for reconsideration or notice of appeal was filed by EAIC, hence, the said RTC decision became final and executory.

Roughly seven months after the finality of the RTC Decision, EAIC, represented by Gala, filed its Petition for Relief from Judgment under Rule 38 of the Rules of Court of the RTC Decision before the same court. The petition for relief from judgment was premised on the alleged fraud committed by Domingo. RTC denied the petition for relief from judgment for being clearly filed out of time under Section 3, Rule 38 of the Rules of Court.

EAIC, represented by Gala, initiated the Petition for Annulment of Judgment under Rule 47 of the Rules of Court of the RTC Decision before the CA.

CA dismissed the petition for annulment of judgment.

EAICs MR was denied by the CA in its Resolution, hence, this petition for review.

Issues:

The CA erred in ruling that there was valid service of summons upon petitioner corporation.

The CA erred in ruling that Domingo was a Director of petitioner corporation at the time summons was served upon her and in denying petitioners motion for reconsideration.

Held:

The Court finds merit in the petition.

It is a settled rule that jurisdiction over the defendant is acquired either upon a valid service of summons or the defendants voluntary appearance in court. When the defendant does not voluntarily submit to the courts 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. The purpose of summons is not only to acquire jurisdiction over the person of the defendant, but also to give notice to the defendant that an action has been commenced against it and to afford it an opportunity to be heard on the claim made against it. The requirements of the rule on summons must be strictly followed, otherwise, the trial court will not acquire jurisdiction over the defendant.

Section 13, Rule 14 of the 1964 Rules of Civil Procedure, the applicable rule on service of summons upon a private domestic corporation then, provides:

Sec. 13. Service upon private domestic corporation or partnership. If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors.

Based on the above-quoted provision, for service of summons upon a private domestic corporation, to be effective and valid, should be made on the persons enumerated in the rule. Conversely, service of summons on anyone other than the president, manager, secretary, cashier, agent, or director, is not valid. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him.

In the present case, the pertinent document showing EAICs composition at the time the summons was served upon it, through Domingo, will readily reveal that she was not its president, manager, secretary, cashier, agent or director. Due to this fact, the Court is of the view that her honest belief that she was the authorized corporate secretary was clearly mistaken because she was evidently not the corporate secretary she claimed to be. In view of Domingos lack of authority to properly represent EAIC, the Court is constrained to rule that there was no valid service of summons binding on it.