Republic v. Perez
REITERATIONFacts
The Antecedents: Respondent Sta. Cruz Timber Company entered into an agreement to comply with the stipulations of Timber License Agreement No. 35. As a condition, the company executed a Forestry Bond for P5,000.00, guaranteed by a surety bond. Subsequently, the Bureau of Internal Revenue assessed Sta. Cruz Timber Company for unpaid forest charges amounting to P4,216.22. Upon the company's refusal to pay, the Republic of the Philippines filed a civil case to forfeit the bond. Procedural History: The Republic filed a complaint against Sta. Cruz Timber Company and its surety. Summons was allegedly served on Sta. Cruz Timber Company through its President, Alfonso L. Felix, Jr., and received by Montano Renato. Sta. Cruz Timber Company failed to file an answer, leading to an order of default. Later, Alfonso Felix, Jr., presented a Constancia stating he was no longer connected with the company and had not received the summons. The lower court, finding that Felix was not the President at the time of service and Renato was not authorized to receive summons, set aside the order of default and granted the company time to file an answer. The Republic's motion for reconsideration was denied. The Republic then filed a Petition for Certiorari and Mandamus with preliminary injunction with the Supreme Court. The Petition: The Republic petitioned this Court for a Writ of Certiorari and Mandamus, alleging that the respondent Court acted without jurisdiction or in excess thereof, or with grave abuse of discretion in setting aside the order of default and denying the motion for reconsideration. The Republic argued that the motion to set aside the default order was filed outside the reglementary period. The respondents contended that the lower court had the authority to lift the order of default upon being informed of the circumstances leading to the failure to file an answer, particularly the invalid service of summons.
Issue(s)
Whether the respondent Court acted without jurisdiction or in excess thereof, or with grave abuse of discretion, in setting aside the order of default and denying the motion for reconsideration. Whether there was a valid service of summons effected upon respondent Sta. Cruz Timber Company.
Ruling
The petition is denied for lack of merit. The orders lifting the default and denying the motion for reconsideration are affirmed.
Ratio Decidendi
On Issue 1: The Supreme Court held that the respondent Court did not act without jurisdiction, in excess thereof, or with grave abuse of discretion. The lower court had jurisdiction over the complaint for forfeiture of bond, and the orders lifting the default and denying reconsideration were issued in the exercise of such jurisdiction. The Order of Default was lifted only after the Court had found the true facts which caused the failure of the respondent Sta. Cruz Timber Company to present its Answer, primarily the invalid service of summons. This actuation by the respondent Judge was considered a proper exercise of discretion to ensure the company had its day in court. The Court further clarified that even if the conclusions reached by the respondent Judge were erroneous, not all errors of law or fact constitute grave abuse of discretion. Moreover, even if the order lifting default was irregular for not observing a three-day notice, Certiorari or Mandamus is not the proper remedy, as judicial errors or mistakes of law are proper subjects of appeal, citing Villa Rey Transit, Inc. v. Bello, et al., G.R. No. L-18957, April 23, 1963. On Issue 2: The Supreme Court affirmed that there was indeed no valid service of summons effected upon the Sta. Cruz Timber Company. The person through whom the summons was served, Alfonso L. Felix, Jr., was no longer connected with the Timber Company in the capacity of President since 1949, a fact that was known to the plaintiff even before the filing of the complaint. The rules explicitly provide in Section 13, Rule 7, that for a domestic corporation, service may be made on the president, manager, secretary, cashier, agent, or any of its directors. Atty. Felix, Jr. was not any of these at the time of service, and Montano Renato, who allegedly received the summons, did not occupy any authorized position within the corporation. Consequently, the trial court had not acquired jurisdiction over the respondent Sta. Cruz Timber Company, thus validating the lower court's decision to lift the order of default.
Main Doctrine
A court retains jurisdiction to lift an order of default even after the reglementary period has expired, provided it is shown that there was no valid service of summons, as jurisdiction over the defendant is a prerequisite for the validity of any subsequent proceedings, including the declaration of default.