Ponio v. Intermediate Appellate Court
REITERATIONFacts
1. The Antecedents: Eliodoro Ponio and Wecons Construction Services, Inc. were sued in the Regional Trial Court for the payment of a sum of money amounting to P27,611.65, plus damages and litigation expenses. The defendants failed to file their answer within the reglementary period, leading to their being declared in default, the presentation of ex-parte evidence, and a judgment rendered against them. 2. Procedural History: Following the default judgment, the petitioners filed a Motion to Lift Order of Default and to Set Aside Decision with Prayer to Admit Defendants' Answer. This motion was denied by the trial court. The petitioners appealed this denial to the Intermediate Appellate Court (IAC), which sustained the trial court's decision. This sustained denial by the IAC is the basis for the current petition before the Supreme Court. 3. The Petition: The petitioners seek review of the IAC's decision, arguing that the trial court never acquired jurisdiction over them due to invalid service of summons. They contend that both the substituted service upon Eliodoro Ponio and the service upon Wecons Construction Services, Inc. were not valid. While the IAC agreed that the services were not valid, it nonetheless upheld the denial of the motion to lift default, citing the lack of an accompanying affidavit of merit. The petitioners argue that an affidavit of merit is not necessary when the motion is grounded on the fundamental issue of lack of jurisdiction.
Issue(s)
Whether the trial court acquired jurisdiction over the petitioners due to the alleged invalid service of summons. Whether the trial court committed a grave abuse of discretion in denying the motion to lift the order of default despite the invalid service of summons.
Ruling
The petition is granted. The decision of the Intermediate Appellate Court is set aside, as well as the order of default issued by the trial court. The trial court is ordered to admit the answer filed by the petitioners. Costs are against the private respondent.
Ratio Decidendi
On the issue of jurisdiction and invalid service of summons: The Court held that the Intermediate Appellate Court correctly found that the substituted service upon petitioner Eliodoro Ponio was not valid, and the service upon petitioner Wecons Construction Services was likewise not valid. The IAC's reasoning, which was agreed upon by the Supreme Court, stated that service of summons upon a defendant corporation can only be effected upon the officers enumerated under Section 13, Rule 14 of the Rules of Court, and this enumeration is exclusive. Furthermore, substituted service is only permissible when personal service cannot be effected within a reasonable time. The Court reiterated the principle that courts acquire jurisdiction over the person of a party defendant by virtue of the service of summons in the manner required by law. Where there is no service of summons or a voluntary general appearance, the court acquires no jurisdiction to pronounce a judgment. On the issue of grave abuse of discretion in denying the motion to lift the order of default: The Court found error in the Intermediate Appellate Court's holding that the trial court did not commit a grave abuse of discretion in denying the motion to lift the order of default because it was not accompanied by an affidavit of merit. The Supreme Court clarified that where a motion to lift an order of default is grounded on the very root of the proceedings, specifically the court's lack of jurisdiction over the defendants, an affidavit of merit is not necessary nor essential. This is because if the court has not acquired jurisdiction, any subsequent proceedings, including the order of default and the judgment rendered, are void. The Court cited its ruling in Salmon and Pacific Commercial Co. vs. Tan Cueco and Delta Motor Sales Corp. vs. Mangosing, emphasizing that a court's lack of jurisdiction renders its orders and judgments void and subject to being set aside.
Main Doctrine
An affidavit of merit is not necessary when a motion to lift an order of default is grounded on the lack of jurisdiction over the defendants due to invalid service of summons.