Villarosa & Partner Co. v. Imperial Development Corporation
NEW DOCTRINEFacts
The Antecedents: Petitioner E.B. Villarosa & Partner Co., Ltd. and private respondent Imperial Development Corporation (IDC) entered into a Deed of Sale with Development Agreement for the development of certain parcels of land into a housing subdivision. The agreement stipulated that any litigation arising therefrom shall be filed in the proper courts of Makati. Procedural History: IDC filed a Complaint for Breach of Contract and Damages against E.B. Villarosa & Partner Co., Ltd. before the RTC of Makati, alleging failure to develop the land. Summons was served upon Engr. Wendell Sabulbero, the Branch Manager of petitioner, at its branch office in Cagayan de Oro City. Petitioner filed a Special Appearance with Motion to Dismiss, arguing improper service of summons and lack of jurisdiction over its person, as Sabulbero was not among the persons authorized under Section 11, Rule 14 of the 1997 Rules of Civil Procedure to receive summons for a corporation. IDC filed a Motion to Declare Defendant in Default. The RTC denied both motions, finding substantial compliance and acquisition of jurisdiction. Petitioner's Motion for Reconsideration was also denied. The Petition: Petitioner filed a petition for certiorari and prohibition, seeking to annul the RTC orders, arguing grave abuse of discretion amounting to lack or excess of jurisdiction due to improper service of summons.
Issue(s)
Whether the trial court acquired jurisdiction over the person of the petitioner corporation through the service of summons upon its Branch Manager. Whether the service of summons upon the Branch Manager of petitioner at its branch office constitutes substantial compliance with Section 11, Rule 14 of the 1997 Rules of Civil Procedure.
Ruling
The petition is granted. The assailed Orders of the RTC are annulled and set aside. The RTC is declared without jurisdiction to take cognizance of Civil Case No. 98-824, and all its orders and issuances in connection therewith are annulled and set aside.
Ratio Decidendi
On the issue of jurisdiction acquired through service of summons upon the Branch Manager: The Court ruled that the trial court did not acquire jurisdiction over the person of the petitioner. The 1997 Rules of Civil Procedure, specifically Section 11 of Rule 14, provides a restricted enumeration of persons upon whom service of summons may be made for a corporation: the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel. This provision revised the old rule, which included "manager," "secretary," "cashier," "agent," or "any of its directors." The Court emphasized that the deletion of "agent" and the change from "manager" to "general manager" significantly narrowed the scope of authorized recipients for summons. The service in this case was made upon the Branch Manager at a branch office, which is not among the authorized persons or locations under the current rule. The Court cited the principle of expressio unios est exclusio alterius to support the restrictive interpretation of the enumeration. The purpose of the rule is to ensure that the corporation receives prompt and proper notice, and service upon a branch manager at a branch office does not guarantee this. The Court reiterated that strict compliance with the mode of service is necessary to confer jurisdiction, and the liberal construction rule cannot be invoked to substitute for plain legal requirements. On whether service upon the Branch Manager constitutes substantial compliance: The Court held that the service upon the Branch Manager at the branch office was improper and did not constitute substantial compliance. The Court clarified that the 1997 Rules of Civil Procedure significantly restricted the persons authorized to receive summons for a corporation compared to the old rules. The specific enumeration in Section 11, Rule 14, must be strictly observed. The Court noted that earlier cases upholding service on various corporate officers or agents were based on the old rule, which allowed service on an "agent." Under the new rule, "agent" is no longer included, and "manager" has been replaced by "general manager." The Court quoted retired Justice Florenz Regalado, who explained that the revision was intended to address ambiguities and prevent absurd results, such as those seen in prior cases where service on an attorney was upheld. The Court also cited Delta Motor Sales Corporation vs. Mangosing, which stressed the necessity of strict compliance and that the liberal construction rule cannot be used to circumvent plain legal requirements. Therefore, the service on the Branch Manager did not effectively "bring home" notice of the suit to the corporation in the manner contemplated by the rules.
Main Doctrine
Service of summons upon the branch manager of a corporation at its branch office, instead of upon the general manager at its principal office, is improper under Section 11, Rule 14 of the 1997 Rules of Civil Procedure, and consequently, the trial court does not acquire jurisdiction over the person of the corporation.