Spouses Mason v. Columbus Philippines Bus Corporation
REITERATIONFacts
The Antecedents: Petitioners Spouses Efren and Digna Mason owned two parcels of land in Pasay City. On March 30, 1993, they entered into a lease contract with respondent Columbus Philippines Bus Corporation (Columbus). A stipulation in the contract required Columbus to construct a building worth P10,000,000.00 by the end of the third year of the lease. Procedural History: Because Columbus failed to comply with the construction stipulation, petitioners filed a complaint for rescission of contract with damages on November 13, 1998, before the Regional Trial Court (RTC) of Pasay City. Summons was served upon Columbus through Ayreen Rejalde, who was described as a secretary in the receiving copy of the summons and a secretary to the corporate president in the sheriff's return, and allegedly a mere filing clerk. Columbus failed to file an answer, prompting petitioners to file a motion to declare it in default, which was granted. Petitioners presented evidence ex-parte, and the RTC rendered a decision on April 22, 1999, rescinding the contract and ordering Columbus to pay various damages and vacate the premises. The decision became final on May 12, 1999. Columbus filed a motion to lift the order of default, which was denied by the RTC on May 26, 1999, which also granted the motion for execution. Columbus' subsequent motions for reconsideration and to lift the writ of execution were also denied. Columbus appealed to the Court of Appeals (CA). The CA set aside the RTC decision, including the order of default and writ of execution, and ordered the RTC to require Columbus to file an answer and conduct further proceedings. The CA held that summons was not properly served on Columbus as it was served through Ayreen Rejalde, who is not among the persons enumerated in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The Petition: Petitioners filed a petition for review with the Supreme Court, averring that the CA erred in holding that there was no valid service of summons and in not holding that substantial compliance was sufficient, and that the CA erred in not holding that jurisdiction was acquired over Columbus.
Issue(s)
Whether there was valid service of summons on private respondent for the trial court to acquire jurisdiction. Whether private respondent’s motion to lift order of default was in order.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of valid service of summons: The Supreme Court affirmed the ruling of the Court of Appeals that there was no valid service of summons on private respondent Columbus Philippines Bus Corporation. The Court reiterated its ruling in E.B. Villarosa & Partner Co., Ltd. v. Judge Benito that Section 11, Rule 14 of the 1997 Rules of Civil Procedure, which enumerates the persons authorized to receive summons for a domestic private juridical entity, is restrictive, limited, and exclusive. The rule now states "general manager" instead of "manager"; "corporate secretary" instead of "secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of its directors" was conspicuously deleted. The Court emphasized that the enumeration under the new rule is not merely a statement of the general rule with the substantial compliance rule as an exception, but rather a strict requirement. The Court clarified that the case of Millenium Industrial Commercial Corporation v. Tan is not applicable as it was decided under the old Rules of Court, whereas the instant case falls under the new rules. The Court stressed that the service of summons is a vital and indispensable ingredient of due process, and depriving private respondent of its right to present its defense would occur if compliance with the rules on service of summons were disregarded. Therefore, service upon Ayreen Rejalde, a mere filing clerk, was invalid, and the trial court did not acquire jurisdiction over private respondent. On the issue of the motion to lift order of default: Since the Court ruled that the service of summons was invalid, it necessarily follows that the Regional Trial Court of Pasay City did not acquire jurisdiction over private respondent. Consequently, all subsequent proceedings held before it, including the order of default, are null and void. As such, the second issue regarding the motion to lift the order of default became moot and academic.
Main Doctrine
Service of summons upon a domestic private juridical entity must strictly comply with Section 11, Rule 14 of the 1997 Rules of Civil Procedure, which enumerates the specific persons authorized to receive summons. The substantial compliance rule is no longer applicable under the said provision, as the enumeration is considered restricted, limited, and exclusive.