Tyson’s Super Concrete v. Dela Cruz
REITERATIONFacts
The Antecedents: Romana Dela Cruz leased several parcels of land to Tyson’s Super Concrete, Inc. (Tyson's) for a period of twenty years, commencing January 1, 1993. The lease agreement stipulated graduated rental payments over the entire term. Subsequently, due to internal disputes among its stockholders, a Management Committee was created by the Securities and Exchange Commission (SEC) to oversee Tyson's operations and protect the interests of its stockholders and creditors. Later, Dela Cruz filed an ejectment case against Tyson's for alleged non-payment of rentals, leading to a default judgment by the Metropolitan Trial Court (MeTC). Procedural History: Tyson's challenged the MeTC's judgment, arguing that it had not been validly served with summons. The MeTC denied Tyson's motion to vacate the judgment, finding that summons was properly served on Francis Chua, who was both the corporate secretary and a member of the SEC-created Management Committee. Tyson's then filed a petition for certiorari and prohibition with the Regional Trial Court (RTC), which initially issued a temporary restraining order but ultimately dismissed the petition. The Court of Appeals (CA) initially reversed the MeTC's decision, deeming the service of summons insufficient. However, upon reconsideration, the CA amended its decision, reinstating the MeTC's orders and upholding the validity of the summons service. The Petition: Tyson's filed a petition for review on certiorari with the Supreme Court, assailing the CA's Amended Decision. The petitioners argued that the CA erred in ruling that summons was validly served and that extrinsic fraud was committed, which deprived the corporation of its day in court and due process. They contended that summons should have been served on the Management Committee, specifically its chairman, and not on Francis Chua. The Supreme Court, however, affirmed the CA's decision, holding that service of summons on Francis Chua, as corporate secretary and a member of the Management Committee, was valid under the applicable rules, and that no extrinsic fraud was proven.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in failing to determine the presence of extrinsic fraud that deprived the petitioner corporation of its day in court or due process. Whether the Court of Appeals committed grave abuse of discretion in ruling that there was valid service of summons upon the petitioner corporation.
Ruling
The Supreme Court denied the petition and affirmed the Amended Decision of the Court of Appeals, holding that summons was validly served upon Tyson's Super Concrete, Inc., thus the MeTC acquired jurisdiction over the corporation.
Ratio Decidendi
On the issue of extrinsic fraud: The Court held that the determination of whether Francis Chua employed extrinsic fraud to deprive petitioners of their day in court involves factual issues, which are beyond the province of the Supreme Court in an appeal by certiorari. The Court reiterated that factual matters are generally for the trial courts to resolve, and their findings are binding unless grounded on speculation or there is grave abuse of discretion. Even assuming the issue was properly raised, the Court found no merit in the claim of extrinsic fraud, as Francis Chua was not an adverse or prevailing party in the ejectment case, and the RTC had already found no evidence of conspiracy between him and the respondent. The Court emphasized that extrinsic fraud must be committed by the prevailing party to prevent the aggrieved party from presenting their case. On the validity of service of summons: The Court affirmed the CA's ruling that summons was validly served upon Francis Chua. At the time of service, Francis Chua was the corporate secretary of Tyson's and a member of the Management Committee appointed by the SEC. Under Section 13, Rule 14 of the Revised Rules of Court, service of summons on a private domestic corporation may be made on its president, manager, secretary, cashier, agent, or any of its directors. As corporate secretary, Francis Chua was a proper person to receive summons. Furthermore, as a member of the Management Committee, he was considered an agent of the corporation and a responsible officer contemplated by the Rules. The Court rejected the argument that only the Chairman of the Management Committee could receive summons, stating that members of the committee are also considered responsible officers. The Court also noted that any internal rule of the SEC or the Committee regarding service of summons could not alter the Rules of Court promulgated by the Supreme Court.
Main Doctrine
Service of summons upon a corporate secretary, who is also a member of a management committee appointed by the SEC, is valid and confers jurisdiction upon the court, as such member is considered a responsible officer of the corporation under the Rules of Court.