Guiguinto Credit Cooperative v. Torres
REITERATIONFacts
The Antecedents: Respondents, members of petitioner Guiguinto Credit Cooperative, Inc. (GUCCI), failed to pay their loans on due dates. Petitioner filed a complaint for collection of sum of money and damages before the Regional Trial Court (RTC) of Bulacan. Procedural History: Summons was served on respondents through their secretary, Benita S. Pagtalunan. The RTC declared respondents in default upon petitioner's motion, as they failed to file an Answer. After ex-parte presentation of evidence, the RTC rendered judgment ordering respondents to pay their respective loan amounts, attorney's fees, and costs. Petitioner moved for and was granted a writ of execution. A sheriff levied respondents' house and lot. The Court of Appeals (CA) issued a temporary restraining order, and subsequently annulled the RTC's decision, ruling that the RTC did not acquire jurisdiction over the persons of respondents due to invalid substituted service of summons, thus violating their right to due process. The CA denied petitioner's motion for reconsideration. The Petition: Petitioner seeks to annul the CA's decision, arguing that the RTC acquired jurisdiction due to respondents' alleged active participation and that the CA erred in annulling the judgment when other legal remedies were available, barring respondents by estoppel and laches. Petitioner also claims the CA erred in dismissing the complaint without evidence presented before it.
Issue(s)
Whether summons was validly served on the respondents. Whether the judgment of the trial court was correctly annulled by the Court of Appeals.
Ruling
The petition is denied. The Decision of the Court of Appeals annulling the RTC's decision for having been rendered without jurisdiction is affirmed.
Ratio Decidendi
On whether summons was validly served on the respondents: The Court affirmed the CA's ruling that summons was not validly served. Jurisdiction over the person of a defendant is acquired through service of summons or voluntary appearance. For natural persons, personal service is the primary mode. Substituted service, as provided in Section 8 of Rule 14 of the Rules of Court, may only be resorted to if personal service cannot be made within a reasonable time, and this impossibility must be shown by stating earnest efforts made to find the defendant personally and that such efforts failed. The Return of Summons in this case merely stated that summons was received by the respondents' secretary, Ms. Benita C. Pagtalunan, without any explanation why personal service was not effected or why substituted service was resorted to. There was no showing of earnest efforts to locate the respondents personally, nor was it established that Pagtalunan was a person of suitable age and discretion residing with the respondents, or that she had a relationship of trust and confidence with them that would ensure notification. The process server's haste and failure to comply with the strict requirements of substituted service rendered the service invalid. The Court reiterated that statutory requirements for substituted service must be strictly construed and faithfully followed, as any deviation renders the service ineffective and deprives the defendant of due process. On whether the judgment of the trial court was correctly annulled by the Court of Appeals: The Court held that the annulment of the RTC's judgment by the CA was correct. Since the substituted service of summons was invalid, the RTC never acquired jurisdiction over the persons of the respondents. Consequently, the order of default, the judgment by default, and the subsequent writ of execution and auction sale were all null and void. The Court emphasized that a judgment rendered without jurisdiction over the person of the defendant is void ab initio and violates the constitutional right to due process. The remedy of annulment of judgment under Rule 47 is proper when a judgment is void for lack of jurisdiction, which includes lack of jurisdiction over the person of the defending party. The respondents were deprived of their right to be heard because they were not properly notified of the action filed against them.
Main Doctrine
Substituted service of summons must strictly comply with statutory requirements, including a showing of impossibility of personal service and that the service was made upon a person of suitable age and discretion residing with the defendant, to acquire jurisdiction over the person of the defendant. Failure to comply renders the service invalid and the subsequent judgment void.