Ejercito v. Vargas Construction
REITERATIONFacts
1. The Antecedents: The underlying dispute arose from construction and clearing operations conducted by M.R. Vargas Construction on Panay Avenue in Quezon City. The City Government of Quezon City had contracted with the construction firm for the improvement of the avenue, which involved the removal of structures and trees. Petitioners Bienvenido Ejercito and Jose Martinez, along with another individual, objected to these operations, claiming they lacked the necessary permits and prior consultation. Their attempts to address their concerns with various government authorities proved unsuccessful. 2. Procedural History: Following the unsuccessful administrative appeals, the petitioners filed a petition for injunction against M.R. Vargas Construction, its owner Marcial R. Vargas, and its foreman Renato Agarao before the Regional Trial Court (RTC) of Quezon City. They also sought a temporary restraining order (TRO). The RTC initially issued a TRO. However, M.R. Vargas Construction, through its counsel, filed a special appearance and moved to dismiss the petition, questioning the court's jurisdiction due to improper service of summons. Despite an initial belief that summons had been properly served, leading to a withdrawal of the jurisdiction defense, the RTC eventually nullified its proceedings due to the lack of valid service of summons on the respondent. The petitioners then filed a petition for certiorari with the Court of Appeals (CA) challenging the RTC's order. The CA dismissed the petition for certiorari, affirming the RTC's decision. The petitioners' motion for reconsideration was subsequently denied. 3. The Petition: This case is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure, filed by Bienvenido Ejercito and Jose Martinez. They assail the decision and resolution of the Court of Appeals, which dismissed their petition for certiorari. The petitioners argue that the Court of Appeals erred in affirming the RTC's ruling that it lacked jurisdiction over the respondents. Specifically, they contend that the trial court did obtain jurisdiction due to the receipt of court processes and the voluntary appearance of respondents before the courts. They also argue that the defense of lack of jurisdiction was waived. The core of their argument is that the presence of the foreman, Renato Agarao, at a hearing constituted a voluntary appearance binding on the respondent enterprise, and that the subsequent withdrawal of the jurisdiction defense was an error.
Issue(s)
Whether the trial court acquired jurisdiction over respondent M.R. Vargas Construction. Whether the defense of lack of jurisdiction was waived by respondent's counsel. Whether the Court of Appeals committed grave abuse of discretion in affirming the RTC's nullification of proceedings.
Ruling
The petition is denied. The Decision and Resolution of the Court of Appeals are affirmed in toto. The temporary restraining order issued is dissolved.
Ratio Decidendi
On the issue of jurisdiction over respondent M.R. Vargas Construction: The Court held that jurisdiction over a defendant is acquired either by valid service of summons or by voluntary appearance. In this case, the Officer's Return indicated that summons was not served on M.R. Vargas Construction because it could not be found at the address provided. The Court emphasized that a sole proprietorship, like M.R. Vargas Construction, does not possess a juridical personality separate from its owner, Marcial R. Vargas. Therefore, the suit should have been instituted against Marcial Vargas himself, and summons should have been served on him personally or through substituted service. The presence of Agarao, a foreman, at a hearing did not constitute voluntary appearance binding on the enterprise, as he was not a real party-in-interest and lacked authority to represent the sole proprietorship in court. Furthermore, the service of a notice of hearing on Rona Adol was not binding as she received it on behalf of a different entity (JCB), and more importantly, the Rules require service of summons, not other court processes, for jurisdiction. On the issue of waiver of the defense of lack of jurisdiction: The Court found the argument implausible. It clarified that when a defendant's appearance is made precisely to object to the court's jurisdiction, it cannot be considered a voluntary submission. The counsel for M.R. Vargas Construction initially made a special appearance to question jurisdiction. Although the counsel later withdrew this ground based on a mistaken belief that summons was served, this was an improvident error. The Court noted that upon discovering the mistake (that petitioner Jose Martinez had signed for the summons), the counsel promptly moved to nullify the proceedings. Both the trial and appellate courts recognized that the summons was not properly served on Vargas, rendering the withdrawal of the defense of lack of jurisdiction an innocuous error. Therefore, the Court of Appeals did not commit a reversible error in affirming the trial court's nullification of the proceedings due to lack of jurisdiction. On the issue of grave abuse of discretion: The Court found no grave abuse of discretion on the part of Judge Jacob. The RTC's nullification of proceedings was based on the finding that summons was not properly served on the respondent enterprise, which is a sole proprietorship. This finding is crucial for acquiring jurisdiction over the person of the defendant. The Court reiterated that the modes of service of summons must be strictly followed, and failure to do so is a fatal defect. The appellate court's affirmation of this finding and the subsequent nullification of proceedings were in accordance with established legal principles, thus not constituting grave abuse of discretion.
Main Doctrine
A sole proprietorship, lacking juridical personality, must be sued through its owner. Service of summons must be strictly complied with for the court to acquire jurisdiction. An appearance made solely to question jurisdiction does not constitute voluntary submission.