Galura v. Math-Agro Corporation
REITERATIONFacts
1. The Antecedents: Spouses Dante and Ma. Teresa L. Galura purchased broiler starters and finishers worth P426,000 from Math-Agro Corporation (MAC), paying P72,500 and leaving an unpaid balance of P353,500. MAC engaged Atty. Ronolfo S. Pasamba to collect the outstanding debt. Atty. Pasamba sent a demand letter to the Spouses Galura, giving them five days to pay the balance and accrued interest, warning of legal action if they failed to do so. 2. Procedural History: MAC filed a collection case against the Spouses Galura before the Regional Trial Court (RTC), Branch 22, Malolos, Bulacan. Summons was attempted to be served at various addresses, with the process server eventually leaving a copy with Victoria Lapuz, the sister-in-law of Dante Galura, at their supposed residence. The Spouses Galura failed to file an answer, leading the RTC to declare them in default and allow MAC to present evidence ex parte. The RTC rendered a decision in favor of MAC, ordering the Spouses Galura to pay the unpaid balance, attorney's fees, and costs. Subsequently, the RTC issued a writ of execution. The Spouses Galura received a copy of the writ of execution and later filed a petition for annulment of judgment and final order with the Court of Appeals (CA), arguing lack of jurisdiction due to invalid substituted service of summons and extrinsic fraud. The CA dismissed their petition, finding the substituted service valid and the fraud claim unbelievable, and also noting that ordinary remedies had not been exhausted. The Spouses Galura moved for reconsideration, which was denied. 3. The Petition: The Spouses Galura filed a petition for review on certiorari under Rule 45 of the Rules of Court, challenging the CA's resolutions. They argued that the CA erred in ruling that there was a valid substituted service of summons, that their allegation of extrinsic fraud was unbelievable, and that they should have first availed of ordinary remedies. The Supreme Court agreed with the Spouses Galura, finding that the substituted service of summons was invalid because the process server failed to show the impossibility of personal service and to state in the return of service that the person served was of suitable age and discretion and resided with the defendants. The Court also noted that when a petition for annulment is grounded on lack of jurisdiction, the petitioner need not allege that ordinary remedies are no longer available.
Issue(s)
Whether the Court of Appeals erred in ruling that there was a valid substituted service of summons. Whether the Court of Appeals erred in ruling that the allegation of extrinsic fraud was unbelievable. Whether the Court of Appeals erred in ruling that the Spouses Galura should have first availed of the ordinary remedies of new trial, appeal, or petition for relief.
Ruling
The Supreme Court GRANTED the petition, SET ASIDE the resolutions of the Court of Appeals, MADE PERMANENT the temporary restraining order, and SET ASIDE the decision and order of the Regional Trial Court. The Court found that the RTC did not acquire jurisdiction over the persons of the Spouses Galura due to invalid substituted service of summons.
Ratio Decidendi
On the validity of substituted service of summons: The Court agreed with the Spouses Galura that the RTC failed to acquire jurisdiction over their persons because the substituted service of summons was invalid. Section 7 of Rule 14 of the Rules of Court requires that substituted service may only be effected if, for justifiable causes, the defendant cannot be served within a reasonable time. The requisites for valid substituted service include the impossibility of personal service within a reasonable time, efforts exerted to locate the defendant, the person to whom the summons is served being of suitable age and discretion and residing with the defendant, and these facts being stated in the return of service. In this case, the process server's return of service did not show the impossibility of personal service within a reasonable time. Despite being informed of the Spouses Galura's correct address, the process server proceeded to another address and then served the summons on the sister-in-law without adequately explaining why personal service was impossible or why the sister-in-law was a person of suitable age and discretion residing with the defendants. The Court reiterated that statutory requirements for substituted service must be strictly, faithfully, and fully observed, as it is in derogation of the common law. The constitutional requirement of due process necessitates service that can reasonably be expected to give notice to the party. Since the substituted service was invalid, the RTC did not acquire jurisdiction over the persons of the Spouses Galura, rendering the RTC's decision and order void. On the allegation of extrinsic fraud: The Court agreed with the Spouses Galura that they were not required to allege that ordinary remedies were no longer available when the petition for annulment of judgment was grounded on lack of jurisdiction over the person. The Court cited Ancheta v. Ancheta, holding that a judgment rendered without jurisdiction is null and void and may be assailed at any time, directly or collaterally, unless barred by laches. Therefore, the Spouses Galura were not precluded from filing a petition for annulment of judgment on the ground of lack of jurisdiction, even if they had not exhausted ordinary remedies, especially since the time for such remedies had already prescribed. On the availability of ordinary remedies: The Court agreed with the Spouses Galura that the ordinary remedies of new trial, appeal, or petition for relief had already prescribed, given that the RTC decision was rendered on June 27, 2001, and the petition for annulment was filed on January 6, 2005. Therefore, the petition for annulment of judgment was the appropriate remedy available to them. The Court emphasized that when a petition for annulment is grounded on lack of jurisdiction, the petitioner need not allege that ordinary remedies are no longer available through no fault of their own, as a judgment rendered without jurisdiction is void and can be assailed anytime.
Main Doctrine
Substituted service of summons is in derogation of the usual method of service and must be strictly, faithfully, and fully observed. The impossibility of personal service within a reasonable time must be shown in the return of service, detailing the efforts exerted to find the defendant and the fact that such efforts failed. Failure to comply with these requirements renders the substituted service ineffective and deprives the court of jurisdiction over the person of the defendant.