Tung Ho Steel v. Ting Guan Trading
REITERATIONFacts
The Antecedents: Tung Ho Steel Enterprises Corporation (Tung Ho), a foreign corporation, entered into a contract of sale with Ting Guan Trading Corporation (Ting Guan), a domestic corporation, for the delivery of heavy metal scrap iron and steel. Ting Guan failed to deliver the full quantity of the contracted goods, leading Tung Ho to initiate arbitration proceedings before the ICC International Court of Arbitration in Singapore. The ICC ruled in favor of Tung Ho, ordering Ting Guan to pay actual damages, costs of arbitration, and legal expenses. Procedural History: Tung Ho filed an action before the Regional Trial Court (RTC) of Makati to enforce the arbitral award. Ting Guan moved to dismiss, citing lack of capacity to sue, prematurity, and improper venue. The RTC denied the motion. Ting Guan moved for reconsideration, adding lack of jurisdiction over its person due to improper service of summons and violation of public policy. The RTC denied this motion as well, finding that Ting Guan had submitted to its jurisdiction. Ting Guan then filed a petition for certiorari with the Court of Appeals (CA). The CA dismissed Tung Ho's complaint for lack of jurisdiction over Ting Guan's person, holding that the service of summons was defective. Both parties moved for partial reconsideration. The CA denied Ting Guan's motion but initially did not resolve Tung Ho's. Ting Guan then filed a petition for review on certiorari with the Supreme Court (G.R. No. 176110), which was denied. Subsequently, the CA denied Tung Ho's motion for reconsideration. Tung Ho then filed the present petition for review on certiorari with the Supreme Court (G.R. No. 182153). The Petition: Tung Ho filed this petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse the Court of Appeals' decision and resolution. Tung Ho argues that the RTC acquired jurisdiction over Ting Guan, asserting that the return of service of summons is prima facie evidence of its validity and that Ting Guan's successive motions before the RTC constituted voluntary appearance. Alternatively, Tung Ho prays for the issuance of an alias summons to cure any defect in service. Ting Guan contends that the petition is barred by res judicata, that the Supreme Court already affirmed the dismissal of the complaint, and that Tung Ho raises factual issues beyond the scope of a Rule 45 petition.
Issue(s)
Whether the present petition is barred by res judicata. Whether the trial court acquired jurisdiction over the person of Ting Guan, specifically: Whether Tejero was the proper person to receive the summons. Whether Ting Guan voluntarily appeared before the trial court. On the finality of judgments and entry of judgment; and the appellate court's jurisdiction.
Ruling
The Supreme Court reversed and set aside the decision and resolution of the Court of Appeals, ordered the reinstatement of SP Proc. No. 11.-5954, and remanded the case to the court of origin for further proceedings.
Ratio Decidendi
On the issue of res judicata: The Court held that its ruling in G.R. No. 176110 did not operate as res judicata on Tung Ho's appeal. The previous disposition only addressed technical or collateral aspects of the case, not the merits of whether Tung Ho could enforce the foreign arbitral award against Ting Guan. The Court emphasized that for res judicata to apply, the prior judgment must be on the merits, unequivocally determining the parties' rights and obligations. In G.R. No. 176110, the Supreme Court only resolved procedural issues divorced from the jurisdictional question that remained pending before the CA. Therefore, without a ruling on the merits of the jurisdiction issue, res judicata could not have set in. On whether Tejero was the proper person to receive summons: The Court found no reason to disturb the lower courts' finding that Tejero was not the corporate secretary and thus not the proper person to receive summons under Section 11, Rule 14 of the Rules of Court. The Supreme Court generally does not re-examine factual findings of lower courts unless there are compelling reasons, adhering to the rule that such findings are final and binding. On whether Ting Guan voluntarily appeared before the trial court: The Court disagreed with the CA's legal conclusion, holding that Ting Guan voluntarily appeared before the RTC. This voluntary appearance is equivalent to service of summons under Rule 14, Section 20 of the Rules of Court. The Court criticized Ting Guan's procedural recourse, including the filing of successive motions to dismiss under the guise of supplemental motions or motions for reconsideration, as improper and dilatory. The Court stressed that under the omnibus motion rule, all objections should be raised in the first motion. Ting Guan's belated reliance on improper service of summons was deemed a mere afterthought. Furthermore, the failure to raise the lack of jurisdiction in the first motion to dismiss was considered fatal, constituting a waiver of the defense. The Court also noted that even if service was defective, the CA should have ordered the issuance of an alias summons instead of dismissing the case outright, citing the policy to avoid dismissal on such grounds in the interest of substantial justice. On the finality of judgments and entry of judgment; and the issue of the appellate court's jurisdiction: The Court clarified that an entry of judgment is premature and inefficacious if a timely motion for reconsideration or appeal is filed. The pendency of Tung Ho's motion for reconsideration with the CA made the entry of judgment in G.R. No. 176110 premature. The Court cited its inherent power to recall or lift an entry of final judgment when it is clear that the decision assailed has not yet become final and executory, consistent with the principle of amending and controlling its process to conform to law and justice. The Court stated that a court's jurisdiction, once attached, cannot be ousted until it finally disposes of the case. The CA was not ousted of its jurisdiction by the promulgation of G.R. No. 176110 because Tung Ho's motion for reconsideration was still pending before it. This pendency prevented the July 5, 2006 CA decision from becoming final and executory. The Court further noted that Tung Ho's timely filing of a motion for reconsideration before the CA and a petition for review on certiorari before the Supreme Court prevented the CA decision from attaining finality, thus preserving Tung Ho's right to appeal.
Main Doctrine
A party voluntarily appears before a court when it files successive motions to dismiss, even if raising lack of jurisdiction in a later motion, thereby submitting to the court's jurisdiction. Furthermore, the filing of a timely motion for reconsideration before the Court of Appeals stays the execution of its judgment, preventing premature entry of judgment in the Supreme Court.