Reicon Realty Builders v. Diamond Dragon Realty
REITERATIONFacts
The Antecedents: Reicon Realty Builders Corporation (Reicon) owned a parcel of land and building. Reicon entered into a Contract of Lease with Diamond Dragon Realty and Management, Inc. (Diamond) for 20 years. Diamond sublet portions to Jollibee and Maybunga. Diamond failed to pay rentals starting June 2006, and its checks were dishonored. Reicon sent a demand letter and terminated the contract, subsequently entering into separate lease contracts with Jollibee and Maybunga. Procedural History: Diamond filed a complaint against Reicon, Jollibee, Maybunga, and others for breach of contract with damages, alleging unlawful interference and seeking to declare the termination of the lease and subsequent contracts invalid. Reicon filed a motion to dismiss on grounds of lack of jurisdiction over its person due to improper service of summons, lack of legal capacity to sue by Diamond (whose registration was allegedly revoked), and lack of cause of action. Jollibee also filed a motion to dismiss on similar grounds. The Regional Trial Court (RTC) denied the motions, ruling that improper service of summons is not a ground for dismissal and that Diamond's legal existence could only be questioned via quo warranto. Reicon elevated the matter to the Court of Appeals (CA) via a petition for certiorari, alleging grave abuse of discretion by the RTC. The CA dismissed Reicon's petition for failure to acquire jurisdiction over Diamond's person and for non-compliance with service requirements. The Petition: Reicon filed a petition for review on certiorari before the Supreme Court, assailing the CA's dismissal of its certiorari petition.
Issue(s)
Whether the Court of Appeals erred in dismissing Reicon's petition for certiorari on procedural grounds, specifically concerning the service of the petition and jurisdiction over the person of Diamond. Whether Diamond Dragon Realty and Management, Inc. had the legal capacity to sue.
Ruling
The petition is meritorious. The Supreme Court reversed and set aside the Resolutions of the Court of Appeals and directed the CA to reinstate Reicon's petition for certiorari. The Court held that the CA erred in dismissing the petition on procedural grounds. The Court also noted that jurisdiction over Diamond's person was acquired through its voluntary appearance.
Ratio Decidendi
On the dismissal of the certiorari petition by the CA and jurisdiction over Diamond's person: The Supreme Court held that the CA erred in dismissing Reicon's certiorari petition. Sections 3 and 4 of Rule 46 of the Rules of Court govern original actions filed before the CA. Section 3 requires the petition to contain the full names and actual addresses of all parties and proof of service thereof on the respondent. Section 4 states that jurisdiction over the person of the respondent is acquired by service of the court's order or resolution indicating its initial action on the petition or by voluntary submission to such jurisdiction. The Court found that Reicon's petition contained the necessary registry numbers and affidavit of service, implying compliance with service requirements. The address used for Diamond was its last known address on record, and there was no evidence of a change of address. The Court clarified that in a certiorari proceeding, which is an original and independent action, service of the petition is made upon the respondent itself, not necessarily upon its counsel, as the rule on service upon counsel under Section 2, Rule 13 of the Rules of Court does not apply at this preliminary stage. Therefore, the CA's dismissal based on non-compliance with service rules and service upon counsel was erroneous. The Supreme Court further observed that the CA had acquired jurisdiction over Diamond's person through its voluntary appearance via a Manifestation filed by its counsel. Diamond, through its counsel, filed a manifestation under a special appearance, seeking the dismissal of Reicon's petition. The Court reiterated that seeking affirmative relief, even under a special appearance, constitutes voluntary submission to the court's jurisdiction. Diamond's argument regarding the alleged improper service of Reicon's petition did not constitute a proper objection to the CA's jurisdiction over its person, as it did not challenge the CA's service of its resolution indicating initial action on the petition. Therefore, Diamond's act of seeking affirmative relief without a proper jurisdictional objection meant it had submitted to the CA's jurisdiction. The Court directed Reicon to submit proof of actual service and ordered Diamond to furnish its current address and confirm its representation by counsel, after which all pleadings should be served on its counsel of record. On whether Diamond Dragon Realty and Management, Inc. had the legal capacity to sue: [This information was not provided in the original text. Please provide the ratio decidendi for this issue.]
Main Doctrine
The Court of Appeals erred in dismissing Reicon's certiorari petition for non-compliance with the rules on service of petition and service upon counsel. Jurisdiction over the person of the respondent can be acquired either by proper service of the court's order or resolution indicating initial action on the petition, or by voluntary submission to such jurisdiction. A special appearance to seek affirmative relief, such as the dismissal of a petition, constitutes voluntary submission to the court's jurisdiction, especially when the grounds for the special appearance do not properly challenge the court's jurisdiction over the person.