United Coconut Planters Bank v. Ang-Sy
REITERATIONFacts
1. The Antecedents: United Coconut Planters Bank (UCPB) filed a complaint for sum of money and damages against Nation Granary, Inc. (NGI), Nation Petroleum Gas, Inc. (NPGI), and several individuals, including spouses Alison Ang-Sy and Guillermo Sy. UCPB alleged that it granted credit accommodations to NGI and NPGI, secured by surety agreements from the spouses Sy and others. Despite demands, the amounts owed, totaling P824,390,158.21 plus interest and charges, remained unpaid. 2. Procedural History: UCPB filed its complaint with the Regional Trial Court (RTC) of Makati City, Branch 146, which issued a writ of preliminary attachment. Summons were served on the defendants. The defendants filed a Motion to Dismiss, arguing that the RTC had not acquired jurisdiction over their persons due to improper service of summons, both for the corporations and the individual defendants. The RTC denied the Motion to Dismiss, prompting the defendants to file a Petition for Certiorari and Prohibition with the Court of Appeals (CA), alleging grave abuse of discretion. The CA granted the petition, reversing the RTC's order and declaring all proceedings void due to defective service of summons. 3. The Petition: UCPB filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. UCPB contends that the CA erred in finding that the RTC did not acquire jurisdiction over the defendant corporations, even though they did not directly assail the RTC's order, and in finding that the RTC did not acquire jurisdiction over the individual defendants. The core issue presented to the Supreme Court is whether the RTC had acquired jurisdiction to hear UCPB's complaint.
Issue(s)
Whether the Court of Appeals committed an error of law when it found that the RTC did not acquire jurisdiction over the defendant corporations, NGI and NPGI, even when such corporations failed to assail the RTC's Order. Whether the Court of Appeals committed an error of law in finding that the RTC did not acquire jurisdiction over the persons of the Sps. Sy, et al., and whether the service of summons was valid; also, whether the Sps. Sy, et al. voluntarily submitted to the RTC's jurisdiction. Whether the RTC acquired jurisdiction to hear petitioner UCPB's Complaint, considering the defective service of summons and the absence of a valid voluntary appearance.
Ruling
The appeal is denied. The Decision and Resolution of the Court of Appeals are affirmed. The RTC did not acquire jurisdiction over the persons of the defendants due to defective service of summons, and there was no voluntary appearance that cured such defect.
Ratio Decidendi
On the issue of jurisdiction over the defendant corporations and UCPB's argument regarding failure to assail the RTC's Order: The Court affirmed the CA's finding that the RTC did not acquire jurisdiction over the defendant corporations, NGI and NPGI. Section 11, Rule 14 of the Rules of Court provides an exclusive enumeration of officers who can receive summons on behalf of a corporation. Service of summons on a mere OIC property supply custodian is invalid. The Court reiterated that service of summons to someone other than these enumerated officers is not valid. Therefore, the RTC failed to acquire jurisdiction over the persons of the defendant corporations. The Court rejected UCPB's argument that the CA erred because the defendant corporations failed to assail the RTC's Order, stressing that issues of jurisdiction are not subject to the whims of the parties and courts may dismiss an action for lack of jurisdiction even if the issue was not raised by the parties. The lack of jurisdiction is apparent and explicit in this case. On the issue of jurisdiction over the persons of Sps. Sy, et al., the validity of service of summons, and voluntary appearance: The Court found the service of summons to be defective. The Rules of Court require personal service of summons. Substituted service is only allowed when, for justifiable causes, the defendant cannot be served within a reasonable time. The Sheriff's Report did not show several attempts to effect personal service on different dates, nor did it clearly state that the person who received the summons was of suitable age and discretion residing with the defendants or was competent to receive it and understood the duty to deliver it. The Court emphasized that the absence of valid service of summons means the court acquires no jurisdiction over the defendant's person, rendering proceedings and judgments void. The Court held that there was no voluntary submission to the jurisdiction of the RTC on the part of respondents Sps. Sy, et al. A party who makes a special appearance to challenge the court's jurisdiction over their person cannot be considered to have submitted to its authority. In this case, although respondents Sps. Sy, et al. prayed for an affirmative relief, they did so in conjunction with an explicit and unequivocal objection to the RTC's jurisdiction based on improper service of summons. This special appearance, therefore, did not constitute a voluntary submission to the court's jurisdiction. Overall Conclusion: Based on the defective service of summons and the absence of a valid voluntary appearance, the RTC failed to acquire jurisdiction over the persons of the defendants. Consequently, all proceedings before the RTC and its subsequent order were void. The CA correctly reversed and set aside the RTC's order.
Main Doctrine
Defective service of summons, without valid voluntary appearance, deprives the court of jurisdiction over the person, rendering all subsequent proceedings and judgments void. A special appearance to challenge jurisdiction, even if coupled with a request for affirmative relief like suspension of proceedings, does not constitute voluntary submission to the court's authority.