Abayon v. Bank of the Philippine Islands
REITERATIONFacts
The Antecedents: The underlying dispute originated from a complaint for a sum of money filed by the Bank of the Philippine Islands (BPI) against Spouses Eloisa Clarito Abayon and Rommil Regenio Abayon. BPI alleged that the spouses incurred an outstanding principal obligation of P285,260.56, plus finance and late payment charges of P121,850.97, through the use of a credit card issued to them. Despite repeated demands, the spouses failed to settle the outstanding balance, prompting BPI to file the collection case. Procedural History: The Metropolitan Trial Court (MeTC) of Makati City initially dismissed BPI's complaint for lack of jurisdiction, finding that the claimed amount, including charges, exceeded the court's threshold. BPI appealed to the Regional Trial Court (RTC) of Makati City. The RTC, while affirming the MeTC's lack of jurisdiction, took cognizance of the case under Section 8, Rule 40 of the Rules of Court, subject to payment of fees. Subsequently, the RTC dismissed the case for non-payment of fees, but later reversed this dismissal upon BPI's motion for reconsideration, ordering compliance with fee payments. The RTC then denied the spouses' motion to dismiss, which was filed via special appearance, and directed them to file an answer. The spouses filed a petition for certiorari with the Court of Appeals (CA), assailing the RTC's orders for allegedly violating their right to due process and for improper acquisition of jurisdiction. The CA dismissed the petition, upholding the RTC's rulings. The Petition: The Spouses Abayon filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the CA's Decision and Resolution. They argue that the CA erred in upholding the RTC's Orders dated August 4, 2017, and February 1, 2018, which they contend violated their right to due process by being issued despite an unresolved motion for reconsideration. They also contest the CA's conclusion that the RTC acquired jurisdiction over them, citing alleged improper service of summons. The petition seeks to set aside the CA's decision and resolution and prays for the issuance of a writ of preliminary injunction and/or temporary restraining order to enjoin the RTC proceedings.
Issue(s)
Whether the Court of Appeals erred in upholding the Orders dated August 4, 2017 and February 1, 2018 of the Regional Trial Court. Whether the Court of Appeals erred in concluding that the Regional Trial Court acquired jurisdiction over petitioners.
Ruling
The Petition is partly meritorious. The Decision dated April 29, 2019 and the Resolution dated September 13, 2019 of the Court of Appeals in CA-G.R. SP No. 155382 are SET ASIDE. The application for the issuance of a writ of preliminary injunction and/or temporary restraining order is DENIED.
Ratio Decidendi
On the first issue (RTC Orders dated August 4, 2017 and February 1, 2018): The Supreme Court ruled that the CA committed reversible error in upholding the RTC's Orders dated August 4, 2017 and February 1, 2018, as these violated petitioners' right to due process. The RTC failed to act on petitioners' motion for reconsideration filed on June 6, 2017, before issuing the subsequent orders denying their motion to dismiss and reiterating its jurisdiction. The CA's reliance on the doctrine that an unacted motion is deemed denied, as established in Orosa v. Court of Appeals, was misplaced in this context. A motion for reconsideration is intended to allow the court to rectify its errors, and arbitrarily ignoring it impairs the movant's right to be heard. The Court emphasized that procedural technicalities should not defeat substantive rights, and the spirit of liberality in Eversley Childs Sanitarium v. Sps. Barbarona should apply to prevent petitioners from losing their day in court due to the RTC's disregard of their motion. Consequently, the assailed RTC Orders were annulled and set aside. On the second issue (RTC's acquisition of jurisdiction over petitioners): The Supreme Court affirmed the CA's conclusion that the RTC properly acquired jurisdiction over the petitioners. While acknowledging that the process server's attempts at personal service of summons were wanting, the Court noted that petitioners never denied receiving the summons via Mangaya, who received it per the instruction of petitioner Eloisa Abayon to the building receptionist. This instruction estopped petitioners from claiming improper service. Furthermore, even assuming the summons were invalid, the RTC acquired jurisdiction through petitioners' voluntary submission. Petitioners actively participated in the proceedings by filing numerous pleadings and seeking affirmative relief without unequivocal objections to the court's jurisdiction, particularly after their initial ad cautelam motion. Their subsequent pleadings, including an opposition and a motion for reconsideration, lacked such reservations, demonstrating their active engagement and notice of the proceedings, which is equivalent to a valid service of summons.
Main Doctrine
The Court held that the RTC's Orders dated August 4, 2017 and February 1, 2018 violated petitioners' right to due process for failing to act on their motion for reconsideration before issuing subsequent orders. However, the RTC acquired jurisdiction over the petitioners through their voluntary submission to its authority, despite alleged defects in the service of summons.