Title
Spouses Laus vs. Court of Appeals
Case
G.R. No. 101256
Decision Date
Mar 8, 1993
Petitioners challenged a default judgment, claiming invalid substituted summons. SC ruled summons defective, voiding judgment due to lack of jurisdiction, remanding for proper service.

Case Digest (G.R. No. 101256)
Expanded Legal Reasoning Model

Facts:

  • Background and Parties
    • The petitioners, spouses Pepito and Loreto Laus, sought review and reversal of lower court decisions.
    • Respondents include the Hon. Court of Appeals, Hon. Salvador C. Ceguera (in his capacity as Presiding Judge of RTC Quezon City, Branch 82), Deputy Sheriff Nilo Sm. Cabang, and Consuelo P. Torres – the private respondent who filed the original complaint.
    • The underlying complaint in Civil Case No. Q-89-3327 was filed by Consuelo P. Torres against “Loredo (sic) Alfaro-Laus and John Doe” for the collection of a promissory note amounting to P66,000.00, of which only a partial payment (P11,000.00) was made.
  • Initiation of the Case and Allegations
    • The complaint alleged that petitioner Loreto Alfaro-Laus had executed a promissory note undertaking payment, and failing to pay the balance (P55,000.00) along with interest and attorney’s fees.
    • A demand letter was served, but the petitioners did not render further payment, prompting the filing of the complaint.
  • Service of Summons and Default Proceedings
    • On October 10, 1989, Deputy Sheriff Romero S. Cruz attempted to personally serve the summons at the petitioners’ residence.
      • After waiting approximately ten (10) minutes and learning that the petitioners were not present, he resorted to substituted service.
      • The summons and accompanying documents were left with a person identified as Josephine Areola, who purportedly acted in the capacity of a maid.
    • The sheriff’s return of service stated that the documents were accepted by Josephine Areola.
    • The petitioners did not file any answer or assert any early objection to the service, culminating in further default procedures.
  • Trial Court Proceedings and Orders
    • On December 29, 1989, the trial court issued an order declaring the petitioners in default.
    • A judgment by default was rendered on January 24, 1990, ordering the petitioners to pay P55,000.00 with interest (at 10%, compounded monthly from February 21, 1989) and attorney’s fees (25% of the entire amount due).
    • On February 2, 1990, the petitioners, before receiving a copy of the default judgment, filed a motion to dismiss the case based on lack of personal jurisdiction due to alleged defective service of summons.
    • The trial court, on March 5, 1990, denied the motion to dismiss on the ground that a default judgment had already been entered.
    • A motion for reconsideration was subsequently filed on April 3, 1990, reiterating objections over the service process, particularly emphasizing that Josephine Areola was a minor and not a proper recipient with sufficient discretion.
    • Evidence at the reconsideration hearing included:
      • Testimonies by petitioner Loreto Alfaro-Laus regarding the nature of Areola’s presence.
      • The private respondent’s evidence indicating that Areola had been residing in the petitioners’ household for months, including prior receipt of a demand letter.
      • Deputy Sheriff Cruz’s affidavit affirming that substituted service was executed during his first and only attempt without adequate inquiries regarding the petitioners’ whereabouts.
    • The trial court, in its August and July determinations, maintained that the substituted service was proper and declined to set aside the default order and subsequent judgment.
    • Later, the Court of Appeals (on May 30, 1991) denied the petition for certiorari, prohibition, and injunction, emphasizing:
      • The untimeliness of the motion to dismiss since it was filed after the entry of the default judgment.
      • That an interlocutory order denying the motion to dismiss is not susceptible to review via a petition for certiorari.
      • That alternative remedies (motion to set aside or appeal) were available but not availed of by the petitioners.
    • Additional proceedings included:
      • Execution of a writ resulting in auction sale of the petitioners’ properties (a 1983 Mitsubishi Galant Sedan and a men’s ring).
      • Resolution of a petition under Rule 45 following the denial of the reconsideration motion on July 30, 1991.
    • The petitioners advanced two primary issues:
      • Whether the trial court acquired jurisdiction over them through the substituted service of summons.
      • Whether the remedy of certiorari is proper to challenge the default order and judgment.
  • Subsequent Developments and Factual Discrepancies
    • Discrepancies in nomenclature existed:
      • Loreto’s name was erroneously mentioned as “Loredo” in the complaint.
      • Pepito Laus was designated as “John Doe,” and no summons was served on him.
    • The trial court’s conflation of defendants in the default order further contributed to the allegation of a void service and jurisdictional error.
    • There was also controversy over the computation and application of interest and attorney’s fees, with the awarded rates deemed unreasonable.

Issues:

  • Jurisdiction over the Petitioners
    • Whether the trial court acquired personal jurisdiction over the petitioners through substituted service.
    • Whether the substituted service complied with the strict requirements of Section 8, Rule 14 of the Revised Rules of Court.
    • Whether the evidence—especially the age and capacity of Josephine Areola—sufficiently validated that the service was properly effected.
  • Timeliness and Appropriateness of the Petitioners’ Remedies
    • Whether filing a motion to dismiss for lack of jurisdiction after the entry of a default judgment was proper.
    • Whether the petitioners could avail of a petition for certiorari to question the default judgment and orders, considering the existence of alternative remedies.
  • Procedural and Evidentiary Conduct of the Sheriff
    • Whether Deputy Sheriff Cruz made sufficient and required inquiries regarding the petitioners’ whereabouts before resorting to substituted service.
    • If the sheriff’s return and affidavit adequately demonstrated the impossibility of personal service in accordance with law.
  • Impact of Defective Service on Judicial Proceedings
    • Whether the defective service of summons nullified the trial court’s subsequent orders, default judgment, writ of execution, and auction sale.
    • Whether the evidence supports the contention that no valid summons was served on petitioner Pepito Laus, thus further impairing the jurisdiction of the court.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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