G.R. No. L-57218 - Far Corporation vs. Francisco

Case Summary (G.R. No. L-57218)

Factual Background

Private respondent alleged that she received a notice from petitioners, signed by petitioner Caram, terminating the lease effective February 15, 198. She requested that the termination be moved to March 15, 1981 to allow her time to find another place. Petitioners allegedly refused to accept her tender of rental for the period from January 16, 1981 to February 15, 1981, and instead padlocked the apartment unit occupied by private respondent. Private respondent therefore filed a complaint for damages with prayer for preliminary injunction in Civil Case No. 40297 on February 19, 1981, before the Court of First Instance of Rizal, Pasig, Metro Manila.

Service of Summons and Motions to Dismiss

On February 27, 1981, the deputy sheriff served summonses and copies of the complaint on both defendants. For petitioner corporation, service was first attempted on Atty. Melquiades Paredes, the corporation’s retained counsel, at an address within the corporation’s premises. Atty. Paredes declined to accept the process, asserting he was neither an agent nor an officer of the corporation. He suggested that the sheriff identify and serve summons on Mr. Enrique Dizon, purportedly the cashier of the corporation. Summons were ultimately served on Mr. Enrique Dizon, who turned out not to be the cashier but the Finance and Administrative Manager of the corporation.

Both petitioners filed motions to dismiss, grounded on the contention that the trial court failed to acquire jurisdiction over their persons due to invalid service of summons. Private respondent opposed the motions on March 17, 1981. The trial court denied the motions and later denied the motion for reconsideration through orders dated March 18, 1981 and June 1, 1981. Petitioners then elevated the matter through the present petition for certiorari.

Proceedings in the Supreme Court

After the petition was filed, the Second Division of the Supreme Court, in a Resolution dated July 6, 1981, required private respondent to comment and issued a restraining order enjoining further proceedings in the case below. Because private respondent failed to comment, the Court required her to explain in a Resolution dated October 5, 1981. Counsel for private respondent filed both an explanation and a comment on November 10, 1981, and the Court accepted these filings in a Resolution dated November 23, 1981, then required petitioners to file a reply. Petitioners complied on January 20, 1982. The Court gave due course in a Resolution dated February 10, 1982, required memoranda, and received them from petitioners on April 26, 1982 and from respondents on August 6, 1982. The case was considered submitted for deliberation in a Resolution dated February 4, 1985.

The Sole Issue

The Court framed the controversy as a single issue: whether there was valid service of summons on both petitioners, thereby vesting the trial court with jurisdiction over their persons in Civil Case No. 40297.

Petitioners’ Position on Invalid Service

Petitioners opposed service of summons on two grounds. First, as to petitioner corporation, they argued that summons were served on Mr. Enrique Dizon, whom petitioners claimed was not within the categories of corporate officers enumerated in Section 13, Rule 14—namely the president, manager, secretary, cashier, agent, or director. According to petitioners, Mr. Dizon, as head of the Finance and Administrative Section, did not fall under any of those authorized persons, and thus his receipt of summons was ineffective.

Second, as to petitioner Rosa O. de Caram, they argued that she could not be personally served because she was absent from the office. They further contended that the substituted service was also defective because it again depended on service on Mr. Dizon.

Respondents’ Arguments and the Trial Court’s View

In addressing the validity of service, the Court emphasized undisputed circumstances surrounding the attempted service. It was conceded that the summonses were initially served on Atty. Paredes, who held office within the corporation’s premises. The Court observed that Atty. Paredes was not merely an ordinary lawyer but an internal counsel in charge of legal matters affecting petitioner corporation, including cases filed for or against it, and that he even acted as counsel for petitioners both in the trial court and in the present Supreme Court proceeding.

The Court nevertheless noted that, despite Atty. Paredes’ refusal to accept summons based on his belief that he was not an agent of the corporation, the critical inquiry remained the sufficiency of summons received by Mr. Dizon and whether the sheriff could resort to substituted service in the circumstances.

Governing Doctrine on Corporate Service of Summons

The Court relied on jurisprudential statements regarding the rationale of service rules for corporations. In Villa Rey Transit Inc. v. Far East Motor Corporation (81 SCRA 303 [1978]), the Court had held that the rules require service on a representative so integrated with the corporation sued that it is a priori supposable that the person served will appreciate responsibility and understand what should be done with the legal papers delivered.

The Court also considered prior rulings construing Section 13, Rule 14. In Filoil Marketing Corporation v. Marine Development Corp of the Phil. (117 SCRA 89 [1982]), service on corporate counsel had been treated as sufficient because the counsel functioned as the corporation’s agent for purposes of receiving process. In a later case, Summit Trading and Development Corp. v. Avendano (135 SCRA 397 [1985]), the Court had likewise recognized the corporate secretary of the president as an agent of the corporation under Section 13, Rule 14.

Application to the Facts: Service on Mr. Dizon as an Authorized Representative

Using these doctrines, the Court held that Mr. Enrique Dizon could be regarded as a person authorized to receive summons on the corporation. The Court characterized him as an Administrative Chief responsible for the management of the corporation, placing him at the level of a manager contemplated under the rules. It further stressed that, as Chief of Finance, he possessed vital and sensitive functions and responsibilities. The Court concluded that under the corporate and management structure, a finance officer occupies a position comparable to, or higher than, a cashier, and therefore would not be among the lesser officers incapable of appreciating the importance of legal papers served.

The Court treated Mr. Dizon as falling squarely within the term Agent authorized by law to receive judicial process for the corporation under Section 13, Rule 14. It further held that, for the same reasons, he could be considered a competent person in charge of the office of defendant owner and manager under Section 8, Rule 14, thus allowing valid substituted service on petitioner Rosa O. de Caram, who was absent from the office at the time of service.

Substituted Service and the Purpose of Summons

The Court rejected petitioners’ criticism of the sheriff’s resort to substituted service. It invoked Ablaza vs. C.I.R. (126 SCRA 254 [1983]), stating that the purpose of summons is to give the defendant notice that an action has been commenced, thereby putting the defendant on guard against the demands of the plaintiff.

The Court observed that petitioners’ own counsel had knowledge of the processes being served on his clients, which negated any claim of surprise. The Court further found that the reasons advanced to question summons bordered on mere technicalities. It also cited Linger & Fisher GMBH v. Intermediate Appellate Court (125 SCRA 527 [1983]) to emphasize that a case should not be dismissed solely because an original summons was wrongfully served, since an alias summons could be served after a defendant appears and questions the propriety

Case Syllabus (G.R. No. L-57218)

The petitioners Far Corporation and Rosa O. De Caram sought certiorari to annul two orders of the Court of First Instance of Rizal, Branch VI presided by Hon. Ricardo J. Francisco.
The assailed orders were (a) the Order dated March 18, 1981 denying petitioners’ motion to dismiss in Civil Case No. 40297, and (b) the Order dated June 1, 1981 denying petitioners’ motion for reconsideration.
The private respondent was Elizabeth P. Nicolas, who sued for damages with prayer for preliminary injunction in Civil Case No. 40297.
The Supreme Court treated the case as hinging on the validity of service of summons, because that service determined whether the trial court acquired jurisdiction over the persons of the petitioners.

Parties and Procedural Posture

Petitioner Far Corporation was alleged to be the owner of a residential apartment at No. 250 Amapola St., Palm Village, Makati, Metro Manila.
Petitioner Rosa O. De Caram was alleged to be the manager and owner of Far Corporation.
Respondent Elizabeth P. Nicolas was the apartment lessee who initiated Civil Case No. 40297 in the CFI of Rizal at Pasig, Metro Manila.
The trial court denied petitioners’ motions to dismiss for lack of jurisdiction over their persons, prompting the present petition for certiorari.
After the filing of the petition, the Supreme Court required respondent to comment and later required an explanation for failure to comment.
The Court accepted respondent’s explanation and comment and required petitioners to file a reply.
The Court gave due course to the petition, required memoranda, and considered the case submitted for deliberation in a later resolution.

Key Factual Allegations

Respondent alleged that she received a notice from petitioners, signed by Rosa O. De Caram, that her lease was being terminated effective February 15, 198.
Respondent allegedly requested that the termination be set instead for March 15, 1981 so she could find another place to live.
Petitioners allegedly refused to accept respondent’s tender of rental for the period January 16, 1981 to February 15, 1981.
Petitioners allegedly padlocked the apartment unit occupied by respondent.
On February 19, 1981, respondent filed the complaint for damages with prayer for preliminary injunction in Civil Case No. 40297.
On February 27, 1981, the deputy sheriff served summonses and copies of the complaint on both defendants.
Initial service was made on Atty. Melquiades Paredes, counsel of the corporation, at an office address within the premises.
Atty. Paredes declined to accept the process on the view that he was not an agent or officer authorized to receive summons, and he suggested that the sheriff serve Mr. Enrique Dizon, whom he thought was the cashier.
The summonses were ultimately served on Mr. Enrique Dizon, who was later found to be Finance and Administrative Manager of the corporation, not the cashier.
Petitioners filed motions to dismiss, asserting the CFI did not acquire jurisdiction over their persons due to allegedly invalid service of summons.
The CFI denied the motions and later denied reconsideration, leading to the certiorari petition.

Statutory and Rule Basis

Petitioners invoked Section 13, Rule 14 of the Rules of Court, which enumerates the corporate officers and agents on whom service of summons may be made.
Petitioners argued that summons for the corporation may be served only on the president, manager, secretary, cashier, agent, or directors.
Petitioners contended that Mr. Enrique Dizon did not fall within the authorized corporate officers under Section 13, Rule 14.
Petitioners also contended that summons to Rosa O. De Caram could not be validly effected through substituted service on Mr. Dizon, given the alleged absence of the proper conditions for substituted service under Rule 14.
The decision treated the decisive question as whether the service made on the corporation’s Finance and Administrative Manager constituted valid service under Rule 14 and whether substituted service for the absent individual defendant was proper.

Issues for Resolution

The sole issue was whether there was valid service of summons on both petitioners, thereby conferring upon the CFI jurisdiction over their persons in Civil Case No. 40297.
For the corporation, the controversy focused on whether Mr. Enrique Dizon was a competent recipient under Section 13, Rule 14.
For the individual defendant Rosa O. De Caram, the controversy focused on whether substituted service was proper when personal service could not be made because she was absent.

Arguments of Petitioners

Petitioners argued that summons for Far Corporation was defective because it was served on Mr. Enrique Dizon, whom petitioners claimed was not within th