G.R. No. 203298 - Interlink Movie Houses, Inc. vs. Court of Appeals

Case Summary (G.R. No. 203298)

Key Dates and Procedural Milestones

Complaint filed with the RTC on 22 July 2008; sheriff’s first return dated 26 September 2008 (summons allegedly served through Jonalyn Liwanan); motion to declare defendants in default filed 5 January 2009; RTC ordered reissuance of summons on 2 March 2009; second sheriff’s return dated 15 May 2009 (summons allegedly served on 11 May 2009 through Amee Ochotorina); motion to declare default granted by RTC on 10 February 2010; RTC decision on merits issued 15 September 2010; Court of Appeals annulled RTC orders and decision on 17 May 2012 and denied reconsideration on 6 September 2012; Supreme Court denied the petition for review.

Facts: service attempts and defendant response

The sheriff’s first return (24 September 2008 service) states the summons and complaint were left at the office of the defendant company’s president through Jonalyn Liwanan, who undertook to forward the documents. After the RTC ordered reissuance, the second sheriff’s return (11 May 2009) states service was effected at the president’s office through Amee Ochotorina, who identified herself as one of the president’s secretaries and said she would bring the summons to his attention. Respondents consistently contested the validity of those services and entered special appearances through counsel to challenge jurisdiction.

RTC rulings on service, default and merits

The RTC initially found the first service defective and ordered fresh summonses. After the second service, the trial court concluded that service on the assistant/secretary of the president constituted sufficient compliance with the Rules of Court and, on 10 February 2010, declared the defendants in default and allowed ex parte presentation of evidence. On the merits, the RTC rendered judgment in favor of Interlink, awarding specific sums for unpaid use of leased premises, rent for certain months, actual damages, and costs.

Court of Appeals ruling

The Court of Appeals granted respondents’ petition for certiorari, concluding that the second service of summons remained defective and that the RTC therefore lacked jurisdiction over respondents’ persons; it annulled the RTC orders and decision and directed issuance of alias summonses to be served validly.

Legal issue presented to the Supreme Court

Whether the Court of Appeals erred in ruling that the trial court did not acquire jurisdiction over the persons of the respondents due to defective service of summons and whether respondents had voluntarily submitted to the RTC’s jurisdiction despite their special appearances.

Governing legal principles on jurisdiction and service of summons

Jurisdiction over a defendant in an in personam civil action is acquired by valid service of summons or by voluntary appearance and submission to the court’s authority. Personal service is effected by handing the summons to the defendant in person; for a domestic private juridical entity, service may be made only on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel — an enumeration treated as exclusive under Rule 14, Section 11 of the Rules of Court. Substituted service is allowed only when personal service cannot be promptly effected; courts have required evidence of reasonable and diligent attempts (traditionally multiple attempts, preferably on at least two different dates, and generally at least three attempts within a reasonable period) before resorting to substituted service.

Application to the facts: validity of service on a corporate secretary

The second service was made on Amee Ochotorina, identified as one of the president’s secretaries. Because the Rules prescribe an exclusive list of corporate officers on whom service may be made and a secretary (other than the corporate secretary) is not among those enumerated, service on Ochotorina was invalid. Consequently, the RTC did not acquire jurisdiction over Expressions by that service.

Application to the facts: substituted service considerations and sheriff’s diligence

Even if the second service were treated as substituted service, the requisites for substituted service were not satisfied. The sheriff attempted personal service only once and failed to show why personal service was impossible despite a single attempt; the sheriff’s return merely records that the alleged secretary said the president was attending to business and would be notified. The authorities invoked by the courts require more than a single attempt and an explanation why personal service could not be promptly effected. The sheriff thus did not exerci

Case Syllabus (G.R. No. 203298)

Title, Citation, and Nature of Case

Reported at 823 Phil. 1032, Third Division, G.R. No. 203298, January 17, 2018.
Petition for review on certiorari to the Supreme Court seeking reversal and setting aside of the Court of Appeals Decision dated 17 May 2012 and Resolution dated 6 September 2012 in CA-G.R. SP No. 116221.
Parties: Petitioners — Interlink Movie Houses, Inc. and Edmer Y. Lim; Respondents — Court of Appeals (as respondent in certiorari), Expressions Stationery Shop, Inc., and Josephine Lim Bon Huan.
Decision authored by Justice Martires.

Facts (Procedural and Factual Background)

On 22 July 2008, Interlink Movie Houses, Inc., through its president Edmer Y. Lim, filed a complaint for sum of money and damages against Expressions Stationery Shop, Inc. (a domestic corporation) and Josephine Lim Bon Huan (president of Expressions) in RTC, Branch 167, Pasig City, Civil Case No. 71732.
The complaint sought recovery of unpaid rentals and damages for alleged breach of a lease contract.
Sheriff’s Return dated 26 September 2008 certified that on 24 September 2008 the summons and complaint were served at the office of the defendant company’s president through one Jonalyn Liwanan, who undertook to forward the documents to her superior.
On 5 January 2009, Interlink moved to declare respondents in default for failure to file an answer.
Respondents entered a special appearance on 6 January 2009 through Atty. Generosa Jacinto, alleging defective service of summons and praying that the motion for declaration of default be denied.
By Order dated 2 March 2009, the RTC denied Interlink’s motion to declare defendants in default, finding the initial summons service defective under Section 11, Rule 14 of the Rules of Court, and ordered issuance and service of new summonses.
Sheriff’s Return dated 15 May 2009 certified that on 11 May 2009 the sheriff served the summons on Expressions at the office of its president, Bon Huan, through Amee Ochotorina, described as one of Bon Huan’s secretaries, who assured the sheriff she would bring the summons to Bon Huan’s attention; the sheriff stated he insisted on personal receipt by Bon Huan but Ochotorina refused, saying Bon Huan was attending to business matters.
Interlink filed another motion to declare defendants in default on 25 June 2009.
Respondents again entered a special appearance on 10 July 2009 arguing the second service was defective because Ochotorina did not work for or was not connected with the office of the president, and she did not hold any of the offices enumerated in Section 11, Rule 14 (president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel).
In its Order dated 10 February 2010, the RTC granted Interlink’s motion to declare defendants in default and allowed Interlink to present evidence ex parte, finding sufficient compliance with service rules since the summons was received by the assistant/secretary of the president and noting corporate officers are usually busy and summonses are usually received by their assistants or secretaries.
On 5 March 2010, respondents, on special appearance, filed an omnibus motion seeking recall of the 10 February 2010 order, reiterating that the second service of summons did not vest jurisdiction.
The RTC denied the omnibus motion by Order dated 9 August 2010.
Interlink proceeded with ex parte presentation of evidence.

Trial Court (RTC) Decision — Dispositive Portion

The RTC rendered judgment in favor of plaintiff Interlink and against defendants Expressions and Bon Huan, ordering them to pay jointly and severally:
- PhP600,000.00 for unpaid use of 1,000 square meters occupied for 4 months at PhP150.00 per square meter with 12% per annum interest from filing of the complaint until full payment;
- PhP242,676.00 for use of the leased premises from June to July 2008 with 12% per annum interest from filing until full payment;
- PhP300,000.00 as actual damages;
- Costs of suit.
Decision was penned by Judge Rolando G. Mislang and dated 15 September 2010.

Petition for Certiorari to the Court of Appeals

Respondents filed a petition for certiorari under Rule 65 before the Court of Appeals challenging the RTC’s orders and decision on the ground that the service of summons was defective and the RTC did not acquire jurisdiction over them.

Court of Appeals Ruling and Relief Granted

In the CA Decision dated 17 May 2012 (penalized by Associate Justice Manuel M. Barrios, with concurrences), the CA annulled the RTC decision.
The CA ruled that the second service of summons was still defective and that the trial court did not acquire jurisdiction over the persons of the respondents, rendering the RTC decision void.
Dispositive portion ordered:
- The petition was GRANTED;
- The assailed Orders dated 09 August 2010 and 10 February 2010 and the Decision dated 15 September 2010 of the RTC, Branch 167, Pasig City in Civil Case No. 71732 were REVERSED and SET ASIDE;
- The CA instructed the respondent court to issue alias summonses on the