G.R. No. 24806 - Agcaoili vs. Suguitan

Case Summary (G.R. No. 24806)

Procedural History and Relief Sought

PNOC filed a complaint for sum of money against Santos to collect the unpaid loan balance. Personal service of summons could not be effected because petitioner’s whereabouts could not be ascertained despite diligent efforts. The trial court allowed service by publication; the summons was published in Remate on May 20, 2003. Respondent submitted an affidavit of publication and an affidavit by its employee that a copy of the summons was sent by registered mail to petitioner’s last known address. Petitioner failed to answer within the prescribed period; respondent moved for ex parte reception of evidence, which the trial court granted (September 11, 2003). Respondent presented evidence ex parte and the case was submitted. Petitioner later filed an Omnibus Motion for Reconsideration and to Admit Attached Answer (October 28, 2003), which the trial court denied (February 6, 2004). The trial court ultimately rendered judgment for PNOC. The Court of Appeals sustained the trial court’s orders and dismissed petitioner’s certiorari petition; the Supreme Court denied review.

Legal Issue on Service by Publication and In Personam Actions

Petitioner argued that service by publication is limited to actions in rem and thus could not be used for an action in personam to recover money. The Court rejected this contention, explaining the current Rule 14, Section 14 expressly applies whenever a defendant’s whereabouts are unknown and cannot be ascertained by diligent inquiry, without limiting the remedy to actions in rem. The in rem/in personam distinction that constrained the predecessor rule no longer controls; the present rule applies to in personam, in rem, and quasi in rem actions when the defendant’s whereabouts are unknown.

Proof of Service by Publication and Complementary Registered Mail

Rule 14, Section 19 requires proof of publication by affidavit of the printer/editor/business or advertising manager (with attached copy of publication) and an affidavit showing deposit of a copy of the summons and order for publication in the post office, postage prepaid, addressed to the defendant at his last known address. The Court held that the complementary service by registered mail is the party’s duty when service by publication is sought, and the Rules do not mandate that the affidavit showing deposit be executed by the clerk of court. Thus, respondent’s affidavits of the newspaper’s advertising manager and of respondent’s employee who mailed the copy satisfied the Rule.

Jurisdiction by Voluntary Appearance

Even assuming arguendo that service was defective, jurisdiction over petitioner’s person was acquired by his voluntary appearance. Rule 14, Section 20 treats a defendant’s voluntary appearance as equivalent to service of summons (except where an appearance is limited to a motion to dismiss that raises lack of personal jurisdiction). Filing the Omnibus Motion for Reconsideration and to Admit Attached Answer constituted a voluntary appearance, thereby vesting the trial court with personal jurisdiction.

Default, Notice of Proceedings, and the Trial Court’s September 11, 2003 Order

The effects of failure to answer are governed by Rule 9, Sections 3 and 4: upon motion (with notice) the court may declare the defending party in default, and a defaulting party is entitled to notice of subsequent proceedings but not to take part in the trial. In the case at bar the trial court’s September 11, 2003 order permitted ex parte reception of respondent’s evidence; the Court of Appeals and Supreme Court observed that the order effectively treated petitioner as in default although there had been no formal motion to declare default. Nevertheless, the Court recognized practical limits: when a defendant cannot be located and service is by publication, sending notice may be impossible. The court emphasized that law does not require the performance of an impossibility (nemo tenetur ad impossibile). Moreover, the record showed a copy of the September 11, 2003 order was mailed to petitioner’s last known address but went unclaimed.

Entitlement to Notice When Defendant Cannot Be Located

Although a defendant formally declared in default is entitled to notice of subsequent proceedings, the decision reasoned that if the defendant’s residence or whereabouts are unknown, no meaningful notice can be sent. The requirement to notify presumes feasibility; if good-faith efforts to locate the defendant have failed and service by publication was authorized, ins

Case Syllabus (G.R. No. 24806)

Procedural History

Petitioner Pedro T. Santos, Jr. was sued by respondent PNOC Exploration Corporation in the Regional Trial Court (RTC) of Pasig City, Branch 167, in Civil Case No. 69262 for collection of P698,502.10, representing the unpaid balance of a car loan advanced when petitioner was a board member.
Personal service of summons failed because petitioner could not be located at his last known address despite diligent efforts; respondent moved for and obtained leave to effect service by publication.
Summons was published in Remate, a newspaper of general circulation, on May 20, 2003; respondent submitted an affidavit of publication (Allan Paul A. Plaza) and an affidavit of service of registered mail by respondent’s employee (Vincent Panganiban).
Petitioner did not file an answer within the prescribed period; respondent moved for reception of its evidence ex parte. The trial court granted the motion in an order dated September 11, 2003, and respondent presented its ex parte evidence; the case was deemed submitted for decision on October 15, 2003.
On October 28, 2003, petitioner filed an "Omnibus Motion for Reconsideration and to Admit Attached Answer," alleging defects in the affidavit of service and denial of due process for non-notification of the September 11, 2003 order; respondent opposed.
The RTC denied petitioner’s motion in an order dated February 6, 2004, ruling (a) the rules do not require the clerk of court to execute the affidavit of complementary registered-mail service, (b) due process was observed because a copy of the September 11, 2003 order was mailed to petitioner’s last known address, and (c) petitioner’s belated answer could not be admitted.
The trial court rendered judgment in Civil Case No. 69262 ordering petitioner to pay P698,502.10 plus legal interest and costs (May 19, 2004 decision); petitioner’s motion for reconsideration of that decision remained pending.
Petitioner filed a petition for certiorari in the Court of Appeals (CA-G.R. SP No. 82482) assailing the September 11, 2003 and February 6, 2004 orders as grave abuse of discretion for lack of jurisdiction due to improper summons service, failure to furnish copies of orders/processes (including the September 11, 2003 order), and preference for technicality over justice.
The Court of Appeals, in a decision dated September 22, 2005, sustained the RTC orders and dismissed the petition; denial of reconsideration followed (December 29, 2005 resolution).
Petitioner elevated the matter to the Supreme Court by a petition for review under Rule 45; the Supreme Court denied the petition and imposed costs against petitioner (Decision penned by Justice Corona, September 23, 2008).

Facts (Loan and Collateral)

The car loan was originally for P966,000 to procure a Honda CRV for petitioner; the loan was evidenced by a promissory note and secured by a chattel mortgage on the vehicle.
One condition of the promissory note provided that upon separation from service, any unpaid balance shall immediately be paid in full (see May 19, 2004 RTC decision, rollo, pp. 82–83).
The amount sought in the complaint was P698,502.10, representing petitioner’s unpaid balance.

Issues Presented

Whether service of summons by publication, complemented by registered-mail service to petitioner’s last known address, was proper and sufficient to confer jurisdiction over petitioner.
Whether the affidavit of complementary registered-mail service was defective because it was not executed by the clerk of court.
Whether petitioner was denied due process because he was not furnished with copies of orders and processes, particularly the September 11, 2003 order permitting ex parte presentation of evidence.
Whether the trial court erred in allowing respondent’s evidence ex parte and in refusing to admit petitioner’s belated answer.
Whether the trial court committed grave abuse of discretion in issuing orders affecting petitioner’s rights.

Applicable Legal Provisions Quoted in the Decision

Section 14, Rule 14 (Summons) — service upon defendant whose identity or whereabouts are unknown; service by publication, by leave of court, in any action where the defendant is designated as unknown owner or whereabouts cannot be ascertained by diligent inquiry.
Section 19, Rule 14 — proof of service by publication: affidavit of printer/foreman/principal clerk/editor/business/advertising manager with copy of publication attached, and an affidavit showing deposit in the post office, postage prepaid, of a copy of the summons and order for publication directed to the defendant by registered mail to his last known address.
Section 20, Rule 14 — voluntary appearance: defendant’s voluntary appearance is equivalent to service of summons; inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction is not a voluntary appearance.
Sections 3 and 4, Rule 9 (Effect of Failure to Plead) — declaration and effect of default; requirement of notice to defendant and entitlement to notice of subsequent proceedings though not to take part in the trial.

Court’s Holdings (Supreme Court)

The petition lacks merit and is DENIED; costs awarded against petitioner.
Service of summons by publication, where the defendant’s whereabouts cannot be ascertained after diligent inquiry and by leave of court, was properly availed of by respondent and was sufficient in the circumstances of this case.
The present text of Section 14, Rule 14 applies to any action — in personam, in rem, or quas