G.R. No. 164632 - Urethane Trading Specialist, Inc. vs. Ong

Case Summary (G.R. No. 164632)

Factual Background and Initiation of the MeTC Case

Petitioner commenced Civil Case No. 8142 in the MeTC in June 2000, seeking payment of money from respondents. During the MeTC proceedings, respondents were declared in default, and petitioner proceeded to present evidence ex parte. On October 30, 2001, the MeTC issued its decision ordering respondents, jointly and severally, to pay petitioner P295,026.01 as actual damages with legal interest and to pay 25% thereof as attorney’s fees.

After the decision became final, petitioner moved for execution on January 10, 2002. With no opposition filed, the MeTC ordered the issuance of a writ of execution on March 18, 2002.

Annulment of Judgment Before the RTC: Allegations of Lack of Jurisdiction and Fraud

On July 9, 2002, respondents filed in the RTC a petition for annulment of judgment with damages and prayer for injunctive relief, docketed as Civil Case No. 69034. Respondents asserted that the MeTC lacked jurisdiction over their persons because they allegedly did not receive the summons. They further alleged that the sheriff’s return of summons was manufactured and that they were not furnished copies of the order of default. On these premises, they prayed for annulment of the MeTC decision on grounds of extrinsic fraud and lack of jurisdiction over their persons.

RTC Proceedings: Motion to Dismiss and the RTC’s Denial

Petitioner moved to dismiss the annulment petition on two principal grounds: first, that the cause of action was barred by the statute of limitations; and second, that respondents’ claim had been waived, abandoned, or otherwise extinguished. Petitioner maintained, as a factual matter, that summons had in fact been served on respondents. Petitioner stated that the MeTC sheriff initially went to Leticia Ong’s business address at Nos. 777–779 Rizal Avenue, Manila, but could not serve because the hardware store at that address had already ceased operations. Petitioner then claimed that the sheriff proceeded to respondents’ residence and, due to respondents’ absence and the domestic helper’s refusal to receive the summons, the sheriff effected substituted service. Petitioner also argued that Edwin Ong, during the hearing on respondents’ application for injunctive relief, admitted attending one hearing in the MeTC case. From these assertions, petitioner argued that respondents could not properly invoke lack of jurisdiction over their persons in the annulment petition. Petitioner further argued that only extrinsic fraud could be raised, and that, because respondents did not file a petition for relief, they were allegedly barred by prescription and could be considered to have waived or abandoned their claims.

Unconvinced, the RTC denied petitioner’s motion to dismiss in an Omnibus Order dated April 4, 2003. Petitioner sought reconsideration, but the RTC denied it on August 8, 2003.

Court of Appeals Proceedings: Dismissal of Certiorari as Improper for an Interlocutory Order

Petitioner then filed in the Court of Appeals a petition for certiorari in CA-G.R. SP No. 79251. In its February 12, 2004 Resolution, the Court of Appeals dismissed the petition on the ground that an interlocutory order is not a proper subject of a special civil action of certiorari. When petitioner moved for reconsideration, the Court of Appeals denied it in a July 26, 2004 Resolution. Petitioner thus pursued the matter before the Supreme Court.

Issues Raised in the Supreme Court

Petitioner presented two issues. First, it queried whether respondents’ petition for annulment should be dismissed on grounds allegedly involving statute of limitations or laches, and on the alleged waiver, abandonment, or extinguishment of the claim. Second, it asked whether petitioner’s petition for certiorari should be dismissed on the theory that an order denying a motion to dismiss is interlocutory and therefore not reviewable by certiorari.

The Supreme Court’s Ruling on the Certiorari Issue

The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that the denial of a motion to dismiss by a trial court cannot ordinarily be questioned through certiorari under Rule 65. The Court reasoned that certiorari is intended to correct errors of jurisdiction, not errors of judgment. Accordingly, the proper remedy for a party aggrieved by such a denial is to file an answer and to raise the objections made in the motion to dismiss as affirmative defenses. If the eventual decision is adverse, the party may then elevate the same issues on appeal. Certiorari is proper only in a narrow circumstance where the trial court gravely abused its discretion in denying the motion, and such exception is applied sparingly. The Court emphasized that grave abuse must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform an enjoined duty, or to act at all in contemplation of law.

Applying these principles, the Supreme Court concluded that the RTC’s denial of petitioner’s motion to dismiss was not tainted with grave abuse of discretion. Hence, the Court of Appeals correctly dismissed the certiorari petition.

Legal Basis and Reasoning on the Alleged Grounds for Dismissal

The Supreme Court further elucidated that petitioner’s arguments, which the motion to dismiss relied upon, concerned (1) a claimed bar by statute of limitations or laches, and (2) claimed waiver, abandonment, or extinguishment of the claim. These grounds, however, were anchored on petitioner’s asserted legal conclusion that respondents could not invoke lack of jurisdiction over their persons in the annulment petition. The Court treated that premise as a conclusion of law that required evidentiary and factual determination, not as a matter resolvable in a motion to dismiss. In particular, petitioner’s allegations that respondents actually received the summons and that Edwin Ong had voluntarily submitted to the MeTC’s jurisdiction were matters of evidence. These issues required trial to determine their truth.

Similarly, the Supreme Court treated the related issues of laches, abandonment, and prescription as involving matters that demanded a fuller determination on the merits rather than resolution through the denial of a motion to dismiss. The Court also reiterated a p

Case Syllabus (G.R. No. 164632)

Urethane Trading Specialist, Inc. (petitioner) filed a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Court of Appeals (CA) Resolutions dated February 12, 2004 and July 26, 2004 in CA-G.R. SP No. 79251.
Edwin Ong and Leticia Ong (respondents) were the defendants in the MeTC civil case that ended in a default judgment and were the petitioners in the RTC case seeking annulment of judgment.
The dispute arose from the denial by the RTC of petitioner’s motion to dismiss filed in respondents’ petition for annulment of judgment with damages and prayer for injunctive relief.
The CA dismissed petitioner’s certiorari petition, holding that an interlocutory order denying a motion to dismiss was not a proper subject of certiorari under Rule 65.
The Supreme Court denied the Rule 45 petition and affirmed the CA.

Parties and Procedural Posture

Petitioner sought Supreme Court review after the CA dismissed its petition for certiorari and denied its motion for reconsideration.
Respondents pursued a remedy in the RTC by filing a petition for annulment of judgment with damages and prayer for injunctive relief after a default decision was rendered against them by the Metropolitan Trial Court (MeTC) of Pasig City.
Petitioner, in the RTC proceedings, filed a motion to dismiss, which the RTC denied in an Omnibus Order dated April 4, 2003.
The RTC further denied petitioner’s motion for reconsideration on August 8, 2003.
Petitioner then filed a certiorari petition in the CA, which the CA dismissed for being directed at an interlocutory order.
The Supreme Court treated the core controversy as the propriety of using certiorari to challenge the RTC’s denial of the motion to dismiss.

Key Factual Allegations

Petitioner filed a Complaint for sum of money in Civil Case No. 8142 before the MeTC of Pasig City in June 2000.
Respondents were declared in default, and petitioner presented evidence ex parte.
The MeTC rendered a decision on October 30, 2001, ordering respondents, jointly and severally, to pay petitioner P295,026.01 with legal interest as actual damages and 25% thereof as attorney’s fees.
After the decision became final, petitioner moved for execution on January 10, 2002, and the MeTC ordered issuance of a writ of execution on March 18, 2002.
On July 9, 2002, respondents filed in the RTC of Pasig City a petition for annulment of judgment with damages and prayer for injunctive relief docketed as Civil Case No. 69034.
Respondents alleged lack of jurisdiction over their persons because they claimed they did not receive the summons, and they alleged that the sheriff’s return of summons was manufactured.
Respondents also alleged that they were not furnished copies of the order of default, and they prayed for annulment on grounds of extrinsic fraud and lack of jurisdiction over their persons.
Petitioner, in the RTC motion to dismiss, countered that the summons was served and that the sheriff first attempted to serve the summons at respondents’ business address, but servicing was allegedly impeded when the hardware store had already ceased operations.
Petitioner further alleged that the sheriff then proceeded to respondents’ residence but, due to respondents’ absence and the domestic helper’s refusal to receive the summons, substituted service was effected.
Petitioner additionally argued that respondent Edwin Ong admitted attending one hearing in the MeTC proceedings on respondents’ application for injunctive relief.
Petitioner maintained that these circumstances negated the claimed lack of jurisdiction over their persons, and it argued that only extrinsic fraud could be invoked in the annulment petition.

Grounds Raised in RTC Motion

Petitioner moved to dismiss the annulment petition on two grounds: (1) statute of limitations or laches, and (2) waiver, abandonment, or extinguishment of the claim.
Petitioner’s limitations and w