E.B. Villarosa & Partners Co., Ltd. i.

Benito, 312 SCRA 65 ,1999|

FACTS:
E . B . Vi l l a ro s a & Pa r t n e r s i s a l i m i t e d p a r t n e r s h i p w i t h
p r i n c i p a l o ffi c e address at 102 Juan Luna St., Davao City and
with branch offices at Paraaque andCagayan de Oro
City (CDO).
Villarosa and Imperial Development (ID) executedan
Agreement wherein Villarosa agreed to develop certain parcels of
land in CDO belonging to ID into a housing subdivision. ID,
fi led a Complaint for Breach of Contract and Damages against
Villarosa before the RTC allegedly for failure of thelatter to comply
with its contractual obligation.Summons, together with the
complaint, were served upon Villarosa, through its Branch
Manager Wendell Sabulbero at the address at CDO but the
Sheriffs Returnof Service stated that the summons was duly
served "E.B. Villarosa & Partner thruits Branch Manager at their
new office Villa Gonzalo, CDO, and evidenced by thesignature on
the face of the original copy of the summons." Villarosa
prayed for the dismissal of the complaint on the ground of
improper service of summons andfor lack of jurisdiction over the
person of the defendant. Villarosa contends that
theR T C d i d n o t a c q u i r e j u r i s d i c t i o n o v e r i t s p e
r s o n s i n c e t h e s u m m o n s w a s improperly served upon
its employee in its branch office at CDO who is not one of those
persons named in Sec. 11, Rule 14 upon whom service of
summons may bemade. ID filed a Motion to Declare Villarosa in
Default alleging that Villarosa hasf a i l e d t o fi l e a n A n s w e r
despite its receipt allegedly on May 5, 1998 of
t h e summons and the complaint, as shown in the Sheriff's Return.
Issue:
Wo n a n a g e n t o f a c o r p o r a t i o n c a n re c e i v e s u m m o n s
i n b e h a l f o f t h e i r corporation?
HELD:
T h e c o u r t a g re e s w i t h t h e c o n t e n t i o n o f Vi l l a ro s a .
E a r l i e r c a s e s h a v e uphold service of summons upon a

construction project manager; a corporation'sassistant

manager; ordinary clerk of a corporation; private secretary
of corporateexecutives; retained counsel; officials who had
charge or control of the operationsof the corporation, like the
assistant general manager; or the corporation's
Chief Finance and Administrative Office. In these cases, these
persons were consideredas "agent" within the contemplation of
the old rule. N o t a b l y , u n d e r t h e n e w Ru l e s , s e r v i c e o f
s u m m o n s u p o n a n A G E N T o f t h e corporation is NO
LONGER authorized.The designation of persons or officers who
are authorized to accept summons for a domestic corporation or
partnership is now limited and more clearly specified
inS e c t i o n 1 1 , R u l e 1 4 . T h e r u l e n o w s t a t e s " g e n e r
a l m a n a g e r " i n s t e a d o f o n l y "manager";"corporate
secretary" instead of "secretary"; and "treasurer" instead
of "cashier." The phrase agent, or any of its directors" is
conspicuously deleted inthe new rule.A strict compliance with
the mode of service is necessary to confer jurisdiction of the court
over a corporation. The officer upon whom service is made must
be onewho is named in the statute; otherwise the service is
insuffi cient. . . The liberalconstruction rule cannot be invoked
and utilized as a substitute for the plain legal requirements as to
the manner in which summons should be served on a domestic
corporation. .

Sablas vs. Sablas526 SCRA 292July 3, 2007

The court cannot declare a defending party in default without a
motion from the other party. Where there is no declaration of
default, answer may be admitted even if filed out of time. Where
answer has been filed, there can be no declaration of default
anymore.
FACTS
Petitioner spouses were served with summons and a copy of the complaint
on October 6, 1999. On October 21, 1999, they filed a motion for extension
of time requesting an additional period of 15 days, or until November 5,
1999, to file their answer. However, they were able to file it only on
November 8, 1999. While the trial court observed that the answer was
filed out of time, it admitted the pleading because no motion to declare
petitioner spouses in default was filed. The following day, respondents filed
a motion to declare petitioner spouses in default but such was denied by
the trial court. Respondents moved for reconsideration but it was also
denied. 'hereafter, they challenged the order in the court of appeals in a
petition for certiorari alleging that the admission of the answer by the trial
court was contrary to the rules of procedure and constituted grave abuse
of discretion amounting to lack of jurisdiction. On a decision dated July 17,
2000, the CA ruled that the trial court committed grave abuse of discretion
because, pursuant to section 3, Rule 9 of the Rules of Court, the trial court
had no recourse but to declare petitioner spouses in default when they
failed to file their answer on or before November 5, 1999. Thus, the CA

granted the petition, vacated the December 6, 1999 order and remanded
the case to the trial court for reception of plaintiffs evidence.
Aggrieved, petitioner spouses (defendants in the trial court) now
assail the July 17, 2000 decision of the Court of appeals in this petition
for review on certiorari
ISSUE
Whether the trial court committed grave abuse of discretion in denying
respondents motion to declare petitioners in default after the latter filed
their answer outside the reglementary period?

RULING
NO
An order of default can be made only upon motion of the claiming party. It
can be properly issued against the defending party who failed to file the
answer within the prescribed period only if the claiming party files a motion
to that effect with notice to the defending party.

Three requirements must be complied with before the court can declare
the defending party in default: (1) the claiming party must file a motion
asking the court to declare the defending party in default, (2) the
defending party must be notified of the motion to declare him in default
and (3) the claiming party must prove that the defending party has failed
to answer within the period provided by the Rules of Court. The rule on
default requires the filing of a motion and notice of such motion to the
defending party. It is not enough that the defendant fails to answer the
complaint within the reglementary period. The trial court cannot motu
proprio declare a defendant in default as the rules leave it up to the
claiming party to protect his or its interests. The trial court should not
under any circumstances act as counsel of the claiming party. It is within
the sound discretion of the trial court to permit the defendant to file his
answer and to be heard on the merits even after the reglamentary period
for filing the answer expires. The Rules of Court provides for discretion on
the part of the trial court not only to extend the time for filing an answer
but also to allow an answer to be filed after the reglementary period. Thus,

the appellate court erred when it ruled that the trial court had no recourse
but to declare petitioner spouses in default when they failed to file their
answer on or before November 5 1999. The rule is that the defendants
answer should be admitted where it is filed before declaration of default
and no prejudice is caused to the plaintiff. There the answer is filed
beyond the reglementary period but before the defendant is declared in
default and there is no showing that defendant intends to delay the case,
the answer should be admitted.
Therefore, the trial court correctly admitted the answer of petitioner
spouses even if it was filed out of time because, at the time of its filing,
they were not yet declared in default nor was a motion to declare them in
default ever filed. Neither was there a showing that petitioner spouses
intended to delay the case. Since the trial court already admitted the
answer, it was correct in denying the subsequent motion of respondents to
declare petitioner spouses in default. The policy of the law is to have every
litigants case tried on the merits as much as possible. Hence, judgments
by default are frowned upon. A case is best decided when all contending
parties are able to ventilate their respective claims and present their
arguments and adduces evidence in support thereof. The parties are thus
given the chance to be heard fully and the demands of due process are
sub served. Moreover, it is only amidst such an atmosphere that accurate
factual findings and correct legal conclusions can be reached by the courts.
Cases are remanded to the trial court for further proceedings.