G.R. No.
81093 March 6, 1990 TRUCKING, dated
PORAC TRUCKING, INC., petitioner,
vs.
THE HONORABLE COURT OF
APPEALS (Fifteenth Division), HON.
EUGENIO S. LABITORIA, In his
capacity as Presiding Judge of the
RTC-Macabebe, Pampanga (Branch
LV) and EMERENCIANA
GUEVARRA, respondents.
Ernesto L. Pineda for petitioner.
Atlee T. Viray for private respondent.
SARMIENTO, J:
This is a petition for review
by certiorari of the decision of the Court
of Appeals in "Emerenciana Guevarra,
plaintiff-appellee v. Porac Trucking Inc.,
defendant-appellant," 1 promulgated on
July 20, 1987, and the Resolution of the
same court dated December 15,
1987, 2 denying the Motion for
Reconsideration filed by the herein
petitioner Porac Trucking, Inc. [hereafter,
simply PORAC TRUCKING].
The case at bar arose from a complaint
for damages filed by the private
respondent Emerenciana Guevarra in
the Regional Trial Court, Branch LV at
San Fernando, Pampanga 3 against
PORAC TRUCKING and Albert
Mercado, in a joint and several capacity,
arising from a collision incident involving
the truck owned by the petitioner while
driven by a certain Albert Mercado, and
the mini Isuzu cargo truck of Guevarra.
The lower court issued summons
directed to Albert Mercado and PORAC
TRUCKING, ordering them to answer the
complaint. While Albert Mercado
received the personal service of
summons on April 28, 1984, a certain
Hermie Lansangan, according to the
Sheriff, refused to receive the copy of the
summons for PORAC TRUCKING. Thus
the Sheriff's return on PORAC
April 28, 1984,
remains unsigned.
On June 11, 1984, the lower court
declared PORAC TRUCKING in default.
Later, a certain Atty. Rodolfo Macalin
filed a "Motion for Leave to File Answer
Beyond Reglementary Period" attaching
thereto the answer of the supposed
defendants. Thereafter, the lower court
took this "appearance" of Atty. Macalino
to mean the voluntary submission by
PORAC TRUCKING to its jurisdiction.
On June 21, 1985, the lower court
rendered a decision in favor of Guevarra
and against defendants Mercado and
PORAC TRUCKING.
A motion for execution was filed by
Guevarra on August 14, 1985 and the
writ was subsequently issued on August
23, 1985.
It was only on November 12, 1985 that
the petitioner, represented by its in-
house counsel, filed a "Petition for Relief
from Judgment with Prayer for
Restraining Order and Preliminary
Injunction." This time, the lawyer was not
Atty. Macalino. Although a restraining
order was issued against the
implementation of the writ of execution,
the lower court eventually issued a
resolution dismissing the "Petition for
Relief from Judgment . . ."
On April 8, 1986, the petitioner appealed
alleging that the defect in the service of
summons was never cured by the
unauthorized appearance of Atty.
Macalino. 4 On the merits, the petitioner
alleges that the appellee Guevarra has
waived all claims from the accident with
the execution of her "Affidavit of
Desistance."
In the said "Affidavit of Desistance" or
"Release of Claim," it appears that
Guevarra had received from First
Integrated Bonding and Insurance Co.,
Inc. (FIBICI), insurer of her vehicle, the
amount of P19,579.80. This amount was
in turn received by FIBICI from Rico
General Insurance, the insurer of
PORAC TRUCKING, with the stated
purpose that:
. . . this RELEASE may be pleaded in bar
to any suit of (sic) proceeding which I/WE
or anyone in my/our behalf, may have
taken or may be taken in connection with
the accident hereinbefore mentioned . .
.5
However, the respondent Court of
Appeals rendered a decision affirming
the judgment appealed from and
dissolving the preliminary injunction it
earlier issued enjoining the
implementation of the writ of execution,
in effect granting the claim filed by
Guevarra against PORAC TRUCKING.
On August 14, 1988, the petitioner filed
this petition for review after its Motion for
Reconsideration was denied by the
respondent court on December 15, 1987.
The only issue for our resolution is
whether or not the summons was
properly served on the petitioner so as to
confer jurisdiction on the then Court of
First Instance over PORAC TRUCKING,
the then defendant.
Section 13 of Rule 14 of the Revised
Rules of Court provides:
Sec. 13. Service upon private domestic
corporation or partnership — If the
defendant is a corporation organized
under the laws of the Philippines or a
partnership duly registered, service may
be made on the president, manager,
secretary, cashier, agent or any of its
directors.
As held in Delta Motor Sales
6
Corp. v. Mangosing cited in the recent
case of Rebollido v. Court of Appeals: 7
The purpose of the rule is to render it
reasonably certain that the corporation
will receive prompt and proper notice in
an action against it or to insure that the
summons may be served on a
representative so integrated with the
corporation that such person will know
what to do with legal papers served on
him or in other words to bring home to the
corporation notice of the filing of the
action.
In the present case, the summons was
supposed to have been received by a
certain Hermie Lansangan who refused
to acknowledge the receipt thereof. He
refused to sign for the petitioner
corporation. And rightly so, for he was
certainly not the president, manager,
secretary, cashier, agent, or any of the
directors of PORAC TRUCKING. As a
matter of fact, the capacity, if any, in
which Lansangan would bind the
corporation was never established. It
appears that the only relationship
Lansangan had with the petitioner
corporation was that he acted as middle
man for specific delivery contracts. 8
In some cases, the Court has been liberal
in bending this rule whenever the
resulting circumstance would facilitate
the administration of justice, and in
requiring only "substantial
9
compliance". These exceptions were
allowed only because of the peculiar
circumstances attending the case,
namely that: 1) there was actual receipt
of the summons by the person served,
meaning the possession of the copy of
the summons was transferred from the
Sheriff to the person served; 2) there was
a signature on the Sheriff's return or
receipt by the person served; and 3)
there was actual receipt of the summons
by then defendant corporation, now
petitioner, through the person on whom
the legal papers were actually served.
In the case at bar, none of these
requisites is present, nor do they appear
to have been complied with. Hence the
case should be returned to the trial court
for the proper hearing on the merits in
order to preclude any possible
infringement of due process.
And who is Atty. Rodolfo Macalino? He is
the lawyer of Rico General Insurance
Corporation, the insurer of PORAC
TRUCKING. Rico General Insurance
Corporation worked for a settlement of
the claim arising from the said accident
with First Integrated Bonding and
Insurance, the insurer of Emerenciana
Guevarra.
And that is where Atty. Macalino's role
begins and ends as far as this case is
concerned. Certainly, the lawyer of the
insurance company did not ipso
facto become the lawyer for the insured
in all subsequent litigations arising from
the accident. And this is as it should be,
notwithstanding the claims of one
Edgardo Simon, Manager of Rico
General Insurance, who declared under
oath that when he learned of the
pendency of the civil case against the
driver and the PORAC TRUCKING, he
himself had instructed their house
counsel, Atty. Macalino, to represent
PORAC TRUCKING. Simon, however,
specifically stated that he never informed
PORAC TRUCKING about the move.
Neither was Atty. Macalino ever hired by
PORAC TRUCKING to represent it in any
case.
It would seem now that this elaborate
scheme was devised to insure the right to
subrogation of Rico General Insurance in
case a judgment favorable to PORAC
TRUCKING were to be rendered. And yet
as an officer of the court, Atty. Macalino
should have known better than to appear
in a case on behalf of another at the mere
prodding of his client.
However we leave the hearing of the
merits of the case to the trial court since
the private respondent had failed to
comment 10 on the veracity of the called
"Release of Claims." Nevertheless this
document must be presented in evidence
and litigated on by the parties to establish
once and for all the extent of their
interests for a full satisfaction of their
claims.
In any case, the unsolicited appearance
of Atty. Rodolfo Macalino, in the absence
of a client-lawyer relationship with the
petitioner corporation, is unbecoming of
a member of the bar, to say the least. The
remanding of the case must be without
prejudice to the investigation of his
actuations. The presiding judge of the
court a quo is hereby ordered to
undertake this investigation and report to
the court his findings and
recommendations within thirty days from
receipt hereof.
WHEREFORE, the petition is
GRANTED; the decision of the
respondent Court of Appeals in SET
ASIDE. The case is REMANDED to the
trial court for the proper proceedings.
SO ORDERED.
MA. IMELDA M. MANOTOC, G.R. No.
This Petition for Review on
130974
Petitioner, Certiorari[1] under Rule 45 presents the
core issue whether there was a valid
Present.
substituted service of summons on
- versus - QUISUMBING, J., petitioner for the trial court to acquire
Chairperson,
jurisdiction. Petitioner Manotoc claims
CARPIO,
CARPIO MORALES, the court a quo should have annulled the
HONORABLE COURT OF TINGA, and proceedings in the trial court for want of
APPEALS and AGAPITA VELASCO,
JR., JJ. jurisdiction due to irregular and
TRAJANO on behalf of the Estate ineffective service of summons.
of ARCHIMEDES TRAJANO,
Promulgated:
Respondents. August 16, 2006 The Facts

DECISION
Petitioner is the defendant in Civil
Case No. 63337 entitled Agapita
VELASCO, JR., J.:
Trajano, pro se, and on behalf of the

The courts jurisdiction over a Estate of Archimedes Trajano v. Imelda

defendant is founded on a valid service Imee R. Marcos-Manotoc[2] for Filing,

of summons. Without a valid service, the Recognition and/or Enforcement of

court cannot acquire jurisdiction over the Foreign Judgment. Respondent Trajano

defendant, unless the defendant seeks the enforcement of a foreign courts

voluntarily submits to it. The defendant judgment rendered on May 1, 1991 by

must be properly apprised of a pending the United States District Court of

action against him and assured of the Honolulu, Hawaii, United States of

opportunity to present his defenses to the America, in a case entitled Agapita

suit.Proper service of summons is used Trajano, et al. v. Imee Marcos-Manotoc

to protect ones right to due process. a.k.a. Imee Marcos, Civil Case No. 86-
0207 for wrongful death of deceased

The Case Archimedes Trajano committed by

military intelligence officials of the
Philippines allegedly under the service of summons. The grounds to
command, direction, authority, support the motion were: (1) the address
supervision, tolerance, sufferance and/or of defendant indicated in the Complaint
influence of defendant Manotoc, (Alexandra Homes) was not her dwelling,
pursuant to the provisions of Rule 39 of residence, or regular place of business
the then Revised Rules of Court. as provided in Section 8, Rule 14 of the
Rules of Court; (2) the party (de la Cruz),
Based on paragraph two of the who was found in the unit, was neither a
Complaint, the trial court issued a representative, employee, nor a resident
Summons[3] on July 6, 1993 addressed of the place; (3) the procedure prescribed
to petitioner at Alexandra Condominium by the Rules on personal and substituted
Corporation or Alexandra Homes, E2 service of summons was ignored; (4)
Room 104, at No. 29 Meralco defendant was a resident of Singapore;
Avenue, Pasig City. and (5) whatever judgment rendered in
this case would be ineffective and futile.
On July 15, 1993, the Summons
and a copy of the Complaint were During the hearing on the Motion
allegedly served upon (Mr.) Macky de la to Dismiss, petitioner Manotoc presented
Cruz, an alleged caretaker of petitioner at Carlos Gonzales, who testified that he
the condominium unit mentioned saw defendant Manotoc as a visitor
earlier.[4] When petitioner failed to file her in Alexandra Homesonly two times. He
Answer, the trial court declared her in also identified the Certification of Renato
default through an A. de Leon, which stated that Unit E-2104
Order[5] dated October 13, 1993. was owned by Queens Park Realty, Inc.;
and at the time the Certification was
On October 19, 1993, petitioner, issued, the unit was not being leased by
by special appearance of counsel, filed a anyone. Petitioner also presented her
Motion to Dismiss[6] on the ground of lack Philippine passport and the
of jurisdiction of the trial court over her Disembarkation/Embarkation
person due to an invalid substituted Card[7] issued by the Immigration Service
of Singapore to show that she was a On October 11, 1994, the trial
resident of Singapore. She claimed that court rejected Manotocs Motion to
the person referred to in plaintiffs Exhibits Dismiss on the strength of its findings
A to EEEE as Mrs. Manotoc may not that her residence, for purposes of the
even be her, but the mother of Tommy Complaint, was AlexandraHomes, Unit
Manotoc, and granting that she was the E-2104, No. 29 Meralco Avenue, Pasig,
one referred to in said exhibits, only 27 Metro Manila, based on the documentary
out of 109 entries referred to Mrs. evidence of respondent Trajano. The trial
Manotoc. Hence, the infrequent number court relied on the presumption that the
of times she allegedly sheriffs substituted service was made in
entered Alexandra Homes did not at all the regular performance of official duty,
establish plaintiffs position that she was and such presumption stood in the
a resident of said place. absence of proof to the contrary. [11]
On the other hand, Agapita On December 21, 1994, the trial
Trajano, for plaintiffs estate, presented court discarded Manotocs plea for
Robert Swift, lead counsel for plaintiffs in reconsideration for lack of merit.[12]
the Estate of Ferdinand Marcos Human
Rights Litigation, who testified that he Undaunted, Manotoc filed a
participated in the deposition taking of Petition for Certiorari and
Ferdinand R. Marcos, Jr.; and he Prohibition[13] before the Court of
confirmed that Mr. Marcos, Jr. testified Appeals (CA) on January 20, 1995,
that petitioners residence was at the docketed as CA-G.R. SP No. 36214
Alexandra Apartment, Greenhills.[8] In seeking the annulment of the October 11,
addition, the entries[9] in the logbook 1994 and December 21, 1994 Orders of
of Alexandra Homes from August 4, Judge Aurelio C. Trampe.
1992 to August 2, 1993, listing the name
of petitioner Manotoc and the Sheriffs
Return,[10] were adduced in evidence.
Ruling of the Court of Appeals boilerplates last two (2) inside pages
where petitioners residence was
On March 17, 1997, the CA indicated. The CA considered the
rendered the assailed withholding of those pages as
Decision,[14] dismissing the Petition for suppression of evidence. Thus,
Certiorari and Prohibition. The court a according to the CA, the trial court had
quo adopted the findings of the trial court acquired jurisdiction over petitioner as
that petitioners residence was there was a valid substituted service
at Alexandra Homes, Unit E-2104, at No. pursuant to Section 8, Rule 14 of the old
29 Meralco Avenue, Pasig, Metro Revised Rules of Court.
Manila, which was also the residence of
her husband, as shown by the testimony On April 2, 1997, petitioner filed a
of Atty. Robert Swift and the Returns of Motion for Reconsideration[15] which was
the registered mails sent to petitioner. It denied by the CA in its
ruled that the Resolution[16] dated October 8, 1997.
Disembarkation/Embarkation Card and
the Certification dated September 17, Hence, petitioner has come
1993 issued by Renato A. De Leon, before the Court for review on certiorari.
Assistant Property Administrator of
Alexandra Homes, were hearsay, and
that said Certification did not refer to July The Issues
1993the month when the substituted
service was effected. Petitioner raises the following
assignment of errors for the Courts
In the same Decision, the CA also consideration:
I. RESPONDENT COURT OF
rejected petitioners Philippine passport
APPEALS COMMITTED [A] SERIOUS
as proof of her residency in Singapore as ERROR IN RENDERING THE
DECISION AND RESOLUTION IN
it merely showed the dates of her QUESTION (ANNEXES A AND B) IN
departure from and arrival in the DEFIANCE OF LAW AND
JURISPRUDENCE IN RULING THAT
Philippines without presenting the THE TRIAL COURT ACQUIRED
JURISDICTION OVER THE PERSON
OF THE PETITIONER THROUGH A
SUBSTITUTED SERVICE OF
SUMMONS IN ACCORDANCE WITH
SECTION 8, RULE 14 OF THE
REVISED RULES OF COURT.
TERRITORIAL SERVICE OF
SUMMONS UNDER
SECTIONS 17 AND 18, RULE
14 OF THE REVISED RULES
OF COURT.[17]

II. RESPONDENT COURT OF

The assigned errors bring to the
APPEALS COMMITTED [A]
SERIOUS ERROR WHEN IT fore the crux of the disagreementthe
RULED THAT THERE WAS A
VALID SERVICE validity of the substituted service of
OF SUMMONS ON AN summons for the trial court to acquire
ALLEGED CARETAKER OF
PETITIONERS RESIDENCE jurisdiction over petitioner.
IN COMPLETE DEFIANCE OF
THE RULING IN CASTILLO
VS. CFI OF BULACAN, BR. IV, The Courts Ruling
G.R. NO. L-
55869, FEBRUARY 20, 1984,
127 SCRA 632 WHICH We GRANT the petition.
DEFINES THE PROPRIETY Acquisition of Jurisdiction
OF SUCH SERVICE UPON
MERE OVERSEERS OF
PREMISES WHERE A PARTY Jurisdiction over the defendant is
SUPPOSEDLY RESIDES.
acquired either upon a valid service of
III. RESPONDENT COURT OF summons or the defendants voluntary
APPEALS COMMITTED [A]
SERIOUS ERROR IN appearance in court. When the
CONCLUDING THAT THE defendant does not voluntarily submit to
RESIDENCE OF THE
HUSBAND IS ALSO THE the courts jurisdiction or when there is no
RESIDENCE OF HIS WIFE valid service of summons, any judgment
CONTRARY TO THE RULING
IN THE BANK OF THE of the court which has no jurisdiction over
PHILIPPINE ISLANDS VS. DE
the person of the defendant is null and
COSTER, G.R. NO.
23181, MARCH 16, 1925, 47 void.[18] In an action strictly in personam,
PHIL. 594.
personal service on the defendant is the
IV. RESPONDENT COURT preferred mode of service, that is, by
OF APPEALS COMMITTED
handing a copy of the summons to the
[A] SERIOUS ERROR IN
FAILING TO APPLY THE defendant in person. If defendant, for
RULE ON EXTRA-
excusable reasons, cannot be served
with the summons within a reasonable
period, then substituted service can be
resorted to. While substituted service of
summons is permitted, it is extraordinary
in character and in derogation of the
usual method of service.[19] Hence, it
must faithfully and strictly comply with the
prescribed requirements and
circumstances authorized by the
rules. Indeed, compliance with the rules
regarding the service of summons is as
much important as the issue of due
process as of jurisdiction.[20]
Requirements for Substituted Service
Section 8 of Rule 14 of the old
Revised Rules of Court which applies to
this case provides:
SEC.8. [21] Substituted
service. If the defendant
cannot be served within a
reasonable time as provided in
the preceding section [personal
service on defendant], service
may be effected (a) by leaving
copies of the summons at the
defendants residence with
some person of suitable age
and discretion then residing
therein, or (b) by leaving the
copies at defendants office or
regular place of business with
some competent person in
charge thereof.
We can break down this section
into the following requirements to effect a
valid substituted service:
(1) Impossibility of Prompt Personal
Service
The party relying on substituted
service or the sheriff must show that
defendant cannot be served promptly or
there is impossibility of prompt
service.[22] Section 8, Rule 14 provides
that the plaintiff or the sheriff is given a
reasonable time to serve the summons to
the defendant in person, but no specific
time frame is mentioned. Reasonable
time is defined as so much time as is
necessary under the circumstances for a
reasonably prudent and diligent man to
do, conveniently, what the contract or
duty requires that should be done, having
a regard for the rights and possibility of
loss, if any[,] to the other party.[23] Under
the Rules, the service of summons has
no set period. However, when the court,
clerk of court, or the plaintiff asks the
sheriff to make the return of the
summons and the latter submits the
return of summons, then the validity of
the summons lapses. The plaintiff may
then ask for an alias summons if the
service of summons has failed.[24] What
then is a reasonable time for the sheriff to
effect a personal service in order to
demonstrate impossibility of prompt
service? To the plaintiff, reasonable time
means no more than seven (7) days
since an expeditious processing of a
complaint is what a plaintiff wants. To the
sheriff, reasonable time means 15 to 30
days because at the end of the month, it
is a practice for the branch clerk of court
to require the sheriff to submit a return of
the summons assigned to the sheriff for
service. The Sheriffs Return provides
data to the Clerk of Court, which the clerk
uses in the Monthly Report of Cases to
be submitted to the Office of the Court
Administrator within the first ten (10) days
of the succeeding month. Thus, one
month from the issuance of summons
can be considered reasonable time with
regard to personal service on the
defendant.
Sheriffs are asked to discharge
their duties on the service of summons
with due care, utmost diligence, and
reasonable promptness and speed so as
not to prejudice the expeditious
dispensation of justice. Thus, they are
enjoined to try their best efforts to
accomplish personal service on
defendant. On the other hand, since the
defendant is expected to try to avoid and
evade service of summons, the sheriff
must be resourceful, persevering, canny,
and diligent in serving the process on the
defendant. For substituted service of
summons to be available, there must be
several attempts by the sheriff to
personally serve the summons within a
reasonable period [of one month] which
eventually resulted in failure to prove
impossibility of prompt service. Several
attempts means at least three (3) tries,
preferably on at least two different
dates. In addition, the sheriff must cite
why such efforts were unsuccessful. It is
only then that impossibility of service can
be confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the
Return of Summons the facts and
circumstances surrounding the
attempted personal service.[25] The
efforts made to find the defendant and
the reasons behind the failure must be If the substituted service will be
clearly narrated in detail in the effected at defendants house or
Return. The date and time of the residence, it should be left with a person
attempts on personal service, the of suitable age and discretion then
inquiries made to locate the defendant, residing therein.[27] A person of suitable
the name/s of the occupants of the age and discretion is one who has
alleged residence or house of defendant attained the age of full legal capacity (18
and all other acts done, though futile, to years old) and is considered to have
serve the summons on defendant must enough discernment to understand the
be specified in the Return to justify importance of a summons. Discretion is
substituted service. The form on Sheriffs defined as the ability to make decisions
Return of Summons on Substituted which represent a responsible choice
Service prescribed in the Handbook for and for which an understanding of what
Sheriffs published by the Philippine is lawful, right or wise may be
Judicial Academy requires a narration of presupposed.[28] Thus, to be of sufficient
the efforts made to find the defendant discretion, such person must know how
personally and the fact of to read and understand English to
failure.[26] Supreme Court Administrative comprehend the import of the summons,
Circular No. 5 dated November 9, and fully realize the need to deliver the
1989 requires that impossibility of prompt summons and complaint to the defendant
service should be shown by stating the at the earliest possible time for the
efforts made to find the defendant person to take appropriate action. Thus,
personally and the failure of such efforts, the person must have the relation of
which should be made in the proof of confidence to the defendant, ensuring
service. that the latter would receive or at least be
notified of the receipt of the
(3) A Person of Suitable Age and summons. The sheriff must therefore
Discretion determine if the person found in the
alleged dwelling or residence of
defendant is of legal age, what the
recipients relationship with the defendant
is, and whether said person
comprehends the significance of the
receipt of the summons and his duty to
immediately deliver it to the defendant or
at least notify the defendant of said
receipt of summons. These matters must
be clearly and specifically described in
the Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be
done at defendants office or regular
place of business, then it should be
served on a competent person in charge
of the place. Thus, the person on whom
the substituted service will be made must
be the one managing the office or
business of defendant, such as the
president or manager; and such
individual must have sufficient
knowledge to understand the obligation
of the defendant in the summons, its
importance, and the prejudicial effects
arising from inaction on
summons. Again, these details must be
contained in the Return.
Invalid Substituted Service in the
Case at Bar
Let us examine the full text of the
Sheriffs Return, which reads:
THIS IS TO CERTIFY that on many
occasions several attempts were
made to serve the summons with
complaint and annexes issued by this
Honorable Court in the above entitled
case, personally upon the
defendant IMELDA IMEE MARCOS-
MANOTOC located at Alexandra
Condominium Corpration [sic] or
Alexandra Homes E-2 Room 104
No. 29 Merlaco [sic] Ave., Pasig,
Metro-Manila at reasonable hours
of the day but to no avail for the
reason that said defendant is usually
out of her place and/or residence or
premises. That on the 15th day of July,
1993, substituted service of summons
was resorted to in accordance with the
Rules of Court in the Philippines
leaving copy of said summons with
complaint and annexes thru [sic] (Mr)
Macky de la Cruz, caretaker of the
said defendant, according to (Ms) Lyn
Jacinto, Receptionist and Telephone
Operator of the said building, a person
of suitable age and discretion, living
with the said defendant at the given
address who acknowledged the
receipt thereof of said processes but
he refused to sign (emphases
the
supplied).
WHEREFORE, said summons
is hereby returned to this
Honorable Court of origin, duly
served for its record and
information.

Pasig, Metro-
Manila July 15, 1993.[29]
A meticulous scrutiny of the
aforementioned Return readily reveals
the absence of material data on the
serious efforts to serve the Summons on
petitioner Manotoc in person. There is no
clear valid reason cited in the Return why
those efforts proved inadequate, to reach
the conclusion that personal service has
become impossible or unattainable
outside the generally couched phrases of
on many occasions several attempts
were made to serve the summons x x x
personally, at reasonable hours during
the day, and to no avail for the reason
that the said defendant is usually out of
her place and/or residence or
premises. Wanting in detailed
information, the Return deviates from the
rulingin Domagas v. Jensen[30] and other
related cases[31]that the pertinent facts
and circumstances on the efforts exerted
to serve the summons personally must
be narrated in the Return. It cannot be
determined how many times, on what
specific dates, and at what hours of the
day the attempts were made. Given the
fact that the substituted service of
summons may be assailed, as in the
present case, by a Motion to Dismiss, it
is imperative that the pertinent facts and
circumstances surrounding the service of
summons be described with more
particularity in the Return or Certificate of
Service.
Besides, apart from the allegation
of petitioners address in the Complaint, it
has not been shown that respondent
Trajano or Sheriff Caelas, who served
such summons, exerted extraordinary
efforts to locate petitioner. Certainly, the
second paragraph of the Complaint only
states that respondents were informed,
and so [they] allege about the address
and whereabouts of petitioner. Before
resorting to substituted service, a plaintiff
must demonstrate an effort in good faith
to locate the defendant through more
direct means.[32] More so, in the case in
hand, when the alleged petitioners
residence or house is doubtful or has not
been clearly ascertained, it would have
been better for personal service to have
been pursued persistently.
In the case Umandap v. Sabio,
Jr.,[33] it may be true that the Court held
that a Sheriffs Return, which states that
despite efforts exerted to serve said
process personally upon the defendant
on several occasions the same proved
futile, conforms to the requirements of
valid substituted service. However, in
view of the numerous claims of
irregularities in substituted service which
have spawned the filing of a great
number of unnecessary special civil
actions of certiorari and appeals to higher
courts, resulting in prolonged litigation
and wasteful legal expenses, the Court
rules in the case at bar that the narration
of the efforts made to find the defendant
and the fact of failure written in broad and
imprecise words will not suffice. The
facts and circumstances should be stated
with more particularity and detail on the
number of attempts made at personal
service, dates and times of the attempts,
inquiries to locate defendant, names of
occupants of the alleged residence, and
the reasons for failure should be included
in the Return to satisfactorily show the
efforts undertaken. That such efforts
were made to personally serve summons
on defendant, and those resulted in
failure, would prove impossibility of
prompt personal service.
Moreover, to allow sheriffs to
describe the facts and circumstances in
inexact terms would encourage routine
performance of their precise duties
relating to substituted servicefor it would
be quite easy to shroud or conceal
carelessness or laxity in such broad
terms. Lastly, considering that monies
and properties worth millions may be lost
by a defendant because of an irregular or
void substituted service, it is but only fair
that the Sheriffs Return should clearly
and convincingly show the
impracticability or hopelessness of
personal service.
Granting that such a general
description be considered adequate,
there is still a serious nonconformity from
the requirement that the summons must
be left with a person of suitable age and
discretion residing in defendants house
or residence. Thus, there are two (2)
requirements under the Rules: (1)
recipient must be a person of suitable
age and discretion; and (2) recipient must
reside in the house or residence of
defendant. Both requirements were not
met. In this case, the Sheriffs Return
lacks information as to residence, age,
and discretion of Mr. Macky de la Cruz,
aside from the sheriffs general assertion
that de la Cruz is the resident caretaker
of petitioner as pointed out by a certain
Ms. Lyn Jacinto, alleged receptionist and
telephone operator
of Alexandra Homes. It is doubtful if Mr.
de la Cruz is residing with petitioner
Manotoc in the condominium unit
considering that a married woman of her
stature in society would unlikely hire a
male caretaker to reside in her
dwelling. With the petitioners allegation
that Macky de la Cruz is not her
employee, servant, or representative, it is
necessary to have additional information
in the Return of Summons. Besides, Mr.
Macky de la Cruzs refusal to sign the
Receipt for the summons is a strong
indication that he did not have the
necessary relation of confidence with
petitioner. To protect petitioners right to
due process by being accorded proper
notice of a case against her, the
substituted service of summons must be
shown to clearly comply with the rules.
It has been stated and restated
that substituted service of summons
must faithfully and strictly comply with the
prescribed requirements and in the
circumstances authorized by the
rules. [34]
Even American case law likewise
stresses the principle of strict compliance
with statute or rule on substituted service,
thus:
The procedure prescribed by a statute
or rule for substituted or constructive
service must be strictly
[35]
pursued. There must be strict
compliance with the requirements of
statutes authorizing substituted or
constructive service.[36]
Where, by the local law,
substituted or constructive
service is in certain situations
authorized in the place of
personal service when the
latter is inconvenient or
impossible, a strict and literal
compliance with the provisions
of the law must be shown in
order to support the judgment
based on such substituted or
constructive
service.[37] Jurisdiction is not to
be assumed and exercised on
the general ground that the
subject matter of the suit is
within the power of the
court. The inquiry must be as to
whether the requisites of the
statute have been complied
with, and such compliance
must appear on the
[38]
record. The fact that the
defendant had actual
knowledge of attempted
service does not render the
service effectual if in fact the
the presumption to apply, the Sheriffs
process was not served in
accordance with the Return must show that serious efforts or
requirements of the statute. [39]
attempts were exerted to personally
serve the summons and that said efforts
failed. These facts must be specifically
Based on the above principles,
narrated in the Return. To reiterate, it
respondent Trajano failed to
must clearly show that the substituted
demonstrate that there was strict
service must be made on a person of
compliance with the requirements of the
suitable age and discretion living in the
then Section 8, Rule 14 (now Section 7,
dwelling or residence of
Rule 14 of the 1997 Rules of Civil
defendant. Otherwise, the Return is
Procedure).
flawed and the presumption cannot be
availed of. As previously explained, the
Due to non-compliance with the
Return of Sheriff Caelas did not comply
prerequisites for valid substituted
with the stringent requirements of Rule
service, the proceedings held before
14, Section 8 on substituted service.
the trial court perforce must be
annulled.
In the case of Venturanza v. Court
of Appeals,[41] it was held that x x x
The court a quo heavily relied on
the presumption of regularity in the
the presumption of regularity in the
performance of official functions by
performance of official duty. It reasons
the sheriff is not applicable in this
out that [t]he certificate of service by the
case where it is patent that the sheriffs
proper officer is prima facie evidence of
return is defective (emphasis supplied).
the facts set out herein, and to overcome
While the Sheriffs Return in the
the presumption arising from said
Venturanza case had no statement on
certificate, the evidence must be clear
the effort or attempt to personally serve
and convincing.[40]
the summons, the Return of Sheriff
Caelas in the case at bar merely
The Court acknowledges that this
described the efforts or attempts in
ruling is still a valid doctrine. However, for
 [G.R. No. 131724. February 28, 2000]
general terms lacking in details as
required by the ruling in the case MILLENIUM INDUSTRIAL
COMMERCIAL
of Domagas v. Jensen and other
CORPORATION, petitioner,
cases. It is as if Caelas Return did not vs. JACKSON TAN, respondent. Jjjuris
mention any effort to accomplish DECISION
personal service. Thus, the substituted
MENDOZA, J.:
service is void.
In December 1994, Millenium Industrial
Commercial Corporation, petitioner
On the issue whether petitioner herein, executed a Deed of Real Estate
Manotoc is a resident Mortgage[1] over its real property covered
by TCT No. 24069 in favor of respondent
of Alexandra Homes, Unit E-2104, at No. Jackson Tan. The mortgage was
29 Meralco Avenue, Pasig City, our executed to secure payment of
petitioner's indebtedness to respondent
findings that the substituted service is in the amount of P2 million, without
void has rendered the matter moot and monthly interest, but which, at maturity
date on June 10, 1995, was payable in
academic. Even assuming that the amount of P4 million.
Alexandra Homes Room 104 is her
On November 9, 1995, respondent filed
actual residence, such fact would not against petitioner a complaint for
make an irregular and void substituted foreclosure of mortgage in the Regional
Trial Court, Branch 6, Cebu City. On
service valid and effective. November 21, 1995, summons and a
copy of the complaint were served upon
petitioner through a certain Lynverd
IN VIEW OF THE FOREGOING, Cinches, described in the sheriff's return,
this Petition for Review is dated November 23, 1995, as "a
hereby GRANTED and the assailed Draftsman, a person of sufficient age and
(discretion) working therein, he is the
March 17, 1997 Decision and October 8, highest ranking officer or Officer-in-
1997 Resolution of the Court of Appeals Charge of defendant's Corporation, to
and the October 11, 1994 and December receive processes of the Court."[2]
21, 1994 Orders of the Regional Trial
Petitioner moved for the dismissal of the
Court, National Capital Judicial Region, complaint on the ground that there was
Pasig City, Branch 163 are no valid service of summons upon it, as
hereby REVERSED and SET a result of which the trial court did not
acquire jurisdiction over it. Petitioner
ASIDE. No costs. invoked Rule 14, 13 of the 1964 Rules of
Court and contended that service on
Lynverd Cinches, as alleged in the
sheriff's return, was invalid as he is not
one of the authorized persons on whom
summons may be served and that, in
fact, he was not even its employee.[3]
Petitioner also sought the dismissal of
the complaint against it on the ground
that it had satisfied its obligation to
respondent when the latter opted to be
paid in shares of stock under the
following stipulation in the mortgage
contract:
That in the remote possibility of failure on
the part of the mortgagor to pay the
mortgage obligation and interest in cash,
the MORTGAGEE at his option may
demand that payment be made in the
form of shares of stock of Millenium
Industrial Commercial Corporation
totaling at least 4,000,000 shares.[4]
Petitioner further prayed for "other reliefs
just and equitable under the
[5]
premises." Jurismis
On December 15, 1995, the trial court
denied petitioner's Motion to Dismiss. Its
order stated:
This refers to the Motion to Dismiss,
dated December 4, 1995, by defendant
anchored on the following grounds:
1. That the Court had not acquired
jurisdiction over the person of the
defendant corporation because
summons was served upon a person
who is not known to or an employee of
the defendant corporation.
2. That the obligation sought to be
collected was already paid and
extinguished.
By interposing the second ground, the
defendant has availed of an affirmative
defense on the basis of which the Court
has to hear and receive evidence. For the
Court to validly decide the said plea of
the defendant it necessarily had to
acquire jurisdiction over the person of the
defendant. Thus, defendant is
considered to have then abandoned its
first ground and is deemed to have
voluntarily submitted itself to the
jurisdiction of the Court. It is a legal
truism that voluntary appearance cures
the defect of the summons, if any. The
defendant's filing of the motion to dismiss
by pleading therein the second ground
amounts to voluntary appearance and it
indeed cured the defect.
Wherefore, Motion to Dismiss is hereby
denied for lack of merit.[6]
Petitioner moved for reconsideration, but
its motion was denied by the trial court in
its order, dated January 16, 1996, for
failure of petitioner to raise any new
ground. Petitioner then filed a petition
for certiorari in the Court of Appeals,
assailing the aforesaid orders of the trial
court.
On September 18, 1997, the Court of
Appeals dismissed the petition.[7] The
appellate court ruled that although
petitioner denied Lynverd Cinches'
authority to receive summons for it, its
actual receipt of the summons could be
inferred from its filing of a motion to
dismiss, hence, the purpose for issuing
summons had been substantially
achieved. Moreover, it was held, by
including the affirmative defense that it
had already paid its obligation and
praying for other reliefs in its Motion to
Dismiss, petitioner voluntarily submitted
to the jurisdiction of the court.[8]Lexjuris
Hence, this petition for review. Petitioner
raises the following issues:
I......WHETHER OR NOT SERVICE OF
SUMMONS UPON A MERE
DRAFTSMAN WHO IS NOT ONE OF
THOSE UPON WHOM SUMMONS MAY
BE SERVED IN CASE OF A
DEFENDANT CORPORATION AS
MENTIONED IN THE RULES IS VALID.
II......WHETHER OR NOT THE
INCLUSION OF ANOTHER
AFFIRMATIVE RELIEF IN A MOTION
TO DISMISS ABANDONS AND WAIVES
THE GROUND OF LACK OF
JURISDICTION OVER THE PERSON
OF THE DEFENDANT THEREIN ALSO
PLEADED UNDER PREVAILING LAW
AND JURISPRUDENCE.
III......WHETHER OR NOT THERE IS A
LEGAL GROUND TO GRANT
PETITIONERS MOTION TO DISMISS
THE COMPLAINT BELOW.
First. Petitioner objects to the application
of the doctrine of substantial compliance
in the service of summons for two
reasons: (1) the enumeration of persons
on whom service of summons on a
corporation may be effected in Rule 14
13, is exclusive and mandatory; and (2)
even assuming that substantial
compliance is allowed, its alleged actual
receipt of the summons is based on an
unfounded speculation because there is
nothing in the records to show that
Lynverd Cinches actually turned over the
summons to any of the officers of the
corporation.[9]Petitioner contends that it
was able to file a motion to dismiss only
because of its timely discovery of the
foreclosure suit against it when it
checked the records of the case in the
trial court.
The contention is meritorious.
Summons is the means by which the
defendant in a case is notified of the
existence of an action against him and,
thereby, the court is conferred jurisdiction
over the person of the defendant.[10] If the
defendant is corporation, Rule 14, 13
requires that service of summons be
made upon the corporations president,
manager, secretary, cashier, agent, or
any of its directors.[11] The rationale of the
rule is that service must be made on a
representative so integrated with the
corporation sued as to make it a
priori presumable that he will realize his
responsibilities and know what he should
do with any legal papers received by
him.[12] Esmso
Petitioner contends that the enumeration
in Rule 14, 13 is exclusive and that
service of summons upon one who is not
enumerated therein is invalid. This is the
general rule.[13] However, it is settled that
substantial compliance by serving
summons on persons other than those
mentioned in the above rule may be
justified. In G & G Trading Corporation v.
Court of Appeals,[14]we ruled that
although the service of summons was
made on a person not enumerated in
Rule 14, 13, if it appears that the
summons and complaint were in fact
received by the corporation, there is
substantial compliance with the rule as its
purpose has been attained.
In Porac Trucking, Inc. v. Court of
Appeals,[15] this Court enumerated the
requisites for the application of the
doctrine of substantial compliance, to wit:
(a) there must be actual receipt of the
summons by the person served, i.e.,
transferring possession of the copy of the
summons from the Sheriff to the person
served; (b) the person served must sign
a receipt or the sheriff's return; and (c)
there must be actual receipt of the
summons by the corporation through the
person on whom the summons was
actually served.[16] The third requisite is
the most important for it is through such
receipt that the purpose of the rule on
service of summons is attained.
In this case, there is no dispute that the
first and second requisites were fulfilled.
With respect to the third, the appellate
court held that petitioner's filing of a
motion to dismiss the foreclosure suit is
proof that it received the copy of the
summons and the complaint. There is,
however, no direct proof of this or that
Lynverd Cinches actually turned over the
summons to any of the officers of the
corporation. In contrast, in our cases
applying the substantial compliance
rule,[17] there was direct evidence, such
as the admission of the corporation's
officers, of receipt of summons by the
corporation through the person upon
whom it was actually served. The
question is whether it is allowable to
merely infer actual receipt of summons
by the corporation through the person on
whom summons was served. We hold
that it cannot be allowed. For there to be
substantial compliance, actual receipt of
summons by the corporation through the
person served must be shown. Where a
corporation only learns of the service of
summons and the filing of the complaint
against it through some person or means
other than the person actually served, the
service of summons becomes
meaningless. This is particularly true in
the present case where there is serious
doubt if Lynverd Cinches, the person on
whom service of summons was effected,
is in fact an employee of the corporation.
Except for the sheriff's return, there is
nothing to show that Lynverd Cinches
was really a draftsman employed by the
corporation. Mse sm
Respondent casts doubt on petitioner's
claim that it came to know about the
summons and the complaint against it
only after it learned that there was a
pending foreclosure of its mortgage.
There is nothing improbable about this
claim. Petitioner was in default in the
payment of its loan. It had received
demand letters from respondent. Thus, it
had reason to believe that a foreclosure
suit would be filed against it. The
appellate court was, therefore, in error in
giving weight to respondent's claims.
Receipt by petitioner of the summons
and complaint cannot be inferred from
the fact that it filed a Motion to Dismiss
the case.
Second. We now turn to the issue of
jurisdiction by estoppel. Both the trial
court and the Court of Appeals held that
by raising the affirmative defense of
payment and by praying for other reliefs
in its Motion to Dismiss, petitioner in
effect waived its objection to the trial
court's jurisdiction over it. We think this is
error.
Our decision in La Naval Drug
Corporation v. Court of
[18]
Appeals settled this question. The rule
prior to La Naval was that if a defendant,
in a motion to dismiss, alleges grounds
for dismissing the action other than lack
of jurisdiction, he would be deemed to
have submitted himself to the jurisdiction
of the court.[19] This rule no longer holds
true. Noting that the doctrine of estoppel
by jurisdiction must be unequivocal and
intentional, we ruled in La Naval:
Jurisdiction over the person must be
seasonably raised, i.e., that it is pleaded
in a motion to dismiss or by way of an
affirmative defense. Voluntary
appearance shall be deemed a waiver of
this defense. The assertion, however, of
affirmative defenses shall not be
construed as an estoppel or as a waiver
of such defense.[20]
Third. Finally, we turn to the effect of
petitioner's prayer for "other reliefs" in its
Motion to Dismiss. In De Midgely v.
Fernandos,[21] it was held that, in a
motion to dismiss, the allegation of
grounds other than lack of jurisdiction
over the person of the defendant,
including a prayer "for such other reliefs
as" may be deemed "appropriate and
proper" amounted to voluntary
appearance. This, however, must be
deemed superseded by the ruling
in La Naval that estoppel by jurisdiction
must be unequivocal and intentional. It
would be absurd to hold that petitioner
unequivocally and intentionally submitted
itself to the jurisdiction of the court by
seeking other reliefs to which it might be
entitled when the only relief that it can
properly ask from the trial court is the
dismissal of the complaint against it. Ex
sm
WHEREFORE, the decision of the Court
of Appeals is REVERSED and the
complaint against petitioner is
DISMISSED.
SO ORDERED.
G.R. No. 107660 January 2, 1995
RAMON C. LOZON, petitioner,
vs.
NATIONAL LABOR RELATIONS
COMMISSION (Second Division) and
PHILIPPINE AIRLINES,
INC., respondents
VITUG, J.:
Petitioner Ramon C. Lozon, a certified
public accountant, was a Senior
Vice-President-Finance of Private
respondent Philippine Airlines, Inc.
("PAL"), when his services were
terminated on 19 December 1990 in the
aftermath of the much-publicized "two-
billion-peso PALscam." Lozon started to
work for the national carrier on 23 August
1967 and, for twenty-three years, steadily
climbed the corporate ladder until he
became one of its vice-presidents.1
His termination from the service was
spawned by a letter sent some time in
June 1990 by a member of PAL's board
of directors, then Solicitor General
Francisco Chavez, to PAL President
Dante Santos. Chavez demanded an
investigation of twenty-three irregularities
allegedly committed by twenty-two high-
ranking PAL officials. Among these
officials was petitioner; he had been
administratively charged by Romeo
David, Senior Vice-President for
Corporate Services and Logistics Group,
for his (Lozon) purported involvement in
four cases, labeled "Goldair,"
"Autographics," "Big Bang of 1983" and
"Middle
East."2 Pending the investigation of
these cases by a panel3 constituted by
then President Corazon C. Aquino,
petitioner was placed under preventive
suspension.
In the organizational meeting of the PAL
board of directors on 19 October 1990
which occasion Feliciano R. Belmonte,
Jr., was elected chairman of the board
while Dante G. Santos was designated
president and chief executive officer,4 the
board deferred action on the election or
appointment of some senior officers of
the company who, like petitioner, had
been charged with various offenses.
On 18 January 1991, the PAL board of
directors issued two resolutions relative
to the investigation conducted by the
presidential investigating panel in the
"Autographics" and "Goldair" cases. In
"Autographics," petitioner was charged,
along with three other officials,5 with
"gross inefficiency, negligence,
imprudence, mismanagement,
dereliction of duty, failure to observe
and/or implement administrative and
executive policies" and with the
"concealment, or cover-up and
prevention of the seasonal discovery of
the anomalous transactions" had with
Autographics, Inc., resulting in, among
other things, an overpayment by PAL to
Autographics in the amount of around
P12 million. Petitioner was forthwith
considered "resigned from the service . .
. for loss of confidence and for acts
inimical to the interests of the
company."6 A similar conclusion was
arrived at by the PAL board of directors
with regard to petitioner in the "Goldair"
case where he, together with six other
PAL officials,7 were charged with like
"offenses" that had caused PAL's
defraudation by Goldair, PAL's general
sales agent in Australia, of 14.6 million
Australian dollars.8
Aggrieved by the action taken by the PAL
board of directors, petitioner, on 26 June
1991 filed with the National Labor
Relations Commission ("NLRC") in
Manila a complaint (docketed NLRC-
NCR Case No. 00-06-03684-91) for
illegal dismissal and for reinstatement,
with backwages and "fringe benefits such
as Vacation leave, Sick leave, 13th
month pay, Christmas Bonus, Medical
Expenses, car expenses, trip pass
entitlement, etc., plus moral damages of
P40 Million, exemplary damages of P10
Million and reasonable attorney's fees."9
On 09 August 1991, 10 the PAL board of
directors also held petitioner as "resigned
from the company" for loss of confidence
and for acts inimical to the interests of the
company in the "Big Bang of 1983" case
for his alleged role in the irregularities
that had precipitated the write-down
(write-off) of assets amounting to P553
million from the books and financial
statements of PAL. 11 In the "Middle
East" case, the PAL board of directors,
on the anomalous administration of
commercial marketing arrangements in
which PAL had lost an estimated P120
million. 12
PAL defended the validity of petitioner's
dismissal before the Labor Arbiter. It
questioned at the same time the
jurisdiction of the NLRC, positing the
theory that since the investigating panel
was constituted by then President
Aquino, said panel, along with the PAL
board of directors, became "a parallel
arbitration unit" which, in legal
contemplation, should be deemed to
have substituted for the NLRC. Thus,
PAL averred, petitioner's recourse
should have been to appeal his case to
the Office of the President. 13 On the
other hand, petitioner questioned the
authority of the panel to conduct the
investigation, asseverating that the
charges leveled against him were purely
administrative in nature that could have
well been ventilated under the grievance
procedure outline in PAL's Code of
Discipline.
On 17 March 1992, Labor Arbiter Jose G.
de Vera rendered a decision ruling for
petitioner.14 The decretal portion of the
decision read:
WHEREFORE, all the foregoing
premises being considered, judgment is
hereby rendered ordering the respondent
Philippine Airlines, Inc., to reinstate the
complainant to his former position with all
the rights, privileges, and benefits
appertaining thereto plus backwages,
which as of March 15, 1992 already
amounted to P2,632,500.00, exclusive of
fringes. Further, the respondent
company is ordered to pay complainant
as follows: P5,000.00 as moral damages;
P1,000,000.00 as exemplary damages,
and attorney's fees equivalent to ten
percent (10%) of all of the foregoing
awards.
SO ORDERED. 15
A day after promulgating the decision,
the labor arbiter issued a writ of
execution. PAL filed a motion to quash
the writ petitioner promptly opposed.
After the labor arbiter had denied the
motion to quash, PAL filed a petition for
injunction with the NLRC (docketed
NLRC IC Case No. 00261-92). No
decision was rendered by NLRC on this
petition. 16
Meanwhile, PAL appealed the decision of
the labor arbiter by filing a memorandum
on appeal, 17 assailing, once again, the
jurisdiction of the NLRC but this time on
the ground that the issue pertaining to the
removal or dismissal of petitioner, a
corporate officer, was within the
exclusive and original jurisdiction of the
Securities and Exchange Commission
("SEC"). Petitioner interposed a partial
appeal praying for an increase in the
amount of moral and exemplary
damages awarded by the labor arbiter. 18
On 24 July 1992, the NLRC rendered a
decision (in NLRC NCR Case No. 00-06-
03684-91) 19 dismissing the case on the
strength of PAL's new argument on the
issue of jurisdiction. 20 Petitioner's
motion for reconsideration was denied by
the NLRC.
The instant petition for certiorari filed with
this Court raises these issues: (a)
Whether or not the NLRC has jurisdiction
over the illegal dismissal case, and (b) on
the assumption that the SEC has that
jurisdiction, whether or not private
respondent is estopped from raising
NLRC's lack of jurisdiction over the
controversy.
We sustain NLRC's dismissal of the
case.
Presidential Decree No. 902-A confers
on the SEC original and exclusive
jurisdiction to hear and decide
controversies and cases involving —
a. Intra-corporate and partnership
relations between or among the
corporation, officers and stockholders
and partners, including their elections or
appointments;
b. State and corporate affairs in relation
to the legal existence of corporations,
partnerships and associations or to their
franchises; and
c. Investors and corporate affairs,
particularly in respect of devices and
schemes, such as fraudulent practices,
employed by directors, officers, business
associates, and/or other stockholders,
partners, or members of registered firms;
as well as
d. Petitions for suspension of payments
filed by corporations, partnerships or
associations possessing sufficient
property to cover all their debts but which
foresee the impossibility of meeting them
when they respectively fall due, or
possessing insufficient assets to cover
their liabilities and said entities are upon
petition or motu propio, placed under the
management of a Rehabilitation
Receiver or Management Committee.
Specifically, in intra-corporate matters
concerning the election or appointment of
officers of a corporation, the decree
provides:
Sec. 5. In addition to the regulatory and
adjudicative functions of the Securities
and Exchange Commission over
corporations, partnerships and other
forms of association registered with it as
expressly granted under existing laws
and decrees, it shall have original and
exclusive jurisdiction to hear and decide
cases involving:
xxx xxx xxx
(c) Controversies in the election or
appointments of directors, trustees,
officers or managers of such
corporations, partnerships or
association.
Petitioner himself admits that vice
presidents are senior members of
management, 21 whose designations are
no longer than just by means of ordinary
promotions. In his own case, petitioner
has been elected to the position of Senior
Vice-President — Finance Group by
PAL's board of directors at its
organizational meeting held on 20
October 1989 pursuant to the By-
laws, 22 under which, he would serve for
a term of one year and until his successor
shall have been elected and
23
qualified. Petitioner, for reasons
already mentioned, did not get to be re-
elected thereafter. 24
In Fortune Cement Corporation
v. NLRC, 25 the Court has quoted with
approval the Solicitor General's
contention that "a corporate officer's
dismissal is always a corporate act
and/or intra-corporate controversy and
that nature is not altered by the reason or
wisdom which the Board of Directors may
have in taking such action." Not the least
insignificant in the case at bench is that
petitioner's dismissal is intertwined with
still another intra-corporate affair, earlier
so ascribed as the "two-billion-peso
PALscam," that inevitably places the
case under the specialized competence
of the SEC and well beyond the ambit of
a labor arbiter's normal jurisdiction under
the general provisions of Article 217 of
the Labor Code. 26
Petitioner contends that the jurisdiction of
the SEC excludes its cognizance over
claims for vacation and sick leaves, 13th
month pay, Christmas bonus, medical
expenses, car expenses, and other
benefits, as well as for moral damages
and attorney's fees. 27 Dy
v. NLRC28 categorically states that the
question of remuneration being asserted
by an officer of a corporation is "not a
simple labor problem but a matter that
comes within the area of corporate affairs
and management, and is in fact, a
corporate controversy in contemplation
of the Corporation Code." With regard to
the matter of damages, in Andaya v.
Abadia 29 where, in a complaint filed
before the Regional Trial Court, the
president and general manager of the
Armed Forces and Police Savings and
Loan Association ("AFPSLAI")
questioned his ouster from the
stewardship of the association, this
Court, in dismissing the petition assailing
the order of the trial court which ruled that
SEC, not the regular courts, had
jurisdiction over the case, has said:
The allegations against herein
respondents in the amended complaint
unquestionably reveal intra-corporate
controversies cleverly conceals,
although unsuccessfully, by use of civil
law terms and phrases. The amended
complaint impleads herein respondents
who, in their capacity as directors of
AFPSLAI, allegedly convened an illegal
meeting and voted for the reorganization
of management resulting in petitioner's
ouster as corporate officer. While it may
be said that the same corporate acts also
give rise to civil liability for damages, it
does not follow that the case is
necessarily taken out of the jurisdiction of
the SEC as it may award damages which
can be considered consequential in the
exercise of its adjudicative
powers. Besides, incidental issues that
properly fall within the authority of a
tribunal may also be considered by it to
avoid multiplicity of
actions. Consequently, in intra-corporate
matters such as those affecting the
corporation, its directors, trustees,
officers, shareholders, the issue of
consequential damages may just as well
be resolved and adjudicated by the SEC.
(Emphasis supplied.)
We here reiterate the above holdings for,
indeed, controversies within the purview
of Section 5 of P.D. No. 902-A must not
be so constricted as to deny to the SEC
the sound exercise of its expertise and
competence in resolving all closely
related aspects of such corporate
disputes.
Petitioner maintains that PAL is
estopped, nevertheless, from
questioning the jurisdiction of the NLRC
considering that PAL did not hold the
dispute to be intra-corporate until after
the case had already been brought on
appeal to the NLRC.
In the first place, there would not be
much basis to indicate that PAL was
"effectively barred by estoppel." 30 As
early as the initial stages of the
controversy PAL had already raised the
issue of jurisdiction albeit mistakenly at
first on the ground that petitioner's
recourse was an appeal to the Office of
the President. The error could not alter
the fact that PAL did question even then
the jurisdiction of both the labor arbiter
and the NLRC.
It has long been the established rule,
moreover, that jurisdiction over a subject
matter is conferred by law, 31 and the
question of lack of jurisdiction may be
raised at anytime even on appeal. 32 In
the recent case of La Naval Drug
Corporation vs. Court of Appeals, G.R.
No. 103200, 31 August 1994, this Court
said:
Lack of jurisdiction over the subject
matter of the suit is yet another matter.
Whenever it appears that the court has
no jurisdiction over the subject matter,
the action shall be dismissed (Section 2,
Rule 9, Rules of Court). This defense
may be interpose at any time, during
appeal (Roxas vs. Rafferty, 37 Phil. 957)
or even after final judgment (Cruzcosa
vs. Judge Concepcion, et al., 101 Phil.
146). Such is understandable, as this
kind of jurisdiction is conferred by law
and not within the courts, let alone the
parties, to themselves determine or
conveniently set aside. In People
vs. Casiano (111 Phil. 73, 93-94), this
Court, on the issue of estoppel, held:
to say that Robin Dui is entirely an
independent and separate case and,
more than that, it is not before us in this
instance.
WHEREFORE, the herein petition
for certiorari is DISMISSED, and the
decision appealed from is AFFIRMED,
without prejudice to petitioner's seeking,
if circumstances permit, a recourse in the
proper forum. No costs.

"The operation of the principle of SO ORDERED.

estoppel on the question of jurisdiction
seemingly depends upon whether the
lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case
was tried and decided upon the theory
that it had jurisdiction, the parties are not
barred, on appeal, from assailing such
jurisdiction, for the same "must exist as a
matter of law, and may not be conferred
by consent of the parties or by estoppel"
(5 C.J.S., 861-863). However, if the lower
court had jurisdiction, and the case was
heard and decided upon a given theory,
such, for instance, as that the court had
no jurisdiction, the party who induced it to
adopt such theory will not be permitted,
on appeal, to assume a inconsistent
position — that the lower court had
jurisdiction. Here, the principle of
estoppel applies. The rule that
jurisdiction is conferred by law, and does
not depend upon the will of the parties,
has no bearing thereon."

Petitioner points to "PAL's scandalous

duplicity" in questioning the jurisdiction of
the NLRC in this particular controversy
while upholding it (NLRC's jurisdiction) in
"Robin Dui v. Philippine Airlines" (Case
No. 00-4-20267) pending before the
Commission. We need not delve into
whether or not PAL's conduct does
indeed smack of opportunities; suffice it