G.R. No. 149660 - MARANAW HOTELS AND RESORT CORP. v. CA, ET AL.

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FIRST DIVISION

[G.R. NO. 149660 : January 20, 2009]

MARANAW HOTELS AND RESORT CORP., Petitioner, v. COURT OF APPEALS, SHERYL OABEL AND MANILA RESOURCE DEVELOPMENT CORP., Respondents.

DECISION

PUNO, C.J.:

Before the Court is a Petition for Review on Certiorari assailing a resolution issued by the Court of Appeals. The resolution denied the Petition for Review filed by
petitioner Maranaw Hotels and Resort Corp.

The present proceedings emanate from a complaint for regularization, subsequently converted into one for illegal dismissal, filed before Labor Arbiter Madjayran H.
Ajan by private respondent Sheryl Oabel.

It appears that private respondent Oabel was initially hired by petitioner as an extra beverage attendant on April 24, 1995. This lasted until February 7, 1997.1
Respondent worked in Century Park Hotel, an establishment owned by the petitioner.

On September 16, 1996,2 petitioner contracted with Manila Resource Development Corporation.3 Subsequently, private respondent Oabel was transferred to
MANRED, with the latter deporting itself as her employer.4 MANRED has intervened at all stages of these proceedings and has consistently claimed to be the
employer of private respondent Oabel. For the duration of her employment, private respondent Oabel performed the following functions:

Secretary, Public Relations Department: February 10, 1997 - March 6, 1997

Gift Shop Attendant: April 7, 1997 - April 21, 1997
Waitress: April 22, 1997 - May 20, 1997
Shop Attendant: May 21, 1997 - July 30, 19985
On July 20, 1998, private respondent filed before the Labor Arbiter a petition for regularization of employment against the petitioner. On August 1, 1998, however,
private respondent Oabel was dismissed from employment.6 Respondent converted her petition for regularization into a complaint for illegal dismissal.

Labor Arbiter Madjayran H. Ajan rendered a decision on July 13, 1999, dismissing the complaint against the petitioner. The decision held:

While complainant alleged that she has been working with the respondent hotel in different department (sic) of the latter on (sic) various capacities (although not all
departments are part and parcel of the hotels), complainant never disputed the fact that her work with the same were on a per function basis or on a "need basis" -
co-terminus with the function she was hired for' .Considering that complainant job (sic) with the respondent hotel was on a per function basis or on a "need basis",
complainant could not even be considered as casual employee or provisional employee. Respondent hotel consider (sic) complainant, at most, a project employee
which does not ripened (sic) into regular employee (sic).7

Private respondent appealed before the National Labor Relations Commission (NLRC). The NLRC reversed the ruling of the Labor Arbiter and held that: (1) MANRED is
a labor-only contractor, and (2) private respondent was illegally dismissed.

Of the first holding, the NLRC observed that under the very terms of the service contract, MANRED shall provide the petitioner not specific jobs or services but
personnel and that MANRED had insufficient capitalization and was not sufficiently equipped to provide specific jobs.8 The NLRC likewise observed that the activities
performed by the private respondent were directly related to and usually necessary or desirable in the business of the petitioner.9

With respect to the termination of private respondent's employment, the NLRC held that it was not effected for a valid or just cause and was therefore illegal. The
dispositive portion of the ruling reads thus:

WHEREFORE, the decision appealed from is hereby REVERSED. xxxx Respondents Century Park Hotel and Manila Resource Development Corporation are hereby
declared jointly and severally liable for the following awards in favor of complainant: 1) her full backwages and benefits from August 1, 1998 up to the date of her
actual reinstatement; 2) her salary differentials, share in the service charges, service incentive leave pay and 13th month pay from July 20, 1995 to July 31, 1998.

SO ORDERED.10

Petitioner subsequently appealed before the Court of Appeals. In a resolution, the appellate court dismissed the petition on account of the failure of the petitioner to
append the board resolution authorizing the counsel for petitioner to file the petition before the Court of Appeals. The Court of Appeals held:

After a careful perusal of the records of the case, We resolve to DISMISS the present petition on the ground of non-compliance with the rule on certification against
forum shopping taking into account that the aforesaid certification was subscribed and verified by the Personnel Director of petitioner corporation without attaching
thereto his authority to do so for and in behalf of petitioner corporation per board resolution or special power of attorney executed by the latter.11

Petitioner duly filed its motion for reconsideration which was denied by the Court of Appeals in a resolution dated August 30, 2001.12

In the present Petition for Review, the petitioner invokes substantial justice as justification for a reversal of the resolution of the Court of Appeals.13 Petitioner
likewise contends that the filing of a motion for reconsideration with the certificate of non-forum shopping attached constitutes substantial compliance with the
requirement.14

There is no merit to the petition.

Well-settled is the rule that the certificate of non-forum shopping is a mandatory requirement. Substantial compliance applies only with respect to the contents of
the certificate but not as to its presence in the pleading wherein it is required.
Petitioner's contention that the filing of a motion for reconsideration with an appended certificate of non forum-shopping suffices to cure the defect in the pleading is
absolutely specious. It negates the very purpose for which the certification against forum shopping is required: to inform the Court of the pendency of any other case
which may present similar issues and involve similar parties as the one before it. The requirement applies to both natural and juridical persons.

Petitioner relies upon this Court's ruling in Digital Microwave Corp. v. Court of Appeals15 to show that its Personnel Director has been duly authorized to sign
pleadings for and in behalf of the petitioner. Petitioner, however, has taken the ruling in Digital Microwave out of context. The portion of the ruling in Digital
Microwave upon which petitioner relies was in response to the issue of impossibility of compliance by juridical persons with the requirements of Circular 28-91.16
The Court's identification of duly authorized officers or directors as the proper signatories of a certificate of non forum-shopping was in response to that issue. The
ruling does not, however, ipso facto clothe a corporate officer or director with authority to execute a certificate of non-forum shopping by virtue of the former's
position alone.

Any doubt on the matter has been resolved by the Court's ruling in BPI Leasing Corp. v. Court of Appeals17 where this Court emphasized that the lawyer acting for the
corporation must be specifically authorized to sign pleadings for the corporation.18 Specific authorization, the Court held, could only come in the form of a board
resolution issued by the Board of Directors that specifically authorizes the counsel to institute the petition and execute the certification, to make his actions binding
on his principal, i.e., the corporation.19

This Court has not wavered in stressing the need for strict adherence to procedural requirements. The rules of procedure exist to ensure the orderly administration of
justice. They are not to be trifled with lightly.

For this reason alone, the petition must already be dismissed. However, even if this grave procedural infirmity is set aside, the petition must still fail. In the interest of
averting further litigation arising from the present controversy, and in light of the respective positions asserted by the parties in the pleadings and other memoranda
filed before this Court, the Court now proceeds to resolve the case on the merits.

Petitioner posits that it has entered into a service agreement with intervenor MANRED. The latter, in turn, maintains that private respondent Oabel is its employee
and subsequently holds itself out as the employer and offers the reinstatement of private respondent.

Notably, private respondent's purported employment with MANRED commenced only in 1996, way after she was hired by the petitioner as extra beverage attendant
on April 24, 1995. There is thus much credence in the private respondent's claim that the service agreement executed between the petitioner and MANRED is a mere
ploy to circumvent the law on employment, in particular that which pertains on regularization.

In this regard, it has not escaped the notice of the Court that the operations of the hotel itself do not cease with the end of each event or function and that there is an
ever present need for individuals to perform certain tasks necessary in the petitioner's business. Thus, although the tasks themselves may vary, the need for sufficient
manpower to carry them out does not. In any event, as borne out by the findings of the NLRC, the petitioner determines the nature of the tasks to be performed by
the private respondent, in the process exercising control.

This being so, the Court finds no difficulty in sustaining the finding of the NLRC that MANRED is a labor-only contractor.20 Concordantly, the real employer of private
respondent Oabel is the petitioner.

It appears further that private respondent has already rendered more than one year of service to the petitioner, for the period 1995-1998, for which she must already
be considered a regular employee, pursuant to Article 280 of the Labor Code:

Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties,
an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. (Emphasis supplied)cralawlibrary

IN VIEW WHEREOF, the present petition is DENIED. The resolution of the Court of Appeals dated June 15, 2001 is affirmed.

Costs against petitioner.

SO ORDERED.
G.R. No. 120496
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 120496 July 17, 1996

FIVE STAR BUS CO., INC. and CARLOS SALONGA, petitioners,

vs.
COURT OF APPEALS, REGIONAL TRIAL COURT, KALOOKAN CITY, BR. 129 and PEDRO and LYDIA SANTOS, respondents.

PUNO, J.:p

This petition for review on certiorari seeks to set aside the decision of the Court of Appeals1 in CA-G.R. CV No. 40969 awarding to private respondents Pedro and
Lydia Santos damages in the total amount of P122,000.00 for the death of their son in a vehicular accident; or, in the alternative, to modify said decision by deleting
the award of moral damages of P50,000.00
This case arose from Civil Case No. C-15500 for breach of contract of carriage and damages filed by private respondents of July 15, 1992 before the Regional Trial
Court, Branch 129, Kalookan City against petitioners Five Star Bus Co., Inc. and Carlos Salonga.2 The Santos spouses sought indemnification for the death of their
twenty-two year old son, Joey Santos, who died on April 27, 1992 aboard a passenger bus owned and operated by petitioner Five Star and driven by petitioner
Salonga. They alleged that their son rode the bus from Pangasinan from Manila when due to the "gross and wanton negligence, recklessness and imprudence" of the
bus driver, it hit an oncoming trailer truck along the Urdaneta, Pangasinan Highway; that the impact resulted on the death of two bus passengers, one of whom was
Joey Santos, and that petitioner refused to pay them damages as heirs of the deceased. Respondents prayed for P50,000.00 for the death of their son, P50,000.00 for
moral damages, P20,000.00 for funeral expenses and P20,000.00 for attorney's fees.

On September 16, 1992, petitioners answered the complaint alleged that it was the negligence of the driver of the trailer truck which encroached the oncoming bus'
lane that caused the mishap resulting in Joey's death.

On September 22, 1992, the trial court set the pre-trial of the case on October 15, 1992 and instructed counsels for both parties to notify their respective clients and
to file their pre-trial briefs. The pre-trial notice reads as follows:

ORDER
(Pre-Trial Notice)

Issues in this case being joined, pre-trial conference under Section 1 Rule 20 of the Rules of Court, in relation t Circular 1-89 of the Supreme Court, is set for October
15, 1992 at 8:30 A.M.

Counsels are instructed to notify their respective clients. Counsels are also reminded of the mandatory filing of pre-trial briefs at least 3 days before the pre-trial date.

SO ORDERED.

Given this 22nd day of September 1992 at the City of Kalookan, Metro Manila.

(Signed)
BAYANI S. RIVERA
Judge3

Copies of the pre-trial notice were sent to Atty. Arnel Nadais, counsel for petitioners.

On October 15, 1992, the day of the pre-trial, petitioners and their counsel failed to appear. Neither did they file a pre-trial brief. On motion by private respondents'
counsel, the trial court declared petitioners as default and scheduled the reception of their evidence on October 30, 1992, thus:

ORDER

When this case was called for pre-trial conference this morning, neither defendants nor their counsel appeared in Court, despite previous notice.

Counsel for the plaintiffs moved that the defendants be declared as in default for failure to appear today despite the notice.

The motion is well taken. Not only did defendants fail to appear despite the previous notice. They have likewise failed to file to file a pre-trial brief, pursuant to
Circular No. 1-89 of the Supreme Court.

WHEREFORE, premises considered, defendants are declared as in default. Accordingly, plaintiffs shall present evidence ex parte on October 30, 1992 at 8:30 A.M.

Counsel for plaintiffs is notified in open court.

Send a copy of this order to counsel for defendants.

SO ORDERED.

Given in the open hearing this 15th day of October 1992 at the City of Kalookan, Metro Manila.

(Signed)
BAYANI S. RIVERA
Judge4

As scheduled, on October 30, 1992, respondent Lydia Santos testified together with Roger Santos, a co-passenger of the deceased. Documents in support of their
testimonies were also presented.

On November 4, 1992, the trial court rendered a decision in favor of respondents, awarding them as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs and against defendant Five Star Bus Co., Inc. as follows:

1. Ordering defendant Five Star Bus Co., Inc. to pay plaintiffs compensatory damages in the sum of P50,000.00;

2. Ordering defendant Five Star Bus Co., Inc. to pay plaintiffs actual damages (funeral expenses) in the amount of P12,000.00;

3. Ordering defendant Five Star Bus Co., Inc. to pay plaintiff's lawyer (Atty. Emerico B. Lomibao) the sum of P10,000.00 as attorney's fees; and

4. Ordering defendant Five Star Bus Co., Inc. to pay the costs of the suit.

SO ORDERED.

Given this 4th day of November 1992 at the City of Kalookan, Metro Manila.

(Signed)
BAYANI S. RIVERA
Judge5

It appears that on the day of promulgation of the trial court's decision, the law firm of Vivar, Lopez and Associates entered its appearance as counsel for petitioners.

On November 10, 1992, a motion to set aside the order of default of October 15, 1992 was filed by Atty. Arnel nadias, former counsel of petitioners to whom pre-trial
notice was sent, resigned as petitioner Five Star's house counsel on September 30, 1992, and their law firm's services were engaged by petitioner much later and the
records of the case were delivered to them only on October 28, 1992, or days after the pre-trial conference.

On November 18, 1991, petitioners also filed a motion for reconsideration of the court's decision.

In an order dated December 10, 1992, the trial court denied both motions to set aside the order of default an for reconsideration.6

Petitioners appealed to the Court of Appeals.

On April 28, 1995, the Court of Appeals affirmed the decision of the trial court but added thereto an award of P50,000.00 for moral damages, as follows:

WHEREFORE, except as to the additional award of P50,000.00 as and for moral damages, the Decision of November 4, 1992 of the RTC-Kalookan City, Branch 129 in
Civil Case No. C-15500, is hereby AFFIRMED. Costs against defendants Five Star Bus Co., Inc. and Carlos Salonga.7

Before us, petitioners raise the following errors:

THE LOWER COURT ERRED IN DECLARING THE DEFENDANTS-APPELLANTS (PETITIONERS) HEREIN AS IN DEFAULT, ALLOWING EX-PARTE PRESENTATION OF EVIDENCE
AND ORDERING PETITIONER TO PAY PLAINTIFFS (RESPONDENTS) COMPENSATORY DAMAGES ON THE SUM OF FIFTY THOUSAND PESOS (P50,000.00), ACTUAL
DAMAGES (FUNERAL EXPENSES) IN THE AMOUNT OF TWELVE THOUSAND PESOS (P12,000.00) AND TO PAY PRIVATE RESPONDENTS' LAWYER THE SUM OF TEN
THOUSAND PESOS (P10,000.00) AS ATTORNEY'S FEES, ARE ALL NULL AND VOID, BEING CONTRARY TO AND INCONSISTENT WITH THE RULES OF COURT, EXISTING
JURISPRUDENCE ON THE MATTER, AND CONSTITUTIONAL PROVISION ON DUE PROCESS.

II

THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT, KALOOKAN CITY, BRANCH 129 AND GRANTING ADDITIONAL AWARD OF
FIFTY THOUSAND PESOS (P50,000.00) AS AND FOR MORAL DAMAGES. 8

We find the petition partly meritorious.

We reject the petitioner's claim that the trial court erred in declaring them as in default for failure to appear at the pre-trial conference when they, as parties, were
never notified thereof.

We have ingrained the rule that when the court schedules a case for pre-trial, notices must be served on the party separately from his counsel which may be made
directly to both party and counsel. It is preferred, however, that service of such notice on a party be made through or care of his counsel at counsel's address "with
the express imposition upon counsel of the obligation of notifying the party of the date, time and place of pre-trial conference."9 It is the duty of counsel upon whom
a pre-trial notice is served to see to it that his client receives such notice and attends the pre-trial, otherwise, he will be liable for grave administrative disciplinary
action. 10

In the instant case, the notice of pre-trial was sent to the counsels of both parties with the express instruction that they notify their respective clients of the
conference. Atty. Naidas received the notice on September 28, 1992, 11 i.e., seventeen (17) days before the scheduled conference and two (2) days before his
resignation as house counsel of petitioner Five Star. He had ample time to notify petitioners of the pre-trial conference.
Atty. Naidas may have already resigned on the day of the pre-trial, but as far as the trial court was concerned, he continued to be petitioners' counsel of record since
no withdrawal of appearance had been filed by him. having duly notified them of the pre-trial, the trial court did not err in declaring petitioners as in default. They
were bound by the negligence of their counsel.

We also hold that after declaring a party as in default or non-suited, the trial court is not duty-bound to receive evidence ex-parte on the very same day it issued the
default or non-suit order. The hearing that petitioners failed to attend was a pre-trial; pre-trial and trial on the merits are usually held on separate days to enable the
parties to prepare for trail. 12 To be sure, petitioners have no cause to complain for it was to their advantage that the trial court scheduled the reception of
respondents' evidence fifteen (15) days after its pre-trial date. The time gap gave them the opportunity to move for reconsideration of the default order before the
presentation of respondents' evidence.

We also reject petitioners' argument that the trial court decided the case with undue haste simply because it promulgated its decision four (4) days after receiving
respondents' evidence. The records show that the issues of the case were simple and the basic evidence consisted of the testimonies of two witnesses which were
relatively short.

We agree, however, with petitioner's contention that the additional award of moral damages should not have granted by the Court of Appeals because private
respondents did not appeal the decision of the trial court.

Fairness dictates that a party who has not appealed from a judgment of the trial court is bound by the terms of the judgment. We reiterate the rule that an appellee,
who is not an appellant, may assign errors in his brief where his purpose is to maintain the judgment on other grounds, but he may not do so if his purpose is to have
the judgment modified or reversed, in which case he must appeal. 13

IN VIEW THEREOF, the decision of the Court of Appeals in CA-G.R. CV No. 40969 is affirmed with the modification that the award of P50,000.00 for moral damages is
deleted.

No cost.

SO ORDERED.

Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.

G.R. No. 155806 - TIBLE & TIBLE COMPANY, INC., ET AL. v. ROYAL SAVINGS AND LOAN ASSOCIATION, ET AL.
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THIRD DIVISION

[G.R. NO. 155806 : April 8, 2008]

TIBLE & TIBLE COMPANY, INC., HEIRS OF EMILIO G. TIBLE, JR., namely: ALMABELLA MENLA VDA. DE TIBLE, EMILIO M. TIBLE IV, MA. MYLENE TIBLE, VICTOR M. TIBLE,
ERIC M. TIBLE, ALLAN M. TIBLE, Petitioner, v. ROYAL SAVINGS AND LOAN ASSOCIATION (now assigned to COMSAVINGS BANK) and GODOFREDO E. QUILING, Deputy
Provincial Sheriff of Calamba, Laguna, Respondents.

DECISION

REYES, R.T., J.:

THE remedies of appeal and certiorari are mutually exclusive, not alternative or successive. Certiorari being an extraordinary remedy, the party which seeks to avail of
it must observe the Rules strictly.

This is a Rule 45 Petition for Review on Certiorari of the Resolution1 of the Court of Appeals (CA) which dismissed a Rule 65 Petition for Certiorari on procedural flaws.

The Facts

The facts, as reflected in the petition and its annexes, are as follows:

Sometime in June 1997, petitioners Tible & Tible Company, Inc. (TTCI) and Emilio G. Tible, Jr. (now deceased), jointly and severally, obtained a loan and/or credit
accommodation from respondent Royal Savings and Loan Association (RSLA) in the total amount of one million five hundred thousand and eighty pesos
(P1,500,080.00). The loan amount was released to petitioner TTCI in four instalments, as follows:

Date Released

Amount

Due Date

June 6, 1977

P750,000.00

June 6, 1980

July 30, 1977

250,040.00

June 30, 1980

September 21, 1977

250,040.00

September 9, 1980

February 21, 1978

250,000.00

February 21, 1980

TOTAL

P1,500,080.00

Securing the loan were the following mortgages:

(a) Chattel Mortgage executed on June 2, 1977 over 64 units/pieces of logging, heavy, and sawmill equipment, their accessions and accessories, all valued at
P3,123,035.00; andcralawlibrary

(b) Chattel Mortgage on 2,243 pieces of logs, with total volume of 683,818 board feet.

The loan was intended to finance the logging and lumber business of petitioner TTCI. Unfortunately, between 1977 to 1980, TTCI did not come up to its projected
capacity of 12,000 board feet per 8-hour operation due to mechanical and design deficiencies. Despite remedial measures undertaken, it was unsuccessful in its
efforts to rehabilitate the sawmill. TTCI was thus able to pay only P418,317.40 through dacion en pago by delivery of its lumber products.
In a Decision dated February 4, 1980 in Civil Case No. 2893, then Judge Luis L. Victor of the Court of First Instance (CFI) of Cavite, Branch 2, approved the compromise
agreement between respondent RSLA, as then plaintiff on the one hand, and petitioners TTCI and Emilio Tible, Jr., as then defendants, on the other. TTCI expressly
admitted to be indebted to RSLA in the sum of P2,428,290.20, inclusive of interests, attorney's fees service charges, stamps collection costs and expenses of suit, to
be restructured for 18 months commencing January 12, 1980.2

Also stipulated in said compromise agreement is the mode of payment, to wit:

2. That defendants, after having fully examined and verified the said sum of P2,428,290.20 to be correct and/or untainted by any illegality or any imperfection in law
and in fact, do hereby expressly propose to pay the said sum of P2,428,290.20 strictly according to the fallowing schedule:

A. P156,176.58 - on or before March 30, 1980;

b. P156,176.58 - on or before April 30, 1980 and every 30th day of the immediately succeeding months thereafter until the account is paid in full, it being expressly
understood that all unpaid instalments shall bear fourteen per cent (14%) interest per annum from their respective dates of default until full payment.3

The compromise agreement further stated that "failure on the part of the defendants to pay any one of the installments as and when the same is due and payable,
shall make the whole obligation immediately due and payable and shall entitle the plaintiff to immediately execute without further verbal or written notice to the
defendants x x x."4

After TTCI defaulted in its monthly payments, RSLA moved for immediate execution of the February 4, 1980 Decision based on the compromise in Civil Case No. N-
2893, without furnishing TTCI any copy of such motion. CFI granted the motion and issued the order dated July 16, 1980 stating as follows:

For failure of the defendants to comply with the decision rendered by the Court on February 4, 1980, the omnibus ex parte motion for appointment of special sheriff
to enforce the same, dated July 1, 1980, filed by the plaintiff is granted.

WHEREFORE, in view thereof, let a writ of execution be issued in this case and the same be implemented by the City Sheriff of Naga City.

SO ORDERED.5

In its manifestation with ex parte motion dated August 17, 1981 in the said civil case, RSLA sought the issuance of an alias writ of execution, which was again granted
by the CFI, as follows:

Considering the manifestation with ex parte motion, dated August 17, 1981, filed by counsel for the plaintiff, to be well-taken, the motion is granted and an alias writ
of execution is hereby issued in this case and to implement the same, Deputy Provincial Sheriff of Laguna Godofredo Quiling is hereby appointed as a special sheriff
for the purpose.

SO ORDERED.6

Accordingly, an alias writ of execution7 was issued.

In a public auction sale conducted on December 12, 1983 by Godofredo E. Quiling, then Deputy Sheriff of the Province of Laguna, twenty-three (23) parcels of land8
were awarded to RSLA as highest bidder for the total bid price of P950,000.00.

On November 5, 1993, almost ten years after the supposed public auction sale, Quiling, now Sheriff IV of Calamba, Laguna, issued the final deed of sale9 in favor of
RSLA (now Comsavings Bank).

Upon another ex parte motion by now respondent Comsavings Bank, the former CFI of Cavite, now Regional Trial Court (RTC), Branch 16, in Cavite City, issued an
Order10 for: (a) the Register of Deeds of Naga City to cancel Transfer Certificate of Title (TCT) No. 9061; (b) the Register of Deeds of Camarines Sur to cancel seven
original and transfer certificates of title; (c) the Provincial Assessor of Camarines Sur to cancel eight tax declarations; and (d) the City Assessor of Naga City to cancel
two tax declarations and (e) all of them to issue in lieu thereof new certificates of title and tax declarations in the name of respondent Comsavings Bank, upon
payment of corresponding fees and subject to subsisting encumbrances.

Aggrieved by these developments, petitioners filed an action for "Annulment of Execution Sale, and TCT Nos. 27994, 24002, 24003, 24004, 24005 and other related
Documents, and/or Reconveyance of Real Property with prayer to Preliminary Injunction and Restraining Order with Damages" initially with the RTC, Branch 24, Naga
City which was docketed as Civil Case No. RTC-96-3626, considering that the subject matter in litigation are located within the territorial jurisdiction of the said court.

In an Order11 dated October 13, 1997, however, RTC, Branch 24, in Naga City dismissed the complaint for want of jurisdiction and suggested that the complaint be
filed in Cavite City instead. It cited Philippine National Bank v. Javelana12 which held that the rule which prohibits a judge from interfering with the actuations of the
judge of another branch of the same court is not infringed when the judge who modifies or annuls the order issued by the other judge acts in the same case and
belongs to the same court.13

Opting against elevating the said order of dismissal to the appellate court, petitioners filed the same complaint, which is now the case involved in the present
petition, with the RTC in Cavite City as suggested by the RTC in Naga City. This was considered as a new case, docketed as Civil Case No. N-6619, raffled to the same
RTC, Branch 16 in which Civil Case No. N-2893 was docketed.

Instead of filing an answer, respondent Comsavings bank filed a motion to dismiss on the ground that petitioners' claim or demand has been waived, abandoned or
otherwise extinguished.

RTC and CA Dispositions

On February 6, 2002, the RTC dismissed the complaint in Civil Case No. N-6619 for want of proof. The RTC likewise dismissed the counterclaim. Petitioners' motion for
reconsideration of said dismissal was also denied by the RTC in its Order dated March 26, 2002, stating that:
Acting on the motion for reconsideration dated February 22, 2002 and finding no new and cogent reason which would warrant a reversal of the decision dated
February 6, 2002 considering that the issues raised have already been passed upon and dealt with adequately, the same is DENIED.

SO ORDERED.14

Petitioners elevated the case to the CA on May 15, 2002 via Petition for Review under Rule 42. On May 20, 2002, after allegedly realizing that the decision of RTC,
Branch 16, Cavite City was not rendered in the exercise of appellate jurisdiction, petitioners filed a motion to withdraw Petition for Review . The CA granted the
motion to withdraw.

On May 23, 2002, petitioners filed a Petition for Certiorari with the CA.

On July 11, 2002, the CA dismissed outright the Petition for Certiorari on procedural grounds, viz.:

(1) the "Verification Affidavit of Non-Forum Shopping" was signed by one Almabella Menla Vda. de Tible, but there is no Special Power of Attorney, Board Resolution
nor Secretary's Certificate was attached thereto authorizing said signatory to sign the Verification and Affidavit of Non-Forum Shopping in behalf of the other
petitioners; (Sec. 3, Rule 46 of the 1997 Rules of Civil Procedure as amended)

(2) there is no written explanation to justify service by mail in lieu of the required personal service of copies of the petition upon the respondents was made (Section
11, Rule 13, Id.; Solar Team Entertainment, Inc. v. Hon. Ricafort, et al., 293 SCRA 661).

Further, even a perfunctory reading of the petition reveals that the same is seriously infirmed in that it is not the proper remedy from the assailed decision dismissing
petitioners' complaint for "Annulment of Execution Sale and T.C.T. Nos. 27994, 24002, 24003, 24005 and other related documents, and/or Reconveyance of Real
Property with prayer for Preliminary Injunction and Restraining Order with Damages" in Civil Case No. N-6619 before the Regional Trial Court of Cavite City, Branch
16, but ordinary appeal therefrom under Rule 41 of the 1997 Rules of Civil Procedure.15

On August 5, 2002, petitioners filed a motion for reconsideration and motion to admit petitioners' special power of attorney and board resolution. In a Resolution
dated October 29, 2002, the CA denied petitioners' plea for reconsideration.

Hence, the present Petition for Review on Certiorari .

Issues

The two main issues are both procedural in nature:

1. Is petitioners' proper remedy an ordinary appeal under Rule 41 or a Petition for Certiorari under Rule 65?cra lawlibrary

2. May the CA relax the application of the rules requiring verification and certification of non-forum shopping under Section 3, Rule 46, as well as compliance with the
rule regarding priorities in modes of service and filing of pleadings under Section 11, Rule 13?

Our Ruling

The CA aptly dismissed the Petition for Certiorari for being an improper remedy.

In the assailed Resolution of July 11, 2002, the CA dismissed petitioners' certiorari petition for being the wrong remedy or mode of review of the decision dated
February 6, 2002 of RTC, Branch 16, in Cavite City.

The RTC decision is a judgment from which an appeal may be taken in accordance with Section 1, Rule 41 of the Rules of Court, which states:

SECTION 1. Subject of appeal. - An appeal may be taken from a judgment or final order that completely disposes of the case or of a particular matter therein when
declared by these Rules to be appealable.

The CA was, therefore, correct when it dismissed outright the Petition for Certiorari. This Court has invariably upheld dismissals of certiorari petitions erroneously
filed, appeal being the correct remedy. It is a very basic rule in our jurisprudence that certiorari cannot be availed of when the party has adequate remedy such as an
appeal.

Section 1, Rule 65 of the 1997 Rule of Civil Procedure explicitly states when a Petition for Certiorari may be availed of, to wit:

SECTION 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. (Emphasis supplied)cralawlibrary

The Court has exhaustively enumerated and painstakingly discussed the differences between these two remedies in Madrigal Transport, Inc. v. Lapanday Holdings
Corporation,16 viz.:

Appeal and Certiorari Distinguished

Between an appeal and a Petition for Certiorari, there are substantial distinctions which shall be explained below.

As to the Purpose. Certiorari is a remedy designed for the correction of errors of jurisdiction, not errors of judgment. In Pure Foods Corporation v. NLRC, we explained
the simple reason for the rule in this light:
"When a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. If it
did, every error committed by a court would deprive it of its jurisdiction and every erroneous judgment would be a void judgment. This cannot be allowed. The
administration of justice would not survive such a rule. Consequently, an error of judgment that the court may commit in the exercise of its jurisdiction is not
correctable through the original civil action of certiorari."

The supervisory jurisdiction of a court over the issuance of a writ of certiorari cannot be exercised for the purpose of reviewing the intrinsic correctness of a judgment
of the lower court - on the basis either of the law or the facts of the case, or of the wisdom or legal soundness of the decision. Even if the findings of the court are
incorrect, as long as it has jurisdiction over the case, such correction is normally beyond the province of certiorari. Where the error is not one of jurisdiction, but of an
error of law or fact - a mistake of judgment - appeal is the remedy.

As to the Manner of Filing. Over an appeal, the CA exercises its appellate jurisdiction and power of review. Over a certiorari, the higher court uses its original
jurisdiction in accordance with its power of control and supervision over the proceedings of lower courts.An appeal is thus a continuation of the original suit, while a
Petition for Certiorari is an original and independent action that was not part of the trial that had resulted in the rendition of the judgment or order complained of.
The parties to an appeal are the original parties to the action. In contrast, the parties to a Petition for Certiorari are the aggrieved party (who thereby becomes the
petitioner) against the lower court or quasi-judicial agency, and the prevailing parties (the public and the private respondents, respectively).

As to the Subject Matter. Only judgments or final orders and those that the Rules of Court so declare are appealable. Since the issue is jurisdiction, an original action
for certiorari may be directed against an interlocutory order of the lower court prior to an appeal from the judgment; or where there is no appeal or any plain, speedy
or adequate remedy.

As to the Period of Filing. Ordinary appeals should be filed within fifteen days from the notice of judgment or final order appealed from. Where a record on appeal is
required, the appellant must file a notice of appeal and a record on appeal within thirty days from the said notice of judgment or final order. A Petition for Review
should be filed and served within fifteen days from the notice of denial of the decision, or of the petitioner's timely filed motion for new trial or motion for
reconsideration. In an appeal by certiorari, the petition should be filed also within fifteen days from the notice of judgment or final order, or of the denial of the
petitioner's motion for new trial or motion for reconsideration.

On the other hand, a Petition for Certiorari should be filed not later than sixty days from the notice of judgment, order, or resolution. If a motion for new trial or
motion for reconsideration was timely filed, the period shall be counted from the denial of the motion.

As to the Need for a Motion for Reconsideration. A motion for reconsideration is generally required prior to the filing of a Petition for Certiorari, in order to afford the
tribunal an opportunity to correct the alleged errors. Note also that this motion is a plain and adequate remedy expressly available under the law. Such motion is not
required before appealing a judgment or final order.17

With these distinctions, it is plainly discernible why a party is precluded from filing a Petition for Certiorari when appeal is available, or why the two remedies of
appeal and certiorari are mutually exclusive and not alternative or successive.18 Where appeal is available, certiorari will not prosper, even if the ground availed of is
grave abuse of discretion.19

More than that, We find no grave abuse of discretion here. Applying the settled jurisprudence on the matter, appeal would have been an adequate remedy, especially
since the dismissal by the RTC was mainly based on factual considerations.

After a thorough review of all the arguments of petitioners, We are unconvinced that the alleged errors referred to are acts of "grave abuse of discretion" that would
fall under the definition of this phrase. As We explained in Pilipino Telephone Corporation v. Pilipino Telephone Employees Association:20

For a Petition for Certiorari under Rule 65 of the Rules of Court to prosper, the tribunal, board or officer exercising judicial or quasi-judicial functions must be proven
to have acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. "Grave abuse of discretion"
has been defined as "a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough, it must be so
grave as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount
to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined or to act at all in contemplation of law."21

It should be stressed that it is not sufficient that a tribunal, in the exercise of its power, abused its discretion; such abuse must be grave.22

Non-compliance with the rules is fatal to a petition for certiorari .

Even assuming, arguendo, that the Petition for Certiorari filed with the CA is the correct remedy, still, petitioners' defective verification and affidavit of non-forum
shopping as required by Section 3, Rule 46, as well as the absence of any written explanation to justify service by mail in lieu of personal service, as required by
Section 11, Rule 13 of the 1997 Rule of Civil Procedure, are fatal to their cause.

In Athena Computers, Inc. v. Reyes,23 the Court stressed that "certiorari, being an extraordinary remedy, the party who seeks to avail of the same must strictly
observe the rules laid down by the law." The Court further explained in Athena:

The acceptance of a Petition for Certiorari as well as the grant of due course thereto is, in general, addressed to the sound discretion of the court. Although the court
has absolute discretion to reject and dismiss a Petition for Certiorari, it does so only (1) when the petition fails to demonstrate grave abuse of discretion by any court,
agency, or branch of the government; or (2) when there are procedural errors, like violations of the Rules of Court or Supreme Court Circulars. Clearly petitioners in
their petition before the Court of Appeals committed procedural errors.

The verification of the petition and certification of non-forum shopping before the Court of Appeals were signed only by Jimenez. There is no showing that he was
authorized to sign the same by Athena, his co-petitioner.

Section 4, Rule 7 of the Rules states that a pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and
correct of his knowledge and belief. Consequently, the verification should have been signed not only by Jimenez but also by Athena's duly authorized representative.
In Docena v. Lapesura, we ruled that the certificate of non-forum shopping should be signed by all the petitioners or plaintiffs in a case, and that the signing by only
one of them is insufficient. The attestation on non-forum shopping requires personal knowledge by the party executing the same, and the lone signing petitioner
cannot be presumed to have personal knowledge of the filing or non-filing by his co-petitioners of any action or claim the same as similar to the current petition.24

As noted by the CA in its Resolution of July 11, 2002, petitioner Almabella Menla Vda. de Tible's signature in the verification and affidavit of non-forum shopping of
the Petition for Certiorari was not ratified by any special power of attorney, board resolution nor secretary's certificate executed by her co-petitioners authorizing her
to sign for and in their behalf. The CA used this as one of its basis to dismiss the petition.

The CA refused to reverse its earlier dismissal upon petitioners' motion for reconsideration despite subsequent compliance by submitting the required special power
of attorney,25 secretary's certificate,26 and board resolution.27

In Digital Microwave Corporation v. Court of Appeals,28 the Court affirmed the CA dismissal of a petition on the same ground, noting '

x x x That petitioner did not in the first instance comply with the requirement of Revised Circular No. 2-91 by having the certification against forum shopping signed
by one of its officers, as it did after its petition before the Court of Appeals had been dismissed, is beyond our comprehension.29 (Emphasis supplied)cralawlibrary

At any rate, it must be noted that subsequent compliance does not ipso facto entitle a party to a reconsideration of the dismissal order. As the Court aptly observed
in Batoy v. Regional Trial Court, Br. 50, Loay, Bohol:30

x x x the requirement under Administrative Circular No. 04-94 for a certificate of non-forum shopping is mandatory. The subsequent compliance with said
requirement does not excuse a party's failure to comply therewith in the first instance. In those cases where this Court excused the non-compliance with the
requirement of the submission of a certificate of non-forum shopping, it found special circumstances or compelling reasons which made the strict application of said
Circular clearly unjustified or inequitable. x x x31 (Emphasis supplied)cralawlibrary

Moreover, petitioners failed to include any written explanation to justify service by mail in lieu of the required personal service of copies of the petition upon
respondents. Section 11, Rule 13 of the Rules of Court states:

SEC. 11. Priorities in modes of service and filing. - Whenever practicable, the service and filing of pleadings and other papers shall be done personally. Except with
respect to papers emanating from the court, a resort to other modes must be accompanied by a written explanation why the service or filing was not done
personally. A violation of this Rule may be cause to consider the paper as not filed. (Emphasis supplied)cralawlibrary

In Solar Team Entertainment v. Ricafort,32 the Court has unequivocally stated that "for the guidance of the Bench and the Bar, strictest compliance with Section 11,
Rule 13 is mandated x x x."33 The Court finds no cogent reason not to apply the same strict standard to petitioners.

The doctrine of liberal application of Procedural rules applies when there is justifiable cause for non-compliance or compelling reason to relax it.

Much reliance is placed on the rule that "Courts are not slaves or robots of technical rules, shorn of judicial discretion. In rendering justice, courts have always been,
as they ought to be, conscientiously guided by the norm that on balance, technicalities take a backseat against substantive rights, and not the other way around."34
This rule must always be used in the right context, lest injustice, rather than justice would be its end result.

It must never be forgotten that, generally, the application of the rules must be upheld, and the suspension or even mere relaxation of its application, is the exception.
This Court previously explained:

The Court is not impervious to the frustration that litigants and lawyers alike would at times encounter in procedural bureaucracy but imperative justice requires
correct observance of indispensable technicalities precisely designed to ensure its proper dispensation. It has long been recognized that strict compliance with the
Rules of Court is indispensable for the prevention of needless delays and for the orderly and expeditious dispatch of judicial business.

Procedural rules are not to be disdained as mere technicalities that may be ignored at will to suit the convenience of a party. Adjective law is important in ensuring
the effective enforcement of substantive rights through the orderly and speedy administration of justice. These rules are not intended to hamper litigants or
complicate litigation but, indeed to provide for a system under which a suitor may be heard in the correct form and manner and at the prescribed time in a peaceful
confrontation before a judge whose authority they acknowledge.

It cannot be overemphasized that procedural rules have their own wholesome rationale in the orderly administration of justice. Justice has to be administered
according to the Rules in order to obviate arbitrariness, caprice, or whimsicality. We have been cautioned and reminded in Limpot v. CA, et al., that:

"Rules of procedure are intended to ensure the orderly administration of justice and the protection of substantive rights in judicial and extrajudicial proceedings. It is
a mistake to propose that substantive law and adjective law are contradictory to each other or, as often suggested, that enforcement of procedural rules should
never be permitted if it will result in prejudice to the substantive rights of the litigants. This is not exactly true; the concept is much misunderstood. As a matter of
fact, the policy of the courts is to give both kinds of law, as complementing each other, in the just and speedy resolution of the dispute between the parties.
Observance of both substantive rights is equally guaranteed by due process, whatever the source of such rights, be it the Constitution itself or only a statute or a rule
of court.

x x x

"x x x (T)hey are required to be followed except only when for the most persuasive of reasons them may be relaxed to relieve a litigant of an injustice not
commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed. x x x While it is true that a litigation is not a game of
technicalities, this does not mean that the Rules of Court may be ignored at will and at random to the prejudice of the orderly presentation and assessment of the
issues and their just resolution. Justice eschews anarchy."35

For the exception to come into play, first and foremost should be the party litigant's plausible explanation for non-compliance with the rules he proposes to be
exempted from. Absent any acceptable explanation, the party's plain violation of the rules will not be countenanced.

Thus, in Suzuki v. De Guzman,36 the Court held:

As a general rule, these requirements are mandatory, meaning, non-compliance therewith is a sufficient ground for the dismissal of the petition. While the Court is
not unmindful of exceptional cases where this Court has set aside procedural defects to correct a patent injustice, concomitant to a liberal application of the rules of
procedure should be an effort on the part of the party invoking liberality to at least explain his failure to comply with the rules. There must be at least a reasonable
attempt at compliance with the Rules. Utter disregard of the Rules cannot justly be rationalized by harking on the policy of liberal construction.37 (Emphasis
supplied)cralawlibrary

In Ortiz v. Court of Appeals,38 the CA dismissed the Petition for Review outright for failure of petitioners to sign the certification of non-forum shopping. The
certification was signed only by their lawyer. In affirming the dismissal of the petition, the Court said:

Regrettably, we find substantial compliance will not suffice in a matter involving strict observance as provided for in Circular No. 28-91. The attestation contained in
the certification on non-forum shopping requires personal knowledge by the party who executed the same. To merit the Court's consideration, petitioner here must
show reasonable cause for failure to personally sign the certification. The petitioners must convince the court that the outright dismissal of the petition would defeat
the administration of justice. However, the petitioner did not give any explanation to warrant their exemption from the strict application of the rule. Utter disregard
of the rules cannot justly be rationalized by harking on the policy of liberal construction.39 (Emphasis supplied)cralawlibrary

Too, the party litigant must convince the Court that the outright dismissal of the petition would defeat the administration of justice.40 The Court's pronouncements
in Pet Plans, Inc. v. Court of Appeals41 are illustrative:

x x x In Loquias v. Office of the Ombudsman (338 SCRA 62, 68 [2000]), we held that failure of one of the petitioners to sign the verification and certificate against
forum shopping constitutes a defect in the petition, which is a ground for dismissing the same. While we have held in rulings subsequent to Loquias that this rule may
be relaxed, petitioners must comply with two conditions: first, petitioners must show justifiable cause for their failure to personally sign the certification, and; second,
they must also be able to prove that the outright dismissal of the petition would seriously impair the orderly administration of justice. x x x42

Recapitulating, the two pre-requisites for the relaxation of the rules are: (a) justifiable cause or plausible reason for non-compliance; and (b) compelling reason to
convince the court that outright dismissal of the petition would seriously impair the orderly administration of justice.

Perusing the records, We find neither justifiable cause nor compelling reason to relax the rules in petitioners' favor.

Petitioners do not have any plausible reason for non-compliance. In their motion for reconsideration43 of the CA dismissal, petitioners claimed that co-petitioners of
Almabella Vda. de Tible, who signed the verification in their behalf, had executed a Special Power of Attorney (SPA) way back in November 22, 1997, but offered no
acceptable explanation why they did not attach a copy of said SPA to their Petition for Certiorari. The same is true with the lack of a board resolution. Supposed
"oversight and/or inadvertence committed by petitioners' counsel" which may easily be alleged, do not per se constitute an acceptable explanation for non-
compliance.

Also, the Court finds nothing on record which constitutes compelling reason for a liberal application of procedural rules.

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

Austria-Martinez*, Acting Chairperson, Tinga**, Chico-Nazario, Nachura, JJ., concur.

G.R. No. 151413 - CAGAYAN VALLEY DRUG CORP. v. COMMISSIONER OF INTERNAL REVENUE : FEBRUARY 2008 - PHILIPPINE SUPREME COURT JURISPRUDENCE
PHILIPPINE SUPREME COURT DECISIONS
SECOND DIVISION

[G.R. NO. 151413 : February 13, 2008]

CAGAYAN VALLEY DRUG CORPORATION, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.

DECISION

VELASCO, JR., J.:

The Case

This Petition for Review under Rule 45 of the Rules of Court seeks the recall of the August 31, 2000 Resolution1 of the Court of Appeals (CA) in CA-G.R. SP No. 59778,
which dismissed petitioner Cagayan Valley Drug Corporation's Petition for Review of the April 26, 2000 Decision2 of the Court of Tax Appeals (CTA) in C.T.A. Case No.
5581 on the ground of defective verification and certification against forum shopping.

The Facts

Petitioner, a corporation duly organized and existing under Philippine laws, is a duly licensed retailer of medicine and other pharmaceutical products. It operates two
drugstores, one in Tuguegarao, Cagayan, and the other in Roxas, Isabela, under the name and style of "Mercury Drug."

Petitioner alleged that in 1995, it granted 20% sales discounts to qualified senior citizens on purchases of medicine pursuant to Republic Act No. (RA) 74323 and its
implementing rules and regulations.

In compliance with Revenue Regulation No. (RR) 2-94, petitioner treated the 20% sales discounts granted to qualified senior citizens in 1995 as deductions from the
gross sales in order to arrive at the net sales, instead of treating them as tax credit as provided by Section 4 of RA 7432.

On December 27, 1996, however, petitioner filed with the Bureau of Internal Revenue (BIR) a claim for tax refund/tax credit of the full amount of the 20% sales
discount it granted to senior citizens for the year 1995, allegedly totaling to PhP 123,083 in accordance with Sec. 4 of RA 7432.

The BIR's inaction on petitioner's claim for refund/tax credit compelled petitioner to file on March 18, 1998 a Petition for Review before the CTA docketed as C.T.A.
Case No. 5581 in order to forestall the two-year prescriptive period provided under Sec. 2304 of the 1977 Tax Code, as amended. Thereafter, on March 31, 2000,
petitioner amended its Petition for Review .

The Ruling of the Court of Tax Appeals

On April 26, 2000, the CTA rendered a Decision dismissing the Petition for Review for lack of merit.5

The CTA sustained petitioner's contention that pursuant to Sec. 4 of RA 7432, the 20% sales discounts petitioner extended to qualified senior citizens in 1995 should
be treated as tax credit and not as deductions from the gross sales as erroneously interpreted in RR 2-94. The CTA reiterated its consistent holdings that RR 2-94 is an
invalid administrative interpretation of the law it purports to implement as it contravenes and does not conform to the standards RA 7432 prescribes.

Notwithstanding petitioner's entitlement to a tax credit from the 20% sales discounts it extended to qualified senior citizens in 1995, the CTA nonetheless dismissed
petitioner's action for refund or tax credit on account of petitioner's net loss in 1995. First, the CTA rejected the refund as it is clear that RA 7432 only grants the 20%
sales discounts extended to qualified senior citizens as tax credit and not as tax refund. Second, in rejecting the tax credit, the CTA reasoned that while petitioner may
be qualified for a tax credit, it cannot be so extended to petitioner on account of its net loss in 1995.

The CTA ratiocinated that on matters of tax credit claim, the government applies the amount determined to be reimbursable after proper verification against any sum
that may be due and collectible from the taxpayer. However, if no tax has been paid or if no amount is due and collectible from the taxpayer, then a tax credit is
unavailing. Moreover, it held that before allowing recovery for claims for a refund or tax credit, it must first be established that there was an actual collection and
receipt by the government of the tax sought to be recovered. In the instant case, the CTA found that petitioner did not pay any tax by virtue of its net loss position in
1995.

Petitioner's Motion for Reconsideration was likewise denied through the appellate tax court's June 30, 2000 Resolution.6

The Ruling of the Court of Appeals

Aggrieved, petitioner elevated the matter before the CA, docketed as CA-G.R. SP No. 59778. On August 31, 2000, the CA issued the assailed Resolution7 dismissing
the petition on procedural grounds. The CA held that the person who signed the verification and certification of absence of forum shopping, a certain Jacinto J.
Concepcion, President of petitioner, failed to adduce proof that he was duly authorized by the board of directors to do so.

As far as the CA was concerned, the main issue was whether or not the verification and certification of non-forum shopping signed by the President of petitioner is
sufficient compliance with Secs. 4 and 5, Rule 7 of the 1997 Rules of Civil Procedure.

The verification and certification in question reads:

I, JACINTO J. CONCEPCION, of legal age with office address at 2nd Floor, Mercury Drug Corporation, No. 7 Mercury Ave, Bagumbayan, Quezon City, under oath,
hereby state that:
1. I am the President of Cagayan Valley Drug Corporation, Petitioner in the above-entitled case and am duly authorized to sign this Verification and Certification of
Absence of Forum Shopping by the Board of Director.

xxx

The CA found no sufficient proof to show that Concepcion was duly authorized by the Board of Directors of petitioner. The appellate court anchored its disposition on
our ruling in Premium Marble Resources, Inc. v. Court of Appeals (Premium), that "[i]n the absence of an authority from the Board of Directors, no person, not even
the officers of the corporation, can validly bind the corporation."8

Hence, we have this petition.

The Issues

Petitioner raises two issues: first, whether petitioner's president can sign the subject verification and certification sans the approval of its Board of Directors. And
second, whether the CTA committed reversible error in denying and dismissing petitioner's action for refund or tax credit in C.T.A. Case No. 5581.

The Court's Ruling

The petition is meritorious.

Premium not applicable

As regards the first issue, we find the CA to have erroneously relied on Premium. In said case, the issue tackled was not on whether the president of Premium Marble
Resources, Inc. was authorized to sign the verification and certification against forum shopping, but rather on which of the two sets of officers, both claiming to be the
legal board of directors of Premium, have the authority to file the suit for and in behalf of the company. The factual antecedents and issues in Premium are not on all
fours with the instant case and is, therefore, not applicable.

With respect to an individual litigant, there is no question that litigants must sign the sworn verification and certification unless they execute a power of attorney
authorizing another person to sign it. With respect to a juridical person, Sec. 4, Rule 7 on verification and Sec. 5, Rule 7 on certification against forum shopping are
silent as to who the authorized signatory should be. Said rules do not indicate if the submission of a board resolution authorizing the officer or representative is
necessary.

Corporate powers exercised through board of directors

It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation Code, clearly enunciates that all corporate powers are exercised, all business
conducted, and all properties controlled by the board of directors. A corporation has a separate and distinct personality from its directors and officers and can only
exercise its corporate powers through the board of directors. Thus, it is clear that an individual corporate officer cannot solely exercise any corporate power
pertaining to the corporation without authority from the board of directors. This has been our constant holding in cases instituted by a corporation.

In a slew of cases, however, we have recognized the authority of some corporate officers to sign the verification and certification against forum shopping. In Mactan-
Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general manager to sign the verification and certificate against
forum shopping;9 in Pfizer v. Galan, we upheld the validity of a verification signed by an "employment specialist" who had not even presented any proof of her
authority to represent the company;10 in Novelty Philippines, Inc., v. CA, we ruled that a personnel officer who signed the petition but did not attach the authority
from the company is authorized to sign the verification and non-forum shopping certificate;11 and in Lepanto Consolidated Mining Company v. WMC Resources
International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and President of the Company can sign the verification and certificate against non-forum
shopping even without the submission of the board's authorization.12

In sum, we have held that the following officials or employees of the company can sign the verification and certification without need of a board resolution: (1) the
Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an
Employment Specialist in a labor case.

While the above cases do not provide a complete listing of authorized signatories to the verification and certification required by the rules, the determination of the
sufficiency of the authority was done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or
representatives of the corporation to sign the verification or certificate against forum shopping, being "in a position to verify the truthfulness and correctness of the
allegations in the petition."13

Authority from board of directors required

In Philippine Airlines v. Flight Attendants and Stewards Association of the Philippines, we ruled that only individuals vested with authority by a valid board resolution
may sign the certificate of non-forum shopping on behalf of a corporation. The action can be dismissed if the certification was submitted unaccompanied by proof of
the signatory's authority.14 We believe that appending the board resolution to the complaint or petition is the better procedure to obviate any question on the
authority of the signatory to the verification and certification. The required submission of the board resolution is grounded on the basic precept that corporate
powers are exercised by the board of directors,15 and not solely by an officer of the corporation. Hence, the power to sue and be sued in any court or quasi-judicial
tribunal is necessarily lodged with the said board.

There is substantial compliance with Rule 7, Secs. 4 and 5

In the case at bar, we so hold that petitioner substantially complied with Secs. 4 and 5, Rule 7 of the 1997 Revised Rules on Civil Procedure. First, the requisite board
resolution has been submitted albeit belatedly by petitioner. Second, we apply our ruling in Lepanto with the rationale that the President of petitioner is in a position
to verify the truthfulness and correctness of the allegations in the petition. Third, the President of petitioner has signed the complaint before the CTA at the inception
of this judicial claim for refund or tax credit.
Consequently, the petition in CA-G.R. SP No. 59778 ought to be reinstated. However, in view of the enactment of RA 9282 which made the decisions of the CTA
appealable to this Court, we will directly resolve the second issue which is a purely legal one.

Petitioner entitled to tax credit

The pith of the dispute between petitioner and respondent is whether petitioner is entitled to a tax refund or tax credit of 20% sales discount granted to senior
citizens under RA 7432 or whether the discount should be treated as a deduction from gross income.

This issue is not new, as the Court has resolved several cases involving the very same issue. In Commissioner of Internal Revenue v. Central Luzon Drug Corporation
(Central Luzon),16 we held that private drug companies are entitled to a tax credit for the 20% sales discounts they granted to qualified senior citizens under RA 7432
and nullified Secs. 2.i and 4 of RR 2-94. In Bicolandia Drug Corporation (formerly Elmas Drug Corporation) v. Commissioner of Internal Revenue,17 we ruled that
petitioner therein is entitled to a tax credit of the "cost" or the full 20% sales discounts it granted pursuant to RA 7432. In the related case of Commissioner of Internal
Revenue v. Bicolandia Drug Corporation,18 we likewise ruled that respondent drug company was entitled to a tax credit, and we struck down RR 2-94 to be null and
void for failing to conform with the law it sought to implement.

A perusal of the April 26, 2000 CTA Decision shows that the appellate tax court correctly ruled that the 20% sales discounts petitioner granted to qualified senior
citizens should be deducted from petitioner's income tax due and not from petitioner's gross sales as erroneously provided in RR 2-94. However, the CTA erred in
denying the tax credit to petitioner on the ground that petitioner had suffered net loss in 1995, and ruling that the tax credit is unavailing.

Net loss in a taxable year does not preclude grant of tax credit

It is true that petitioner did not pay any tax in 1995 since it suffered a net loss for that taxable year. This fact, however, without more, does not preclude petitioner
from availing of its statutory right to a tax credit for the 20% sales discounts it granted to qualified senior citizens. The law then applicable on this point is clear and
without any qualification. Sec. 4 (a) of RA 7432 pertinently provides:

Sec. 4. Privileges for the Senior citizens. The senior citizens shall be entitled to the following:

a) the grant of twenty percent (20%) discount from all establishments relative to utilization of transportation services, hotels and similar lodging establishments,
restaurants and recreation centers and purchase of medicines anywhere in the country: Provided, That private establishments may claim the cost as tax credit.
(Emphasis ours.)

The fact that petitioner suffered a net loss in 1995 will not make the tax credit due to petitioner unavailable. This is the core issue resolved in Central Luzon, where we
ruled that the net loss for a taxable year does not bar the grant of the tax credit to a taxpayer pursuant to RA 7432 and that prior tax payments are not required for
such grant. We explained:

Although this tax credit benefit is available, it need not be used by losing ventures, since there is no tax liability that calls for its application. Neither can it be reduced
to nil by the quick yet callow stroke of an administrative pen, simply because no reduction of taxes can instantly be effected. By its nature, the tax credit may still be
deducted from a future, not a present, tax liability, without which it does not have any use. x x x

xxx

While a tax liability is essential to the availment or use of any tax credit, prior tax payments are not. On the contrary, for the existence or grant solely of such credit,
neither a tax liability nor a prior tax payment is needed. The Tax Code is in fact replete with provisions granting or allowing tax credits, even though no taxes have
been previously paid.19

It is thus clear that petitioner is entitled to a tax credit for the full 20% sales discounts it extended to qualified senior citizens for taxable year 1995. Considering that
the CTA has not disallowed the PhP 123,083 sales discounts petitioner claimed before the BIR and CTA, we are constrained to grant them as tax credit in favor of
petitioner.

Consequently, petitioner's appeal before the CA in CA-G.R. SP No. 59778 must be granted, and, necessarily, the April 26, 2000 CTA Decision in C.T.A. Case No. 5581
reversed and set aside.

WHEREFORE, the petition is GRANTED. The August 31, 2000 CA Resolution in CA-G.R. SP No. 59778 is ANNULLED AND SET ASIDE. The April 26, 2000 CTA Decision in
C.T.A. Case No. 5581 dismissing petitioner's claim for tax credit is accordingly REVERSED AND SET ASIDE. The Commissioner of Internal Revenue is ORDERED to issue a
Tax Credit Certificate in the name of petitioner in the amount of PhP 123,083. No costs.

SO ORDERED.
G.R. No. 207914
FCD PAWNSHOP AND MERCHANDISING COMPANY, FORTUNATO C. DIONISIO, JR., and FRANKLIN C. DIONISIO, Petitioners,
vs.
UNION BANK OF THE PHILIPPINES, ATTY. NORMAN R. GABRIEL, ATTY. ENGRACIO M. ESCASINAS, JR., and THE REGISTRY OF DEEDS FOR MAKATI CITY, Respondents.

DECISION

DEL CASTILLO, J.:

Assailed in this Petition for Review on Certiorari1are the February 28, 2013 Decision2 of the Court of Appeals (CA) dismissing the herein petitioners' Petition for
Certiorari3in CA-,G.R. SP. No. 126075, and its June 28, 2013 Resolution 4 denying their Motion for Reconsideration5 in said case.

Factual Antecedents

Together with Felicitas Dionisio-Juguilon and Adelaida Dionisio, petitioners Fortunato C. Dionisio, Jr, (Fortunato) and Franklin C. Dionisio (Franklin) owned FCD
Pawnshop and Merchandising Company, which in turn was the registered owner of a pared of fond in Makati under Transfer Certificate of Title No. (168302) S-3664,
or TCT (168302) S-3664.

In 2009, Fortunato and Franklin entrusted the original owner's copy of TCT (168302) S-3664 to Atty. Rowena Dionisio. It was later discovered that the said title was
used as collateral by Sunyang Mining Corporation (Sunyang) to obtain a ₱20 million loan from from respondent Union Bank of the Philippines (UBP).

Civil Case No. 11-116 - for annulment of mortgage

On February 9, 2011, Fortunato and Franklin filed against UBP, Sunyang, the Registry of Deeds of Makati, and several others Civil Case No. 11-116, a Petition6 to annul
the Sunyang mortgage and claim for damages, based on the premise that TCT (168302) S-3664 was fraudulently mortgaged. The case was assigned to Branch 57 of
the Regional Trial Court (RTC) of Makati (Branch 57).

Meanwhile, UBP caused the extrajudicial foreclosure of the subject property, and it bought the same at the auction sale. In the Notice of Extrajudicial Sale 7 published
prior to the auction sale, however, the title to the subject property was at one point erroneously indicated as "Transfer Certificate of Title No. 163302 (S-3664);" but
elsewhere in the notice, the title was correctly indicated as "Transfer Certificate of Title No. 168302 (S-3664)." The publisher later circulated an Erratum8 admitting its
mistake, and it made the corresponding correction.

Civil Case No. 11-1192 - for annulment of foreclosure sale and certificate of sale

On account of perceived irregularities in the foreclosure and sale proceedings, Fortunato and Franklin filed in December 2011 a Complaint9 against UBP, the Registry
of Deeds of Makati, and several others for annulment of the extrajudicial foreclosure and certificate of sale issued, with injunctive relief The case was docketed as
Civil Case No. l 1 -1192 and assigned to Branch 133 of the Makati RTC (Branch 133).

In a written opposition, UBP claimed that the filing of Civil Case No. 11-1192 violated the rule against forum shopping.

Ruling of the Regional Trial Court in Civil Case No. l1-1192

On March 26, 2012, Branch 133 issued an Order10 dismissing Civil Case No. 11-1192 on the ground of forum shopping. It held:

The instant case involves the Annulment of Extra-Judicial Foreclosure Sale and Certificate of Sale with Prayer for Temporary Restraining Order and Preliminary
Injunction, and Damages. However, a case for Annulment of Mortgage is still pending before the Regional Trial Court Makati City, Branch 57. The Annulment of Extra-
Judicial Foreclosure Sale and the Annulment of Mortgage involves (sic) the same subject property described in the Transfer Certificate of Title No. (168302)-S-3664.
While the plaintiffs alleged that the issue in the case before HTC 57 deals with the validity of the mortgage and the issue in the instant case deals with the validity of
the foreclosure sale, this Court finds the same to be interrelated. The ruling on the validity of the Foreclosure Sale would also deal with the validity of the mortgage.
Thus, there would be a possibility that the ruling on the said validity by this Court would be in conflict with ruling on the Annulment of Mortgage case which is now
pending before the RTC Makati Branch 57.

As the Supreme Court consistently held x x x there is forum shopping when a party repetitively avails of several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either
pending in or already resolved adversely by some other court,' Hence, there is a clear showing of forum shopping which is a ground for the dismissal of this case.

WHEREFORE, in view of the foregoing[,] the instant case is hereby DISMISSED on the ground of forum shopping.

SO ORDERED.11

Fortunato and Franklin moved to reconsider, but the trial court, in a June 14, 2012 Order,12 held its ground, stating among others that-

In the present case, there is no dispute that the plaintiffs clearly violated Section 4, Rule 2, of the Rules of Court apparently for splitting a cause of action by filing
separately and independently the instant action which can be best pleaded in the annulment of mortgage earlier lodged.

Certainly, it would be for the best interest and benefit of the parties herein if the present action (annulment of foreclosure proceeding) is just pleaded as plaintiff's
cause of action in the annulment of mortgage first lodged and now pending before RTC Branch 57, instead of being filed separately to save time and effort. x x x

xxxx
In the final analysis, although it may seem that the two cases contain two separate remedies that arc both available to the plaintiffs, it cannot be said that the two
remedies which arose from one wrongful act can be pursued in two different cases.

The rule against splitting a cause of action is intended to prevent repeated litigation between the same parties in regard to the same subject of controversy, to
protect the defendant from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits. It comes from the old maxim nemo debet bis
vexari, pro una et eadem causa (no man shall be twice vexed for one and the same cause).13

Ruling of the Court of Appeals

Petitioners filed an original Petition for Certiorari14before the CA docketed as CA-G.R. SP. No. l26075. Claiming that there is no forum shopping, they argued that Civil
Case No. 11-116 (annulment of mortgage) and Civil Case No. 11-1192 (annulment of foreclosure and sale proceedings) involve different subject matters; in the first,
the subject is the mortgage constituted on the property and its validity, while the second covers the foreclosure and sale thereof, as well as the validity thereof; that
the evidence required to prove the first case is not the same as that which must prove the second; that judgments obtained in the two cases will not be inconsistent
with each other; and that the causes of action in both cases are not the same, as in fact the cause of action in the second case did not exist yet when they filed the
first, but accrued only later. They added that there is no splitting of a single cause of action, and that as between the two cases, there is no identity of reliefs sought.

On February 28, 2013, the CA rendered the assailed Decision dismissing the Petition, stating thus -

In sum, the lone issue to be resolved is whether petitioners Fortunato and Franklin were guilty of forum-shopping when they successively filed the Annulment of
Mortgage case mid Annulment of Foreclosure Sale case.

xxxx

Given the foregoing considerations, We hold that petitioners Fortunato and Franklin clearly violated the rule on forum-shopping as the elements of litis pendentia are
present in the case at bench. Consider the following:

Firstly, it is undisputed that there is identity of parties representing the same interests in the two cases, both involving petitioners x x x and private respondent Bank.
Notwithstanding that in the first case, FCD Pawnshop x x x was not indicated as a party and respondent Sunyang was not impleaded therein, it is evident that the
primary litigants in the two actions are the same.

Secondly, in finding that the other elements of litis pendentia were present in the instant case, We deem it necessary the case of Goodland Company, Inc. vs. Asia
United Bank, et al.15

In Goodland, petitioner initially filed a Complaint for Annulment of Mortgage on the ground that the Real Estate Mortgage (REM) contract was falsified and irregularly
executed. Subsequently, it filed a second case where it prayed for injunctive relief and/or nullification of the extrajudicial foreclosure sale by reason of, among others,
defective publication of the Notice of Sale and falsification of the REM contract which was the basis of foreclosure, thus, rendering the latter as similarly null and void.
The High Court found petitioner guilty of forum-shopping ratiocinating that there can be no detem1ination of the validity of the extrajudicial foreclosure and the
propriety of the injunction in the Injunction case without necessarily ruling on the validity of the REM.

We stress, however, that unlike the Goodland case, the instant controversy involved a situation wherein the allegations in the Complaint for Annulment of
Foreclosure did not explicitly and categorically raise the falsification of the REM contract as one of the grounds for declaring the annulment of the said foreclosure
sale. Here, petitioners anchored their arguments on the alleged irregularities in the foreclosure proceedings, i.e., different title numbers in the documents used or
issued in the auction sale and that the Petition for Extrajudicial Foreclosure Sale was filed without authority. Nonetheless, after a careful study of the Goodland case,
We are ever more convinced that the same is still instructive on the issue at hand. Consider the following pertinent portions of the case:

'x x x There can be no dispute that the prayer for relief in the two cases was based on the same attendant facts in the execution of REMs over petitioner's properties
in favor of AUB. While the extrajudicial foreclosure of mortgage, consolidation of ownership in AUB and issuance of title in the latter's name were set forth only in the
second case x x x, these were simply the expected consequences of the REM transaction in the first case x x x. These eventualities are precisely what petitioner sought
to avert when it filed the first case. Undeniably then, the injunctive relief sought against the extrajudicial foreclosure, as well as the cancellation of the new title in the
name of the creditor- mortgagee AUB, were all premised on the alleged nullity of the REM due to its allegedly fraudulent and irregular execution and registration -
the same facts set forth in the first case. In both cases, petitioner asserted its right as owner of the property subject of the REM, while AUB invoked the rights of a
foreclosing creditor-mortgagee, x x x

x x x In the first case, petitioner alleged the fraudulent and irregular execution and registration of the REM which violated its right as owner who did not consent
thereto, while in the second case petitioner cited further violation of its right as owner when AUB foreclosed the property, consolidated its ownership and obtained a
new TCT in its name. Considering that the aforesaid violations of petitioner's right as owner in the two cases both hinge on the binding effect of the REM, i.e., both
cases will rise or fall on the issue of the validity of the REM, it follows that the same evidence will support and establish the first and second causes of action. The
procedural infirmities or non-compliance with legal requirements for extrajudicial foreclosure raised in second case were but additional grounds in support of the
injunctive relief sought against the foreclosure which was, in the first place, illegal on account of the mortgage contract's nullity. Evidently, petitioner never relied
solely on the alleged procedural irregularities in the extrajudicial foreclosure when it sought the reliefs in the second case. x x x'

While in the instant case, the Annulment of Foreclosure Sale was merely founded on irregularities in the foreclosure proceedings, witl1out deliberately raising the
alleged nullity of the REM, the foregoing clearly suggests that in resolving the said Annulment of Foreclosure Sale case, its determination will still be anchored upon
and premised on the issue of the validity of REM. Parenthetically, should it be found that the mortgage contract is null and void, the proceedings based thereon shall
likewise become ineffectual. The resolution of the Annulment of Foreclosure Sale case, therefore, is inevitably dependent on the effectivity of the REM transaction,
thus, it can be said that both cases shall be substantially founded on the same transactions, same essential facts and circumstances.

In addition, as correctly pointed out by the private respondent Bank, a careful scrutiny of the Complaint for Annulment of Foreclosure shows petitioners Fortunato
and Franklin's repeated reference to the subject property as unlawfully and fraudulently mortgaged. As such, insofar as the determination of the validity of
foreclosure proceedings is concerned, same evidence will have to be utilized as the antecedent facts that gave rise to both cases were the same.

xxxx
Thirdly, a judgment in the Annulment of Mortgage case will amount to res judicata in the Annulment of Foreclosure Sale case. It is a principle in res judicata that once
a final judgment has been rendered, the prevailing party also has an interest in the stability of that judgment. To allow relitigation creates the risk of inconsistent
results and presents the embarrassing problem of determining which of two conflicting decisions is to be preferred. Here, conflicting decisions may result should the
Annulment of Foreclosure case be allowed to proceed.

To stress once again, should RTC Br. 57 rule that the REM contract is null and void, the proceedings based thereon shall likewise become ineffectual.1âwphi1
Considering that both RTC Brs. 57 and 133 will be confronted (sic) to discuss or make any pronouncement regarding the validity of the REM, the possibility of
conflicting rulings or decisions may be rendered with respect to the said issue. With that, We deem it proper that petitioners Fortunato and Franklin should have just
amended their Complaint for Annulment of Mortgage, pleading therein the subsequent extrajudicial foreclosure and include in the prayer the nullification of the said
extrajudicial foreclosure.

In view of the foregoing, no grave abuse of discretion can be imputed to public respondent RTC Br. 133 in finding that petitioners Fortunato and Franklin committed
forum-shopping. The instant petition, therefore, indubitably warrants denial.

WHEREFORE, the petition is DENIED. The a5sailed Orders dated March 26, 2012 and June 14, 2012 of the x x x Regional Trial Court of Makati City, Branch 133, in Civil
Case No. 11-1192, are hereby AFFIRMED.

Costs against petitioners.

SO ORDERED.16 (Emphasis in the original)

A Motion for Reconsideration was filed, but the same was denied in a June 28, 2013 Resolution of the CA. Hence, the present Petition.

In a September 1, 2014 Resolution, 17 the Court resolved to give due course to the instant Petition.1âwphi1

Issues

Petitioners essentially point out that in maintaining Civil Case Nos. 11-116 and 11-1192, they are not guilty of forum shopping, nor did they violate the rule on litis
pendentia.

Petitioners' Arguments

In praying that the assailed CA dispositions be set aside, petitioners in their Petition and Reply18 reiterate the arguments in their CA Petition that, as between Civil
Case No. 11-116 (annulment of mortgage) and Civil Case No. 11-1192 (annulment of foreclosure and sale proceedings), there is no identity of causes of action, subject
matter, issues, and reliefs sought; that both cases require different evidence as proof; and that judgments obtained in the two cases will not be inconsistent with each
other, and any decision obtained in one will not constitute res judicata on the other.

Respondent UBP's Arguments

Respondent UBP, on the other hand, essentially argues in its Comment19 that the Petition should be denied, for being a mere rehash of the arguments in petitioners'
CA Petition which have been thoroughly passed upon by the appellate court; that as correctly held by the CA, Civil Case No. 11-1192 (annulment of foreclosure and
sale proceedings) is anchored on a determination of the validity or binding effect of the real estate mortgage in Civil Case No. 11-116 (annulment of mortgage case),
and both cases are supported by, and will rise and fall on, the same evidence; that the necessary consequence of Civil Case No. 11-1192 is determined solely by the
decision in Civil Case No. 11-116 in that if it is found that the mortgage is null and void, then the foreclosure arid sale proceedings bas thereon would likewise become
ineffectual; that the grow1ds for annulment of the foreclosure and sale proceedings merely constitute additional reasons for seeking injunctive relief: if any, in the
annulment of mortgage case, but cannot form the basis of a separate cause of action; and that a judgment in Civil Case No. 11-116 on the validity of the mortgage
should thus amount to res judicata in Civil Case No. 11-1192 on the effect of the foreclosure and sale, but with the pendency of both cases, a possibility of conflicting
rulings by different courts on the validity of the mortgage exists.

Our Ruling

The Court denies the Petition.

This ponente has had the occasion to rule on a case20 where a party instituted two cases against the same set of defendants - one for the annulment of a real estate
mortgage, and a second for injunction and nullification of the extrajudicial foreclosure and consolidation of title, rooted in the same real estate mortgage - who
moved to dismiss the second case on the ground of forum shopping, claiming that both cases relied on a determination of the same issue: that is, the validity of the
real estate mortgage. The trial court dismissed the second case, but the CA ordered its reinstatement. This ponente affirmed the trial court, declaring as follows:

There is forum shopping 'when a party repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on
the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in or already resolved adversely by
some other court.' The different ways by which forum shopping may be committed were explained in Chua v. Metropolitan Bank & Trust Company:

Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having
been resolved yet (where the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous
case having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based on the same cause of action but with different
prayers (splitting causes of action, where the ground for dismissal is also either litis pendentia or res judicata).

Common in these types of forum shopping is the identity of the cause of action in the different cases filed. Cause of action is defined as 'the act or omission by which
a party violates the right of another.’

The cause of action in the earlier Annulment Case is the alleged nullity of the REM (due to its allegedly falsified or spurious nature) which is allegedly violative of
Goodland's right to the mortgaged property. It serves as the basis for the prayer for the nullification of the REM. The Injunction Case involves the same cause of
action, inasmuch as it also invokes the nullity of the REM as the basis for the prayer for the nullification of the extrajudicial foreclosure and for injunction against
consolidation of title. While the main relief sought in the Annulment Case (nullification of the REM) is ostensibly different from the main relief sought in the Injunction
Case (nullification of the extrajudicial foreclosure and injunction against consolidation of title), the cause of action which serves as the basis for the said reliefs
remains the same - the alleged nullity of the REM. Thus, what is involved here is the third way of committing forum shopping, i.e., filing multiple cases based on the
same cause of action, but with different prayers. As previously held by the Court, there is still forum shopping even if the reliefs prayed for in the two cases are
different, so long as both cases raise substantially the same issues.

There can be no determination of the validity of the extrajudicial foreclosure and the propriety of injunction in the Injunction Case without necessarily ruling on the
validity of the REM, which is already the subject of the Annulment Case. The identity of the causes of action in the two cases entails that the validity of the mortgage
will be ruled upon in both, and creates a possibility that the two rulings will conflict with each other. This is precisely what is sought to be avoided by the rule against
forum shopping.

The substantial identity of the two cases remains even if the parties should add different grounds or legal theories for the nullity of the REM or should alter the
designation or form of the action. The well-entrenched rule is that 'a party cannot, by varying the form of action, or adopting a different method of presenting his
case, escape the operation of the principle that one and the same cause of action shall not be twice litigated.'21 (Emphasis supplied)

The foregoing view was reiterated in a subsequent pronouncement,22 which happens to form the underlying premise of the CA's disposition.

The factual milieu in the present case is the same as in the above-cited cases. The plaintiffs in both cases first filed a case for annulment of the mortgage, followed by
the case for annulment of the foreclosure proceedings. For this reason, the underlying principle in these previously decided cases must apply equally to the instant
case. Thus, the Court completely agrees with the CA's findings that in the event that the court in Civil Case No. 11-116 (annulment of mortgage case) should nullify
the Sunyang mortgage, then subsequent proceedings based thereon, including the foreclosure, shall also be nullified. Notably as well, the CA's observation in Civil
Case No. 11-1192 (case for annulment of foreclosure and sale) - that since the complaint therein repeatedly makes reference to an "unlawful" and "fraudulent"
Sunyang mortgage, then the same evidence in Civil Case No. 11-116 will have to be utilized- is well-taken.

Petitioners maintain that Civil Case No. 11-1192 (case for annulment of foreclosure and sale) is grounded on specific irregularities committed during the foreclosure
proceedings. However, their Complaint in said case reiterates the supposed illegality of the Sunyang mortgage, thus presenting the court in said case with the
opportunity and temptation to resolve the issue of validity of the mortgage. There is therefore a danger that a decision might be rendered by the court in Civil Case
No. 11-1192 that contradicts the eventual ruling in Civil Case No. 11-116, or the annulment of mortgage case.

The rules of procedure are geared toward securing a just, speedy, and inexpensive disposition of every action and proceeding.23 "Procedural law has its own
rationale in the orderly administration of justice, namely, to ensure the effective enforcement of substantive rights by providing for a system that obviates
arbitrariness, caprice, despotism, or whimsicality in the settlement of disputes."24 With these principles in mind, the Court would rather have petitioners try their
cause of action in Civil Case No. 11-116, rather than leave the trial court in danger of committing error by issuing a decision or resolving an issue in Civil Case No. 11-
1192 that should properly be rendered or resolved by the court trying Civil Case No. 11-116.

WHEREFORE, the Petition is DENIED. The February 28, 2013 Decision and June 28, 2013 Resolution of the Court of Appeals in CA-G.R. SP. No. 126075 are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO

Associate JusticeESTELA M. PERLAS-BERNABE
Associate Justice
ALFREDO BENJAMIN S. CAGUIOA
Associate Justice

CERTIFICATION

Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice
G.R. No. 204325, April 18, 2016 - LYNMAN BACOLOR, JEFFREY R. GALURA, HELEN B. TORRES, FRITZIE C. VELLEGAS, RAYMOND CANLAS AND ZHEILA C. TORRES,
Petitioners, v. VL MAKABALI MEMORIAL HOSPITAL, INC., ALEJANDRO S. MAKABALI, MELCHOR CATAMBING AND DAX M. TIDULA, Respondents. : APRIL 2016 -
PHILIPPINE SUPREME COURT JURISPRUDENCE
LYNMAN BACOLOR, JEFFREY R. GALURA, HELEN B. TORRES, FRITZIE C. VELLEGAS, RAYMOND CANLAS AND ZHEILA C. TORRES,*Petitioners, v. VL MAKABALI MEMORIAL
HOSPITAL, INC., ALEJANDRO S. MAKABALI, MELCHOR CATAMBING AND DAX M. TIDULA, Respondents.

DECISION

DEL CASTILLO, J.:

Rules of procedure must be used to achieve speedy and efficient administration of justice and not derail it. When strict application of the rules on verification and
non-forum shopping will result in patent denial of substantial justice, these rules may be construed liberally. After all, the ends of justice are better served when cases
are determined on the merits, not on mere technicality.1

This Petition for Review on Certiorari assails the Resolution2 dated July 12, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 125333. The CA dismissed the Petition
for Certiorari filed therewith because of the purported defective Verification/Certificate of Non-Forum Shopping with Undertaking appended to the Petition; and of
petitioners' violation of Section 3, Rule 46 of the Rules of Court. Also challenged is, the CA Resolution3 dated October 22, 2012 which denied the Motion for
Reconsideration for lack of merit.

Factual Antecedents

The case stemmed from an amended Complaint4 for illegal dismissal and money claims filed by Drs. Lynman Bacolor (Dr. Bacolor), Jeffrey R. Galura (Dr. Galura),
Helen B. Torres (Dr. Helen), Fritzie C. Villegas (Dr. Villegas), Raymond Canlas (Dr. Canlas), Zheila C. Torres (Dr. Zheila) and Dax Tidula (Dr. Tidula) against VL Makabali
Hospital Inc. (the Hospital), Alejandro S. Makabali, its owner and President, and Melchor Catambing (Catambing), its Emergency Room (ER) Manager.5

Allegedly, the Hospital engaged Drs. Bacolor, Galura, Villegas and Canlas as resident physicians assigned in its ER for one year, commencing October 2000 until
October 2001. It engaged Drs. Helen and Zheila, also as ER resident physicians, starting March 2001 until March 2002, and January 2002 until January 2003,
respectively. Despite the expiration of their contracts, the Hospital continued to employ Drs. Bacolor, Galura, Villegas, Canlas, Helen and Zheila (petitioners).6

Petitioners stated that on May 3, 2006, Catambing and one Dr. Lopez instructed them to resign, and re-apply to the Hospital as resident physicians under a one-year
fixed term contract. They further alleged that Catambing and Dr. Lopez later directed them to sign a. waiver and offered them "gratitude" pay of P27,000.00 but they
refused to resign; and because of their refusal, respondents demoted them as assistant physicians in the Operating-Room (OR) of the Hospital.7

Additionally, petitioners insisted that to compel them to resign, respondents issued notices to explain to Drs. Bacolor, Galura, Helen, Villegas and Canlas. In particular,
Drs. Bacolor, Galura and Helen were charged with dishonesty for allegedly directing patients to secure laboratory examinations outside the Hospital; while Drs.
Villegas and Canlas were charged with violation of timekeeping procedure and habitual violation of rules and regulations.8

Consequently, petitioners filed a case for constructive illegal dismissal against respondents. They argued that despite their complaint, respondents still conducted an
administrative investigation against them.9 On June 30, 2006, Drs. Bacolor and Galura received notices of termination from the Hospital.10

Petitioners contended that they were constructively dismissed when respondents demoted them as assistant physicians in the OR of the Hospital.11 They stated that
such demotion was neither necessary nor temporary, and was arbitrarily done to force them to resign. They further averred that Drs. Bacolor and Galura were
actually illegally dismissed after they were given respective notices of termination.12

On the other hand, Dr. Tidula stated that the Hospital engaged him as resident physician for a year commencing on January 1, 2001 to December 31, 2001; the
Hospital renewed his contract for the year 2002 to 2003; and after his contract expired, the Hospital continued to engage his services.13

Dr. Tidula likewise alleged that in 2005, several resident physicians in the Hospital resigned. As a result, the remaining resident physicians were made to fill in their
duties. Allegedly, it was agreed upon that when a resident doctor was absent, a reliever would take his place; and the reliever's fee would be charged against the
salary of the absent doctor. Dr. Tidula claimed that the reliever shall punch in the time card of the absent doctor for t recording, accounting and expediency
purposes.14

Furthermore, Dr. Tidula asserted that in February 2006, Dr. Amelita Lising (Dr. Lising), who was a resident physician, went on leave. He averred that being the acting
Chief Resident, he implemented the agreement regarding the designation of reliever. He stated that the relievers of Dr. Lising were made to punch in and out her
time card to prove that they had taken her place; and they received salary from that intended for Dr. Lising.15

Dr. Tidula narrated that on May 3, 2006, he and his fellow residents were directed to resign with the promise that they would be re-engaged under a fixed term of
one year. He averred that Catambing and Dr. Lopez also instructed him and the other resident physicians to tender their resignation and sign a waiver in favor of the
Hospital. He alleged that they were also offered P27,000.00 as financial assistance; however, he and the other resident physicians refused to resign.16

Additionally, Dr. Tidula alleged that on May 16, 2006, he was ordered to report exclusively at the OR of the Hospital as assistant physician; and this demotion was a
result of his refusal to resign. Consequently, he filed a complaint for constructive dismissal against the Hospital.17

Later, Catambing gave Dr. Tidula a Notice18 of dismissal for violation of timekeeping procedure. Dr. Tidula stated that he inquired from Catambing why he was not
given any notice to explain. Purportedly, Catambing informed him that a notice to explain was sent through a private courier. Upon verification, Dr. Tidula discovered
that the notice was delivered to a person unknown to him. He informed the Hospital about the matter but the Hospital insisted that he was given the opportunity to
explain and was invited to an investigation, as such, the sanction against him remains.19

Dr. Tidula argued that he was illegally dismissed since he did not receive a notice to explain; and he did not violate any of the company rules.20
For their part, respondents asserted that Drs. Tidula, Bacolor and Galura were validly dismissed. In particular, they alleged that Dr. Tidula violated timekeeping
procedure of the Hospital when he punched in Dr. Lising's time card on February 2, 6, 10 and 12, 2006.21 On the other hand Drs. Bacolor and Galura were found
guilty of referring patients to other clinics for laboratory examination in February 2006.22

Moreover, respondents claimed that the Hospital did not dismiss Drs. Helen, Villegas and Canlas; thus, they should be dropped from the complaint. They added that
Dr. Zheila was never cited for any infraction but she abandoned her work as she had been absent since July 2006.23

Ruling of the Labor Arbiter

On July 23, 2010, the LA rendered a Decision24 finding respondents guilty of illegally dismissing petitioners and Dr. Tidula, as well as ordering respondents to pay
them backwages from the time of their dismissal until finality of the Decision, and separation pay. The LA also ordered the Hospital to pay petitioners and Dr. Tidula
moral damages of P100,000.00 each and exemplary damages of P100,000.00 each, and attorney's fees.

The Hospital appealed to the National Labor Relations Commission (NLRC).25cralawred

Ruling of the National Labor Relations Commission

On November 11, 2011, the NLRC reversed and set aside the LA Decision and dismissed the complaints.26 It held that there was no showing that petitioners and Dr.
Tidula were demoted, and that such demotion amounted to constructive dismissal. It ruled that "it would be difficult to discern the differences between the duties of
a resident and assistant physician, as both indubitably perform doctor's duties."27 Also, the NLRC decreed that Dr. Zheila did not even sign the verification and
certificate of non-forum shopping in this case.

Moreover, the NLRC gave credence to respondents' position that Drs. Bacolor and Galura were validly dismissed because they repeatedly referred patients to another
clinic for laboratory examinations. It ruled that such was an act of deceit because the Hospital offered the same services.

On April 18, 2012, the NLRC denied petitioners and Dr. Tidula's motion for reconsideration.28

Aggrieved, petitioners filed a Petition for Certiorari with the CA ascribing grave abuse of discretion on the part of the NLRC in giving due course to the appeal despite
its alleged lack of appeal bond; and in reversing the LA Decision.

The Petition was accompanied by three separate Verifications/Certificates of Non-Forum Shopping signed by Drs. Galura, Bacolor and Helen.29 Atty. Carlos Raphael
N. Francisco executed and signed a Verification/Certificate of Non-Forum Shopping with Undertaking in behalf of Drs. Villegas, Canlas and Zheila.30

Ruling of the Court of Appeals

On July 12, 2012, the CA issued the assailed Resolution, the pertinent portions of which read:
chanRoblesvirtualLawlibrary

The Petition for Certiorari contains the following infirmities, hence is DISMISSED:

1. The Verification/Certification of Non-Forum Shopping With Undertaking attached to the Petition is executed by Atty. Carlos Raphael N. Francisco, allegedly [sic]
counsel of record of petitioners Fritzie C. Villegas, Raymond Canlas and Zeila C. Torres, not by the three petitioners themselves, in violation of Rule 7, Section 5 of the
Rules of Court, and the ruling in Far Eastern Shipping Company v. Court of Appeals et al.

2. The Petition does not indicate in its title that Dax Tidula is a party respondent, although in the portion entitled 'Parties' he is so named, and does not indicate the
address of Dax Tidula, all in violation of Rule 46, Section 3 of the Rules of Court, in relation to Rule 65 of the same Rules.

SO ORDERED.31ChanRoblesVirtualawlibrary
On October 22, 2012, the CA denied petitioners' Motion for Reconsideration.32

Aggrieved, petitioners filed this Petition raising the following assignment of errors:
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1
THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE
HONORABLE COURT WHEN THE COURT OF APPEALS DISMISSED THE PETITION FOR CERTIORARI OF THE PETITIONERS DESPITE THE FACT THAT SEVERAL OF THE
PETITIONERS HAD VALIDLY EXECUTED VERIFICATIONS AND CERTIFICATES OF NON-FORUM SHOPPING WHICH WERE ATTACHED TO SAID PETITION FOR CERTIORARI;
2
THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE
HONORABLE COURT WHEN THE COURT OF APPEALS DISMISSED THE PETITION FOR CERTIORARI OF THE PETITIONERS DESPITE THE FACT THAT THE PETITIONERS HAD
SUBSTANTIALLY COMPLIED WITH THE RULES ON THE EXECUTION OF A VERIFICATION AND CERTIFICATE OF NON-FORUM SHOPPING;
3
THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE-
HONORABLE COURT WHEN THE COURT OF APPEALS. DISMISSED THE PETITION FOR CERTIORARI OF THE PETITIONERS DESPITE THE FACT THAT THE ONLY KNOWN
ADDRESS OF RESPONDENT TIDULA WAS INCLUDED IN THE PETITION FOR CERTIORARI AND THAT RESPONDENT TIDULA, THROUGH HIS COUNSEL, WAS SERVED WITH
A COPY OF SUCH PETITION FOR CERTIORARI;
4
THE COURT OF APPEALS SANCTIONED A DEPARTURE BY THE NLRC IN NLRC CASE NO[.] RAB. III-06-10180-06 FROM THE ACCEPTED OR USUAL COURSE OF JUDICIAL
PROCEEDINGS AS THE COURT OF APPEALS ALLOWED THE NLRC TO VIRTUALLY EXTEND THE PERIOD OF THE RESPONDENT HOSPITAL TO FILE AN APPEAL FOR ALMOST
FOUR MONTHS FROM THE EXPIRATION OF THE PERIOD TO FILE SUCH APPEAL;
5
THE COURT OF APPEALS SANCTIONED A DEPARTURE BY THE NLRC IN NLRC CASE NO[.] RAB. 111-06-10180-06 FROM THE ACCEPTED OR USUAL COURSE OF JUDICIAL
PROCEEDINGS AS THE COURT OF APPEALS ALLOWED THE NLRC TO GIVE DUE COURSE TO AN APPEAL THAT WAS CLEARLY FILED OUT OF TIME AND TO MODIFY THE
DECISION OF THE LABOR ARBITER THAT WAS ALREADY FINAL AND EXECUTORY; and
6
THE COURT OF APPEALS SANCTIONED A DEPARTURE BY THE NLRC IN NLRC CASE NO[.] RAB. III-06-10180-06 FROM THE ACCEPTED OR USUAL COURSE OF JUDICIAL
PROCEEDINGS AS THE COURT OF APPEALS TOLERATED THE GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION COMMITTED BY THE
NLRC IN REVERSING IN TOTO THE DECISION OF THE LABOR ARBITER DESPITE THE FACT THAT SUCH REVERSAL IS NOT SUPPORTED BY ANY EVIDENCE ON RECORD AND
BY THE APPLICABLE LAWS.33
Petitioners argue that the verifications executed by three of the six petitioners and the verification executed by their counsel constituted full compliance with the
required verification. They contended that the three petitioners who made their verification are real parties-in-interest, and their counsel who also verified the
Petition had been in possession of authentic and relevant records of the case.

Also, petitioners posit that the failure of Drs. Villegas, Canlas and Zheila to execute a certificate of non-forum shopping should not have caused the dismissal of the
Petition for Certorari. They insist that under justifiable circumstances, the signature of one of the petitioners in the certificate against forum shopping substantially
complies with the rules. They further point out that all of them share a common interest and invoke a common cause of action under the same set of facts.

Moreover, petitioners submit that they complied with Section 3, Rule 46 of the Rules of Court. They contend that they included Dr. Tidula in the Petition for Certiorari
as respondent because he remains interested in the reversal of the NLRC Decision and Resolution. They add that from the inception of the case, all pleadings had
been coursed through Dr. Tidula's counsel; and they are unaware of the address of Dr. Tidula as he never indicated it in his position paper. Hence, they maintain that
it is fair that in the present proceeding, any pleading intended for Dr. Tidula be sent to his counsel.

In addition, petitioners state that the non-inclusion of Dr. Tidula is not a fatal defect but a mere typographical error which does not prejudice the rights of any party.

Finally, petitioners fault the CA in not finding that the NLRC committed grave abuse of discretion in giving due course to the Hospital's appeal despite its failure to
post appeal bond within the period to perfect an appeal. They also maintain that the NLRC committed grave abuse of discretion in holding that they were not illegally
dismissed by respondents.

The Hospital, on the other hand, asserts that the CA correctly dismissed the Petition because it was filed by a counsel who had no authority from petitioners; and that
the Certificate against Forum Shopping attached thereto was fatally defective. It also declares that the Petition for Certiorari improperly impleaded Dr. Tidula as
respondent. Lastly, it contends that petitioners are not entitled to money claims.

Our Ruling

The Petition is meritorious.

In Altres v. Empleo,34 the Court summarized the basic tenets involving non-compliance with the requirements on, or filing of defective verification and certificate
against forum shopping, to wit:
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1) A distinction must be made between non-compliance with the requirement on or submission of defective verification, and non-compliance with the requirement
on or submission of defective certification against forum shopping.

2) As to verification, non-compliance therewith or a defect therein does not necessarily render the pleading fatally defective. The court may order its submission or
correction or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice
may be served thereby.

3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the petition have been made in good faith or are true and correct.

4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need to relax the Rule on the ground of "substantial compliance" or presence of "special circumstances or
compelling reasons".

5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties to
the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the Rule.

6) Finally, the certification against forum shopping must be executed by the party-pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must execute a Special Power of Attorney designating his counsel of record to sign on his behalf.
The CA dismissed the Petition for Certiorari on the ground that the Verification/Certificate of Non-Forum Shopping executed by petitioners' counsel on behalf of Drs.
Villegas, Canlas and Zheila violated Section 5, Rule 7 of the Rules of Court.35

As properly pointed out by the CA, the Verification/Certificate of Non-Forum Shopping with Undertaking executed by petitioners' counsel is not valid. As stated in
Altres, a certificate against forum shopping must be signed by the party and in case his counsel signs the same on his behalf, the counsel must be armed with a special
power of attorney. Since petitioners' counsel is not shown to have been authorized by Drs. Villegas, Canlas and Zheila to sign a certificate of non-forum shopping on
their behalf, the execution of said certificate by counsel violates the foregoing rules.

Nonetheless, the CA failed to consider the concept of "substantial compliance" to the requirements of verification and certificate of non-forum shopping, as it has
been shown that three of the six petitioners executed their own verification and certificate against forum shopping.

The verification of a pleading is a formal and not a jurisdictional requirement. It is intended to assure that the allegations in a pleading are true and correct. As such,
the court may order the correction of unverified pleadings, or it may act on them and waive strict compliance with the rules.36

The verification requirement is deemed substantially complied with when a person who has sufficient knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification; and matters alleged therein have been made in good faith or are true and correct. Thus, there is substantial compliance if
at least one of the petitioners makes a proper verification.37
In Ateneo de Naga University v. Manalo,38 the signature of one of three petitioners therein was considered substantial compliance with the verification requirement.
The Court held that Fr. Tabora, the petitioner who signed the verification, has sufficient knowledge to swear to the truth of the allegations in the petition filed with
the CA; and his signature was ample assurance that the allegations have been made in good faith or are true and correct.

In SKM Art Craft Corporation v. Bauca,39 the Court held that the verification and certificate against forum shopping signed by nine out of 23 respondents substantially
complied with the verification requirement since they have common interest and cause of action. The Court likewise stated that the apparent merit of the petition
and the conflicting findings, of the LA and the NLRC also justified the decision of the CA to resolve the case on the merits.

In this case, three out of six petitioners signed three separate verifications appended to the Petition for Certiorari. Their signatures are sufficient assurance that the
allegations in the Petition were made in good faith, or are true and correct. Thus, there is substantial compliance with the verification requirement.

On the other hand, as a rule, the certificate against forum shopping must be signed by all plaintiffs or petitioners; otherwise, those who did not sign will be dropped
as parties to the case. Under reasonable or justifiable situations, such as when the plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of one of them in the certificate against forum shopping is considered substantial compliance with the rules.40cralawred

In Abaria v. National Labor Relations Commission,41 47 out of 88 petitioners signed the certificate against forum shopping. The Court ruled that the petitioning
employees shared a common interest and cause of action when they filed the case for illegal dismissal. The Court decreed ,that when petitioners therein appealed to
the CA, they pursued the case as a collective body, invoking one argument in support of their cause of action, which is, the illegal dismissal purportedly committed by
their employer when union members resorted to strike due to the employer's refusal to bargain with officers of the local chapter.

Furthermore, in Torres v. Specialized Packaging Development Corp.,42 the Court allowed the relaxation of the rules on submission. of certificate against forum
shopping. One of the compelling grounds for the allowance of said certificate therein where only two of 25 petitioners signed the same was the "apparent merits of
the substantive aspects of the case." It noted that the varying views of the LA and the NLRC give ample basis for the necessity of a review on the merits and the
outright dismissal of the petition was prejudicial to the substantive rights.

Here, three of six petitioners signed the certificate of non-forum shopping. At the least, the CA could have ordered that those who did not sign it be dropped as
parties, but not the outright dismissal of the Petition.

The Court, nevertheless, holds that there are justifiable reasons for the relaxation of the rules on the filing of a certificate of non-forum shopping and that the
certificate against forum shopping signed by three out of six petitioners suffices.

Specifically, petitioners' cause of action revolves on the same issue, that is, respondents illegally dismissed them under similar circumstances. They were all resident
physicians who were purportedly 1) re-employed by the Hospital even after the expiration of their respective one year contracts; 2) forced to resign and offered to be
re-engaged as fixed term employees but declined; 3) demoted; 4) accused of violations of the Hospital rules and regulations; and, 5) dismissed.

Moreover, substantial justice dictates that the Petition for Certiorari be given due course and be resolved on the merits. This is especially so since the findings of the
LA are contrary to those of the NLRC,43 particularly on the issues of whether respondents illegally dismissed petitioners and of whether they were afforded due
process of law.

The requirement of strict compliance with the rules on filing of certificate against forum shopping highlights the mandatory character of the submission of such
certificate. However, this mandatory requirement allows substantial compliance provided that there are justifiable circumstances for the relaxation of the rules.44

Furthermore, the CA dismissed the Petition for Certiorari because it did not indicate in its title that Dr. Tidula is a party respondent and the Petition did not state Dr.
Tidula's actual address. The CA held that these omissions violate Section 3,45 Rule 46 of the Rules of Court, in relation to Rule 65 thereof.

We do not agree.

Since Dr. Tidula was included as one of the respondents in the body of the Petition, then the CA could have clarified with petitioners the non-inclusion of Dr. Tidula in
the title and could have ordered the title rectified.

Likewise, the Court finds that the failure to state the address of Dr. Tidula is insufficient to cause the dismissal of the Petition. The lack of address of Dr. Tidula is not a
fatal defect as he had been represented by his counsel in the case. The indication that the party "could be served with process care of his counsel was substantial
compliance with the Rules." And, when a party has appeared through counsel, service is to be made upon the counsel, unless the court expressly orders that it be
made upon the party.46

In view of the foregoing, a remand of the case to the CA for proper disposition on the merits is deemed proper.chanrobleslaw

WHEREFORE, the Petition is GRANTED. The July 42, 2012 and October 22, 2012 Resolutions of the Court of Appeals in CA-G.R. SP No. 125333 are REVERSED and SET
ASIDE. The case is REMANDED to the Court of Appeals for appropriate disposition.
G.R. No. 183795
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 183795 November 12, 2014

PRUDENTIAL BANK (now Bank of the Philippine Islands) as the duly appointed ADMINISTRATOR OF THE ESTATE OF JULIANA DIEZ VDA. DE GABRIEL,Petitioner,
vs.
AMADOR A. MAGDAMIT, JR., on his behalf and as substituted heir (son) of AMADOR MAGDAMIT, SR., and AMELIA F. MAGDAMIT, as substituted heir (Widow) of
AMADOR MAGDAMIT, SR., Respondents.

DECISION

PEREZ, J.:

Before us is a Petition for Review under Rule 45 of the 1997 Rules of Civil Procedure assailing the Decision1 and Resolution2 of the Court of Appeals (CA) dated 3
September 2007 and 18 July 2008, respectively, in CA-G.R. SP No. 93368, affirming the Decision of the Regional Trial Court (RTC),3 dated 18 January 2006, in Civil Case
No. 05-112499, which reversed the ruling of the Metropolitan Trial Court (MeTC) on the ground that the MeTC did not acquire jurisdiction over the person of the
respondents due to invalid service of summons.

The facts as culled from the records are as follows:

This is a case of unlawful detainer filed by petitioner Prudential Bank, now Bank of the Philippine Islands (petitioner), in its capacity as administrator of the Estate of
Juliana Diez Vda. De Gabriel (Estate). It is based on the ground of respondents’ failure to pay rentals and refusal to vacate the subject property, which is allegedly part
of the Estate located at 1164 Interior, Julio Nakpil St., Paco, Manila, covered by Transfer Certificate of Title No. 118317 of the Registry of Deeds of Manila.

In the Original Complaint4 filed before the MeTC, Branch 15 of Manila, petitioner impleaded Amador A. Magdamit, Jr. (Magdamit, Jr.), as respondent.

Instead of filing an Answer, Magdamit, Jr. filed a Notice of Special Appearance with Motion to Dismiss. Among others, Magdamit, Jr. argued that (1) petitioner was
not duly authorized through a Board Resolution to institute the complaint, (2) he was not the occupant of the subject property but instead, his parents, as grantees or
awardees of Juliana Diez Vda. De Gabriel, and (3) the MeTC did not acquire jurisdiction over his person because the summons was served at his former address at
1164 Interior Julio Nakpil St., Paco, Manila. On 30 April 2003, petitioner filed a Motion to Strike Out this pleading on the ground that it is prohibited. Petitioner then
filed an Amended Complaint, this time, impleading both Magdamit, Jr. and Amador Magdamit, Sr. (Magdamit, Sr.).

In an Order5 dated 26 June 2003, the MeTC granted petitioner’s Motion to Strike Out Magdamit, Jr.’s Notice of Special Appearance with Motion to Dismiss and
ordered Magdamit,Jr. to file an Answer. The Order reads:

After due consideration of the matter and arguments stated therein, the Court resolves to DENY the defendant’s Motion to dismiss, it appearing that the summons
issued in this case was served, albeit substituted nevertheless valid. It is of no consequence that defendant is also presently residing in Bacoor, Cavite. Suffice it to say
that summons was served upon him (although substituted) on the leased premises which plaintiff is justified in assuming that he is also residing there at. Moreover, it
appears that he knew the person on whom summons was served (together with a copy of the complaint) as a certain Dara Cabug only that he claims that the latter is
not of "suitable age and discretion" to receive the summons. Simply put, the requirement of due process has been satisfied. Be that as it may, it would not unduly
prejudice the rights of the plaintiff if defendant is given additional period of five (5) days from notice hereof within which to file his Answer.6

In response to the Amended Complaint, both Magdamit, Jr. and Magdamit, Sr. filed their Answers separately. On 9 July 2003, Magdamit, Jr., filed his Answerwith
Counterclaim7 (In a Special Appearance Capacity). On the other hand, Magdamit, Sr. filed his Answer8 on 13 November 2003. Magdamit, Sr. argued that the MeTC
did not acquire jurisdiction over his person because the summons was not properly served as the summons was received by Madel Magalona, who is not authorized
to receive summons being a mere housemaid of Magdamit, Sr.’s daughter, Arleen Marie Cabug. Also, Magdamit, Sr. argued that in the 1960s, the Spouses Francisco
and Juliana Gabriel assigned the subject property to him free of charge as a reward and in recompense for the long, faithful, and devoted services he rendered to
them. Since then, he had been continuously exercising acts of ownership over the subject property, including payment of real estate taxes. Magdamit, Sr. further
argued that amendment of the Complaint in order to implead him is improper. According to Magdamit, Sr., amendment cannot be allowed so as to confer jurisdiction
upon a court that never acquired it in the first place, and the ejectment case cannot be instituted against Magdamit, Jr. because an action to recover possession
cannot be maintained against one who is not in actual or legal possession thereof.9

Pending litigation of the case, Magdamit, Jr., who was made an original defendant in the MeTC, substituted his deceased father, Magdamit, Sr.

Ruling of the MeTC

After trial, the MeTC ruled in favor of petitioner. According to the MeTC, "[t]he fact that the person who received the summons was a 13-year old girl does not make
the service of summons invalid. That she was of sufficient age and discretion is shown by the fact that she was intelligent enough to immediately bring to the
attention of defendant Atty. Amador Magdamit, Jr. the summons and copy of the complaint she received."10 The MeTC went on further, stating that Magdamit Sr.’s
claim of ownership is beyond its jurisdiction because the onlyissue in an ejectment case is "possession de facto". The dispositive portion of the MeTC Decision dated
21 March 2005 reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against defendants Amador Magdamit, Sr.:
1. ordering said defendant and all persons claiming right under him to vacate the subject three (3) lots covered by TCT No. 118317 of the Registry of Deeds of Manila,
located at and also known as 1164 Interior J. Nakpil St., Paco, Manila and to peacefully surrender possession thereof to plaintiff;

2. ordering said defendant to pay plaintiff the sum of ₱180,000.00 representing rentals or reasonable compensation for the use of the property due from August 2003
up to February 2005 and ₱10,000.00 per month thereafter until defendants fully vacate the subject property;

3. ordering said defendant to pay plaintiff the sum of ₱20,000.00 as attorney’s fees; and

4. to pay the costs. The complaint is dismissed as against defendant Amador Magdamit, Jr. and the latter’s counterclaim is likewise dismissed.

SO ORDERED.11

Ruling of the RTC

On appeal, the RTC set aside the decision of the MeTC and dismissed the case for lack of jurisdiction over the person of the respondents.12 According to the RTC,
amending the original complaint to implead Magdamit, Sr. to cure a defect in the complaint and introduce a non-existing cause of action, which petitioner did not
possess at the outset, and to confer

jurisdiction upon the court that never acquired jurisdiction in the first place renders the complaint dismissible. The RTC further stated that because the Return did not
clearly indicate the impossibility of service of summons within a reasonable time upon the respondents, the process server’s resort to substituted service of summons
was unjustified. The decision of the RTC reads:

WHEREFORE, this Court finds merit on the appeal and consequently, the decision on appeal is hereby set aside, and this case is accordingly dismissed for lack of
jurisdiction over the persons of the defendants.13

Ruling of the CA

Aggrieved, petitioner filed an appeal via a petition for review under Rule 42 of the Rules of Court beforethe CA. The petitioner argued that the RTC erred in ruling
thatthe MeTC did not acquire jurisdiction over the person of the respondents due to improper service of summons considering that the respondents participated in
the proceedings in the MeTC by filing a Notice of Appearance with Motion to Dismiss, Answer with Counterclaim, entering into pre-trial, submitting position papers,
and presenting evidence, which militate against the alleged improper service of summons. On 3 September 2007, the CA denied the petition and affirmed the
decision of the RTC.

According to the CA, the Return, with only a general statement and without specifying the details of the attendant circumstances or of the efforts exerted to serve the
summons, will notsuffice for purposes of complying with the rules of substituted service of summons. The CA also rejected petitioner’s contention that respondents’
voluntary submission to the jurisdiction of the court cured any defect in the substituted service of summons when as early as during the infancy of the proceedings in
the MeTC, Magdamit, Jr. seasonably raised the ground of lack of jurisdiction over his person by filing a Notice of Appearance with Motion to Dismiss, which the
respondents incessantly reiterated in their pleadings even when the case was elevated to the RTC, then to the CA. The dispositive portion of the decision of the CA
reads:

Having found that the MeTC did notacquire jurisdiction over the persons (sic) of respondents, it would be futile on Our part to still pass upon the other errors
assigned by petitioner. WHEREFORE, premises considered, the petition is DENIED. Costs against petitioner.

SO ORDERED.14

The motion for reconsideration was likewise denied for lack of merit.

Hence, this Petition, raising the following assignment of errors:

"I. Whether or not the Court of Appeals erred in dismissing the Petition for Review of the Decision of the Regional Trial Court of Manila dated January 18,2006; and
disposing of only the issue of lack of jurisdiction over the person of respondents for alleged improper service of summons;

II. Whether or not the Court of Appeals erred in not ruling on the material and substantial issues in the case; and

III. Whether or not the Court of Appeals erred in affirming the decision of the Metropolitan Trial Court of Manila dismissing of the Complaint against Magdamit, Jr.,
based on the ground that he was no longer residing at the subject property prior to, and at the time of the filing of the ejectment complaint."15

The pivotal issue is whether or not the MeTC acquired jurisdiction over the person of the respondents.

The petition is bereft of merit.

Both respondents, Magdamit, Jr. and Magdamit, Sr. argued that the MeTC did not acquire jurisdiction overtheir persons due to defective or improper service of
summons. Magdamit,Sr. argued that the MeTC could not have acquired jurisdiction over his person due to improper/defective service of summons because it was
served upon an incompetent person, the housemaid of his daughter. Magdamit Sr. also argued that the MeTC did not acquire jurisdiction over him because he was
impleaded asa respondent only after the inherently invalid original complaint was amended. According to Magdamit, Sr., the original complaint was inherently invalid
because it was instituted against Magdamit, Jr., against whom an action to recover possession cannot be maintained, because he is not in actual or legal possession
thereof. Thus, the amendment of the inherently invalid original complaint for the purpose of curing a defect to confer jurisdiction was invalid as the MeTC never
acquired jurisdiction in the first place.16 Pertinent to the position of Magdamit, Sr. is the Sheriff’s Return dated 24 October 2003 on the service of summons on
Magdamit, Jr. which reads:

1. That, on October 22, 2003, he proceeded to the place of defendant Amador Magdamit, Sr. at No. 1164 Int. Julio Nakpil St., Paco, Manila, for the purpose of serving
the Summons issued in the above-entitled case, but no service was effected because he was not around;
2. That, on October 23, 2003, undersigned repaired (sic) anew to the said place but for the second time, he failed to reached (sic) said defendant. Thus, he elected
(sic) substituted service by serving the said summons together with the copy of the complaint and annexes attached thereat (sic) to Ms. Madel Magalona, a person of
sufficient age and living thereat who however refused to acknowledge(d) receipt thereof;

3. That, undersigned explained to (this)Ms. Magalona the contents of the said process in a language she fully understood and adviced (sic) her to gave (sic) the same
to her employer as soon as he arrives.17

On the other hand, Magdamit, Jr. argued that the MeTC did not acquire jurisdiction over his person because the summons was not served at his residence but at the
house of Magdamit, Sr., and on a person not authorized to receive summons. The Sheriff’s Return dated 25 March 2003 reads:

This is to certify, that on the 24th day of March, 2003, xxx served copy of the Summons together with the copy of the Complaint and its attachment, upon
defendant/s Amador A. Magdamit, Jr. at 1164 Int., J. Nakpil St., Paco, Manila, by tendering the copy to Dara Cabug (grand daughter), a person of sufficient age,
discretion and residing therein who however refused to acknowledged (sic) receipt thereof.

That on several occasions despite deligent (sic) efforts exerted to serve the said processes personally to defendant/s herein the same proved futile. Thus, substituted
service was effected in accordance with the provision of Sec. 8, Rule 14, Rules of Court.

In view of the foregoing, the original summons is now respectfully returned to the Honorable Court, DULY SERVED.18

Fundamental is the rule that jurisdiction over a defendant in a civil case is acquired either through service of summons or through voluntary appearance in court and
submission to its authority. In the absence or when the service of summons upon the person of the defendant isdefective, the court acquires no jurisdiction over his
person, and a judgment rendered against him is null and void.19

In actionsin personamsuch as ejectment, the court acquires jurisdiction over the person of the defendant through personal or substituted service of summons.
However, because substituted service is in derogation of the usual method of service and personal service of summons is preferred over substituted service, parties
do not have unbridled right to resort to substituted service of summons.20 Before substituted service of summons is resorted to, the parties must: (a) indicate the
impossibility of personal service of summons within a reasonable time; (b) specify the efforts exerted to locate the defendant; and (c) state that the summons was
served upon a person of sufficient age and discretion who is residing in the address, or who is in charge of the office or regular place of business of the defendant.21

In Manotoc v. Court of Appeals,22 we have succinctly discussed a valid resort to substituted service of summons:

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. 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." 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. 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 Sheriff’s 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. The efforts made to find the defendant
and the reasons behind the failure must be clearly narrated in detail in the Return.The date and time of the attempts on personal service, the inquiries made to locate
the defendant, the name/s of the occupants of the alleged residence or house of defendant and all other acts done, though futile, to serve the summons on
defendant must be specified in the Return to justify substituted service. The form on Sheriff’s Return of Summons on Substituted Service prescribed in the Handbook
for Sheriffs published by the Philippine Judicial Academy requires a narration of the efforts made to find the defendant personally and the fact of failure. Supreme
Court Administrative Circular No. 5 dated November 9, 1989 requires that "impossibility of prompt service should be shown by stating the efforts made to find the
defendant personallyand the failure of such efforts," which should be made in the proof of service.

(3) A Person of Suitable Age and Discretion

If the substituted service will be effected at defendant’s house or residence, it should be left with a person of "suitable age and discretion then residing therein." A
person of suitable age and discretion is one who has attained the age of full legal capacity (18 years old) and is considered to have enough discernment to understand
the importance of a summons. "Discretion" isdefined as "the ability to make decisions which represent a responsible choice and for which an understanding of what
is lawful, right or wise may be presupposed". Thus, to be of sufficient discretion, suchperson must know how to read and understand English to comprehend the
import of the summons, and fully realize the need to deliver the summonsand complaint to the defendant at the earliest possible time for the person to take
appropriate action. Thus, the person must have the "relation of confidence" to the defendant, ensuring that the latter would receive orat least be notified of the
receipt of the summons. The sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the
recipient’s 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 defendant’s 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 tounderstand the obligation of the defendant in the summons, its importance, and the prejudicial effects arising from
inaction on the summons. Again, these details must be contained in the Return.23 (Emphasis and underscoring supplied; citations omitted)

The service of summons on Magdamit, Sr. failed to comply with the rule laid down in Manotoc. The resort to substituted service after just two (2) attempts to
personally serve the summons on Magdamit, Sr., is premature under our pronouncement that:

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 Sheriff’s 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.24

Then too, the proof of service failed to specify the details of the attendant circumstances. The Return merely expressed a general statement that because the Sheriff
failed to reachMagdamit, Sr., he elected substituted service of summons. The Return failed to state the impossibility to serve summons within a reasonable time. And
the further defect in the service was that the summons was served on a person not of sufficient discretion, an incompetent person, Madel Magalona, a housemaid of
Magdamit Sr.’s daughter, Arleen Marie Cabug.

Similar to the case of Magdamit, Sr., the service of summons on Magdamit, Jr. also failed to complywith the rules laid down in Manotoc. The summons was served at
1163 Int., J. Nakpil St., Paco, Manila, Magdamit, Jr.’s former residence when at the time, Magdamit, Jr. was residing at 0369 Jupiter St., Progressive Village 20 and 21,
Molino I, Bacoor, Cavite. In Keister v. Navarro,25 we have defined "dwelling house" or "residence" to refer to a place where the person named in the summons is
living at the time when the service is made, even though he may be temporarily out of the country at the time to the time of service. Therefore, it is not sufficient for
the Sheriff "to leave the copy at defendant's former dwelling house, residence, or place ofabode, as the case may be, after his removal therefrom".26

Worse, the Return did not make mention of any attempt to serve the summons at the actual residence of Magdamit, Jr. The Return merely expressed a general
statement that the sheriff exerted efforts to serve the summons and that the same was futile, "[t]hat on several occasions despite deligent (sic) efforts exerted to
serve the said processes personally to defendant/s herein the same proved futile," without any statement on the impossibility of service of summons within a
reasonable time. Further, the summons was served on a certain DaraCabug, a person not of suitable age and discretion, who is unauthorized to receive the same.

Notably, the requirement additionally is that

Thus, to be of sufficient discretion, such person must know how to read and understand English to comprehend the import of the summons, and fully realize the need
to deliver the summons and complaint to the defendant at the earliest possible timefor the person to take appropriate action. Thus, the person must have the
"relation of confidence" to the defendant, ensuring that the latter would receive or at least be notified of the receipt of the summons. The sheriff must therefore
determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipient’s 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 tothe 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.27

The readily acceptable conclusion inthis case is that the process server at once resorted to substituted service of summons without exerting enough effort to
personally serve summons on respondents. In Sps. Jose v. Sps. Boyon,28 we discussed the effect of failure to specify the details of the effort exerted by the process
serverto personally serve summons upon the defendants:

The Return of Summons shows no effort was actually exerted and no positive step taken by either the process server or petitioners to locate and serve the summons
personally on respondents. At best, the Return merely states the alleged whereabouts of respondents without indicating that such information was verified from a
person who had knowledge thereof. Certainly, without specifying the details of the attendant circumstances or of the efforts exerted to serve the summons, a general
statement that such efforts were made will not suffice for purposes of complying withthe rules of substituted service of summons.29 (Emphasis and underscoring
supplied)

In the case at bar, the Returns contained mere general statements that efforts at personal service were made. Not having specified the details of the attendant
circumstances or of the efforts exerted to serve the summons,30 there was a failure to comply strictly with all the requirements of substituted service, and as a result
the service of summons is rendered ineffective.31

Filing an Answer does not amount to voluntary appearance

The petitioner asserted that assuming arguendo that the service of summons was defective, respondents’ filing of their respective Answers and participation in the
proceedings in the MeTC, such as attending the pre-trial and presenting evidence, amount to voluntary appearance which vested the MeTC jurisdiction over their
persons.

Indeed, despite lack of valid service of summons, the court can still acquire jurisdiction over the person of the defendant by virtue of the latter’s voluntary
appearance. Section 20, Rule14 of the Rules of Court clearly states:
Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss
of other grounds aside from lack of jurisdiction over the person shall not be deemed a voluntary appearance.

However, such is not the case atbar. Contrary to petitioner’s contention, respondents are not deemed to have voluntarily submitted to the court’s jurisdiction by
virtue of filing an Answer or other appropriate responsive pleadings and by participating in the case.

The mandate under the Rules on Summary Proceedings that govern ejectment cases, is expeditious administration of justice such that the filing of an Answer is
mandatory. To give effect to the mandatory character and speedy disposition of cases, the defendant is required to file an answer within ten (10) days from service of
summons, otherwise, the court, motu proprio, or upon motion of the plaintiff, shall render judgment as may be warranted by the facts alleged in the complaint,
limited to the relief prayed for by the petitioner.32 Through this rule, the parties are precluded from resorting to dilatory maneuvers.

Compliantly, respondents filed their respective Answers. In the MeTC, at first, Magdamit, Jr. filed a Notice of Special Appearance with Motion to Dismiss, where he
seasonably raised the issue of lack of jurisdiction, which the MeTC later ordered to be stricken out. In lieu thereof, Magdamit, Jr. filed an Answer with Counterclaim
(In a Special Appearance Capacity). Again, Magdamit, Jr. reiterated the lack of jurisdiction over his person and the subject matter. On the other hand, Magdamit, Sr.
filed an Answer with an allegation by special defense that the original complaint

should be dismissed outright because the MeTC did not acquire jurisdiction over his person and the subject matter.1âwphi1 In sum, both respondents filed their
Answers via special appearance.

In Philippine Commercial International Bank v. Spouses Wilson Dy Hong Pi and Lolita Dy,33 we held that filing of an answer in a special appearance cannot be
construed as voluntary appearance or submission to the court’s jurisdiction:

Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes exerted over his person, or his voluntary
appearance in court. As a general proposition, one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by reason of this
rule that we have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment, and
to lift order of default with motion for reconsideration, is considered voluntary submission to the court’s jurisdiction. This, however, is tempered by the concept of
conditional appearance, such that a party who makes a special appearance to challenge, among others, the court’s jurisdiction over his person cannot be considered
to have submitted to its authority.

Prescinding from the foregoing, it is thus clear that:

(1) Special appearance operates as an exception to the general rule on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the defendantmust be explicitly made, i.e., set forth in an unequivocal manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in instanceswhere a pleading or motion seeking affirmative relief is filed
and submitted to the court for resolution.34 (Emphasis supplied and underscoring supplied)

Parallel to our ruling in Philippine Commercial International Bank, the respondents’ act of filing their respective Answers with express reservation should not be
construed as a waiver of the lack of jurisdiction of the MeTC over their person because of non-service/defective/improper service of summons and for lack of
jurisdiction over the subject matter. Hence, sans voluntary submission to the court’s jurisdiction, filing an answer in compliance with the rules on summary procedure
in lieu of obtaining an adverse summary judgment does not amount to voluntary submission. As we already held, a party who makes a special appearance in court,
challenging the jurisdiction of said court, is not deemed to have submitted himself to the jurisdiction of the court.35 It should not be construed as voluntary
submission to the jurisdiction of the court.

In view of the foregoing, the petition is DENIED. The Decision and

Resolution of the Court of Appeals in CA-G.R. SP No. 93368, which upheld the ruling of the Regional Trial Court that the Metropolitan Trial Court in Civil Case No.
174798 did not acquire jurisdiction over the person of the respondents due to invalid service of summons, are AFFIRMED.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

MARIANO C. DEL CASTILLO*

Associate JusticeBIENVENIDO L. REYES**
Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
G.R. No. 130974

THIRD DIVISION

G.R. No. 130974 August 16, 2006

MA. IMELDA M. MANOTOC, Petitioner,

vs.
HONORABLE COURT OF APPEALS and AGAPITA TRAJANO on behalf of the Estate of ARCHIMEDES TRAJANO, Respondents.

DECISION

VELASCO, JR., J.:

The court’s jurisdiction over a defendant is founded on a valid service of summons. Without a valid service, the court cannot acquire jurisdiction over the defendant,
unless the defendant voluntarily submits to it. The defendant must be properly apprised of a pending action against him and assured of the opportunity to present his
defenses to the suit. Proper service of summons is used to protect one’s right to due process.

The Case

This Petition for Review on Certiorari 1 under Rule 45 presents the core issue whether there was a valid substituted service of summons on petitioner for the trial
court to acquire jurisdiction. Petitioner Manotoc claims the court a quo should have annulled the proceedings in the trial court for want of jurisdiction due to irregular
and ineffective service of summons.

The Facts

Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se, and on behalf of the Estate of Archimedes Trajano v. Imelda ‘Imee’ R. Marcos-
Manotoc 2 for Filing, Recognition and/or Enforcement of Foreign Judgment. Respondent Trajano seeks the enforcement of a foreign court’s judgment rendered on
May 1, 1991 by the United States District Court of Honolulu, Hawaii, United States of America, in a case entitled Agapita Trajano, et al. v. Imee Marcos-Manotoc a.k.a.
Imee Marcos, Civil Case No. 86-0207 for wrongful death of deceased Archimedes Trajano committed by military intelligence officials of the Philippines allegedly under
the command, direction, authority, supervision, tolerance, sufferance and/or influence of defendant Manotoc, pursuant to the provisions of Rule 39 of the then
Revised Rules of Court.

Based on paragraph two of the Complaint, the trial court issued a Summons 3 on July 6, 1993 addressed to petitioner at Alexandra Condominium Corporation or
Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.

On July 15, 1993, the Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an alleged caretaker of petitioner at the
condominium unit mentioned earlier. 4 When petitioner failed to file her Answer, the trial court declared her in default through an Order 5 dated October 13, 1993.

On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion to Dismiss 6 on the ground of lack of jurisdiction of the trial court over her person
due to an invalid substituted service of summons. The grounds to support the motion were: (1) the address of defendant indicated in the Complaint (Alexandra
Homes) was not her dwelling, residence, or regular place of business as provided in Section 8, Rule 14 of the Rules of Court; (2) the party (de la Cruz), who was found
in the unit, was neither a representative, employee, nor a resident of the place; (3) the procedure prescribed by the Rules on personal and substituted service of
summons was ignored; (4) defendant was a resident of Singapore; and (5) whatever judgment rendered in this case would be ineffective and futile.

During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos Gonzales, who testified that he saw defendant Manotoc as a visitor in Alexandra
Homes only two times. He also identified the Certification of Renato A. de Leon, which stated that Unit E-2104 was owned by Queens Park Realty, Inc.; and at the
time the Certification was issued, the unit was not being leased by anyone. Petitioner also presented her Philippine passport and the Disembarkation/Embarkation
Card 7 issued by the Immigration Service of Singapore to show that she was a resident of Singapore. She claimed that the person referred to in plaintiff’s Exhibits "A"
to "EEEE" as "Mrs. Manotoc" may not even be her, but the mother of Tommy Manotoc, and granting that she was the one referred to in said exhibits, only 27 out of
109 entries referred to Mrs. Manotoc. Hence, the infrequent number of times she allegedly entered Alexandra Homes did not at all establish plaintiff’s position that
she was a resident of said place.

On the other hand, Agapita Trajano, for plaintiffs’ estate, presented Robert Swift, lead counsel for plaintiffs in the Estate of Ferdinand Marcos Human Rights Litigation,
who testified that he participated in the deposition taking of Ferdinand R. Marcos, Jr.; and he confirmed that Mr. Marcos, Jr. testified that petitioner’s residence was
at the Alexandra Apartment, Greenhills. 8 In addition, the entries 9 in the logbook of Alexandra Homes from August 4, 1992 to August 2, 1993, listing the name of
petitioner Manotoc and the Sheriff’s Return, 10 were adduced in evidence.

On October 11, 1994, the trial court rejected Manotoc’s Motion to Dismiss on the strength of its findings that her residence, for purposes of the Complaint, was
Alexandra Homes, Unit E-2104, No. 29 Meralco Avenue, Pasig, Metro Manila, based on the documentary evidence of respondent Trajano. The trial court relied on the
presumption that the sheriff’s substituted service was made in the regular performance of official duty, and such presumption stood in the absence of proof to the
contrary. 11

On December 21, 1994, the trial court discarded Manotoc’s plea for reconsideration for lack of merit. 12

Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 13 before the Court of Appeals (CA) on January 20, 1995, docketed as CA-G.R. SP No. 36214
seeking the annulment of the October 11, 1994 and December 21, 1994 Orders of Judge Aurelio C. Trampe.

Ruling of the Court of Appeals

On March 17, 1997, the CA rendered the assailed Decision, 14 dismissing the Petition for Certiorari and Prohibition. The court a quo adopted the findings of the trial
court that petitioner’s residence was at Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig, Metro Manila, which was also the residence of her husband,
as shown by the testimony of Atty. Robert Swift and the Returns of the registered mails sent to petitioner. It ruled that the Disembarkation/Embarkation Card and the
Certification dated September 17, 1993 issued by Renato A. De Leon, Assistant Property Administrator of Alexandra Homes, were hearsay, and that said Certification
did not refer to July 1993—the month when the substituted service was effected.

In the same Decision, the CA also rejected petitioner’s Philippine passport as proof of her residency in Singapore as it merely showed the dates of her departure from
and arrival in the Philippines without presenting the boilerplate’s last two (2) inside pages where petitioner’s residence was indicated. The CA considered the
withholding of those pages as suppression of evidence. Thus, according to the CA, the trial court had acquired jurisdiction over petitioner as there was a valid
substituted service pursuant to Section 8, Rule 14 of the old Revised Rules of Court.

On April 2, 1997, petitioner filed a Motion for Reconsideration 15 which was denied by the CA in its Resolution 16 dated October 8, 1997.

Hence, petitioner has come before the Court for review on certiorari.

The Issues

Petitioner raises the following assignment of errors for the Court’s consideration:

I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN RENDERING THE DECISION AND RESOLUTION IN QUESTION (ANNEXES A AND B) IN DEFIANCE
OF LAW AND JURISPRUDENCE IN RULING THAT 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.

II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR WHEN IT RULED THAT THERE WAS A VALID SERVICE OF SUMMONS ON AN ALLEGED
CARETAKER OF PETITIONER’S RESIDENCE IN COMPLETE DEFIANCE OF THE RULING IN CASTILLO VS. CFI OF BULACAN, BR. IV, G.R. NO. L-55869, FEBRUARY 20, 1984,
127 SCRA 632 WHICH DEFINES THE PROPRIETY OF SUCH SERVICE UPON MERE OVERSEERS OF PREMISES WHERE A PARTY SUPPOSEDLY RESIDES.

III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN CONCLUDING THAT THE RESIDENCE OF THE HUSBAND IS ALSO THE RESIDENCE OF HIS WIFE
CONTRARY TO THE RULING IN THE BANK OF THE PHILIPPINE ISLANDS VS. DE COSTER, G.R. NO. 23181, MARCH 16, 1925, 47 PHIL. 594.

IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN FAILING TO APPLY THE RULE ON EXTRA-TERRITORIAL SERVICE OF SUMMONS UNDER
SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES OF COURT. 17

The assigned errors bring to the fore the crux of the disagreement—the validity of the substituted service of summons for the trial court to acquire jurisdiction over
petitioner.

The Court’s Ruling

We GRANT the petition.

Acquisition of Jurisdiction

Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. When the defendant does not
voluntarily submit to the court’s jurisdiction or when there is no valid service of summons, "any judgment of the court which has no jurisdiction over the person of
the defendant is null and void." 18 In an action strictly in personam, personal service on the defendant is the preferred mode of service, that is, by handing a copy of
the summons to the defendant in person. If defendant, for 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 defendant’s residence with some person of suitable age and discretion then residing therein, or
(b) by leaving the copies at defendant’s 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 Sheriff’s 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 clearly narrated in detail in the Return. The date and time of the attempts on personal service, the inquiries
made to locate the defendant, the name/s of the occupants of the alleged residence or house of defendant and all other acts done, though futile, to serve the
summons on defendant must be specified in the Return to justify substituted service. The form on Sheriff’s Return of Summons on Substituted Service prescribed in
the Handbook for Sheriffs published by the Philippine Judicial Academy requires a narration of the efforts made to find the defendant personally and the fact of
failure. 26 Supreme Court Administrative Circular No. 5 dated November 9, 1989 requires that "impossibility of prompt service should be shown by stating the efforts
made to find the defendant personally and the failure of such efforts," which should be made in the proof of service.

(3) A Person of Suitable Age and Discretion

If the substituted service will be effected at defendant’s house or residence, it should be left with a person of "suitable age and discretion then residing therein." 27 A
person of suitable age and discretion is one who has attained the age of full legal capacity (18 years old) and is considered to have enough discernment to understand
the importance of a summons. "Discretion" is defined as "the ability to make decisions which represent a responsible choice and for which an understanding of what
is lawful, right or wise may be presupposed". 28 Thus, to be of sufficient discretion, such person must know how to read and understand English to comprehend the
import of the summons, and fully realize the need to deliver the summons and complaint to the defendant at the earliest possible time for the person to take
appropriate action. Thus, the person must have the "relation of confidence" to the defendant, ensuring that the latter would receive or at least be notified of the
receipt of the summons. The sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the
recipient’s 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 defendant’s 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 the 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 Sheriff’s 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 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 ruling—in 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 petitioner’s address in the Complaint, it has not been shown that respondent Trajano or Sheriff Cañelas, 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 petitioner’s 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 Sheriff’s 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 service—for 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 Sheriff’s 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 defendant’s 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 Sheriff’s
Return lacks information as to residence, age, and discretion of Mr. Macky de la Cruz, aside from the sheriff’s 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 petitioner’s 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 Cruz’s 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 petitioner’s 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 pursued. 35 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 record. 38 The fact that the defendant had actual
knowledge of attempted service does not render the service effectual if in fact the process was not served in accordance with the requirements of the statute. 39

Based on the above principles, respondent Trajano failed to demonstrate that there was strict compliance with the requirements of the then Section 8, Rule 14 (now
Section 7, Rule 14 of the 1997 Rules of Civil Procedure).

Due to non-compliance with the prerequisites for valid substituted service, the proceedings held before the trial court perforce must be annulled.

The court a quo heavily relied on the presumption of regularity in the performance of official duty. It reasons out that "[t]he certificate of service by the proper officer
is prima facie evidence of the facts set out herein, and to overcome the presumption arising from said certificate, the evidence must be clear and convincing." 40

The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply, the Sheriff’s Return must show that serious efforts or attempts
were exerted to personally serve the summons and that said efforts failed. These facts must be specifically narrated in the Return. To reiterate, it must clearly show
that the substituted service must be made on a person of suitable age and discretion living in the dwelling or residence of defendant. Otherwise, the Return is flawed
and the presumption cannot be availed of. As previously explained, the Return of Sheriff Cañelas did not comply with the stringent requirements of Rule 14, Section 8
on substituted service.

In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the presumption of regularity in the performance of official functions by the sheriff is not
applicable in this case where it is patent that the sheriff’s return is defective (emphasis supplied)." While the Sheriff’s Return in the Venturanza case had no statement
on the effort or attempt to personally serve the summons, the Return of Sheriff Cañelas in the case at bar merely described the efforts or attempts in general terms
lacking in details as required by the ruling in the case of Domagas v. Jensen and other cases. It is as if Cañelas’ Return did not mention any effort to accomplish
personal service. Thus, the substituted service is void.

On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig City, our findings that the substituted
service is void has rendered the matter moot and academic. Even assuming that Alexandra Homes Room 104 is her actual residence, such fact would not make an
irregular and void substituted service valid and effective.

IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and the assailed March 17, 1997 Decision and October 8, 1997 Resolution of the Court of
Appeals and the October 11, 1994 and December 21, 1994 Orders of the Regional Trial Court, National Capital Judicial Region, Pasig City, Branch 163 are hereby
REVERSED and SET ASIDE.No costs.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice
WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
G.R. No. 181517
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 181517 July 6, 2015

GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners,

vs.
NISSIN-UNIVERSAL ROBINA CORPORATION, Respondent.

DECISION

PERALTA, J.:

For resolution is a Petition for Review under Rule 45 of the Rules of Court which petitioners Green Star Express, Inc. and Fruto Sayson, Jr. brought before the Court,
assailing the Decision 1 of the Court of Appeals (CA) dated September 17, 2007 and its Resolution2 dated January 22, 2008 in CA-G.R. SP No. 86824. The CA nullified
the Resolution dated May 5, 2004 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, and dismissed the complaint for lack
of jurisdiction.

The following are the antecedents of the case:

On February 25, 2003, a Mitsubishi L-300 van which Universal Robina Corporation ( URC) owned figured in a vehicular accident with petitioner Green Star Express,
Inc.' s (Green Star) passenger bus, resulting in the death of the van's driver. Thus, the bus driver, petitioner Fruto Sayson, Jr., was charged with the crime of reckless
imprudence resulting in homicide.

Thereafter, Green Star sent a demand letter to respondent NissinUniversal Robina Corporation (NURC) for the repair of its passenger bus amounting to ₱567, 070.68.
NURC denied any liability therefore and argued that the criminal case shall determine the ultimate liabilities of the parties. Thereafter, the criminal case was
dismissed without prejudice, due to insufficiency of evidence.

Sayson and Green Star then filed a complaint for damages against NURC before the R TC of San Pedro, Laguna. Francis Tinio, one of NURC's employees, was the one
who received the summons. On February 6, 2004, NURC filed a Motion to Dismiss claiming lack of jurisdiction due to improper service.

On May 5, 2004, the RTC issued a Resolution denying NURC's motion to dismiss. It ruled that there was substantial compliance because there was actual receipt of
the summons by NURC. The dispositive portion of said Resolution thus reads:

WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED.3

Since its Motion for Reconsideration was denied, NURC elevated the case to the CA via a Petition for Certiorari. On September 17, 2007, the CA reversed the RTC
ruling, hence:

WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions, dated May 5, 2004 and dated July 26, 2004, of the Regional Trial Court of San
Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, are hereby NULLIFIED and a new one rendered granting Petitioner's Motion to Dismiss, dated February 3, 2004.
Private Respondents' Amended Complaint for Damages filed against Petitioner Nissin-Universal Robina Corporation is accordingly dismissed for lack of jurisdiction.

SO ORDERED.4

Aggrieved, Green Star and Sayson moved for reconsideration, but the same was denied. Hence, this petition.

The lone issue is whether or not the summons was properly served on NURC, vesting the trial court with jurisdiction.

The petition is benefit of merit.

It is a well-established rule that the rules on service of summons upon a domestic private juridical entity must be strictly complied with. Otherwise, the court cannot
be said to have acquired jurisdiction over the person of the defendant.5

NURC maintains that the RTC did not acquire jurisdiction over it as the summons was received by its cost accountant, Francis Tinio.1âwphi1 It argues that under
Section 11, Rule 14 of the 1997 Rules of Court, which provides the rule on service of summons upon a juridical entity, in cases where the defendant is a domestic
corporation like NURC, summons may be served only through its officers.6 Thus:

Section 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or association organized under the laws of the
Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house
counsel.7

This provision replaced the former Section 13, Rule 14 of the 1964 Rules of Court which read:
Section 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.8

In the past, the Court upheld service of summons upon a construction project manager, a corporation’s assistant manager, and ordinary clerk of a corporation,
private secretary of corporate executives, retained counsel, and officials who had control over the operations of the corporation like the assistant general manager or
the corporation’s Chief Finance and Administrative Officer. The Court then considered said persons as "agent" within the contemplation of the old rule. Notably,
under the new Rules, service of summons upon an agent of the corporation is no longer authorized,9 The rule now likewise states "general manager" instead of
"manager"; "corporate secretary" instead of merely "secretary"; and "treasure" instead of "cashier."10 It has now become restricted, limited, and exclusive only to
the persons enumerated in the aforementioned provision, following the rule in statutory construction that the express mention of one person excludes all others, or
expression unions est exclusion alterius. Service must, therefore, be made only on the person expressly listed in the rules.11 If the revision committee intended to
liberalize the rule on service of summons, it could have easily done so by clear and concise language.12

Here, Tinio, a, member of NURC’s accounting staff, received the summons on January 22, 2004. Green star claims that it was received upon instruction of Junadette
Avedillo. The general manager of the corporation. Such fact, however, does not appear in the Sheriff’s Return.13 The Return did not even state whether Avedillo was
present at the time the summons was received by Tinio, the supposed assistant manager. Green Star further avers that the sheriff tendered the summons, but
Avedillo simply refused to sign and receive the same. She then allegedly instructed Tinio to just receive it in her behalf. However, Green Star never presented said
sheriff as witness during the hearing of NURC’s motion to dismiss to attest to said claim. And while the sheriff executed an affidavit which appears to support such
allegation, the same was likewise not presented as evidence. It was only when the case was already before the CA that said affidavit first surfaced. Since the service of
summons was made on a cost accountant, which is not one of the designated persons under Section 11 of Rule 14, the trial court did not vadily acquire jurisdiction
over NURC,14 although the corporation may have actually received the summons.15 To rule otherwise will be an outright circumvention of the rules, aggravating
further the delay in the administration of justice.16

At this juncture, it is worth emphasizing that notice to enable the other party to be heard and to present evidence is not a mere technicality or a trivial matter in any
administrative or judicial proceedings. The service of summons is a vital and indispensable ingredient of due process. Corporations would be easily deprived of their
right to present their defense in a multi-million peso suit, if the Court would disregard the mandate of the Rules on the service of summons.17

WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated September 17, 2007 and Resolution dated January 22, 2008 in CA-G.R. SP No. 86824 are
hereby AFFIRMED.
G.R. No. 202505
EXPRESS PADALA (ITALIA) S.P.A., now BDO REMITTANCE (ITALIA) S.P.A., Petitioner
vs.
HELEN M. OCAMPO, Respondent

DECISION

JARDELEZA, J.:

This is a petition for review on certiorari1 challenging the Decision2 dated January 5, 2012 and Resolution3 dated June 27, 2012 of the Court of Appeals (CA) in CA-
G.R. SP No. 113475. The CA granted the petition for certiorari filed by respondent Helen M. Ocampo (Ocampo) and set aside the Decision4 dated September 14, 2009
of the Regional Trial Court (RTC) in Civil Case No. MC08-3775 which granted BDO Remittance (Italia) S.P.A. 's (BDO Remittance) petition for recognition of foreign
judgment.

The core issue being raised is whether service of summons was validly effected upon respondent, who lives in Italy, through substituted service.

BDO Remittance, a corporation with principal office in Italy, hired respondent Ocampo as a remittance processor in September 2002. She was dismissed in February
2004 for misappropriating the sum of €24,035.60 by falsifying invoices of money payments relating to customers' money transfer orders from February to December
2003.5

Accordingly, BDO Remittance filed a criminal complaint against Ocampo for the same acts before the Court of Turin, Italy. Ocampo pleaded guilty to the offense
charged. On April 13, 2005, the Honorable Court of Turin convicted and sentenced her to suffer imprisonment of six months and a penalty of €300.00, but granted her
the benefit of suspension of the enforcement of sentence on account of her guilty plea (the Court of Turin Decision).6

On September 22, 2008, BDO Remittance filed a petition for recognition of foreign judgment7 with the RTC of Mandaluyong City. BDO Remittance prayed for the
recognition of the Court of Turin Decision and the cancellation or restriction of Ocampo' s Philippine passport by the Department of Foreign Affairs (DFA).8

On November 21, 2008, the sheriff attempted to personally serve the summons on Ocampo in her local address alleged in the petition located in San Bernardo
Village, Darasa, Tanauan, Batangas. However, since the address was incomplete, the sheriff sought the help of barangay officials, who pointed him to the house
belonging to Ocampo's father, Nicasio Ocampo, Victor P. Macahia (Macahia), uncle of Ocampo and present occupant, informed the sheriff that Ocampo and her
family were already in Italy, and that he was only a caretaker of the house. The sheriff then proceeded to serve the summons upon Macahia.9 After Ocampo failed to
file an answer, BDO Remittance filed a motion to declare Ocampo in default. The RTC granted the motion and allowed BDO Remittance to present evidence ex
parte.10

On September 14, 2009, the RTC rendered a Decision11 in favor of BDO Remittance (RTC Decision). It recognized as valid and binding in the Philippines the Court of
Turin Decision and ordered the DFA to cancel or restrict Ocampo's Philippine passport and not to allow its renewal until she has served her sentence.12

On February 11, 2010, Ocampo's mother, Laureana Macahia, received a copy of the RTC Decision and forwarded it to Ocampo.13 Not having been represented by
counsel a quo, the period of appeal lapsed. Ocampo was later able to engage the services of counsel who filed a petition for certiorari under Rule 65 with the CA on
April 12, 2010.14 Ocampo principally argued that the RTC acted in grave abuse of discretion in recognizing and ordering the enforcement of the Court of Turin
Decision.15

In its now assailed Decision,16 the CA set aside the RTC Decision and revoked the order to cancel or restrict Ocampo's Philippine passport (CA Decision). The CA first
settled the issue of procedural due process, particularly whether Ocampo was properly served with summons. It held that since Ocampo's whereabouts were
unknown, summons should have been served in accordance with Section 14, Rule 14 of the Rules of Civil Procedure. The sheriff however, erroneously effected the
substituted service of summons under Section 7 of Rule 14. Thus, the CA concluded that the RTC did not acquire jurisdiction over Ocampo, and the RTC Decision
against her is null and void. It also found that the RTC acted in grave abuse of discretion when it recognized a foreign judgment of a criminal case and ordered the DFA
to restrict or cancel Ocampo's passport.17

After the CA denied its motion for reconsideration, BDO Remittance filed the present petition for review under Rule 45 arguing that: (1) Ocampo availed of the wrong
remedy; and (2) the RTC did not gravely abuse its discretion in granting the petition for recognition of foreign judgment and ordering the DFA to restrict or cancel
Ocampo's passport.18

In her comment,19 Ocampo explained that BDO Remittance's insistence on the enforcement of Court of Turin Decision is misleading because, by availing of the
benefit of suspension of the enforcement, the penalty of confinement will not be enforced upon her. She also presented a decree20 from the High Court of Turin
dated June 29, 2010 which stated that her criminal liability has been extinguished.

We deny the petition.

The general rule in this jurisdiction is that summons must be served personally on the defendant. Section 6, Rule 14 of the Rules of Court provides:

Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses
to receive and sign for it, by tendering it to him.

For justifiable reasons, however, other modes of serving summons may be resorted to. When the defendant cannot be served personally within a reasonable time
after efforts to locate him have failed, the rules allow summons to be served by substituted service. Substituted service is effected by leaving copies of the summons
at the defendant's residence with some person of suitable age and discretion then residing therein, or by leaving the copies at defendant's office or regular place of
business with some competent person in charge thereof. 21

When the defendant's whereabouts are unknown, the rules allow service of summons by publication.22 As an exception to the preferred mode of service, service of
summons by publication may only be resorted to when the whereabouts of the defendant are not only unknown, but cannot be ascertained by diligent inquiry. The
diligence requirement means that there must be prior resort to personal service under Section 7 and substituted service under Section 8, and proof that these modes
were ineffective before summons by publication may be allowed.23 This mode also requires the plaintiff to file a written motion for leave of court to effect service of
summons by publication, supported by affidavit of the plaintiff or some person on his behalf, setting forth the grounds for the application.24

In the present case, the sheriff resorted to substituted service upon Ocampo through her uncle, who was the caretaker of Ocampo's old family residence in Tanauan,
Batangas. The CA held that substituted service was improperly resorted to. It found that since Ocampo' s "whereabouts are unknown and cannot be ascertained by
diligent inquiry x x x service may be effected only by publication in a newspaper of general circulation."25

We agree with the CA that substituted service is improper under the facts of this case. Substituted service presupposes that the place where the summons is being
served is the defendant's current residence or office/regular place of business. Thus, where the defendant neither resides nor holds office in the address stated in the
summons, substituted service cannot be resorted to. As we explained in Keister v. Navarro: 26

Under the Rules, substituted service may be effect[ed] (a) by leaving copies of the summons at the defendant's dwelling house or residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or regular place of business with some competent person in charge
thereof. The terms "dwelling house" or "residence" are generally held to refer to the time of service, hence it is not sufficient "to leave the copy at defendant's former
dwelling house, residence, or place of abode, as the case may be, after his removal therefrom." They refer to the place where the person named in the summons is
living at the time when the service is made, even though he may be temporarily out of the country at the time. Similarly, the terms "office" or "regular place of
business" refer to the office or place of business of defendant at the time of service. Note that the rule designates the persons to whom copies of the process may be
left. The rule presupposes that such a relation of confidence exists between the person with whom the copy is left and the defendant and, therefore, assumes that
such person will deliver the process to defendant or in some way give him notice thereof.27 (Italics in the original, citations omitted.)

Based on the sheriffs report, it is clear that Ocampo no longer resides in San Bernardo Village, Darasa, Tanauan, Batangas. The report categorically stated that
"defendant Helen M. Ocampo and her family were already in Italy,"28 without, however, identifying any specific address. Even BDO Remittance itself admitted in its
petition for recognition that Ocampo' s "whereabouts in Italy are no longer certain."29 This, we note, is the reason why in alleging the two addresses of Ocampo, one
in Italy and one in the Philippines, BDO Remittance used the phrase "last known [address ]"30 instead of the usual "resident of." Not being a resident of the address
where the summons was served, the substituted service of summons is ineffective. Accordingly, the RTC did not acquire jurisdiction over the person of Ocampo.

BDO Remittance's reliance on Palma v. Galvez31 is misplaced for the simple reason that the case involved service of summons to a person who is temporarily out of
the country. In this case, however, Ocampo's sojourn in Italy cannot be classified as temporary considering that she already resides there, albeit her precise address
was not known. Modes of service of summons must be strictly followed in order that the court may acquire jurisdiction over the person of the defendant. The
purpose of this is to afford the defendant an opportunity to be heard on the claim against him.32 BDO Remittance is not totally without recourse, as the rules allow
summons by publication and extraterritorial service.33 Unlike substituted service, however, these are extraordinary modes which require leave of court.

The service of summons is a vital and indispensable ingredient of a defendant's constitutional right to due process. As a rule, if a defendant has not been validly
summoned, the court acquires no jurisdiction over his person, and a judgment rendered against him is void.34 Since the RTC never acquired jurisdiction over the
person of Ocampo, the judgment rendered by the court could not be considered binding upon her.

Consequently, it is no longer necessary to delve into the other issues raised in the petition. These issues can be resolved by the trial court upon acquiring jurisdiction
over Ocampo and giving her an opportunity to be heard. It is in a better position to receive and assess the evidence that may be presented by Ocampo, including the
decree dated June 29, 2010 issued by the High Court of Turin, to the effect that her liability has been extinguished. While such claim would tend to render the case
moot, we refuse to consider the argument at the first instance on two grounds: first, we are not a trier of facts; and second, the document submitted has not been
authenticated in accordance with the rules on evidence.

WHEREFORE, the petition is DENIED. The Decision dated January 5, 2012 and Resolution dated June 27, 2012 of the Court of Appeals in CA-G.R. SP No. 113475 are
AFFIRMED insofar as there was no valid service of summons. The Decision dated September 14, 2009 of the Regional Trial Court, Branch 212, Mandaluyong City in
Civil Case No. MCOS-3775 is declared VOID.
SO ORDERED.

FRANCIS H. JARDELEZA
Associate Justice

G.R. No. 171137

Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 171137 June 5, 2009

PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Petitioner,

vs.
SPOUSES WILSON DY HONG PI and LOLITA DY and SPOUSES PRIMO CHUYACO, JR. and LILIA CHUYACO, Respondents.

DECISION

PUNO, C.J.:

Before the Court is a petition for review on certiorari assailing the Decision1 dated July 18, 2005 of the Court of Appeals in CA–G.R. SP. No. 85282, and its Resolution2
dated January 10, 2006, denying petitioner’s motion for reconsideration.

Spouses Damian and Tessie Amadeo are indebted to petitioner Philippine Commercial International Bank, a domestic uni-banking corporation, as sureties for
Streamline Cotton Development Corporation. The promissory notes became due and demandable, but the Amadeo spouses failed to pay their outstanding
obligations despite repeated demands. As of February 15, 1994, these obligations stood at Ten Million, Six Hundred Seventy-One Thousand, Seven Hundred Twenty-
Six Pesos and Sixty-One Centavos (P10,671,726.61).

Petitioner subsequently discovered that roughly a month before the due date of the promissory notes, the Amadeo spouses (i) sold three (3) or nearly all of their real
properties to respondents, Spouses Wilson and Lolita Dy and Spouses Primo and Lilia Chuyaco, and (ii) immediately caused the transfer of the titles covering the
parcels of land in favor of the latter. The consideration for these sales was further alleged to have been grossly insufficient or inadequate.

Believing that the transfers were done in fraud of creditors, petitioner instituted an action for rescission and damages on April 22, 1994. In its Complaint3 in Civil Case
No. 94-1585 against Spouses Amadeo, Dy and Chuyaco, petitioner asked the Regional Trial Court of Makati City for the following reliefs:

1. Annulling the Deeds of Absolute Sale both dated September 16, 1993 and thereafter, direct the Registries of Deeds of Sultan Kudarat and Davao City to cancel the
Transfer Certificates of Title Nos. (sic) T-27628, T-202868, and T-202869 issued in the name of Wilson Dy Hong Pi and Lolita G. Dy AND Primo Chuyaco, Jr. and Lilia O.
Chuyaco, respectively, and in lieu thereof, issue new ones under the name of Damian and Tessie Amadeo.

2. Ordering the defendants to pay the plaintiff moral damages in the sum of P200,000.00; exemplary damages in the sum of P200,000.00; and P100,000.00 as[,] and
for[,] attorney’s fees.4

The case was then raffled to Branch 133, presided over by Judge Napoleon E. Inoturan.

Upon service of summons on the Amadeo spouses, the latter filed a Motion to Dismiss5 on the ground that the Complaint violated the explicit terms of Supreme
Court Circular No. 04-94, as the Verification was executed by petitioner’s legal counsel. 6 Petitioner filed its Opposition to the Motion to Dismiss,7 where it argued
that (i) the rule cited by the Amadeo spouses should not be applied literally, and (ii) at any rate, petitioner’s legal counsel was authorized by petitioner to institute the
Complaint.8 On February 4, 1995, the trial court issued an Order9 denying the Motion to Dismiss.

The Amadeo spouses subsequently filed an Answer10 where they alleged that petitioner failed to release the loans to Streamline Cotton Development Corporation on
the agreed date, thereby constraining them to incur loans from third parties at high interest rates to keep the company afloat. These loans were covered by
postdated checks which had to be funded once the obligations fell due, lest the Amadeo spouses face criminal prosecution. In order to pay the said loans, they thus
had to sell the properties subject of this case. The Amadeo spouses further claimed that the purchase price for the three (3) parcels of land was the fair market value,
and that they had other personal and real properties which may be availed of to answer for their obligations. In their Counterclaim, they prayed for moral damages of
P200,000.00, attorney’s fees and expenses of litigation.

Petitioner filed its Reply and Answer to Counterclaim11 on March 8, 1995.

On September 13, 1995, petitioner filed an Ex Parte Motion for Leave to Serve Summons by Publication12 on Spouses Dy and Chuyaco. However, this was denied in
an Order13 dated September 14, 1995 on the ground that summons by publication cannot be availed of in an action in personam.

Accordingly, on March 4, 1996, petitioner filed an Amended Complaint14 to include allegations in support of, and a prayer for, a writ of preliminary attachment.
Petitioner then presented evidence in relation thereto, and on February 25, 1997, the trial court issued an Order15 for the issuance of the writ. Upon petitioner’s ex-
parte motion, the trial court likewise directed the Clerk of Court of the Regional Trial Court of Davao City to designate a Special Sheriff to implement the writ of
preliminary attachment.16

In Orders17 dated January 12, 1998 and February 20, 1998, respectively, petitioner was directed to inform the court whether it still intended to pursue the case. This
appears to have been motivated by the fact that no property of the defendants had been attached as of yet. Petitioner did not comply with the said Orders;
consequently, the case was dismissed without prejudice on June 26, 1998 for failure to prosecute.18 By this time, petitioner had already caused the annotation of a
notice of lis pendens at the back of the titles of the properties subject of this case (i.e., TCT Nos. T-27628, T-202868, and T-202869).
On August 3, 1998, petitioner filed a Motion for Reconsideration of the June 26, 1998 Order, alleging that its failure to notify the trial court of its intention to pursue
the case was prompted solely by the difficulty of locating properties against which the writ of attachment could be enforced. In the interest of justice, the trial court
granted the motion.19

Defendant Spouses Amadeo, Dy and Chuyaco then filed an "Omnibus Motion to Dismiss and to Annul All the Proceedings Taken Against the Defendants"20 on
December 11, 1998, in which motion they questioned the jurisdiction of the trial court over their persons. Petitioner filed its Opposition21 thereto on February 15,
1999. Defendants filed their Reply22 on March 10, 1999, while petitioner filed its Rejoinder23 on June 9, 1999. Said motion, however, was merely noted without
action in an August 2, 2001 Order24 since its notice of hearing was addressed only to the Clerk of Court, viz.:

It appears from the Motion that its Notice of Hearing is not addressed to any of the parties concerned as otherwise required by Rule 15[,] Section 5 of the 1997 Rules
of Civil Procedure. Such being the case, the Motion is deemed a mere scrap of paper as held in Provident International Resources Corporation vs. Court of Appeals,
259 SCRA 510.

In any event, the record shows that defendants Sps. Amadeo have been duly served with summons as early as November 11, 1994 per Sheriff’s Return of Service
dated November 14, 1994, and they are therefore within the jurisdiction of the Court. However, defendants Spouses Dy and Chuyaco have not been served with
summons as evidenced by Officer’s Return dated May 24, 1994 and Return of Service dated June 10, 1994, respectively, and so the Court has not yet acquired
jurisdiction over them. Since aforesaid Motion is deemed a scrap of paper, it cannot be construed to manifest a (sic) voluntary appearance on their part.

Wherefore, the Omnibus Motion is noted without action. Let alias summons be issued to defendants-spouses Dy and Chuyaco. For plaintiff’s guidance, it may avail
itself of Rule 14[,] Section 14 on summons by publication if it so desires, upon proper motion.

SO ORDERED. (underscoring in the original)

Spouses Dy and Chuyaco subsequently filed a "Motion to Dismiss (for Lack of Jurisdiction)"25 on February 18, 2002, in which motion they essentially accused
petitioner of not causing summons to be served upon them and losing interest in the case. Petitioner filed its Opposition26 thereto, and in an April 23, 2002 Order,27
the trial court denied the Motion to Dismiss on account of (i) petitioner’s Compliance and Manifestation28 that it had not lost interest in pursuing the case, and (ii)
the Motion for Leave of Court to Serve Summons by Publication that petitioner filed simultaneously with its Opposition. On April 24, 2002, the Motion for Leave of
Court to Serve Summons by Publication was submitted for resolution.29

Respondent Spouses Dy and Chuyaco next filed a "Motion to Dismiss for Failure to Prosecute"30 on June 17, 2003. The significant portions of the motion state:

2. That based on the order of this Honorable Court dated April 23, 2003 (sic), the Motion for Leave of Court to Serve Summons by Publication was submitted for
resolution, but the movants-defendants would like to remind the Honorable Court that a Motion of the same nature was already filed on September 13, 1995 and
was DENIED on September 14, 1995. xxx;

3. That therefore, the order dated August 21, 2001 of this Honorable Court which advised the complainant to avail of Rule 14 Section 14 of the Rules is contrary to its
order dated September 14, 1995;

4. That up to this date, the complainant has not lifted a finger to pursue this case against movants-defendants, hence, this Motion to Dismiss.

WHEREFORE, premises considered, it is most respectfully prayed that this case be dismissed against the movants-defendants and to order the deletion of the Notice
of Lis Pendens at the back of the subject title (sic).

This was opposed by petitioner, arguing that it had already filed a motion for the service of summons by publication, but the trial court had yet to act on it.31 On July
25, 2003, this Motion was submitted for resolution.32

On November 4, 2003, Spouses Dy and Chuyaco personally, and not through their counsel, filed a "Motion for Inhibition without submitting themselves to the
jurisdiction of this Honorable Court,"33 the relevant portions of which state:

1. That since 1998, the defendants-movants have been moving for the dismissal of this case as far as the movants are concerned and to nullify the proceedings taken
against them since the Honorable Court has not yet acquired jurisdiction over their persons when the plaintiff presented its evidence against defendants (sic) Sps.
Damian and Tessie Amadeo and even thereafter;

2. That, however only on (sic) August 2, 2001 or after more than three (3) years, that this Honorable Court denied the said Motion to Dismiss due to technicality (sic)
and merely require (sic) the plaintiff to serve the summons either personally or thru publication;

3. That, however in the order of this Honorable Court dated September 14, 1995, it already denied the Ex-Parte Motion for Leave to Serve Summons by Publication
"considering that the action herein is in personam", hence, this order is contrary to its latest order dated August 2, 2001;

4. That another Motion to Dismiss was filed last June 11, 200334 on the ground of lack of interest to pursue the case but up to this date, the Honorable Court has
done nothing that delays (sic) the proceedings to the prejudice of the defendants-movants;

5. That this continuous delay in the proceedings shows that the Honorable Court may not be competent enough to further hear this case.

WHEREFORE, premises considered, it is most respectfully prayed for the inhibition of this Honorable Court (sic) from further hearing this case.

This was submitted for resolution on November 13, 2003.

The motion for inhibition was adopted by their counsel on record, Clarissa Castro, through a "Motion to Adopt Motion for Inhibition and Manifestation," which was
filed on February 11, 200435 and noted by the trial court in a February 20, 2004 Order.36 On June 23, 2004, however, the trial court (i) denied the motion for
inhibition for lack of merit, (ii) ruled that Spouses Dy and Chuyaco have voluntarily submitted themselves to the jurisdiction of the trial court, and (iii) gave them
fifteen (15) days from receipt of the Order within which to file their respective answers, as follows:
Acting on the Motion for Inhibition, the Court hereby denies the same for lack of legal basis.

In any event, the fact that defendants Wilson Dy and Primo Chuyaco, Jr. signed said Motion themselves and in behalf of their respective spouses undoubtedly
indicates their voluntary appearance in this case and their submission to the jurisdiction of this Court. The phrase "without submitting themselves to the jurisdiction
of this Honorable Court" in the heading of said Motion can not qualify the clear import of Rule 14 section 20 which states:

Voluntary appearance. — The defendant's voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss of other
grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance. (23a)

It may be noted that subject Motion for Inhibition is not a Motion to Dismiss.

Wherefore, defendants-spouses Dy and Chuyaco are given fifteen (15) days from receipt hereof within which to file their respective answers.

All pending incidents are deemed resolved.37

Unsatisfied with the Order, respondent Spouses Dy and Chuyaco filed a Petition for Certiorari under Rule 6538 before the CA, alleging that "the public respondent
committed grave abuse of discretion when he considered the Motion to Inhibit (without submitting to the jurisdiction of the Honorable Court) which they had filed to
question his impartiality and competence due to the delay in resolving the Motion to Dismiss based on lack of jurisdiction, as voluntary appearance, and wherein he
required the respondents to file their Answer within the required period." The CA granted the petition in this wise:

The old provision under Section 23, Rule 14 of the Revised Rules of Court provided that:

Section 23. What is equivalent to service. The defendant’s voluntary appearance in the action shall be equivalent to service.

Under Section 20, Rule 14 of the 1997 Rules of Civil Procedure, the provision now reads as follows:

Sec. 20. Voluntary Appearance. — The defendant's voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss
of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance.

What remains the same, carry (sic) over from the old doctrine, is that the issue of jurisdiction must be raised seasonably.

But everything else changed.

What changed is that: if a motion is filed, whatever kind it is, it need no longer be for the sole and separate purpose of objecting to the jurisdiction of the court
because the motion may raise myriad issues in that one motion of special appearance as long as the objection to the jurisdiction of the court is included. xxx

What necessarily changed also is that the medium of "special appearance" is no longer restricted to a motion to dismiss because one could now file any type of
motion provided you included the issue of lack of jurisdiction due to defective service of summons.

Thus, in this case at bar, the "two motions to dismiss" and the "motion to inhibit" may be treated as "special appearance" since they all included the issue of lack of
jurisdiction due to non-service of summons. They did not constitute as submitting the movant to the jurisdiction of the court.

xxx xxx xxx

There being no proper service of summons on petitioners and there being no voluntary appearance by petitioners, the trial court did not acquire jurisdiction over the
persons of the defendants, the herein petitioners. Any proceeding undertaken by the trial court against them would consequently be null and void.

WHEREFORE, premises considered, the assailed June 23, 2004 Order of the Regional Trial Court of Makati City, Branch 133, is hereby DECLARED NULL AND VOID as
against herein petitioners. The April 22, 1994 complaint filed by Philippine Commercial International Bank is hereby DISMISSED as against herein petitioners DY and
CHUYACO only, no jurisdiction over their persons having been acquired.

SO ORDERED.39

Petitioner’s motion for reconsideration was denied by the appellate court.40

Hence this appeal, where petitioner argues that:

I.

THE COURT OF APPEALS ERRED IN DECLARING THE JUNE 23, 2004 ORDER OF THE TRIAL COURT NULL AND VOID AND IN DISMISSING THE COMPLAINT AS AGAINST
RESPONDENTS DY AND CHUYACO AND RENDERING THE QUESTIONED DECISION AND RESOLUTION IN A WAY THAT IS NOT IN ACCORD WITH THE FACTS AND
APPLICABLE LAWS AND JURISPRUDENCE, WHICH HOLD THAT BY THEIR SUCCESSIVE FILING OF MOTIONS WITH THE CONVENIENT CAVEAT THAT THEY ARE NOT
SUBMITTING TO THE JURISDICTION OF THE COURT A QUO, THEY HAVE VOLUNTARILY SUBMITTED TO THE TRIAL COURT’S JURISDICTION.

A. THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED THE CASE AS AGAINST DY AND CHUYACO.

B. THE SPOUSES DY AND CHUYACO HAVE LOST THEIR RIGHT TO QUESTION THE TRIAL COURT’S JURISDICTION OVER THEM WHEN THEY DID NOT RAISE THE DENIAL OF
THEIR APRIL 22, 2002 MOTION TO DISMISS TO THE COURT OF APPEALS.

C. THE SPOUSES DY AND CHUYACO HAVE MISERABLY FAILED TO SHOW BASIS IN SEEKING THE TRIAL COURT’S JURISDICTION.

D. THE SPOUSES DY AND CHUYACO HAVE VOLUNTARILY SUBMITTED THEMSELVES TO THE TRIAL COURT’S JURISDICTION.
II.

THE COURT OF APPEALS ERRED IN A WAY THAT IS NOT IN ACCORD WITH APPLICABLE LAWS AND JURISPRUDENCE IN NOT DISMISSING THE PETITION FOR CERTIORARI
NOTWITHSTANDING THAT THE DY AND CHUYACO SPOUSES FAILED TO SHOW THAT THERE IS NO APPEAL, OR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE
ORDINARY COURSE OF LAW AVAILABLE TO THEM.41

Simply stated, the issues are: (1) Was the petition for certiorari prematurely filed? (2) Has there been voluntary appearance on the part of respondent Spouses Dy and
Chuyaco as to confer the trial court with jurisdiction over their persons? and (3) Did the trial court correctly deny the motion for inhibition?

We shall discuss these issues in seriatim.

First Issue: Propriety of Certiorari

Petitioner contends that respondents subverted the settled rule that a Petition for Certiorari under Rule 65 is available only when there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law.42 It asserts that respondents’ failure to move for reconsideration of the June 23, 2004 Order of the trial
court, denying the latter’s motion for inhibition, provides sufficient cause for the outright dismissal of the instant petition.

We disagree.

Petitioner is correct that a motion for reconsideration, as a general rule, must have first been filed before the tribunal, board, or officer against whom the writ of
certiorari is sought.43 This is intended to afford the latter an opportunity to correct any actual or fancied error attributed to it.44 However, there are several
exceptions where the special civil action for certiorari will lie even without the filing of a motion for reconsideration, namely:

a. where the order is a patent nullity, as where the court a quo has no jurisdiction;

b. where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed
upon in the lower court;

c. where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the government or the petitioner, or the
subject matter of the action is perishable;

d. where, under the circumstances, a motion for reconsideration would be useless;

e. where petitioner was deprived of due process and there is extreme urgency for relief;

f. where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable;

g. where the proceedings in the lower court are a nullity for lack of due process;

h. where the proceedings were ex parte or in which the petitioner had no opportunity to object; and

i. where the issue raised is one purely of law or where public interest is involved.45

Otherwise stated, a motion for reconsideration may be dispensed with only if there are concrete, compelling, and valid reasons for doing so.46

We find that respondents’ non-filing of a motion for reconsideration is justifiable under the circumstances of this case. It is not disputed that the trial court, rightly or
wrongly, considered them to have voluntarily submitted to its jurisdiction by virtue of their motion for inhibition. Thus, respondents’ apprehension that the motion
for reconsideration might be construed as further manifesting their voluntary appearance is certainly well-grounded. They may not, therefore, be faulted for having
resorted immediately to a special civil action for certiorari.1avvphil

Second Issue: Voluntary Appearance

Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes exerted over his person, or his voluntary
appearance in court.47 As a general proposition, one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court.48 It is by reason of
this rule that we have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment,
and to lift order of default with motion for reconsideration, is considered voluntary submission to the court’s jurisdiction.49 This, however, is tempered by the
concept of conditional appearance, such that a party who makes a special appearance to challenge, among others, the court’s jurisdiction over his person cannot be
considered to have submitted to its authority.50

Prescinding from the foregoing, it is thus clear that:

(1) Special appearance operates as an exception to the general rule on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant must be explicitly made, i.e., set forth in an unequivocal manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in instances where a pleading or motion seeking affirmative relief is
filed and submitted to the court for resolution.

Measured against these standards, it is readily apparent that respondents have acquiesced to the jurisdiction of the trial court as early as June 17, 2003, when they
filed their Motion to Dismiss for Failure to Prosecute. Significantly, the motion did not categorically and expressly raise the jurisdiction of the court over their persons
as an issue. It merely (i) "reminded" the court of its purportedly conflicting Orders in respect of summons by publication, (ii) alleged that because petitioner "has not
lifted a finger to pursue this case against movants-defendants," the case may be dismissed for failure to prosecute, and (iii) prayed additionally for the deletion of the
Notice of Lis Pendens indicated at the back of the transfer certificates of title covering the subject properties. We note, furthermore, that the motion failed to qualify
the capacity in which respondents were appearing and seeking recourse.51 It is in this light that the Court’s pronouncement in Busuego v. Court of Appeals52 finds
cogent application:

A voluntary appearance is a waiver of the necessity of a formal notice. An appearance in whatever form, without explicitly objecting to the jurisdiction of the court
over the person, is a submission to the jurisdiction of the court over the person. While the formal method of entering an appearance in a cause pending in the courts
is to deliver to the clerk a written direction ordering him to enter the appearance of the person who subscribes it, an appearance may be made by simply filing a
formal motion, or plea or answer. This formal method of appearance is not necessary. He may appear without such formal appearance and thus submit himself to the
jurisdiction of the court. He may appear by presenting a motion, for example, and unless by such appearance he specifically objects to the jurisdiction of the court, he
thereby gives his assent to the jurisdiction of the court over his person.53 (emphasis supplied)

Besides, any lingering doubts on the issue of voluntary appearance dissipate when the respondents’ motion for inhibition is considered. This motion seeks a sole
relief: inhibition of Judge Napoleon Inoturan from further hearing the case. Evidently, by seeking affirmative relief other than dismissal of the case, respondents
manifested their voluntary submission to the court’s jurisdiction. It is well-settled that the active participation of a party in the proceedings is tantamount to an
invocation of the court’s jurisdiction and a willingness to abide by the resolution of the case, and will bar said party from later on impugning the court’s jurisdiction.54

To be sure, the convenient caveat in the title of the motion for inhibition (i.e., "without submitting themselves to the jurisdiction of this Honorable Court") does not
detract from this conclusion. It would suffice to say that the allegations in a pleading or motion are determinative of its nature; the designation or caption thereof is
not controlling.55 Furthermore, no amount of caveat can change the fact that respondents tellingly signed the motion to inhibit in their own behalf and not through
counsel, let alone through a counsel making a special appearance.

Third Issue: Inhibition

Respondents argue that the trial court’s so-called "continuous delay in the proceedings" is indicative of the fact that it is incompetent to continue hearing the case.
Respondents therefore assert that the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it denied their motion to
inhibit and required them to file their Answer.

We are not convinced.

Under the first paragraph of Section 1, Rule 137 of the Rules of Court, a judge or judicial officer shall be mandatorily disqualified to sit in any case in which:

(a) he, or his wife or child, is pecuniarily interested as heir, legatee, creditor or otherwise; or

(b) he is related to either party within the sixth degree of consanguinity or affinity, or to counsel within the fourth degree, computed according to the rules of civil
law; or

(c) he has been executor, administrator, guardian, trustee or counsel; or

(d) he has presided in any inferior court when his ruling or decision is the subject of review, without the written consent of all parties in interest, signed by them and
entered upon the record.56

Paragraph two of the same provision meanwhile provides for the rule on voluntary inhibition and states: "[a] judge may, in the exercise of his sound discretion,
disqualify himself from sitting in a case, for just or valid reasons other than those mentioned above." That discretion is a matter of conscience and is addressed
primarily to the judge’s sense of fairness and justice.57 We have elucidated on this point in Pimentel v. Salanga,58 as follows:

A judge may not be legally prohibited from sitting in a litigation. But when suggestion is made of record that he might be induced to act in favor of one party or with
bias or prejudice against a litigant arising out of circumstances reasonably capable of inciting such a state of mind, he should conduct a careful self-examination. He
should exercise his discretion in a way that the people's faith in the courts of justice is not impaired. A salutary norm is that he reflect on the probability that a losing
party might nurture at the back of his mind the thought that the judge had unmeritoriously tilted the scales of justice against him. That passion on the part of a judge
may be generated because of serious charges of misconduct against him by a suitor or his counsel, is not altogether remote. He is a man, subject to the frailties of
other men. He should, therefore, exercise great care and caution before making up his mind to act in or withdraw from a suit where that party or counsel is involved.
He could in good grace inhibit himself where that case could be heard by another judge and where no appreciable prejudice would be occasioned to others involved
therein. On the result of his decision to sit or not to sit may depend to a great extent the all-important confidence in the impartiality of the judiciary. If after reflection
he should resolve to voluntarily desist from sitting in a case where his motives or fairness might be seriously impugned, his action is to be interpreted as giving
meaning and substances to the second paragraph of Section 1, Rule 137. He serves the cause of the law who forestalls miscarriage of justice.

The present case not being covered by the rule on mandatory inhibition, the issue thus turns on whether Judge Napoleon Inoturan should have voluntarily inhibited
himself.

At the outset, we underscore that while a party has the right to seek the inhibition or disqualification of a judge who does not appear to be wholly free, disinterested,
impartial and independent in handling the case, this right must be weighed with the duty of a judge to decide cases without fear of repression.59 Respondents
consequently have no vested right to the issuance of an Order granting the motion to inhibit, given its discretionary nature.60

However, the second paragraph of Rule 137, Section 1 does not give judges unfettered discretion to decide whether to desist from hearing a case.61 The inhibition
must be for just and valid causes, and in this regard, we have noted that the mere imputation of bias or partiality is not enough ground for inhibition, especially when
the charge is without basis.62 This Court has to be shown acts or conduct clearly indicative of arbitrariness or prejudice before it can brand them with the stigma of
bias or partiality.63 Moreover, extrinsic evidence is required to establish bias, bad faith, malice or corrupt purpose, in addition to palpable error which may be
inferred from the decision or order itself.64 The only exception to the rule is when the error is so gross and patent as to produce an ineluctable inference of bad faith
or malice.65

We do not find any abuse of discretion by the trial court in denying respondents’ motion to inhibit. Our pronouncement in Webb, et al. v. People of the Philippines, et
al.66 is apropos:
A perusal of the records will reveal that petitioners failed to adduce any extrinsic evidence to prove that respondent judge was motivated by malice or bad faith in
issuing the assailed rulings. Petitioners simply lean on the alleged series of adverse rulings of the respondent judge which they characterized as palpable errors. This is
not enough. We note that respondent judge's rulings resolving the various motions filed by petitioners were all made after considering the arguments raised by all the
parties. xxx

xxx xxx xxx

We hasten to stress that a party aggrieved by erroneous interlocutory rulings in the course of a trial is not without remedy. The range of remedy is provided in our
Rules of Court and we need not make an elongated discourse on the subject. But certainly, the remedy for erroneous rulings, absent any extrinsic evidence of malice
or bad faith, is not the outright disqualification of the judge. For there is yet to come a judge with the omniscience to issue rulings that are always infallible. The
courts will close shop if we disqualify judges who err for we all err. (emphasis supplied)

Truth be told, respondents are not entirely blameless for any perceived delay in the resolution of the various incidents of the case. For instance, they make much of
the fact that close to three years passed before their "Omnibus Motion to Dismiss and to Annul All the Proceedings Taken Against the Defendants," filed on December
11, 1998, was noted by the trial court. But the fact remains that the said "motion," not having a notice of hearing addressed to the adverse party, is legally a mere
scrap of paper.67 It presents no question which merits the attention and consideration of the court, and is not entitled to judicial cognizance.68

Considering the foregoing, we rule that respondents’ accusations of delay, incompetence, and bias on the part of the trial court are unfounded. Hence, they are not
entitled to the inhibition of Judge Inoturan as a relief.

IN VIEW WHEREOF, the Petition is hereby GRANTED. The Decision dated July 18, 2005 of the Court of Appeals and its Resolution dated January 10, 2006 are hereby
REVERSED and SET ASIDE, and another in their stead is hereby rendered ORDERING respondent Spouses Dy and Chuyaco to answer the Complaint in Civil Case No. 94-
1585 within fifteen (15) days from receipt of this Decision.

The trial court is directed to proceed hearing the case, and to resolve the same with dispatch.

No costs.

SO ORDERED.

REYNATO S. PUNO
Chief Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice

RENATO C. CORONA
Associate Justice

TERESITA J. LEONARDO-DE CASTRO