In a significant ruling, the Supreme Court reiterated that a court cannot exercise authority over a person if the summons—the official notice of a lawsuit—was improperly served. This means that if the rules for delivering the summons are not strictly followed, any decisions made by the court against that person are invalid. This decision underscores the critical importance of proper legal procedure in ensuring fairness and protecting individual rights in court proceedings.

Knocking on the Wrong Door: How Faulty Summons Nullified a Bank’s Claim

The case of United Coconut Planters Bank v. Sps. Alison Ang-Sy and Guillermo Sy, et al., arose from a complaint filed by UCPB against several defendants, including the Sy spouses and two corporations, for a sum of money and damages. UCPB alleged that Nation Granary, Inc. (NGI) had been granted credit accommodations secured by surety agreements from Nation Petroleum Gas, Inc. (NPGI) and the Sy spouses. When demands for payment went unanswered, UCPB filed suit and sought a preliminary attachment of the defendants’ assets.

However, the defendants argued that the court lacked jurisdiction over their persons because the summons was improperly served. They claimed that substituted service, which involves leaving the summons with someone other than the defendant, was used without first attempting personal service. Additionally, they contended that service on the corporations was invalid because it was made on an employee who was not authorized to receive legal documents on behalf of the company. The Regional Trial Court (RTC) initially denied the motion to dismiss, but the Court of Appeals (CA) reversed this decision, leading UCPB to appeal to the Supreme Court.

At the heart of this case is the fundamental principle of jurisdiction, which is the power and authority of a court to hear, try, and decide a case. Jurisdiction over the parties in a civil case is acquired either through proper service of summons or through the defendant’s voluntary appearance in court. The Rules of Court specify the manner in which summons must be served, with personal service being the preferred method. Substituted service is only allowed when personal service is not possible after diligent attempts. For corporations, the summons must be served on specific officers, such as the president, general manager, or corporate secretary.

According to the Rules of Court, upon the filing of the complaint and the payment of the requisite legal fees, the clerk of court shall forthwith issue the corresponding summons to the defendants. The summons shall be served by handling a copy thereof to the defendant in person.

The Supreme Court found that the service of summons in this case was indeed defective. The Sheriff’s Report did not show that the sheriff made several attempts to personally serve the summons on different dates, which is a prerequisite for valid substituted service. Furthermore, the report failed to indicate that the person who received the summons at the defendants’ residence was of suitable age and discretion, and that they understood the significance of the document. As for the corporations, the summons was served on an OIC property supply custodian, who was not among the officers authorized to receive summons on behalf of the company.

The Court emphasized that, in the absence of proper service of summons, the court does not acquire jurisdiction over the person of the defendant, and any proceedings or judgments are null and void. In the case of Prudential Bank v. Magdamit, Jr., et al., the Supreme Court reiterated this principle, stating:

In the absence of service of summons or when the service of summons upon the person of the defendant is defective, the court acquires no jurisdiction over his person, and the proceedings and any judgment rendered are null and void.

UCPB argued that even if the service of summons was defective, the defendants had voluntarily submitted to the court’s jurisdiction by seeking affirmative relief in their Motion to Dismiss. Specifically, UCPB pointed to the defendants’ request for a suspension of proceedings due to a Stay Order issued by another court. However, the Supreme Court rejected this argument, citing the principle of conditional appearance.

The Court explained that a party who makes a special appearance to challenge the court’s jurisdiction over their person cannot be considered to have submitted to its authority, even if they also seek other forms of relief. In Interlink Movie Houses, Inc., et al. v. Court of Appeals, et al., the Supreme Court clarified this point, stating that a special appearance operates as an exception to the general rule on voluntary appearance when the defendant explicitly and unequivocally objects to the court’s jurisdiction.

The Court distinguished the present case from previous rulings where the defendants were deemed to have voluntarily submitted to the court’s jurisdiction by seeking affirmative relief. In those cases, the defendants had not clearly and expressly raised the issue of jurisdiction over their persons. In contrast, the Sy spouses and other individual defendants in this case plainly and unmistakably questioned the RTC’s jurisdiction over their persons due to improper service of summons. Therefore, their request for a suspension of proceedings did not amount to a voluntary submission to the court’s jurisdiction.

Finally, the Supreme Court addressed UCPB’s argument that the CA erred in holding that the RTC lacked jurisdiction over the defendant corporations, even though those corporations had not questioned the RTC’s Order before the CA. The Court held that issues of jurisdiction are not subject to the whims of the parties. Even if a party does not raise the issue of jurisdiction, the courts are not prevented from addressing it, especially where the lack of jurisdiction is apparent and explicit. In the case of Paguio v. NLRC, the Supreme Court emphasized that courts may dismiss an action for lack of jurisdiction, even if the issue is not raised by the parties.

In conclusion, the Supreme Court upheld the CA’s decision, finding that the RTC had not acquired jurisdiction over the persons of the defendants due to defective service of summons. The Court emphasized the importance of strictly complying with the rules on service of summons and clarified the distinction between general and special appearance in challenging a court’s jurisdiction.

FAQs

What was the key issue in this case?	The key issue was whether the Regional Trial Court (RTC) acquired jurisdiction over the defendants given the alleged improper service of summons. The Supreme Court examined the requirements for valid service and voluntary appearance.
What is a summons?	A summons is an official notice informing a defendant that a lawsuit has been filed against them and that they are required to appear in court. It is a critical step in establishing the court’s jurisdiction over the defendant.
What is substituted service?	Substituted service is a method of serving a summons when personal service is not possible. It involves leaving copies of the summons at the defendant’s residence or office with a person of suitable age and discretion.
What are the requirements for valid substituted service?	For substituted service to be valid, the sheriff must make several attempts to personally serve the summons on different dates. The person who receives the summons must be of suitable age and discretion and understand the significance of the document.
What happens if the summons is not properly served?	If the summons is not properly served, the court does not acquire jurisdiction over the person of the defendant. Any proceedings or judgments rendered by the court are null and void.
What is voluntary appearance?	Voluntary appearance occurs when a defendant takes actions that indicate their submission to the court’s jurisdiction, even if the summons was not properly served. However, a special appearance to challenge jurisdiction does not constitute voluntary submission.
What is the difference between a general and special appearance?	A general appearance is when a party submits to the court’s jurisdiction. A special appearance is made solely to challenge the court’s jurisdiction over the person of the defendant.
Did the defendant corporations question jurisdiction in this case?	Although the defendant corporations did not directly appeal the RTC’s order, the Supreme Court can still consider jurisdictional defects. Courts have the authority to address jurisdictional issues even if not raised by the parties.
What was the ultimate ruling of the Supreme Court?	The Supreme Court affirmed the Court of Appeals’ decision, holding that the RTC did not acquire jurisdiction over the defendants due to defective service of summons. The Court emphasized the importance of complying with the rules on service of summons.

This case serves as a reminder of the importance of proper legal procedures in ensuring fairness and protecting individual rights. The strict rules regarding service of summons are designed to guarantee that defendants receive adequate notice of the lawsuit against them and have the opportunity to defend themselves. Failure to comply with these rules can have serious consequences, rendering court proceedings invalid and unenforceable.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: United Coconut Planters Bank v. Sps. Alison Ang-Sy and Guillermo Sy, G.R. No. 204753, March 27, 2019