671 Phil. 388; 108 OG No.

34, 4272 (August 20, 2012)

FIRST DIVISION

[ G.R. No. 167545, August 17, 2011 ]

ATIKO TRANS, INC. AND CHENG LIE NAVIGATION CO., LTD.,

PETITIONERS, VS. PRUDENTIAL GUARANTEE AND ASSURANCE,
INC., RESPONDENT.
DECISION

DEL CASTILLO, J.:

Where service of summons upon the defendant principal is coursed thru its co-defendant
agent, and the latter happens to be a domestic corporation, the rules on service of summons
upon a domestic private juridical entity [1] must be strictly complied with. Otherwise, the court
cannot be said to have acquired jurisdiction over the person of both defendants.  And insofar
as the principal is concerned, such jurisdictional flaw cannot be cured by the agent's
subsequent voluntary appearance.

This Petition for Review on Certiorari assails the December 10, 2004 Decision[2] of the Court
of Appeals (CA) in CA-G.R. SP No. 82547 which affirmed the April 8, 2003 Decision [3] of
the Regional Trial Court (RTC), Branch 150, Makati City.  Said Decision of the RTC
affirmed the August 6, 2002 Decision[4] of the Metropolitan Trial Court (MeTC), Branch 63,
Makati City, which disposed as follows:

WHEREFORE, judgment is rendered declaring defendants Cheng Lie Navigation Co.,

Ltd. and Atiko Trans, Inc. solidarily liable to pay plaintiff Prudential Guarantee &
Assurance, Inc. the following amounts:

1. P205,220.97 as actual damages with interest of 1% per month from 14 December

1999 until full payment;

2. P10,000.00 as Attorney's fees; and

3. Costs of suit.
SO ORDERED.[5]

Likewise assailed is the CA's Resolution[6] dated March 16, 2005 which denied the Motion for
Reconsideration of the said December 10, 2004 Decision.

Factual Antecedents

On December 11, 1998, 40 coils of electrolytic tinplates were loaded on board M/S Katjana
in Kaohsiung, Taiwan for shipment to Manila.  The shipment was covered by Bill of Lading
No. KNMNI-15126[7] issued by petitioner Cheng Lie Navigation Co., Ltd. (Cheng Lie) with
Oriental Tin Can & Metal Sheet Manufacturing Co., Inc. (Oriental) as the notify party.  The
cargoes were insured against all risks per Marine Insurance Policy No. 20RN-18749/99
issued by respondent Prudential Guarantee and Assurance, Inc. (Prudential).

On December 14, 1998, M/S Katjana arrived in the port of Manila.  Upon discharge of the
cargoes, it was found that one of the tinplates was damaged, crumpled and dented on the
edges.  The sea van in which it was kept during the voyage was also damaged, presumably
while still on board the vessel and during the course of the voyage.

Oriental then filed its claim against the policy.  Satisfied that Oriental's claim was
compensable, Prudential paid Oriental P205,220.97 representing the amount of losses it
suffered due to the damaged cargo.

Proceedings before the Metropolitan Trial Court

On December 14, 1999, Prudential filed with the MeTC of Makati City a Complaint [8] for sum
of money against Cheng Lie and Atiko Trans, Inc. (Atiko).  In addition to the above
undisputed facts, Prudential alleged that:

1. Plaintiff (Prudential) is a domestic insurance corporation duly organized and existing

under the laws of the Philippines with office address at Coyiuto House, 119 Carlos
Palanca[,] Jr. St., Legaspi Village, Makati City;

2. Defendant Cheng Lie Navigation Co. Ltd., is [a] foreign shipping company doing
business in the Philippines [thru] its duly authorized shipagent defendant Atiko Trans
Inc. which is a domestic corporation duly established and created under the laws of the
Philippines with office address at 7th Floor, Victoria Bldg., United Nation[s] Ave.,
Ermita, Manila, where both defendants may be served with summons and other court
processes;

3. At all times material to the cause of action of this complaint, plaintiff was and still is
engaged in, among others, marine insurance business; Whereas Defendant Cheng Lie
Navigation Co. Ltd. was and still is engaged in, among others, shipping, transportation
and freight/cargo forwarding business, and as such, owned, operated and/or chartered
the ocean going vessel M/S "Katjana" as common carrier to and from any Philippine
[port] in international trade [thru] its duly authorized shipagent defendant Atiko Trans
Inc. (Both defendants are hereinafter referred to as the "CARRIER");

x x x x

9. Plaintiff, as cargo-insurer and upon finding that the consignee's insurance claim was
in order and compensable, paid the latter's claim in the amount of P205,220.97 under
and by virtue of the aforesaid insurance policy, thereby subrogating herein plaintiff to
all the rights and causes of action appertaining to the consignee against the defendants;
[9]

On March 20, 2000, Prudential filed a Motion to Declare Defendant in Default, [10] alleging
among others that on March 1, 2000 a copy of the summons was served upon petitioners thru
cashier Cristina Figueroa and that despite receipt thereof petitioners failed to file any
responsive pleading.  Acting on the motion, the MeTC issued an Order [11] declaring Cheng Lie
and Atiko in default and allowing Prudential to present its evidence ex-parte.
On August 6, 2002, the MeTC rendered its judgment by default.  Atiko then filed a Notice of
Appeal[12] dated November 4, 2002.

Proceedings before the Regional Trial Court and the Court of Appeals

In its Memorandum of Appeal,[13] Atiko argued that Prudential failed to prove the material
allegations of the complaint.  Atiko asserted that Prudential failed to prove by preponderance
of evidence that it is a domestic corporation with legal personality to file an action; that
Cheng Lie is a private foreign juridical entity operating its shipping business in the
Philippines thru Atiko as its shipagent; that Cheng Lie is a common carrier, which owns and
operates M/S Katjana; that Prudential was subrogated to the rights of Oriental; and, that
Atiko can be held solidarily liable with Cheng Lie.

Although assisted by the same counsel, Cheng Lie filed its own Memorandum of Appeal [14]
maintaining that the MeTC never acquired jurisdiction over its person.

On April 8, 2003, the RTC rendered its Decision dismissing the appeal and affirming the
Decision of the MeTC. Atiko and Cheng Lie challenged the RTC Decision before the CA via
a Petition for Review[15] under Rule 42 of the Rules of Court but the appellate court affirmed
the RTC's Decision.

Hence, this petition.

Issues

In their Memorandum,[16] petitioners raised the following issues:

1. WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS

AFFIRMED BY MAKATI RTC AND THE COURT OF APPEALS IS NULL
AND VOID FOR FAILURE TO ACQUIRE JURISDICTION OVER THE
PERSONS OF THE PETITIONERS-DEFENDANTS CONSIDERING THAT
THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS
REQUIRED BY RULE 14 OF THE RULES OF COURT.

2. WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO

PROVE THE MATERIAL ALLEGATIONS IN THE COMPLAINT EVEN IN
DEFAULT JUDGMENT OR WHETHER OR NOT IN DEFAULT
JUDGMENT, ALL ALLEGATIONS IN THE COMPLAINT ARE DEEMED
CONTROVERTED, HENCE, MUST BE PROVED BY COMPETENT
EVIDENCE.

2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE

ITS LEGAL PERSONALITY TO SUE EVEN IN DEFAULT JUDGMENT.

2.2. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE

THAT PETITIONER-DEFENDANT ATIKO IS THE SHIPAGENT OF
PETITIONER-DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT.

2.3. WHETHER X X X THE TESTIMONIES OF THE WITNESSES AND

THE DOCUMENTARY EXHIBITS CAN BE CONSIDERED FOR
PURPOSES OTHER THAN THE PURPOSE FOR WHICH THEY WERE
OFFERED.
 2.4. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN
DEFAULT ADDRESSED AND SENT TO ONLY ONE OF THE
DEFENDANTS WOULD BIND THE OTHER DEFENDANT TO WHOM THE
MOTION WAS NOT ADDRESSED AND NOT SENT.[17]

Our Ruling

The petition is partly meritorious. We shall first tackle the factual matters involved in this
case, then proceed with the jurisdictional issues raised.

Petitioners raised factual matters which

are not the proper subject of this appeal.

Petitioners contend that the lower courts grievously erred in granting the complaint because,
even if they were declared in default, the respondent still has the burden of proving the
material allegations in the complaint by preponderance of evidence.  Petitioners further argue
that respondent miserably failed to discharge this burden because it failed to present
sufficient proof that it is a domestic corporation.  Hence, respondent could not possibly
maintain the present action because only natural or juridical persons or entities authorized by
law can be parties to a civil action.  Petitioners also claim that respondent failed to present
competent proof that Cheng Lie is a foreign shipping company doing business in the
Philippines thru its duly authorized shipagent Atiko. Lastly, petitioners assert that respondent
failed to prove that Cheng Lie is a common carrier which owned, operated and/or chartered
M/S Katjana thru its duly authorized shipagent Atiko. Petitioners emphasize that there is no
proof, testimonial or otherwise, which would support the material allegations of the
complaint.  They also insist that respondent's witnesses do not have personal knowledge of
the facts on which they were examined.

Respondent, for its part, assails the propriety of the remedy taken by the petitioners.  It posits
that petitioners advanced factual matters which are not the proper subject of a petition for
review on certiorari.  Besides, the lower courts consistently held that the allegations in
respondent's complaint are supported by sufficient evidence.

We agree with respondent.

A cursory reading of the issues raised readily reveals that they involve factual matters which
are not within the province of this Court to look into. Well-settled is the rule that in petitions
for review on certiorari under Rule 45, only questions of law can be raised.  While there are
recognized exceptions to this rule,[18]  none is present in this case.  "[A]s a matter of x x x
procedure, [this] Court defers and accords finality to the factual findings of trial courts,
[especially] when such findings were [affirmed by the RTC and the CA. These] factual
determination[s], as a matter of long and sound appellate practice, deserve great weight and
shall not be disturbed on appeal x x x.  [I]t is not the function of the Court to analyze and
weigh all over again the evidence or premises supportive of the factual holding of the lower
courts."[19]

MeTC properly acquired jurisdiction

over the person of Atiko.

Petitioners also argue that the MeTC did not acquire jurisdiction over the person of Atiko as
the summons was received by its cashier, Cristina Figueroa.  They maintain that under
Section 11, Rule 14 of the Rules of Court, when the defendant is a domestic corporation like
Atiko, summons may be served only upon its president, general manager, corporate secretary,
treasurer or in-house counsel.

We are not persuaded.  True, when the defendant is a domestic corporation, service of
summons may be made only upon the persons enumerated in Section 11, Rule 14 of the
Rules of Court.[20]  However, jurisdiction over the person of the defendant can be acquired not
only by proper service of summons but also by defendant's voluntary appearance without
expressly objecting to the court's jurisdiction, as embodied in Section 20, Rule 14 of the
Rules of Court, viz:

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.

In the case at bench, when Atiko filed its Notice of Appeal, [21] Memorandum of Appeal,[22]
Motion for Reconsideration[23] of the April 8, 2003 Decision of the RTC, and Petition for
Review,[24] it never questioned the jurisdiction of the MeTC over its person.  The filing of
these pleadings seeking affirmative relief amounted to voluntary appearance and, hence,
rendered the alleged lack of jurisdiction moot.  In Palma v. Galvez,[25] this Court reiterated the
oft-repeated rule that "the filing of motions seeking affirmative relief, such as, 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, are considered voluntary submission to
the jurisdiction of the court."

Moreover, petitioners' contention is a mere afterthought. It was only in their Memorandum [26]
filed with this Court where they claimed, for the first time, that Atiko was not properly served
with summons.  In La Naval Drug Corporation v. Court of Appeals,[27] it was held that the
issue of jurisdiction over the person of the defendant must be seasonably raised.  Failing to do
so, a party who invoked the jurisdiction of a court to secure an affirmative relief cannot be
allowed to disavow such jurisdiction after unsuccessfully trying to obtain such relief. [28]

It may not be amiss to state too that in our February 13, 2006 Resolution, [29] we reminded the
parties that they are not allowed to interject new issues in their memorandum.

MeTC did not acquire jurisdiction over

the person of Cheng Lie.

Petitioners likewise challenge the validity of the service of summons upon Cheng Lie, thru
Atiko.  They claim that when the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service of summons may be made, among others, upon
its resident agent.  In this case, however, there is no proof that Atiko is the local agent of
Cheng Lie.

On this score, we find for the petitioners.  Before it was amended by A.M. No. 11-3-6-SC, [30]
Section 12 of Rule 14 of the Rules of Court reads:

SEC. 12. Service upon foreign private juridical entity.  - When the defendant is a
foreign private juridical entity which has transacted business in the Philippines, service
 may be made on its resident agent designated in accordance with law for that purpose,
or, if there be no such agent, on the government official designated by law to that
effect, or on any of its officers or agents within the Philippines.

Elucidating on the above provision of the Rules of Court, this Court declared in Pioneer
International, Ltd. v. Guadiz, Jr.[31] that when the defendant is a foreign juridical entity,
service of summons may be made upon:

1. Its resident agent designated in accordance with law for that purpose;

2. The government official designated by law to receive summons if the

corporation does not have a resident agent; or,

3. Any of the corporation's officers or agents within the Philippines.

In the case at bench, no summons was served upon Cheng Lie in any manner prescribed
above.  It should be recalled that Atiko was not properly served with summons as the person
who received it on behalf of Atiko, cashier Cristina Figueroa, is not one of the corporate
officers enumerated in Section 11 of Rule 14 of the Rules of Court.  The MeTC acquired
jurisdiction over the person of Atiko not thru valid service of summons but by the latter's
voluntary appearance.  Thus, there being no proper service of summons upon Atiko to speak
of, it follows that the MeTC never acquired jurisdiction over the person of Cheng Lie.  To
rule otherwise would create an absurd situation where service of summons is valid upon the
purported principal but not on the latter's co-defendant cum putative agent despite the fact
that service was coursed thru said agent.  Indeed, in order for the court to acquire jurisdiction
over the person of a defendant foreign private juridical entity under Section 12, Rule 14 of
the Rules of Court, there must be prior valid service of summons upon the agent of such
defendant.

Also, the records of this case is bereft of any showing that cashier Cristina Figueroa is a
government official designated by law to receive summons on behalf of Cheng Lie or that she
is an officer or agent of Cheng Lie within the Philippines.  Hence, her receipt of summons
bears no significance insofar as Cheng Lie is concerned.  At this point, we emphasize that the
requirements of the rule on summons must be strictly followed, [32] lest we ride roughshod on
defendant's right to due process.[33]

With regard to Cheng Lie's filing of numerous pleadings, the same cannot be considered as
voluntary appearance. Unlike Atiko, Cheng Lie never sought affirmative relief other than the
dismissal of the complaint on the ground of lack of jurisdiction over its person.  From the
very beginning, it has consistently questioned the validity of the service of summons and the
jurisdiction of the MeTC over its person.

It does not escape our attention though that Cheng Lie's pleadings do not indicate that the
same were filed by way of special appearance.  But these, to our mind, are mere inaccuracies
in the title of the pleadings.  What is important are the allegations contained therein which
consistently resisted the jurisdiction of the trial court.  Thus, Cheng Lie cannot be considered
to have submitted itself to the jurisdiction of the courts. [34]

In fine, since the MeTC never acquired jurisdiction over the person of Cheng Lie, its decision
insofar as Cheng Lie is concerned is void.[35]
Cheng Lie was improperly declared in default.

Applying the above disquisition, the MeTC likewise erred in declaring Cheng Lie in default.
Settled is the rule that a defendant cannot be declared in default unless such declaration is
preceded by a valid service of summons.[36]

WHEREFORE, the instant petition is PARTIALLY GRANTED.  The assailed December

10, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 82547 is AFFIRMED with
the MODIFICATION that the judgment insofar as Cheng Lie Navigation Co., Ltd. is
concerned is declared VOID for failure to acquire jurisdiction over its person as there was
improper service of summons.

SO ORDERED.

Corona, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ., concur.

[1] Rules of Court, Rule 14, Section 11. It reads:

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.

CA rollo, pp. 160-181; penned by Associate Justice Monina Arevalo-Zenarosa and

[2]

concurred in by Associate Justices Remedios A. Salazar-Fernando and Danilo B. Pine.

[3]
Id. at 35-39; penned by Judge Zeus C. Abrogar.
[4]
Id. at 49-50; penned by Judge Evelyn S. Arcaya-Chua.
[5]
Id. at 50.
[6]
Id. at 205-207.
[7]
Id. at 46.
[8]
Id. at 42-45.  Docketed as Civil Case No. 68976.
[9]
Id. at 42-44.
[10]
  Id. at 46-47.
[11]
  Id. at 48; penned by Judge Socorro B. Inting.
[12]
  Id. at 51.
[13]
  Id. at 54-65.
[14]
  Id. at 75-83.
[15]
  Id. at 2-34.
[16]
  Rollo, pp. 204-225.
[17]
  Id. at 207.

"[S]uch as when: (1) the conclusion is grounded on speculations, surmises or conjectures;

[18]

(2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of
discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact
are conflicting; (6) there is no citation of specific evidence on which the factual findings are
based; (7) the findings of absence of facts are contradicted by the presence of evidence on
record; (8) the findings of the [Court of Appeals] are contrary to those of the trial court; (9)
the [Court of Appeals] manifestly overlooked certain relevant and undisputed facts that, if
properly considered, would justify a different conclusion; (10) the findings of the [Court of
Appeals] are beyond the issues of the case; and (11) such findings are contrary to the
admissions of both parties." (International Container Terminal Services, Inc. v. FGU
Insurance Corporation, G.R. No. 161539, June 27, 2008, 556 SCRA 194, 199.)

  Tapuroc v. Loquellano Vda. de Mende, G.R. No. 152007, January 22, 2007, 512 SCRA
[19]

97, 105-106.
[20]
  Supra note 1.
[21]
  CA rollo, p. 51.
[22]
  Id. at 54-65.
[23]
  Id. at 98-108.
[24]
  Id. at 2-34.
[25]
  G.R. No. 165273, March 10, 2010, 615 SCRA 86, 99.
[26]
  Rollo, pp. 204-225.
[27]
G.R. No. 103200, August 31, 1994, 236 SCRA 78, 91.
[28]
  Tijam v. Sibonghanoy, 131 Phil. 556, 564 (1968).
[29]
  Rollo, pp. 202-203.

  AMENDMENT OF SECTION 12, RULE 14 OF THE RULES OF COURT ON

[30]

SERVICE UPON FOREIGN PRIVATE JURIDICAL ENTITY.  As amended, said provision

of the Rules of Court now reads:

SEC. 12. Service upon foreign private juridical entity. -- When the defendant is a foreign
private juridical entity which has transacted business in the Philippines, service may be made
on its resident agent designated in accordance with law for that purpose, or, if there be no
such agent, on the government official designated by law to that effect, or on any of its
officers or agents within the Philippines.
If the foreign private juridical entity is not registered in the Philippines or has no resident
agent, service  may, with leave of court, be effected out of the Philippines through any of the
following means:
a) By personal service coursed through the appropriate court in the foreign country with the
assistance of the Department of Foreign Affairs;

b) By publication once in a newspaper of general circulation in the country where the

defendant may be found and by serving a copy of the summons and the court order by-
registered mail at the last known address of the defendant;

c) By facsimile or any recognized electronic means that could generate proof of service; or
d) By such other means as the court may in its discretion direct.
[31]
  G.R. No. 156848, October 11, 2007, 535 SCRA 584, 601.
[32]
  Id. at 600.
[33]
  Pascual v. Pascual, G.R. No. 171916, December 4, 2009, 607 SCRA 288, 291.

  See also the similar case of Hongkong and Shanghai Banking Corporation Limited v.
[34]

Catalan, 483 Phil. 525 (2004).

[35]
  Pascual v. Pascual, supra at 306.
[36]
  Vlason Enterprises Corporation v. Court of Appeals, 369 Phil. 269, 307 (1999).