SECOND DIVISION

G.R. No. 108538             January 22, 1996

LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA, respondents.
DECISION
MENDOZA, J.:
Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an action for
partition filed against her and her husband, who is also her attorney, summons intended for her may be
served on her husband, who has a law office in the Philippines. The Regional Trial Court of Manila,
Branch 48, said no and refused to declare Lourdes A. Valmonte in default, but the Court of Appeals said
yes. Hence this petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They are both
residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who
is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for
this purpose between his residence in the state of Washington and Manila, where he holds office at S-
304 Gedisco Centre, 1564 A. Mabini Ermita, Manila.
On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner Lourdes
A. Valmonte, filed a complaint for partition of real property and accounting of rentals against petitioners
Lourdes A. Valmonte and Alfredo D. Valmonte before the Regional Trial Court of Manila, Branch 48. The
subject of the action is a three-door apartment located in Paco, Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road,
Chesterfield, Missouri, U.S.A., while the defendants are spouses, of legal age and at present residents of
90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for purposes of this complaint may be
served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant
Alfredo D. Valmonte as defendant Lourdes Arreola Valmonte's spouse holds office and where he can be
found.
Apparently, the foregoing averments were made on the basis of a letter previously sent by
petitioner Lourdes A. Valmonte to private respondent's counsel in which, in regard to the partition of
the property in question, she referred private respondent's counsel to her husband as the party to
whom all communications intended for her should be sent. The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I received on 3 July 1991. Please
address all communications to my lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and fax
numbers appear below.
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila
Telephone: 521-1736
Fax: 521-2095
 Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the time, was
at his office in Manila. Petitioner Alfredo D. Valmonte accepted the summons, insofar as he was
concerned, but refused to accept the summons for his wife, Lourdes A. Valmonte, on the ground that he
was not authorized to accept the process on her behalf. Accordingly the process server left without
leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes
A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her
in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and
opposed the private respondent's motion.
In its Order dated July 3, 1992, the trial court, denied private respondent's motion to declare
petitioner Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied on
September 23, 1992. Whereupon, private respondent filed a petition for certiorari, prohibition
and mandamus  with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the petition and
declaring Lourdes A. Valmonte in default. A copy of the appellate court's decision was received by
petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila office and on January 21, 1993 in
Seattle, Washington. Hence, this petition.
The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A. Valmonte
was validly served with summons. In holding that she had been, the Court of Appeals stated:1
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the
aforementioned counsel of Dimalanta to address all communications  (evidently referring to her
controversy with her sister Mrs. Dimalanta over the Paco property, now the subject of the instant case)
to her lawyer who happens also to be her husband. Such directive was made without any qualification
just as was her choice/designation of her husband Atty. Valmonte as her lawyer likewise made without
any qualification or reservation. Any disclaimer therefore on the part of Atty. Valmonte as to his being
his wife's attorney (at least with regard to the dispute vis-a-vis  (sic) the Paco property) would appear to
be feeble or trifling, if not incredible.
This view is bolstered by Atty. Valmonte's subsequent alleged special appearance made on
behalf of his wife. Whereas Mrs. Valmonte had manifestly authorized her husband to serve as her
lawyer relative to her dispute with her sister over the Paco property and to receive all communications
regarding the same and subsequently to appear on her behalf by way of a so-called special appearance,
she would nonetheless now insist that the same husband would nonetheless had absolutely no
authority to receive summons on her behalf. In effect, she is asserting that representation by her lawyer
(who is also her husband) as far as the Paco property controversy is concerned, should only be made by
him when such representation would be favorable to her but not otherwise. It would obviously be
inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that her husband has
the authority to represent her when an advantage is to be obtained by her and to deny such authority
when it would turn out to be her disadvantage. If this be allowed, Our Rules of Court, instead of being
an instrument to promote justice would be made use of to thwart or frustrate the same.
xxx       xxx       xxx
Turning to another point, it would not do for Us to overlook the fact that the disputed summons
was served not upon just an ordinary lawyer of private respondent Lourdes A. Valmonte, but upon her
lawyer husband. But that is not all, the same lawyer/husband happens to be also her co-defendant in
the instant case which involves real property which, according to her lawyer/husband/co-defendant,
belongs to the conjugal partnership of the defendants (the spouses Valmonte). It is highly inconceivable
and certainly it would be contrary to human nature for the lawyer/husband/co-defendant to keep to
himself the fact that they (the spouses Valmonte) had been sued with regard to a property which, he
claims to be conjugal. Parenthetically, there is nothing in the records of the case before Us regarding any
manifestation by private respondent Lourdes A. Valmonte about her lack of knowledge about the case
instituted against her and her lawyer/husband/co-defendant by her sister Rosita. . . .
PREMISES CONSIDERED, the instant petition for certiorari, prohibition and mandamus is given
due course. This Court hereby Resolves to nullify the orders of the court a quo  dated July 3, 1992 and
September 23, 1992 and further declares private respondent Lourdes Arreola Valmonte as having been
properly served with summons.
Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred (1) in
refusing to apply the provisions of Rule 14, §17 of the Revised Rules of Court and applying instead Rule
14, §8 when the fact is that petitioner Lourdes A. Valmonte is a nonresident defendant; and (2) because
even if Rule 14, §8 is the applicable provision, there was no valid substituted service as there was no
strict compliance with the requirement by leaving a copy of the summons and complaint with petitioner
Alfredo D. Valmonte. Private respondent, upon the other hand, asserts that petitioners are invoking a
technicality and that strict adherence to the rules would only result in a useless ceremony.
We hold that there was no valid service of process on Lourdes A. Valmonte.
To provide perspective, it will be helpful to determine first the nature of the action filed against
petitioners Lourdes A. Valmonte and Alfredo D. Valmonte by private respondent, whether it is an
action in personam, in rem  or quasi in rem. This is because the rules on service of summons embodied in
Rule 14 apply according to whether an action is one or the other of these actions.
In an action in personam, personal service of summons or, if this is not possible and he cannot
be personally served, substituted service, as provided in Rule 14, §§7-82 is essential for the acquisition by
the court of jurisdiction over the person of a defendant who does not voluntarily submit himself to the
authority of the court.3 If defendant cannot be served with summons because he is temporarily abroad,
but otherwise he is a Philippine resident, service of summons may, by leave of court, be made by
publication.4 Otherwise stated, a resident defendant in an action in personam, who cannot be personally
served with summons, may be summoned either by means of substituted service in accordance with
Rule 14, §8 or by publication as provided in §§ 17 and 18 of the same Rule.5
In all of these cases, it should be noted, defendant must be a resident of the Philippines,
otherwise an action in personam cannot be brought because jurisdiction over his person is essential to
make a binding decision.
On the other hand, if the action is in rem  or quasi in rem, jurisdiction over the person of the
defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction over
the res. If the defendant is a nonresident and he is not found in the country, summons may be served
exterritorially in accordance with Rule 14, §17, which provides:
§17. Extraterritorial service. - When the defendant does not reside and is not found in the
Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or
contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from
any interest therein, or the property of the defendant has been attached within the Philippines, service
may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by
publication in a newspaper of general circulation in such places and for such time as the court may
order, in which case a copy of the summons and order of the court shall be sent by registered mail to
the last known address of the defendant, or in any other manner the court may deem sufficient. Any
order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer..
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem  is that it has
jurisdiction over the res, i.e.  the personal status of the plaintiff who is domiciled in the Philippines or the
property litigated or attached.
Service of summons in the manner provided in §17 is not for the purpose of vesting it with
jurisdiction but for complying with the requirements of fair play or due process, so that he will be
informed of the pendency of the action against him and the possibility that property in the Philippines
belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff
and he can thereby take steps to protect his interest if he is so minded.6
Applying the foregoing rules to the case at bar, private respondent's action, which is for
partition and accounting under Rule 69, is in the nature of an action quasi in rem. Such an action is
essentially for the purpose of affecting the defendant's interest in a specific property and not to render a
judgment against him. As explained in the leading case of Banco Español Filipino v. Palanca  :7
[An action quasi in rem  is] an action which while not strictly speaking an action in rem  partakes
of that nature and is substantially such. . . . The action quasi in rem  differs from the true action in rem  in
the circumstance that in the former an individual is named as defendant and the purpose of the
proceeding is to subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property of the defendant,
whether by attachment, foreclosure, or other form of remedy, are in a general way thus designated. The
judgment entered in these proceedings is conclusive only between the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service
of summons on her must be in accordance with Rule 14, §17. Such service, to be effective outside the
Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general
circulation in such places and for such time as the court may order, in which case a copy of the summons
and order of the court should be sent by registered mail to the last known address of the defendant; or
(3) in any other manner which the court may deem sufficient.
Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not
done by means of any of the first two modes, the question is whether the service on her attorney,
petitioner Alfredo D. Valmonte, can be justified under the third mode, namely, "in any . . . manner the
court may deem sufficient."
We hold it cannot. This mode of service, like the first two, must be made outside the Philippines,
such as through the Philippine Embassy in the foreign country where the defendant resides.8 Moreover,
there are several reasons why the service of summons on Atty. Alfredo D. Valmonte cannot be
considered a valid service of summons on petitioner Lourdes A. Valmonte. In the first place, service of
summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by
Rule 14, §17 and certainly was not a mode deemed sufficient by the court which in fact refused to
consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for
her failure to file an answer.
In the second place, service in the attempted manner on petitioner was not made upon prior
leave of the trial court as required also in Rule 14, §17. As provided in §19, such leave must be applied
for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting
forth the grounds for the application.
Finally, and most importantly, because there was no order granting such leave, petitioner
Lourdes A. Valmonte was not given ample time to file her Answer which, according to the rules, shall be
not less than sixty (60) days after notice. It must be noted that the period to file an Answer in an action
against a resident defendant differs from the period given in an action filed against a nonresident
defendant who is not found in the Philippines. In the former, the period is fifteen (15) days from service
of summons, while in the latter, it is at least sixty (60) days from notice.
Strict compliance with these requirements alone can assure observance of due process. That is
why in one case,9 although the Court considered publication in the Philippines of the summons (against
the contention that it should be made in the foreign state where defendant was residing) sufficient,
nonetheless the service was considered insufficient because no copy of the summons was sent to the
last known correct address in the Philippines..
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463 (1975), in
which it was held that service of summons upon the defendant's husband was binding on her. But the
ruling in that case is justified because summons were served upon defendant's husband in their conjugal
home in Cebu City and the wife was only temporarily absent, having gone to Dumaguete City for a
vacation. The action was for collection of a sum of money. In accordance with Rule 14, §8, substituted
service could be made on any person of sufficient discretion in the dwelling place of the defendant, and
certainly defendant's husband, who was there, was competent to receive the summons on her behalf. In
any event, it appears that defendant in that case submitted to the jurisdiction of the court by instructing
her husband to move for the dissolution of the writ of attachment issued in that case.
On the other hand, in the case of Gemperle v.  Schenker, 10 it was held that service on the wife of
a nonresident defendant was found sufficient because the defendant had appointed his wife as his
attorney-in-fact. It was held that although defendant Paul Schenker was a Swiss citizen and resident of
Switzerland, service of summons upon his wife Helen Schenker who was in the Philippines was sufficient
because she was her husband's representative and attorney-in-fact in a civil case, which he had earlier
filed against William Gemperle. In fact Gemperle's action was for damages arising from allegedly
derogatory statements contained in the complaint filed in the first case. As this Court said, "[i]n other
words, Mrs. Schenker had authority to sue, and had actually sued, on behalf of her husband, so that she
was, also, empowered to represent him in suits filed against him, particularly in a case, like the one at
bar, which is a consequence of the action brought by her on his behalf" 11 Indeed, if instead of filing an
independent action Gemperle filed a counterclaim in the action brought by Mr. Schenker against him,
there would have been no doubt that the trial court could have acquired jurisdiction over Mr. Schenker
through his agent and attorney-in-fact, Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her husband as
her attorney-in-fact. Although she wrote private res- pondent's attorney that "all communications"
intended for her should be addressed to her husband who is also her lawyer at the latter's address in
Manila, no power of attorney to receive summons for her can be inferred therefrom. In fact the letter
was written seven months before the filing of this case below, and it appears that it was written in
connection with the negotiations between her and her sister, respondent Rosita Dimalanta, concerning
the partition of the property in question. As is usual in negotiations of this kind, the exchange of
correspondence was carried on by counsel for the parties. But the authority given to petitioner's
husband in these negotiations certainly cannot be construed as also including an authority to represent
her in any litigation.
For the foregoing reasons, we hold that there was no valid service on petitioner Lourdes A.
Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and the orders dated July 3, 1992 and
September 23, 1992 of the Regional Trial Court of Manila, Branch 48 are REINSTATED.
SO ORDERED.
SECOND DIVISION
G.R. No. 127692             March 10, 2004
FORTUNATO GOMEZ and AURORA GOMEZ, petitioners,
vs.
COURT OF APPEALS, ADOLFO TROCINO and MARIANO TROCINO, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the decision1 of the Court of Appeals dated September 30, 1996, in CA-G.R. SP No. 40067,
nullifying the decision and orders of the Regional Trial Court of Cebu City (Branch 10) in Civil Case No.
CEB-11103, for want of jurisdiction.
Civil Case No. CEB-11103 is an action for specific performance and/or rescission filed by herein
petitioners, spouses Fortunato and Aurora Gomez, against the heirs of Jesus J. Trocino, Sr., which
include herein respondents and their mother Caridad Trocino.2
Filed on December 16, 1991, the complaint alleges: Some time in 1975, the spouses Jesus and
Caridad Trocino mortgaged two parcels of land covered by TCT Nos. 10616 and 31856 to Dr. Clarence
Yujuico. The mortgage was subsequently foreclosed and the properties sold at public auction on July 11,
1988, and before the expiry of the redemption period, the spouses Trocino sold the property to
petitioners on December 12, 1989, who in turn, redeemed the same from Dr. Yujuico. The spouses
Trocino, however, refused to convey ownership of the properties to petitioners, hence, the complaint.
On January 10, 1992, the trial court’s Process Server served summons on respondents, in the
manner described in his "Return of Service," to wit:
Respectfully returned to the Branch Clerk of Court, Regional Trial Court of Cebu, Branch 10, the
herein attached original summons issued in the above-entitled case with the information that on
January 8, 1992 summons and copies of the complaint were served to the defendants Jacob, Jesus Jr.,
Adolfo, Mariano, Consolacion, Alice, Racheal thru defendant Caridad Trocino at their given address at
Maria Cristina Extension (besides Sacred Heart School for Girls), Cebu City, evidence by her signature
found at the lower portion of the original summons.3
WHEREFORE I, respectfully return the original summons duly served to the court of origin.
Cebu City, Philippines, January 10, 1992.
(signed)
DELFIN D. BARNIDO
RTC Process Server
On January 27, 1992, the defendants, through their counsel Atty. Expedito P. Bugarin, filed their
Answer. Defendant Caridad A. Trocino, respondents’ mother, verified said pleading.4
After trial on the merits, the RTC rendered its decision on March 1993, with the following
disposition:
 WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and
against the defendants.
The latter are hereby ordered to jointly and severally execute a Deed of Sale in favor of the
plaintiffs and to deliver the owner’s duplicate copies of TCT Nos. 10616 and 31856, covering the
properties sold, to the plaintiffs within ten (10) days from the finality of the judgment, after which
plaintiffs shall pay in turn to the defendants the balance of ₱2,000,000.00. Otherwise, the sale is
rescinded and revoked and the defendants are directed to return to the plaintiffs the amount of
₱500,000.00, with interest of 12% per annum computed from December 6, 1989, until the full amount is
paid.
In addition thereto, defendants are to pay jointly and severally to the plaintiffs, the amount of
₱50,000.00 as moral damages; ₱20,000.00 as exemplary damages; ₱40,000.00 by way of attorney’s fees;
and ₱10,000.00 as litigation expenses.
SO ORDERED.5
Due to the defendants’ failure to deliver the owner’s duplicate of TCT Nos. 10616 and 31856,
the RTC issued an order on August 29, 1995 declaring said titles null and void, and ordering the Register
of Deeds of Cebu City to issue new titles in the name of herein petitioners.6
Thereafter, or on March 13, 1996, respondents Adolfo and Mariano Trocino filed with the Court
of Appeals, a petition for the annulment of the judgment rendered by the RTC-Cebu (Branch 10) in Civil
Case No. CEB-11103. Private respondents alleged that the trial court’s decision is null and void on the
ground that it did not acquire jurisdiction over their persons as they were not validly served with a copy
of the summons and the complaint. According to them, at the time summons was served on them,
Adolfo Trocino was already in Ohio, U.S.A., and has been residing there for 25 years, while Mariano
Trocino was in Talibon, Bohol, and has been residing there since 1986. They also refuted the receipt of
the summons by Caridad A. Trocino, and the representation made by Atty. Bugarin in their behalf.
Respondents also contended that they have a meritorious defense.7 Petitioners filed their
Comment/Answer to the petition.8
On September 30, 1996, the Court of Appeals issued the assailed Decision granting the petition
and annulling the decision of the RTC-Cebu (Branch 10). The decretal portion of the decision reads:
WHEREFORE, the decision of the Regional Trial Court of Cebu City, Branch 10, in Civil Case No.
CEB-11103 as well as all Orders issued to implement the same are hereby ANNULLED AND SET ASIDE.
The Register of Deeds of Cebu City is hereby ENJOINED from cancelling Transfer Certificates of Title Nos.
10616 and 31856. No pronouncement as to costs.
SO ORDERED.9
Their motion for reconsideration having been denied by the Court of Appeals, petitioners filed
the present petition, setting forth the following assignment of errors:
I. THE COURT OF APPEALS ERRED IN FINDING LACK OF PRIOR KNOWLEDGE ON THE PART OF
RESPONDENTS TROCINO, REGARDING THE PROCEEDINGS BEFORE THE RTC OF CEBU CITY AND IN NOT
DISMISSING THE PETITION FOR VIOLATION OF SUPREME COURT CIRCULAR 04-94.
II. THE COURT OF APPEALS ERRED IN DECLARING THE NEED FOR PERSONAL AND/OR
EXTRATERRITORIAL SERVICE OF SUMMONS, DESPITE THE NATURE OF THE CAUSE OF ACTION BEING ONE
IN REM.
III. THE COURT OF APPEALS ERRED IN ANNULLING THE JUDGMENT, CAUSING FURTHER USELESS
LITIGATION AND UNNECESSARY EXPENSE ON PETITIONERS AND RESPONDENTS, ESPECIALLY SINCE
RESPONDENTS HAVE NOT SHOWN ANY VALID DEFENSE AS GROUND FOR REVERSAL OF JUDGMENT OF
THE RTC.
IV. THE COURT OF APPEALS ERRED IN RULING THAT ITS JUDGMENT IS APPLICABLE IN FAVOR OF
CARIDAD TROCINO.10
Summons is a writ by which the defendant is notified of the action brought against him. Service
of such writ is the means by which the court acquires jurisdiction over his person.11 Any judgment
without such service in the absence of a valid waiver is null and void.12
The resolution of the present petition hinges on the issue of whether or not summons was
effectively served on respondents. If in the affirmative, the trial court had validly acquired jurisdiction
over their persons and therefore its judgment is valid.
To resolve whether there was valid service of summons on respondents, the nature of the
action filed against them must first be determined. As the Court explained in Asiavest Limited vs. Court
of Appeals, it will be helpful to determine first whether the action is in personam, in rem, or quasi in rem
because the rules on service of summons under Rule 14 of the Rules of Court of the Philippines apply
according to the nature of the action.13
In actions in personam, summons on the defendant must be served by handing a copy thereof
to the defendant in person, or, if he refuses to receive it, by tendering it to him. This is specifically
provided in Section 7, Rule 14 of the Rules of Court,14 which states:
SEC. 7. Personal service of summons.-- The summons shall be served by handing a copy thereof
to the defendant in person or, if he refuses to receive it, by tendering it to him.
If efforts to find defendant personally makes prompt service impossible, substituted service may
be effected 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 by leaving the copies at the defendant's
office or regular place of business with some competent person in charge thereof.15 In substituted
service, it is mandated that the fact of impossibility of personal service should be explained in the proof
of service.16
When the defendant in an action in personam is a non-resident who does not voluntarily submit
himself to the authority of the court, personal service of summons within the State is essential to the
acquisition of jurisdiction over his person. This cannot be done if the defendant is not physically present
in the country, and thus, the court cannot acquire jurisdiction over his person and therefore cannot
validly try and decide the case against him.17 An exception was accorded in Gemperle vs. Schenker
wherein service of summons through the non-resident’s wife, who was a resident of the Philippines, was
held valid, as the latter was his representative and attorney-in-fact in a prior civil case filed by the non-
resident, and the second case was merely an offshoot of the first case.18
Meanwhile, in actions in rem or quasi in rem, jurisdiction over the person of the defendant is
not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over
the res, although summons must be served upon the defendant in order to satisfy the due process
requirements.19 Thus, where the defendant is a non-resident who is not found in the Philippines, and (1)
the action affects the personal status of the plaintiff; (2) the action relates to, or the subject matter of
which is property in the Philippines in which the defendant has or claims a lien or interest; (3) the action
seeks the exclusion of the defendant from any interest in the property located in the Philippines; or (4)
the property of the defendant has been attached in the Philippines, summons may be served
extraterritorially by (a) personal service out of the country, with leave of court; (b) publication, also with
leave of court; or (c) any other manner the court may deem sufficient.20
 In the present case, petitioners’ cause of action in Civil Case No. CEB-11103 is anchored on the
claim that the spouses Jesus and Caridad Trocino reneged on their obligation to convey ownership of the
two parcels of land subject of their sale. Thus, petitioners pray in their complaint that the spouses
Trocino be ordered to execute the appropriate deed of sale and that the titles be delivered to them
(petitioners); or in the alternative, that the sale be revoked and rescinded; and spouses Trocino ordered
to return to petitioners their down payment in the amount of P500,000.00 plus interests. The action
instituted by petitioners affect the parties alone, not the whole world. Hence, it is an action in
personam, i.e., any judgment therein is binding only upon the parties properly impleaded.21
Contrary to petitioners’ belief, the complaint they filed for specific performance and/or
rescission is not an action in rem. While it is a real action because it affects title to or possession of the
two parcels of land covered by TCT Nos. 10616 and 31856, it does not automatically follow that the
action is already one in rem. In Hernandez vs. Rural Bank of Lucena, Inc., the Court made the following
distinction:
In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a
contract or the recovery of damages. In a real action, the plaintiff seeks the recovery of real property, or,
as indicated in section 2(a) of Rule 4, a real action is an action affecting title to real property or for the
recovery of possession, or for partition or condemnation of, or foreclosure of a mortgage on, real
property.
An action in personam is an action against a person on the basis of his personal liability, while an
action in rem is an action against the thing itself, instead of against the person. Hence, a real action may
at the same time be an action in personam and not necessarily an action in rem.22
The objective sought in petitioners’ complaint was to establish a claim against respondents for
their alleged refusal to convey to them the title to the two parcels of land that they inherited from their
father, Jesus Trocino, who was one of the sellers of the properties to petitioners. Hence, to repeat, Civil
Case No. CEB-11103 is an action in personam because it is an action against persons, namely, herein
respondents, on the basis of their personal liability. As such, personal service of summons upon the
defendants is essential in order for the court to acquire of jurisdiction over their persons.23
A distinction, however, must be made with regard to service of summons on respondents Adolfo
Trocino and Mariano Trocino. Adolfo Trocino, as records show, is already a resident of Ohio, U.S.A. for
25 years. Being a non-resident, the court cannot acquire jurisdiction over his person and validly try and
decide the case against him.
On the other hand, Mariano Trocino has been in Talibon, Bohol since 1986. To validly acquire
jurisdiction over his person, summons must be served on him personally, or through substituted service,
upon showing of impossibility of personal service. Such impossibility, and why efforts exerted towards
personal service failed, should be explained in the proof of service. The pertinent facts and
circumstances attendant to the service of summons must be stated in the proof of service or Officer’s
Return. Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds.24
In the present case, the process server served the summons and copies of the complaint on
respondents Jacob, Jesus, Jr., Adolfo, Mariano, Consolacion, Alice and Racheal,25 through their mother,
Caridad Trocino.26 The return did not contain any particulars as to the impossibility of personal service
on Mariano Trocino within a reasonable time. Such improper service renders the same ineffective.
Due process of law requires personal service to support a personal judgment, and, when the
proceeding is strictly in personam brought to determine the personal rights and obligations of the
parties, personal service within the state or a voluntary appearance in the case is essential to the
acquisition of jurisdiction so as to constitute compliance with the constitutional requirement of due
process.27
Moreover, inasmuch as the sheriff’s return failed to state the facts and circumstances showing
the impossibility of personal service of summons upon respondents within a reasonable time,
petitioners should have sought the issuance of an alias  summons. Under Section 5, Rule 14 of the Rules
of Court, alias summons may be issued when the original summons is returned without being served on
any or all of the defendants.28 Petitioners, however, did not do so, and they should now bear the
consequences of their lack of diligence.
The fact that Atty. Expedito Bugarin represented all the respondents without any exception does
not transform the ineffective service of summons into a valid one. It does not constitute a valid waiver
or even a voluntary submission to the trial court’s jurisdiction. There was not even the slightest proof
showing that respondents authorized Atty. Bugarin’s appearance for and in their behalf. As found by the
Court of Appeals:
While Caridad Trocino may have engaged the services of Atty. Bugarin, it did not necessarily
mean that Atty. Bugarin also had the authority to represent the defendant heirs. The records show that
in all the pleadings which required verification, only Caridad Trocino signed the same. There was never a
single instance where defendant heirs signed the pleading. The fact that a pleading is signed by one
defendant does not necessarily mean that it is binding on a co-defendant. Furthermore, Caridad Trocino
represented herself as the principal defendant in her Motion to Withdraw Appeal. (Rollo, p. 80)
Since the defendant heirs are co-defendants, the trial court should have verified the extent of
Atty. Bugarin’s authority when petitioners failed to appear as early as the pre-trial stage, where the
parties are required to appear. The absence of the defendant heirs should have prompted the trial court
to inquire from the lawyer whether he was also representing the other petitioners. As co-defendant and
co-heirs over the disputed properties, the defendant heirs had every right to be present during the trial.
Only Caridad Trocino appeared and testified on her own behalf. All the defenses raised were her own,
not the defendant heirs.29
Consequently, the judgment sought to be executed against respondents were rendered without
jurisdiction as there was neither a proper service of summons nor was there any waiver or voluntary
submission to the trial court’s jurisdiction. Hence, the same is void, with regard to private respondents
except Caridad Trocino.
It must be pointed out that while it was the spouses Jesus and Caridad Trocino who sold the
properties to petitioners, their right to proceed against Jesus Trocino when he died was passed on to his
heirs, which includes respondents and Caridad Trocino. Such transmission of right occurred by operation
of law, more particularly by succession, which is a mode of acquisition by virtue of which the property,
rights and obligations to the extent of the value of the inheritance of a person are transmitted.30 When
the process server personally served the summons on Caridad Trocino, the trial court validly acquired
jurisdiction over her person alone. Hence, the trial court’s decision is valid and binding with regard to
her, but only in proportion to Caridad Trocino’s share. As aptly stated by the Court of Appeals:
This Court’s decision is therefore applicable to all the defendant heirs with the exception of
defendant Caridad Trocino considering that it was the latter who entered into the alleged sale without
the consent of her husband. She is therefore estopped from questioning her own authority to enter into
the questioned sale. Moreover, Caridad Trocino was validly served with summons and was accorded due
process.31
 WHEREFORE, the petition for review is DENIED. The decision of the Court of Appeals in CA-G.R.
SP No. 40067 is AFFIRMED.
Costs against petitioners.
SO ORDERED.

G.R. No. 165273               March 10, 2010

LEAH PALMA, Petitioner,
vs.
HON. DANILO P. GALVEZ, in his capacity as PRESIDING JUDGE of the REGIONAL TRIAL
COURT OF ILOILO CITY, BRANCH 24; and PSYCHE ELENA AGUDO, Respondents.

DECISION

PERALTA, J.:

Assailed in this petition for certiorari under Rule 65 of the Rules of Court are the Orders dated May
7, 20041 and July 21, 20042 of the Regional Trial Court (RTC) of Iloilo City, Branch 24, granting the
motion to dismiss filed by private respondent Psyche Elena Agudo and denying reconsideration
thereof, respectively.

On July 28, 2003, petitioner Leah Palma filed with the RTC an action for damages against the
Philippine Heart Center (PHC), Dr. Danilo Giron and Dr. Bernadette O. Cruz, alleging that the
defendants committed professional fault, negligence and omission for having removed her right
ovary against her will, and losing the same and the tissues extracted from her during the surgery;
and that although the specimens were subsequently found, petitioner was doubtful and uncertain
that the same was hers as the label therein pertained that of somebody else. Defendants filed their
respective Answers. Petitioner subsequently filed a Motion for Leave to Admit Amended Complaint,
praying for the inclusion of additional defendants who were all nurses at the PHC, namely, Karla
Reyes, Myra Mangaser and herein private respondent Agudo. Thus, summons were subsequently
issued to them.

On February 17, 2004, the RTC's process server submitted his return of summons stating that the
alias summons, together with a copy of the amended complaint and its annexes, were served upon
private respondent thru her husband Alfredo Agudo, who received and signed the same as private
respondent was out of the country.3

On March 1, 2004, counsel of private respondent filed a Notice of Appearance and a Motion for
Extension of Time to File Answer4 stating that he was just engaged by private respondent's husband
as she was out of the country and the Answer was already due.

On March 15, 2004, private respondent's counsel filed a Motion for Another Extension of Time to File
Answer,5 and stating that while the draft answer was already finished, the same would be sent to
private respondent for her clarification/verification before the Philippine Consulate in Ireland; thus,
the counsel prayed for another 20 days to file the Answer.

On March 30, 2004, private respondent filed a Motion to Dismiss6 on the ground that the RTC had
not acquired jurisdiction over her as she was not properly served with summons, since she was
temporarily out of the country; that service of summons on her should conform to Section 16, Rule
14 of the Rules of Court. Petitioner filed her Opposition7 to the motion to dismiss, arguing that a
substituted service of summons on private respondent's husband was valid and binding on her; that
service of summons under Section 16, Rule 14 was not exclusive and may be effected by other
modes of service, i.e., by personal or substituted service. Private respondent filed a Comment8 on
petitioner's Opposition, and petitioner filed a Reply9 thereto.

On May 7, 2004, the RTC issued its assailed Order granting private respondent's motion to dismiss.
It found that while the summons was served at private respondent's house and received by
respondent's husband, such service did not qualify as a valid service of summons on her as she was
out of the country at the time the summons was served, thus, she was not personally served a
summons; and even granting that she knew that a complaint was filed against her, nevertheless, the
court did not acquire jurisdiction over her person as she was not validly served with summons; that
substituted service could not be resorted to since it was established that private respondent was out
of the country, thus, Section 16, Rule 14 provides for the service of summons on her by publication.

Petitioner filed a motion for reconsideration, which the RTC denied in its Order dated July 21, 2004.

Petitioner is now before us alleging that the public respondent committed a grave abuse of discretion
amounting to lack or excess of jurisdiction when he ruled that:

I. Substituted service of summons upon private respondent, a defendant residing in the

Philippines but temporarily outside the country is invalid;

II. Section 16, Rule 14, of the 1997 Rules of Civil Procedure limits the mode of service of
summons upon a defendant residing in the Philippines, but temporarily outside the country,
exclusively to extraterritorial service of summons under section 15 of the same rule;

III. In not ruling that by filing two (2) motions for extension of time to file Answer, private
respondent had voluntarily submitted herself to the jurisdiction of respondent court, pursuant
to Section 20, Rule 14 of the 1997 Rules of Civil Procedure, hence, equivalent to having
been served with summons;

IV. The cases cited in his challenged Order of May 7, 2004 constitute stare decisis despite
his own admission that the factual landscape in those decided cases are entirely different
from those in this case.10

Petitioner claims that the RTC committed a grave abuse of discretion in ruling that Section 16, Rule
14, limits the service of summons upon the defendant-resident who is temporarily out of the country
exclusively by means of extraterritorial service, i.e., by personal service or by publication, pursuant
to Section 15 of the same Rule. Petitioner further argues that in filing two motions for extension of
time to file answer, private respondent voluntarily submitted to the jurisdiction of the court.

In her Comment, private respondent claims that petitioner's certiorari under Rule 65 is not the proper
remedy but a petition for review under Rule 45, since the RTC ruling cannot be considered as having
been issued with grave abuse of discretion; that the petition was not properly verified because while
the verification was dated September 15, 2004, the petition was dated September 30, 2004. She
insists that since she was out of the country at the time the service of summons was made, such
service should be governed by Section 16, in relation to Section 15, Rule 14 of the Rules of Court;
that there was no voluntary appearance on her part when her counsel filed two motions for extension
of time to file answer, since she filed her motion to dismiss on the ground of lack of jurisdiction within
the period provided under Section 1, Rule 16 of the Rules of Court.
In her Reply, petitioner claims that the draft of the petition and the verification and certification
against forum shopping were sent to her for her signature earlier than the date of the finalized
petition, since the petition could not be filed without her signed verification. Petitioner avers that
when private respondent filed her two motions for extension of time to file answer, no special
appearance was made to challenge the validity of the service of summons on her.

The parties subsequently filed their respective memoranda as required.

We shall first resolve the procedural issues raised by private respondent.

Private respondent's claim that the petition for certiorari under Rule 65 is a wrong remedy thus the
petition should be dismissed, is not persuasive. A petition for certiorari is proper 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 at law.11 There is "grave abuse of discretion"
when public respondent acts in a capricious or whimsical manner in the exercise of its judgment as
to be equivalent to lack of jurisdiction.

Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an appeal may be taken only
from a final order that completely disposes of the case; that no appeal may be taken from (a) an
order denying a motion for new trial or reconsideration; (b) an order denying a petition for relief or
any similar motion seeking relief from judgment; (c) an interlocutory order; (d) an order disallowing or
dismissing an appeal; (e) an order denying a motion to set aside a judgment by consent, confession
or compromise on the ground of fraud, mistake or duress, or any other ground vitiating consent; (f)
an order of execution; (g) a judgment or final order for or against one or more of several parties or in
separate claims, counterclaims, cross-claims and third-party complaints, while the main case is
pending, unless the court allows an appeal therefrom; or (h) an order dismissing an action without
prejudice. In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action for certiorari under Rule 65.

In this case, the RTC Order granting the motion to dismiss filed by private respondent is a final order
because it terminates the proceedings against her, but it falls within exception (g) of the Rule since
the case involves several defendants, and the complaint for damages against these defendants is
still pending.12 Since there is no appeal, or any plain, speedy, and adequate remedy in law, the
remedy of a special civil action for certiorari is proper as there is a need to promptly relieve the
aggrieved party from the injurious effects of the acts of an inferior court or tribunal.13

Anent private respondent's allegation that the petition was not properly verified, we find the same to
be devoid of merit. The purpose of requiring a verification is to secure an assurance that the
allegations of the petition have been made in good faith, or are true and correct, not merely
speculative.14 In this instance, petitioner attached a verification to her petition although dated earlier
than the filing of her petition. Petitioner explains that since a draft of the petition and the verification
were earlier sent to her in New York for her signature, the verification was earlier dated than the
petition for certiorari filed with us. We accept such explanation. While Section 1, Rule 65 requires
that the petition for certiorari be verified, this is not an absolute necessity where the material facts
alleged are a matter of record and the questions raised are mainly of law.15 In this case, the issue
raised is purely of law.

Now on the merits, the issue for resolution is whether there was a valid service of summons on
private respondent.
In civil cases, the trial court acquires jurisdiction over the person of the defendant either by the
service of summons or by the latter’s voluntary appearance and submission to the authority of the
former.16 Private respondent was a Filipino resident who was temporarily out of the Philippines at the
time of the service of summons; thus, service of summons on her is governed by Section 16, Rule
14 of the Rules of Court, which provides:

Sec. 16. Residents temporarily out of the Philippines. – When an action is commenced against a
defendant who ordinarily resides within the Philippines, but who is temporarily out of it,
service may, by leave of court, be also effected out of the Philippines, as under the preceding
section. (Emphasis supplied)

The preceding section referred to in the above provision is Section 15, which speaks of
extraterritorial service, thus:

SEC. 15. Extraterritorial service. ─ When the defendant does not reside and is not found in the
Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject of
which is, property within the Philippines, in which the defendant has or claims a lien or interest,
actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the
defendant from any interest therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the Philippines by personal service as
under section 6; or by publication in a newspaper of general circulation in such places and for such
time as the court may order, in which case a copy of the summons and order of the court shall be
sent by registered mail to the last known address of the defendant, or in any other manner the court
may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not
be less than sixty (60) days after notice, within which the defendant must answer.

The RTC found that since private respondent was abroad at the time of the service of summons, she
was a resident who was temporarily out of the country; thus, service of summons may be made only
by publication.

We do not agree.

In Montefalcon v. Vasquez,17 we said that because Section 16 of Rule 14 uses the words "may" and
"also," it is not mandatory. Other methods of service of summons allowed under the Rules may also
be availed of by the serving officer on a defendant-resident who is temporarily out of the Philippines.
Thus, if a resident defendant is temporarily out of the country, any of the following modes of service
may be resorted to: (1) substituted service set forth in section 7 ( formerly Section 8), Rule 14; (2)
personal service outside the country, with leave of court; (3) service by publication, also with leave of
court; or (4) in any other manner the court may deem sufficient.18

In Montalban v. Maximo,19 we held that substituted service of summons under the present Section 7,
Rule 14 of the Rules of Court in a suit in personam against residents of the Philippines temporarily
absent therefrom is the normal method of service of summons that will confer jurisdiction on the
court over such defendant. In the same case, we expounded on the rationale in providing for
substituted service as the normal mode of service for residents temporarily out of the Philippines.

x x x A man temporarily absent from this country leaves a definite place of residence, a dwelling
where he lives, a local base, so to speak, to which any inquiry about him may be directed and where
he is bound to return. Where one temporarily absents himself, he leaves his affairs in the hands of
one who may be reasonably expected to act in his place and stead; to do all that is necessary to
protect his interests; and to communicate with him from time to time any incident of importance that
may affect him or his business or his affairs. It is usual for such a man to leave at his home or with
his business associates information as to where he may be contacted in the event a question that
affects him crops up. If he does not do what is expected of him, and a case comes up in court
against him, he cannot just raise his voice and say that he is not subject to the processes of our
courts. He cannot stop a suit from being filed against him upon a claim that he cannot be summoned
at his dwelling house or residence or his office or regular place of business.

Not that he cannot be reached within a reasonable time to enable him to contest a suit against him.
There are now advanced facilities of communication. Long distance telephone calls and cablegrams
make it easy for one he left behind to communicate with him.20

Considering that private respondent was temporarily out of the country, the summons and complaint
may be validly served on her through substituted service under Section 7, Rule 14 of the Rules of
Court which reads:

SEC. 7. Substituted service. — If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, 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 have held that a dwelling, house or residence refers 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.21 It is, thus, the service of the summons intended for the defendant that must
be left with the person of suitable age and discretion residing in the house of the defendant.
Compliance with the rules regarding the service of summons is as important as the issue of due
process as that of jurisdiction.22
1avvphi1

Section 7 also designates the persons with 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.23

In this case, the Sheriff's Return stated that private respondent was out of the country; thus, the
service of summons was made at her residence with her husband, Alfredo P. Agudo, acknowledging
receipt thereof. Alfredo was presumably of suitable age and discretion, who was residing in that
place and, therefore, was competent to receive the summons on private respondent's behalf.

Notably, private respondent makes no issue as to the fact that the place where the summons was
served was her residence, though she was temporarily out of the country at that time, and that
Alfredo is her husband. In fact, in the notice of appearance and motion for extension of time to file
answer submitted by private respondent's counsel, he confirmed the Sheriff's Return by stating that
private respondent was out of the country and that his service was engaged by respondent's
husband. In his motion for another extension of time to file answer, private respondent's counsel
stated that a draft of the answer had already been prepared, which would be submitted to private
respondent, who was in Ireland for her clarification and/or verification before the Philippine
Consulate there. These statements establish the fact that private respondent had knowledge of the
case filed against her, and that her husband had told her about the case as Alfredo even engaged
the services of her counsel.

In addition, we agree with petitioner that the RTC had indeed acquired jurisdiction over the person of
private respondent when the latter's counsel entered his appearance on private respondent's behalf,
without qualification and without questioning the propriety of the service of summons, and even filed
two Motions for Extension of Time to File Answer. In effect, private respondent, through counsel, had
already invoked the RTC’s jurisdiction over her person by praying that the motions for extension of
time to file answer be granted. We have held 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.24 When private respondent earlier invoked the jurisdiction of the RTC to
secure affirmative relief in her motions for additional time to file answer, she voluntarily submitted to
the jurisdiction of the RTC and is thereby estopped from asserting otherwise.25

Considering the foregoing, we find that the RTC committed a grave abuse of discretion amounting to
excess of jurisdiction in issuing its assailed Orders.

WHEREFORE, the petition is GRANTED. The Orders dated May 7, 2004 and July 21, 2004 of the
Regional Trial Court of Iloilo City, Branch 24, are hereby SET ASIDE. Private respondent
is DIRECTED to file her Answer within the reglementary period from receipt of this decision.

SO ORDERED.

FIRST DIVISION

G.R. No. 202505, September 06, 2017

EXPRESS PADALA (ITALIA) S.P.A., NOW BDO REMITTANCE (ITALIA)

S.P.A., Petitioner, v. 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 sheriff's 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.
SECOND DIVISION
[ G.R. No. 210741, October 14, 2020 ]
MARIA LEA JANE I. GESOLGON AND MARIE STEPHANIE N. SANTOS, PETITIONERS, VS.
CYBERONE PH., INC., MACIEJ MIKRUT, AND BENJAMIN JUSON, RESPONDENTS.
DECISION
HERNANDO, J.:
Challenged in this petition1 is the September 2, 2013 Decision2 and January 10, 2014
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 128807 which set aside the November 26,
2012 Decision4 and January 21, 2013 Resolution5 of the National Labor Relations Commission (NLRC)
and dismissed the complaint for illegal dismissal filed by petitioners Maria Lea Jane I. Gesolgon
(Gesolgon) and Marie Stephanie N. Santos (Santos) against respondents CyberOne PH., Inc. (CyberOne
PH), Maciej Mikrut (Mikrut) and Benjamin Juson (Juson).
The Antecedents
In their Complaint dated May 5, 20116, Gesolgon and Santos alleged that they were hired on
March 3, 2008 and April 5, 2008, respectively, by Mikrut as part-time home-based remote Customer
Service Representatives of CyberOne Pty. Ltd. (CyberOne AU), an Australian company.7 Thereafter, they
became full time and permanent employees of CyberOne AU and were eventually promoted as
Supervisors.
Sometime in October 2009, Mikrut, the Chief Executive Officer (CEO) of both CyberOne AU and
CyberOne PH, asked petitioners, together with Juson, to become dummy directors and/or incorporators
of CyberOne PH to which petitioners agreed. As a result, petitioners were promoted as Managers and
were given increases in their salaries. The salary increases were made to appear as paid for by CyberOne
PH.
However, in the payroll for November 16 to 30, 2010, Mikrut reduced petitioners' salaries from
P50,000.00 to P36,000.00, of which P26,000.00 was paid by CyberOne AU while the remaining
P10,000.00 was paid by CyberOne PH. Aside from the decrease in their salaries, petitioners were only
given P20,000.00 each as 13th month pay for the year 2010.
Sometime in March 2011, Mikrut made petitioners choose one from three options: (a) to take
an indefinite furlough and be placed in a manpower pool to be recalled in case there is an available
position; (b) to stay with CyberOne AU but with an entry level position as home-based Customer Service
Representative; or (c) to tender their irrevocable resignation. Petitioners alleged that they were
constrained to pick the first option in order to save their jobs. In April 2011, petitioners received
P13,000.00 each as their last salary.
Hence, petitioners filed a case against respondents and CyberOne AU for illegal dismissal. They
likewise claimed for non-payment or underpayment of their salaries and 13th month pay; moral and
exemplary damages; and attorney's fees.
On the other hand, CyberOne PH, Mikrut and Juson denied that any employer-employee
relationship existed between petitioners and CyberOne PH. They insisted that petitioners were
incorporators or directors and not regular employees of CyberOne PH. They claimed that petitioners
were employees of CyberOne AU and that the NLRC had no jurisdiction over CyberOne AU because it is a
foreign corporation not doing business in the Philippines.
 Ruling of the Labot Arbiter (LA):
In his March 30, 2012 Decision,8 the LA held that petitioners are not employees of CyberOne PH
as the latter did not exercise control over them. Also, since there was no evidence showing that
CyberOne PH and CyberOne AU are one and the same entity, the presumption that they have
personalities separate and distinct from one another stands. The LA ruled that petitioners are merely
shareholders or directors of CyberOne PH and not its regular employees.
Also, since CyberOne AU is a foreign corporation not doing business in the Philippines, then the
LA has no jurisdiction over it. Hence, petitioners' complaint had to be dismissed for lack of merit.
Ruling of the National Labor Relations Commission:
In its November 26, 2012 Decision,9 the NLRC ruled that petitioners are employees of CyberOne
AU and CyberOne PH. The fact that petitioners are nominal shareholders of CyberOne PH does not
preclude them from being employees of CyberOne PH.
Moreover, the NLRC noted that for January 2010 to April 2011, CyberOne PH paid petitioners
their P20,000.00 monthly salary and P1,000.00 monthly allowance net of withholding tax and other
mandatory government deductions. Respondents did not present any proof of payment of director's fee
to petitioners. Similarly CyberOne AU was shown to have previously paid petitioners' salaries for
services actually rendered including allowance and phone CSR allowance as per the terms of
employment and pay slips presented by petitioners.
The NLRC also found that petitioners were illegally dismissed from service. It ratiocinated that
due to respondents' allegations that petitioners had not made enough progress on their leadership skills
and failed to follow the directives of the management which resulted in the issuance of several warnings
by CyberOne AU, they effectively admitted they indeed terminated or eventually dismissed petitioners,
although on unsubstantiated grounds as it turned out. Also, the NLRC held that respondents' claim that
they received a number of complaints and non-compliance repmis from call center customers which
prompted them to terminate petitioners' services but later on decided to give them furlough status, is
additional proof that they had indeed terminated petitioners.
The NLRC noted that the Furlough Notifications dated March 30, 2011 issued by CyberOne AU to
petitioners were, in fact, notices of dismissal. Petitioners were informed that respondent CyberOne AU
was unable to provide them with work but that it may engage their services again in the future. The
NLRC concluded that petitioners were dismissed without valid cause and due process.
Lastly, the NLRC noted that CyberOne AU is doing business in the Philippines due to its
participation in the management, supervision or control of CyberOne PH which is indicative of a
continuity of commercial dealings or arrangements. Thus, the doctrine of piercing the corporate veil
must be applied as to it.
The NLRC thus reversed and set aside the LA's March 30, 2012 Decision, to wit:
WHEREFORE, all of the foregoing premises considered, judgment is hereby rendered finding
merit in the instant appeal; the appealed Decision is hereby VACATED and SET ASIDE, and a new one
rendered declaring complainants to have been ILLEGALLY DISMISSED by Respondents who are hereby
ordered to reinstate complainants to their previous or equivalent position without loss of seniority
rights and privileges, and to solidarily pay complainant (1) their backwages from the time of their
dismissal up to the time of their reinstatement, and (2) their respective 13th month and service
incentive leave pays in the sums P1,175,113.64 (Maria Lea Jane Gesolgon) and P1,175,113.64 (Marie
Stephanie N. Santos) or P2,350,227.28 as of October 30, 2012.
 The computation of this Commission's Computation and Examination Unit (CEU) forms part of
this Decision.
SO ORDERED.10
Respondents moved for reconsideration of the NLRC's November 26, 2012 Decision but this was
denied by the NLRC in its January 21, 2013 Resolution11 for lack of merit.
Ruling of the Court of Appeals:
In its assailed September 2, 2013 Decision,12 the appellate court reversed the findings of the
NLRC and ruled that no employer-employee relationship existed between petitioners, on one hand, and
respondent CyberOne PH, on the other hand. First, the appellate court found no evidence that
CyberOne PH hired petitioners as its employees. It held that the NLRC's reliance on the pay slips
presented by petitioners as proof that they were employees of respondent CyberOne PH was flawed.
On the contrary, the CA found no substantial evidence that petitioners were under the payroll
account of CyberOne PH. The CA noted that the pay slips presented by petitioners were mere
photocopies and not the original duplicates of computerized pay slips. In particular, the pay slips for the
period October 1, 2009 to March 16, 2011, the period within which petitioners were allegedly hired by
CyberOne PH, indicated that the salaries were paid in Australian dollars. The CA pointed out that it was
unusual for a Philippine corporation to pay its employees' wages in foreign currency. For the CA, this
only served to highlight the fact that petitioners were employees of CyberOne AU and not CyberOne PH.
The appellate court also stressed that the Furlough Notifications were issued by CyberOne AU
and not by CyberOne PH. This means that CyberOne PH did not have the power of termination over the
petitioners. The Resignation Letters of petitioners also showed that they resigned as directors of
CyberOne PH and not as employees.
Lastly, there was no evidence that CyberOne PH exercised control over the means and method
by which petitioners performed their job. Petitioners also failed to present evidence as regards their
duties and responsibilities as employees of CyberOne PH.
The appellate court also held that the NLRC misapplied the doctrine of piercing the corporate
veil. It ruled that although it was established that Mikrut and CyberOne AU owned majority of the shares
of CyberOne PH, such fact may not be a basis for disregarding the independent corporate status of
CyberOne PH. Mere ownership by a single stocld1older or by another corporation of all or nearly all of
the capital stock of a corporation is not in itself sufficient reason for disregarding the fiction of separate
corporate personalities. There was no evidence on record to show that the polices, corporate finances,
and business practices of CyberOne PH were completely controlled by CyberOne AU. Also, no evidence
was presented to show that CyberOne PH was organized and controlled, and its affairs conducted, in a
manner that made it merely an instrumentality, agency, conduit or adjunct of CyberOne AU or that it
was established to defraud third persons, including herein petitioners. Hence, the appellate court
concluded that CyberOne AU and CyberOne PH are two distinct and separate entities.
The fallo of the CA's Decision dated September 2, 2013 reads:
WHEREFORE, the petition is GRANTED. The assailed Decision dated November 26, 2012 and
Resolution dated January 21, 2013 of the public respondent National Labor Relations Commission
(NLRC), Second Division, in NLRC LAC No. 05-001446-12 (NLRC NCR No. 05-07138-11), are hereby SET
ASIDE. Accordingly, the Complaint for Illegal Dismissal against petitioners in NLRC-NCR Case No. 05-
07138-11 is hereby DISMISSED.
SO ORDERED.13
 Petitioners moved for reconsideration of the CA's September 2, 2013 Decision but it was
consequently denied by the appellate court in its January 10, 2014 Resolution.14
Hence, petitioners filed this Petition for Review on Certiorari under Rule 45.
Issue
The issues to be resolved in this case are the following:
1. Whether or not petitioners were employees of CyberOne PH and CyberOne AU.
2. Whether or not petitioners were illegally dismissed.
Our Ruling
We find the Petition without merit.
A perusal of the records reveals that Gesolgon and Santos were hired on March 3, 2008 and
April 5, 2008, respectively, as home-based Customer Service Representatives of CyberOne AU, a
corporation organized and existing under the laws of Australia.15 However, on March 30, 2011
petitioners were notified by CyberOne AU of their dismissal through Furlough Notifications16 placing
their employment on hold in view of the company's cost-cutting measure. The Furlough Notifications
showed that CyberOne AU was actually terminating the services of petitioners effective April 15, 2011.
Petitioners were required to return, on or before April 1, 2011, any company assets, documents, laptop
computers, VPN router, office keys and identification tags that were in their possession.
At the outset, since there is an issue involving the piercing of the corporate veils of CyberOne PH
and CyberOne AU, it must be emphasized that the records are bereft of any showing that this Court has
acquired jurisdiction over CyberOne AU, a foreign corporation, through a valid service of summons,
although respondent CyberOne PH, Mikrut and Juson were validly served with summons.
Notably, CyberOne AU is a foreign corporation organized and existing under the laws of
Australia and is not licensed to do business in the Philippines. CyberOne AU did not appoint and
authorize respondents CyberOne PH, a domestic corporation, and Mikrut, the Managing Director of
CyberOne AU and a stockholder of CyberOne PH, as its agents in the Philippines to act in its behalf. Also,
it was not shown that CyberOne AU is doing business in the Philippines.
While it is true that CyberOne AU owns majority of the shares of CyberOne PH, this,
nonetheless, does not warrant the conclusion that CyberOne PH is a mere conduit of CyberOne AU. The
doctrine of piercing the corporate veil applies only in three basic instances, namely: (a) when the
separate distinct corporate personality defeats public convenience, as when the corporate fiction is used
as a vehicle for the evasion of an existing obligation; (b) in fraud cases, or when the corporate entity is
used to justify a wrong, protect a fraud, or defend a crime; or (c) is used in alter ego cases, i.e., where a
corporation is essentially a farce, since it is a mere alter ego or business conduit of a person, or where
the corporation is so organized and controlled and its affairs conducted as to make it merely an
instrumentality, agency, conduit or adjunct of another corporation.17
We find that the application of the doctrine of piercing the corporate veil is unwarranted in the
present case. First, no evidence was presented to prove that CyberOne PH was organized for the
purpose of defeating public convenience or evading an existing obligation. Second, petitioners failed to
allege any fraudulent acts committed by CyberOne PH in order to justify a wrong, protect a fraud, or
defend a crime. Lastly, the mere fact that CyberOne PH's major stockholders are CyberOne AU and
respondent Mikrut does not prove that CyberOne PH was organized and controlled and its affairs
conducted in a manner that made it merely an instrumentality, agency, conduit or adjunct of CyberOne
AU. In order to disregard the separate corporate personality of a corporation, the wrongdoing must be
clearly and convincingly established.
 Moreover, petitioners failed to prove that CyberOne AU and Mikrut, acting as the Managing
Director of both corporations, had absolute control over CyberOne PH. Even granting that CyberOne AU
and Mikrut exercised a certain degree of control over the finances, policies and practices of CyberOne
PH, such control does not necessarily warrant piercing the veil of corporate fiction since there was not a
single proof that CyberOne PH was formed to defraud petitioners or that CyberOne PH was guilty of bad
faith or fraud.
Hence, the doctrine of piercing the corporate veil cannot be applied in the instant case. This
means that CyberOne AU cannot be considered as doing business in the Philippines through its local
subsidiary CyberOne PH. This means as well that CyberOne AU is to be classified as a non-resident
corporation not doing business in the Philippines.
Considering the foregoing, We now go back to the issue of whether this Court has acquired
jurisdiction over CyberOne AU.
Sections 12 and 15, Rule 14, of the Rules of Court suppletorily apply:
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.
xxxx
Sec. 15. Extraterritorial service. - When the defendant does not reside and is not found in the
Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject of
which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual
or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant
from any interest therein, or the property of the defendant has been attached within the Philippines,
service may, by leave of court, be effected out of the Philippines by personal service as under section 6;
or by publication in a newspaper of general circulation in such places and for such time as the court may
order, in which case a copy of the summons and order of the court shall be sent by registered mail to
the last known address of the defendant, or in any other manner the court may deem sufficient. Any
order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer.
Applying the foregoing, CyberOne AU, as a non-resident foreign corporation which is not doing
business in the Philippines, may be served with summons by extraterritorial service, to wit: (1) when the
action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which
is property, within the Philippines, in which the defendant claims a lien or an interest, actual or
contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the
defendant from any interest in property located in the Philippines; and (4) when the defendant non
residents property has been attached within the Philippines. In these instances, service of summons may
be effected by (a) personal service out of the country, with leave of court; (b) publication, also with
leave of court; or (c) any other manner the court may deem sufficient.18
Extraterritorial service of summons applies only where the action is in rem or quasi in rem but
not if an action is in personam19 as in this case; hence, jurisdiction over CyberOne AU cannot be
acquired unless it voluntarily appears in court.20 Consequently, without a valid service of summons and
without CyberOne AU voluntarily appearing in court, jurisdiction over CyberOne AU was not validly
acquired. Consequently, no judgment can be issued against it, if any. Any such judgment will only bind
respondents CyberOne PH, Mikrut, and Juson.
In any event, the determination of whether there exists an employer-employee relationship
between petitioners and CyberOne PH is ultimately a question of fact.Ꮮαwρhi ৷ Generally, only errors of
law are reviewed by this Court. Factual findings of administrative and quasi-judicial agencies specializing
in their respective fields, especially when affirmed by the appellate court, are accorded high respect, if
not finality.21 However, in this case, the findings of the NLRC are in conflict with that of the LA and CA.
Thus, as an exception to the rule, We now look into the factual issues involved in this case.
The four-fold test used in determining the existence of employer employee relationship involves
an inquiry into: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer's power to control the employee with respect to the means
and method by which the work is to be accomplished.22
Based on record, petitioners were requested by respondent Mikrut to become stockholders and
directors of CyberOne PH with each one of them subscribing to one share of stock. However, petitioners
contend that they were hired as employees of CyberOne PH as shown by the pay slips indicating that
CyberOne PH paid them P10,000.00 monthly net of mandatory deductions. Other than the pay slips
presented by petitioners, no other evidence was submitted to prove their employment by CyberOne PH.
Petitioners failed to present any evidence that they rendered services to CyberOne PH as employees
thereof. As correctly observed by the appellate court:23
But as pointed out earlier, other than the payslips mentioned, no other documents tending to
prove their employment with CyberOne PH., Inc., were submitted by the private respondents. It bears
stressing that no employment contracts, or at least a job offer, was presented by the private
respondents to bolster their claim. True, there is no requirement under the law that the contract of
employment of the kind entered into by an employer and an employee should be in any particular form.
Nevertheless, We emphasize the fact that the private respondents initially presented as evidence a copy
of the Job Offer dated March 3, 2008, which showed that respondent Gesolgon was hired as Remote
Customer Service Representative of CyberOne AU, and not CyberOne PH., Inc.
As to the power of dismissal, the records reveal that petitioners submitted letters of resignation
as directors of CyberOne PH and not as employees thereof. This fact negates their contention that they
were dismissed by CyberOne PH as its employees. Lastly, the power of control of CyberOne PH over
petitioners is not supported by evidence on record. To reiterate, petitioners failed to prove the manner
by which CyberOne PH alledgedly supervised and controlled their work. In fact, petitioners failed to
mention their functions and duties as employees of CyberOne PH. They merely relied on their
allegations that they were hired and paid by CyberOne PH without specifying the terms of their
employment as well as the degree of control CyberOne PH had over the means and method by which
their work would be accomplished.
As it is established that petitioners are not employees of CyberOne PH, there is no need for this
Court to delve into the issues of petitioners' illegal dismissal, their monetary claims and the probative
value of the pay slips presented by petitioners. Based on the foregoing, this Court is convinced that
petitioners are not employees of CyberOne PH, but stockholders thereof.
To summarize, the Court did not acquire jurisdiction over CyberOne AU. CyberOne PH is neither
the resident agent nor the conduit of CyberOne AU upon which summons may be served. Also, there
existed no employer employee relationship between petitioners and CyberOne PH. Hence, there is no
dismissal to speak of, much more illegal dismissal.
 WHEREFORE, the Petition is DENIED. The assailed September 2, 2013 Decision and January 10,
2014 Resolution of the Court of Appeals in CA-G.R. SP No. 128807 are hereby AFFIRMED. No cost.
SO ORDERED.
FIRST DIVISION
[ G.R. No. 244129, December 09, 2020 ]
ELEONOR SAROL, PETITIONER, VS. SPOUSES GEORGE GORDON DIAO AND MARILYN A. DIAO,
ET. AL. RESPONDENT.
DECISION
CARANDANG, J.:
This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the
Resolution2 dated December 13, 2018 of the Court of Appeals (CA) in CA-G.R. SP No. 12099 which
dismissed the Petition for Annulment of Judgment3 filed by petitioner Eleonor Sarol (Sarol) against
respondents Spouses George Gordon Diao and Marilyn Diao (Spouses Diao), and Sheriff IV Norman
Stephen Tale (Sheriff Tale) of the Regional Trial Court (RTC) of Dumaguete City, Branch 44.
Facts of the Case
Sometime in 2007, petitioner Sarol purchased from a certain Claire Chiu a parcel of land located
in Guinsuan, Poblacion, Zamboanguita, Negros Oriental. The parcel of land has an area of 1,217 square
meters and is designated as Lot No. 7150. Sarol claims to have purchased the property for
P2,000,000.00, where she initially paid P1,800,000.00 and settled the remaining balance amounting to
P200,000.00 in 2011. On July 20, 2011, the Deed of Sale over the property was executed in view of
payment of the remaining balance worth P200,000.00. Accordingly, the Original Certificate of Title (OCT)
No. FV-44750 registered in the name of Claire Chiu was cancelled and Transfer Certificate of Title (TCT)
No. 103-2012000605 was issued in the name of Sarol on February 16, 2012.4
Sarol had been in possession of the property since 2007 and began developing a beach resort.
She eventually left the Philippines to reside in Germany. Her father, Emproso Sarol, was made to
manage all her assets in the Philippines, including the beach resort and Lot No. 7150. Sarol also left
Marie Jeane Alanta-ol to manage the beach resort.5
Spouses Diao claim that their property is adjacent to Lot No. 7150. Prior the sale of said property
to Sarol, Claire Chiu caused to survey the property yielding an area of 1,217 square meters. However,
the area, as surveyed, is erroneous because it included 464 square meters of Spouses Diao's property. In
2009, Spouses Diao learned of this overlap. They immediately demanded Claire Chiu and Sarol to return
their portion of the property, but to no avail.6 In 2015, Spouses Diao filed a complaint7 with the RTC
Branch 44, Dumaguete City docketed as Civil Case No. 2015-15007 entitled Spouses George Gordon Diao
and Marilyn Diao v. Claire Chiu, joined by her husband Ginghis Gamaliel D. Chiu, the Register of Deeds of
Negros Oriental and Eleanor Sarol. Spouses Diao sought to partially cancel the contracts from which
Claire Chiu derived ownership over Lot No. 7150, to reconvey an area of 464 square meters from said
property in their favor and to hold Claire Chiu and Sarol liable for damages.8
Ruling of the Regional Trial Court
In the course of the proceedings for the abovementioned case, summons9 was issued for
service to Claire Chiu, her husband Ginghis Chiu, the Register of Deeds of Negros Oriental, and Sarol. The
address of Sarol indicated in the summons states "Guinsuan, Poblacion, Zamboanguita, Negros
Oriental,"10 or the location of the property she purchased from Claire Chiu. OnApril16, 2015,
respondent Sheriff Tale issued a Sheriffs Return of Summons,11 which states that summons was served
on Claire Chiu but could not be served to Sarol "on the ground that she is out of the country."12 Spouses
Diao then moved for the issuance of alias summons.13 In the Sheriffs Return dated July 25,
2015,14 Sheriff Tale stated his three failed attempts to personally serve the alias summons to Sarol at
Guinsuan, Poblacion, Zamboanguita, Negros Oriental. Sheriff Tale narrates that on July 10, 2015, the
alias summons was not served because nobody was around the location. In the evening of the same
date, he, again, failed to serve the alias summons after receiving information from the caretaker that
Sarol left a few days ago. Early morning of July 11, 2015, Sheriff Tale spoke with the caretaker and
learned that Sarol arrived the Philippines on July 3, 2015 and left for Germany on July 7, 2015; that the
caretaker had no idea of Sarol's return.15 For this reason, Spouses Diao moved that summons be served
by publication in a newspaper of general circulation in the City of Dumaguete and in the Province of
Negros Oriental pursuant to Section 15, Rule 14 of the Rules of Court on extraterritorial service of
summons.16 In an Order dated February 5, 2016, the RTC directed service of summons on Sarol by
publication in a newspaper of general circulation in the City of Dumaguete and in the Province of Negros
Oriental, for two consecutive weeks and to send copies of the summons and of the order by registered
mail to the last known address of Sarol in Guinsuan, Poblacion, Zamboanguita Negros Oriental.17
Claire Chiu filed her answer to the complaint, but failed to appear at the pre-trial proceedings.
Sarol, on the other hand, failed to file any pleadings with the RTC. Upon motion of Spouses Diao, Claire
Chiu and Sarol were declared in default in an Order18 dated January 25, 2017. The Order became final
and executory allowing Spouses Diao to present their evidence ex-parte. On December 13, 2017, the
RTC rendered a Decision19 in favor of Spouses Diao. The dispositive portion of the Decision of the RTC
reads,
WHEREFORE, judgment is hereby rendered:
1. Declaring the Deed of Confirmation and Ratification of Sale and the Deed of Absolute Sale
partially null and void and of no legal effect insofar as they affect the plaintiffs lot;
2. Ordering the defendants to reconvey to the plaintiff the 464-square-meter portion of Lot No.
7150, Pls-847, identical to Lot No. 2788_B, CSD-07-010295, by executing a deed of conveyance;
3. Ordering the defendants Chiu to pay plaintiff Thirty Thousand Pesos (PHP30,000) as moral
damages, and PhP15,000 as exemplary damages;
4. Ordering defendants Chiu to pay plaintiffs attorney's fees of fifteen thousand Pesos
(PHP15,000) based on quantum meruit; and
5. Dismissing the counterclaim for lack of merit;
Costs against the defendants.
SO ORDERED.20 (Emphasis in the original)
The Decision of the RTC attained finality. Thereafter and on motion of Spouses Diao, the RTC
issued a Writ of Execution21 dated May 2, 2018.
In view of the finality of the Decision of the RTC, Sarol filed a Petition for Annulment of
Judgement22 under Rule 47 of the Rules Court with the CA. She sought to invalidate the Decision of the
RTC because the court a quo did not acquire jurisdiction over her person. Sarol argued that she was not
served with any summons relating to the case instituted by Spouses Diao.23
Ruling of the Court of Appeals
In the assailed Resolution24 dated December 13, 2018, the CA dismissed the petition for
annulment of judgment. The CA held that Sarol is a Filipino resident, who was temporarily out of the
country. Thus, the rules on service of summons under Section 16, Rule 14 of the Rules of Court is
applicable. Under Section 16, service of summons, to a resident defendant, who is temporarily out of
the country, may be effected by modes provided for in Section 15, Rule 14 of the Rules of Court.
Following Section 15 on extraterritorial service of summons, one of the modes of service may be
"effected x x x by publication in a newspaper of general circulation, in which case a copy of the summons
and order of the court shall be sent by registered mail to the last known address of the defendant x x x".
The CA found that personal service of the summons and the alias summons could not be effected at
Sarol's address in Guinsuan, Poblacion, Zamboanguita, Negros Oriental because Sarol was out of the
country. Thus, Spouses Diao moved for the service of summons by publication which the RTC granted in
an Order dated February 5, 2016. The CA held that summons was clearly served on the person of Sarol
by publication. Having failed to timely file an answer to the complaint, Sarol was declared in default.
Further, the CA held that Sarol failed to show clear facts and laws for the petition for annulment of
judgment to prosper.25
Petitioner's Arguments
Unsatisfied with the Decision of the CA, Sarol filed the instant petition before this Court
reiterating that the RTC did not acquire jurisdiction over her person. Sarolargued that there was a
defective service of summons by Sheriff Tale. While she is named a recipient of the summons, the
address, Guinsuan, Poblacion, Zamboanguita, Negros Oriental, was incorrect. Sarol argued that she
never became a resident at said address. Her last known address in the Philippines was
in Barangay Tamisu, Bais City, Negros Oriental. She claimed that after her purchase of the subject
property from Claire Chiu, she migrated to Germany. Hence, personal service of the summons could not
have validly been effected.26
Other modes of service of summons were also not proven to have been successfully executed.
The substituted service of summons under Section 7, Rule 14 of the Rules of Court provides that such
mode of service may be effected by leaving copies of the summons: (a) at the defendant's residence
with some person of suitable age and discretion then residing therein; or (b) at defendant's office or
regular place of business with some competent person in charge thereof. Sarol asserted failure on the
part of Sheriff Tale to effect service of summons under this rule. If Sarol's residential address was indeed
at Guinsuan, Poblacion Zamboanguita, Sheriff Tale could have easily served the alias summons to Sarol's
caretaker at the beach resort built on the subject property. In this case, Sarol argued that there was no
proof of the successful substituted service of the alias summons.27
Sarol also argued that the RTC erred in allowing the service of summons by publication because
none of the rules for such mode of service are applicable. First, Section 14, Rule 14 of the Rules of Court
provides that service by publication shall be resorted to when: (1) the defendant is unknown or the like;
and (2) whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry. None of
the foregoing conditions are present in Sarol's case because Spouses Diao knew that she was one of the
defendants to the case and that she resided in Germany. Second, Section 15, Rule 14 of the Rules of
Court on extraterritorial service of summons by publication requires that a copy of the summons and
order of the court be sent by registered mail to the last known address of the defendant. Sarol claims
that there was no mail to her last address in the Philippines in Barangay Tamisu, Bais City, Negros
Oriental or to her residence in Germany. Third, Section 16, Rule 14 of the Rules of Court provides that
extraterritorial service of summons shall be made when a resident defendant is temporarily out of the
Philippines. Sarol argues that this rule is inapplicable because she is a permanent resident in
Germany.28 Finally, Sarol claims that no affidavit of the publisher, editor or advertising manager was
presented as proof of service by publication required under the Rules of Court.29
Respondent's Arguments
 In their Comment,30 Spouses Diao claim that there is no truth to Sarol's lack of knowledge of
the pendency of the case. They argue that Sarol returns to the beach reson every year, and that the
resort caretaker had a pre-arranged agreement with Sheriff Tale to inform the latter when Sarol is in the
Philippines. However, when Sheriff Tale made inquiries of Sarol's return to the country, the caretaker
had a ready reply that Sarol already left. Sarol clearly evaded the service of summons, leaving Spouses
Diao with no other choice but to resort to serve summons by publication. Moreover, a Petition for
Annulment of Judgment may be resorted when there is no available or adequate remedy. Here, Spouses
Diao argue that Sarol lost her opportunity to defend her case for deliberately evading the service of
summons.31
Ruling of the Court
The proper service of summons is important because it serves to acquire jurisdiction over the
person of the defendant or respondent, or to notify said person of the action filed against them and to
afford an opportunity to be heard on the claims made against them.32 Logically, in order to effect the
proper service of summons it is crucial to furnish the correct address of the defendant or respondent in
a complaint. The foregoing is in consonance with the doctrine of due process. A violation of this due
process would be a jurisdictional defect.33 Thus, absent the proper service of summons, the trial court
does not acquire jurisdiction and renders null and void all subsequent proceedings and issuances in
relation to the case.34
Here, the summons and alias summons issued by the court a quo to Sarol indicated her
residential address at "Guinsuan, Poblacion, Zamboanguita, Negros Oriental."35 The address is
undisputedly the location of the property, which is the subject matter of this case. We find that in the
complaint for reconveyance36 filed by Spouses Diao with the RTC of Dumaguete City, Branch 44, Sarol
was included as a party-defendant for being the purchaser of the disputed property from co-defendant
Claire Chiu.37 To Our mind, as Sarol purchased the disputed property located in Guinsuan, Poblacion,
Zamboanguita, Negros Oriental, Spouses Diao considered the location of the property to be Sarol's place
of residence. However, the records pertaining to Sarol's claim over the subject property reveal that her
place of residence is in Tamisu, Bais City, Negros Oriental. The Deed of Sale38 dated July 20, 2011
between Sarol and Claire Chiu indicates that Sarol's residence is in "Tamisu, Bais City."39 TCT No. 103-
201200060540 or the transfer certificate of title registered under Sarol's name for the subject property
also indicates that Sarol's place of residence is in "Tamisu, Bais City, Negros Oriental Central
Visayas."41 Absent any allegation and evidence to prove otherwise, We give credence to Sarol's position
that her place of residence is not in Guinsuan, Poblacion, Zamboanguita, Negros Oriental. For this
reason, the service of summons should have been made in Tamisu, Bais City, Negros Oriental.
The preferred mode of service of summons shall be done personally upon the defendant or
respondent.42 However, our rules set out other modes of service.ℒαwρhi ৷ Section 7, Rule 1443 of the
Rules of Court allows the substituted service of summons if, for justifiable causes, the defendant cannot
be served within a reasonable time. It shall be effected by leaving copies of the summons: (a) at the
defendant's residence with some person of suitable age and discretion residing therein; or (b) at the
defendant's place of business with some competent person in charge thereof. "Dwelling house" or
"residence" refers 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
service44 As discussed, We found that the address in Guinsuan, Poblacion, Zarnboanguita, Negros
Oriental is not Sarol's place of residence. Therefore, service of summons to Sarol, even by substituted
service, should have been effected in Tamisu, Bais City, Negros Oriental. Assuming that Guinsuan,
Poblacion, Zamboanguita, Negros Oriental is Sarol's regular place of business, We find that there was no
substituted service effected. The Sheriff's Return of Summons45 dated April 16, 2015 and Sheriff's
Return of Alias Summons46 dated July 25, 2015 report the unsuccessful service to Sarol because she is
out of the country. Sheriff Tale accounted in the Return of Alias Summons that he merely inquired from
the caretaker the whereabouts of Sarol.47 From the foregoing, the returns of the sheriff do not state
that substituted service of summons was made to the designated persons provided under Section 7,
Rule 14.
Spouses Diao are not totally without recourse as the rules allow summons by publication and
extraterritorial service. These are extraordinary modes which require leave of court.48 In fact, in view of
Sheriff Tale's reports of failure to serve summons on Sarol, Spouses Diao moved for the extraterritorial
service of summons by publication under Section 15,49 Rule 14 of the Rules of Court.50 Under this rule,
one of the modes to effect the extraterritorial service of summons is by publication in a newspaper of
general circulation in such places and for such time as the court may order, in which case a copy of the
summons and order of the court shall be sent by registered mail to the last known correct address of the
defendant. Furthermore, to avail this mode, the action or complaint filed against a nonresident
defendant: (1) affects the personal status of the plaintiff or relates to; or (2) the subject of which, is
property within the Philippines, in which the defendant has or claims a lien or interest, actual or
contingent; or (3) in which the relief demanded consists, wholly or in part, in excluding the defendant
from any interest therein; or (4) the property of the defendant has been attached within the Philippines.
We emphasize that it is the duty of the court to require the fullest compliance with all the requirements
of the statute permitting service by publication. Where service is obtained by publication, the entire
proceeding should be closely scrutinized by the courts and a strict compliance with every condition of
law should be exacted.51
Here, as Sarol is out of the country and the action pertains to her interest over a parcel of land
located in the Philippines, the RTC granted the extraterritorial service on Sarol by publication in a
newspaper of general circulation in the. City of Dumaguete and in the Province of Negros Oriental, for
two consecutive weeks and to send copies of the summons and of the order of the court a quo by
registered mail to the last known address of Sarol in Guinsuan, Poblacion, Zamboanguita Negros
Oriental.52 Following the provisions of Section 15, Rule 14 of the Rules of Court and the aforementioned
order of the court, publication must be duly observed and copies of the summons and order of the court
be served at Sarol's last known correct address by registered mail, as a complement to the publication.
The failure to strictly comply with the requirements of the rules regarding the mailing of copies of the
summons and the order for its publication is a fatal defect in the service of summons. Considering that
Sarol's last known address is in Tamisu, Bais City, Negros Oriental, copies of the summons and order of
the court must be sent to this address. As Spouses Diao furnished an address in Guinsuan, Poblacion,
Zamboanguita, Negros Oriental, service of summons by publication is defective in view of the failure to
mail the requirements of Section 15, Rule 14 to the correct address of Sarol. Relatedly, the findings of
the CA on service of summons by publication under Section 16,53 Rule 14 of the Rules of Court cannot
be considered proper because this rule also follows the same procedures set out in Section 15, Rule 14
of the Rules of Court on publication and mailing to the last known correct address of the defendant or
respondent. Spouses Diao only assert compliance with publication of summons in Dumaguete City and
Negros Oriental. There were no records presented showing proof of service by registered mail of the
summons and the order of the court to the last known address of Sarol as required under the rules by
the court a quo in this case.
We reiterate that the service of summons is vital and indispensable to defendant's right to due
process.54 A violation of this due process is a jurisdictional defect55 which renders null and void all
subsequent proceedings and issuances in relation to the case.56 Thus, the judgment57 and the Writ of
Execution58 issued by the RTC of Dumaguete City, Branch 44 in Civil Case No. 2015-15007 is null and
void. In which case, We find that Sarol's availment of the petition for annulment of judgement under
Rule 47 of the Rules of Court59 is proper. Our rules explicitly provide that lack of jurisdiction is one of
the grounds in a petition for annulment of judgment.60 Lack of jurisdiction on the part of the trial court
in rendering the judgment or final order is either lack of jurisdiction over the subject matter or nature of
the action, or lack of jurisdiction over the person of the petitioner.61 In cases involving jurisdiction over
the subject matter, We have recognized denial of due process as a valid ground to file a petition for
annulment of judgment.62 Section 163 of Rule 47 of the Rules of Court provides that this remedy shall
be available where the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of the petitioner. Further, a petition for annulment of
judgment because of lack of jurisdiction over the person or subject matter may be proved at most by the
evidence on record but never by extraneous evidence.64 Had there been the proper service of
summons, Sarol would have had such remedies as, a motion for new trial, appeal, certiorari, petition for
relief from judgment, among others, to assail the Decision of the RTC of Dumaguete City, Branch 44. In
view of the failure to properly serve summons, Sarol could not have learned of the instant case and had
no other recourse but to file a petition under the extraordinary remedy of annulment of judgment
provided in Rule 47 of the Rules of Court.
WHEREFORE, the petition is GRANTED. The Resolution dated December 13, 2018 of the Court of
Appeals in CA-G.R. SP No. 12099 is REVERSED and SET ASIDE. The Decision dated December 13, 2017
and the Writ of Execution dated May 2, 2018 of the Regional Trial Court of Dumaguete City, Branch 44 in
Civil Case No. 2015-15007 are declared NULL and VOID.
SO ORDERED.