FILOIL MARKETING CORPORATION, PLAINTIFF-APPELLEE, VS. MARINE DEVELOPMENT CORPORATION OF THE PHILIPPINES, DEFENDANT-APPELLANT.

FilOil Marketing versus Marine Development Corporation of the Philippines

The Case

This is a civil action for a sum of money. FilOil Marketing Corporation, the plaintiff, sued Marine Development Corporation of the Philippines, the defendant, to collect an unpaid balance. The defendant refused to submit to the trial court, insisting that the court never acquired jurisdiction over its person because the summons was improperly served. The case matters because it fixes, in plain terms, who counts as an agent of a corporation for purposes of service of summons: a lawyer who has been appearing for the corporation in the very motions attacking the service is himself the corporation's agent, and service on him binds the corporation.

Procedural History

FilOil filed its complaint for a sum of money before Branch Twelve of the Court of First Instance of Manila. Summons and complaint were first served on a house helper of the corporation's general manager. The corporation made a special appearance and moved to dismiss on the ground of improper service. The trial court did not dismiss; it ordered that a new summons be issued in accordance with Section 13, Rule 14 of the Revised Rules of Court within fifteen days, failing which the case would be dismissed. A second service was attempted on a purchasing chief, which the corporation also challenged. After several motions and a compliance naming the corporation's officers and directors, the trial court ordered that summons be served through the corporation's lawyers, the Syquia law offices. An alias summons was then served on Attorney Paulino Al. Aquino, an assistant attorney in that office. The trial court thereafter declared the corporation in default, received the plaintiff's evidence ex parte before the branch clerk as commissioner, and rendered judgment against the corporation. The corporation appealed to the Supreme Court, and the only issue raised on appeal was whether the trial court acquired jurisdiction over its person.

Facts

FilOil brought suit to recover a balance it claimed was owing from Marine Development Corporation of the Philippines. The first attempt at service went to a house helper of the corporation's general manager, and the corporation promptly attacked it as improper. The trial court gave the plaintiff fifteen days to serve a new summons under the rule on service upon private domestic corporations, warning that the case would otherwise be dismissed.

A second attempt was made on a purchasing chief, whom the corporation showed by affidavit to be a minor employee. The corporation then filed a supplemental motion to dismiss, and the plaintiff moved to declare it in default. The trial court denied the default motion but left the supplemental motion unresolved. When the corporation filed a further motion to dismiss, the trial court directed its counsel to disclose the whereabouts of its officers so that proper service could be made. Counsel complied, giving the names and addresses of the officers and directors.

The trial court then ordered that summons be issued and served through the corporation's lawyers, the Syquia law offices. Pursuant to that order, an alias summons and copy of the complaint were served on Attorney Paulino Al. Aquino, an assistant attorney in that office, who had already appeared in court several times for the corporation in connection with its motions to dismiss. The trial court declared the corporation in default, received the plaintiff's evidence ex parte, and rendered judgment sentencing the corporation to pay the balance claimed, with interest at the stipulated rate of twelve percent per annum from the filing of the case, plus attorney's fees and costs.

Issues

• Whether or not the trial court acquired jurisdiction over the person of the defendant corporation when the summons and copy of the complaint were served on its retained counsel.
• Whether or not the trial court erred in declaring the corporation in default and rendering judgment against it instead of dismissing the case for lack of jurisdiction.

Applicable Provisions

Section 13, Rule 14 of the New Rules of Court provides:

Section 13. Service upon private domestic corporation or partnership. If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors.

This provision supplies the list of persons on whom summons may validly be served for a domestic corporation, and the whole case turns on whether the corporation's counsel falls within the word agent in that list.

Ruling

On the first issue, the Court held that there was valid service of summons. The corporation admitted that the summons and complaint were served on Attorney Aquino, an assistant attorney in the Syquia law offices, who had appeared in court three or four times for the corporation in connection with its motions to dismiss on the ground of improper service. Because he was acting for and in behalf of the corporation in those very motions, he was the corporation's agent, and service upon him was sufficient under the rule.

The Court relied on its earlier ruling in Republic versus Ker and Company, where counsel who had represented the corporation through the administrative and appellate stages of a tax case, and who had corresponded on its behalf after the complaint was filed, were held to be the taxpayer's agent when summons was served. The Court quoted that ruling with approval:

Perforce, they were the taxpayer's agent when summons was served. Under Section 13 of Rule 7, now Rule 14, aforequoted, service upon the agent of a corporation is sufficient.

On the second issue, the Court held that the trial court did not err in declaring the corporation in default and rendering judgment against it. Since jurisdiction over the person of the corporation had been validly acquired, there was no ground to set aside the judgment or to dismiss the case.

Doctrine

Service of summons upon a private domestic corporation may be made on its president, manager, secretary, cashier, agent, or any of its directors. The word agent is not confined to a corporate officer or a regular employee. A lawyer who has been appearing for the corporation in court, particularly in the very motions attacking the service of summons, acts for and in behalf of the corporation and is therefore its agent for purposes of service. Service on that lawyer confers jurisdiction over the corporation's person, and a default judgment thereafter entered is valid.

Disposition

The Supreme Court upheld the trial court's order declaring the corporation in default and denied the prayer to set aside the judgment, with costs against the defendant.

Remember This

The one line to memorize: a corporation's counsel who appears for it in court is its agent, and service of summons on him is service on the corporation. Examiners use this case to test the list of persons under Section 13, Rule 14 and the rule that jurisdiction over a corporation's person may be acquired through service on its agent.