GLOBEMASTER TRAVELMART CORPORATION, PETITIONER, VS. HON. ANTONIO M. ROSALES, IN HIS OFFICIAL CAPACITY AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH 52, MANILA, AND MARA…

Globemaster Travelmart versus Rosales

The Case

This is a petition for certiorari brought by Globemaster Travelmart Corporation, the defendant below, against Judge Antonio M. Rosales of the Regional Trial Court of Manila, Branch 52, and Maranaw Hotels and Resort Corporation, the plaintiff below. Globemaster asks the Supreme Court to reverse the trial court's orders denying its motion to dismiss a complaint for a sum of money with damages. Globemaster argues that the court never acquired jurisdiction over it because summons was improperly served, and that the writ of preliminary attachment was void because it was enforced before summons was served. The case matters because it settles two practical rules every litigator must know: how summons is validly served on a domestic corporation, and when a writ of attachment may lawfully be implemented.

Procedural History

Maranaw Hotels and Resort Corporation filed a complaint for a sum of money with damages, together with an application for a writ of preliminary attachment, before the Regional Trial Court of Manila. The trial court initially denied the application for lack of an affidavit, but upon correction of the deficiency it ordered the attachment and the writ was issued. Globemaster then filed a motion to dismiss on the ground that the court had not acquired jurisdiction over it, claiming it was not validly served with summons. The trial court denied the motion, finding that summons was validly served by personal service on Globemaster's president and general manager, and that the contemporaneous service of summons and execution of the writ rendered the attachment valid. Globemaster moved for reconsideration, which was also denied. Globemaster then elevated the matter to the Supreme Court by petition for certiorari.

Facts

On November 24, 2003, Maranaw filed its complaint and applied for a writ of preliminary attachment against Globemaster. The trial court initially denied the application for lack of an affidavit, but after the deficiency was corrected it ordered the attachment on December 4, 2003, and the writ was forthwith issued commanding the branch sheriff to attach Globemaster's properties.

On January 12, 2004, Maranaw's counsel asked the sheriff not to serve the summons and writ until they could locate assets to be attached. The next day the lawyer informed her of a bank account and asked that a notice of garnishment be sent to the Philippine Savings Bank, Jaboneros Branch. On January 14, the sheriff served the notice on the bank, which then held the small amount deposited by Globemaster. On January 29, she submitted to the bank an Order of Delivery of Money to apply the amount to partial satisfaction of the writ.

On March 1, 2004, the sheriff served the summons and writ on Globemaster at its given address through its alleged Operations Manager, Cris Querubin, who refused to sign but verbally instructed a liaison officer to receive on his behalf. The sheriff then went to the bank and picked up the garnished amount of 38,567 pesos and 50 centavos in the form of a cashier's check, which she turned over to the Office of the Clerk of Court on March 8. The evidence showed that Cris Querubin was in fact Globemaster's president and general manager.

Issues

• Whether or not the trial court acquired jurisdiction over Globemaster through valid service of summons on its president and general manager.
• Whether or not the writ of preliminary attachment was validly implemented when the notice of garnishment was served and the deposit set aside before summons was served on Globemaster.

Applicable Provisions

Section 11 of Rule 14 of the Rules of Court, on service of summons upon a corporation, provides:

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

This is the governing framework because Globemaster is a private domestic corporation, and the persons named in this provision are those authorized to receive summons for it.

Section 5 of Rule 57 of the Rules of Court, on the implementation of a writ of attachment, provides:

A prior attachment is expressly allowed only when among a few other things not directly relevant to the case, summons cannot be served personally or by substituted service despite diligent efforts.

This provision confirms that a writ of attachment may not be enforced ahead of summons except in the narrow cases it allows, which do not include this case.

Ruling

On the first issue, the Court held that service of summons was valid. Both parties had argued on the wrong ground, focusing on the rules on personal and substituted service, when the applicable rule was Section 11 of Rule 14 on corporations. The Court noted that the summons was handed directly to Cris Querubin, the president and general manager, who is one of the officers expressly authorized to receive it. He cannot pretend ignorance of the process, nor escape responsibility by having his liaison officer acknowledge receipt. The Court added that service on subordinate employees who act on behalf of the responsible officers named in the rules is likewise sufficient, because the purpose of the rule is to ensure that summons reaches a representative so integrated with the corporation that he will know what to do with the legal papers served on him.

On the second issue, the Court held that the implementation of the writ of attachment was void. Under the simultaneity or contemporaneity rule, where the application for a writ of attachment is embodied in the complaint, the application must be served either simultaneously with service of summons or after jurisdiction over the defendant was acquired by such service. Levy on property pursuant to the writ may not be effected unless preceded or contemporaneously accompanied by service of summons. The Court stressed that the critical point is the implementation of the writ, and quoted the rule that:

Once the implementation commences, it is required that the court must have acquired jurisdiction over the defendant for without such jurisdiction, the court has no power and authority to act in any manner against the defendant.

The Court explained that the garnishment was already effected when the bank set aside the deposit, because by that time Globemaster could no longer make use of it. It was immaterial that the sheriff picked up the cashier's check on the same day that summons was served. The writ was therefore implemented before summons was served, and the implementation was void.

Doctrine

Service of summons on a domestic corporation is validly made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel, as provided in Section 11 of Rule 14. Service on a subordinate employee who acts on behalf of these responsible officers is also sufficient, because the purpose of the rule is to ensure that the summons reaches a representative so integrated with the corporation that he will know what to do with the legal papers. A president who personally receives the summons cannot escape responsibility by having a liaison officer acknowledge receipt.

A writ of attachment may not be implemented before the court acquires jurisdiction over the defendant. Where the application for attachment is embodied in the complaint, it must be served simultaneously with summons or after jurisdiction is acquired. The jurisdictional bar is peremptory: even if the defendant is later brought into the case, the subsequent service of summons cannot cure the fatal defect in the enforcement of the writ of attachment.

Disposition

The Supreme Court affirmed the orders denying the motion to dismiss, but declared invalid the service of the notice of garnishment made prior to the service of summons.

Remember This

The single line worth memorizing is that a writ of attachment implemented before summons is void, and later service of summons cannot cure the defect. Examiners like to use this case on the simultaneity rule in attachment and on valid service of summons upon corporations through authorized officers and their subordinate employees.