EDUVIGES BELTRAN ESPIRITU AND FLORINDA B. ESPIRITU, PETITIONERS, VS. THE COURT OF APPEALS, PEDRO DEL ROSARIO, RESPONDENTS.

Espiritu versus Court of Appeals

The Case

This is the case of Espiritu versus Court of Appeals, a petition for review decided by the Supreme Court in July 1974. Edoviges Beltran Espiritu and her daughter Florinda B. Espiritu, mother and daughter, were sued by Pedro del Rosario in an action to annul a contract of sale of certain lands. The sale had been made by the Espiritus in favor of a corporation called Golden Earth, Incorporated, which was never joined as a party in the lower courts. The case matters for two enduring lessons: the requirements of valid substituted service of summons, and the rule that an indispensable party must be joined, failing which all proceedings are ineffective.

Procedural History

Pedro del Rosario filed an action in the Court of First Instance of Rizal to annul the sale of lands between the Espiritus and Golden Earth, Incorporated. The trial court declared the petitioners in default and rendered judgment by default, declaring the impugned sale null and void. The Espiritus appealed to the Court of Appeals, which affirmed the trial court, holding that there was valid substituted service of summons upon the petitioners and that the sale was void. The petitioners then came to the Supreme Court by petition for review. Golden Earth, Incorporated attempted to intervene before the Supreme Court, but its motion for intervention was denied for being obviously filed out of time.

Facts

The petitioners, mother and daughter, sold certain lands to Golden Earth, Incorporated. Respondent Pedro del Rosario later brought an action to annul that contract of sale. Summons for both petitioners was served upon Florinda B. Espiritu, the daughter, at their house in Tenejeros, Malabon, Rizal. She paid no heed to the papers received from the Sheriff because she thought they were not important, since they seemed to refer to another case between her and her mother, on the one hand, and Del Rosario, on the other, which had already been settled with the approval of the Court.

Because of the failure to answer, the trial court declared the petitioners in default and rendered judgment by default, annulling the sale. The Court of Appeals affirmed, finding that there was valid substituted service and that no denial of due process occurred. The Supreme Court noted that Golden Earth, Incorporated, the vendee in the sale sought to be annulled, was never a party in the lower courts.

Issues

• Whether or not there was valid substituted service of summons upon the petitioners, such that the order declaring them in default did not violate due process.
• Whether or not the absence of Golden Earth, Incorporated, the vendee in the sale sought to be annulled, as an indispensable party, rendered the proceedings and the judgment ineffective.

Applicable Provisions

Section 8 of Rule 14 of the Rules of Court, on substituted service, provides:

If the defendant cannot be served promptly within a reasonable time by personal service, 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.

This provision governs whether the service on the daughter at the family residence bound both petitioners.

Section 7 of Rule 3 of the Rules of Court, on indispensable parties, provides:

Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.

This provision is decisive because the vendee, Golden Earth, Incorporated, was not joined, and its absence affected the validity of all proceedings.

Ruling

On the first issue, the Court held that there was valid substituted service. Service of summons for both petitioners, mother and daughter, was made upon Florinda B. Espiritu at their house in Tenejeros, Malabon, Rizal. There was reason to believe, absent any showing to the contrary, that she was a person of suitable age and discretion on the occasion the summons were served on her at their residence. Under these circumstances, it was baseless for the petitioners to pretend that there had been a denial of due process. The Court found no error in the appellate court's holding that there was valid substituted service under Section 8 of Rule 14.

On the second issue, the Court held that the absence of Golden Earth, Incorporated rendered all proceedings ineffective. What was decisive was that the Court of Appeals annulled, as did the trial court, a contract not between the plaintiff and the defendants before them, but between said defendants and a third person not a party to the action, Golden Earth, Incorporated, the vendee of the lands. The Court held that Golden Earth, Incorporated is an indispensable party and its absence renders ineffective all the proceedings subsequent to the filing of the complaint, including the judgment. What the trial court should have done upon perceiving that the vendee in the sale sought to be annulled was absent was to order that it be impleaded.

Doctrine

First, substituted service of summons is valid when copies are left at the defendant's dwelling house or residence with a person of suitable age and discretion then residing therein, and absent contrary proof, the person served is presumed to be of suitable age and discretion. Second, an indispensable party is one without whom no final determination can be had of an action, and the absence of such a party renders ineffective all proceedings subsequent to the filing of the complaint, including the judgment. The trial court, upon perceiving that an indispensable party is absent, should order that it be impleaded.

Disposition

The Supreme Court reversed the decision of the Court of Appeals and remanded the case to the trial court to have Golden Earth, Incorporated impleaded, to serve summons anew on the petitioners, and to try the case all over again, considering the questioned default order as of no effect, with costs against the private respondent.

Remember This

The single line worth memorizing is that the absence of an indispensable party renders ineffective all proceedings subsequent to the filing of the complaint, including the judgment. Examiners like to use this case on the consequences of failing to implead an indispensable party, and on the validity of substituted service upon a person of suitable age and discretion at the defendant's residence.