FAR CORPORATION AND ROSA O. DE CARAM, PETITIONERS, VS. HON. RICARDO J. FRANCISCO PRESIDING JUDGE OF BRANCH VI, CFI OF RIZAL AT PASIG, METRO MANILA, AND ELIZABETH P. NICOLAS, RES…

Far Corporation versus Francisco

The Case

This is a petition for certiorari brought by Far Corporation and its manager and owner, Rosa O. de Caram, against Judge Ricardo J. Francisco of the Court of First Instance of Rizal, Branch VI, sitting at Pasig, and against Elizabeth P. Nicolas, the lessee of the corporation's apartment unit. The petitioners ask the Supreme Court to annul two orders of the trial judge refusing to dismiss the complaint for damages and injunction that Nicolas had filed against them. The petitioners' sole ground is that the trial court never acquired jurisdiction over their persons because the summonses were not validly served. The case matters because it fixes, in concrete terms, who may receive summons for a corporation and for an individual under the old rules of procedure, and because it teaches that service of summons is a tool of notice, not a trap for technicalities.

Procedural History

Elizabeth P. Nicolas filed a complaint for damages with a prayer for preliminary injunction against Far Corporation and Rosa O. de Caram in the Court of First Instance of Rizal at Pasig. The deputy sheriff of Rizal attempted service of the summonses and copies of the complaint at the corporation's office at Pasong Tamo, Makati. Both petitioners moved to dismiss on the ground that the lower court had not acquired jurisdiction over their persons. The trial judge, Judge Francisco, denied both motions to dismiss in an order dated March 18, 1981, and later denied the petitioners' motion for reconsideration. The petitioners then came to the Supreme Court on a petition for certiorari. The Second Division of the Court required the private respondent to comment and issued a restraining order enjoining further proceedings below. After the private respondent failed at first to comment, the Court required an explanation and the comment, which were filed. The Court then gave due course to the petition, required memoranda from both sides, and considered the case submitted for deliberation. The case was decided in December 1986.

Facts

Far Corporation owned a residential apartment at Amapola Street, Palm Village, Makati, Metro Manila, and Rosa O. de Caram was the manager and owner of the corporation. Elizabeth P. Nicolas was the lessee of that apartment. She allegedly received a notice from the corporation, signed by Caram, terminating the lease as of February 15, 1981. She allegedly asked that the lease instead be terminated on March 15, 1981, so that she could look for another place. The petitioners allegedly refused her tender of payment of rental for the period from January 16 to February 15, 1981, and padlocked the apartment unit she occupied. On February 19, 1981, Nicolas filed her complaint for damages with a prayer for preliminary injunction.

On February 27, 1981, the deputy sheriff of Rizal served the summonses and copies of the complaint for both petitioners at the corporation's address at Pasong Tamo, Makati. He first served them on Attorney Melquiades Paredes, the corporation's retained counsel, who held office at the same address. Paredes declined to accept the process, claiming that he was neither an agent nor an officer of the corporation, and suggested that the sheriff find out whether Mr. Enrique Dizon was the cashier of the corporation and, if so, serve the summons on him for the corporation. The summonses were finally served on Mr. Enrique Dizon, who turned out to be not the cashier but the Finance and Administrative Manager of the corporation.

Both petitioners moved to dismiss, arguing that the lower court had not acquired jurisdiction over their persons. For the corporation, they argued that Dizon was not among the officers authorized to receive summons. For Caram, they argued that she could not be served personally because she was absent from the office, and that the substituted service on Dizon was likewise invalid.

Issues

• Whether or not there was valid service of summons on the corporation, Far Corporation, through Mr. Enrique Dizon, its Finance and Administrative Manager, such that the trial court acquired jurisdiction over its person.
• Whether or not there was valid substituted service of summons on Rosa O. de Caram, the owner and manager of the corporation, through Mr. Enrique Dizon as the competent person in charge of her office.

Applicable Provisions

Section 13, Rule 14 of the Rules of Court, on service of summons upon a corporation, provides:

Service upon a corporation may be made by serving the summons upon the president, manager, secretary, cashier, agent, or any of its directors.

This is the provision around which the first issue turns, because the petitioners insist that Dizon falls under none of the listed officers.

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

If the defendant cannot be served personally within a reasonable time, service may be made by leaving a copy of the summons at his dwelling house or place of business with some person of suitable age and discretion residing therein or in charge of the office or place of business.

This is the provision on which the validity of the substituted service on Caram depends, because Dizon was the person in charge of the office when she was absent.

Ruling

On the first issue, the Court held that there was valid service on the corporation. The Court first noted that the processes were initially served on Attorney Paredes, the corporation's internal counsel, who was in charge of legal matters affecting the corporation, including cases filed for or against it, and who was in fact the petitioners' counsel both below and in the Supreme Court. Citing its earlier ruling in Filoil Marketing Corporation versus Marine Development Corporation of the Philippines, the Court considered counsel for a defendant corporation as perforce the defendant's agent, so that service upon him is sufficient. The Court found it inconceivable that Paredes did not know who the cashier of the corporation was, or any other officer authorized to receive summons. At the very least, he had constructive notice that a case had been filed against the corporation and that its appearance was being ordered, and in good faith he could have verified the processes instead of resorting to technicalities in an apparent attempt to frustrate the ends of justice.

Turning to the service on Dizon, the Court adopted the rationale of Villa Rey Transit versus Far East Motor Corporation, quoting it:

According to jurisprudence, the rationale of all rules for service of process on corporation is that service must be made on a representative so integrated with the corporation sued as to make it a priori supposable that he will realize his responsibilities and know what he should do with any legal papers served on him.

Applying that standard, the Court held that Dizon, as Administrative Chief, was responsible for the management of the corporation, which placed him on the level of a manager contemplated by the Rules. As Chief of Finance, he was conferred with vital and sensitive functions and responsibilities, and under corporate and management organizational structure a finance officer even holds a higher position than a cashier. He was therefore not one of the lesser officers who could not appreciate the importance of the papers delivered to him. On the contrary, he fell squarely under the term agent authorized by law to receive the processes of the Court for the corporation.

On the second issue, the Court held that the substituted service on Caram was likewise valid. For the same reasons, Dizon could be considered a competent person in charge of the office of the defendant owner and manager of the corporation, as provided in Section 8, Rule 14 of the Rules of Court, to validly receive the summons for her when she could not receive it personally because she was absent from the office at the time of service. The sheriff could not be faulted for resorting to substituted service where prompt personal service was not possible. Quoting Ablaza versus the Commissioner of Internal Revenue, the Court reminded that the purpose of summons is to give notice to the defendant that an action has been commenced against him, so that he is put on guard as to the demands of the plaintiff. Here, no less than the petitioners' counsel himself was aware of the processes being served on his clients, so that the element of surprise was the least that could be invoked, and the reasons advanced against the validity of the service on Caram bordered on mere technicality.

Finally, the Court ruled that a case should not be dismissed simply because an original summons was wrongfully served, since it is difficult to conceive that where a defendant appears before the court complaining that he had not been validly summoned, the case against him would be dismissed. An alias summons can be actually served on such defendant.

Doctrine

Service of summons on a corporation must be made on a representative so integrated with the corporation that it is supposable, at first blush, that he will realize his responsibilities and know what to do with the legal papers served on him. Under Section 13, Rule 14, the term agent is not limited to the officers named in the rule; a finance and administrative manager, and even internal counsel, may qualify as such an agent. For substituted service under Section 8, Rule 14, a person in charge of the office who holds managerial rank is a competent person to receive summons for an absent defendant. And the purpose of summons being notice, a defendant who in fact learns of the action cannot defeat jurisdiction by insisting on technical defects in service; the remedy is an alias summons, not dismissal.

Disposition

The petition was dismissed, the restraining order previously issued was lifted, and the case was remanded to the lower court for further proceedings, so that the private respondent, Elizabeth P. Nicolas, prevailed on the jurisdictional question.

Remember This

The one line to memorize is that service of summons must be made on a representative so integrated with the corporation as to make it supposable that he will realize his responsibilities and know what to do with the papers served on him. Examiners use this case to test the meaning of agent under Section 13, Rule 14, the validity of substituted service on a person in charge of the office, and the rule that a wrongfully served summons calls for an alias summons rather than dismissal.