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Chapter 1 1

#1 ERIBERTO P. ROSARIO and PAZ UNTALAN DE ROSARIO vs.

FILOMENO CARANGDANG, ET AL. Moreover, when the pleading is so fatally defective or that the
amendment would permit to radically alter the theory and the
FACTS: Herein plaintiffs-appellants Eriberto P. Rosario and Paz nature of the action, then the court may refuse the amendment of
Untalan de Rosario filed a complaint against herein defendants- the defective pleading and order the case's dismissal.
appellees Filomeno Carangdang et. al, as the latter filed an
opposition when they applied for a registration as owners of a parcel Furthermore, the lower court does not have jurisdiction over the
of land. case as it is one for forcible entry and detainer. Thus, as the lower
court has not jurisdiction, it neither has the power nor the
Moreover, defendants illegally entered into the premises and jurisdiction to act on the motion for the admission of the complaint.
continued to possess occupy the presmises.
Thus, the lower court did not err in refusing to admit plaintiffs'
Defendants moved for the complaint's dismissal as it is one of amended complaint.
forcible entry and detainer and the demand for damages does not
exceed P2,000. Thus, it is exclusively cognizable by the Justice of the The case might be different had the amendments been made before
Peace Court. an answer or a motion to dismiss had been filed, since the original
complaint was then amendable, and the amendment could
Furthermore, there is another pending land registration between the supersede the original pleading, as of right, without leave of court
same parties and for the same cause. being required, and without the Court taking cognizance at all of the
original complaint.
Lower court dismissed the complaint. Plaintiffs moved for
reconsideration of the dismissal and prayed for the amended In view of the foregoing, the orders appealed from are affirmed,
complaint's admission, wherein they make specific allegation for the without prejudice to appellants' filing another case for
first time that the defendants are claiming of the land in question in reivindicacion. Costs against appellants.
the two registration cases previously mentioned.
#2 BONIFACIO GOTICO vs. LEYTE CHINESE CHAMBER OF
However, defendants' position was sustained by the lower court. COMMERCE
Motion for reconsideration was filed but was denied.
FACTS: The controversy revolves around ownership of a portion of a
Hence, this appeal. 1,306sqm of land in Tacloban City. Disputed Portion is approximately
872 sqm.
ISSUES:
1. WON the lower court erred in dismissing the plaintiffs' Herein plaintiff-appellant Bonifacio Gotico filed an Ejectment case
complaints? against herein defendant-appellee, Leyte Chinese Chamber of
2.WON the lower court erred in denying their motion for Commerce as he alleged that the latter occupied the Disputed
reconsideration and refusing to admit their amended complaint? Portion which he owns and possess. Moreover, the defendant
utilized the said portion as private cemetery.
RULING:
Gotico demands a monthly rental of P500 computed from date of
1. NO, THE COURT HAS HELD THAT THE LOWER COURT DID NOT defendant's occupancy, and for the latter to vacate the Disputed
ERR IN DISMISSING THE PLAINTIFF'S COMPLAINTS. Portion ad to declare plaintiff-appellant as lawful and possessor.

While the plaintiffs claim that their action is for declaration o Leyte Chinese Chamber of Commerce prayed for the complaint's
ownership or quieting of title based on their prayer, it is clear that dismissal and declaration of Gotico's title as null and void on the
the action they filed is forcible entry. Moreover, the Court has held ground that it been in possession of the Disputed Portion with
that prayer is not a material part of the complaint. It is the approval of Bureau of Health and that Gotico obtained a title by
allegations of the complaint which determine which court should means of fraud.
jurisdiction be conferred to.
Moreover, prior to the institution of the Ejectment case, defendant-
Moreover, even if the plaintiffs ' claim of damages is P2,500, well- appellee has already filed a cancellation of Gotico's title before
settled is the rule that justice of the peace courts have exclusive Bureau of Lands.
jurisdiction over forcible entry and detainer cases, regardless of the
amount claimed therein as damages. Thus, the lower court did not Bureau of Land filed a civil case to cancel Gotico's title and reverse it
err in dismissing the plaintiffs' original complaints. to the Government.

2. NO. THE COURT HAS HELD THAT THE LOWER COURT DID NOT The two cases were jointly heard and a joint Pre-trial was held.
ERR IN DENYING THE PLAINTIFFS' MOTION FOR RECONSIDERATION
AND REFUSING TO ADMIT THEIR AMENDED COMPLAINT. Gotico then filed an "Omnibus Motion to Amend Complaint and
Recall or Correct some Pre-Trial Admissions" to amend the paragraph
While it is true that the under the liberal provisions of our Rules of 3 (Leyte has been occupying the land in 1928) and paragraph 4 of
Court, amendments to pleading are favored and liberally allowed in the Complaint and in the prayer.
the furtherance of justice, it is obvious that when it appears from the
very face of the complaint that the Court has no jurisdiction over the However, it was denied including the two motions for
subject-matter of the case, an amendment of the complaint cannot reconsideration.
be allowed so to confer jurisdiction upon the Court.
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Meanwhile, the Reversion case was decided in the Government's Information System at the former's offices. The hardware was
favor. Consequently, Gotico's title was cancelled as it was found that delivered and installed successfully.
plaintiff obtained it thru fraudulent means and collude with the Land
Investigator. However, their subsequent contract for the development of a data
processing software program or ISLA needed to computerize the
Leyte Chinese Chamber of Commerce filed a Motion for Summary ACCRALAW office was not implemented.
Judgment in the Reversion Case alleging that there is "no genuine
issue between the parties ... and the defendant is entitled as a ACCRALAW filed a complaint for a breach of contract with damages,
matter of law to the dismissal of the ... case." replevin and attachment against WANG LABORATORIES before RTC
Makati.
Summary judgment was rendered therein ordering reversion of Lot
4875 to the State. WANG LABORATORIES filed a Motion to Dismiss the complaint as
there was improper service of summons. Hence, the court was not
Subsequently, the Ejectment Case was dismissed as Gotico admitted able to acquire jurisdiction over the petitioner's person.
that the defendants has been occupying the land in question in
1928. Petitioner filed a Motion for Deposition by Oral Examination to
present testimonial evidence in support of its motion to dismiss.
The case was elevated before CA, which only affirmed trial court's
decision. RTC ordered the taking of the deposition by way of oral examination.

Hence, this appeal. ACCRALAW filed an Ex-Abundante Cautela Motion for leave to Effect
Extraterritorial Service of Summons on WANG LAB, which was
ISSUE: WON trial court erred in denying Gotico's Motion to Recall or granted by respondent Judge Mendoza.
Correct some pre-trial admissions?
On the other hand, WANG LAB'S motion to dismiss was denied as
RULING: No, the Court has held that the trial court did not err in petitioner voluntarily submitted itself to court's jurisdiction.
denying Gotico's Motion to correct some pre-trial admissions.
Hence, this petition for Certiorari, Prohibition and mandamus with
Pursuant to Sec. 4, Rule 20 of the Rules of Court, the Order entered Preliminary Injunction.
at the pre-trial controls the subsequent course of the action.
Furthermore, under Rule 129, section 2, it is necessary for a party ISSUE: WON respondent Court has acquired jurisdiction over the
who desires to be relieved of the effects of admissions in the person of the petitioner, a foreign corporation?
pleadings and any admissions made in the course of the trial to show
that the admission had been made through palpable mistake. In this RULING: Yes, respondent Court has acquired jurisdiction over the
case, that there was no such palpable mistake is shown by the fact person of the petitioner, a foreign corporation.
that the year "1928" was stated not only in paragraph 4 of the
Complaint, but repeated in the Prayer, and reiterated in the Pre-trial Section 14, Rule 7 of Rules of Court provides three (3) modes of
admissions. effecting service upon private foreign corporation:
1) by serving upon the agent designated in accordance with law to
Under the circumstances obtaining and in the face of the evidence, accept service of summons;
the rule on liberality of construction of the Rules cannot be 2) if there is no resident agent, by service on the government official
successfully invoked. To do so would be obstructive of the interests designated by law to that office; and
of substantial justice. 3) by serving on any officer or agent of said corporation within the
Philippines.
WHEREFORE, the judgment of the then Court of First Instance of
Leyte, Branch IV, is hereby affirmed Summons for WANG LAB was served on EXXBYTE's business address,
in toto. Costs against plaintiff-appellant. as the latter is petitioner's authorized and exclusive representative
and distributor in PH.
SO ORDERED.
Petitioner argues that extra-judicial summons or any kind thereof
cannot bind it as it is not doing business in PH nor is it licensed to do
#4 WANG LABORATORIES, INC. vs. MENDOZA so.
PONENTE: PARAS
G.R. No. 72147 However, there is no general as to what constitutes doing or
"engaging" or "trading" in business. It depends on the circumstances,
Petitioner WANG LABORATORIES, INC. is a US based corporation, facts and statute applicable.
engaged in the business of manufacturing and selling computers
worldwide. WANG LAB cannot argue that it is not doing business in PH. It has
installed 26 different products in several corporations in PH since
EXXBYTE TECHNOLOGIES CORPROATION is petitioner's exclusive 1976.
distributor in the Philippines.
Its trade name is registered with PH Patents Office.
Angara, Concepcion, Regala & Cruz Law Offices (ACCRALAW) is a
partnership which entered into a contract with EXXBYTE for Moreover, its controller in Asia, Mr. Yeoh, visited its distributor's
acquisition and installation of a Wang 2200 US Integrated office and conducted training programs in PH.
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EXXBYTE, as its distributor in PH, was allowed by Wang to use its They claim that 502 hectares of land which belong to the
registered logo and trademark. government have been occupied by them and their predecessors-in-
interest continuously, adversely, and exclusively for more than thirty
Thus, "where a single act or transaction of a foreign corporation is (30) years. Moreover, they filed application for land titling in their
not merely incidental or casual but is of such character as distinctly respective name with the appropriate govt agency.
to indicate a purpose to do other business in the State, such act
constitutes doing business within the meaning of statutes While petitioners claim that the land in dispute was part of the
prescribing the conditions under which a foreign corporation may be public domain, they named as respondents several persons and
served with summons." corporations who are titled owners of subdivided parcels of land
within the subject property, which includes Vil-Ma Maloles
Moreover, although a foreign corporation is not doing business in Subdivision (Vil-Ma).
PH, it is not exempted from being sued in PH courts as it may be
done so against persons in PH. The court granted petitioners' leave of court to serve summons by
publication since personal service of summons could not be effected
While WANG LAB objects to Court's jurisdiction over its person, the on Vil-Ma and some of the other named respondents.
pleadings they filed alleging non-jurisdictional grounds already
indicate that it has waived lack of jurisdiction of court. The summons was published in "Metropolitan Newsweek," a
periodical edited and published in the City of Caloocan and Malolos,
Notably, in its Motion to Dismiss, it sought affirmative reliefs Bulacan.
requiring exercising of jurisdiction:
- authority for authority to take testimony by way of deposition upon Some of the named respondents filed their respective responsive
oral examination; pleadings, while the others, including Vil-Ma, failed to answer, and
- for extension of time to file opposition to plaintiffs' motion to effect were thus declared in default.
Extraterritorial Service of Summons;
- to hold in abeyance any and all proceedings relative to plaintiffs' The court a quo found that the case involves three parcels of land
foregoing motion and containing 502 hectares more or less:
- to consider as a mere scrap of paper plaintiff's motion to strike out - Lot 1 and 2 at Old Balara, Diliman, QC and
Deposition - Lot 3 at Sitio Veterans, Barrio Payatas and Silangan, QC

Additionally, WANG LAB also prayed for: A Partial Decision was rendered in favor of petitioners as Lots 1 and 2
(1) authority to reset date of taking of deposition; are clearly null and void as they do not have technical descriptions
(2) admission of the formal stenographic notes and appearing on their respective face. Without any technical
(3) suspension of time to file responsive pleadings, description, a title is fictitious and the mere issuance thereof is
fraudulent. As such, none of the title holder of void titles is an
It also participated in court proceedings other than objecting to lack innocent purchaser since no rights could be transferred to them
of jurisdiction. since the titles are fictitious.

Well settled is the rule that "A voluntary appearance is a waiver of And despite Bureau of Forest Development's contention that the lots
the necessity of formal notice." are part of the unclassified public land of gov, the fact that
petitioners have acquired legally a title over Lots 1, 2 & 3 of this case
Thus, when one objects to court's jurisdiction, person must only do through extra-ordinary prescription of thirty (30) years of
so for that sole and separate purpose. continuous, public, open and uninterrupted possession, the lands
being agricultural are susceptible of private ownership by
If the appearance is for any other purpose, the defendant is deemed petitioners.
to have submitted himself to the jurisdiction of the court. Such an
appearance gives the court jurisdiction over the person. On May 17, 1989, exactly one (1) year and fifty-seven (57) days after
the above-quoted judgment by default was rendered, a Petition for
Furthermore, if he alleges any non-jurisdictional ground for Annulment of Judgment with Certiorari, Prohibition and Mandamus
dismissing the action, the Court acquires jurisdiction over him. was brought before CA by the titled owners of the subdivided lots
within Vil-Ma as the court a quo had no jurisdiction over them and
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit, their respective titled properties.
with costs against the petitioner. The temporary restraining order is
hereby lifted immediately. They only came to know of the adverse judgment when petitioners
sought the execution of the judgment by attempting to demand the
SO ORDERED. titled owners of the lots to vacate their respective properties.

#5 PINLAC vs. CA The Partial Decision was null and void on the grounds of lack of
G.R. No. 91486 jurisdiction and extrinsic fraud as:
Ponent: Ynares-Santiago - petition to quiet title is a collateral proceeding which can only be
filed by the registered owner or person having an interest in
FACTS: Herein petitioners are World War II veterans, their registered property
dependents and successors-in-interest. - they were never made parties to nor were their lots described in
the complaint, published summons, and Partial Decision. VIL-MA
Petitioners filed a class suit for Quieting of Title before RTC QC. already ceased to exist in 1976.
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Moreover, the summons, as well as the Partial Decision was not

published in a newspaper or periodical of general circulation. Thus, All lots in the subdivision had been disposed of to private individuals,
the defective service of summons to said defendant did not place the herein private respondents. As such, they should have been
individual lot owners under the trial court’s jurisdiction, nor are they impleaded as party-respondents before the court a quo.
bound by the adverse judgment.
- respondents were denied due process of law But they were not made respondents, neither were they informed of
- their titles cannot be defeated by alleged adverse, continuous and the adverse proceedings that would result in the nullification of their
notorious possession of petitioners duly registered titles. This constitutes a clear blatant disregard of
- if subject property is unclassified forest lands, it is not capable of respondents' rights as registered owner.
private appropriation. Court a quo lacks authority to declare subject
property to be reclassified as agricultural land Thus, it was correct of CA to annul and set aside court a quo's Partial
- trial court violated Section 3(c), Rule 10 of the Rules of Court which Decision as the latter lacked jurisdiction and denied the respondents
provides that when some of several respondents fail to answer, "the due process of law.
court shall try the case against all upon the answers thus filed and
render judgment upon the evidence thus presented," whenever a It is elementary that before a person can be deprived of his right or
complaint states a common cause of action against several property he should first be informed of the claim against him and the
respondents theory on which such claim is premised.

CA granted respondents' application for writ of preliminary The court a quo should give all the necessary parties every chance to
injunction as the latter were not individually served with summons. fight their case fairly and in the open, without resort to
technicalities.
Moreover, respondents' petition was granted and annulled RTC's
Partial Decision as trial court lacked jurisdiction over the persons of "(c) Effect of partial default. — When a pleading asserting a claim
respondents as the said decision cannot bind Vil-Ma since the states a common cause of action against several defending parties,
partnership was dissolved on 1976 and can no longer be sued as it some of whom answer and the others fail to do so, the court shall try
has no more juridical personality. the case against all upon the answers thus filed and render judgment
upon the evidence presented."
Petitioners' motion for reconsideration was denied.
However, the trial court, unmindful of the above-quoted rule,
Hence, the instant petition for certiorari. proceeded to receive evidence ex parte only against the defaulted
respondents. The trial court’s disposition is not only violative of the
ISSUE: WON court a quo acquired jurisdiction over private rules but also a clear negation of the defaulted respondents’ limited
respondents by the publication of summons and petition as rights.
ordered?
WHEREFORE, in view of all the foregoing, the decision of the Court of
RULING: NO, the court a quo did not acquire jurisdiction over Appeals in CA-G.R. SP No. 17596 is AFFIRMED and the instant
private respondents by publication of summons and petition. petition is DENIED for lack of merit.

Court agrees with CA that Partial Decision is null and void as private SO ORDERED.
respondents were not duly served summons or notified of the
proceedings against them. #6 OAMINAL vs. CASTILLO

The publication i "Metropolitan Newsweek" is invalid as it is not a FACTS: Petitioner Henry Oaminal filed a complaint for collection
newspaper of general circulation in QC where the property is against respondents Pablito and Guia Castillo before RTC Ozamis City
located, as required by PD No. 1079, Section 1. and prayed for respondents to pay him P1.5M as liquidated damages
and P150K as attorney's fees.
While the service of summons by publication may have been done
with the approval of the trial court, it does not cure the fatal defect On May 30, 2000, summons together with the complaint was served
that the "Metropolitan Newsweek" is not a newspaper of general upon Ester Fraginal, Mrs. Castillo's secretary.
circulation in Quezon City. The Rules strictly require that publication
must be "in a newspaper of general circulation and in such places On June 6, 2000, respondents filed their "Urgent Motion to Declare
and for such time as the court may order." Service of Summons Improper and Legally Defective" as Sheriff's
Return failed to comply with Section (1), Rule 14 of the Rules of
The modes of service of summons should be strictly followed in Court or substituted service of summons.
order that the court may acquire jurisdiction over the respondents,
19 and failure to strictly comply with the requirements of the rules The schedule hearing of the Motion on July 14, 2000 did not take
regarding the order of its publication is a fatal defect in the service of place and was rescheduled to August 16, 2000.
summons.
Oaminal filed an Ombibus Motion to Declare respondents in Default
Granting that the publication strictly complied with the rules, the and to Render Judgment because no answer was filed by the latter.
service of summons would still be ineffective insofar as private
respondents are concerned when the Quieting of Title was filed on Respondents filed the ff:
Nov. 2, 1983, Vil-Ma no longer existed as juridical entity, as it was - Omnibus Motion Ad Cautelam to Admit Motion to Dismiss and
dissolved on January 26, 1976 and can no longer be sued having lost Answer with Compulsory Counter-claim dated Nov. 9, 2000 (hearing
its juridical personality. Nov. 27, 2000, 8:30pm)
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- Urgent Motion to Dismiss also dated Nov. 9, 2000 (hearing Nov. 27, "Section 6. Service in person on defendant. - Whenever practicable,
2000, 8:30am) (complaint is barred by improper venue and litis the summons shall be served by handing a copy thereof to the
pendentia) defendant in person, or, if he refuses to receive and sign for it, by
- Answer with Compulsory Counter-Claim dated Nov. 9, 2000 tendering it to him.

Judge denied respondents' Motion to Dismiss and admitted their "Section 7. Substituted service. - If, for justifiable causes, the
answer and set the pre-trial on January 17, 2001. defendant cannot be served within a reasonable time as provided in
the preceding section, service may be effected (a) by leaving copies
An 'Urgent Motion to Inhibit Ad Cautelam' against Judge[Zapatos] of the summons at the defendant's residence with some person of
was filed by respondents however this was denied as it was filed suitable age and discretion then residing therein, or (b) by leaving
beyond the reglementary period. the copies at defendant's office or regular place of business with
some competent person in charge thereof."
Hence, he (1) denied the Motion to Admit Motion to Dismiss and Personal service of summons is preferred over substituted service.
Answer; (2) declared [respondents] in default; and (3) Resort to the latter is permitted when the summons cannot be
ordered[petitioner] to present evidence ex-parte within ten days promptly served on the defendant in person and after stringent
from receipt of [the] order, [failing] which, the case will be dismissed. formal and substantive requirements have been complied with.

Judge Zapatos rendered a decision in favor of petitioner and ordered Personal service of summons is preferred over substituted service.
respondents to pay P1.5M as liquidated damages and P20K as
attorney's fees and litigation expenses. For substituted service of summons to be valid, it is necessary to
establish the ff circumstances:
Respondents filed with the CA a Petition for certiorari, prohibition (a) personal service of summons within a reasonable time was
and injunction, with a prayer for a writ of preliminary injunction or impossible;
temporary restraining order (TRO), which was granted. (b) efforts were exerted to locate the party; and
(c)the summons was served upon a person of sufficient age and
CA ruled that trial court did not validly acquire jurisdiction over discretion residing at the party's residence or upon a competent
respondents as the summons had been improperly served on them person in charge of the party's office or regular place of business.
based on the Sheriff's Return, which did not contain any averment
that effort had been exerted to personally serve the summons on While the Sheriff's Return did not state efforts for personal service, a
them before substituted service was resorted to. Thus, the appellate requirement for substituted service, the respondents did not deny
court set aside the trial court's Decision and dismissed, without actual receipt of the summons through their secretary and only
prejudice. questioned the manner of service.

Hence, this Petition for Review. Moreover, they did not raise in their Motion to Dismiss the issue of
jurisdiction, they only raised improper venue and litis pendentia.
ISSUE: WON the trial court acquired jurisdiction over respondents? Thus, whatever defect there was in the manner of service should be
deemed waived.
RULING: Yes, the trial court acquired jurisdiction over respondents
as they submitted themselves to its jurisdiction when they filed WHEREFORE, the Petition is hereby GRANTED IN PART, and the
Omnibus Motion to Admit the Motion to Dismiss and Answer with Decision of the Court of Appeals MODIFIED. The trial court's Order of
Counterclaim, an Answer with Counterclaim, a Motion to Inhibit, Default dated May 22, 2001 and Judgment of Default dated August
and a Motion for Reconsideration and Plea to Reset Pre-trial. 23, 2001 are ANNULLED, and the case remanded to the trial court for
further proceedings on the merits. No costs.
In civil cases, trial court acquires jurisdiction over the person of the
defendant either by the service of summons or by the latter's SO ORDERED.
voluntary appearance and submission to the authority of the former.
#7 HSBC vs. CATALAN
As respondents invoked the trial court's jurisdiction to secure
affirmative reliefs such as to admit answer, additional time to file FACTS: Cecilia Diez Catalan filed a complaint for a sum of money with
answer, reconsideration of default judgment, these acts constitute damages against petitioner HSBANK before RTC Bacolod City as the
voluntary submission to court's jurisdiction. Thus, they may not latter allegedly refused to pay her the value of five (5) HSBACNK
repudiate the very same authority they have invoked after failing to checks issued by Thomson worth HK$3,200,000.00.
obtain the relief they prayed for.
Feb 1, 2001 - Summons was served on HSBACK at their office in
Moreover, while there are infirmities on the manner of service, such Makati City.
defect has been cured as clearly respondents themselves submitted
to trial court's jurisdiction when they sought these affirmative reliefs Feb 21, 2001 - A Motion for Extension of Time to File Answer or
to the court. Motion to Dismiss was filed by HSBANK

Where the action is in personam and the defendant is in the March 8, 2001 - A Motion to Dismiss was filed by HSBANK on the ff
Philippines, the service of summons may be made through personal grounds:
or substituted service in the manner provided for by Sections 6 and 7 - RTC has no jurisdiction over complaint's subject matter
of Rule 14 of the Revised Rules of Court, which read: - plaintiff did not pay the correct filing or docket fees
- RTC has no jurisdiction over the person of HSBANK
- complaint does not state a cause of action against HSBANK
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- plaintiff engages in forum-shopping answers before the RTC rendered moot and academic the issue of
the RTC’s lack of jurisdiction over the person of the petitioners; that
September 10, 2001 - Catalan filed Amended Complaint impleading the RTC has jurisdiction over the subject matter since it is one for
petitioner HSBC TRUSTEE as co-defendant and invoking Article 19 of damages under Article 19 of the Civil Code for the alleged unjust acts
the Civil Code as basis for her cause of action of petitioners and not a money claim against the estate of Thomson;
and, that the amended complaint states a cause of action under
Catalan gave the 5 original checks issued to her by Thomson to HSBC Article 19 of the Civil Code which could merit a favorable judgment if
trustee as HSBANK failed to clear all checks issued by Thomson/ found to be true. The CA noted that Catalan may have prayed for
payment of the value of the checks but ratiocinated that she merely
Despite her demands to clear the checks and payment be made to used the value as basis for the computation of the damages.
her, HSBACNK and HSBC TRUSTEE refused to do so without valid any
valid reason. Hence, these two petitions for review on certiorari.

Catalan prays that HSBANK and HSBC TRUSTEE be ordered to pay ISSUES:
₱20,864,000.00 representing the value of the five checks at the rate - WON the complaint state a cause of action?
of ₱6.52 per HK$1 as of January 29, 2001 for the acts of HSBANK and - WON RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE?
HSBC TRUSTEE in refusing to pay the amount justly due her, in
addition to moral and exemplary damages, attorney’s fees and RULING:
litigation expenses. 1. YES THE COURT HELD THE COMPLAINT STATE A CAUSE OF
ACTION.
October 2, 2001 - HSBANK filed a Motion to Dismiss Amended 2. YES, THE COURT RULED THAT THE RTC ACQUIRED
Complaint JURISDICTION OVER HSBAN BUT NOT ON HSBC TRUSTEE.

October 17, 2001 - summons for HSBC TRUSTEE was tendered to the ## Court’s Decision:
In House Counsel of HSBANK (Makati Branch) at the Enterprise 1. **Issue of Cause of Action**:
Center, Tower 1, Ayala Avenue corner Paseo de Roxas, Makati. – The Court examined the complaint and found it based on the tort
principle of abuse of rights under Article 19 of the Civil Code.
October 29, 2001 - HSBC TRUSTEE filed a Special Appearance for – HSBANK: The refusal to honor the checks despite Thomson’s
Motion to Dismiss Amended Complaint questioning the jurisdiction instructions shows potential bad faith, forming a basis for Catalan’s
of the RTC over it. claim of damages.
– HSBC TRUSTEE: The disapproval of Catalan’s claim without an
November 15, 2001 - HSBC TRUSTEE filed a Submission attaching the explanation after receiving the original checks could also be seen as
Affidavit executed in Hongkong by Phoenix Lam, Senior Vice- bad faith.
President of HSBC TRUSTEE, attesting to the fact that:
1) HSBCTRUSTEE has not done nor is it doing business in the 3. **Jurisdiction Over HSBANK and HSBC TRUSTEE**:
Philippines;
2) it does not maintain any office in Makati or anywhere in the The Rules of Court provides that a court generally acquires
Philippines; jurisdiction over a person through either a valid service of summons
3) it has not appointed any agent in Philippines; and in the manner required by law or the person’s voluntary appearance
4) HSBANK Makati has no authority to receive any summons or court in court.
processes for HSBC TRUSTEE
We find that both lower courts overlooked Section 20 of Rule 14 of
RTC denied the two (2) motions to dismiss as it has jurisdiction over the 1997 Rules of Civil Procedure which provides that "the inclusion
the subject matter of the action because it is an action for damages in a motion to dismiss of other grounds aside from lack of
under Article 19 of the Civil Code for the acts of unjustly refusing to jurisdiction over the person of the defendant shall not be deemed a
honor the checks issued by Thomson and not a money claim against voluntary appearance." Nonetheless, such omission does not aid
the estate of Thomson. HSBANK’s case.

HSBANK and HSBC TRUSTEE filed separate motions for Having earlier invoked the jurisdiction of the RTC to secure
reconsideration but were both denied. affirmative relief in its motion for additional time to file answer or
motion to dismiss, HSBANK, effectively submitted voluntarily to the
February 21, 2003 - Catalan moved to declare HSBANK and HSBC jurisdiction of the RTC and is thereby estopped from asserting
TRUSTEE in default for failure to file their answer to the amended otherwise, even before this Court.
complaint.
– HSBANK: Filing the motion for extension constituted voluntary
March 5, 2003 - HSBANK and HSBC TRUSTEE filed separate petitions appearance, thereby submitting to the court’s jurisdiction.
for certiorari and/or prohibition with the CA. – HSBC TRUSTEE: No voluntary submission to jurisdiction observed;
the service of summons was improper as there was no sufficient
March 18, 2003 - HSBANK and HSBC TRUSTEE filed before the RTC allegation or proof that HSBC TRUSTEE was doing business in the
separate Answers ad cautelam as "precaution against being declared Philippines through HSBANK.
in default and without prejudice to the separate petitions for
certiorari and/or prohibition then pending with the CA." HSBC TRUSTEE has been consistent in all its pleadings in assailing the
service of summons and the jurisdiction of the RTC over it. Thus,
The two petitions for certiorari before the CA were consolidated. CA HSBC TRUSTEE cannot be declared in estoppel when it filed an
dismissed the two petitions for certiorari as filing of petitioners’ Answer ad cautelam before the RTC while its petition for certiorari
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was pending before the CA. Such answer did not render the petition
for certiorari before the CA moot and academic. The Answer of HSBC
TRUSTEE was only filed to prevent any declaration that it had by its
inaction waived the right to file responsive pleadings.