UCPB loses P1-B collection suit

Published May 20, 2019, 7:52 PM

by Ellalyn De Vera & Richa Noriega

By Rey Panaligan

The Supreme Court (SC) has affirmed a Court of Appeals (CA) decision that reversed a trial court ruling in favor of the United Coconut Planters Bank (UCPB) involving about P1-billion collection suit against two firms and their owners for loans obtained in 2005.

In a decision written by Associate Justice Alfredo Benjamin S. Caguioa, the SC ruled that the CA was correct in ruling that the owners of the two firms were not served the summons on the collection suit and, thus, the trial court did not acquire jurisdiction over the case.

“In the absence of a summons or when the service of summons upon the person of the defendant is defective, the court acquires no jurisdiction over his person and the proceedings and any judgment rendered are null and void,” the SC said.

Case records showed that in 2006, UCPB filed with the Makati City regional trial court (RTC) a case for sum of money and damages against Nation Granary, Inc. (NGI), spouses Alison Ang-Sy and Guillermo Sy, Renato Ang, Nena Ang, Ricky Ang, Derick Chester A. Sy, and Nation Petroleum Gas, Inc. (NPGI).

UCPB asked the trial court to order those charged to pay more than P824 million, excluding interest, penalty and other charges; P 1 million in attorney’s fees and litigation expenses, and the cost of suit.

On Nov. 30, 2006, the trial court granted UCPB’s plea for a writ of preliminary attachment.

NGI and NPGI sought the dismissal of the case in a pleading filed Dec. 18, 2006.

The firms’ owners said they did not receive a summons and thus, the trial court did not acquire jurisdiction over them.

The firms said that if a defendant is a corporation, service of summons may be made on the president, managing partner, general manager, corporate secretary or in-house counsel.

They also said that the personal service of a summons should be first resorted to in the case of the individuals named in the complaint before substituted service should be affected.

UCPB opposed the motion to dismiss.

When the trial court denied the motion to dismiss and the subsequent motion for reconsideration, those named in the complaint elevated the issue before the CA.

On Feb. 10, 2012, the CA granted NGI and NPGI’s petition and reversed the June 8, 2007 ruling of the trial court.

The CA ruled that the trial court failed to acquire jurisdiction over the persons named in the UCPB complaint due to improper service of summons.

UCPB elevated the case to the SC and sought the reversal of the CA decision. Its petition was denied by the SC.

The SC ruled:

“It is crystal clear that there were no several attempts made to effect personal service in the instant case; as correctly found by the court a  quo (CA), there was only a single day’s effort to personally serve summons upon the therein defendants.

“Further, as also correctly found by the CA, the Sheriff’s Report miserably failed to indicate that the person who received the summons was a person of suitable age and discretion residing in the residence of the therein defendants.

“Nor is there a statement that validates that such person understood the significance of the receipt of the summons and the correlative duty to immediately deliver the same to the therein defendants or, at the very least, to notify the said persons immediately.

“Jurisprudence is clear and unequivocal in making it an ironclad rule that such matters ‘must be clearly and specifically described in the Return of Summons.

“As regards the service of summons undertaken with respect to the therein defendant corporations, i.e., NGI and NPGI, the CA was also not mistaken in holding that since the summons was served on a mere OIC property supply custodian, the services of summons undertaken were defective.

“Service of summons to someone other than the corporation president, managing partner, general manager, corporate secretary, treasurer, and in-house counsel is not valid.”

At the same time, the SC said that the filing of a motion to dismiss the complaint and suspend proceedings filed by those named in the trial court case cannot be construed as a voluntary submission on their part to the trial court’s jurisdiction.

Citing a previous ruling, the SC said that “… a party who makes a special appearance to challenge, among others, the court’s jurisdiction over his person cannot be considered to have submitted to its authority.”

“Wherefore, the appeal (by the UCPB) is hereby denied. The Decision dated February 10, 2012, and Resolution dated December 7, 2012, issued by the Court of Appeals Special Twelfth Division, and Former Special Twelfth Division, respectively, in CA-G.R. SP No. 102725 are affirmed,” the SC ruled.