THIRD DIVISION

[G.R. No. 184333. April 1, 2013.]

SIXTO N. CHU , petitioner, vs . MACH ASIA TRADING CORPORATION ,

respondent.

DECISION

PERALTA , J : p

This is a petition for review on certiorari assailing the Decision 1 dated July 25, 2007 of the
Court of Appeals (CA) in CA-G.R. CV No. 70666, and the Resolution 2 dated August 28,
2008 denying petitioner's Motion for Reconsideration.
The factual and procedural antecedents are as follows:
Respondent Mach Asia Trading Corporation is a corporation engaged in importing dump
trucks and heavy equipments. On December 8, 1998, petitioner Sixto N. Chu purchased on
installment one (1) Hitachi Excavator worth P900,000.00 from the respondent. Petitioner
initially paid P180,000.00 with the balance of P720,000.00 to be paid in 12 monthly
installments through Prime Bank postdated checks. On March 29, 1999, petitioner again
purchased two (2) heavy equipments from the respondent on installment basis in the sum
of P1,000,000.00, namely: one (1) motorgrader and one (1) payloader. Petitioner made a
down payment of P200,000.00 with the balance of P800,000.00 payable in 12 monthly
installments through Land Bank postdated checks. 3
However, upon presentment of the checks for encashment, they were dishonored by the
bank either by reason of "closed account," "drawn against insuf cient funds," or "payment
stopped." Respondent informed petitioner that the checks were dishonored and invited
him to its of ce to replace the checks. On September 16, 1999, respondent sent petitioner
a formal demand letter urging the latter to settle his accounts within ve days from receipt
of the letter. In response, petitioner sent respondent a letter explaining that his business
was badly hit by the Asian economic crisis and that he shall endeavor to pay his obligation
by giving partial payments. He said that he shall also voluntarily surrender the subject units
should he fail to do so. 4
On November 11, 1999, respondent led a complaint before the Regional Trial Court (RTC)
of Cebu City for sum of money, replevin, attorney's fees and damages against the
petitioner. Respondent prayed for the payment of the unpaid balance of P1,661,947.27 at
21% per annum until full payment, 25% of the total amount to be recovered as attorney's
fees, litigation expenses and costs. 5
On November 29, 1999, the RTC issued an Order 6 allowing the issuance of a writ of
replevin on the subject heavy equipments.
On December 9, 1999, Sheriff Doroteo P. Cortes proceeded at petitioner's given address
for the purpose of serving the summons, together with the complaint, writ of replevin and
bond. However, the Sheriff failed to serve the summons personally upon the petitioner,
since the latter was not there. The Sheriff then resorted to substituted service by having
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 the summons and the complaint received by a certain Rolando Bonayon, a security guard
of the petitioner. 7
Petitioner failed to le any responsive pleading, which prompted respondent to move for
the declaration of defendant in default. On January 12, 2000, the RTC issued an Order
declaring defendant in default and, thereafter, allowed respondent to present its evidence
ex parte. CacTSI

On December 15, 2000, after respondent presented its evidence, the RTC rendered a
Decision against the petitioner, thus:
1. By adjudicating and adjudging plaintiff's right of ownership and
possession over the subject units mentioned and described in the complaint, and
which were already seized and turned over to the plaintiff by virtue of the writ of
replevin.
2. Ordering defendants to pay to plaintiff the sum of (sic) equivalent to 25%
of the total amount recovered or value of the heavy equipments possessed as
attorney's fees, and to reimburse no less than P15,000.00 as expenses for
litigation, plus the cost of the premium of replevin bond in the amount of
P11,333.50. 8

Aggrieved, petitioner sought recourse before the CA, docketed as CA-G.R. CV No. 70666.
Petitioner argued that the RTC erred in concluding that the substituted service of
summons was valid, and that, consequently, there was error on the part of the RTC when it
declared him in default, in proceeding with the trial of the case, and rendering an
unfavorable judgment against him.
On July 25, 2007, the CA rendered a Decision 9 af rming the Decision of the RTC, the
decretal portion of which reads:
WHEREFORE, IN LIGHT OF THE FOREGOING, the Decision of the Regional Trial
Court of Cebu, Branch 17, in Civil Case No. CEB-24551, rendered on December 15,
2000, is hereby AFFIRMED with the sole modi cation as to award of attorney's
fees, which is hereby reduced to 10% of the value of the heavy equipments
recovered.

SO ORDERED. 1 0

Ruling in favor of the respondent, the CA opined, among others, that the requirement of due
process was complied with, considering that petitioner actually received the summons
through his security guard. It held that where the summons was in fact received by the
defendant, his argument that the Sheriff should have rst tried to serve summons on him
personally before resorting to substituted service of summons deserves scant
consideration. Thus, in the interest of fairness, the CA said that the process server's
neglect or inadvertence in the service of summons should not unduly prejudice the
respondent's right to speedy justice. cDHAES

The CA also noted that petitioner failed to set up a meritorious defense aside from his
contention that summons was not properly served. It went further and decided the case on
the merits and ruled that petitioner has an unpaid obligation due to respondent for the
heavy machineries he purchased from the latter. It, however, reduced the amount of
attorney's fees awarded to 10% of the value of the heavy equipments recovered.
Petitioner led a Motion for Reconsideration, but it was denied in the Resolution 1 1 dated
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 August 28, 2008.
Hence, the petition assigning the following errors:
I

THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN

DEFIANCE OF LAW AND JURISPRUDENCE IN FINDING THAT THE TRIAL COURT
ACQUIRED JURISDICTION OVER THE PERSON OF THE DEFENDANT EVEN
WHEN THE SUBSTITUTED SERVICE OF SUMMONS WAS IMPROPER. 1 2

II

THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN

DEFIANCE OF LAW AND JURISPRUDENCE IN HOLDING THAT HEREIN
PETITIONER SHOULD HAVE SET UP A MERITORIOUS DEFENSE EVEN WHEN
THE SUMMONS WAS IMPROPERLY SERVED. 1 3

Petitioner argues that there was no valid substituted service of summons in the present
case. He maintains that jurisdiction over the person of the defendant is acquired only
through a valid service of summons or the voluntary appearance of the defendant in court.
Hence, when there is no valid service of summons and no voluntary appearance by the
defendant, any judgment of a court, which acquired no jurisdiction over the defendant, is
null and void.
On its part, respondent posits that the RTC acquired jurisdiction over the person of the
petitioner and the judgment by default of the RTC was based on facts, law, and
jurisprudence and, therefore, should be enforced against the petitioner. aSTAcH

The petition is meritorious.

Courts acquire jurisdiction over the plaintiffs upon the ling of the complaint. On the other
hand, jurisdiction over the defendants in a civil case is acquired either through the service
of summons upon them or through their voluntary appearance in court and their
submission to its authority. 1 4
As a rule, summons should be personally served on the defendant. It is only when
summons cannot be served personally within a reasonable period of time that substituted
service may be resorted to. 1 5 Section 7, Rule 14 of the Rules of Court provides:
SEC. 7. Substituted service. — If, for justi able causes, the defendant cannot
be served within a reasonable time as provided in the preceding section, service
may be effected (a) by leaving copies of the summons at the defendant's
residence with some person of suitable age and discretion then residing therein,
or (b) by leaving the copies at defendant's of ce or regular place of business with
some competent person in charge thereof.

It is to be noted that in case of substituted service, there should be a report indicating that
the person who received the summons in the defendant's behalf was one with whom the
defendant had a relation of con dence, ensuring that the latter would actually receive the
summons. 1 6
Also, impossibility of prompt personal service must be shown by stating that efforts have
been made to nd the defendant personally and that such efforts have failed. This is
necessary because substituted service is in derogation of the usual method of service. It is
a method extraordinary in character, hence, may be used only as prescribed and in the
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 circumstances authorized by statute. The statutory requirements of substituted service
must be followed strictly, faithfully and fully, and any substituted service other than that
authorized by statute is considered ineffective. 1 7
In the case at bar, the Sheriff's Return provides:
Respectfully returned to the Honorable Regional Trial Court, Branch 17, Cebu City,
the Summons and writ issued in the above-entitled case with the following
information, to wit: ETIHCa

1. That the Summons, together with the complaint, writ of replevin and
bond was received on December 7, 1999, by Rolando Bonayon, a
security guard on defendant Sixto Chu at his given address who
received and signed receipt thereof.
2. That the writ of replevin was duly executed on the same date,
December 7, 1999, Tacloban City and San Jorge, Samar of the
following properties subject of the writ.
a) Excavator Hitachi with Serial No. WHO44-116-0743

b) Motorgrader with Serial No. N525PS-1014

c) Payloader with Serial No. KLD70-54224

After the issuance of the Sheriff's inventory receipt, the units were turned over to
Al Caballero and companion, representatives of plaintiff, who shipped the same
to Cebu to be deposited with MACH ASIA TRADING CORPORATION, Block 26
MacArthur Highway, Reclamation Area, Cebu City, for safekeeping, subject to the
provision of Sec. 6, Rule 60 of the Rules of Court. 1 8

Clearly, it was not shown that the security guard who received the summons in behalf of
the petitioner was authorized and possessed a relation of con dence that petitioner would
de nitely receive the summons. This is not the kind of service contemplated by law. Thus,
service on the security guard could not be considered as substantial compliance with the
requirements of substituted service.
Moreover, the reasoning advanced by the CA in ruling against the petitioner was based
merely on conjectures and surmises. The CA even went as far as to conclude that the
process server's neglect should not have unduly prejudiced the respondent, thus:
Hence, if Chu had actually received the summons through his security guard, the
requirement of due process would have nevertheless been complied with. . . . .
Based on the presumption that a person takes ordinary care of his concerns, the
security guard would not have allowed the sheriff to take possession of the
equipments without the prior permission of Chu; otherwise he would be
accountable to Chu for the said units. Chu, for his part, would not have given his
permission without being informed of the fact of the summons and the writ of
replevin issued by the lower court, which permission includes the authority to
receive the summons and the writ of replevin. aIcDCA

Thus, where summons was in fact received by defendant, his argument that the
sheriff should have tried rst to serve summons on him personally before
resorting to substituted service of summons is not meritorious.
xxx xxx xxx.

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 Evidently, plaintiff-appellee cannot be penalized, through no fault of its own, for
an irregular or defective return on service of summons. . . . .
xxx xxx xxx.

In the interest of fairness, the process server's neglect or inadvertence in the

service of summons should not, thus, unduly prejudice plaintiff-appellee's right to
speedy justice. . . . 1 9

The service of summons is a vital and indispensable ingredient of due process. As a rule, if
defendants have not been validly summoned, the court acquires no jurisdiction over their
person, and a judgment rendered against them is null and void. 2 0 Since the RTC never
acquired jurisdiction over the person of the petitioner, the judgment rendered by the court
could not be considered binding upon him for being null and void.
WHEREFORE , premises considered, the petition is GRANTED . The Decision of the Court
of Appeals, dated July 25, 2007, as well as its Resolution dated August 28, 2008, in CA-G.R.
CV No. 70666 is hereby REVERSED and SET ASIDE . The Decision of the Regional Trial
Court dated December 15, 2000 is declared NULL and VOID. The Regional Trial Court is
hereby ORDERED to validly serve summons upon Sixto N. Chu and, thereafter, proceed
with the trial of the main action with dispatch.
SO ORDERED . DCcIaE

Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.

Footnotes

1. Penned by Associate Justice Francisco P. Acosta, with Associate Justices Pampio A.

Abarintos and Stephen C. Cruz, concurring; rollo, pp. 16-25.
2. Rollo, pp. 27-29.
3. Rollo, p. 17.
4. Id.
5. Id. at 17-18.
6. Id. at 18.
7. Id.
8. Id. at 19.
9. Id. at 16-25.
10. Id. at 24-25.
11. Id. at 27-29.
12. Id. at 7.
13. Id. at 11.
14. Kukan International Corporation v. Reyes, G.R. No. 182729, September 29, 2010, 631
SCRA 596, 612, citing Orion Security Corporation v. Kalfam Enterprises, Inc., G.R. No.
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 163287, April 27, 2007, 522 SCRA 617, 622.

15. Orion Security Corporation v. Kalfam Enterprises, Inc., supra, at 622.

16. Casimina v. Legaspi, 500 Phil. 560, 569 (2005).
17. B.D. Long Span Builders, Inc. v. R.S. Ampeloquio Realty Development, Inc., G.R. No.
169919, September 11, 2009, 599 SCRA 468, 474-475.
18. Id. at 18. (Emphasis supplied)
19. Id. at 21-23.
20. B.D. Long Span Builders, Inc. v. R.S. Ampeloquio Realty Development, Inc., supra note
17, at 473.

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