RULE 14: SUMMONS
LAW ON LEGAL AND COURT PROCESSES:
A RULE-BY-RULE EXPOSITION
PUBLISHED ONLY VIA
PROJECT JURISPRUDENCE - PHILIPPINES
-oOo-
MARK ANGELO S. DELA PEÑA
To cite this online book, please use the following:
Dela Peña. 2023. "Law on Legal and Court Processes: A Rule-by-Rule Exposition." Published by Project Jurisprudence - Philippines. Published: September 20, 2023. Link: [Insert link] Last accessed: [Insert date of access].
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RULE 14: SUMMONS
Summonses are official documents that notifies a person that a court proceeding is pending against him/her and informs him/her as a defending party that, should s/he fail to file an responsive pleading within a period provided for by law or by the rules, a judgment may be granted in favor of the one who initiated the complaint or petition. Summonses are the physical manifestation of procedural due process which hears before it condemns and proceeds upon inquiry, rendering judgment only after trial. It contemplates notice and opportunity to be heard before judgment is rendered affecting one's person or property.[1]
At this early stage, the student will benefit much if s/he keeps in mind that, regardless of the type of action, the preferred mode of service of summons is personal service. To avail themselves of substituted service, courts must rely on a detailed enumeration of the sheriff's actions and a showing that the defendant cannot be served despite diligent and reasonable efforts. The sheriff's return,[2] which contains these details, is entitled to a presumption of regularity, and on this basis, the court may allow substituted service. Should the sheriff's return be wanting of these details, substituted service will be irregular if no other evidence of the efforts to serve summons was presented. Failure to properly serve summons will mean that the court failed to acquire jurisdiction over the person of the defendant.[3]
While the preferred mode of service of summons is done personally upon the defendant or respondent,[4] the rules set out other modes of service. Rule 14 of the Rules of Court allows the substituted service of summons if, for justifiable causes, the defendant cannot be served in person within a reasonable time.[5] It shall be effected by leaving copies of the summons: (a) at the defendant's residence with some person of suitable age and discretion residing therein; or (b) at the defendant’s place of business with some competent person in charge thereof. “Dwelling house” or “residence” refers to the place where the person named in the summons is living at the time when the service is made, even though s/he may be temporarily out of the country at the time. Similarly, the term “office” or “regular place of business” refers to the office or place of business of defendant at the time of service.[6]
If service in person and service by substitution cannot be effected, the plaintiff or the petitioner is not without recourse as the rules allow summons by publication and extraterritorial service[7] under certain circumstances. The term “under certain circumstances” is important because these are extraordinary modes which require leave of court.[8]
Under the Rules of Court, one of the modes to effect the extraterritorial service of summons is by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known correct address of the defendant. Furthermore, to avail this mode, the action or complaint filed against a nonresident defendant must be limited to the following: (a) it affects the personal status of the plaintiff or relates to; or (b) its subject is property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent; or (c) the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein; or (d) the property of the defendant has been attached within the Philippines. The duty of the court to require the fullest compliance with all the requirements of the statute permitting service by publication must be emphasized.[9] Where service is obtained by publication, the entire proceeding should be closely scrutinized by the courts and a strict compliance with every condition of law should be exacted.[10]
IMPORTANCE OF PROPER SERVICE OF SUMMONS
The proper service of summons is important because it allows the court to acquire jurisdiction over the person of the defendant or respondent, or to notify said person of the action filed against them and to afford an opportunity to be heard on the claims made against them.[11] Logically, in order to effect the proper service of summons, it is crucial for the complainant or petitioner to furnish the correct address of the defendant or respondent in a complaint or petition.[12]
The foregoing is in consonance with the doctrine of due process.[13] A violation of this due process would be a jurisdictional defect.[14] Thus, absent the proper service of summons, the trial court does not acquire jurisdiction and renders null and void all subsequent proceedings and issuances in relation to the case.[15]
RULE 14’S CONCERN
The concern of Rule 14 of the Rules of Court revolves around three (3) things: (a) service of summons upon the defendant; (b) its propriety, validity, and sufficiency; and, (c) proof of service. Thus, the student should keep in mind the following questions. How should the service of summons be effected? Was it effected properly? Was the defendant sufficiently or is s/he considered sufficiently notified? How can one prove that service of summons has been properly effected? What is the effect of failure to properly serve summons?
CLERK TO ISSUE SUMMONS
Unless the complaint is on its face dismissible under Section 1 of Rule 9, the court shall, within five (5) calendar days from receipt of the initiatory pleading and proof of payment of the requisite legal fees, direct the clerk of court to issue the corresponding summons to the defendants.[16]
It is the clerk of court that issues the summons to the defendant or defendants, in compliance with an order issued by the court. Normally, in practice, the summons-issuance order says, “Finding the complaint to be sufficient in form and substance, the clerk of court is hereby directed to issue the corresponding summons and cause the same to be served properly to the defendant.” Now, the service of summons is not the job of the clerk of court but the court sheriff’s.
From the discussion above, it can be inferred that there is an administrative hierarchy in court: (a) the judge being on top of the hierarchy as the leader of the court; and (b) the clerk of court being second to the judge. According to the 2002 Manual for Clerks of Court,[17] in the past, the custody of court records was entrusted to one of the judges, custos retulorum (keeper of the rolls). The word “clerk” at root denoted a member of the clergy, and the time was when the law and the gospel flowed from the same hand. However, in progress of time, clerks and judges became sharply differentiated. The manifest impossibility of a judge’s having charge of and writing the records and issuing writs became apparent, and the office of the clerk of court was created.[18] According to the said Manual:
The Clerk of Court of a Court of justice is an essential officer in any judicial system. The office is the hub of activities, both adjudicative and administrative.[19] While an officer of the Court, a public officer and an “officer of the law,” the position is not that of a judicial officer, nor is it synonymous with the Court.[20] The office is essentially a ministerial one.
A Judge alone cannot make the Court function as it should. In the over-all scheme of judicial business, many non-judicial concerns, intricately and inseparably interwoven with the trial and adjudication of cases, must perforce be performed by other individuals that make up the team that complements the Court. Of these individuals, the Clerk of Court eclipses the others in functions, responsibilities, importance and prestige.
Other employees of the court are the court researcher, the court interpreter, the court sheriff, the court stenographers, the civil docket clerks, the criminal docket clerks, and others.
PAYMENT OF LEGAL FEES
Before the clerk of court is directed to issue the summons, the court must ensure that there has been payment of the appropriate docket, filing and other legal fees.[21] This is important because it is elementary that in both original and appellate cases, the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees.[22]
CONTENTS OF SUMMONS
The summons shall be directed to the defendant, signed by the clerk of court under seal, and contain: (a) the name of the court and the names of the parties to the action; (b) when authorized by the court upon ex parte motion, an authorization for the plaintiff to serve summons to the defendant; (c) a direction that the defendant answer within the time fixed by the Rules of Court; and (d) a notice that unless the defendant so answers, plaintiff will take judgment by default and may be granted the relief applied for.[23]
A copy of the complaint and order for appointment of guardian ad litem, if any, shall be attached to the original and each copy of the summons.[24]
In the preceding discussions, it was mentioned that the court sheriff is the one tasked to served summons. While this is true in general, the Section 2 of Rule 14 of the Rules of Court allows a deputization-authorization given to the plaintiff to effect the proper service of summons.
SUMMONS, BY WHOM SERVED
The summons may be served by the sheriff, his deputy, or other proper court officer, and in case of failure of service of summons by them, the court may authorize the plaintiff - to serve the summons - together with the sheriff. In cases where summons is to be served outside the judicial region of the court where the case is pending, the plaintiff shall be authorized to cause the service of summons.[25]
If the plaintiff is a juridical entity, it shall notify the court, in writing, and name its authorized representative therein, attaching a board resolution or secretary's certificate thereto, as the case may be, stating that such representative is duly authorized to serve the summons on behalf of the plaintiff.[26]
If the plaintiff misrepresents that the defendant was served summons, and it is later proved that no summons was served, the case shall be dismissed with prejudice, the proceedings shall be nullified, and the plaintiff shall be meted appropriate sanctions.[27]
If summons is returned without being served on any or all the defendants, the court shall order the plaintiff to cause the service of summons by other means available under the Rules of Court. Failure to comply with the order shall cause the dismissal of the initiatory pleading without prejudice.[28]
DIMISSAL WITH/WITHOUT PREJUDICE
The term “dismissal with prejudice” is an incomplete phrase that has been used so often that lawyers no longer think about the complete phrase. The complete phrase is actually “dismissal with prejudice to the re-filing of the case.” Hence, when a case is dismissed without prejudice, the claiming party is not barred from re-filing the same. On the other hand, a dismissal with prejudice means that the case can no longer be re-filed.
The rules on summons are very strict regarding the return[29] of service of summons. If deputized, the plaintiff must truthfully inform the court of the circumstances of the service, whether the same has been served or not and whether the service was effected properly or improperly.
A misrepresentation by the plaintiff that the summons has been served, when in fact it was not, will result not only in the dismissal of the case with prejudice but also other sanctions such as contempt of court.
If there are multiple defendants and any or some of them have not been served with summons, the court will order the plaintiff to effect its proper service. If the plaintiff fails to comply with the order of the court, the case shall be dismissed without prejudice.
Regarding the plaintiff’s failure to comply with a court order, related to this is a separate rule under Section 3 of Rule 17 of the Rules of Court. Under said Section 3, if, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his or her evidence in chief on the complaint, or to prosecute his or her action for an unreasonable length of time, or to comply with the Rules of Court or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court’s own motion, without prejudice to the right of the defendant to prosecute his/her counterclaim in the same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.
VALIDITY OF SUMMONS AND ISSUANCE OF ALIAS SUMMONS
Summons shall remain valid until duly served, unless it is recalled by the court. In case of loss or destruction of summons, the court may, upon motion, issue an alias summons.[30]
There is failure of service after unsuccessful attempts to personally serve the summons on the defendant in his/her address indicated in the complaint. Substituted service should be in the manner provided under Section 6 of Rule 14.[31]
ALIAS SUMMONS
The term “alias” under Rule 14 refers to its old use, referring to “another.” Hence, alias summons means “another summons” or “summons issued at another time.”
In the past and in previous practice, alias summonses were issued whenever the sheriff’s return failed to state the facts and circumstances showing the impossibility of personal service of summons upon respondents or defendants within a reasonable time.[32] This was due to the old phraseology of Section 4 (then Section 5) of Rule 14, viz: “If a summons is returned without being served on any or all of the defendants, the server shall also serve a copy of the return on the plaintiff’s counsel, stating the reasons for the failure of service, within (5) days therefrom. In such a case, or if the summons has been lost, the clerk, on demand of the plaintiff, may issue an alias summons.” Note, however, that under the amendments introduced by A.M. No. 19-10-20-SC,[33] summonses now remain valid even if unserved and until the same is served. It is only in cases of loss or destruction of a summons that an alias summons should be issued.
SERVICE IN PERSON ON DEFENDANT
Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person and informing the defendant that s/he is being served, or, if s/he refuses to receive and sign for it, by leaving the summons within the view and in the presence of the defendant.[34]
There are two types of service of summons in person on the defendant. First, there is actual tender which means that a copy of the summons is handed to the defendant in his/her person and the person serving the same informs him/her that s/he is being served. This is where the phrase, “You got served,” was taken from in the United States. Second, there is constructive tender which refers to a situation in which the respondent or defendant is refusing the accept the summons and/or to sign an acknowledgment of receipt thereof. The remedy in this kind of situation is simply to leave a copy of the summons within the view and in the presence of the person being served. Even though there is refusal to physically accept the summons and/or to sign an acknowledgment of receipt thereof, the Rules of Court considers constructive tender as a valid form of service in person.
SHERIFF’S RETURN IN CASE OF CONSTRUCTIVE TENDER
There would be no complication if the defendant does not refuse to accept the service of summons and to sign an acknowledgment of such receipt. If the situation were otherwise, however, and the court sheriff effects a service in person through constructive tender, it does not mean that the service in invalid.
In either case, the court sheriff will write in his/her report (return) the circumstances of such service, whether actual tender or constructive tender. This sheriff’s return is prima facie evidence of the facts therein set out. To overcome the presumption of regularity of performance of official functions in favor of such sheriff’s return, the evidence against it must be clear and convincing. Any person who questions the facts stated in said return is required to show proof to the contrary; otherwise, the presumption[35] of regularity of performance on the part of the Sheriff in the case stands.[36]
SUBSTITUTED SERVICE OF SUMMONS
If, for justifiable causes, the defendant cannot be served personally after at least three (3) attempts on two (2) separate dates,[37] service may be effected: (a) by leaving copies of the summons at the defendant's residence to a person at least eighteen (18) years of age and of sufficient discretion residing therein; (b) by leaving copies of the summons at the defendant’s office or regular place of business with some competent person in charge thereof; (c) by leaving copies of the summons, if refused entry upon making his/her authority and purpose known, with any of the officers of the homeowners’ association or condominium corporation, or its chief security officer in charge of the community or the building where the defendant may be found; or (d) by sending an electronic mail to the defendant's electronic mail address, if allowed by the court.[38]
In relation to (b) above, a competent person includes, but is not limited to, one who customarily receives correspondences for the defendant.
Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant's voluntary appearance in court.[39] When the defendant does not voluntarily submit to the court’s jurisdiction or when there is no valid service of summons, any judgment of the court which has no jurisdiction over the person of the defendant is null and void.[40]
Personal service on the defendant is the preferred mode of service,[41] that is, by handing a copy of the summons to the defendant in person and informing him/her that s/he is being served. This may also be done by constructive tender, i.e., by leaving a copy of the summons within his/her view and in his/her presence. If the defendant, for excusable reasons, cannot be served with the summons within a reasonable period, then substituted service can be resorted to.[42]
“Reasonable period” or “reasonable time” means within thirty (30) days from issuance of the summons[43] and despite three (3) attempts on two (2) separate dates. “Reasonable time,” under obligations law, has also been defined as “so much time as is necessary under the circumstances for a reasonably prudent and diligent man to do, conveniently, what the contract or duty requires that should be done, having a regard for the rights and possibility of loss, if any[,] to the other party.”[44]
While substituted service of summons is permitted by the Rules of Court, it is extraordinary in character and in derogation of the usual method of service.[45] Hence, it must faithfully and strictly comply with the prescribed requirements and circumstances authorized by the rules. Indeed, compliance with the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction.[46]
IMPOSSIBILITY OF PROMPT SERVICE
The party relying on substituted service or the sheriff must show that defendant cannot be served promptly or there is impossibility of prompt service within reasonable time and despite the number of attempts stated by the Rules of Court.[47]
Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence, and reasonable promptness and speed so as not to prejudice the expeditious dispensation of justice. Thus, they are enjoined to try their best efforts to accomplish personal service on defendant. On the other hand, since the defendant is expected to try to avoid and evade service of summons, the sheriff must be resourceful, persevering, canny, and diligent in serving the process on the defendant. For substituted service of summons to be available, there must be several attempts by the sheriff to personally serve the summons within a reasonable period of one (1) month which eventually resulted in failure to prove impossibility of prompt service. In addition, the sheriff must cite why such efforts were unsuccessful. It is only then that impossibility of service can be confirmed or accepted.[48]
SUITABLE AGE AND DISCRETION
If the substituted service is effected at defendant’s house or residence, it should be left with a person of suitable age and discretion then residing therein. A person of suitable age and discretion is one who has attained the age of full legal capacity, i.e., eighteen (18) years old, and is considered to have enough discernment to understand the importance of a summons.
“Discretion” is defined as “the ability to make decisions which represent a responsible choice and for which an understanding of what is lawful, right or wise may be presupposed.”[49] Thus, to be of sufficient discretion, such person must know how to read and understand English to comprehend the import of the summons, and fully realize the need to deliver the summons and complaint to the defendant at the earliest possible time for the person to take appropriate action. Thus, the person must have the “relation of confidence” to the defendant, ensuring that the latter would receive or at least be notified of the receipt of the summons.[50]
The court sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipient’s relationship with the defendant is, and whether said person comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons. These matters must be clearly and specifically described in the return of summons.[51]
COMPETENT PERSON IN CHARGE
If the substituted service will be done at defendant’s office or regular place of business, then it should be served on a competent person in charge of the place. Thus, the person on whom the substituted service generally must be the one managing the office or business of defendant, such as the president or manager; and such individual must have sufficient knowledge to understand the obligation of the defendant in the summons, its importance, and the prejudicial effects arising from inaction on the summons. Nonetheless, the Rules of Court also always substituted service upon a person who customarily receives correspondences for the defendant such as the receiving section of an office. Again, these details must be contained in the return.[52]
To emphasize, the procedure prescribed by a statute or rule for substituted or constructive service must be strictly pursued.[53] There must be strict compliance with the requirements of statutes authorizing substituted or constructive service.[54]
SERVICE UPON ENTITY WITHOUT JURIDICAL PERSONALITY
When persons associated in an entity without juridical personality are sued under the name by which they are generally or commonly known, service may be effected upon all the defendants by serving upon any one of them, or upon the person in charge of the office or place of business maintained in such name. But such service shall not bind individually any person whose connection with the entity has, upon due notice, been severed before the action was filed.[55]
SERVICE UPON PRISONERS
When the defendant is a prisoner confined in a jail or institution, service shall be effected upon him or her by the officer having the management of such jail or institution who is deemed as a special sheriff for said purpose. The jail warden shall file a return within five (5) calendar days from service of summons to the defendant.[56]
SERVICE CONSISTENT WITH INTERNATIONAL CONVENTIONS
Service may be made through methods which are consistent with established international conventions to which the Philippines is a party.[57] One of such international conventions is the Hague Service Convention.[58]
SERVICE UPON MINORS AND INCOMPETENTS
When the defendant is a minor, insane or otherwise an incompetent person, service of summons shall be made upon him/her personally and on his/her legal guardian if s/he has one, or if none, upon his or her guardian ad litem whose appointment shall be applied for by the plaintiff. In the case of a minor, service shall be made on his/her parent or guardian.[59]
Service upon spouses
When spouses are sued jointly, service of summons should be made to each spouse individually.[60] This is in conjunction with the rule that husband and wife shall sue or be sued jointly, except as provided by law.[61]
WHETHER SHERIFF SHOULD LOOK INTO THE VALIDITY OF MARRIAGE
In serving the summonses to husband and wife, does the sheriff or any deputized person to do so have to look into the validity of the marriage in order to decide whether joint service should be made? The answer is in the negative because it is presumed that a man and woman deporting themselves as husband and wife have entered into a lawful contract of marriage.[62]
SERVICE UPON DOMESTIC PRIVATE JURIDICAL ENTITY
When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel of the corporation wherever they may be found, or in their absence or unavailability, on their secretaries.[63] If such service cannot be made upon any of the foregoing persons, it shall be made upon the person who customarily receives the correspondence for the defendant at its principal office.[64]
In case the domestic juridical entity is under receivership or liquidation, service of summons shall be made on the receiver or liquidator, as the case may be.
Should there be a refusal on the part of the persons above-mentioned to receive summons despite at least three (3) attempts on two (2) separate dates, service may be made electronically, if allowed by the court, as provided under Section 6 of Rule 14.[65]
ELECTRONIC SERVICE TO DOMESTIC CORPORATIONS
The Securities and Exchange Commission (SEC) has issued Memorandum Circular No. 28 (MC No. 28) dated August 27, 2020 requiring corporations, partnerships, associations, and individuals under the jurisdiction and supervision of the SEC to create and/or designate email addresses and cellphone numbers for transactions with the SEC.[66] In fact, even at the registration stage, the designation of an email address is required by the SEC. These corporate regulations make it easier to electronically serve summons upon a domestic corporation in case personal service fails.
Duty of counsel of record
Where the summons is improperly served and a lawyer makes a special appearance on behalf of the defendant to, among others, question the validity of service of summons, the counsel shall be deputized by the court to serve summons on his/her client.[67]
In the past, defense lawyers would easily enter their special appearance (also known as appearance ex abudante cautelam) to question the lack of jurisdiction of the court over the person of the defendant. Such appearances were entered without much consequence for the lawyer because courts would, as a result, simply issue an order for another attempt to serve summons.
Under the new rules,[68] however, it is clarified that the counsel for the defendant who enters his/her appearance ex abudante cautelam will be deputized by the court to serve summons on his/her client. This is a way for the courts to ensure that there will be no further delay in the administration of justice. The counsel, having entered his/her appearance for the defendant, is presumed to have had communications with the latter, hence, facilitating the process of service.
SERVICE UPON FOREIGN PRIVATE JURIDICAL ENTITIES
When the defendant is a foreign private juridical entity which has transacted or is doing business in the Philippines, as defined by law, service may be made on its resident agent designated in accordance with the law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers, agents, directors or trustees within the Philippines.[69]
If the foreign private juridical entity is not registered in the Philippines, or has no resident agent but has transacted or is doing business in it, as defined by law, such service may, with leave of court, be effected outside of the Philippines through any of the following means: (a) by personal service coursed through the appropriate court in the foreign country with the assistance of the department of foreign affairs; (b) by publication once in a newspaper of general circulation in the country where the defendant may be found and by serving a copy of the summons and the court order by registered mail at the last known address of the defendant; (c) by facsimile; (d) by electronic means with the prescribed proof of service; or (e) by such other means as the court, in its discretion, may direct.[70]
FOREIGN CORPORATIONS
A foreign corporation is one formed, organized or existing under laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or State. It shall have the right to transact business in the Philippines after obtaining a license for that purpose in accordance with the Revised Corporation Code and a certificate of authority from the appropriate government agency.[71]
“HAS TRANSACTED BUSINESS” OR “DOING BUSINESS”
In both the first paragraph and the second paragraph of Section 14 of Rule 14, the Rules of Court requires that a nexus between the Philippines and a foreign private juridical entity in the proper service of summons upon the latter. This nexus or legal connection is required to be established through transacting or doing business in the Philippines. Note, however, that the term of Section 14 is “has transacted or is doing business in the Philippines.”
The plain and ordinary meaning of “has transacted” can lead the student to believe that one transaction is enough, as opposing to “doing business” which carries the connotation of continuity.
The Supreme Court has formulated two (2) tests to determine whether a foreign corporation is “doing business” in the Philippines. The first test, also known as the “true test” or the “substance test,” is whether the foreign corporation is continuing the body of the business or enterprise for which it was organized or whether it has substantially retired from it and turned it over to another.[72] The second test, also known as the “continuity test,” looks into the continuity of commercial dealings and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of some of the functions normally incident to, and in the progressive prosecution of, the purpose and object of its organization.[73]
The number of the transactions entered into is not determinative whether a foreign corporation is doing business in the Philippines; the intention to continue the body of its business prevails.[74] The number or quantity is merely an evidence of such intention.[75] A single act or transaction may then be considered as doing business when a corporation performs acts for which it was created or exercises some of the functions for which it was organized.[76]
As an exception to the above-discussed rule, a foreign corporation may sue without a license on the basis of an isolated transaction.[77] Thus, the phrase “isolated transaction” has a definite and fixed meaning, i.e., a transaction or series of transactions set apart from the common business of a foreign enterprise in the sense that there is no intention to engage in a progressive pursuit of the purpose and object of the business organization. Whether a foreign corporation is “doing business” does not necessarily depend upon the frequency of its transactions, but more upon the nature and character of the transactions.[78]
Based on the foregoing, a single act may be considered as either doing business or an isolated transaction depending on its nature.[79] It may be considered as doing business if it implies a continuity of commercial dealings and contemplates the performance of acts or the exercise of functions normally incidental to and in the progressive pursuit of its purpose. Contrarily, it may be considered as an isolated transaction if it is different from or not related to the common business of the foreign corporation in the sense that there is no objective to increasingly pursue its purpose or object. At any rate, a license is not required if the foreign corporation is suing on an isolated transaction.[80]
OTHER LAWS ON “DOING BUSINESS”
Under Section 150 of the Revised Corporation Code,[81] no foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.
However, the Revised Corporation Code is silent as to the definition of the phrase “doing business.” In relation to this, it has been held by the Supreme Court that there is no general rule or governing principle as to what constitutes “doing” or “engaging in” or “transacting” business in the Philippines. As such, each case must be judged in the light of its peculiar circumstances.[82]
Other laws offer a definition. For example, Republic Act No. 7042[83] says that phrase “doing business” shall include soliciting orders, service contracts, opening offices, whether called “liaison” offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization: provided, however, that the phrase “doing business” shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account.
On the other hand, Article 65 of Presidential Decree (PD) No. 1789 says that the phrase “doing business” shall include soliciting orders, purchases, service contracts, opening offices, whether called “liaison” offices or branches; appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the Philippines for a period or periods totalling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines, and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization.
Section 1(g) of the Implementing Rules and Regulations (IRR) for PD No. 1789 clarifies said definition by providing that “doing business” includes: (a) soliciting orders, purchases (sales) or service contracts. Concrete and specific solicitations by a foreign firm or by an agent of such foreign firm, not acting independently of the foreign firm, amounting to negotiations or fixing of the terms and conditions of sales or service contracts, regardless of where the contracts are actually reduced to writing, shall constitute doing business even if the enterprise has no office or fixed place of business in the Philippines. The arrangements agreed upon as to manner, time and tem1s of delivery of the goods or the transfer of title thereto is immaterial. A foreign firm which does business through the middlemen acting in their own names, such as indentors, commercial brokers or commission merchants, shall not be deemed doing business in the Philippines. But such indentors, commercial brokers or commission merchants shall be the ones deemed to be doing business in the Philippines; and (b) appointing a representative or distributor who is domiciled in the Philippines, unless said representative or distributor has an independent status, i.e., it transacts business in its name and for its own account, and not in the name or for the account of a principal. Thus, where a foreign firm is represented in the Philippines by a person or local company which does not act in its name but in the name of the foreign firm, the latter is doing business in the Philippines.
The foregoing laws and rules consistently provide that the appointment of representatives which transact business in its own name and for its own account shall not be deemed as “doing business.” Also, the IRR for PD No. 1789 specifically mentions that transactions done through middlepersons acting in their own names, such as indentors, are excluded from the phrase “doing business.”[84]
SERVICE UPON PUBLIC CORPORATIONS
When the defendant is the Republic of the Philippines, service may be effected on the Solicitor General; in case of a province, city or municipality, or like public corporations, service may be effected on its executive head, or on such other officer or officers as the law or the court may direct.[85]
Lawyers are probably very familiar with the address of the Office of the Solicitor General (OSG): No. 134 Amorsolo Street, Legazpi Village, Makati, Metro Manila. This is because, for most of special proceedings, the OSG is copy-furnished petitions, especially in cases involving public interest such as in petitions for change of name, petitions for correction of entries in a person’s birth certificate and so on.
In case a public corporation is a defendant, such as a local government unit (LGU), service of summons may be effected on the governor of a province, the mayor of a city or municipality or the punongbarangay of a barangay. The court may also direct service of summons on any other officer or officers as it may deem proper or as the law provides. For example, service of summons may be effected on the municipal administrator instead of the municipal mayor whenever circumstances warrant the same.
SERVICE UPON DEFENDANT WHOSE IDENTITY OR WHEREABOUTS ARE UNKNOWN
In any action where the defendant is designated as an unknown owner, or the like, or whenever his/her whereabouts are unknown and cannot be ascertained by diligent inquiry, within ninety (90) calendar days from the commencement of the action, service may, by leave of court, be effected upon him/her by publication in a newspaper of general circulation and in such places and for such time as the court may order.[86]
Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) calendar days after notice, within which the defendant must answer.[87]
It may happen that the identity of the defendant is unknown to the plaintiff. This, of course, cannot prevent the filing of an appropriate action with the proper court because, under Section 14 of Rule 3 of the Rules of Court, whenever the identity or name of a defendant is unknown, s/he may be sued as the unknown owner, heir, devisee, or by such other designation as the case may require; when his/her identity or true name is discovered, the pleading must be amended accordingly.
The problem then shifts to the proper service of summons. How can service of summons be effected properly upon the defendant if his/her name or whereabouts is unknown? The answer is Section 16 of Rule 14 of the Rules of Court, i.e., service of summons via publication. However, such service cannot be effected without prior permission from the court. Hence, the plaintiff must first file a motion for leave of court and await the court’s order granting the same.
It is important to emphasize that Section 16 of Rule 14 refers to a situation in which the plaintiff is not aware of the name or address of the defendant. Otherwise, s/he must state in his/her complaint such facts and such shall be the basis of the service of summons.
The defendant served with summons via publication has sixty (60) calendar days after notice to file his/her responsive pleading. “After notice” here does not mean that the actual fact that the defendant noticed, perceived, or became aware of the printed newspaper containing the summons. Otherwise, service of summons may be evaded by the simple and expedient reason that the defendant does not read the newspaper or, even if s/he does, was not able to read the brand or company of the newspaper on which the summons was published.
It is said that publication of a notice is binding upon the whole world because it is a constructive notice to the whole world.[88] Although such rule does not squarely apply to the publication of summonses, especially because such rule is more applicable in actions strictly in rem,[89] the same principle may be used to repel any attempt by the defendant to evade service of summons via publication by simply denying having read the newspaper on which it is published.
EXTRATERRITORIAL SERVICE
When the defendant does not reside and is not found in the Philippines, and the action affects (a) the personal status of the plaintiff or (b) relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or (c) in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or (d) the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service; or as provided for in international conventions to which the Philippines is a party; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) calendar days after notice, within which the defendant must answer.[90]
If an action affects the personal status of the plaintiff, or if the action the plaintiff claims a lien or interest in the Philippines-located property of the defendant, or if the defendant’s property has been attached within the Philippines, the plaintiff may ask permission from the court to allow (a) personal service upon the defendant, or (b) substituted service of summons, or (c) service through the Hague Service Convention, or (d) service through publication. In case of service of summons via publication, a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. The term “any other manner the court may deem sufficient” may include electronic service of summons.
RESIDENTS TEMPORARILY OUT OF THE PHILIPPINES
When any action is commenced against a defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be also effected out of the Philippines, as under Section 17 of Rule 14 of the Rules of Court.[91]
In practice, however, the best way to serve summons upon a defendant who is temporarily outside the Philippines is substituted service of summons.
LEAVE OF COURT
Any application to the court under Rule 14 for leave to effect service in any manner for which leave of court is necessary shall be made by motion in writing, supported by affidavit of the plaintiff or some person on his behalf, setting forth the grounds for the application.[92]
RETURN/REPORT
Within thirty (30) calendar days from issuance of summons by the clerk of court and receipt thereof, the sheriff or process server, or person authorized by the court, shall complete its service. Within five (5) calendar days from service of summons, the server shall file with the court and serve a copy of the return to the plaintiff's counsel, personally, by registered mail, or by electronic means authorized by the Rules of Court.[93]
Should substituted service have been effected, the return shall state: (1) the impossibility of prompt personal service within a period of thirty (30) calendar days from issue and receipt of summons; (2) the date and time of the three (3) attempts on at least (2) two separate dates to cause personal service and the details of the inquiries made to locate the defendant residing thereat; and (3) the name of the person at least eighteen (18) years of age and of sufficient discretion residing thereat; name of competent person in charge of the defendant's office or regular place of business, or name of the officer of the homeowners' association or condominium corporation or its chief security officer in charge of the community or building where the defendant may be found.[94]
PROOF OF SERVICE
The proof of service of a summons shall be made in writing by the server and shall set forth the manner, place, and date of service; shall specify any papers which have been served with the process and the name of the person who received the same; and shall be sworn to when made by a person other than a sheriff or his/her deputy.[95]
If summons was served by electronic mail, a printout of said e-mail, with a copy of the summons as served, and the affidavit of the person mailing, shall constitute as proof of service.[96]
PROOF OF SERVICE BY PUBLICATION
If the service has been made by publication, service may be proved by the affidavit of the publisher, editor, business or advertising manager, to which affidavit a copy of the publication shall be attached and by an affidavit showing the deposit of a copy of the summons and order for publication in the post office, postage prepaid, directed to the defendant by registered mail to his/her last known address.[97]
VOLUNTARY APPEARANCE
The defendant's voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall be deemed a voluntary appearance.[98]
[1] Luzon Surety Co., Inc. v. Jesus Panaguiton, 173 Phil. 355, 360 (1978), cited in Ombudsman v. Conti, 806 Phil. 384 [ G.R. No. 221296. February 22, 2017 ].
[2] “Return” is an old term for “report.”
[3] See De Pedro v. Romasan Development Corporation, 748 Phil. 706, [ G.R. No. 194751. November 26, 2014 ].
[4] De Pedro v. Romasan Development Corp., 748 Phil. 706, 726 (2014).
[5] What constitutes “reasonable time” is defined under the rules, following the ruling in Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[6] Express Padala (Italia) SPA v. Ocampo, 817 Phil. 911, 919, (20 17), citing Keister v. Judge Navarro, 167 Phil. 567, 573-574 (1977).
[7] Sarol v. Diao, [ G.R. No. 244129. December 09, 2020 ].
[8] Sarol v. Diao, [ G.R. No. 244129. December 09, 2020 ].
[9] Sarol v. Diao, [ G.R. No. 244129. December 09, 2020 ].
[10] Sarol v. Diao, [ G.R. No. 244129. December 09, 2020 ], citing Acance v. Court of Appeals, 493 Phil. 676,688 (2005), in turn, citing Dulap v. CA, 149 Phil. 636, 649 (1971).
[11] Herrera, O., Remedial Law Vol. 1, 2000 Ed., p. 665, citing Ablaza v. CIR, 211 Phil. 425, 431 (1983); Paramount Insurance Corporation v. Judge Japzon, 286 Phil. 1048, 1055 (1992); Toyota Cubao, Inc v. CA, 346 Phil. 181, 186 (1997).
[12] Sarol v. Diao, [ G.R. No. 244129. December 09, 2020 ].
[13] Sarol v. Diao, [ G.R. No. 244129. December 09, 2020 ].
[14] De Pedro v. Romasan Development Corp., 748 Phil. 706, 726 (2014).
[15] Herrera, O., Remedial Law Vol. 1, 2000 Edition, p. 665, citing Toyota Cubao, Inc. v. CA, 346 Phil. 181, 187 (1997), which cited Keister v. Judge Navarro, 167 Phil. 567, 572 (1977).
[16] Section 1, Rule 14, Rules of Court.
[17] March 08, 2002.
[18] State ex rel. Henson v. Sheppard, 91 SW 477 (1905).
[19] Citing Fred Ruiz Castro, Chief Justice, February 23, 1979.
[20] Citing 14 C.J.S. 1211.
[22] Gonzales, et al. v. Pe, 670 Phil. 597, 610-611 (2011), citing Far Corporation v. Magdaluyo, 485 Phil. 599, 610 (2004). See also Bollozos v. Heirs of de Aguilar, G.R. No. 194310, March 29, 2022.
[23] Section 2, Rule 14, Rules of Court.
[24] Section 2, Rule 14, Rules of Court.
[25] Section 3, Rule 14, Rules of Court.
[26] Section 3, Rule 14, Rules of Court.
[27] Section 3, Rule 14, Rules of Court.
[28] Section 3, Rule 14, Rules of Court.
[29] An old term for “report.”
[30] Section 4, Rule 14, Rules of Court.
[31] Section 4, Rule 14, Rules of Court.
[32] Gomez v. Court of Appeals, 469 Phil. 38 [ G.R. No. 127692. March 10, 2004 ].
[33] October 15, 2019.
[34] Section 5, Rule 14, Rules of Court.
[35] Orosa vs. Court of Appeals, 261 SCRA 376, citing Vargas and Co. vs. Chan Hang Chiu, 29 Phil 446 (1915).
[36] Madrigal v. Court of Appeals, 377 Phil. 345 [ G.R. No. 129955. November 26, 1999 ].
[37] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[38] Section 6, Rule 14, Rules of Court.
[39] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[40] Domagas v. Jensen, G.R. No. 158407, January 17, 2005, 448 SCRA 663, 677, citing Lam v. Rosillosa, G.R. No. L-3595, May 22, 1950, 86 Phil. 447.
[41] De Pedro v. Romasan Development Corporation, 748 Phil. 706 [ G.R. No. 194751. November 26, 2014 ].
[42] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[43] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[44] Far Eastern Realty Investment, Inc. v. CA, G.R. No. L-36549, October 5, 1988, 166 SCRA 256, 262.
[45] Hamilton v. Levy, G.R. No. 139283, November 15, 2000, 344 SCRA 821.
[46] Ang Ping v. CA, G.R. No. 126947, July 15, 1999, 369 Phil. 607, 310 SCRA 343.
[47] Arevalo v. Quitalan, G.R. No. 57892, September 21, 1982, 116 SCRA 700, 707.
[48] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[49] Webster's Third New International Dictionary (1993), p. 647, cited in Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[50] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[51] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[52] Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[53] 2B Am Jur 2d, Process § 150, p. 857, citing Guaranty Trust & Safe Deposit Co. v. Green Cove S. & M.R.. Co., 139 US 137, 35 L Ed 116, 11 S Ct 512.
[54] Miller v. Corning Glass Works, 102 Ariz 326, 429 P2d 438, cited in Manotoc v. CA, 530 Phil. 454 [ G.R. NO. 130974. August 16, 2006 ].
[55] Section 7, Rule 14, Rules of Court.
[56] Section 8, Rule 14, Rules of Court.
[57] Section 9, Rule 14, Rules of Court.
[59] Section 10, Rule 14, Rules of Court.
[60] Section 11, Rule 14, Rules of Court.
[61] Section 4, Rule 3, Rules of Court.
[62] Section 3 (aa), Rule 131, Rules of Court.
[63] Section 12, Rule 14, Rules of Court.
[64] Section 12, Rule 14, Rules of Court.
[65] Section 12, Rule 14, Rules of Court.
[66] Riziel Ann A. Cabreros. Date unspecified. "The Securities and Exchange Commission Requires Submission of Official and Alternate E-mail Addresses and Cellphone Numbers under Memorandum Circular No. 28, s. 2020." Published at https://platonmartinez.com/articles/the-securities-and-exchange-commission-requires-submission-of-official-and-alternate-e-mail-addresses-and-cellphone-numbers-under-memorandum-circular-no-28-s-2020. Last accessed: October 10, 2023.
[67] Section 13, Rule 14, Rules of Court.
[68] Introduced by A.M. No. 19-10-20-SC, October 15, 2019.
[69] Section 14, Rule 14, Rules of Court.
[70] Section 14, Rule 14, Rules of Court.
[71] Section 140, Republict Act No. 11232, February 20, 2019; “Revised Corporation Code of the Philippines.”
[72] Agilent Technologies v. Integrated Silicon, 471 Phi1. 582 (2004), citing Mentholatum v. Mangaliman, 72 Phil. 524 (1941).
[73] Magna Ready Mix v. Andersen, [ G.R. No. 196158. January 20, 2021 ].
[74] Eriks Pte. Ltd. v. Court of Appeals, 335 Phil. 229, 239 (1997).
[75] Eriks Pte. Ltd. v. Court of Appeals, 335 Phil. 229, 239 (1997).
[76] European Resources and Technologies, Inc. v. Ingenieuburo Birkhahn + Nolte, 479 Phil 114, 124 (2004).
[77] Eriks Pte. Ltd. v. Court of Appeals, 335 Phil. 229, 239 (1997).
[78] Eriks Pte. Ltd. v. Court of Appeals, 335 Phil. 229, 239 (1997).
[79] Magna Ready Mix v. Andersen, [ G.R. No. 196158. January 20, 2021 ].
[80] Magna Ready Mix v. Andersen, [ G.R. No. 196158. January 20, 2021 ].
[81] Republic Act No. 11232, February 20, 2019.
[82] Georg Grotjahn GMBH & Co. v. Isnani, 305 Phil. 231, 238-239 (1994).
[83] Foreign Investments Act of 1991.
[84] DPB v. Monsanto, [ G.R. No. 207153. January 25, 2023 ].
[85] Section 15, Rule 14, Rules of Court.
[86] Section 16, Rule 14, Rules of Court.
[87] Section 16, Rule 14, Rules of Court.
[88] Alba v. Court of Appeals, 503 Phil. 451 [G.R. No. 164041. July 29, 2005 ].
[89] Cabañez v. Solano, 786 Phil. 381 THIRD DIVISION [ G.R. No. 200180. June 06, 2016 ]
[90] Section 17, Rule 14, Rules of Court.
[91] Section 18, Rule 14, Rules of Court.
[92] Section 19, Rule 14, Rules of Court.
[93] Section 20, Rule 14, Rules of Court.
[94] Section 20, Rule 14, Rules of Court.
[95] Section 21, Rule 14, Rules of Court.
[96] Section 21, Rule 14, Rules of Court.
[97] Section 22, Rule 14, Rules of Court.
[98] Section 23, Rule 14, Rules of Court.