Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=52986:gr-169919-2009nad&catid=1522&Itemid=566
Timestamp: 2019-04-26 12:16:08+00:00

Document:
B. D. LONG SPAN BUILDERS, INC., Petitioner, v. R. S. AMPELOQUIO REALTY DEVELOPMENT, INC., Respondent.
This is a Petition for Review 1 of the Court of Appeals' Decision2 dated 14 July 2005 and Resolution dated 30 September 2005 in CA-G.R. CV No. 78259. The Court of Appeals reversed the Decision3 dated 14 January 2003 of the Regional Trial Court of Muntinlupa City, Branch 206 (RTC).
Petitioner B. D. Long Span Builders, Inc. and respondent R. S. Ampeloquio Realty Development, Inc. are corporations duly organized and existing under the laws of the Republic of the Philippines.
On 31 July 1999, petitioner and respondent entered into an Agreement wherein petitioner agreed to render "rip rapping" construction services at respondent's Ampeloquio International Resort in Ternate, Cavite, for the contract price of P50 million. On the same day, the parties entered into a second Agreement for the same construction project, stipulating a contract price of P30 million, hence bringing the total contract price of the project to P80 million. Both Agreements required petitioner to deposit with respondent a cash bond of one percent (1%) of the contract price, to be returned to petitioner upon completion of the project. In compliance, petitioner deposited with respondent a cash bond amounting to P800,000.
Respondent failed to fulfill its obligations under the Agreements, resulting in the cancellation of the project. Petitioner demanded the return of the P800,000 cash bond, but respondent refused to do so. Petitioner's legal counsel sent two (2) demand letters dated 19 April 2002 and 10 May 2002 to respondent, but the latter still refused to return the P800,000 cash bond.
Respondent failed to file an Answer or any responsive pleading to the complaint. Upon motion of petitioner, the RTC issued an Order dated 29 November 2002, declaring respondent in default, and allowing petitioner to present evidence ex parte.
WHEREFORE, finding preponderance of evidence in support of the instant complaint, the same is granted.
Judgment is rendered declaring the aforesaid contracts entered into by plaintiff with defendant, both dated July 31, 1999 for the rip rapping construction project at the Ampeloquio International Resort in Ternate, Cavite, as RESCINDED.
5) Pay the cost of suit in the amount of P10,539.00.
WHEREFORE, in view of the foregoing, the decision dated January 14, 2003 of the Regional Trial Court, Branch 206, Muntinlupa City in Civil Case No. 02-217 is hereby REVERSED and SET ASIDE.
The sole issue for resolution in this case is whether the Court of Appeals erred in ruling that there was invalid service of summons upon respondent, and hence the trial court did not acquire jurisdiction over said respondent.
We find the appeal without merit.
SEC. 11. 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.
SEC. 7. Substituted service.' If, for justifiable 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 office or regular place of business with some competent person in charge thereof.
In Orion Security Corporation v. Kalfam Enterprises, Inc.,17 this Court held 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 confidence ensuring that the latter would actually receive the summons.
On October 17, 2002 at about 11:00 o'clock in the morning, undersigned tried to cause the service of the Summons together with the attached complaint & its annexes in the above-entitled case to the defendant at his given address on record. Mr Romel Dalahoy, a staff of said Realty received the said Summons with the attached complaint & its annexes as evidenced by the former's signature as appearing on the original copy of the aforesaid Summons.
Henceforth, the said Summons with the attached complaint & its annexes to Atty. Evangeline V. Tiongson, Clerk of Court V, this Court, is respectfully returned, DULY SERVED, by substituted service.
Clearly, the summons was not served personally on the defendant (respondent) through any of the officers enumerated in Section 11 of Rule 14; rather, summons was served by substituted service on the defendant's staff member, Romel Dolahoy. Substituted service was resorted to on the server's first attempt at service of summons, and there was no indication that prior efforts were made to render prompt personal service on the defendant.
Petitioner's contention that respondent's filing of Notice of Appeal effectively cured any defect in the service of summons is devoid of merit. It is well-settled that a defendant who has been declared in default has the following remedies, to wit: (1) he may, at any time after discovery of the default but before judgment, file a motion, under oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake or excusable neglect, and that he has a meritorious defense; (2) if judgment has already been rendered when he discovered the default, but before the same has become final and executory, he may file a motion for new trial under Section 1(a) of Rule 37; (3) if he discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 of Rule 38; and (4) he may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default has been presented by him.19 Thus, respondent, which had been declared in default, may file a notice of appeal and question the validity of the trial court's judgment without being considered to have submitted to the trial court's authority.
WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals' Decision dated 14 July 2005 and Resolution dated 30 September 2005 in CA-G.R. CV No. 78259. Let the case be REMANDED to the trial court for further proceedings upon valid service of summons to respondent.
2 Penned by Associate Justice Remedios A. Salazar-Fernando with Associate Justices Rosmari D. Carandang and Monina Arevalo-Zenarosa, concurring.
3 Penned by Judge Patria A. Manalastas-De Leon.
5 CA rollo, pp. 50-51.
6 Promulgated on 14 July 2005.
9 Orion Security Corporation v. Kalfam Enterprises, Inc., G.R. No. 163287, 27 April 2007, 522 SCRA 617, citingCasimina v. Legaspi, G.R. No. 147530, 29 June 2005, 462 SCRA 171, 177.
10 Spouses Mason v. Court of Appeals, 459 Phil. 689, 699 (2003), citing National Power Corporation v. NLRC, 339 Phil. 89, 107 (1997).
11 Bank of the Philippine Islands v. Spouses Evangelista, 441 Phil. 445, 453 (2002).
12 Bank of the Philippine Islands v. Sps. Santiago, G.R. No. 169116, 28 March 2007, 519 SCRA 389, 400, citing Delta Motor Sales Corp. v. Mangosing, 162 Phil. 804 (1976).
13 Santiago, Jr. v. Bank of the Philippine Islands, G.R. No. 163749, 26 September 2008, 566 SCRA 435.
14 Ang Ping v. Court of Appeals, 369 Phil. 607, 614 (1999).
17 Supra note 9 at 623.
19 Talsan Enterprises, Inc. v. Baliwag Transit, Inc., 369 Phil. 409, 421 (1999).

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