RULE 10SWAGMAN VS CAFacts: Sometime in 1996 and 1997, Swagman through Atty. Infante and Hegerty, its president and vice-president, respectively, obtained from Christian loans evidenced by three promissory notes dated 7 August 1996, 14 March 1997, and 14 July 1997. Each of the promissory notes is in the amount of US$50,000 payable after three years from its date with an interest of 15% per annum payable every three months. In a letter dated 16 December 1998, Christian informed the petitioner corporation that he was terminating the loans and demanded from the latter payment of said loans. On 2 February 1999, Christian filed with the RTC a complaint for a sum of money and damages against the petitioner corporation, Hegerty, and Atty. Infante. The petitioner corporation, together with its president and vice-president, filed an Answer raising as defenses lack of cause of action. According to them, Christian had no cause of action because the three promissory notes were not yet due and demandable. The trial court ruled that under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure, a complaint which states no cause of action may be cured by evidence presented without objection. Thus, even if the plaintiff had no cause of action at the time he filed the instant complaint, as defendants obligation are not yet due and demandable then, he may nevertheless recover on the first two promissory notes in view of the introduction of evidence showing that the obligations covered by the two promissory notes are now due and demandable. When the instant case was filed on February 2, 1999, none of the promissory notes was due and demandable, but , the first and the second promissory notes have already matured during the course of the proceeding. Hence, payment is already due. This finding was affirmed in toto by the CA.Issue: Whether or not a complaint that lacks a cause of action at the time it was filed be cured by the accrual of a cause of action during the pendency of the case. Held: No. Cause of action, as defined in Section 2, Rule 2 of the 1997 Rules of Civil Procedure, is the act or omission by which a party violates the right of another. Its essential elements are as follows: 1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2. An obligation on the part of the named defendant to respect or not to violate such right; and 3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief. It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief. Such interpretation by the trial court and CA of Section 5, Rule 10 of the 1997 Rules of Civil Procedure is erroneous. The curing effect under Section 5 is applicable only if a cause of action in fact exists at the time the complaint is filed, but the complaint is defective for failure to allege the essential facts.Amendments of pleadings are allowed under Rule 10 of the 1997 Rules of Civil Procedure in order that the actual merits of a case may be determined in the most expeditious and inexpensive manner without regard to technicalities, and that all other matters included in the case may be determined in a single proceeding, thereby avoiding multiplicity of suits.RULE 14VILLAROSA VS BENITOFacts: Petitioner is a limited partnership with principal office address at Davao City and with branch offices at Paraaque, MM and Lapasan, Cagayan de Oro City. Petitioner and private respondent executed a Deed of Sale with Development Agreement wherein the former agreed to develop certain parcels of land located at Cagayan de Oro belonging to the latter into a housing subdivision for the construction of low cost housing units. They further agreed that in case of litigation regarding any dispute arising therefrom, the venue shall be in the proper courts of Makati. private respondent, as plaintiff, filed a Complaint for Breach of Contract and Damages against petitioner, as defendant, before the RTC Makati for failure of the latter to comply with its contractual obligation in that, other than a few unfinished low cost houses, there were no substantial developments therein. Summons, together with the complaint, were served upon the defendant, through its Branch Manager at the stated address at Cagayan de Oro City but the Sheriff's Return of Service stated that the summons was duly served "upon defendant E.B. Villarosa & Partner Co., Ltd. thru its Branch Manager Engr. at their new office Villa Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the signature on the face of the original copy of the summons. Defendant prayed for the dismissal of the complaint on the ground of improper service of summons and for lack of jurisdiction over the person of the defendant. It contends that the RTC did not acquire jurisdiction over its person since the summons was improperly served upon its employee in its branch office at Cagayan de Oro City who is not one of those persons named in Section 11, Rule 14 RoC upon whom service of summons may be made. plaintiff filed an Opposition to Defendant's Motion to Dismiss. plaintiff filed a Motion to Declare Defendant in Default. the trial court issued an Order denying defendant's Motion to Dismiss as well as plaintiffs Motion to Declare Defendant in Default. defendant, filed a Motion for Reconsideration alleging that Sec.11, Rule 14 of the new Rules did not liberalize but, on the contrary, restricted the service of summons on persons enumerated therein; and that the new provision is very specific and clear in that the word "manager" was changed to "general manager", "secretary" to "corporate secretary", and excluding therefrom agent and director. Defendant's Motion for Reconsideration was denied, hence this petition.

Issue: Whether or not the trial court acquired jurisdiction over the person of petitioner upon service of summons on its Branch Manager

Held: No. the enumeration of persons to whom summons may be served is "restricted, limited and exclusive" following the rule on statutory construction expressio unios est exclusio alterius and argues that if the Rules of Court Revision Committee intended to liberalize the rule on service of summons, it could have easily done so by clear and concise language. under the new Rules, service of summons upon an agent of the corporation is no longer authorized. The designation of persons or officers who are authorized to accept summons for a domestic corporation or partnership is now limited and more clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states "general manager" instead of only "manager"; "corporate secretary" instead of "secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of its directors" is conspicuously deleted in the new rule.

CITIZENS SURETY VS HERRERAFacts:

Citizens Surety and Insurance Co (Citizens) alleged that at the request of Santiago Dacanay, it issued 2 surety bonds to guarantee payment of P5K promissory notes in favor Gregorio Fajardo and Manufacturers Bank & Trust Co respectively. As security, the Santiago and Josefina Dacanay executed an Indemnity Agreement to jointly indemnify Citizens for losses, costs and expenses (with 12% annual interest) and a REM over a parcel of land in Baguio. The Dacanays failed to pay the promissory notes compelling Citizens to pay. The Dacanays failed to reimburse Citizens however, forcing the latter to cause the extrajudicial foreclosure of the mortgage and file a case to recover the unsatisfied balance.

At petitioners request, the respondent Judge caused summons to be made by publication in the Philippines Herald. But despite such publication and deposit of copy with the Manila post office, the defendant did not appear within 60 days from the last publication.

Plaintiff sought the defendants to be declared in default, but the Judge eventually dismissed the case, the suit being in personam and the defendants not having appeared.

Issue:

W/N summons made by publication is sufficient for the court to acquire jurisdictionHeld:

No. In an action strictly in personam, personal service of summons, within the forum, is essential to the acquisition of jurisdiction over the person of the defendant, who does not voluntarily submit himself to the authority of the court. In other words, summons by publication cannot consistently with the due process clause in the Bill of Rights confer upon the court jurisdiction over said defendants.

The proper recourse for the creditor is to locate properties, real or personal, of the resident defendant debtor with unknown address and cause them two be attached, in which case, the attachment converts the action into a proceeding in rem or quasi in rem and the summons by publication may be valid.

Given the skill of debtors to conceal their properties however, the decision of the respondent Judge should be set aside and held pending in the archives until petitioner tracks down the whereabouts of the defendants person or properties.

PNOC VS SANTOSFacts: PNOC Exploration Corporation, respondent, filed a complaint for a sum of money against petitioner Pedro Santos Jr. in the RTC of Pasig. The amount sought to be collected was the petitioners unpaid balance of the car loan advanced to him by respondent when he was still a member of its board of directors.

Personal service of summons were made to petitioner but failed because the latter cannot be located in his last known address despite earnest efforts to do so. Subsequently, on respondents motion, the trial court allowed service of summons by publication. Respondent caused the publication of the summons in Remate, a newspaper of general circulation in the Philippines. Thereafter, respondent submitted the affidavit of publication and the affidavit of service of respondents employee to the effect that he sent a copy of the summons by registered mail to petitioners last known address.

Petitioner still failed to answer within the prescribed period despite the publication of summons. Hence, respondent filed a motion for the reception of its evidence ex parte. Trial court granted said motion and proceeded with the ex parte presentation and formal offer of its evidence.

Petitioner filed an Omnibus Motion for Reconsideration and to Admit Attached Answer, alleging that the affidavit of service submitted by respondent failed to comply with Section 19, Rule 14 of the Rules of Court as it was not executed by the clerk of court. Trial court denied the said motion and held that the rules did not require such execution with the clerk of court. It also denied the motion to admit petitioners answer because the same was filed way beyond the reglementary period.

Petitioner appeals to the CA via a petition for certiorari but failed and even sustained the trial courts decision and ordered the former to pay the amount plus legal interest and cost of suit. Hence, this petition.

Issues:

(1) Whether or not there is lack of jurisdiction over the petitioner due to improper service of summons.

(2) Whether or not the rule on service by publication under Section 14, Rule 14 of the Rules of Court applies only to actions in rem, not actions in personam.

(3) Whether or not the affidavit of service of the copy of the summons should have been prepared by the clerk of court and not respondents messenger.

Held:

(1) Section 14, Rule 14 provides that in any action where the defendant is designated as an unknown owner or the like or when his whereabouts are unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon him by publication in a newspaper of general circulation and in such places and for such times as the court may order. Since petitioner could not be personally served with summons despite diligent efforts to locate his whereabouts, respondent sought and was granted leave of court to effect the service of summons upon him by publication in a newspaper of general circulation. Thus, petitioner was proper served with summons by publication and that there is jurisdiction over his person.

(2) The in rem/in personam distinction was significant under the old rule because it was silent as to the kind of action to which the rule was applicable but this has been changed, it now applies to any action. The present rule expressly states that it applies in any action where the defendant is designated as an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry. Hence, the petitioners contention that the complaint filed against him is not covered by the said rule because the action for recovery of sum of money is an action in personam is not applicable anymore.

(3) The service of summons by publication is complemented by service of summons by registered mail to defendants last known address. This complementary service is evidenced by an affidavit showing the deposit of a copy of the summons and order for publication in the post office, postage for prepaid, directed to the defendant by registered mail to his last known address. The rules, however, do not require that the affidavit of complementary service be executed by the clerk of court. While the trial court ordinarily does the mailing of copies of its orders and processes, the duty to make the complementary service by registered mail is imposed on the party who resorts to service by publication.