[11] Bpi Vs. Spouses Santiago.docx

BPI vs. SPOUSES SANTIAGO GR. No. 169116 March 28, 2007 Chico-Nazario, J. FACTS: This is a petition for review by the Petitioner (BPI) for the reversal of the decision of the CA affirming the decision of the RTC enjoining the extrajudicial foreclosure sale of a parcel of land registered under the name of spouses Santiago Respondent Centrogen is a domestic corp., engaged in Pharmaceuticals and organized under Philippine laws and represented by the act of its president (son of spouses Santiago) On several Occasions, Centrogen obtained loans from the Far East Bank and Trust Company (FEBTC) . The amount reached was Php 4,650,000. It is evidenced by promissory notes executed by the President of Centrogen (Edwin Santiago) As security for the loan, Ireneo (parent of Edwin) executed a Real Estate Mortgage that covered a parcel of land located at Sta. Cruz, Laguna (2,166 sqm) in the amount of php 490,000. Later, the same property was secured for another loan obligation in the amount of Php 1.5m Centrogen defaulted in the payment of its loan obligation and it became due and demandable. FEBTC later merged with BPI and BPI was left as the surviving corp. (so sa Corp law BPI will assume all the rights and obligations of FEBTC under mergers) BPI then filed an extra-judicial foreclosure on the Real estate Mortgage, A notice of sale was issued and on the same day, the spouses were served with a copy of such notice. Upon Receipt, the spouses and Centrogen filed a complaint seeking for a TRO. The complaint alleged that the initial obligation was fully paid as evidenced by Union bank check with BPI as payee. In addition, it alleged that the original agreement was for the amount of 5 million pesos, only 2 million was released as such resulted in the failure of the project of the company. BPI was summoned to answer the complaint and it served a copy (sheriff) to the branch manager of BPI Sta. Cruz. BPI then filed a motion to dismiss on the ground of lack of jurisdiction over the person (citing Procedural infirmities in filing of the complaint). BPI claims that the branch manager was not one of those authorized by Section 11, Rule 14 of the Revised Rules of Court to receive summons on behalf of the corporation ergo it did not bind the corporation. ISSUE: Whether or not the RTC acquired jurisdiction over the person of BPI when the original summons was served upon the Branch Manager of Sta. Cruz. RULING: Yes. Sec. 11, Rule 14. 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. Basic is the rule that a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise, the service is insufficient. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. the service of summons on BPI’s Branch Manager did not bind the corporation for the branch manager is not included in the enumeration of the statute of the persons upon whom service of summons can be validly made in behalf of the corporation. Such service is therefore void and ineffectual. However, upon the issuance and the proper service of new summons on 11 March 2003, before the Writ of Preliminary Injunction was issued on 20 March 2003, whatever defect attended the service of the original summons, was promptly and accordingly cured. The subsequent service of summons was neither disputed nor was it mentioned by BPI except in a fleeting narration of facts and therefore enjoys the presumption that official duty has been regularly performed A case should not be dismissed simply because an original summons was wrongfully served.