The United Coconut Planters Bank has lost its legal battle for the recovery of almost P1 billion from a rice trading family who allegedly failed to pay its loan obligations from the bank since 2006.
This after the Supreme Court’s Second Division through Associate Justice Alfredo Benjamin Caguioa upheld the decision of the Court of Appeals in 2012, which reversed and set aside the 2007 order issued by the Regional Trial Court of Makati City in favor of UCPB.
In June 8, 2008, the Makati City RTC denied the respondents’ motion to dismiss the complaint for damages with prayer for the issuance of a writ of preliminary attachment filed by UCPB.
The UCPB named the National Granary Inc., spouses Alison Ang Sy and Guillermo Sy, Renato Ang, Nena Ang and Ricky Ang as respondents in the complaint.
Also included in the notice served by the court sheriff were Derick Chester Sy and National Petroleum Gas Inc., formerly National Petroleum Corp.
Apart from denying the respondents’ motion to dismiss, the RTC also issued a writ of preliminary attachment preventing them from disposing of their assets and holdings pending resolution of the UCPB’s complaint.
National Granary set up the Sariaya port by obtaining P1.6-billion loans from several banks, including UCPB.
However, the SC ruled that the CA did not commit any mistake in reversing the Makati RTC’s orders.
The high court sided with the argument of the respondents that the trial court had failed to acquire jurisdiction over them for failure to properly serve the summons against them.
“In the absence of summons or when the service of summons upon the person of the defendant is defective, the court acquires no jurisdiction over his person and the proceedings and any judgment rendered are null and void,” the SC ruled, in its March 27 resolution.
Based on the records, the SC said the prerequisites for valid substituted service was not observed as there was only a single day effort to personally serve the summons upon the defendants.
The SC noted that the sheriff’s report also failed to indicate that the person who received the summons was a person of suitable age and residing in the residence of the defendants.
“Nor is there a statement that validates that such person understood the significance of the receipt of the summons and the correlative duty to immediately deliver the same to the therein defendants or, at the very least, to notify the said persons immediately,” the SC said.
“Jurisprudence is clear and unequivocal in making it an ironclad rule that such matters “must be clearly and specifically described in the Return of Summons,” the high court said.
As regards to the service of summons to NGI and NPGI, the SC said the CA correctly held that since the summons were served on a mere employee and not to its officials, the services of summons were defective.
Contrary to the argument of UCPB, the high tribunal said even the filing of the motion to dismiss the complaint and suspend proceedings by the respondents cannot be construed as voluntary submission on their part to the court’s jurisdiction.
Their appearance before the court, according to the SC, should fall under the concept of conditional appearance, such that a party who makes a special appearance to challenge, among others, the court’s jurisdiction over his person cannot be considered to have submitted to its authority.
Associate Justices Antonio Carlin, Estela Perlas-Bernard, Jose Reyes, Jr. and Amy Lazaro-Javier concurred with the ruling.