Belo vs. Marcantonio

A defendant who files a motion to lift an order of default and to re-open trial seeks affirmative relief and thereby voluntarily submits to the court’s jurisdiction, curing any defect in the service of summons; however, the court’s subsequent refusal to set aside the default order and allow the defendant to participate in the proceedings violates the right to be heard, rendering all proceedings after the default order null and void for denial of due process.

Petitioner Felicita Z. Belo filed a complaint for foreclosure of mortgage against respondent Carlita C. Marcantonio in the Regional Trial Court of Mandaluyong City. Summons was served by substituted service at respondent’s former address; the receiving person was mistakenly identified as respondent’s niece when she was in fact respondent’s daughter. Respondent learned of the case only after she had been declared in default, petitioner had presented evidence ex parte, and the case had been submitted for decision. Respondent moved to lift the default order, asserting defective service and meritorious defenses. The trial court denied relief, holding that substituted service was valid and that respondent’s motion itself constituted voluntary appearance. The Court of Appeals annulled the trial court’s orders. In the Supreme Court, petitioner no longer contested the invalidity of the substituted service but maintained that the defect had been cured by respondent’s voluntary submission.

• Nature of the Action: On January 12, 2015, petitioner Felicita Z. Belo filed a complaint for foreclosure of mortgage against respondent Carlita C. Marcantonio before the RTC of Mandaluyong City, Branch 208, docketed as Civil Case No. MC15-9374.

• Service of Summons: The clerk of court issued summons dated January 26, 2015 addressed to respondent at 155 Haig St., Mandaluyong City. Per the Sheriff’s Return dated January 29, 2015, substituted service was resorted to after a single attempt at personal service; the summons and complaint were left with a certain Giovanna Marcantonio, described as respondent’s “niece,” who was of suitable age and discretion and acknowledged receipt. The Return stated that respondent was “not around and cannot be found at the given address” and that “earnest efforts were exerted to serve summons personally,” without further detail.

• Default and Ex Parte Proceedings: Respondent did not file an answer. Upon petitioner’s motion, respondent was declared in default. Petitioner presented evidence ex parte, and the case was submitted for decision.

• Motion to Lift Default: In April 2016, before judgment was rendered, respondent learned of the case. She filed a Motion to Set Aside/Lift Order of Default and to Re-Open Trial dated April 11, 2016, asserting: (a) she learned of the case only on April 5, 2016 through petitioner’s niece; (b) she did not receive summons; (c) she was a resident of Cavite, not Mandaluyong, at the time of service; (d) the recipient was her daughter Giovanna, not her niece, and Giovanna never forwarded the summons to her; (e) she had meritorious defenses, including fraudulent misrepresentation by one Maria Cecilia Duque and partial payments reducing the claimed amount.

• RTC Orders: In its Order dated August 15, 2016, the RTC denied the motion, finding the substituted service valid and stating that the proceedings were in order. Respondent’s motion for reconsideration was likewise denied in an Order dated September 22, 2017; the RTC added that respondent’s filing of the motion to lift default and the motion for reconsideration amounted to voluntary appearance, vesting the court with jurisdiction.

• CA Proceedings: Respondent filed a Petition for Certiorari and Prohibition with the CA, imputing grave abuse of discretion to the RTC. The CA ruled that substituted service was improperly effected — the sheriff made only one attempt at personal service and gave no details of the “earnest efforts” claimed. The CA further held that respondent’s motions, filed precisely to question jurisdiction, did not constitute voluntary submission to jurisdiction. The CA annulled the RTC orders and directed the RTC to allow respondent to file a responsive pleading.

• RTC Decision During Pendency: While the CA case was pending, and no TRO or WPI had been issued, the RTC proceeded to render a Decision dated May 25, 2018 in favor of petitioner.

• Cure of Defect by Voluntary Appearance: Petitioner conceded the invalidity of the substituted service but argued that respondent’s filing of a Motion to Set Aside/Lift Order of Default and to Re-Open Trial constituted voluntary submission to the jurisdiction of the trial court, thereby curing the defect in the service of summons and rendering the entire RTC proceedings binding upon respondent.

• Binding Effect of Default Proceedings: Petitioner insisted that because respondent was deemed to have voluntarily submitted to jurisdiction, the default order and the subsequent ex parte proceedings were valid and could not be disturbed.

• No Voluntary Submission: Respondent countered that her motions were filed explicitly to question the trial court’s jurisdiction over her person due to defective service of summons, and she consistently and categorically detailed the circumstances of the invalid service. She maintained that seeking to set aside a default order on jurisdictional grounds does not amount to voluntary appearance.

• Denial of Due Process: Respondent argued that the RTC violated her right to due process by treating her motion to lift default as a responsive pleading, ruling that she failed to substantiate her defenses therein, and by refusing to allow her to participate in the trial despite her repeated pleas to be heard on the merits.

• Cure of Defect: Whether respondent’s filing of a Motion to Set Aside/Lift Order of Default and to Re-Open Trial constituted voluntary submission to the trial court’s jurisdiction, thereby curing the admittedly defective substituted service of summons.

• Right to Due Process: Whether the RTC’s refusal to set aside the default order and to allow respondent to participate in the proceedings violated respondent’s right to due process, specifically the right to be heard.

• Cure of Defect: The defect in the service of summons was cured by respondent’s voluntary submission to the trial court’s jurisdiction. One who seeks an affirmative relief — such as moving to set aside a default order and to re-open trial — is deemed to have submitted to the jurisdiction of the court, as held in Navale v. Court of Appeals and La Naval Drug Corporation v. Court of Appeals. Respondent’s motion asked the trial court for the affirmative relief of allowing her to participate in the trial; in doing so, she voluntarily appeared and submitted to its authority, despite her simultaneous challenge to the validity of the summons. Thus, the notice aspect of due process was satisfied at that point.

• Right to Due Process: While the notice aspect was cured, the hearing aspect was not. Due process consists of both notice and hearing — the opportunity to be heard and to defend one’s interests. The improper service of summons was undisputed and established; it was a meritorious justification for failure to file an answer. Despite this, the RTC insisted on the validity of the default order and continuously disallowed respondent from participating in the proceedings. This deprived respondent of the opportunity to be heard, rendering the subsequent proceedings null and void as violative of due process. The CA therefore correctly nullified the RTC orders dated August 15, 2016 and September 22, 2017, and the RTC Decision dated May 25, 2018 — rendered during the pendency of the CA case — perforce shared the same nullity. To allow respondent to belatedly participate would serve substantial justice, expedite the proceedings, and avoid multiplicity of suits.

• Requirements for Valid Substituted Service (Manotoc v. Court of Appeals) — Substituted service is in derogation of the preferred method of personal service and is allowed only where personal service cannot be effected within a reasonable time. Before resorting to substituted service, the sheriff must exert at least three best-effort attempts at personal service, preferably on at least two different dates, within a reasonable period of one month, and the Return must detail why those attempts were unsuccessful. A single attempt and a mere general statement that “earnest efforts” were made are insufficient to justify substituted service.

• Voluntary Submission to Jurisdiction by Seeking Affirmative Relief — A defendant who files a motion seeking affirmative relief from the court — such as a motion to set aside a default order and to re-open trial — is deemed to have voluntarily submitted to the court’s jurisdiction, even if the motion simultaneously challenges the validity of the service of summons. This submission cures any defect in the service of summons with respect to the notice requirement of due process.

• Twin Requirements of Due Process: Notice and Hearing — Due process consists of two essential components: (a) notice, which means that a person whose interests are affected by a proceeding is informed of the facts and law upon which the action is based so they may adequately defend their interests; and (b) hearing, which means the opportunity to be heard or a chance to defend one’s interests. Both must be satisfied; curing the notice defect does not automatically satisfy the hearing requirement, and a court’s refusal to allow a defendant to participate after they have submitted to jurisdiction constitutes a denial of due process.

• Remedies of a Defaulting Party (Lina v. Court of Appeals) — A defendant declared in default may: (a) before judgment, file a sworn motion to set aside the order of default on the ground of fraud, accident, mistake, or excusable neglect, showing a meritorious defense (Rule 38, Section 3; formerly Rule 18); (b) after judgment but before finality, move for new trial under Rule 37, Section 1(a); (c) after final judgment, file a petition for relief under Rule 38, Section 2; or (d) appeal from the judgment as contrary to the evidence or the law, even without having sought to set aside the default order, under Rule 41, Section 2.

• “As substituted service is in derogation of the usual method of service — personal service is preferred over substituted service — parties do not have unbridled right to resort to substituted service of summons.” — This passage emphasizes the exceptional nature of substituted service and the strict standards for its validity under Manotoc.

• “One who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court.” — The ratio decidendi for holding that a motion to lift default and re-open trial, despite challenging jurisdiction, constitutes voluntary appearance that cures the summons defect.

• “Due process consists of notice and hearing. Notice means that the persons with interests in the litigation be informed of the facts and law on which the action is based for them to adequately defend their respective interests. Hearing, on the other hand, means that the parties be given an opportunity to be heard or a chance to defend their respective interests.” — The Court’s articulation of the two components of procedural due process, grounding its ruling that curing the notice defect did not remedy the denial of the right to be heard.

• Manotoc v. Court of Appeals, 530 Phil. 454 (2006) — The controlling standard for the validity of substituted service; the sheriff must make at least three attempts at personal service and detail the circumstances of failure. Applied to find that the single attempt and generic Return were fatally inadequate.

• Lina v. Court of Appeals, 220 Phil. 311 (1985) — Enumerates the four remedies available to a defaulting party depending on the stage of proceedings. Cited to contextualize respondent’s procedural options.

• Navale v. Court of Appeals, 324 Phil. 70 (1996); La Naval Drug Corporation v. Court of Appeals, 306 Phil. 84 (2004) — Establish the doctrine that a party who seeks affirmative relief voluntarily submits to the court’s jurisdiction. Applied to deem respondent’s motion to lift default as a curative submission.

• Interlink Movie Houses, Inc. v. Court of Appeals, G.R. No. 203298, January 17, 2018 — Reiterates the rule that seeking affirmative relief constitutes voluntary submission to jurisdiction.

• Rule 9, Section 3, Rules of Court — Governs the declaration of default; if a defending party fails to answer within the allowed time, the court, upon motion and proof, shall declare the party in default and proceed to grant relief as the pleading warrants. The trial court applied this provision to declare respondent in default and render judgment based on ex parte evidence.

• Rule 14, Sections 7 and 8, Rules of Court — Prescribe the modes of service of summons, with substituted service under Section 8 allowed only when personal service under Section 7 cannot be effected within a reasonable time. The sheriff’s Return was found deficient under these standards.

• Rule 18 (now renumbered), Section 3; Rule 37, Section 1(a); Rule 38, Section 2; Rule 41, Section 2, Rules of Court — These provisions, as catalogued in Lina v. Court of Appeals, constitute the procedural remedies of a party in default at various stages of litigation.

• Constitution, Article III, Section 1 (Due Process Clause) — The ultimate basis for holding that the trial court’s refusal to allow respondent to participate despite her submission to jurisdiction violated her right to due process.

Peralta, C.J., Lazaro-Javier, and Lopez, JJ., concurred. Justice Caguioa filed a separate concurring opinion.