G.R. No. 175109 ; August 6, 2008
PARAMOUNT INSURANCE CORP., petitioner, vs. A.C. ORDOÑEZ CORPORATION and FRANKLIN SUSPINE, respondents.

FACTS

Petitioner Paramount Insurance Corp., as subrogee, filed a complaint for damages against respondents A.C. Ordoñez Corporation and its driver, Franklin Suspine, arising from a vehicular accident. Summons was served on the corporation on April 3, 2000, received by Samuel D. Marcoleta of its Receiving Section. Petitioner moved to declare respondents in default for failure to file an answer. Respondent corporation opposed, arguing improper service of summons, claiming it was served on a secretarial staff unfamiliar with court processes, and that its president only received it on June 24, 2000. It sought a 15-day extension to file an answer. The Metropolitan Trial Court (MeTC) subsequently admitted the corporation’s belatedly filed Answer and set the case for pre-trial.
Petitioner assailed the MeTC orders via a petition for certiorari before the Regional Trial Court (RTC), arguing grave abuse of discretion. The RTC granted the petition, set aside the MeTC orders, and remanded the case to act on the motion to declare in default. The Court of Appeals (CA) reversed the RTC, reinstating the MeTC orders. Petitioner elevated the case to the Supreme Court.

ISSUE

The core issue is whether the MeTC committed grave abuse of discretion in admitting the respondent corporation’s Answer despite questions regarding the propriety of service of summons and the timeliness of the pleading.

RULING

The Supreme Court denied the petition and affirmed the CA decision. On the pivotal issue of service of summons, the Court held that service upon the corporation was invalid. Applying Section 11, Rule 14 of the Rules of Court, service upon a domestic private juridical entity may only be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel. Service to a receiving section staff member, Samuel D. Marcoleta, did not constitute valid service as he was not among the enumerated authorized officers. This rule is exclusive, and the argument of substantial compliance is unavailing.
Consequently, the period for the corporation to file its Answer did not commence due to invalid service. The MeTC, therefore, did not commit grave abuse of discretion, which implies a capricious and whimsical exercise of judgment, in admitting the Answer and allowing the case to proceed to pre-trial. The Court emphasized that rules of procedure are tools to facilitate justice, not to dismiss cases on mere technicalities, especially where a party has demonstrated a willingness to defend itself on the merits. The other issues raised by petitioner, including those on mediation and corporate existence, were found to be without merit.