GR 172204; (July, 2014) (Digest)
G.R. No. 172204 , July 2, 2014
CATHAY METAL CORPORATION, Petitioner, vs. LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., Respondent.
FACTS
Respondent Laguna West Multi-Purpose Cooperative, Inc. (Laguna West) is a cooperative under the Comprehensive Agrarian Reform Law. It allegedly entered into a joint venture agreement with farmer-beneficiaries in Silang, Cavite, and caused the annotation of its adverse claim on the beneficiaries’ certificates of title in 1996. Meanwhile, petitioner Cathay Metal Corporation (Cathay) entered into Irrevocable Exclusive Right to Buy contracts with the same farmer-beneficiaries. After the land was converted to mixed use in 1998, Cathay bought the properties in 1999, and transfer certificates of title were issued in its name, carrying over the annotations of Laguna West’s adverse claim.
In 2000, Cathay filed a consolidated petition for cancellation of these adverse claims with the Regional Trial Court (RTC) of Tagaytay City. It attempted to serve the petition by registered mail to Laguna West’s official address at “Barangay Mayapa, Calamba, Laguna,” but the mail was returned with a certification stating the cooperative was “not existing.” Cathay also claimed an attempt at personal service failed for the same reason. Upon Cathay’s motion, the RTC issued an order on December 15, 2000, declaring that substituted service had been effected. Cathay was then allowed to present evidence ex parte.
Laguna West later learned of the case and, through its Vice-President Orlando dela Peña, filed a manifestation and motion, alleging it never received the summons and petition and requesting service at a new address (No. 160, Narra Avenue, Looc, Calamba, Laguna). The RTC initially granted this on March 16, 2001. Cathay filed a motion for reconsideration instead of complying, arguing the case was already submitted for decision and Laguna West was in default. The RTC eventually granted Cathay’s motion for reconsideration on January 16, 2003, finding that Laguna West’s representatives failed to prove their authority and that service should have been made to the address in its Cooperative Development Authority Certificate of Registration.
The RTC rendered a decision on March 21, 2003, granting the petition for cancellation, but rescinded it on April 3, 2003, for being prematurely issued while a motion for reconsideration was pending. Subsequently, on June 23, 2003, the RTC again granted Cathay’s petition, ordering the cancellation of the annotations, based on findings that Laguna West had been inoperative since 1992, its official address was “closed,” and the adverse claim had lapsed under the Property Registration Decree.
Laguna West appealed to the Court of Appeals (CA), arguing that Cathay secured favorable orders through fraud by sending pleadings to an old address and that the trial court erred in applying substituted service, thus never acquiring jurisdiction. The CA granted the appeal on November 25, 2005, and remanded the case to the RTC for Laguna West’s presentation of evidence, ruling there was no valid service of summons in accordance with Rule 14, Section 11 of the Rules of Court. The CA denied Cathay’s motion for reconsideration on April 5, 2006.
ISSUE
Whether respondent Laguna West Multi-Purpose Cooperative, Inc. was properly served with summons or notices of the hearing on the petition for cancellation of annotations of adverse claim.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ decision. The Court held that the Rules of Court govern court procedures, including service of summons. Rule 14, Section 11 provides an exclusive enumeration of persons authorized to receive summons for juridical entities: the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel. The provisions on notices in the Cooperative Code cannot replace these rules on summons. The attempted service by registered mail to Laguna West’s address, which was returned unserved, and the subsequent order for substituted service were invalid. The trial court did not acquire jurisdiction over Laguna West due to improper service. Therefore, the CA correctly remanded the case to the trial court to allow Laguna West to present its evidence.