G.R. No. 150768 & 160176; August 20, 2008
HEIRS OF MAMERTO MANGUIAT, et al., petitioners, vs. THE HON. COURT OF APPEALS and J.A. DEVELOPMENT CORPORATION, and REPUBLIC OF THE PHILIPPINES, respondents.

FACTS

The petitioners, heirs of original awardees of Lot 1993 (Calamba Estate) under the Friar Lands Act, filed a complaint for quieting of title and cancellation of certificates of title against J.A. Development Corporation (JDC), the Bureau of Telecommunications (BUTEL), and others. Summons was served on BUTEL through an employee, Cholito Anitola, whose position was not specified in the sheriff’s return. BUTEL failed to file an answer. The trial court granted the petitioners’ motion to declare BUTEL in default and allowed ex parte presentation of evidence. Subsequently, the court rendered a partial decision against BUTEL, declaring the petitioners as equitable owners, ordering the cancellation of BUTEL’s title, and directing the transfer of possession.
JDC, which had filed a motion to dismiss that was denied, moved to set aside the partial decision, arguing it constituted a prejudgment. The trial court denied this motion and issued a writ of execution. Meanwhile, the Republic, through the Office of the Solicitor General (OSG), filed a separate petition for annulment of judgment, arguing the trial court never acquired jurisdiction over BUTEL due to invalid service of summons.

ISSUE

The core issues were: (1) whether the trial court acquired jurisdiction over BUTEL given the mode of service of summons; and (2) whether the rendition of a partial default judgment against one defendant (BUTEL) was procedurally correct when a co-defendant (JDC) had filed an answer and was actively contesting the case.

RULING

The Supreme Court denied the petitions and affirmed the Court of Appeals’ decisions annulling the partial decision. On jurisdiction, the Court ruled that service of summons on BUTEL was invalid. BUTEL, as a government agency, is represented in litigation by the OSG. Service must be made on the Solicitor General or his authorized representative. Service upon a low-ranking employee like Anitola, without proof of his authority to receive court processes, did not bind the Republic or BUTEL. Consequently, the trial court never acquired jurisdiction over BUTEL, rendering the partial decision void.
On procedure, the Court emphasized that under Section 3(c), Rule 9 of the Rules of Court, when a common cause of action is asserted against several defendants and some answer while others default, the court must try the case against all defendants based on the answer filed and the evidence presented. The answer of the answering defendant inures to the benefit of the defaulted co-defendant. The trial court gravely abused its discretion by dividing the trial, first rendering a partial decision ex parte against the defaulted BUTEL while the case against JDC remained pending. This deprived BUTEL of due process, as it was denied the benefit of the defense and evidence JDC could present. The proper course was a single, unified trial culminating in a single judgment for all defendants.