G.R. No. 172595 ; April 10, 2008
BIENVENIDO EJERCITO and JOSE MARTINEZ, petitioners, vs. M.R. VARGAS CONSTRUCTION, BRION, MARCIAL R. VARGAS, Sole Owner, RENATO AGARAO, respondents.

FACTS

Petitioners Bienvenido Ejercito and Jose Martinez filed a petition for injunction with the Regional Trial Court (RTC) of Quezon City against “M.R. Vargas Construction,” represented by its owner Marcial R. Vargas and foreman Renato Agarao, seeking to halt the clearing and concreting of Panay Avenue. Summons was issued to the stated business address but was returned unserved, with the notation that the enterprise was unknown at that location. Despite this, the RTC proceeded to hear the application for a temporary restraining order (TRO), which Agarao attended. The court granted the TRO and later a writ of preliminary injunction. Counsel for the construction enterprise initially moved to dismiss but withdrew the jurisdictional challenge upon being shown a copy of the summons bearing a signature, mistakenly believing it was received by his client. It was later discovered that the recipient’s signature was actually that of petitioner Jose Martinez.
The RTC, upon motion, nullified all proceedings due to lack of jurisdiction over the respondent, finding that summons was never validly served. The Court of Appeals affirmed this ruling. Petitioners now argue that jurisdiction was acquired through Agarao’s voluntary appearance at the TRO hearing and the initial withdrawal of the jurisdictional challenge by counsel.

ISSUE

Whether the Regional Trial Court validly acquired jurisdiction over the respondents despite the defective service of summons.

RULING

No, the RTC did not validly acquire jurisdiction. Jurisdiction over the defendant is acquired only upon a valid service of summons or the defendant’s voluntary appearance. Service of summons upon an entity without juridical personality, like M.R. Vargas Construction which is a sole proprietorship, must be made pursuant to the Rules of Court. Rule 14, Section 8 requires service upon the owner or the person in charge of the office or place of business. Here, the summons was returned unserved; the subsequent signing by petitioner Martinez constituted a fraudulent act that did not constitute valid service. The voluntary appearance of counsel or a party to contest the court’s jurisdiction does not constitute a waiver of such jurisdictional defect. Agarao’s presence at the TRO hearing was not for the purpose of submitting to the court’s authority but was related to the injunction application. The counsel’s temporary withdrawal of the jurisdictional challenge, based on a mistaken belief induced by the fraudulent signature, did not operate as a waiver or cure the fatal defect in service. Consequently, all proceedings conducted by the RTC were null and void for lack of jurisdiction. The Court of Appeals correctly affirmed the RTC’s order nullifying the proceedings.