G.R. No. 183035 ; January 9, 2013
OPTIMA REALTY CORPORATION, Petitioner, vs. HERTZ PHIL. EXCLUSIVE CARS, INC., Respondent.

FACTS

Petitioner Optima Realty Corporation and respondent Hertz Phil. Exclusive Cars, Inc. entered into a Contract of Lease for commercial space, which was later amended to expire on 28 February 2006. Hertz failed to pay rentals and utility bills for several months preceding the lease’s expiration. Optima sent a demand letter and, after the lease term ended without renewal, filed an unlawful detainer complaint before the Metropolitan Trial Court (MeTC). Summons was served on a Hertz supervisor, Henry Bobiles, who received it upon telephonic instruction from his manager. Hertz filed a Motion for Leave to File Answer, arguing the service of summons was defective but opting to answer nonetheless.
The MeTC ruled in favor of Optima, ordering Hertz to vacate and pay arrears. The Regional Trial Court (RTC) affirmed this decision. On appeal, the Court of Appeals (CA) reversed, holding that the MeTC did not acquire jurisdiction over Hertz due to improper service of summons on a non-managerial employee, and remanded the case for proper service.

ISSUE

Whether the Court of Appeals erred in ruling that the MeTC failed to acquire jurisdiction over the person of Hertz due to alleged improper service of summons.

RULING

The Supreme Court reversed the CA and reinstated the MeTC and RTC decisions. The Court held that jurisdiction over Hertz was properly acquired. Hertz voluntarily submitted to the MeTC’s jurisdiction when it filed a Motion for Leave to File Answer with Counterclaim. In that motion, Hertz sought affirmative relief by asking the court to admit its Answer, which included a counterclaim for damages. This constituted a voluntary appearance, curing any potential defect in the service of summons. Jurisdiction over the defendant in a civil case is acquired either by proper service of summons or by the defendant’s voluntary appearance. By actively participating in the proceedings and seeking relief from the court, Hertz effectively recognized the court’s authority.
On the substantive merits, the Court found the unlawful detainer justified. The lease contract expired by its own terms on 28 February 2006, and Hertz’s belated notice of intent to renew, sent well past the 90-day contractual deadline, was ineffective. Furthermore, Hertz’s failure to pay rent for seven months constituted a valid ground for ejectment under Article 1673(2) of the Civil Code. Therefore, Optima had a clear right to recover possession of the property.