G.R. No. 201378 , October 18, 2017
G.V. FLORIDA TRANSPORT, INC., Petitioner, vs. TIARA COMMERCIAL CORPORATION, Respondent.

FACTS

Victory Liner, Inc. (VLI) filed a damages suit against G.V. Florida Transport, Inc. (GV Florida) and its driver before the Regional Trial Court (RTC) of Caloocan City, arising from a bus collision. In its Answer, GV Florida alleged that a tire blow-out due to factory defects in Michelin tires was the proximate cause. Consequently, GV Florida filed a third-party complaint against Tiara Commercial Corporation (TCC), the seller of the tires. Summons was served on TCC’s financial supervisor, not on any officer listed under Section 11, Rule 14 of the Rules of Court. TCC filed a motion to dismiss, arguing improper service of summons and that the third-party complaint, being a claim for implied warranty, had prescribed as it was filed beyond the six-month period under Article 1571 of the Civil Code. The RTC denied the motion. TCC then filed a petition for certiorari with the Court of Appeals (CA).
The CA granted TCC’s petition. It ruled that the RTC never acquired jurisdiction over TCC due to improper service of summons, as the service upon a financial supervisor did not comply with the exclusive enumeration in the rules. The CA further held that GV Florida’s third-party complaint was essentially a claim for implied warranty against hidden defects, which prescribes in six months from delivery. Since the tires were purchased in March 2007 and the third-party complaint was filed in April 2008, the action had prescribed. GV Florida elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

The primary issues were: (1) whether the RTC acquired jurisdiction over TCC despite the alleged improper service of summons; and (2) whether the third-party complaint against TCC had prescribed.

RULING

The Supreme Court granted the petition, reversed the CA Decision, and reinstated the RTC Orders. On jurisdiction, the Court held that while the initial service of summons on TCC’s financial supervisor was indeed defective, TCC voluntarily submitted to the RTC’s jurisdiction. Jurisdiction over the person can be acquired either by proper service of summons or by voluntary appearance. TCC’s filing of a motion for extension of time to file a responsive pleading, followed by an Answer Ad Cautelam and active participation in pre-trial proceedings without reserving its jurisdictional objection, constituted voluntary appearance. This cured the defect in the service of summons.
On the issue of prescription, the Court ruled that the CA erred in characterizing the third-party complaint as a simple action for implied warranty subject to a six-month prescriptive period. The Court clarified that the nature of an action is determined by the allegations in the complaint. GV Florida’s third-party complaint alleged that the tire blow-out due to product defects was the proximate cause of the collision, making TCC liable for the resulting damages under the law on quasi-delicts (torts). A cause of action based on quasi-delict prescribes in four years. Since the complaint was filed within this period, it had not prescribed. The Court emphasized that a third-party complaint is proper when the third-party defendant may be liable to the defendant for all or part of the plaintiff’s claim, which was sufficiently alleged in this case. The RTC, therefore, did not commit grave abuse of discretion in denying the motion to dismiss.