G.R. No. L-8576; February 11, 1915
VARGAS and COMPANY, plaintiff-appellee, vs. CHAN HANG CHIU, ET AL., defendants-appellants.

FACTS:
On August 19, 1911, Chan Hang Chiu filed an action in the justice’s court of Manila against Vargas and Company, a mercantile partnership, to recover a sum of money. The sheriff certified that he served the summons and complaint on Vargas and Company by delivering copies to Jose Macapinlac, whom he identified as the managing agent of the company. On July 2, 1912, the justice’s court rendered judgment against Vargas and Company. Execution was issued, and the company’s property was levied upon. Vargas and Company paid the judgment under protest and subsequently filed this action to annul the judgment, alleging that the justice’s court never acquired jurisdiction because: (1) as a partnership, all partners must be served summons individually, and (2) even if service on a managing agent sufficed, Macapinlac was not such an agent but merely a salesman. The trial court ruled in favor of Vargas and Company, declaring the prior judgment void. Chan Hang Chiu appealed.

ISSUE:
1. Whether service of summons on the managing agent of a commercial partnership is sufficient to confer jurisdiction over the partnership, or whether service must be made on all individual partners.
2. Whether the plaintiff successfully rebutted the presumption of valid service arising from the sheriff’s certificate that service was made on the managing agent.

RULING:
The Supreme Court REVERSED the trial court’s judgment and dismissed the complaint.

1. On the Sufficiency of Service on a Managing Agent: The Court held that a commercial partnership, like Vargas and Company, is a juridical entity with a legal personality separate from its individual partners under Articles 35 and 38 of the Civil Code and Article 116 of the Code of Commerce. Consequently, it may sue and be sued in its firm name. Service of summons upon such an entity is properly effected by serving its managing agent, chief officer, or other official specified by law (under Section 396 of the Code of Civil Procedure), and not by serving all partners individually. The Court noted that the universal practice in the Philippines supports this procedure, and Vargas and Company itself invoked this principle by filing the present action in its company name.

2. On Rebutting the Presumption of Valid Service: The sheriff’s certificate of service constitutes prima facie evidence of the facts stated therein, creating a presumption of valid service. To overcome this presumption, the evidence must be clear and convincing. Vargas and Company presented only one witness, its bookkeeper, who gave negative and hearsay testimony about Macapinlac’s role. The witness lacked personal knowledge of the contractual relations between Macapinlac and the partnership. The Court found this evidence insufficient to rebut the strong presumption of regularity arising from the sheriff’s certificate. The company failed to present any partner or person with direct knowledge to substantiate its claim that Macapinlac was not a managing agent.

Therefore, the judgment of the justice’s court was valid and enforceable. The Court did not find it necessary to address the implications of the payment under protest. The complaint was dismissed on the merits.