ATLANTIC ERECTORS V. HERBAL COVE, G.R. NO. 148568, MARCH 20, 2003 MANCIA

FACTS:

Herbal Cove and Atlantic Erectors entered into a Construction Contract whereby the former agreed to construct four (4) units of townhouses. The contract period is 180 days commencing [on] July 7, 1996 and to terminate on January 7, 1997. [Petitioner] claimed that the said period was not followed due to reasons attributable to [respondent], namely: suspension orders, additional works, force majeure, and unjustifiable acts of omission or delay on the part of said [respondent]. [Respondent], however, denied such claim and instead pointed to [petitioner] as having exceeded the 180 day contract period aggravated by defective workmanship and utilization of materials which are not in compliance with specifications.

Petitioner filed a complaint for sum of money with damages with the Regional Trial Court. In addition, they also filed a notice of lis pendens for annotation during the pendency of the civil case they filed.

Respondents filed a Motion to Dismiss [petitioner's] Complaint for lack of jurisdiction and for failure to state a cause of action. They claimed [that] the Makati RTC has no jurisdiction over the subject matter of the case because the parties' Construction Contract contained a clause requiring them to submit their dispute to arbitration. RTC dismissed the Complaint as against respondent for petitioner's failure to comply with a condition precedent to the filing of a court action which is the prior resort to arbitration and as against Escaler for failure of the Complaint to state a cause of action. they filed a Motion to Cancel Notice of Lis Pendens. They argue that the Notices of lis pendens are without basis because the action is a purely personal action to collect a sum of money and recover damages and does not directly affect title to, use, or possession of real property. RTC initially granted the Motion to Cancel Notice; however, they reversed and reinstated the Notices after Atlantic filed a Motion for Reconsideration. CA reinstated the initial order of the RTC granting Herbal’s Motion to Cancel the Notice of Lis Pendens.

ISSUE:

"I. Whether or not money claims representing cost of materials for and labor on the houses constructed on a property are a proper lien for annotation of lis pendens on the property title.

"II. Whether or not the trial court, after having declared itself without jurisdiction to try the case, may still decide on the substantial issue of the case.”

HELD:

First Ruling:

No

Petitioner avers that its money claim on the cost of labor and materials for the townhouses it constructed on the respondent's land is a proper lien that justifies the annotation of a notice

of lis pendens on the land titles. According to petitioner, the money claim constitutes a lien that can be enforced to secure payment for the said obligations. It argues that, to preserve the alleged improvement it had made on the subject land, such annotation on the property titles of respondent is necessary.

On the other hand, Respondent Herbal Cove argues that the annotation is bereft of any factual or legal basis, because petitioner's Complaint does not directly affect the title to the property, or the use or the possession thereof. It also claims that petitioner's Complaint did not assert ownership of the property or any right to possess it. Moreover, respondent attacks as baseless the annotation of the Notice of Lis Pendens through the enforcement of a contractor's lien under Article 2242 of the Civil Code. It points out that the said provision applies only to cases in which there are several creditors carrying on a legal action against an insolvent debtor.

As a general rule, the only instances in which a notice of lis pendens may be availed of are as follows: (a) an action to recover possession of real estate; (b) an action for partition; and (c) any other court proceedings that directly affect the title to the land or the building thereon or the use or the occupation thereof. Additionally, this Court has held that resorting to lis pendens is not necessarily confined to cases that involve title to or possession of real property. This annotation also applies to suits seeking to establish a right to, or an equitable estate or interest in, a specific real property; or to enforce a lien, a charge or an encumbrance against it.

Article 2242 of the Civil Code or the enforcement of the lien thereunder is applicable here, because petitioner's Complaint failed to satisfy the foregoing requirements. Nowhere does it show that respondent's property was subject to the claims of other creditors or was insufficient to pay for all concurring debts. Moreover, the Complaint did not pertain to insolvency proceedings or to any other action in which the adjudication of claims of preferred creditors could be ascertained.

Another factor negates the argument of petitioner that its money claim involves the enforcement of a lien or the assertion of title to or possession of the subject property: the fact that it filed its action with the RTC of Makati, which is undisputedly bereft of any jurisdiction over respondent's property in Tagaytay City. Certainly, actions affecting title to or possession of real property or the assertion of any interest therein should be commenced and tried in the proper court that has jurisdiction over the area, where the real property involved or a portion thereof is situated. If petitioner really intended to assert its claim or enforce its supposed lien, interest or right over respondent's subject properties, it would have instituted the proper proceedings or filed a real action with the RTC of Tagaytay City, which clearly had jurisdiction over those properties.

 A complaint or an action is determined by the courts to be in personam, the rationale for or purpose of the notice of lis pendens ceases to exist. To be sure, this Court has expressly and categorically declared that the annotation of a notice of lis pendens on titles to properties is not proper in cases wherein the proceedings instituted are actions in personam.

Second Issue:

On the basis of the foregoing rule, the trial court lost jurisdiction over the case only on August 31, 1998, when petitioner filed its Notice of Appeal. Thus, any order issued by the RTC prior to that date should be considered valid, because the court still had jurisdiction over the case. Accordingly, it still had the authority or jurisdiction to issue the July 30, 1998 Order canceling the Notice of Lis Pendens. On the other hand, the November 4, 1998Order that set aside the July

30, 1998 Order and reinstated that Notice should be considered without force and effect, because it was issued by the trial court after it had already lost jurisdiction.

As discussed previously, erroneously misplaced is the reliance of petitioner on the premise that its money claim is an action for the enforcement of a contractor's lien. Verily, the annotation of the Notice of Lis Pendens on the subject property titles should not have been made in the first place. The Complaint filed before the Makati RTC -- for the collection of a sum of money and for damages -- did not provide sufficient legal basis for such annotation.

Finally, petitioner vehemently insists that the trial court had no jurisdiction to cancel the Notice. Yet, the former filed before the CA an appeal, docketed as CA-GR CV No. 65647,21 questioning the RTC's dismissal of the Complaint for lack of jurisdiction. Moreover, it must be remembered that it was petitioner which had initially invoked the jurisdiction of the trial court when the former sought a judgment for the recovery of money and damages against respondent. Yet again, it was also petitioner which assailed that same jurisdiction for issuing an order unfavorable to the former's cause. Indeed, parties cannot invoke the jurisdiction of a court to secure affirmative relief, then repudiate or question that same jurisdiction after obtaining or failing to obtain such relief.

SPS. MARIANO MADRIGAL AND JULIETA MADRIGAL VS. COURT OF APPEALS

FACTS:

Joseph Aquino and Josefina Aquino (SPOUSES AQUINO) brought a Complaint for recovery of possession with damages against Mariano F. Madrigal (MARIANO) and Intercity Properties, Inc., (INTERCITY), before the Regional Trial Court of Makati City, Branch 139, which issued on June 25, 1993 the corresponding summons. The summons and complaint were duly served on INTERCITY but not on MARIANO.

Alias summons issued upon motion of the SPOUSES AQUINO. On December 20, 1993, since MARIANO was not in his residence despite several attempts to look for him, substituted service of summons was resorted to by "leaving a copy of the summons together with the complaint and its annexes to his wife, Julieta S. Madrigal, a person of suitable age and discretion and who acknowledged receipt thereof . . .." The return of service bore her signature.

When the case was called for pre-trial, the co-defendant, INTERCITY and its counsel failed to appear, despite due notice. So, upon motion of the private respondents (plaintiffs below), INTERCITY was declared in default in the Order.

For failure to file an answer or any responsive pleading, MARIANO was declared in default and the SPOUSES AQUINO adduced their evidence ex-parte, on the basis of which a Judgment by Default.  Copy of such decision was duly received by MARIANO.

A Motion to Lift Order of Default was presented by MARIANO, contending that the trial court never acquired jurisdiction over his person as he was not personally served with summons together with the complaint, and that the complaint was defective because his wife who, according to movant, is an indispensable party, was not impleaded as a party. The same motion was amended to pray for the setting aside of the said decision. Both motions were denied. Mariano's Motion for Reconsideration was also denied.

MARIANO, with his wife, JULIETA F. Madrigal, (JULIETA, for brevity), as co-petitioner, brought an original action for Certiorari before the Court of Appeals, to annul the aforesaid orders allegedly issued with grave abuse of discretion. The Court of Appeals dismissed the petition.

ISSUE:

Whether or not there was invalid service of summons on petitioner MARIANO

HELD:

No.

In upholding the questioned substituted service of summons, the Court of Appeals opined that "the averments in the Officer's Return dated December 20, 1993, coupled with the finding by the lower Court that as early as July 1, 1993, there had been earlier attempts to serve summons upon the petitioner, are sufficient compliance with the requirements for substituted service.

In a long line of cases, 8 this Court held that the impossibility of personal service justifying availment of substituted service should be explained in the proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer's Return; otherwise, the substituted service cannot be upheld. It bears stressing that since service of summons, especially for actions in personam, is essential for the acquisition of jurisdiction over the person of the defendant, 9 the resort to a substituted service must be duly justified. Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds.

To determine whether there was such an observance and substituted service was warranted under the premises, it is necessary for the Court to carefully peruse and evaluate the Sheriff's Return which reported: (1) That on several occasions, at reasonable hours of the day, the Deputized Process Server, Jose T. Manabat, tried to serve upon MARIANO the summons together with the complaint; (2) That diligent efforts were exerted by the said Deputized Process Server; (3) That service of summons was then made on MARIANO's wife, JULIETA, a person of suitable age and discretion who acknowledged receipt thereof. 

The Sheriff's certificate of service of summons is prima facie evidence of the facts therein set out. To overcome the presumption of regularity of performance of official functions in favor of such Sheriff's Return, the evidence against it must be clear and convincing.

MARIANO should have produced enough evidence to negate the presumption of regularity featuring the Process Server's Return. The aforesaid certification issued by Via Marine Corporation is purely self-serving and did not suffice to establish that he was truly a stay-in employee.

As between the Sheriff's Return on the substituted service, which carries with it a presumption of regularity, and MARIANO's self-serving assertion that he only came to know of the case against him, when his sister-in-law delivered to him the decision of the lower court, the Sheriff's Return is undoubtedly more deserving of faith and credit.

Petitioners' reliance on the ruling in Venturanza vs. Court of Appeals, 156 SCRA 305, is misplaced. In that case, the Sheriff's Return was declared invalid for failure to include material statements on the address of the person on whom substituted service was effected, and on the fact that diligent efforts were exerted to locate the defendant. Conformably, the Court ruled that "the presumption of regularity of performance of official functions by the sheriff is not applicable in this case wherein it is patent that the sheriff's return is defective.

EDUARDO FERNANDEZ, ET. AL VS. COURT OF APPEALS MANCIA

FACTS:

This petition involves Lot of the Bacolod cadastre originally titled to petitioners' predecessor-in-interest, Prudencio Fernandez. After Fernandez acquired ownership of the lot, he tried to eject private respondent Jesus Ciocon and some other occupants off the property. Allegedly, Ciocon asked Fernandez that he be given a "last chance" to repurchase the lot. Fernandez refused. After this rejection, on September 21, 1985, Ciocon filed a complaint against Fernandez for reconveyance of the land or what remains of it after deducting portions already sold to others. Ciocon claimed he had paid for the full reconveyance price to Fernandez on February 7, 1958 for which Fernandez signed a receipt. Fernandez through his guardian ad litem denied receiving any money from Ciocon and averred that Ciocon's receipt was a forgery. Fernandez died on January 23, 1966. He was substituted in the civil suit by his heirs namely: Dominadora, and their children Eduardo, Teresita, Leticia, Adolfo, Gloria, Zenaida and Esmerna.

Private respondents Levita Llera, Hospicio Pedrina, Rufo Calves, and Monserrat Villalba were intervenors in said suit who claimed that they had purchased portions of Lot from Ciocon. A case was filed by Alfonso Jardenil, Anunciacion Jover, and Vicente Urbanozo who also claimed to have bought portions of the lot from Ciocon. Two Cases were eventually consolidated.

Judge Jocson issued an Order requiring the parties to state in writing within 15 days whether or not they agree to have the records transmitted to the Court of Appeals with incomplete transcripts of stenographic notes, and if they should fail to reply after 15 days from receipt of the order, the court would consider the parties' silence as conformity and order the transmittal of the extant records to the Court of Appeals. An order was issued ordering transmittal of the records to the appellate court.

Ciocon filed a Motion to have Above-Entitled Cases Decided Anew, which Judge Jocson granted on October 3, 1991. Judge Jocson reasoned that since the cases were decided on the basis of the records taken by his predecessor, and without the testimony of Roberto Tolentino, the handwriting expert who testified on the alleged forgery of Fernandez' signature, granting the motion was in the best interest of justice.

Judge Jocson rendered a second decision setting aside the judgment rendered on May 30, 1988. In the second decision, the judge explained that the Court of Appeals, after receiving the notices of appeal and the incomplete records, "remanded" the case and ordered the re-taking of the testimonies of witnesses Ciocon and Tolentino. The second decision was a complete reversal of the first decision and directed the return of the disputed lot to Ciocon and intervenors except the portions still being litigated. It also ordered the cancellation of the new title issued to Fernandez and the issuance of a new title in the name of Jesus Ciocon and intervenors.

HELD:

E.B. VILLAROSA & PARTNER CO. LTD. VS. HON. BENITO MANCIA

FACTS:

Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership .Petitioner and private respondent executed a Deed of Sale with Development Agreement wherein the former agreed to develop certain parcels of land located Cagayan de Oro. They further agreed that in case of litigation regarding any dispute arising therefrom, the venue shall be in the proper courts of Makati.

Private respondent, as plaintiff, filed a Complaint for Breach of Contract and Damages against petitioner, as defendant, before the Regional Trial Court of Makati allegedly for failure of the latter to comply with its contractual obligation.