Guanzon vs. Arradaza

Substituted service of summons at a defendant's office or regular place of business is valid if effected by leaving copies with a competent person in charge thereof, even if such person is not specifically authorized to receive summons, provided personal service cannot be effected within a reasonable time.

On May 22, 1995, respondent Andrew Arradaza boarded a jeepney owned by Francisca Maidin and Erlinda Lebita, driven by Reynaldo Lebita. A dump truck registered to petitioner Erlinda Guanzon, driven by Ruel Escarilla, collided with the jeepney. Arradaza sustained injuries, incurred medical expenses, lost earnings, and was unable to enroll in his fifth year of engineering.

• The Accident and Complaint: Arradaza filed an Amended Complaint for damages against Maidin, the Lebitas, Escarilla, and Guanzon, alleging negligence by the drivers and failure of diligence in the selection and hiring of Escarilla by Guanzon. Maidin and the Lebitas filed an answer with a cross-claim against Escarilla and Guanzon, attributing fault to Escarilla and alleging Guanzon's negligence in hiring.
• Service of Summons: Summons was not served on Escarilla because he was no longer connected with Guanzon's firm. Personal service on Guanzon at her Land Transportation Commission-registered address failed because she was unknown there. An SEC General Information Sheet provided another address (478 Rizal Ave. Ext., Caloocan City). Substituted service was effected at this address through Susan Ador, an employee of suitable age working at the premises.
• Default and Motion to Dismiss: Guanzon failed to file an answer and was declared in default on July 12, 1996. Almost two years later, on July 9, 1998, Guanzon filed a Motion to Dismiss based on defective service of summons, which the MeTC denied.

• Defective Substituted Service: Guanzon argued that the sheriff's return clearly showed the substituted service of summons was defective, producing no effect other than the nullity of the proceedings.

• Validity of Substituted Service: Whether the substituted service of summons on petitioner Guanzon was defective, warranting the nullity of the proceedings.

• Validity of Substituted Service: The substituted service was valid. Personal service was first attempted but failed. Substituted service was then effected at Guanzon's place of business through Susan Ador, a person of suitable age employed there. The Rules do not require the person in charge of the defendant's regular place of business to be specifically authorized to receive summons; it is sufficient that the person appears to be in charge. The sheriff's return enjoys a presumption of regularity, which Guanzon failed to overcome with clear and convincing evidence.
• Improper Remedy: Filing a Motion to Dismiss almost two years after being declared in default was improper. The proper remedies for a party declared in default are a motion to set aside the order of default, a motion for new trial, a petition for relief, an appeal, or a petition for certiorari.

• Substituted Service of Summons at Place of Business — Substituted service may be resorted to only when the defendant cannot be served personally within a reasonable time. When effected at the defendant's office or regular place of business, it is valid if left with a competent person in charge thereof. It is not necessary that such person be specifically authorized to receive summons; it is enough that the person appears to be in charge.
• Presumption of Regularity of Sheriff's Return — The sheriff's return is prima facie evidence of the facts set out therein, fortified by the presumption of regularity in the performance of official duty. Clear and convincing evidence is required to overcome this presumption.
• Remedies of a Party Declared in Default — A party declared in default may avail of: (a) motion under oath to set aside order of default on grounds of fraud, accident, mistake, or excusable negligence, provided there is a meritorious defense; (b) motion for new trial if judgment is rendered but not yet final; (c) petition for relief if judgment is final and executory; (d) appeal from the judgment; or (e) certiorari if grave abuse of discretion attended the declaration of default.

• "It is not necessary that the person in charge of the defendant’s regular place of business be specifically authorized to receive the summons. It is enough that he appears to be in charge."
• "The constitutional requirement of due process exacts that the service be such as may be reasonably expected to give the notice desired. Once the service provided by the rules reasonably accomplishes that end, the requirement of justice is answered; the traditional notions of fair play are satisfied and due process is served."

• Cerezo v. Tuazon, G.R. No. 141538 — Followed. Cited for the enumeration of remedies available to a party declared in default.
• Crisologo v. Globe Telecom, Inc., G.R. No. 167631 — Followed. Cited for the proposition that certiorari is available to nullify a judgment by default if grave abuse of discretion attended the declaration.
• Gochangco v. CFI of Negros Occidental, G.R. No. L-49396 — Followed. Cited for the rule that a person in charge of the defendant's place of business need not be specifically authorized to receive summons.
• Montalban v. Maximo, 131 Phil. 154 — Followed. Cited for the due process standard that service must reasonably be expected to give the notice desired.

• Section 6, Rule 14, Rules of Court — Requires personal service of summons by handing a copy to the defendant in person, or tendering it if refused. Applied to emphasize that personal service must first be attempted before substituted service is resorted to.
• Section 7, Rule 14, Rules of Court — Governs substituted service, allowing service by leaving copies at the defendant's residence with a person of suitable age and discretion residing therein, or at the defendant's office/regular place of business with a competent person in charge thereof. Applied to validate the service of summons on Guanzon through Susan Ador at Guanzon's place of business.
• Section 3(b), Rule 9, Rules of Court — Allows a defendant in default to file a motion under oath to set aside the order of default on grounds of fraud, accident, mistake, or excusable negligence, provided there is a meritorious defense. Referenced as one of the proper remedies Guanzon should have availed of instead of a motion to dismiss.

Panganiban, C.J. (Chairperson), Ynares-Santiago, Austria-Martinez, and Callejo, Sr., JJ.