Mangila vs. Court of Appeals

A writ of preliminary attachment cannot be validly implemented unless the trial court has first acquired jurisdiction over the defendant, which requires prior or simultaneous service of summons. Additionally, a sole proprietorship does not possess a separate juridical personality; thus, its business address cannot serve as the plaintiff's residence for purposes of determining venue.

Anita Mangila, an exporter of seafoods, engaged the freight forwarding services of Loreta Guina, operating as Air Swift International, a single proprietorship. Mangila defaulted on payments for three shipments. Guina filed a collection suit in the Regional Trial Court of Pasay City.

• The Transaction: In January 1988, Mangila contracted Guina's freight forwarding services for shipments to Guam, agreeing to pay cash on delivery. Guina's invoice stipulated 18% interest on overdue accounts, 25% attorney's fees in case of suit, and stated that the agreed venue for litigation was Makati, Metro Manila.
• Default and Filing of Suit: Mangila failed to pay for three shipments in March 1988, incurring a debt of P109,376.95. Despite demands, payment was not made. Guina filed a collection suit in RTC Pasay on June 10, 1988.
• Attachment and Service of Summons: Initial service of summons failed because Mangila had moved to Pampanga and left for Guam. Construing this departure as intent to defraud, Guina moved for preliminary attachment, which the RTC granted on September 26, 1988. The writ was implemented on October 28, 1988. Alias summons was served on Mangila only on January 26, 1989.
• Venue and Default: Mangila moved to dismiss based on the venue stipulation in the invoice (Makati). The RTC denied the motion, accepting Guina's claim that "Makati" was a printing error. Mangila filed her Answer maintaining the improper venue defense. At the pre-trial, Mangila's counsel arrived late, leading the RTC to terminate pre-trial and allow Guina to present evidence ex-parte without expressly declaring Mangila in default. The RTC ruled in favor of Guina.

• Validity of Attachment: The writ of attachment was improperly issued and served because the trial court had not acquired jurisdiction over her person, summons having been served months after the writ's implementation.
• Declaration of Default: There was no valid declaration of default; counsel was merely late, and the order did not explicitly declare her in default.
• Improper Venue: The action should have been filed in Makati based on the invoice stipulation.
• Monetary Award: The award of P109,376.95 plus attorney's fees was erroneous.

• Attachment Exceptions: Prior or contemporaneous service of summons is not required when personal or substituted service cannot be effected despite diligent efforts, or when the defendant is temporarily absent.
• Venue Stipulation: The "Makati" stipulation was a mere inadvertence by the printer, and Mangila knew Guina held office in Pasay, not Makati.

• Preliminary Attachment: Whether the writ of preliminary attachment was validly issued and implemented despite the lack of prior or simultaneous service of summons.
• Venue of Action: Whether the filing of the case in Pasay City was proper given the invoice's venue stipulation and the residence of the parties.
• Declaration of Default: Whether the trial court validly allowed ex-parte presentation of evidence without an express declaration of default.
• Monetary Award: Whether the monetary award and attorney's fees were proper.

• Preliminary Attachment: The writ of attachment was invalidly implemented. Jurisdiction over the person of the defendant must be acquired before or simultaneously with the implementation of the writ. Issuance of the writ does not require jurisdiction, but implementation does. The belated service of summons did not cure the defect retroactively.
• Venue of Action: The case was filed in an improper venue. The stipulation for Makati was not exclusive due to the lack of qualifying words. However, Pasay was also improper. A sole proprietorship has no separate juridical personality; thus, its business address in Pasay cannot serve as the plaintiff's residence for venue purposes. The proper venues are the residences of the parties: Parañaque (Guina) or Pampanga (Mangila).
• Declaration of Default: Not resolved, as the case was dismissed on the grounds of improper venue and invalid attachment.
• Monetary Award: Not resolved, as the case was dismissed on the grounds of improper venue and invalid attachment.

• Three Stages of Attachment — The grant of preliminary attachment involves: (1) the court issuing the order granting the application; (2) the issuance of the writ pursuant to the order; and (3) the implementation of the writ. Jurisdiction over the person of the defendant is not required for the first two stages but is indispensable for the third.
• Jurisdiction over the Person in Attachment — A writ of preliminary attachment cannot bind the defendant unless the court has acquired jurisdiction over the person by service of summons or voluntary appearance prior to or simultaneously with the implementation of the writ. Subsequent service of summons does not retroactively cure the defect of implementation without prior jurisdiction.
• Juridical Personality of Sole Proprietorship — A sole proprietorship does not possess a juridical personality separate and distinct from its owner. Consequently, it cannot file or defend an action in court in its business name, and its business address cannot be considered the residence of the plaintiff for purposes of determining venue.
• Exclusive Venue Stipulations — A mere stipulation on venue is not enough to preclude parties from bringing a case in other venues. Absent qualifying or restrictive words indicating that the specified place is the "only" or "exclusive" venue, the stipulation is considered merely an agreement on an additional forum.

• "It goes without saying that whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of defendant - issuance of summons, order of attachment and writ of attachment - these do not and cannot bind and affect the defendant until and unless jurisdiction over his person is eventually obtained by the court, either by service on him of summons or other coercive process or his voluntary submission to the court’s authority." — Emphasizes the necessity of acquiring jurisdiction over the person before the implementation of a writ of attachment can bind the defendant.
• "A sole proprietorship does not possess a juridical personality separate and distinct from the personality of the owner of the enterprise... Thus, not being vested with legal personality to file this case, the sole proprietorship is not the plaintiff in this case but rather [the proprietor] in [her] personal capacity." — Establishes that a sole proprietorship's business address cannot be used as a residence for venue purposes, distinguishing it from a corporation.

• Davao Light & Power Co., Inc. v. Court of Appeals, 204 SCRA 343 (1991) — Followed. Clarified that implementation of a writ of attachment requires prior or simultaneous service of summons on the defendant.
• Cuartero v. Court of Appeals, 212 SCRA 260 (1992) — Followed. Held that while the first two stages of attachment do not require jurisdiction over the person, implementation does.
• Sy v. Tyson Enterprises, Inc., 119 SCRA 367 (1982) — Distinguished. Held that a corporation's residence for venue purposes is its place of business, not the residence of its president; this separate personality rule does not apply to sole proprietorships.
• Yao Ka Sin Trading v. Court of Appeals, 209 SCRA 763 (1992) — Followed. Cited for the principle that a sole proprietorship lacks separate juridical personality.
• Langkaan Realty Development, Inc. v. UCPB, 347 SCRA 542 (2000) — Followed. Cited for the rule that venue stipulations require qualifying words to be considered exclusive.

• Rule 57, Section 1, Rules of Court — Preliminary attachment may be granted at the commencement of the action or at any time thereafter. Applied to show that issuance of the writ does not require prior jurisdiction over the defendant.
• Rule 57, Section 5, Rules of Court — Requires the sheriff to serve the defendant copies of the affidavit, bond, order of attachment, and the summons and complaint during implementation. Applied to emphasize that implementation necessitates service of summons.
• Rule 4, Section 2, Rules of Court — Venue of personal actions is where the plaintiff or defendant resides, at the election of the plaintiff. Applied to determine proper venue based on the residence of the proprietor, not the sole proprietorship.
• Rule 4, Section 4(b), Rules of Court — General venue rules do not apply where parties have validly agreed in writing on the exclusive venue. Applied to clarify that the invoice stipulation was not exclusive.
• Rule 14, Sections 14 & 16, Rules of Court — Service of summons by publication for unknown whereabouts or residents temporarily out of the country. Applied to show that private respondent had other remedies to obtain jurisdiction before implementing the writ.

Puno, Panganiban