Tung Ho Steel Enterprises Corp. vs. Ting Guan Trading Corp.

A defendant who files a motion to dismiss without raising the defense of lack of jurisdiction over the person in that first motion voluntarily submits to the court's jurisdiction and waives the defense. The omnibus motion rule requires that all objections then available be raised in a single motion attacking a pleading; the belated assertion of improper service of summons in a subsequent motion for reconsideration or supplemental motion is a prohibited piecemeal objection and constitutes voluntary appearance equivalent to service of summons under Section 20, Rule 14 of the Rules of Court.

Tung Ho Steel Enterprises Corporation, a foreign corporation organized under Taiwanese law, and Ting Guan Trading Corporation, a Philippine domestic corporation, entered into a contract of sale dated January 9, 2002, whereby Ting Guan obligated itself to deliver heavy metal scrap iron and steel to Tung Ho. Ting Guan failed to deliver the full quantity contracted. Tung Ho initiated arbitration before the ICC International Court of Arbitration in Singapore. On June 18, 2004, the ICC rendered an award in Tung Ho's favor, ordering Ting Guan to pay actual damages of US$ 659,646.15 with 6% interest per annum from December 4, 2002 until final payment, arbitration costs of US$ 47,000.00, and legal costs and expenses of NT$ 761,448.00 and US$ 34,552.83. Tung Ho thereafter sought recognition and enforcement of the arbitral award in the Philippines.

• The Contract and Arbitration: On January 9, 2002, Ting Guan Trading Corporation, a Philippine domestic corporation, contracted to deliver heavy metal scrap iron and steel to Tung Ho Steel Enterprises Corporation, a Taiwanese foreign corporation. Ting Guan failed to deliver the full quantity. Tung Ho filed a request for arbitration before the ICC International Court of Arbitration in Singapore. On June 18, 2004, the ICC ruled in Tung Ho's favor, awarding actual damages of US$ 659,646.15 with 6% interest per annum from December 4, 2002 until full payment, plus arbitration costs and legal expenses.

• Enforcement Proceedings before the RTC: On October 24, 2004, Tung Ho filed a complaint for recognition and enforcement of the arbitral award before the RTC of Makati, Branch 145. Summons was served on one Ms. Fe Tejero, identified in the return of service as Ting Guan's corporate secretary.

• Ting Guan's Successive Motions: Ting Guan filed a motion to dismiss raising lack of capacity to sue and prematurity. It subsequently filed a "supplemental motion to dismiss" on the ground of improper venue, asserting that the complaint should have been filed in Cebu where its principal place of business was located. The RTC denied the motion to dismiss on May 11, 2005. Only then — in a motion for reconsideration — did Ting Guan raise for the first time the alleged lack of jurisdiction over its person, contending that Ms. Tejero was not its corporate secretary and was not authorized to receive summons under Section 11, Rule 14 of the Rules of Court. The RTC denied reconsideration on November 21, 2005, ruling that Ting Guan had voluntarily submitted to the court's jurisdiction.

• CA Proceedings and the Anomalous Posture: Ting Guan filed a Rule 65 petition before the CA. On July 5, 2006, the CA dismissed the complaint for lack of jurisdiction over Ting Guan's person, but ruled that venue was properly laid in Makati. Both parties filed partial motions for reconsideration. The CA resolved Ting Guan's motion first (denying it on December 5, 2006), while Tung Ho's motion remained pending. Ting Guan elevated its case to the Supreme Court via G.R. No. 176110, which was denied; entry of judgment was made on January 8, 2008. Tung Ho's own motion for reconsideration remained unresolved before the CA until March 12, 2008, when it was denied. The RTC meanwhile declared the case closed and terminated based on the entry of judgment in G.R. No. 176110.

• Jurisdiction Acquired through Valid Service: Tung Ho maintained that the RTC acquired jurisdiction over Ting Guan's person because the return of service of summons constituted prima facie evidence of the facts recited therein — namely, that Tejero was Ting Guan's corporate secretary — and the sheriff was presumed to have regularly performed official duties.

• Voluntary Appearance: Tung Ho argued in the alternative that Ting Guan's successive motions before the RTC were equivalent to voluntary appearance, thereby curing any defect in the service of summons.

• Issuance of Alias Summons: Tung Ho prayed that if the service of summons were indeed defective, an alias summons be issued to cure the defect rather than dismiss the complaint outright.

• Impropriety of Rule 65 Petition: Before the CA, Tung Ho contended that a petition for certiorari was not the proper remedy to assail the denial of a motion to dismiss; the proper recourse was to file an answer and subsequently appeal any adverse judgment.

• Res Judicata: Ting Guan argued that Tung Ho's appeal was barred by res judicata because the Supreme Court had already affirmed with finality the dismissal of the complaint in G.R. No. 176110.

• Improper Service of Summons: Ting Guan insisted that Ms. Fe Tejero was not its corporate secretary and was not among the persons authorized under Section 11, Rule 14 of the Rules of Court to receive summons on behalf of a corporation.

• Question of Fact: Ting Guan contended that the issue of whether Tejero was a proper person to receive summons was a factual question beyond the scope of a petition for review on certiorari under Rule 45.

• Additional Grounds for Dismissal: In its own petition before the Supreme Court (G.R. No. 176110), Ting Guan sought dismissal on further grounds: prematurity of the complaint, nullity of the foreign arbitral award, improper venue, and enforcement contrary to public policy.

• Res Judicata: Whether the present petition is barred by res judicata in light of the Supreme Court's prior ruling and entry of judgment in G.R. No. 176110.

• Jurisdiction over the Person — Proper Service: Whether Ms. Fe Tejero was the proper person to receive summons on behalf of Ting Guan under Section 11, Rule 14 of the Rules of Court.

• Jurisdiction over the Person — Voluntary Appearance: Whether Ting Guan voluntarily appeared before the trial court through its successive motions to dismiss, thereby waiving the defense of lack of jurisdiction over its person.

• Res Judicata: The petition was not barred by res judicata. The ruling in G.R. No. 176110 did not constitute a judgment on the merits of the jurisdictional question; it resolved only the collateral procedural issues raised by Ting Guan — namely, prematurity, nullity of the arbitral award, improper venue, and repugnance to public policy. What became immutable was solely the determination that the complaint was not dismissible on those grounds. Furthermore, the July 5, 2006 CA decision had not attained finality at the time entry of judgment was made in G.R. No. 176110 because Tung Ho's own motion for reconsideration remained pending before the CA. The pendency of a timely motion for reconsideration stays execution of the assailed judgment; hence, the entry of judgment in G.R. No. 176110 was premature and inefficacious. A court may recall or lift an entry of judgment motu proprio when the decision assailed has not yet become final under the rules, as held in Realty Sales Enterprises, Inc. v. Intermediate Appellate Court.

• Jurisdiction over the Person — Proper Service: The factual finding that Tejero was not Ting Guan's corporate secretary was not disturbed. The Supreme Court, not being a trier of facts, declined to re-examine the lower courts' evaluation of the evidence on this point. The service of summons was therefore defective under Section 11, Rule 14.

• Jurisdiction over the Person — Voluntary Appearance: Despite the defective service, the trial court acquired jurisdiction over Ting Guan's person through voluntary appearance. Under the omnibus motion rule (Section 8, Rule 15), a motion attacking a pleading must include all objections then available. Ting Guan filed a motion to dismiss and a "supplemental motion to dismiss" without raising lack of jurisdiction over its person; it raised this defense for the first time only in a motion for reconsideration. This belated assertion violated the rule against piecemeal objections and constituted a waiver. Citing Anunciacion v. Bocanegra, the Court held that the defense of lack of jurisdiction over the person must be raised in the very first motion to dismiss; failure to do so operates as a waiver and cannot be cured in subsequent motions. Ting Guan's successive filings were characterized as dilatory and improper — the Rules of Court permit only one motion to dismiss. Additionally, even assuming no voluntary appearance, the CA should have ordered the issuance of alias summons rather than dismissing the complaint outright, consistent with the policy enunciated in Lingner & Fisher GMBH v. Intermediate Appellate Court that courts should not haphazardly dismiss cases solely on the ground of improper service of summons when the defect is curable.

• Omnibus Motion Rule — Under Section 8, Rule 15 of the Rules of Court, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available. The rule aims to obviate multiplicity of motions and to discourage dilatory tactics. A party is not permitted to file successive motions raising new grounds piecemeal. Applied here, Ting Guan's failure to include lack of jurisdiction over its person in its first motion to dismiss — raising it only in a subsequent motion for reconsideration — was a violation of the omnibus motion rule.

• Voluntary Appearance as Equivalent to Service of Summons — Under Section 20, Rule 14 of the Rules of Court, "[t]he defendant's voluntary appearance in the action shall be equivalent to service of summons." A defendant who invokes the court's jurisdiction by filing pleadings seeking affirmative relief, without simultaneously objecting to jurisdiction over its person, is deemed to have submitted voluntarily. Ting Guan's filing of a motion to dismiss and supplemental motion to dismiss on grounds other than jurisdiction over the person constituted voluntary appearance.

• Waiver of Jurisdictional Defense through Omission in First Motion to Dismiss — As established in Anunciacion v. Bocanegra, the affirmative defense of lack of jurisdiction over the person must be raised in the very first motion to dismiss. Failure to do so is a waiver that cannot be revived in later motions or pleadings.

• Policy Against Dismissal for Curable Defects in Summons — Under Lingner & Fisher GMBH v. Intermediate Appellate Court, courts should exercise caution in dismissing complaints solely on the ground of improper service of summons when the defect is curable through the issuance of alias summons. The interest of substantial justice and the expeditious resolution of proceedings militate against dismissal that penalizes the plaintiff for a defect attributable to the sheriff or process server.

• Premature Entry of Judgment — As held in Realty Sales Enterprises, Inc. v. Intermediate Appellate Court, an entry of judgment does not make a judgment final and executory when it is not so in truth; it merely records the fact of finality. A premature entry of judgment — made while a timely motion for reconsideration remains pending — is inefficacious and may be recalled motu proprio by the court pursuant to its inherent power to amend and control its processes to conform to law and justice under Section 5(g), Rule 135 of the Rules of Court.

• Retention of Jurisdiction Pending Resolution of Incidents — A court's jurisdiction, once attached, cannot be ousted until the case is finally disposed of. The pendency of unresolved incidents — such as a motion for reconsideration — prevents the judgment from attaining finality and preserves the court's competence to act.

• "Under the omnibus motion rule, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available. The purpose of this rule is to obviate multiplicity of motions and to discourage dilatory motions and pleadings. Party litigants should not be allowed to reiterate identical motions, speculating on the possible change of opinion of the courts or of the judges thereof."

• "Ting Guan's belated reliance on the improper service of summons was a mere afterthought, if not a bad faith ploy to avoid the foreign arbitral award's enforcement which is still at its preliminary stage after the lapse of almost a decade since the filing of the complaint."

• "We categorically stated that the defendant should raise the affirmative defense of lack of jurisdiction over his person in the very first motion to dismiss. Failure to raise the issue of improper service of summons in the first motion to dismiss is a waiver of this defense and cannot be belatedly raised in succeeding motions and pleadings."

• "An entry of judgment does not make the judgment so entered final and executory when it is not so in truth. An entry of judgment merely records the fact that a judgment, order or resolution has become final and executory; but it is not the operative act that makes the judgment, order or resolution final and executory."

• "The lower courts should be cautious in haphazardly dismissing complaints on this ground alone considering that the trial court can cure this defect and order the issuance of alias summons on the proper person in the interest of substantial justice and to expedite the proceedings."

• Anunciacion v. Bocanegra, G.R. No. 152496, July 30, 2009, 594 SCRA 319 — Followed. Established the categorical rule that the defense of lack of jurisdiction over the person must be raised in the very first motion to dismiss; failure to do so constitutes waiver.

• Lingner & Fisher GMBH v. Intermediate Appellate Court, G.R. No. L-63557, October 28, 1983, 125 SCRA 523 — Followed. Established the policy that courts should not dismiss a complaint simply for improper service of summons when the defect is curable by alias summons.

• Realty Sales Enterprises, Inc. v. Intermediate Appellate Court, G.R. No. L-67451, April 25, 1989 — Applied. Ruled that a premature entry of judgment is inefficacious and may be recalled motu proprio when the assailed decision has not yet become final under the Rules.

• Boston Equity Resources, Inc. v. Court of Appeals, G.R. No. 173946, June 19, 2013 — Cited for the proposition that the filing of successive motions to dismiss under the guise of "supplemental" motions or motions for reconsideration is improper and dilatory.

• de Zuzuarregui, Jr. v. Court of Appeals, 264 Phil. 1124 (1990) — Cited for the general rule that the denial of a motion to dismiss is not a proper subject of a Rule 65 petition, with exceptions for lack of jurisdiction over the person or over the subject matter.

• Section 8, Rule 15, Rules of Court (Omnibus Motion Rule) — A motion attacking a pleading, order, judgment, or proceeding shall include all objections then available. Applied to bar Ting Guan's belated assertion of lack of jurisdiction over its person in a motion for reconsideration after omitting it from the initial motion to dismiss.

• Section 20, Rule 14, Rules of Court (Voluntary Appearance) — The defendant's voluntary appearance in the action shall be equivalent to service of summons. Applied to Ting Guan's filing of motions to dismiss on grounds other than jurisdiction, which was deemed a voluntary submission to the court's authority.

• Section 1, Rule 16, Rules of Court (Motion to Dismiss — Time) — Requires the defendant to file a motion to dismiss within the time for, but before filing, the answer. Ting Guan's use of successive motions violated the rule's one-motion limit.

• Section 11, Rule 14, Rules of Court (Service upon Corporations) — Prescribes the persons authorized to receive summons on behalf of a domestic corporation. The factual finding that Tejero was not among these persons was sustained.

• Rule 51, Section 10, Rules of Court (Entry of Judgments) — Entry of judgment may be had only if no appeal or motion for reconsideration is timely filed. The pendency of Tung Ho's motion for reconsideration before the CA rendered the entry of judgment in G.R. No. 176110 premature.

• Section 5(g), Rule 135, Rules of Court (Inherent Powers of Courts) — Empowers courts to amend and control their processes and orders to conform to law and justice. Recognized as the basis for motu proprio recall of a premature entry of judgment.

Associate Justices Antonio T. Carpio (Chairperson), Mariano C. Del Castillo, Jose Portugal Perez, and Estela M. Perlas-Bernabe concurred.