The Supreme Court has clarified that substituted service of summons on a corporate officer at their regular place of business is valid if served on a competent person in charge, even without specific authorization to receive summons. This decision reinforces the presumption of regularity in the performance of a sheriff’s duties, requiring defendants to present convincing evidence to rebut this presumption. The ruling emphasizes the importance of ensuring that corporate officers are duly notified of legal actions, balancing procedural requirements with practical realities.

When a Secretary’s Receipt of Summons Binds a Corporate Officer

This case revolves around Gentle Supreme Philippines, Inc.’s (GSP) collection suit against Consar Trading Corporation (CTC), its president Ricardo Consulta, and vice-president Norberto Sarayba. GSP claimed that CTC, through Consulta and Sarayba, failed to pay for merchandise. The central issue is whether the service of summons on Consulta was properly executed, specifically if leaving the summons with Sarayba’s secretary, Agnes Canave, constituted valid service.

The Regional Trial Court (RTC) initially ruled in favor of GSP after declaring the defendants in default due to their failure to answer the complaint. Consulta then filed a petition for annulment of the RTC decision before the Court of Appeals (CA), arguing that he was not properly served with summons. The CA sided with Consulta, leading GSP to appeal to the Supreme Court.

The Supreme Court reversed the CA’s decision, holding that valid substituted service of summons was indeed effected on Consulta. The Court emphasized that only Consulta brought an action for the annulment of the RTC decision; therefore, the CA should not have ruled on whether CTC and Sarayba were properly served with summons. The right to due process must be personally invoked. Citing the sheriff’s return, which serves as prima facie evidence, the Court noted that Canave was an authorized representative of both Consulta and Sarayba.

The Court cited Guanzon v. Arradaza, where it was established that it is not necessary for the person in charge of the defendant’s regular place of business to be specifically authorized to receive the summons; it is sufficient that they appear to be in charge. This principle is vital for understanding how courts interpret the rules of civil procedure in the context of corporate entities. The Supreme Court also stated:

According to the sheriff’s return, which is prima facie evidence of the facts it states, he served a copy of the complaint on Canave, an authorized representative of both Consulta and Sarayba.

The ruling underscores that unless rebutted by clear and convincing evidence, the sheriff’s return holds significant weight. Consulta failed to provide sufficient evidence to counter the presumption of regularity in the sheriff’s performance of duty. The Court also pointed out that Consulta himself admitted that CTC was apprised of the civil action through Canave, suggesting that Canave held a position of responsibility within the company. Moreover, it was highlighted that strict and faithful compliance is crucial in effecting substituted service. However, when rigid application of rules becomes a means to evade responsibility, the Court will intervene. Here is how the concept of substituted service is defined by the Rules of Court:

Section 7. Substituted Service. – If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof.

The Court found it implausible that Consulta was unaware of the suit until the notice of execution sale, considering that summons had been properly served on Sarayba through Canave, the company’s bank deposits had been garnished, and the company had offered to settle the judgment. Therefore, the Supreme Court reversed the Court of Appeals’ decision and reinstated the Regional Trial Court’s decision.

What was the key issue in this case?	The key issue was whether the service of summons on Ricardo Consulta, a corporate officer, was valid when it was left with Sarayba’s secretary, Agnes Canave, at his regular place of business. The court needed to determine if this constituted proper substituted service.
What did the sheriff’s return state?	The sheriff’s return indicated that Agnes Canave was an authorized representative of both Ricardo Consulta and Norberto Sarayba. This statement carries significant weight as prima facie evidence of the facts stated therein, according to the Supreme Court.
What is the significance of “prima facie evidence” in this context?	“Prima facie evidence” means that the sheriff’s return is presumed to be true and accurate unless the opposing party presents sufficient evidence to disprove it. In this case, Consulta failed to provide enough evidence to rebut the presumption of regularity.
Did Consulta present any evidence to rebut the sheriff’s return?	No, Consulta’s evidence was insufficient to rebut the presumption of regularity in the sheriff’s performance of duty. He did not provide clear and convincing evidence that Canave was incompetent to receive the summons on his behalf.
What did Consulta argue regarding his awareness of the lawsuit?	Consulta claimed he was unaware of the suit until he received a notice of execution sale. However, the Court found this implausible, given that summons had been served on his vice-president, the company’s bank deposits were garnished, and the company offered to settle the judgment.
What is the relevance of Canave being Sarayba’s secretary?	As Sarayba’s secretary, Canave’s job would likely include receiving documents and correspondence, giving her the appearance of authority to accept court documents. This aligned with the principle that the person in charge need not be specifically authorized to receive summons.
What legal principle did the Court emphasize regarding due process?	The Court emphasized that the right to due process must be personally invoked by the party claiming to have been denied such right. In this case, only Consulta filed for annulment, so the CA should not have ruled on the service of summons for CTC and Sarayba.
What does the ruling imply for corporate officers?	The ruling implies that corporate officers must ensure proper communication and documentation within their companies. This is to avoid situations where they could claim ignorance of legal proceedings due to improper service of summons.
What was the ultimate decision of the Supreme Court?	The Supreme Court reversed the Court of Appeals’ decision and reinstated the Regional Trial Court’s decision. It found that valid substituted service of summons had been effected on Consulta, giving the RTC jurisdiction over his person.

This case clarifies the requirements for valid substituted service of summons on corporate officers, particularly regarding who is considered a competent person in charge at the defendant’s regular place of business. The ruling emphasizes that the sheriff’s return is considered prima facie evidence of proper service. It also highlights the balance between strict procedural compliance and preventing the evasion of legal responsibilities.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Gentle Supreme Philippines, Inc. vs. Ricardo F. Consulta, G.R. No. 183182, September 01, 2010