G.R. No. 172204; July 2, 2014
Posted by: Ana R. Bonita on July 18, 2018
FACTS:
Respondent Laguna West Multi-Purpose Cooperative is a cooperative recognized under Republic Act No. 6657 or the Comprehensive Agrarian Reform Law. It allegedly entered into a joint venture agreement with farmer-beneficiaries through Certificates of Land Ownership Award (CLOA) in Silang, Cavite. While respondent was negotiating with the farmer-beneficiaries, petitioner Cathay Metal Corporation entered into Irrevocable Exclusive Right to Buy (IERB) contracts with the same farmer-beneficiaries. Under the IERB, the farmer-beneficiaries committed themselves to sell to petitioner their agricultural properties upon conversion to industrial or commercial properties or upon expiration of the period of prohibition from transferring title to the properties.
In 1996, respondent caused the annotation of its adverse claim on the farmer-beneficiaries' certificates of title. On November 9, 1998, the Department of Agrarian Reform issued an order converting the properties from agricultural to mixed use.
In 1999, petitioner and the farmer-beneficiaries executed contracts of sale of the properties. Transfer certificates of title were also issued in the name of petitioner in the same year. The annotations in the original titles were copied to petitioner's titles.
Respondent's Vice-President, Orlando dela Peña, sent two letters dated March 20, 2000 and April 12, 2000 to petitioner, informing it of respondent's claim to the properties. Petitioner did not respond.
On September 15, 2000, petitioner filed a consolidated petition for cancellation of adverse claims on its transfer certificates of title with the Regional Trial Court of Tagaytay City. It served a copy of the petition by registered mail to respondent's alleged official address at "Barangay Mayapa, Calamba, Laguna." The petition was returned to sender because respondent could not be found at that address. The postman issued a certification stating that the reason for the return was that the "cooperative [was] not existing." Petitioner allegedly attempted to serve the petition upon respondent personally. However, this service failed for the same reason. Upon petitioner's motion, the Regional Trial Court issued an order on December 15, 2000 declaring petitioner's substituted service, apparently by registered mail, to have been effected. Petitioner was later allowed to present its evidence ex parte.
Petitioner emphasized the following points: Summons was served upon respondent at its official registered address at Barangay Mayapa, Calamba, Laguna. Since no one received the summons, petitioner insisted that the trial court issue an order to effect substituted service. Respondent still did not file its answer. Petitioner argued that summons could only be validly served to respondent's official address as indicated in its registration with the Cooperative Development Authority. This is because respondent as a registered cooperative is governed by Republic Act No. 6938, a substantive law that requires summons to be served to respondent's official address. Substantive law takes precedence over procedural rules.
ISSUE:
Whether or not respondent was properly served with summons or notices of the hearing on the petition for cancellation of annotations of adverse claim on the properties.
HELD:
Respondent was not validly served with summons.
Republic Act No. 6938 of 1990 or the Cooperative Code of the Philippines provides that cooperatives are mandated to have an official postal address to which notices shall be sent, thus:
Art. 52. Address. – Every cooperative shall have an official postal address to which all notices and communications shall be sent. Such address and every change thereof shall be registered with the Cooperative Development Authority.
This provision was retained in Article 51 of Republic Act No. 9520 or the Philippine Cooperative Code of 2008. Article 51 provides:
Art. 51. Address. Every cooperative shall have an official postal address to which all notices and communications shall be sent. Such address and every change thereof shall be registered with the Authority.
Relying on the above provision, petitioner argued that respondent was sufficiently served with summons and a copy of its petition for cancellation of annotations because it allegedly sent these documents to respondent's official address as registered with the Cooperative Development Authority. Petitioner further argued that the Rules of Procedure cannot trump the Cooperative Code with respect to notices. This is because the Cooperative Code is substantive law, as opposed to the Rules of Procedure, which pertains only to matters of procedure.
Petitioner is mistaken.
The promulgation of the Rules of Procedure is among the powers vested only in this court. Article VIII, Section 5(5) provides:
Sec. 5. The Supreme Court shall have the following powers:
. . . .
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice of law, the integrated bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.
This means that on matters relating to procedures in court, it shall be the Rules of Procedure that will govern. Proper court procedures shall be determined by the Rules as promulgated by this court. Service of notices and summons on interested parties in a civil, criminal, or special proceeding is court procedure. Hence, it shall be governed by the Rules of Procedure.
The Cooperative Code provisions may govern matters relating to cooperatives' activities as administered by the Cooperative Development Authority. However, they are not procedural rules that will govern court processes. A Cooperative Code provision requiring cooperatives to have an official address to which all notices and communications shall be sent cannot take the place of the rules on summons under the Rules of Court concerning a court proceeding.
This is not to say that the notices cannot be sent to cooperatives in accordance with the Cooperative Code. Notices may be sent to a cooperative's official address. However, service of notices sent to the official address in accordance with the Cooperative Code may not be used as a defense for violations of procedures, especially when such violation affects another party's rights.
Section 11, Rule 14 of the Rules of Court provides the rule on service of summons upon a juridical entity. It provides that summons may be served upon a juridical entity only through its officers. Thus:
Sec. 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel.
We have already established that the enumeration in Section 11 of Rule 14 is exclusive. Service of summons upon persons other than those officers enumerated in Section 11 is invalid. Even substantial compliance is not sufficient service of summons. This provision of the rule does not limit service to the officers' places of residence or offices. If summons may not be served upon these persons personally at their residences or offices, summons may be served upon any of the officers wherever they may be found.
Hence, petitioner cannot use respondent's failure to amend its Articles of Incorporation to reflect its new address as an excuse from sending or attempting to send to respondent copies of the petition and the summons. The Rules of Court provides that notices should be sent to the enumerated officers. Petitioner failed to do this. No notice was ever sent to any of the enumerated officers.
