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BOSTON EQUITY RESOURCES v. CA

FACTS:

The Court of Appeals denied petitioner's motion for reconsideration, leading to the filing of the present petition for review on certiorari before the Supreme Court.

Petitioner claims that the Court of Appeals erred in not holding that the respondent is already estopped from questioning the trial court's jurisdiction. Petitioner argues that the estate of Manuel is not an indispensable party and that the inclusion of Manuel as a party-defendant is a mere misjoinder of party. Petitioner also asserts that since the estate of Manuel is not indispensable, it is not necessary for petitioner to file its claim against said estate. The main issue revolves around the correctness of the trial court's orders denying respondent's motion to dismiss.

The Court of Appeals erred in granting the writ of certiorari in favor of the respondent. The special civil action for certiorari is not the proper remedy to challenge the denial by the trial court of a motion to dismiss. The trial court's order denying a motion to dismiss is interlocutory and does not finally dispose of the case on its merits.

Even if certiorari is the proper remedy, the trial court did not commit grave abuse of discretion in denying the respondent's motion to dismiss. The trial court acted correctly in issuing the questioned orders because the respondent's motion to dismiss was filed six years and five months after she filed her amended answer, which clearly violated the rules of court.

Furthermore, the respondent's motion to dismiss was filed after petitioner had completed the presentation of its evidence in the trial court. This gives credence to petitioner's and the trial court's belief that the filing of the motion was a mere delay tactic by the respondent.

It is also important to note that the respondent had previously filed another motion to dismiss, which was denied by the trial court. The respondent's multiple motions, along with motions for postponement, support petitioner's claim that the respondent is deliberately impeding the early resolution of the case.

The Court of Appeals erred in entertaining respondent's petition for certiorari and ruling that the trial court committed grave abuse of discretion in denying the motion to dismiss.

ISSUES:

  1. Whether lack of jurisdiction over the person of the defendant can be raised at any stage of the proceeding or is subject to waiver.

  2. Whether the trial court acquired jurisdiction over the person of the defendant through valid service of summons.

  3. Whether the complaint against the other defendants should have been dismissed since the court never acquired jurisdiction over the person of Sereno.

  4. Whether the estate of Manuel Toledo is an indispensable party to the collection case.

  5. Whether compliance with the procedure for enforcing collection against the estate of a deceased debtor is a condition precedent before an action can be filed against the surviving solidary debtors.

  6. Whether the inclusion of the deceased debtor as a party defendant is a misjoinder of parties.

  7. Whether the failure to effect service of summons unto Patricio Sereno renders the case dismissible.

  8. Whether Manuel, who was already dead at the time of the filing of the complaint, should be substituted by his heirs in the case.

RULING:

  1. Lack of jurisdiction over the person of the defendant is subject to waiver and must be invoked in the answer or a motion to dismiss. If not raised, it is deemed waived. The defense of lack of jurisdiction over the person is not one of the defenses deemed not waived under Rule 9 of the Rules of Court.

  2. The trial court did not acquire jurisdiction over the person of the defendant since there was no valid service of summons upon him. Summons is the means by which the court acquires jurisdiction over the defendant's person. Thus, the trial court did not have jurisdiction over the defendant.

  3. The court held that the complaint against the other defendants should not be dismissed even though the court never acquired jurisdiction over the person of Sereno. The defense of lack of jurisdiction over one's person is personal to the person claiming it, and since Sereno is already deceased, he cannot invoke this defense. Additionally, the failure to serve summons on Sereno does not affect the complaint against the other defendants who were properly served and have already submitted their responsive pleadings. Therefore, the complaint against Sereno was dismissed, but the complaint against the other defendants was upheld.

  4. The court ruled that the estate of Manuel Toledo is not an indispensable party to the collection case. The obligation of Manuel and his wife, the respondent, is solidary, as stated in the contract. Therefore, the petitioner can collect the entire amount of the obligation from the respondent alone, without the need to implead the estate of Manuel. The court held that the collection case can proceed and the demands of the petitioner can be satisfied by the respondent alone, even without involving the estate of Manuel.

  5. Compliance with the procedure for enforcing collection against the estate of a deceased debtor is not a condition precedent before an action can be filed against the surviving solidary debtors. The creditor has the option to proceed against any one, some, or all of the solidary debtors simultaneously. Failure to comply with the procedure does not deprive the court of jurisdiction over the action against the surviving debtors. (Manila Surety & Fidelity Co., Inc. v. Villarama, et. al.)

  6. The inclusion of the deceased debtor as a party defendant is not a misjoinder of parties if the deceased debtor would have been a party had they been alive at the time the case was filed. Dropping the name of the deceased debtor from the case is not the proper remedy. (Sarsaba v. Vda. de Te)

  7. The failure to effect service of summons unto Patricio Sereno does not render the case dismissible. The case may proceed independently against the three answering defendants who were validly served with summons.

  8. Manuel should not be substituted by his heirs in the case. The court never acquired jurisdiction over Manuel's person as he was already dead at the time of the filing of the complaint.

PRINCIPLES:

  • The defense of lack of jurisdiction over the person of a party must be invoked in the answer or a motion to dismiss to prevent waiver. Lack of jurisdiction over the person is subject to waiver and is a personal defense only the party can assert by not waiving it through silence.

  • Jurisdiction over the person of a defendant is acquired by valid service of summons. The court acquires jurisdiction over the defendant's person through summons, which is the means by which the defendant is notified of the action and brought into the jurisdiction of the court.

  • Lack of jurisdiction over one's person is a personal defense that is not applicable once the person claiming it is deceased.

  • An indispensable party is one who has such an interest in the controversy or subject matter of a case that a final adjudication cannot be made without injuring or affecting that interest.

  • A person is not an indispensable party if their interest in the controversy or subject matter is separable from the interest of the other parties.

  • In a solidary obligation, the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously.

  • The estate of a deceased debtor is not an indispensable party if the obligation is solidary, and the creditor can collect from one debtor alone without involving the estate.

  • The creditor has the right to proceed against any one, some, or all of the solidary debtors simultaneously. Compliance with the procedure for enforcing collection against the estate of a deceased debtor is not mandatory. (Philippine National Bank v. Asuncion)

  • A substantive law cannot be amended by a procedural rule. Procedural rules cannot prevail over substantive laws. (Manila Surety & Fidelity Co., Inc. v. Villarama, et. al.)

  • Misjoinder or non-joinder of parties is not a ground for dismissal of an action. Parties may be dropped or added at any stage of the action on motion of any party or on the court's initiative. (Section 11, Rule 3, Rules of Court)

  • Failure to effect service of summons on a defendant does not necessarily render the case dismissible if there are other defendants who were validly served with summons and the case can still proceed independently against them.

  • Only natural or juridical persons, or entities authorized by law, may be parties in a civil action. A decedent does not have the capacity to be sued and may not be named a party defendant in a court action.

  • Substitution of a party is proper only when the party to be substituted died during the pendency of the case, and there is a legal representative or representatives who can be appointed.