CASE DIGEST : CEZAR QUIAMBAO v. BONIFACIO C. SUMBILLA GR No. 192901, Feb 01, 2023 GAERLAN

Facts

Bonifacio Sumbilla and Aderito Yujuico, members of the Board of Directors of Pacifica, Inc., filed three separate complaints against Cezar Quiambao, Owen Carsi-Cruz, Anthony Quiambao, and Pacifica before the Regional Trial Courts of Pasig, Manila, and Makati. The cases sought to enjoin the corporation's Annual Stockholders' Meeting (ASM), declare the meeting and the election of directors void, and question the legality of corporate acts under the Corporation Code. The multiple filings arose because Pacifica's corporate records with the SEC reflected conflicting principal office addresses, creating uncertainty as to the proper venue.

The petitioners moved to dismiss the Makati case, arguing that respondents committed forum shopping in violation of Section 5, Rule 7 of the Rules of Court, which requires a certification against forum shopping and prohibits the filing of multiple actions involving the same parties, causes of action, and reliefs. They likewise contended that the RTC never acquired jurisdiction over their persons because summons was improperly served, making the subsequent order declaring them in default void. The Court of Appeals ruled that the substituted service of summons was defective but held that respondents were not guilty of forum shopping, prompting petitioners to elevate the case to the Supreme Court.

Issue

1. Whether respondents committed forum shopping by filing three separate complaints involving substantially the same parties, causes of action, and reliefs in different trial courts, in violation of Section 5, Rule 7 of the Rules of Court.
2. Whether the Regional Trial Court validly acquired jurisdiction over the persons of the petitioners through substituted service of summons pursuant to Rule 14 of the Rules of Court.

Held

The Supreme Court denied the petition and affirmed the Court of Appeals. It ruled that forum shopping was not committed. The Court explained that forum shopping exists when a party repeatedly avails of several judicial remedies involving the same transactions in the hope of obtaining a favorable judgment. However, the respondents filed the three complaints only because the SEC records contained conflicting information on Pacifica's principal place of business, making it uncertain which court had the proper venue. They did not intend to obtain conflicting rulings and promptly withdrew the unnecessary actions, thereby eliminating the possibility of multiple judgments. The Court emphasized that Section 5, Rule 7 is intended to prevent the abuse of court processes, not to punish parties who act in good faith to preserve their remedies amid legitimate uncertainty.

The Court likewise held that the RTC failed to acquire jurisdiction over the petitioners because the substituted service of summons did not comply with the requirements of Rule 14 of the Rules of Court. Before substituted service may be resorted to, the serving officer must first show earnest and diligent efforts to effect personal service, and these efforts must be specifically stated in the sheriff's return. Since these jurisdictional requirements were not observed, the service of summons was invalid, and the trial court's order declaring petitioners in default had no legal basis. Accordingly, while the Court upheld the dismissal of the forum shopping charge, it also sustained the ruling that jurisdiction over the petitioners was never validly acquired due to improper service of summons.