Planters Development Bank v Chandumal (Civil Procedure)

Planters Development Bank v Chandumal
GR No. 195619, September 5, 2012

FACTS:

BF Homes, Inc. and Chandumal entered into a contract to sell a parcel of land. BF Homes then sold to PDB all its rights and interests over the contract. On June 18, 1999, an action for judicial confirmation of notarial rescission and delivery of possession was filed by PDP against Chandumal.

Consequently, summons was issued. According to the Sheriff's return, Sheriff Galing attempted to personally serve the summons upon Chandumal on three dates but it was unavailing as she was always out of the house on said dates. Hence, the sheriff caused substituted service of summons by serving the same through Chandumal's mother who acknowledged receipt thereof.

For her failure to file within the prescribed period, PDB filed an ex parte motion to declare Chandumal in default which was granted by the RTC. On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of Default maintaining that she did not receive the summons and/or was not notified of the same. RTC denied Chandumal's motion which was reversed by the Court of Appeals due to invalid and ineffective substituted service of summons.

ISSUES:
(1) Whether there was valid substituted service of summons
(2) Whether Chandumal voluntarily submitted to the jurisdiction of the trial court
(3) Whether there was proper rescission by notarial act of the contract to sell

HELD:
(1) There was no valid substitute service of summons.

The Return of Summons does not specifically show or indicate in detail the actual exertion of efforts or any positive step taken by the officer or process server in attempting to serve the summons personally to the defendant. The return merely states the alleged whereabouts of the defendant without indicating that such information was verified from a person who had knowledge thereof.

(2) Respondent voluntarily submitted to the jurisdiction of the trial court.

Section 20, Rule 14 of the Rules of Court states "The defendant's voluntary appearance in the action shall be equivalent to service of summons"

(3) There is no valid rescission of the contract to sell by notarial act.

The allegation that Chandumal made herself unavailable for payment is not an excuse as the twin requirements for a valid and effective cancellation under the law, i.e. notice of cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value, is mandatory.