G.R. No.

182153, April 07, 2014

FACTS:
Tung Ho is a foreign corporation organized under the laws of Taiwan, Republic of China. On the
other hand, respondent Ting Guan Trading Corp. (Ting Guan) is a domestic corporation organized
under the laws of the Philippines.

On January 9, 2002, Ting Guan obligated itself under a contract of sale to deliver heavy metal
scrap iron and steel to Tung Ho. Subsequently, Tung Ho filed a request for arbitration before the
ICC International Court of Arbitration (ICC) in Singapore after Ting Guan failed to deliver the full
quantity of the promised heavy metal scrap iron and steel.

The ICC ruled in favor of Tung Ho on June 18, 2004 and ordered Ting Guan to pay Tung Ho the
following: (1) actual damages with interest of 6% per annum from December 4, 2002 until final
payment; (2) cost of arbitration; and (3) legal costs and expenses.

On October 24, 2004, Tung Ho filed an action against Ting Guan for the recognition and
enforcement of the arbitral award before the Regional Trial Court (RTC) of Makati, Branch 145.
Ting Guan moved to dismiss the case based on Tung Ho's lack of capacity to sue and for
prematurity. Ting Guan subsequently filed a supplemental motion to dismiss based on improper
venue. Ting Guan argued that the complaint should have been filed in Cebu where its principal
place of business was located.

The RTC denied Ting Guan's motion to dismiss. Ting Guan moved to reconsider the order and
raised the RTC's alleged lack of jurisdiction over its person as additional ground for the dismissal
of the complaint. Ting Guan insisted that Ms. Fe Tejero, on whom personal service was served,
was not its corporate secretary and was not a person allowed under Section 11, Rule 14 of the
Rules of Court to receive a summons. It also asserted that Tung Ho cannot enforce the award in the
Philippines without violating public policy as Taiwan is not a signatory to the New York
Convention. The RTC denied the motion.

The CA dismissed the complaint for lack of jurisdiction over the person of Ting Guan. The CA
held that Tung Ho failed to establish that Tejero was Ting Guan's corporate secretary. The CA also
ruled that a petition for certiorari is the proper remedy to assail the denial of a motion to dismiss if
the ground raised in the motion is lack of jurisdiction. Subsequently, both parties moved to
partially reconsider the CA decision. Tung Ho reiterated that there was proper service of summons.
On the other hand, Ting Guan sought to modify the CA decision with respect to the proper venue
of the case. The CA denied Ting Guan's motion for partial reconsideration in an order dated
December 5, 2006. It was not until March 12, 2008, the CA finally denied Tung Ho's partial
motion for reconsideration for lack of merit.
ISSUE (S):
1) Whether the present petition is barred by res judicata; and
2) Whether the trial court acquired jurisdiction over the person of Ting Guan, specifically:
a) Whether Tejero was the proper person to receive the summons; and
b) Whether Ting Guan made a voluntary appearance before the trial court.

HELD:
The Court's Ruling

We find the petition meritorious.

I. The Court is not precluded from ruling on the jurisdictional issue raised in the petition

A. The petition is not barred by res judicata

Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive on the rights of the parties or their privies in all later suits on all points
and matters determined in the former suit. For res judicata to apply, the final judgment must be on
the merits of the case which means that the court has unequivocally determined the parties' rights
and obligations with respect to the causes of action and the subject matter of the case.

Contrary to Ting Guan's position, our ruling in G.R. No. 176110 does not operate as res judicata
on Tung Ho's appeal; G.R. No. 176110 did not conclusively rule on all issues raised by the parties
in this case so that this Court would now be barred from taking cognizance of Tung Ho's petition.
Our disposition in G.R. No. 176110 only dwelt on technical or collateral aspects of the case, and
not on its merits. Specifically, we did not rule on whether Tung Ho may enforce the foreign
arbitral award against Ting Guan in that case.

B. The appellate court cannot be ousted of jurisdiction until it finally disposes of the case

The court's jurisdiction, once attached, cannot be ousted until it finally disposes of the case. When
a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to
proceed to the final determination of the case is retained. A judge is competent to act on the case
while its incidents remain pending for his disposition.

The CA was not ousted of its jurisdiction with the promulgation of G.R. No. 176110. The July 5,
2006 decision has not yet become final and executory for the reason that there remained a pending
incident before the CA the resolution of Tung Ho's motion for reconsideration when this Court
promulgated G.R. No. 176110. In this latter case, on the other hand, we only resolved procedural
issues that are divorced from the present jurisdictional question before us. Thus, what became
immutable in G.R. No. 176110 was the ruling that Tung Ho's complaint is not dismissible on
grounds of prematurity, nullity of the foreign arbitral award, improper venue, and the foreign
arbitral award's repugnance to local public policy. This leads us to the conclusion that in the
absence of any ruling on the merits on the issue of jurisdiction, res judicata on this point could not
have set in.
C. Tung Ho's timely filing of a motion for reconsideration and of a petition for review on certiorari
prevented the July 5, 2006 decision from attaining finality

Furthermore, under Section 2, Rule 45 of the Rules of Court, Tung Ho may file a petition for
review on certiorari before the Court within (15) days from the denial of its motion for
reconsideration filed in due time after notice of the judgment. Tung Ho's timely filing of a motion
for reconsideration before the CA and of a Rule 45 petition before this Court prevented the July 5,
2006 CA decision from attaining finality. For this Court to deny Tung Ho's petition would result in
an anomalous situation where a party litigant is penalized and deprived of his fair opportunity to
appeal the case by faithfully complying with the Rules of Court.

II. The trial court acquired jurisdiction over the person of Ting Guan A. Tejero was not the proper
person to receive the summons

Nonetheless, we see no reason to disturb the lower courts' finding that Tejero was not a corporate
secretary and, therefore, was not the proper person to receive the summons under Section 11, Rule
14 of the Rules of Court. This Court is not a trier of facts; we cannot re-examine, review or re-
evaluate the evidence and the factual review made by the lower courts. In the absence of
compelling reasons, we will not deviate from the rule that factual findings of the lower courts are
final and binding on this Court.

B. Ting Guan voluntarily appeared before the trial court

However, we cannot agree with the legal conclusion that the appellate court reached, given the
established facts.[23] To our mind, Ting Guan voluntarily appeared before the trial court in view
of the procedural recourse that it took before that court. Its voluntary appearance is equivalent to
service of summons.

As a basic principle, courts look with disfavor on piecemeal arguments in motions filed by the
parties. Under the omnibus motion rule, a motion attacking a pleading, order, judgment, or
proceeding shall include all objections then available. The purpose of this rule is to obviate
multiplicity of motions and to discourage dilatory motions and pleadings. Party litigants should not
be allowed to reiterate identical motions, speculating on the possible change of opinion of the
courts or of the judges thereof.

In this respect, Section 1, Rule 16 of the Rules of Court requires the defendant to file a motion to
dismiss within the time for, but before filing the answer to the complaint or pleading asserting a
claim. Section 1, Rule 11 of the Rules of Court, on the other hand, commands the defendant to file
his answer within fifteen (15) days after service of summons, unless a different period is fixed by
the trial court. Once the trial court denies the motion, the defendant should file his answer within
the balance of fifteen (15) days to which he was entitled at the time of serving his motion, but the
remaining period cannot be less than five (5) days computed from his receipt of the notice of the
denial.
Instead of filing an answer, the defendant may opt to file a motion for reconsideration. Only after
the trial court shall have denied the motion for reconsideration does the defendant become bound
to file his answer. If the defendant fails to file an answer within the reglementary period, the
plaintiff may file a motion to declare the defendant in default. This motion shall be with notice to
the defendant and shall be supported by proof of the failure.

The trial court's denial of the motion to dismiss is not a license for the defendant to file a Rule 65
petition before the CA. An order denying a motion to dismiss cannot be the subject of a petition for
certiorari as the defendant still has an adequate remedy before the trial court i.e., to file an answer
and to subsequently appeal the case if he loses the case. As exceptions, the defendant may avail of
a petition for certiorari if the ground raised in the motion to dismiss is lack of jurisdiction over the
person of the defendant or over the subject matter.

We cannot allow and simply passively look at Ting Guan's blatant disregard of the rules of
procedure in the present case. The Rules of Court only allows the filing of a motion to dismiss
once. Ting Guan's filing of successive motions to dismiss, under the guise of "supplemental motion
to dismiss" or "motion for reconsideration", is not only improper but also dilatory. Ting Guan's
belated reliance on the improper service of summons was a mere afterthought, if not a bad faith
ploy to avoid the foreign arbitral award's enforcement which is still at its preliminary stage after
the lapse of almost a decade since the filing of the complaint.

Furthermore, Ting Guan's failure to raise the alleged lack of jurisdiction over its person in the first
motion to dismiss is fatal to its cause. Ting Guan voluntarily appeared before the RTC when it
filed a motion to dismiss and a "supplemental motion to dismiss" without raising the RTC's lack of
jurisdiction over its person. In Anunciacion v. Bocanegra, we categorically stated that the
defendant should raise the affirmative defense of lack of jurisdiction over his person in the very
first motion to dismiss. Failure to raise the issue of improper service of summons in the first
motion to dismiss is a waiver of this defense and cannot be belatedly raised in succeeding motions
and pleadings.

Even assuming that Ting Guan did not voluntarily appear before the RTC, the CA should have
ordered the RTC to issue an alias summons instead. In Lingner & Fisher GMBH vs. Intermediate
Appellate Court[35], we enunciated the policy that the courts should not dismiss a case simply
because there was an improper service of summons. The lower courts should be cautious in
haphazardly dismissing complaints on this ground alone considering that the trial court can cure
this defect and order the issuance of alias summons on the proper person in the interest of
substantial justice and to expedite the proceedings.