FIRST DIVISION
G.R. No. 210302, August 27, 2020
INTEGRATED MICRO ELECTRONICS, INC., Petitioner, v. STANDARD INSURANCE CO., INC., Respondents.
D E C I S I O N
LOPEZ, J.:
The proper interpretation of the terms of a contract and the validity of service of summons are the main issues in this Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Court of Appeals' (CA) Decision1 dated March 26, 2013 in CA-G.R. SP No. 124433, which reversed the findings of the Regional Trial Court (RTC).
Under the insurance policy x x x, "if a claim be made and rejected and an action or suit be not commenced either in the Insurance Commission[,] or any Court of competent jurisdiction within twelve (12) months from receipt of notice of such rejection, or in case of arbitration taking place as provided herein within twelve (12) months after due notice of the award made by the arbitrator or arbitrators or umpire, then the claim shall for all purposes be deemed to have been abandoned and shall not be thereafter be recoverable x x x."Integrated Micro's motion for reconsideration was denied.14 Hence, this petition for review on certiorari arguing that the CA gravely erred in finding that:
Undoubtedly, the complaint was filed out of time.
Jurisprudence dictates that the aforementioned period must be reckoned from the date the claim was rejected or denied. This doctrine was highlighted by the Supreme Court in Summit Guarantee, et al. VS, Hon. De Guzman, viz:.
"The one-year period should instead be counted from the date of rejection by the insurer as this is the time when the cause of action accrues."
In the instant case, the respondent had until 24 February fill to file a complaint against the petitioner. However, the records reveal that the case was filed on 11 April 2011 or a period of one and a half (1 ½) months after the cause of action has prescribed. Thus, it is evident that the respondent had lost its right to file its claim from the petitioner.x x x x
Further, We find that the instant complaint is likewise dismissible on the ground that the service of summons was invalid as it was served on the legal assistant of the in-house counsel.x x x x
WHEREFORE, premises considered,: the instant Petition is GRANTED. Accordingly, the Orders dated 9 November 2011 and 13 February of the court a quo are hereby NULLIFIED and SET ASIDE.13 (Emphases-supplied.)
A. THE CLAIM OF PETITIONER x x x HAS PRESCRIBED;Integrated Micro cites Eagle Star., Co., Ltd, et al. V. Chia Yu16 and insists that its arose of action has not prescribed. The cause of action only accrues when the insurer finally rejects the claim.17 Accordingly, Standard Insurance's Letter dated February 24, 2010 denying Integrated Micro's claim is only initial and did not prejudice any request for reconsideration. The 12-month-prescriptive period should be reckoned from April 15, 2010 when Integrated Micro received the final rejection of its for reconsideration. Also, the service of summons upon the legal assistant or secretary of insurer's in-house counsel is considered substantial compliance since Standard Insurance actually received the summons.
B. THE SERVICE OF SUMMONS RESPONDENT x x x WAS INVALID.15
GENERAL CONDITIONS APPLICABLE UNDER ALL SECTIONSIt is explicit that if a claim is made and rejected, an action or suit should be commenced within a period of 12 months. There is no qualification nor distinction whether it is the insurer's initial or final rejection. The parties did not agree that the insurer should first deny any request for reconsideration before a suit for indemnity may be filed. Thus, based on the plain and ordinary context of the agreement, the parties contemplated that the cause of action for loss or damages arising from the insurance contract shall accrue from rejection of the claim at the first instance.x x x x
Claimx x x x
If a claim be made and rejected and an action or suit be not commenced either in the Insurance Commission or any Court of competent jurisdiction within twelve (12) months from receipt of notice of such rejection, or in case of arbitration taking place as provided herein within twelve (12) months after due notice of the award made by the arbitrator or arbitrators or umpire, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.20 (Emphasis supplied.)
x x x the rejection referred to should be construed as the rejection, in the first instance, for if what is being referred to is a reiterated rejection conveyed in a resolution of a petition for reconsideration, such should have been expressly stipulated.We echoed the same reasons in H.H. Hollero Construction, Inc. v. GSIS, et al.,24 and maintained that "x x x 'final rejection' simply means denial by the insurer of the claims of the insured and not the rejection or denial by the insurer of the insured's motion or request for reconsideration. The rejection referred to should be construed as the rejection in the first instance x x x."25 Accordingly, the CA did not err in ruling that Integrated Micro's cause of action had prescribed. To be sure, Integrated Micro received the notice rejecting its claim on February 24, 2010, but the complaint was filed only on April 11, 2011, which is beyond the 12-month prescriptive period.
Thus, to allow the filing of a motion for reconsideration to suspend the running of the prescriptive period of twelve months, a whole new body of rules on the matter should be promulgated so as to avoid any conflict that may be brought by it, such as:
a) whether the mere filing of a plea for reconsideration of a denial is sufficient or must it be supported by arguments/affidavits/material evidence;
b) how many petitions for reconsideration should be permitted?23 (Emphases supplied.)
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. (Emphasis supplied.)Notably, this provision amended Rule 14, Section 1326 of the 1964 Rules of Court that allowed service to an agent of a corporation. The new rule, however, has specifically identified and limited the persons to whom service of summons must be made.27 Contrary to Integrated Micro's assertion, the amendment effectively abandoned the substantial compliance doctrine and restricted the persons authorized to receive summons for juridical entities. As aptly discussed in Sps. Mason v. Court of Appeals,28viz.:cralawred
The question of whether the substantial compliance rule is still applicable under Section 11, Rule 14 of the 1997 Rules of Civil Procedure has been settled in Villarosa which applies squarely to the instant case, x x x We held that there was no valid service of summons on Villarosa as service was made through a person not included in the enumeration in Section 11, Rule 14 of the 1997 Rules of Civil Procedure, which revised the Section 13, Rule 14 of the 1964 Rules of Court. We discarded the trial court's basis for denying the motion to dismiss, namely, private respondent's substantial compliance with the rule on service of summons, and fully agreed with petitioner's assertions that the enumeration under the new rule is restricted, limited and exclusive following the rule in statutory construction that expressio imios est exclusio cilterius. Had the Rules of Court Revision Committee intended to liberalize the rule on service of summons, we said, it could have easily done so by clear and concise language. Absent a manifest intent to liberalize the rule, we stressed strict compliance with Section 11, Rule 14 of the 1997 Rules of Civil Procedure.29 (Emphasis supplied.)FOR THESE REASONS, the petition is DENIED. The Court of Appeals' Decision dated March 26, 2013 in CA-G.R. SP No. 124433 is AFFIRMED.chanroblesvirtuallawlibrary
Endnotes:
* Designated additional Member per raffle dated June 29, 2020, in lieu of Chief Justice Peralta (no part).
1Rollo, pp. 57-66; penned by Associate Justice Francisco P. Acosta, with the concurrence of Associate Justices Fernanda Lampas-Peralta and Angelita A. Gacutan.
2Id. at 30, 131-183.
3Id. at 31.
4Id. at 103-104.
5Id.
6Rollo, pp. 112-113.
7Id. at 114.
8Id. at 115-117.
9Id. at 118-123.
10Id. at 124-147.
11Id. at 69-70.
12Supra note 1.
13Rollo, pp. 61-65.
14Id. at 25-26.
15Id. at 35.
16 96 Phil. 696 (1955).
17Id. at 701.
18Alpha Insurance and Surety Co. v. Castor, 717 Phil. 131, 137-138 (2013).
19 CIVIL CODE OF THE PHILIPPINES, Art. 1370, par. (1).
20Rollo, p. 174.
21 272-A Phil. 155 (1991).
22Id. at 158.
23Id. at 160-161.
24 744 Phil. 11 (2014).
25Id. at 18.
26 RULES OF COURT (1964), Rule 14, Section 13 stated: Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors.
27G. V. Florida Transport, Inc. v. Tiara Commercial Corp., 820 Phil. 235, 252 (2017).
28 459 Phil. 689 (2003).
29Id. at 697-698.