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[G.R. No. 159590.� April 25, 2005]
HSBC vs. CATALAN
SECOND DIVISION
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated APR 25 2005.
G.R. No. 159590 (Hongkong and Shanghai Banking Corporation Limited vs. Cecilia Diez Catalan) and G.R. No. 159591 (HSBC International Trustee Limited vs. Cecilia Diez Catalan.)
R E S O L U T I O N
Catalan filed a complaint against HSBANK and HSBC Trustee for sum of money and damages for wanton refusal to pay the value of checks issued in her favor by Thomson. She anchored her cause of action on Article 19 of the Civil Code, the abuse of rights principle. HSBANK alleged that Catalan has no cause of action for abuse of rights. HSBC Trustee alleged that the case should be dismissed against it for improper service of summons.
In a Decision dated October 18, 2004, we held that Catalan has a cause of action against HSBANK and HSBC Trustee for abuse of rights but dismissed the case against HSBC Trustee for improper service of summons.
HSBANK and Catalan filed separate motions for partial reconsideration.
HSBANK prays for a fresh second look of the case because the allegations of the complaint and annexes thereto do not show that HSBANK committed any abuse in refusing to honor the subject checks. It argues that, as may be deciphered from copies of the checks attached in the complaint, the checks were deposited after Thomson was already dead. It adds that another reason for HSBANK to be wary in honoring the checks is that in a previous communication, Thomson admitted having previously issued checks to Catalan without his full signature and in which correction fluid was used. It insists that HSBANK acted with prudence and in good faith in returning the checks pending confirmation in view of its failure to communicate with Thomson by phone to verify if indeed he issued the checks and the signatures are genuine. It submits that in the absence of any allegations on abuse of right, the complaint against HSBANK is an ordinary action to compel the bank, as drawee, to honor the checks, which she cannot pursue because HSBANK did not accept the check. Under Sec. 147 of the Negotiable Instruments Law, the drawee is not liable unless and until he accepts the check.
On the other hand, Catalan seeks a reversal of the decision insofar as it declared the lower court without jurisdiction over HSBC Trustee because of improper service of summons. She claims that HSBC Trustee effectively waived the improper service of summons when on June 9, 2004 and August 11, 2004 it conducted its cross examination on Catalan.
In compliance with a resolution of the Court dated January 19, 2005, the parties filed their respective comments to each party's motion for partial reconsideration.
Anent HSBANK'S motion for partial reconsideration, we adequately addressed and resolved its arguments in our decision. We reiterate that in determining whether a complaint fails to state a cause of action, only the allegations therein may be properly considered. [1] cralaw Moreover, a defendant who moves to dismiss the complaint on this ground hypothetically admits all the averments thereof. [2] cralaw The test of the sufficiency of the facts alleged in a complaint is whether, admitting the facts alleged, the court may render a valid judgment upon them in accordance with the prayer of the complaint. [3] cralaw If the allegations in the complaint furnish sufficient basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presented by the defendants. [4] cralaw If the trial court finds the allegations to be sufficient, but doubts their veracity, it must deny the motion to dismiss and then require the defendant to answer, and proceed to try the case on the merits. [5] cralaw In this case, assuming the facts to be true, Catalan's complaint sufficiently establishes a cause of action. On the basis of her allegations, the trial court may render a valid judgment. Thus, the complaint passes the test of sufficiency of the facts alleged. The other matters raised by HSBANK cannot be determined in a motion to dismiss or the petition before this Court. Those are purely factual issues that should be the subject of a full-dress trial in the trial court.
With respect to Catalan's motion for partial reconsideration, we stress that only when a party participated in the trial without objecting to the court's jurisdiction is he estopped and deemed to have effectively waived the issue of the trial court's jurisdiction. Stated elsewise, the active participation of a party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction. [6] cralaw In this case, since improper service of summons has seasonably been raised, as aptly held in Signetics Corp. vs. Court of Appeals, [7] "there should be no real cause for what may understandably be its apprehension, i.e., that by its participation during the trial on the merits, it may, absent an invocation of separate or independent reliefs of its own, be considered to have voluntarily submitted itself to the court's jurisdiction." [8] cralaw Thus, HSBC Trustee's cross-examination of Catalan cannot be deemed a waiver of improper service of summons since it has timely raised said issue before the trial court.
WHEREFORE, the separate motions for partial reconsideration of HSBANK and Catalan are DENIED. The denial is FINAL. No further pleadings from movants will be entertained.
SO ORDERED.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
[1] cralaw Vda. De Daffon vs. Court of Appeals, August 20, 2002, 387 SCRA 427, 432.
[2] cralaw Barcelona vs. Court of appeals, G.R. No. 130087, September 24, 2003, 412 SCRA 41, 51.
[3] cralaw Sta. Clara Homeowners' Association vs. Gaston, G.R. No. 141961, January 23, 2002, 374 SCRA 396, 411.
[4] cralaw Vda. De Daffon vs. Court of Appeals, supra.
[5] cralaw Dimayuga vs. Dimayuga, 96 Phil. 859, 862, April 29, 1955; Pi�ero vs. Enriquez, 84 Phil. 774, 777, October 25, 1949.
[6] cralaw Oca vs. Court of Appeals, G.R. No. 144817, March 7, 2002, 378 SCRA 642.
[7] cralaw G.R. No. 105141, August 31, 1993, 225 SCRA 737, 746.
[8] cralaw Reiterated in Hahn vs. Court of Appeals, G.R. No. 113074, January 22, 1997, 266 SCRA 537.
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