Posted by: Rianne Fernandez
FACTS:
M/V Star Ace, a vessel owned and operated by Poro Point Shipping Services (PPSS), ran aground in La Union during a typhoon. Cesar Urbino, Sr. sued PPSS for damages and impleaded Banco do Brasil (BDB) because it has a claim over the ship. BDB is a foreign corporation not engaged in business in the Philippines nor does it have any office or agent designated herein.
FACTS:
M/V Star Ace, a vessel owned and operated by Poro Point Shipping Services (PPSS), ran aground in La Union during a typhoon. Cesar Urbino, Sr. sued PPSS for damages and impleaded Banco do Brasil (BDB) because it has a claim over the ship. BDB is a foreign corporation not engaged in business in the Philippines nor does it have any office or agent designated herein.
The Trial court ruled in favor of Urbino. BDB appealed arguing that there was no valid service of summons because the same was issued to the ambassador of Brazil and further stated that summon through publication was inapplicable to it as the action against them is an action in personam.
ISSUE:
Whether or not the summons was properly issued.
HELD:
Banco do Brasil takes exception to the appellate courts declaration that the suit below is in rem, not in personam, thus, service of summons by publication was sufficient for the court to acquire jurisdiction over the person of Banco do Brasil, and thereby liable to private respondent Cesar Urbino for damages claimed, amounting to $300,000.00. Petitioner further challenges the finding that the February 18, 1991 decision of the trial court was already final and thus, cannot be modified or assailed.
ISSUE:
Whether or not the summons was properly issued.
HELD:
Banco do Brasil takes exception to the appellate courts declaration that the suit below is in rem, not in personam, thus, service of summons by publication was sufficient for the court to acquire jurisdiction over the person of Banco do Brasil, and thereby liable to private respondent Cesar Urbino for damages claimed, amounting to $300,000.00. Petitioner further challenges the finding that the February 18, 1991 decision of the trial court was already final and thus, cannot be modified or assailed.
First. When the defendant is a nonresident and he is not found in the country, summons may be served extraterritorially in accordance with Rule 14, Section 17[53] of the Rules of Court. Under this provision, there are only four (4) instances when extraterritorial service of summons is proper, namely: "(1) when the action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or interest, actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the defendant non-residents property has been attached within the Philippines."[54] In these instances, service of summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient.[55]
Clear from the foregoing, extrajudicial service of summons apply only where the action is in rem, an action against the thing itself instead of against the person, or in an action quasi in rem, where an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or loan burdening the property. This is so inasmuch as, in in rem and quasi in rem actions, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res.[56]
However, where the action is in personam, one brought against a person on the basis of his personal liability, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. When the defendant is a non-resident, personal service of summons within the state is essential to the acquisition of jurisdiction over the person.[57] This cannot be done, however, if the defendant is not physically present in the country, and thus, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him.[58]
In the instant case, private respondents suit against petitioner is premised on petitioners being one of the claimants of the subject vessel M/V Star Ace.[59] Thus, it can be said that private respondent initially sought only to exclude petitioner from claiming interest over the subject vessel M/V Star Ace. However, private respondent testified during the presentation of evidence that, for being a nuisance defendant, petitioner caused irreparable damage to private respondent in the amount of $300,000.00.[60] Therefore, while the action is in rem, by claiming damages, the relief demanded went beyond the res and sought a relief totally alien to the action.
It must be stressed that any relief granted in rem or quasi in rem actions must be confined to the res, and the court cannot lawfully render a personal judgment against the defendant.[61] Clearly, the publication of summons effected by private respondent is invalid and ineffective for the trial court to acquire jurisdiction over the person of petitioner, since by seeking to recover damages from petitioner for the alleged commission of an injury to his person or property[62] caused by petitioners being a nuisance defendant, private respondents action became in personam. Bearing in mind the in personam nature of the action, personal or, if not possible, substituted service of summons on petitioner, and not extraterritorial service, is necessary to confer jurisdiction over the person of petitioner and validly hold it liable to private respondent for damages. Thus, the trial court had no jurisdiction to award damages amounting to $300,000.00 in favor of private respondent and as against herein petitioner.
Second. We settled the issue of finality of the trial courts decision dated February 18, 1991 in the Vlason case, wherein we stated that, considering the admiralty case involved multiple defendants, "each defendant had a different period within which to appeal, depending on the date of receipt of decision."[63] Only upon the lapse of the reglementary period to appeal, with no appeal perfected within such period, does the decision become final and executory.[64]
In the case of petitioner, its Motion to Vacate Judgment and to Dismiss Case was filed on April 10, 1991, only six (6) days after it learned of the existence of the case upon being informed by the Embassy of the Federative Republic of Brazil in the Philippines, on April 4, 1991, of the February 18, 1991 decision.[65] Thus, in the absence of any evidence on the date of receipt of decision, other than the alleged April 4, 1991 date when petitioner learned of the decision, the February 18, 1991 decision of the trial court cannot be said to have attained finality as regards the petitioner.
