El Banco Espaol-Filipino vs Vicente Palanca G.R. No.

L-11390 March 26, 1918 FACTS: Engracio Palanca Tanquinyeng y Limquingco mortgaged various parcels of real property in Manila to El Banco Espanol-Filipino. Afterwards, Engracio returned to China and there he died on January 29, 1810 without returning again to the Philippines. The mortgagor then instituted foreclosure proceeding but since defendant is a non-resident, it was necessary to give notice by publication. The Clerk of Court was also directed to send copy of the summons to the defendants last known address, which is in Amoy, China. It is not shown whether the Clerk complied with this requirement. Nevertheless, after publication in a newspaper of the City of Manila, the cause proceeded and judgment by default was rendered. The decision was likewise published and afterwards sale by public auction was held with the bank as the highest bidder. On August 7, 1908, this sale was confirmed by the court. However, about seven years after the confirmation of this sale, a motion was made by Vicente Palanca, as administrator of the estate of the original defendant, wherein the applicant requested the court to set aside the order of default and the judgment, and to vacate all the proceedings subsequent thereto. The basis of this application was that the order of default and the judgment rendered thereon were void because the court had never acquired jurisdiction over the defendant or over the subject of the action. ISSUE: Whether or not the lower court acquired jurisdiction over the defendant and the subject matter of the action. RULING: On Jurisdiction The word jurisdiction is used in several different, though related, senses since it may have reference (1) to the authority of the court to entertain a particular kind of action or to administer a particular kind of relief, or it may refer to the power of the court over the parties, or (2) over the property which is the subject to the litigation. The sovereign authority which organizes a court determines the nature and extent of its powers in general and thus fixes its competency or jurisdiction with reference to the actions which it may entertain and the relief it may grant. How Jurisdiction is Acquired Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his submission to its authority, or it is acquired by the coercive power of legal process exerted over the person.

Jurisdiction over the property which is the subject of the litigation may result either from a seizure of the property under legal process, whereby it is brought into the actual custody of the law, or it may result from the institution of legal proceedings wherein, under special provisions of law, the power of the court over the property is recognized and made effective. In the latter case the property, though at all times within the potential power of the court, may never be taken into actual custody at all. An illustration of the jurisdiction acquired by actual seizure is found in attachment proceedings, where the property is seized at the beginning of the action, or some subsequent stage of its progress, and held to abide the final event of the litigation. An illustration of what we term potential jurisdiction over the res, is found in the proceeding to register the title of land under our system for the registration of land. Here the court, without taking actual physical control over the property assumes, at the instance of some person claiming to be owner, to exercise a jurisdiction in rem over the property and to adjudicate the title in favor of the petitioner against all the world. In the terminology of American law the action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is expressed the idea that while it is not strictly speaking an action in rem yet it partakes of that nature and is substantially such. The expression "action in rem" is, in its narrow application, used only with reference to certain proceedings in courts of admiralty wherein the property alone is treated as responsible for the claim or obligation upon which the proceedings are based. The action quasi rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant, and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. All proceedings having for their sole object the sale or other disposition of the property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered in these proceedings is conclusive only between the parties.

ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA GUINA, respondents. G.R. No. 125027. August 12, 2002 FACTS: This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to set aside the Decision of the Court of Appeals affirming the Decision of the Regional Trial Court, Branch 108, Pasay City. The trial court upheld the writ of attachment and the declaration of default on petitioner while ordering her to pay private respondent P109,376.95 plus 18 percent interest per annum, 25 percent attorneys fees and costs of suit. On December 15, 1995, the Court of Appeals rendered adecision affirming the decision of the trial court. The Court of Appeals upheld the validity of theissuance of the writ of attachment and sustained the filing of the action in the RTC of Pasay. TheCourt of Appeals also affirmed the declaration of default on petitioner and concluded that the trial court did not commit any reversible error.

ISSUES: WHETHER RESPONDENT COURT ERRED IN NOT HOLDING THAT THE W R I T O F ATTACHMENT WAS IMPROPERLY ISSUED AND SERVED; WHETHER THERE WAS IMPROPER VENUE. HELD: The petition is GRANTED on the grounds of improper venue and invalidity of the service of the writ of attachment. The decision of the Court of Appeals and the order of respondent judge denying the motion to dismiss are REVERSED and SET ASIDE. The grant of the provisional remedy of attachment involves three stages: first, the court issues the order granting the application; second, the writ of attachment issues pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that jurisdiction over the person of the defendant be first obtained. However, once the implementation of the writ commences, t h e c o u r t m u s t h a v e a c q u i r e d j u r i s d i c t i o n o v e r t h e defendant for without such jurisdiction, the court has no power and authority to act in any manner against the defendant. Any order issuing from the Court will not bind the defendant. The trial court cannot enforce such a coercive process on petitioner without first obtaining jurisdiction over her person. The preliminary writ of attachment must be served after or simultaneous with the service of summons on the defendant whether by personal service, substituted service or by publication as warranted by the circumstances of the case. The subsequent service of summons does not confer a retroactive acquisition of jurisdiction over her person because the law does not allow for retroactivity of a belated service. The rules on venue, like other procedural rules, are designed to insure a just and orderly administration of justice or the impartial and evenhanded determination of every action and proceeding. Obviously, this objective will not be attained if the plaintiff is given unrestricted freedom to choose where to file the complaint or petition.

EMMANUEL C. OATE and ECON HOLDINGS CORPORATION, petitioners, vs. HON. ZUES C. ABROGAR, as Presiding Judge of Branch 150 of the Regional Trial Court of Makati, and SUN LIFE ASSURANCE COMPANY OF CANADA, respondents. G.R. No. 107303 February 21, 1994 FACTS: Sun Life filed a complaint for sum of money with a prayer for the issuance of a writ of preliminary attachment against Onate, et. al. The prayer for the writ was granted by the Court. The Sheriff attempted to serve summons to Onate, et. al. but he was unsuccessful. Despite of

this, the sheriff started to serve notices of garnishment upon banks, and notices of attachment upon other properties of Onate. The Sheriff was able to serve summons after the notice of garnishment. Onate argues that the attachment is improper because the RTC has not yet acquired jurisdiction over their persons. The SC said that whatever defects attended the attachment, these were cured when the sheriff was finally able to serve them the summons later on. Onate filed an MR. ISSUE: Whether or not the attachment is valid for having been cured by a subsequent service of summons HELD: No. Sun Life uses Davao Lights v CA to bolster its argument that the defects in the attachment were cured by the subsequentservice of summons. But this is a misreading of the Davao Lights case. What the Davao Lights case said is that a write of attachment may be issued and granted by the court, but it cannot be implemented until jurisdiction is acquired over the persons whose properties are subject to attachment. The subsequent service of summons, therefore, will not cure any defect in the attachment. The Court emphasized that at the very least, the writ of attachment must be served simultaneously with the service of summons before the writ may be enforced.

PERLA COMPANIA vs. RAMOLETE G.R. No. L-60887 November 13, 1991 FACTS: Enriquezs vehicle collided with the vehicle of Palmes, causing his death and injuries to Borbon. Palmes widow filed a complaint against Nelia Enriquez before CFI Cebu, claiming actual, moral, nominal and exemplary damages as a result of the accident. Judgment was rendered in favour of Palmes. The judgment of the trial court became final and executory and a writ of execution was thereafter issued. The writ of execution was, however, returned unsatisfied. Enriquez declared under oath that the Cimarron PUJ registered in her name was covered by a third-party liability insurance policy issued by petitioner Perla. Palmes filed a motion for garnishment praying that an order of garnishment be issued against the insurance policy issued by Perla in favor of Enriquez. Court issued an Order directing the Provincial Sheriff or his deputy to garnish the third-party liability insurance policy. Perla moved for the quashal of the writ of garnishment, contending that it was not a party to the case and that jurisdiction over its person had never been acquired by the trial court by service of summons or by any process.

ISSUE: WON the insurance contract can be subjected to garnishment or execution to satisfy the judgment in a case where the garnishee was not a party to the case and the trial court did not acquire jurisdiction over garnishee's person? HELD: Yes. In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is not necessary that summons be served upon him. The garnishee need not be impleaded as a party to the case. All that is necessary for the trial court lawfully to bind the person of the garnishee or any person who has in his possession credits belonging to thejudgment debtor is service upon him of the writ of garnishment. Garnishment has been defined as a species of attachment for reaching any property or credits pertaining or payable to a judgment debtor. In legal contemplation, it is a forced novation by the substitution of creditors: the judgment debtor, who is the original creditor of the garnishee is, through service of the writ of garnishment, substituted by the judgment creditor who thereby becomes creditor of the garnishee. Garnishment has also been described as a warning to a person having in his possession property or credits of the judgment debtor, not to pay the money or deliver the property to the latter, but rather to appear and answer the plaintiff's suit. The Rules of Court themselves do not require that the garnishee be served with summons or impleaded in the case in order to make him liable. Through service of the writ of garnishment, the garnishee becomes a "virtual party" to, or a "forced intervenor" in, the case and the trial court thereby acquires jurisdiction to bind him to compliance with all orders and processes of the trial court with a view to the complete satisfaction of the judgment of the court. The garnishment of property to satisfy a writ of execution operates as an attachment and fastens upon the property a lien by which the property is brought under the jurisdiction of the court issuing the writ. It is brought into custodia legis, under the sole control of such court. In the present case, there can be no doubt, therefore, that the trial court actually acquired jurisdiction over petitioner Perla when it was served with the writ of garnishment of the thirdparty liability insurance policy it had issued in favor of judgment debtor Nelia Enriquez. Perla cannot successfully evade liability thereon by such a contention. On the contention that a separate civil case has to be instituted against Perla: The Court there held that a separate action needs to be commenced when the garnishee "claims an interest in the property adverse to him (judgment debtor) or denies the debt." In the instant case, petitioner Perla did not deny before the trial court that it had indeed issued a third-party liability insurance policy in favor of the judgment debtor.

PEOPLE'S BANK AND TRUST COMPANY, plaintiff-appellee, vs.

SYVEL'S INCORPORATED,ANTONIO Y. SYYAP and ANGEL Y SYYAP,defendantsappellants. G.R. No. L-29280 August 11, 1988 FACTS: This is an action for foreclosure of chattel mortgage executed in favor of the plaintiff by the defendant Syvel's Incorporated on its stocks of goods, personal properties and other materials owned by it and located at its stores or warehouses The chattel mortgage was in connection with a credit commercial line in the amount of P900,000.00 granted the said defendant corporation, the expiry date of which was May 20, 1966. On May 20, 1965, defendants Antonio V. Syyap and Angel Y. Syyap executed an undertaking in favor of the plaintiff whereby they both agreed to guarantee absolutely and unconditionally and without the benefit of excussion the full and prompt payment of any indebtedness to be incurred on account of the said credit line. Against the credit line granted the defendant Syvel's Incorporated the latter drew advances in the form of promissory notes. In view of the failure of the defendant corporation to make payment in accordance with the terms and conditions agreed upon in the Commercial Credit Agreement the plaintiff started to foreclose extrajudicially The chattel mortgage. After the filing of this case and during its pendency, Syyap proposed to have the case settled. Mr. Syyap offered to execute a real estate mortgage on his real property located in Bacoor, Cavite. Mr. De las Alas consented, and so the Real Estate Mortgage was executed by the defendant Antonio V. Syyap and his wife Margarita Bengco Syyap on June 22, 1967. In that deed of mortgage, defendant Syyap admitted that as of June 16,1967, the indebtedness of Syvel's Incorporated was P601,633.01.No part of the amount has been paid by either of the defendants. Hence their liabilities cannot be questioned ISSUE: WON the obligation secured by the Chattel Mortgage sought to be foreclosed was novated by the subsequent execution by Syyap of a real estate mortgage as additional collateral to the obligation secured by said chattel mortgage. HELD: Novation takes place when the object or principal condition of an obligation is changed or altered. It is elementary that novation is never presumed; it must be explicitly stated or there must be manifest incompatibility between the old and the new obligations in every aspect. In the case at bar, there is nothing in the RealEstate Mortgage which supports appellants's ubmission. The contract on its face does not show the existence of an explicit novation nor incompatibility on every point between the "old and the "new" agreements as the second contract evidently indicates that the same was executed as new additional security to the chattel mortgage previously entered into by the parties. Moreover, appellants agreed that the chattel mortgage "shall remain in full force and shall not be impaired by this (real estate) mortgage."It is clear, therefore, that a novation was not intended. The real estate mortgage was evidently taken as additional security for the performanceof the contract.