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[G.R. Nos. 121576-78.

June 16, 2000]


BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS, HON. ARSENIO M.
GONONG, and CESAR S. URBINO, SR., respondents.
DE LEON, JR., J.:
Poro Point Shipping Services requested permission for its vessel M/V Star Ace, which had engine
trouble, to unload its cargo and to store it at the Philippine Ports Authority (PPA) compound in San
Fernando, La Union while awaiting transhipment to Hongkong. The request was approved by the
Bureau of Customs. Customs personnel boarded the vessel on suspicion that it was the hijacked M/V
Silver Med owned by Med Line Philippines Co., and that its cargo would be smuggled into the country.
The district customs collector seized said vessel and its cargo. A notice of hearing of SFLU Seizure
Identification No. 3-89 was served on its consignee, Singkong Trading Co. of Hongkong, and its
shipper, Dusit International Co., Ltd. of Thailand.
While seizure proceedings were ongoing, La Union was hit by three typhoons, and the vessel ran
aground and was abandoned. The vessel's authorized representative, Frank Cadacio, entered into
salvage agreement with Cesar Urbino, Sr. (General Manager of Duraproof Services) to secure and
repair the vessel at the agreed consideration of $1 million and "fifty percent (50%) [of] the cargo after
all expenses, cost and taxes."
Finding that no fraud was committed, the District Collector of Customs, Quiray, lifted the warrant of
seizure. However, Customs Commissioner Mison declined to issue a clearance for Quirays Decision;
instead, he forfeited the vessel and its cargo. Accordingly, acting District Collector of Customs Sy
issued a Decision decreeing the forfeiture and the sale of the cargo in favor of the government.
To enforce its preferred salvors lien, Duraproof Services filed with the RTC of Manila a Petition for
Certiorari, Prohibition and Mandamus assailing the actions of Commissioner Mison and District
Collector Sy. Also impleaded as respondents were PPA Representative Mangaoang and Med Line
Philippines, Inc.
Private respondent amended its Petition to include Quiray; the PPA Port Manager; Vlason Enterprises
as represented by Angliongto; Singkong Trading Company as represented by Atty. Eddie Tamondong;
Banco Du Brasil; Dusit International Co.; Thai-Nan Enterprises Ltd., and Thai-United Trading Co.,
Ltd.
Summonses were served. Upon motion of the private respondent, the trial court allowed summons by
publication to be served upon defendants who were not residents and had no direct representative in the
country. Banco du Brasil was declared in default.
Eventually, the trial court ruled in favor of Duraproof Services ordering respondents to pay to

Duraproof the amounts prayed for in the petition, specifically, $300,000 in damages for Banco du
Brasil and a writ of execution was issued.
Banco do Brasil filed, by special appearance, an Urgent Motion to Vacate Judgement and to Dismiss
Case on the ground that the Decision of the trial court is void with respect to it for having been
rendered without validly acquiring jurisdiction over the person of Banco do Brasil, as the summons was
only served on the Ambassador of Brazil. It amended its petition to specifically aver that its special
appearance is solely for the purpose of questioning the Courts exercise of personal jurisdiction. The
RTC granted the motion and denied MR of Duraproof. CA set aside and reinstated first decision of
RTC in favor of Duraproof. Hence, this petition.
ISSUES:
1. Whether or not the court acquired jurisdiction over Banco Do Brasil?
2. Whether or not initial decision of trial court was final, thus cannot be modified?
RULING:
1. No. Duraproof's suit against petitioner is premised on petitioners being one of the claimants of the
subject vessel M/V Star Ace. Thus, it can be said that Duraproof initially sought only to exclude
petitioner from claiming interest over the subject vessel M/V Star Ace. However, Duraproof 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. 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. Clearly, the publication
of summons effected by Duraproof 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 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.
2. No. 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."Only upon the lapse of the reglementary period to appeal, with no appeal perfected within

such period, does the decision become final and executory.


In the case of petitioner, its Motion to Vacate Judgment and to Dismiss Case was filed 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 of the trial court's decision. Thus, in the absence of any evidence
on the date of receipt of decision, the decision of the trial court cannot be said to have attained finality
as regards the petitioner.