before entry of judgment, a plaintiff or any proper party may have the property of the adverse party attached as security
for the satisfaction of any judgment that may be recovered in the following cases:
(a) In an action for the recovery of a specified
amount of money or damages, other than moral and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasi-delict against a party who is about to depart from the Philippines with intent to defraud his creditors;
(b) In an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful
violation of duty;
(c) In an action to recover the possession of
property unjustly or fraudulently taken, detained or converted, when the property, or any part thereof, has been concealed, removed, or disposed of to prevent its being found or taken by the applicant or an authorized person;
(d) In an action against a party who has been guilty of a fraud in contracting the debt or incurring the obligation upon which the action is brought, or in the performance thereof;
(e) In an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his creditors; or
(f) In an action against a party who does not reside and is not found in the Philippines, or on whom summons may be served by publication. (1a)
The court interpreted these provisions to mean that if there is publication of the summons, there should be a proceeding accompanying preliminary attachment over the personal properties of the defendant. Otherwise, the court will be unable to acquire jurisdiction over the person of the defendant. If we are not able to convert the action in personam to that in rem, the court will not be able to acquire jurisdiction over the person of the defendant, and therefore, the court will not have authority at all to entertain the case. Note: If the court still did not still acquire jurisdiction over the defendant despite the attachment of the personal properties of the defendant, then the case will be archived. There can be no dismissal of the case. No prescription will run, since the complaint is archived.
Citizen’s Surety vs. Herrera Digest : Facts:
Citizens Surety and Insurance Co (Citizens) alleged that at the request of Santiago Dacanay, it issued 2 surety bonds to
guarantee payment of P5K promissory notes in favor Gregorio Fajardo and Manufacturers Bank & Trust Co respectively. As security, the Santiago and Josefina Dacanay executed an Indemnity Agreement to jointly indemnify Citizens for losses, costs and expenses (with 12% annual interest) and a REM over a parcel of land in Baguio. The Dacanays failed to pay the promissory notes compelling Citizens to pay. The Dacanays failed to reimburse Citizens however, forcing the latter to cause the extra-judicial foreclosure of the mortgage and file a case to recover the unsatisfied balance.
At petitioner’s request, the respondent Judge caused summons to be made by publication in the Philippines Herald. But despite such publication and deposit of copy with the Manila post office, the defendant did not appear within 60 days from the last
Plaintiff sought the defendants to be declared in default, but the Judge eventually dismissed the case, the suit being in
personam and the defendants not having appeared.
Issue:
W/N summons made by publication is sufficient for the court to acquire jurisdiction
Held:
No. In an action strictly in personam, personal service of summons, within the forum, is essential to the acquisition of jurisdiction over the person of the defendant, who does not voluntarily submit himself to the authority of the court. In other words, summons by publication cannot – consistently with the due process clause in the Bill of Rights – confer upon the court jurisdiction over said defendants.
The proper recourse for the creditor is to locate properties, real or personal, of the resident defendant debtor with unknown address and cause them to be attached, in which case, the attachment converts the action into a proceeding in rem or quasi in rem and the summons by publication may be valid.
Given the skill of debtors to conceal their properties
however, the decision of the respondent Judge should be set aside and held pending in the archives until petitioner tracks down the whereabouts of the defendant’s person or properties.
In 2008, Santos vs. PNOC was decided, which changed the principles held under Citizen’s Surety vs. Herrera.
Santos vs. PNOC Defendant in an Action in personam can be subject to court’s jurisdiction (2008)
The defendant did not file an answer within the reglementary period. The lawyer of the plaintiff did not move for publication of summons, but filed only a motion to allow him to present evidence ex parte. The judge
rendered a decision in favor of the plaintiff. When defendant learned of the decision, he moved for reconsideration thereof. The Court then gained jurisdiction over the person of the defendant mad a voluntary appearance when the defendant filed his motion for reconsideration.
Santos vs. PNOC Digest
Facts: PNOC Exploration Corporation, respondent, filed a complaint for a sum of money against petitioner Pedro Santos Jr. in the RTC of Pasig. The amount sought to be collected was the petitioner’s unpaid balance of the car loan advanced to him by respondent when he was still a member of its board of
directors.
Personal service of summons were made to petitioner but failed because the latter cannot be located in his last known address despite earnest efforts to do so. Subsequently, on respondent’s motion, the trial court allowed service of summons by
publication. Respondent caused the publication of the
summons in Remate, a newspaper of general circulation in the Philippines. Thereafter, respondent submitted the affidavit of publication and the affidavit of service of respondent’s
employee to the effect that he sent a copy of the summons by registered mail to petitioner’s last known address.
Petitioner still failed to answer within the prescribed period despite the publication of summons. Hence, respondent filed a motion for the reception of its evidence ex parte. Trial court granted said motion and proceeded with the ex parte
Petitioner filed an Omnibus Motion for Reconsideration and to Admit Attached Answer, alleging that the affidavit of service submitted by respondent failed to comply with Section 19, Rule 14 of the Rules of Court as it was not executed by the clerk of court. Trial court denied the said motion and held that the rules did not require such execution with the clerk of court. It also denied the motion to admit petitioner’s answer because the same was filed way beyond the reglementary period.
Petitioner appeals to the CA via a petition for certiorari but failed and even sustained the trial court’s decision and ordered the former to pay the amount plus legal interest and cost of suit. Hence, this petition.
Issues:
(1) Whether or not there is lack of jurisdiction over the petitioner due to improper service of summons.
(2) Whether or not the rule on service by publication under Section 14, Rule 14 of the Rules of Court applies only to actions in rem, not actions in personam.
(3) Whether or not the affidavit of service of the copy of the summons should have been prepared by the clerk of court and not respondent’s messenger.
Held:
(1) Section 14, Rule 14 provides that in any action where the defendant is designated as an unknown owner or the like or when his whereabouts are unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon him by publication in a newspaper of general circulation and in such places and for such times as the court may order. Since petitioner could not be personally served with summons despite diligent efforts to
locate his whereabouts, respondent sought and was granted leave of court to effect the service of summons upon him by publication in a newspaper of general circulation. Thus,
petitioner was proper served with summons by publication and that there is jurisdiction over his person.
(2) The in rem/in personam distinction was significant under the old rule because it was silent as to the kind of action to which the rule was applicable but this has been changed, it now applies to any action. The present rule expressly states that it applies “in any action where the
defendant is designated as an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry .” Hence, the petitioner’s
contention that the complaint filed against him is not covered by the said rule because the action for recovery of sum of money is an action in personam is not applicable anymore.
(3) The service of summons by publication is
complemented by service of summons by registered mail to defendant’s last known address. This complementary service is evidenced by an affidavit “showing the deposit of a copy of the summons and order for publication in the post office, postage for prepaid, directed to the defendant by registered mail to his last known address”. The rules, however, do not require that the affidavit of complementary service be executed by the clerk of court. While the trial court ordinarily does the mailing of copies of its orders and processes, the duty to make the complementary service by registered mail is imposed on the party who resorts to service by publication.
Since 2008, the lawyers have made use of Santos vs. PNOC as the authority to convince a trial court that there is no need for a publication of summons for the issuance of a writ of preliminary attachment before the court could acquire jurisdiction over the person of the defendant.
In 2010, SC resolved another case, Palma vs. Galvez. In the case of Palma vs. Galvez, the SC held that we should literally apply what the Rules provides, particularly Section 16 of Rule 14. If you read Section 16, the defendant is a resident of RP temporarily out of RP. In relation to Section 14, if the whereabouts of the defendant is unknown, there could be
publication of summons, and that would enable the court to acquire jurisdiction over the person of the defendant.
Palma vs. Galvez (When the whereabouts of defendant is unknown, there is no need for publication of summons.)
Reiterates Santos vs. PNOC – there is no need , under Sections 14 to 16 in Rule 14, for the conversion of an action in personam to that in rem before a court could acquire jurisdiction over the person of the defendant.
Now on the merits, the issue for resolution is whether there was a valid service of summons on private respondent.
In civil cases, the trial court acquires jurisdiction over the person of the defendant either by the service of summons or by the latter’s voluntary appearance and submission to the authority of the former. Private respondent was a Filipino resident who was temporarily out of the Philippines at the time of the service of summons; thus, service of summons on her is governed by Section 16, Rule 14 of the Rules of Court, which provides:
Sec. 16. Residents temporarily out of the Philippines. – When an action is commenced against a defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be also effected out of the Philippines, as under the preceding section. (Emphasis supplied)
The preceding section referred to in the above provision is Section 15, which speaks of extraterritorial service, thus:
SEC. 15. Extraterritorial service. ─ When the defendant does not reside and is not found in the Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 6; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer.
The RTC found that since private respondent was abroad at the time of the service of summons, she was a resident who was temporarily out of the country; thus, service of summons may be made only by publication.
We do not agree.
In
Montefalcon v. Vasquez, we said that because Section 16 of Rule 14 uses the words “may” and “also,” it is not mandatory. Other methods of service of summons allowed under the Rules may also be availed of by the serving officer on a defendant-resident who is temporarily out of the Philippines. Thus, if a resident defendant is temporarily out of the country, any of the following modes of service may be resorted to: (1) substituted service set forth in section 7 ( formerly Section 8), Rule 14; (2)
personal service outside the country, with leave of court; (3) service by publication, also with leave of court; or (4) in any other manner the court may deem sufficient.
In Montalban v. Maximo, we held that substituted service of summons under the present Section 7, Rule 14 of the Rules of Court in a suit in personam against residents of the Philippines temporarily absent therefrom is the normal method of service of summons that will confer jurisdiction on the court over such defendant. In the same case, we expounded on the rationale in providing for substituted service as the normal mode of service for residents temporarily out of the Philippines.
x x x A man temporarily absent from this country leaves a definite place of residence, a dwelling where he lives, a local base, so to speak, to which any inquiry about him may be directed and where he is bound to return. Where one temporarily absents himself, he leaves his affairs in the hands of one who may be reasonably expected to act in his place and stead; to do all that is necessary to protect his interests; and to communicate with him from time to time any incident of importance that may affect him or his business or his affairs. It is usual for such a man to leave at his home or with his business associates information as to where he may be contacted in the event a question that affects him crops up. If he does not do what is expected of him, and a case comes up in court against him, he cannot just raise his voice and say that he is not subject to the processes of our courts. He cannot stop a suit from being filed against him upon a claim that he cannot be summoned at his dwelling house or residence or his office or regular place of business.
Not that he cannot be reached within a reasonable time to enable him to contest a suit
against him. There are now advanced facilities of communication. Long distance telephone calls and cablegrams make it easy for one he left behind to communicate with him.
Considering that private respondent was temporarily out of the country, the summons and complaint may be validly served on her through substituted service under Section 7, Rule 14 of the Rules of Court which reads:
SEC. 7. Substituted service. — If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof.
We have held that a dwelling, house or residence refers to the place where the person named in the summons is living at the time when the service is made, even though he may be temporarily out of the country at the time. It is, thus, the service of the summons intended for the defendant that must be left with the person of suitable age and discretion residing in the house of the defendant. Compliance with the rules regarding the service of summons is as important as the issue of due process as that of jurisdiction.
Section 7 also designates the persons with whom copies of the process may be left. The rule presupposes that such a relation of confidence exists between the person with whom the copy is left and the defendant and, therefore, assumes that such person will deliver the process to defendant or in some way give him notice thereof.
In this case, the Sheriff's Return stated that private respondent was out of the country; thus, the service of summons was made at her residence with her husband, Alfredo P. Agudo, acknowledging receipt thereof. Alfredo was presumably of suitable age and discretion, who was residing in that place and, therefore, was competent to receive the summons on private respondent's behalf.
Notably, private respondent makes no issue as to the fact that the place where the summons was served was her residence, though she was temporarily out of the country at that time, and that Alfredo is her husband. In fact, in the notice of appearance and motion for extension of time to file answer submitted by private respondent's counsel, he confirmed the Sheriff's Return by stating that private respondent was out of the country and that his service was engaged by respondent's husband. In his motion for another extension of time to file answer, private respondent's counsel stated that a draft of the answer had already been prepared, which would be submitted to private respondent, who was in Ireland for her clarification and/or verification before the Philippine Consulate there. These statements establish the fact that private respondent had knowledge of the case filed against her, and that her husband had told her about the case as Alfredo even engaged the services of her counsel.