ASIAVEST LIMITED vs.

CA Facts: The plaintiff Asiavest Limited filed a complaint against the defendant Antonio Heras praying that said defendant be ordered to pay to the plaintiff the amounts awarded by the Hong Kong Court Judgment. The action filed in Hong Kong against Heras was in personam, since it was based on his personal guarantee of the obligation of the principal debtor. The trial court concluded that the Hong Kong court judgment should be recognized and given effect in this jurisdiction for failure of HERAS to overcome the legal presumption in favor of the foreign judgment. Asiavest moved for the reconsideration of the decision. It sought an award of judicial costs and an increase in attorney's fees with interest until full payment of the said obligations. On the other hand, Heras no longer opposed the motion and instead appealed the decision to CA. The Court of Appeals (CA) agreed with Heras that notice sent outside the state to a non-resident is unavailing to give jurisdiction in an action against him personally for money recovery. Summons should have been personally served on Heras in Hong Kong, Issue: Whether or not the judgment of the Hong Kong Court has been repelled by evidence of want of jurisdiction due to improper notice to the party Asiavest cannot now claim that Heras was a resident of Hong Kong at the time since the stipulated fact that Heras "is a resident of New Manila, Quezon City, Philippines" refers to his residence at the time jurisdiction over his person was being sought by the Hong Kong court. Accordingly, since Heras was not a resident of Hong Kong and the action against him was, ne in personam, summons should have been personally served on him in Hong Kong. The extraterritorial service in the Philippines was therefore invalid and did not confer on the Hong Kong court jurisdiction over his person. It follows that the Hong Kong court judgment cannot be given force and effect here in the Philippines for having been rendered without jurisdiction. On the same note, Heras was also an absentee,hence, he should have been served with summons in the same manner as a non-resident not found in Hong Kong. Section 17, Rule 14 of the Rules of Court providing for extraterritorial service will not apply because the suit against him was in personam. Neither can we apply Section 18, which allows extraterritorial service on a resident defendant who is temporarily absent from the country, because even if Heras be considered as a resident of Hong Kong, the undisputed fact remains that he left Hong Kong not only temporarily but for good

BANCO DO BRASIL vs. THE COURT OF APPEALS Facts: Poro Point Shipping Services, then acting as the local agent of Omega Sea Transport Company of Honduras & Panama, a Panamanian Company (hereafter referred to as Omega), requested permission for its vessel M/V Star Ace, which had engine trouble, to unload its cargo. The customs personnel boarded the vessel when it docked on January 7, 1989, 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. customs collector seized said vessel and its cargo pursuant to Section 2301, Tariff and Customs Code. While seizure proceedings were ongoing, La Union was hit by three typhoons, and the vessel ran aground and was abandoned. On June 8, 1989, its authorized representative, Frank Cadacio, entered into salvage agreement with private respondent to secure and repair the vessel Finding that no fraud was committed, the District Collector of Customs, lifted the warrant of seizure on July 1989. However, then Customs Commissioner Salvador M. Mison declined to issue a clearance for Quirays Decision; instead, he forfeited the vessel and its cargo To enforce its preferred salvors lien, herein Private Respondent Duraproof Services filed with the Regional Trial Court of Manila a Petition for Certiorari, Prohibition and Mandamus. On January 10, 1989, private respondent amended its Petition to include former District Collector Quiray; PPA Port Manager Adolfo Ll. Amor, Jr.; x Vlason Enterprises as represented by its president, Vicente 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. On April 10, 1991, petitioner Banco do Brasil filed, by special appearance, an Urgent Motion to Vacate Judgement and to Dismiss Case on the ground that the February 18, 1991 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. Petitioner subsequently amended its petition to specifically aver that its special appearance is solely for the purpose of questioning the Courts exercise of personal jurisdiction. Issue: Wether or not the court aquired jurisdiction over Banco do Brasil Held: Petitioner 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 petitioner Banco do Brasil, and thereby liable to private respondent Cesar Urbino for damages claimed. Petitioner avers that the action filed against it is an action for damages, as such it is an action in personam which requires personal service of summons be made upon it for the court to acquire jurisdiction over it. However, inasmuch as petitioner Banco do Brasil is a non-resident foreign corporation, not engaged in business in the Philippines, unless it has property located in the Philippines which may be attached to convert the action into an action in rem, the court cannot acquire jurisdiction over it in respect of an action in personam. The petition bears merit, thus the same should be as it is hereby granted. 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. 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. 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 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 caused by petitioners being a nuisance defendant, private respondents action became in personam.

NM ROTHSCHILD AND SONS vs. LEPANTO Facts: On August 30, 2005, respondent Lepanto Consolidated Mining Company filed with the Regional Trial Court (RTC) of Makati City a Complaint against petitioner NM Rothschild & Sons (Australia) Limited praying for a judgment declaring the loan and hedging contracts between the parties void for being contrary to Article 2018. The trial court authorized respondents counsel to personally bring the summons and Complaint to the Philippine Consulate General in Sydney, Australia for the latter office to effect service of summons on petitioner (defendant). On October 20, 2005, petitioner filed a Special Appearance With Motion to Dismiss[5] praying for the dismissal of the Complaint on the following grounds: (a) the court has not acquired jurisdiction over the person of petitioner due to the defective and improper service of summons; (b) the Complaint failed to state a cause of action and respondent does not have any against petitioner; (c) the action is barred by estoppel; and (d) respondent did not come to court with clean hands. On December 9, 2005, the trial court issued an Order denying the Motion to Dismiss. Meanwhile, on December 28, 2006, the trial court issued an Order directing respondent to answer some of the questions in petitioners Interrogatories to Plaintiff dated September 7, 2006. Notwithstanding the foregoing, petitioner filed the present petition assailing resolution of the Court that the trial court committed grave abuse of discretion in not finding that it had not validly acquired jurisdiction over petitioner and that the plaintiff had no cause of action. Issue: whether or not the court committed grave abuse of discretion in not finding that it had not validly acquired jurisdiction over petitioner and that the plaintiff had no cause of action. Held: The service of summons to petitioner through the DFA by the conveyance of the summons to the Philippine Consulate General in Sydney, Australia was clearly made not through the above-quoted Section 12, but pursuant to Section 15 of the same rule which provides: 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. Breaking down Section 15, Rule 14, it is apparent that there are only four instances wherein a defendant who is a non-resident and is not found in the country may be served with summons by extraterritorial service, to wit: (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 an 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-resident's property has been attached within the Philippines. 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. Undoubtedly, extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an action is in personam. When the case instituted is an action in rem or quasi in rem, Philippine courts already have jurisdiction to hear and decide the case because, in actions in rem and quasi in rem, 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. Thus, in such instance, extraterritorial service of summons can be made upon the defendant. The said extraterritorial service of summons is not for the purpose of vesting the court with jurisdiction, but for complying with the requirements of fair play or due process, so that the defendant will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff, and he can thereby take steps to protect his interest if he is so minded. On the other hand, when the defendant or respondent does not reside and is not found in the Philippines, and the action involved is in personam, Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. The Complaint in the case at bar is an action to declare the loan and Hedging Contracts between the parties void with a prayer for damages. It is a suit in which the plaintiff seeks to be freed from its obligations to the defendant under a contract and to hold said defendant pecuniarily liable to the plaintiff for entering into such contract. It is therefore an action in personam, unless and until the plaintiff attaches a property within the Philippines belonging to the defendant, in which case the action will be converted to one quasi in rem.