5. Tradition Asia Pacific v.

Moya (DE GUZMAN) and is not found in the Philippines, or on whom summons may be served by
December 13, 2017 | No Ponente. It’s a Notice | Rule 57- Purpose of a Writ of publication (Rule 57, Sec. 1[f]).
Preliminary Attachment Here, the attachment of the shares of Tradition Asia in Tradition-PH was
clearly resorted to in order to vest trial court with jurisdiction over the res.
PETITIONER: Tradition Asia Pacific Pte. Ltd. Although the extraterritorial service and publication of summons was resorted to
RESPONDENTS: Hon. Encarnacion Jaja G. Moya, Presiding Judge of the RTC prior to the actual attachment of Tradition Asia’s property, jurisdiction over the
Makati, Branch 146, and Tullet Prebon [Philippines], Inc. action had already been acquired by the trial court upon the actual implementation
SUMMARY: of the writ of preliminary attachment.
Tradition Asia (Petitioner) is a Singaporean corporation. It established a
subsidiary in the Philippines to expand its business, known as Tradition Financial DOCTRINE:
Services Philippines, Inc. (Tradition-PH). Tullet Prebon [Philippines] Inc. Jurisdiction over the res is acquired either a) by the seizure of the property under
(Tullet-PH/Respondent) is a domestic corporation. The latter instituted in Makati legal process, whereby it is brought into actual custody of the law; or b) as a result
RTC a complaint for damages with prayer for the issuance of preliminary of the institution of legal proceedings, in which the power of the court is
attachment (among other provisional remedies) of Tradition Asia’s properties in recognized and made effective. Letter “a” partakes a writ of preliminary
the Philippines, particularly its shares of stock in Tradition-PH. attachment.
Prior to the attachment of the said properties, Tullet-PH filed for the
extraterritorial service of summons upon Tradition Asia in Singapore. This was FACTS:
granted and complied with, eventually leading to Makati RTC’s issuance of the 1. Tradition Asia Pacific Pte. Ltd. (Petitioner/Tradition Asia) is a corporation
writ of attachment, which was implemented two days later. operating under the laws of Singapore. It is part of one of the largest Inter-
Tradition Asia appealed in the CA, but the latter denied. It now appeals before dealer Brokers (IDB) in the world, the Compangie Financiere Tradition
the SC arguing that: a) the complaint for damages against it is an action in (Tradition Goup). The latter serves an an intermediary that facilitates
personam – consequently, jurisdiction over its person can only be acquired transactions between brokers/dealers and dealer banks in the market.
through personal or substituted service; and b) the failure of Tullet-PH to attach 2. Tradition Group used to cater to the Philippine market only through Tradition
Tradition Asia’s properties prior to the extraterritorial service of summons is fatal Asia. However, the former had the objective of expanding and diversifying its
to the RTC’s acquisition of jurisdiction over it. business in Asia, so it established a subsidiary in the Philippines known as
Did CA err in ruling that Makati RTC acquired jurisdiction over the Tradition Financial Services Philippines, Inc. (Tradition-PH).
action due to the attachment of Tradition Asia’s shares of stocks in Tradition- 3. On the other hand, Tullet Prebon, [Philippines] Inc. (Private Respondent/
PH? - NO Tullet-PH) is a domestic corporation duly organized under our laws. It belongs
While the complaint of damages is indeed an action in personam, which to the Tullet Prebon Plc Group, one of the competitors of the Tradition Group
jurisdiction is acquired either by personal or substituted services, a Philippine in the global market.
court may still try a case against a defendant which is not found nor does reside in 4. In February 2009, Tullet-PH filed a complaint for damages, with prayer for
the country by converting the action into a proceeding in rem or quasi in rem by the issuance of preliminary attachment, TRO, and/or writ of preliminary
attaching the property to the defendant. injunction against Tradition Asia, Tradition-PH, Tradition Asia’s Chief
The seizure of property under legal process partakes a writ of preliminary Financial Officer Lent, Tradition Financial Services, LTF., London’s
attachment, which may issue in an action against a party who does not reside (Tradition London) employee Schulze, and Tullet-PH’s former high-ranking

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 employees and/or members of the board (namely: Villalon, Chuidian, service to Tradition Asia, otherwise, it will not acquire jurisdiction
Harvey). over it.
Since Tradition Asia is not found nor does reside in the Philippines, However, since Tradition Asia does not reside nor is found in the
Tullet-PH prayed for the attachment of the former’s properties in the Philippines (hence, personal and substituted service cannot be
Philippines. effected), Tullet-PH’ remedy is to convert the action into a
5. April 16, 2009, Makati RTC issued an Order granting Tullet-PH’s application proceeding in rem or quasi in rem by attaching the former’s
for the issuance of a writ of preliminary attachment, and directed the properties in the Philippines.
attachment of 139,995 shares of stock of Tradition Asia in Tradition-PH. Thereafter, the service of summons, either by publication coupled
However, despite these developments, no writ of attachment was with sending a copy of the court’s orders to the last known address
issued by the RTC, neither was there any attachment made of by registered mail will be for the purpose of complying with due
Tradition Asia’s properties in the Philippines. process requirements not for acquiring jurisdiction.
6. Tullet-PH filed an Ex-Parte Motion for Leave of Court for Extraterritorial The case was properly converted into an in rem proceeding since
Service of Summons, praying for the service of summons upon Tradition Asia Tradition Asia’s properties in the Philippines had already been
thru publication or registered mail. This was granted. attached.
It later manifested its compliance as shown by its 1) Affidavit of 11. With its subsequent MR being denied, Tradition Asia filed this Rule 45
Publication of the Chief Editor of The Manila Times stating the petition arguing that –
publication of the summons and complaint; and 2) Affidavit of The complaint for damages against it partakes of the nature of an
Service by Registered Mail, stating that the Order, Summons, and action in personam. Consequently, jurisdiction over its person can
Complaint were deposited in the post office of Tradition Asia’s last only be acquired through personal or substituted service; and
known address at Singapore. That the failure of the respondent to actually attach its properties prior
7. Tullet-PH then moved to declare Tradition Asia in default for failing to file its to the extraterritorial service of summons is fatal to the RTC’s
answer to the complaint despite extraterritorial service. acquisition of jurisdiction over it.
8. As response, Tradition Asia filed its Special Appearance and Opposition,
alleging the impropriety of service of summons upon it because not one of its ISSUE: Did CA err in ruling that Makati RTC acquired jurisdiction over the action due
properties located in the Philippines was attached at the time of the alleged to the attachment of Tradition Asia’s shares of stocks in Tradition-PH? - NO
service of summons.
9. Makati RTC issued a writ of attachment on March 16, 2010, which was RATIO: Wherefore, petition is denied.
implemented two days after.
It denied both the motion to dismiss filed by Tradition Asia and 1. The Makati RTC has acquired jurisdiction over the res; therefore,
Tullet-PH’ motion to declare defendants in default. jurisdiction over the person of the petitioner is no longer required.
Tradition Asia’s MR was denied, so it appealed with the CA via Rule a. The complaint for damages is indeed in the nature of an action in
65. personam – that is, one brought against a person on the basis of personal
10. CA dismissed Tradition Asia’s appeal. liability.
It conceded that since the instant case for damages is an action in As such, jurisdiction over Tradition Asia is necessary for the
personam, the summons must be served by personal or substituted court to validly try and decide the case. Such jurisdiction in in

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 personam cases is acquired through personal service, or if not f. [Application] Here, the attachment of the shares of Tradition Asia in
possible, substituted service. Tradition-PH was clearly resorted to in order to vest trial court with
b. Philippine courts cannot try any case against a defendant who does not jurisdiction over the res. Although the extraterritorial service and
reside and is not found in the Philippines because of the impossibility publication of summons was resorted to prior to the actual attachment
of acquiring jurisdiction over its person, unless it voluntarily appears. of Tradition Asia’s property, jurisdiction over the action had already
In such cases, the remedy of plaintiff is to convert the action been acquired by the trial court upon the actual implementation of the
into a proceeding in rem or quasi in rem by attaching the writ of preliminary attachment on March 18, 2010. (See Fact No. 9)
property to the defendant.
c. In a proceeding in rem or quasi in rem, jurisdiction over the person of 2. However, the extraterritorial service of summons is improper.
the defendant is not a prerequisite to confer jurisdiction on the court, a. There are only 4 instances when extraterritorial service of summons is
provided that the court acquires jurisdiction over the res. proper (Velayo-Fong v. Sps. Velayo): when the
Jurisdiction over the res is acquired either: i. action affects the personal status of the plaintiffs;
i. by the seizure of the property under legal process, ii. defendant claims a lien or interest, actual or contingent;
whereby it is brought into actual custody of the law; iii. relief demanded in such action consists, wholly or in part, in
or excluding the defendant from any interest in property located
ii. as a result of the institution of legal proceedings, in in the Philippines; and
which the power of the court is recognized and made iv. defendant’s property has been attached within the Philippines.
effective. In these instances, service of summons may be effected by:
d. The seizure of property under legal process contemplated in the i. personal service out of the country, with leave of court;
foregoing partakes a writ of preliminary attachment. ii. publication, also with leave of court; or
Rule 57, Section 1. Grounds upon which attachment may issue. — At the iii. any other manner the court may deem sufficient.
commencement of the action or at any time before entry of judgment, a plaintiff b. [Application] The instant case does not fall into any of the 4 instances.
or any proper party may have the property of the adverse party attached as security The extraterritorial service of summons made prior to the actual
for the satisfaction of any judgment that may be recovered in the following cases: attachment of Tradition Asia’s property did not serve to vest
xxx
jurisdiction to the trial court over it nor the res, since the operative
act that conferred the trial court with jurisdiction over the action
(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. was the actual attachment of the property – which act converted the
action into an action quasi in rem.
e. While the attachment of a defendant’s property is sufficient to confer c. Regardless of the nature of the action, proper service of summons is
the trial court with jurisdiction over the action, summons must still be imperative, and a decision rendered without proper service of summons
served for the purpose of fair play or due process. suffers a defect in jurisdiction.
This is so the defendant may be informed of the pendency of [Application] Tradition Asia was not properly and formally
the action against it and that it could take steps to protect its notified of the proceedings due to the improper service of
interest when its property in the Philippines or in which it has summons against it.
an interest is subjected to a judgment against its favor. (-end)