Hasegawa and Nippon Eng. Consultants v. Kitamura DigestHasegawa and Nippon Eng. v. Kitamura G.R. No. 149177 November 23, 2007Ponente: Justice Nachura

Facts:1. The petitioner Nippon Engineering Consultants Co. is a Japanese consultancy firm which provides technical and management support in the infrastructure project of foreign governments. It entered into a Independent Contractor Agreement (ICA) with respondent Kitamura, a Japanese national permanently residing in the Philippines. Under the ICA, the respondent will extend professional services to the petitioner for a year.

2. Subsequently Kitamura was assigned as project manager of STAR project in 1999. In 2000, he was informed by the petitioner that it will no longer renew the ICA and that he will be retained until its expiration. Kitamura filed a civil casefor specific performance before the RTC of Lipa and damages.

3. The lower court ruled that it has jurisdiction over the dispute and denied the petitioner's motion to dismiss since accordingly, it is vested by law with the power to entertain and hear the civil case filed by Kitamura. The Court of Appeals upheld the lower court's decision.

Issue: Whether or not the RTC has jurisdiction over the case

HELD: YES

1. The only issue is the jurisdiction, hence, choice-of-law rules as raised by the petitioner is inapplicable and not yet called for (reference to  lex loci, lex contractus, or state of most significant rule). The petitioner prematurelyinvoked the said rules before pointing out any conflict between the laws of Japan and the Philippines.

2. The doctrine on forum non conveniens cannot be invoked to deprive the RTC of its jurisdiction. Dismissing the case on this ground requires a factual determination hence the principle is considered to be more a matter of defense.

G.R. No. L-26379      December 27, 1969

WILLIAM C. REAGAN, ETC., petitioner,vs.COMMISSIONER OF INTERNAL REVENUE, respondent.

Facts:

William C. Reagan was at one time a civilian employee of an American corporation providing technical assistance to the United States Air Force in the Philippines. He is a citizen of the United States and an employee of Bendix Radio, Division of Bendix Aviation Corporation, which provides technical assistance to the United States Air Force, was assigned at Clark Air Base, Philippines, on or about July 7, 1959 … . Nine (9) months thereafter and before his tour of duty expired, petitioner imported on April 22, 1960 a tax-free 1960 Cadillac car with accessories valued at $6,443.83, including freight, insurance and other charges. Reagan sold the car to a Willie Johnson Jr. of theUS Marine Corps stationed in Sangley Point, Cavite for US$ 6,600. Johnson sold the same, on the same day to Fred Meneses, a Filipino. As a result of the transaction, the Commissioner rendered Reagan liable for income tax in the sum of P2,970. Reagan claimed that he was exempt as the transaction occurred in Clark Air Base, which as he contends is “a base outside the Philippines.”

Issue(s):

Whether or not petitioner Reagan was covered by the tax exemption[1]? Whether or not the Clark Air Base is a US territory or within the Philippine Jurisdiction?

Held:

No. The petition is denied because the (act of) sell(ing) happened within the territory of the Philippines.[1] The same rationale with the case of People v. Acierto applies wherein in Military Bases Agreement, the Philippines consents the other country (US) exercise jurisdiction in certain cases. The consent was given purely as a matter of comity, courtesy and expediency over the bases as part of the Philippine territory or divested itself completely of jurisdiction over offenses committed therein.

“WHEREFORE, the decision of the Court of Tax Appeals of May 12, 1966 denying the refund of P2,979.00 as the income tax paid by petitioner is affirmed. With costs against petitioner”.

GR # L-26379, December 27, 1969 (Constitutional Law – Power to Tax)FACTS: Petitioner questioned the payment of an income tax assessed on him by public respondent on an amount realized by him on a sale of his automobile to a member of the US Marine Corps, the transaction having taken place at the Clark Field Air Base. Petitioner contends that the base is outside Philippine territory and therefore beyond the jurisdictional power to tax.

ISSUE: Whether or not a sale made on a foreign military base is excluded from tax.

HELD: No. The said foreign military bases is not a foreign soil or territory  for purposes of income tax legislation. Philippine jurisdictional rights including the power to tax are preserved.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 46631             November 16, 1939

IDONAH SLADE PERKINS, petitioner, vs.ARSENIO P. DIZON, Judge of First Instance of Manila, EUGENE ARTHUR PERKINS, and BENGUET CONSOLIDATED MINING COMPANY, respondents.

Alva J. Hill for petitioner.Ross, Lawrence, Selph & Carrascoso for respondent Judge and Benguet Consolidated Mining Company.DeWitt, Perkins & Ponce Enrile for respondent Perkins.

 

MORAN, J.:

On July 6, 1938, respondent, Eugene Arthur Perkins, instituted an action in the Court of First Instance of Manila against the Benguet Consolidated Mining Company for dividends amounting to P71,379.90 on 52,874 shares of stock registered in his name, payment of which was being withheld by the company; and, for the recognition of his right to the control and disposal of said shares, to the exclusion of all others. To the complaint, the company filed its answer alleging, by way of defense, that the withholding of such dividends and the non-recognition of plaintiff's right to the disposal and control of the shares were due to certain demands made with respect to said shares by the petitioner herein, Idonah Slade Perkins, and by one George H. Engelhard. The answer prays that the adverse claimants be made parties to the action and served with notice thereof by publication, and that thereafter all such parties be required to interplead and settle the rights among themselves. On September 5, 1938, the trial court ordered respondent Eugene Arthur Perkins to include in his complaint as parties defendant petitioner, Idonah Slade Perkins, and George H. Engelhard. The complaint was accordingly amended and in addition to the relief prayed for in the original complaint, respondent Perkins prayed that petitioner Idonah Slade Perkins and George Engelhard be adjudged without interest in the shares of stock in question and excluded from any claim they assert thereon. Thereafter, summons by publication were served upon the non-resident defendants, Idonah Slade Perkins and George H. Engelhard, pursuant to the order of the trial court. On December 9, 1938, Engelhard filed his answer to the amended complaint, and on December 10, 1938, petitioner Idonah Slade Perkins, through counsel, filed her pleading entitled "objection to venue, motion to quash, and demurrer to jurisdiction" wherein she challenged the jurisdiction of the lower court over her person. Petitioner's objection, motion and demurrer having been overruled as well as her motion for reconsideration of the order of denial, she now brought the present petition for certiorari, praying that the summons by publication issued against her be declared null and void, and that, with respect to her, respondent Judge be permanently prohibited from taking any action on the case.

The controlling issue here involved is whether or not the Court of First Instance of Manila has acquired jurisdiction over the person of the present petitioner as a non-resident defendant, or, notwithstanding the want of such jurisdiction, whether or not said court may validly try the case. The parties have filed lengthy memorandums relying on numerous authorities, but the principles governing the question are well settled in this jurisdiction.

Section 398 of our Code of Civil Procedure provides that when a non-resident defendant is sued in the Philippine courts and it appears, by the complaint or by affidavits, that the action relates to real or personal property within the Philippines in which said defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding such person from any interest therein, service of summons maybe made by publication.

We have fully explained the meaning of this provision in El Banco Español Filipino vs. Palanca, 37 Phil., 921, wherein we laid down the following rules:

(1) In order that the court may validly try a case, it must have jurisdiction over the subject-matter and over the persons of the parties. Jurisdiction over the subject-matter is acquired by concession of the sovereign authority which organizes a court and determines the nature and extent of its powers in general and thus fixes its jurisdiction with reference to actions which it may entertain and the relief it may grant. Jurisdiction over the persons of the parties is acquired by their voluntary appearance in court and their submission to its authority, or by the coercive power of legal process exerted over their persons.

(2) When the defendant is a non-resident and refuses to appear voluntary, the court cannot acquire jurisdiction over his person even if the summons be served by publication, for he is beyond the reach of judicial process. No tribunal established by one State can extend its process beyond its territory so as to subject to its decisions either persons or property located in another State. "There are many expressions in the American reports from which it might be inferred that the court acquires personal jurisdiction over the person of the defendant by publication and notice; but such is not the case. In truth, the proposition that jurisdiction over the person of a non-resident cannot be acquired by publication and notice was never clearly understood even in the American courts until after the decision had been rendered by the Supreme Court of the United States in the leading case of Pennoyer v. Neff (95 U.S., 714; 24 Law. ed., 565). In the light of that decisions which have subsequently been rendered in that and other courts, the proposition that jurisdiction over the person cannot be thus acquired by publication and notice is no longer open to question; and it is now fully established that a personal judgment upon constructive or substituted service against a non-resident who does not appear is wholly invalid. This doctrine applies to all kinds of constructive or substituted process, including service by publication and personal service outside of the jurisdiction in which the judgment is rendered; and the only exception seems to be found in the case where the non-resident defendant has expressly or impliedly consented to the mode of service. (Note to Raher vs. Raher, 35 L. R. A. [N. S.], 292; see also L.R.A. 585; 35 L.R.A. [N.S.], 312.)

(3) The general rule, therefore, is that a suit against a non-resident cannot be entertained by a Philippine court. Where, however, the action is in rem or quasi in rem  in connection with property located in the Philippines, the court acquires jurisdiction over the res, and its jurisdiction over the person of the non-resident is non-essential. In order that the court may exercise power over the res, it is not necessary that the court should take actual custody of the property, potential custody thereof being sufficient. There is potential custody when, from the nature of the action brought, the power of the court over the property is impliedly recognized by law. "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."

(4) As before stated, in an action in rem or quasi in rem against a non-resident defendant, jurisdiction over his person is non-essential, and if the law requires in such case that the summons upon the defendant be served by publication, it is merely to satisfy the constitutional requirement of due process. If any be said, in this connection, that "may reported cases can be cited in which it is assumed that the question of the sufficiency of publication or notice in the case of this kind is a question affecting the jurisdiction of the court, and the court is sometimes said to acquire jurisdiction by virtue of the publication. This phraseology was undoubtedly originally adopted by the court because of the analogy between service by publication and personal service of process upon the defendant; and, as has already been suggested, prior to the decision of Pennoyer v. Neff (supra), the difference between the legal effects of the two forms of service was obscure. It is accordingly not surprising that the modes of expression which had already been moulded into legal tradition before that case was decided have been brought down to the present day. But it is clear that the legal principle here involved is not affected by the peculiar languages in which the courts have expounded their ideas." lawphi1.net

The reason for the rule that Philippine courts cannot acquire jurisdiction over the person of a non-resident, as laid down by the Supreme Court of the United States in Pennoyer v. Neff, supra, may be found in a recognized principle of public law to the effect that "no State can exercise direct jurisdiction and authority over persons or property without its territory. Story, Confl. L., ch. 2; Wheat, Int. L., pt. 2, ch. 2. The several States are of equal dignity and authority, and the independence of one implies the exclusion of power from all others. And so it is laid down by jurists, as an elementary principle, that the laws of one State have no operation outside of its territory, except so far as is allowed by comity; and that no tribunal established by it can extend its process beyond that territory so as to subject either persons or property to its decisions. "Any exertion of authority of this sort beyond this limit," says Story, "is a mere nullity, and incapable of binding such persons or property in any other tribunals." Story, Confl. L., sec. 539." (Pennoyer v. Neff, 95 U.S., 714; 24 Law. ed., 565, 568-569.).

When, however, the action relates to property located in the Philippines, the Philippine courts may validly try the case, upon the principle that a "State, through its tribunals, may subject property situated within its limits owned by non-residents to the payment of the demand of its own citizens against them; and the exercise of this jurisdiction in no respect infringes upon the sovereignty of the State where the owners are domiciled. Every State owes protection to its citizens; and, when non-residents deal with them, it is a legitimate and just exercise of authority to hold and appropriate any property owned by such non-residents to satisfy the claims of its citizens. It is in virtue of the State's jurisdiction over the property of the non-resident situated within its limits that its tribunals can inquire into the non-resident's obligations to its own citizens, and the inquiry can then be carried only to the extent necessary to control the disposition of the property. If the non-resident has no property in the State, there is nothing upon which the tribunals can adjudicate." (Pennoyer v. Neff, supra.)

In the instant case, there can be no question that the action brought by Eugene Arthur Perkins in his amended complaint against the petitioner, Idonah Slade Perkins, seeks to exclude her from any interest in a property located in the Philippines. That property consists in certain shares of stocks of the Benguet Consolidated Mining Company, a sociedad anonima, organized in the Philippines under the provisions of the Spanish Code of Commerce, with its principal office in the City of Manila and which conducts its mining activities therein. The situs of the shares is in the jurisdiction where the corporation is created, whether the certificated evidencing the ownership of those shares are within or without that jurisdiction. (Fletcher Cyclopedia Corporations, Permanent ed. Vol. 11, p. 95). Under these circumstances, we hold that the action thus brought is quasi in rem, for while the judgement that may be rendered therein is not strictly a judgment in rem, "it fixes and settles the title to the property in controversy and to that extent partakes of the nature of the judgment in rem." (50 C.J., p 503). As held by the Supreme Court of the United States in Pennoyer v. Neff (supra);

It is true that, in a strict sense, a proceeding in rem  is one taken directly against property, and has for its object the disposition of the property, without reference to the title of individual claimants; but , in a large and more general sense, the terms are applied to actions between parties, where the direct object is to reach and dispose of property owned by them, or of some interest therein.

The action being in quasi in rem, The Court of First Instance of Manila has jurisdiction over the person of the non-resident. In order to satisfy the constitutional requirement of due process, summons has been served upon her by publication. There is no question as to the adequacy of publication made nor as to the mailing of the order of publication to the petitioner's last known place of residence in the United States. But, of course, the action beingquasi in rem and notice having be made by publication, the relief that may be granted by the Philippine court must be confined to the res, it having no jurisdiction to render a personal judgment against the non-resident. In the amended complaint filed by Eugene Arthur Perkins, no money judgment or other relief in personam  is prayed for against the petitioner. The only relief sought therein is that she be declared to be without any interest in the shares in controversy and that she be excluded from any claim thereto.

Petitioner contends that the proceeding instituted against her is one of interpleading and is therefore an action in personam. Section 120 of our Code of Civil Procedure provides that whenever conflicting claims are or may be made upon a person for or relating to personal property, or the performance of an obligation or any portion thereof, so that he may be made subject to several actions by different persons, such person may bring an action against the conflicting claimants, disclaiming personal interest in the controversy, and the court may order them to interplead with one another and litigate their several claims among themselves, there upon proceed to determine their several claims. Here, The Benguet Consolidated Mining Company, in its answer to the complaint filed by Eugene Arthur Perkins, averred that in connection with the shares of stock in question, conflicting claims were being made upon it by said plaintiff, Eugene Arthur Perkins, his wife Idonah Slade Perkins, and one named George H. Engelhard, and prayed that these last two be made parties to the action and served with summons by publication, so that the three claimants may litigate their conflicting claims and settle their rights among themselves. The court has not issued an order compelling the conflicting claimants to interplead with one another and litigate their several claims among themselves, but instead ordered the plaintiff to amend his complaint including the other two claimants as parties defendant. The plaintiff did so, praying that the new defendants thus joined be excluded fro any interest in the shares in question, and it is upon this amended complaint that the court ordered the service of the summons by publication. It is therefore, clear that the publication of the summons was ordered not in virtue of an interpleading, but upon the filing of the amended complaint wherein an action quasi in rem  is alleged.

Had not the complaint been amended, including the herein petitioner as an additional defendant, and had the court, upon the filing of the answer of the Benguet Consolidated Mining Company, issued an order under section 120 of the Code of Civil Procedure, calling the conflicting claimants into court and compelling them to interplead with one another, such order could not perhaps have validly been served by publication or otherwise, upon the non-resident Idonah Slade Perkins, for then the proceeding would be purely one of interpleading. Such proceeding is a personal action, for it merely seeks to call conflicting claimants into court so that they may interplead and litigate their several claims among themselves, and no specific relief is prayed for against them, as the interpleader have appeared in court, one of them pleads ownership of the personal property located in the Philippines and seeks to exclude a non-resident claimant from any interest therein, is a question which we do not decide not. Suffice it to say that here the service of the summons by publication was ordered by the lower court by virtue of an action quasi in rem against the non-resident defendant.

Respondents contend that, as the petitioner in the lower court has pleaded over the subject-matter, she has submitted herself to its jurisdiction. We have noticed, however, that these pleas have been made not as independent grounds for relief, but merely as additional arguments in support of her contention that the lower court had no jurisdiction over the person. In other words, she claimed that the lower court had no jurisdiction over her person not only because she is a non-resident, but also because the court had no jurisdiction over the subject-matter of the action and that the issues therein involved have already been decided by the New York court and are being relitigated in the California court. Although this argument is obviously erroneous, as neither jurisdiction over the subject-matter nor res adjudicata nor lis pendens has anything to do with the question of jurisdiction over her person, we believe and so hold that the petitioner has not, by such erroneous argument, submitted herself to the jurisdiction of the court. Voluntary appearance cannot be implied from either a mistaken or superflous reasoning but from the nature of the relief prayed for.

For all the foregoing, petition is hereby denied, with costs against petitioner.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-825             July 20, 1948

ROMAN MABANAG, plaintiff-appellant, vs.JOSEPH M. GALLEMORE, defendant-appellee.

Santiago Catane for appellant.No appearance for appellee.

TUASON, J.:

This case, here on appeal from an order dismissal by the Court of First Instance of Occidental Misamis, raises the question of the court's jurisdiction. More specifically, the question is whether the action is in personam or one in rem. The trial court opined that it is the first and that it "has no authority nor jurisdiction to render judgment against the herein defendant, Joseph M. Gallemore for being a non-resident.

The purpose of the action is to recover P735.18, an amount said to have been paid by the plaintiff to the defendant for two parcels of land whose sale was afterward annulled. The defendant is said to be residing in Los Angeles, California, U. S. A. He has no property in the Philippine except an alleged debt owing him by a resident of the municipality of Occidental Misamis. This debt, upon petition of the plaintiff, after the filing of the complaint and before the suit was dismissed, was attached to the extent of plaintiff's claim for the payment of which the action was brought. But the attachment was dissolved in the same order dismissing the case.

It was Atty. Valeriano S. Kaamino who has amicus curiæ filed the motion to dismiss and to set aside the attachment. There is no appearance before this Court to oppose the appeal.

Section 2, Rule 5, of the Rules of Court provides:

If any of the defendants does not reside and is not found in the Philippines, and the action effects the personal status of the plaintiff, or any property of the defendant located in the Philippines, the action may be commenced and tried in the province where the plaintiff resides or the property, or any portion thereof, is situated or found.

The Philippine leading cases in which this Rule, or its counterpart in the former Code of Civil Procedure, section 377 and 395, were cited and applied, are Banco Español-Filipino vs. Palanca, 37 Phil. 921, and Slade Perkins vs. Dizon, 40 Off. Gaz., [3d Suppl.], No. 7, p. 216. The gist of this Court's ruling in these cases, in so far as it is relevant to the present issues, is given in I Moran's Comments on the Rules of Court, 2d Ed., 105:

As a general rule, when the defendant is not residing and is not found in the Philippines, the Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person, unless he voluntarily appears in court. But, when the action affects the personal status of the plaintiff residing in the Philippines, or is intended to seize or dispose of any property, real or personal, of the defendant, located in the Philippines, it may be validly tried by the Philippine courts, for then, they have jurisdiction over the res, i.e., the personal status of the plaintiff or the property of the defendant, and their jurisdiction over the person of the non-resident defendant is not essential. Venue in such cases may be laid in the province where the plaintiff whose personal status is in question resides, or where the property of the defendant or a part thereof involved in the litigation is located.

Literally this Court said:

Jurisdiction over the property which is the subject of 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. (Banco Español-Filipino vs. Palanca, supra, 927-928.).

In an ordinary attachment proceeding, if the defendant is not personally served, the preliminary seizure is to be considered necessary in order to confer jurisdiction upon the court. In this case the lien on the property is acquired by the seizure; and the purpose of the proceeding is to subject the property to that lien. If a lien already exists, whether created by mortgage, contract, or statute, the preliminary seizure is not necessary; and the court proceeds to enforce such lien in the manner provided by law precisely as though the property had been seized upon attachment. (Roller vs. Holly, 176 U.S., 398, 405; 44 Law. ed., 520.) It results that the mere circumstance that in an attachment the property may be seized at the inception of the proceedings, while in the foreclosure suit it is not taken into legal custody until the time comes for the sale, does not materially affect the fundamental principle involved in both cases, which is that the court is here exercising a jurisdiction over the property in a proceeding directed essentially in rem. (Id., 929-930.).

When, however, the action relates to property located in the Philippines, the Philippine courts may validly try the case, upon the principles that a "State, through its tribunals, may subject property situated within its limit owned by non-residents to the payment of the demand of its own citizens against them; and the exercise of this jurisdiction in no respect infringes upon the sovereignty of the State were the owners are domiciled. Every State owes protection to its own citizens; and, when non-residents deal with them, it is a legitimate and just exercise of authority to hold any appropriate any property owned by such non-residents to satisfy the claims of its citizens. It is in virtue of the State's jurisdiction over the property of the non-resident situated within its limits that its tribunals can inquire into the non-resident's obligations to its own citizens, and the inquiry can then be carried only to the extent necessary to control disposition of the property. If the non-resident has no property in the State, there is nothing upon which the tribunals can adjudicate. (Slade Perkins vs. Dizon, 40 Off. Gaz. [3d Supplement], No. 7, p. 216.).

A fuller statement of the principle whereunder attachment or garnishment of property of a non-resident defendant confers jurisdiction on the court in an otherwise personal action, appears in two well known and authoritative works:

The main action in an attachment or garnishment suit is in rem until jurisdiction of the defendant is secured. Thereafter, it is in personam and also in rem, unless jurisdiction of the res is lost as by dissolution of the attachment. If jurisdiction of the defendant is acquired but jurisdiction of the res is lost, it is then purely in personam. . . a proceeding against property without jurisdiction of the person of the defendant is in substance a proceeding in rem; and where there is jurisdiction of the defendant, but the proceedings against the property continues, that proceedings is none the less necessarily in rem, although in form there is but a single proceeding. (4 Am. Jur., 556-557.)

As the remedy is administered in some states, the theory of an attachment, whether it is by process against or to subject the property or effects of a resident or non-resident of the state, is that it partakes essentially of the nature and character of the proceeding in personam and not of a proceeding in rem. And if the defendant appears the action proceeds in accordance with the practice governing proceedings in personam. But were the defendant fails to appear in the action, the proceeding is to be considered as one in the nature of a proceeding in rem. And where the court acts directly on the property, the title thereof being charged by the court without the intervention of the party, the proceeding unquestionably is one in rem in the fullest meaning of the term.

In attachment proceedings against a non-resident defendant where personal service on him is lacking, it is elementary that the court must obtain jurisdiction of the property of the defendant. If no steps have been taken to acquire jurisdiction of the defendant's person, and he has not appeared and answered or otherwise submitted himself to the jurisdiction of the court, the court is without jurisdiction to render judgment until there has been a lawful seizure of property owned by him within the jurisdiction of the court. (2 R. C. L., 800-804.).

Tested by the foregoing decisions and authorities, the Court has acquired jurisdiction of the case at bar by virtue of the attachment of the defendant's credit. Those authorities and decisions, so plain and comprehensive as to make any discussion unnecessary, are in agreement that though no jurisdiction is obtained over the debtor's person, the case may proceed to judgment if there is property in the custody of the court that can be applied to its satisfaction.

It is our judgment that the court below erred in dismissing the case and dissolving the attachment; and it is ordered that, upon petition of the plaintiff, it issue a new writ of attachment and then proceed to trial. The costs of this appeal will be charged to defendant and appellee.

El Banco Espanol-Filipino vs. PalancaG.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 defendant’s 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* Whether or not due process of law was observed

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.

It is true that in proceedings of this character, if the defendant for whom publication is made appears, the action becomes as to him a personal action and is conducted as such. This, however, does not affect the proposition that where the defendant fails to appear the action is quasi in rem; and it should therefore be considered with reference to the principles governing actions in rem.

G.R. No. 128803 September 25, 1998

ASIAVEST LIMITED, petitioner, vs.THE COURT OF APPEALS and ANTONIO HERAS, respondents.

In 1984, a Hong Kong court ordered Antonio Heras to pay US$1.8 million or its equivalent, with interest, to Asiavest Ltd. Apparently, Heras guaranteed a certain loan in Hong Kong and the debtor in said loan defaulted hence, the creditor, Asiavest, ran after Heras. But before said judgment was issued and even during trial, Heras already left for good Hong Kong and he returned to the Philippines. So when in 1987, when Asiavest filed a complaint in court seeking to enforce the foreign judgment against Heras, the latter claim that he never received any summons, not in Hong Kong and not in the Philippines. He also claimed that he never received a copy of the foreign judgment. Asiavest however contends that Heras was actually given service of summons when a messenger from the Sycip Salazar Law Firm served said summons by leaving a copy to one Dionisio Lopez who was Heras’ son in law.ISSUE: Whether or not the foreign judgment can be enforced against Heras in the Philippines.HELD: No. Although the foreign judgment was duly authenticated (Asiavest was able to adduce evidence in support thereto) and Heras was never able to overcome the validity of it, it cannot be enforced against Heras here in the Philippines because Heras was not properly served summons.

Hence, as far as Philippine law is concerned, the Hong Kong court has never acquired jurisdiction over Heras. This means then that Philippine courts cannot act to enforce the said foreign judgment.The action against Heras is an action in personam and as far as Hong Kong is concerned, Heras is a non resident. He is a non resident because prior to the judgment, he already abandoned Hong Kong. The Hong Kong law on service of summons in in personam cases against non residents was never presented in court hence processual presumption is applied where it is now presumed that Hong Kong law in as far as this case is concerned is the same as Philippine laws. And under our laws, in an action  in personam wherein the defendant is a non-resident who does not voluntarily submit himself to the authority of the court, personal service of summons within the state is essential to the acquisition of jurisdiction over her person.  This method of service is possible if such defendant is physically present in the country. If he is not found therein, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him . Without a personal service of summons, the Hong Kong court never acquired jurisdiction. Needless to say, the summons tendered to Lopez was an invalid service because the same does not satisfy the requirement of personal service.

Corpuz vs. Sto. Tomas and Sol Gen G.R. No. 186571, 11 August 2010Facts:               Petitioner was a former Filipino citizen who acquired Canadian citizenship through naturalization. He was married to the respondent but was shocked of the infidelity on the part of his wife. He went back to Canada and filed a petition for divorce and was granted.  Desirous to marry another woman he now loved, he registered the divorce decree in the Civil Registry Office and was informed that the foreign decree must first be judicially recognized by a competent Philippine court. Petitioner filed for judicial recognition of foreign divorce and declaration of marriage as dissolved with the RTC where respondent failed to submit any response. The RTC denied the petition on the basis that the petitioner lacked locus standi. Thus, this case was filed before the Court.

Issues: WON the second paragraph of Art 26 of the FC extends to aliens the right to petition a court of this jurisdiction fro the recognition of a foreign divorce decree.

Decision:         The alien spouse cannot claim under the second paragraph of Art 26 of the Family Code because the substantive right it establishes is in favour of the Filipino spouse.  Only the Filipino spouse can invoke the second par of Art 26 of the Family Code.

The unavailability of the second paragraph of Art 26 of the Family Code to aliens does not necessarily strip the petitioner of legal interest to petition the RTC for the recognition of his foreign divorce decree. The petitioner, being a naturalized Canadian citizen now, is clothed

by the presumptive evidence of the authenticity of foreign divorce decree with conformity to alien’s national law.

HERALD BLACK DACASIN,

Petitioner

, v.

SHARON DEL MUNDO DACASIN,

Respondent

.

G.R. No. 168785 : February 5, 2010CARPIO,

J.:

Facts:

•

Herald, American, and Sharon, Filipino, were

married in Manila in April 1994.

They have one daughter, Stephanie, born on September 21, 1995.

•

In June 1999, Sharon sought and obtained a divorce decree

from the CircuitCourt, 19th Judicial Circuit, Lake County, Illinois (Illinois court). In its ruling, the Illinoiscourt dissolved the marriage of petitioner and respondent, awarded to respondentsole custody of Stephanie and retained jurisdiction over the case for enforcementpurposes.

•

On January 28, 2002,

both executed in Manila a contract for joint custody overStephanie.

•

In 2004,

Herald filed a case against Sharon alleging that Sharon had exercised solecustody over Stephanie contrary to their agreement.

o

The trial court held that (1) it is precluded from taking cognizance over thesuit considering the Illinois court’s retention of jurisdiction to enforce itsdivorce decree, including its order awarding sole custody of Stephanie torespondent; (2) the divorce decree is binding on petitioner following the“nationality rule” prevailing in this jurisdiction; and (3) the Agreement is voidfor contravening Article 2035, paragraph 5 of the Civil Code prohibitingcompromise agreements on jurisdiction and dismissed the case.

Issue:

WON the trial court has jurisdiction to take cognizance of petitioner’s suit andenforce the Agreement on the joint custody of the parties child

Held/ Rationale:

The trial court’s refusal to entertain petitioner’s suit was grounded not onits lack of power to do so but on its thinking that the Illinois court’s divorce decree stripped itof jurisdiction. This conclusion is unfounded. What the Illinois court retained was “jurisdictionx x x for the purpose of enforcing all and sundry the various provisions of [its] Judgment forDissolution.” Petitioner’s suit seeks the enforcement not of the “various provisions” of thedivorce decree but of the post-divorce Agreement on joint child custody. Thus, the actionlies beyond the zone of the Illinois court’s so-called “retained jurisdiction.”

The Pasig City Civil Registry acted out of line when it registered the foreign decree of divorce on the petitioner and respondent’s marriage certificate without judicial order recognizing the said decree.  The registration of the foreign divorce decree without the requisite judicial recognition is void.

The petition for review on certiorari is granted, the RTC decision is reversed and Court ordered t6he remand of the case to the trial court for further proceedings in light of the ruling.

Van Dorn vs Romillo (G.R. No. L-68470)Posted: August 8, 2011 in Civil Law Tags: Divorce, Marriage, Nationality Principle

0Nationality Principle – Divorce

FACTS:

Petitioner Alice Reyes is a citizen of the Philippines while private respondent is a citizen of the United

States; they were married in Hongkong. Thereafter, they established their residence in the Philippines

and begot two children. Subsequently, they were divorced in Nevada, United States, and that

petitioner has re-married also in Nevada, this time to Theodore Van Dorn.

Private respondent filed suit against petitioner, stating that petitioner’s business in Manila is their

conjugal property; that petitioner he ordered to render accounting of the business and that private

respondent be declared to manage the conjugal property. Petitioner moved to dismiss the case

contending that the cause of action is barred by the judgment in the divorce proceedings before the

Nevada Court. The denial now is the subject of the certiorari proceeding.

ISSUE:

Whether or not the divorce obtained by the parties is binding only to the alien spouse.

HELD:

Is it true that owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine

nationals are covered by the policy against absolute divorces the same being considered contrary to

our concept of public policy and morality. However, aliens may obtain divorces abroad, which may be

recognized in the Philippines, provided they are valid according to their national law. In this case, the

divorce in Nevada released private respondent from the marriage from the standards of American Law,

under which divorce dissolves the marriage.

Thus, pursuant to his national law, private respondent is no longer the husband petitioner. He would

have no standing to sue in the case below as petitioner’s husband entitled to exercise control over

conjugal assets. As he is bound by the decision of his own country’s court, which validly exercised

jurisdiction over him, and whose decision he does not repudiate, he is stopped by his own

representation before said court from asserting his right over the alleged conjugal property.

G.R. No. 133743             February 6, 2007

EDGAR SAN LUIS, Petitioner, vs.FELICIDAD SAN LUIS, Respondent.

During his lifetime, Felicisimo (Rodolfo’s dad) contracted three marriages. His first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children. On August 11, 1963, Virginia predeceased Felicisimo.Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce before the Family Court of the First Circuit, State of Hawaii, which issued a Decree Granting Absolute Divorce and Awarding Child Custody on December 14, 1973. On June 20, 1974, Felicisimo married Felicidad San Luis, then surnamed Sagalongos. He had no children with respondent but lived with her for 18 years from the time of their marriage up to his death on December 18, 1992. Upon death of his dad Rodolfo sought the dissolution of their conjugal partnership assets and the settlement of Felicisimo’s estate. On December 17, 1993, she filed a petition for letters of administration before the Regional Trial Court of Makati City. Rodolfo claimed that respondent has no legal personality to file the petition because she was only a mistress of Felicisimo since the latter, at the time of his death, was still legally married to Merry Lee. Felicidad presented the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal capacity to marry her by virtue of paragraph 2 Article 26 of the Family Code.Rodolfo asserted that paragraph 2, Article 26 of the Family Code cannot be given retroactive effect to validate respondent’s bigamous marriage with Felicisimo because this would impair vested rights in derogation of Article 256.ISSUE: Whether or not Felicidad’s marriage to Felicisimo is bigamous.HELD: The divorce decree allegedly obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the present petition as Felicisimo’s surviving spouse. However, the records show that there is insufficient evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, the Court laid down the specific guidelines for pleading and proving foreign law and divorce judgments. It held that presentation solely of the divorce decree is insufficient and that proof of its authenticity and due execution must be presented. Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office.With regard to respondent’s marriage to Felicisimo allegedly solemnized in California, U.S.A., she submitted photocopies of the Marriage Certificate and the annotated text of the Family Law Act of California which purportedly show that their marriage was done in accordance with the said law. As stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and proved.The case should be remanded to the trial court for further reception of evidence on the divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo.

REPUBLIC VS ORBECIDOG.R. No. 154380October 5, 2005

FACTS:

In 1981, Cipriano Orbecido III married Lady Myro Villanueva in Lam-an,Ozamis City.In 1986, Orbecido discovered that his wife had had been naturalized as anAmerican citizen.Sometime in 2000, Orbecido learned from his son that his wife had obtained adivorce decree and married an American.Orbecido filed with the Trial Court a petition for “Authority to Remarry”invoking Article 26 Paragraph 2 of the Family Code, the Court granted the petition.The Republic, herein petitioner, through the Office of the Solicitor General,sought for reconsideration but it was denied by the Trial Court.

ISSUE:

Whether or not the allegations of the respondent was proven as a fact accordingto the rules of evidence.

HELD:

Before a foreign divorce decree can be recognized by our own courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreignlaw allowing it. Such foreign law must also be proved as our courts cannot take judicialnotice of foreign laws. Like any other fact, such laws must be alleged and proved.Furthermore, respondent must also show that the divorce decree allows his former wife toremarry as specifically required in Article 26. Otherwise, there would be no evidencesufficient to declare that he is capacitated to enter into another marriage.However, in the present petition there is no sufficient evidence submitted and onrecord, we are unable to declare, based on respondent’s bare allegations that his wife,who was naturalized as an American citizen, had obtained a divorce decree and hadremarried an American, that respondent is now capacitated to remarry. Such declarationcould only be made properly upon respondent’s submission of the aforecited evidence inhis favor.ACCORDINGLY, the petition by the Republic of the Philippines is GRANTED.The assailed Decision dated May 15, 2002, and Resolution dated July 4, 2002, of theRegional Trial Court of Molave, Zamboanga del Sur, Branch 23, are hereby SET ASIDE.

G.R. No. 139868. June 8, 2006Petitioner: Alonzo Q. AnchetaRespondent: Candelaria Guersey-DalaygonPonente: Austria-Martinez, J.

Facts: Spouses Audrey O’Neill and W. Richard Guersey were American citizens who haveresided in the Philippines for 30 years. On July, 29, 1979, Audrey died, and shebequeathed her entire estate to Richard through a will. In 1981, Richard marriedCandelaria Guersey-Dalaygon.On July, 20, 1984, Richard died; leaving a will wherein he bequeathed his entireestate to respondent, save for his rights and interests over the A/G Interiors, Inc.shares, which he left to Kyle, his daughter with Audrey. The will was admitted toprobate by the Court of Maryland, USA, and Atty. William Quasha of the QuashaAsperilla Ancheta Peña and Nolasco Law Offices was appointed as ancillaryadministrator.On October 19, 1987, petitioner filed in Special Proceeding No.9625 before theMakati RTC, a motion to declare Richard and Kyle as heirs of Aubrey andapportioned to them ¾ and ¼ of all the estate, respectively. This motion andproject of partition was granted and approved by the trial court in its Order datedFebruary 12, 1988. This was opposed by respondent on the ground that under thelaw of the State of Maryland, “a legacy passes to the legatee the entire interest of the testator in the property subject of the legacy.” Respondent argued that sinceAudrey devised her entire estate to Richard, then it should be wholly adjudicated tohim and not merely ¾ thereof, and since Richard left his entire estate to therespondent, except for the A/G Interior Inc. shares, then the entire property shouldnow pertain to respondent. The Court of Appeals annulled the trial court’s Orders inSpeacial Proceeding No. 9625 abd later denied the appeal of the petitioner, thus thepetition for review on certiorari.Issue:Whether or not the petitioner willfully breached his fiduciary duty when hedisregarded the laws of the State of Maryland on the distribution of Audrey’s estatein accordance with her will.

Held: Petitioner’s failure to proficiently manage the distribution of Audrey’s estateaccording to the terms of her will amounted to extrinsic fraud. Being a foreignnational, the intrinsic validity of Audrey’s will, especially with regard as to who are