EL BANCO ESPAÑOL V. PALANCA G.R. No. L-11390, March 26, 1918
FACTS:
Engracio Palanca Tanquinyeng was indebted to El Banco and he had this parcel of land as security to his debt. His debt amounted to P218,294.10. His property is worth 75k more than what he owed. Due to the failure of Engracio to make his payments, El Banco executed an instrument to mortgage Engracio’s property. Engracio had gone away from the scene of his life activities to end his days in the city of Amoy, China. Since Engracio is a non-resident El Banco has to notify Engracio about their intent to sue him by means of publication using a newspaper.
The lower court further ordered the clerk of court to furnish Engracio a copy and that it’d be sent to Amoy, China. However, it was not clear or shown if the clerk complied with the order. Nevertheless, after the publication of the proceeding in the newspaper, the defendant Tanquinyeng did not appear, so judgment was rendered in favor of the bank by default. Consequently, the court ordered the sale of the property, and during which, the bank acquired the same.
7 years thereafter, Vicente Palanca surfaced on behalf of Engracio as his administrator to petition for the annulment of the ruling. Vicente averred that there had been no due process as Engracio never received the summons.
ISSUE:
WON the lower court acquired the necessary jurisdiction over the defendant to enable it to proceed with the foreclosure of the mortgage.
RULING:
YES. Jurisdiction was acquired by the court. The action to foreclose a mortgage is a quasi in rem proceeding. In this kind of action, an individual is named as a defendant but its object is to subject that person's interest in a property to a corresponding lien or obligation or an action pertaining to the status of a person. Moreover, the decision is binding only between the parties. Further, jurisdiction over the person of the defendant is not essential because the jurisdiction of the court is derived from the power which it possesses over the property, and the relief granted by the court is limited to such as can be enforced against the property itself.
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 proceedings 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. 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.
Moreover, since the defendant is a nonresident and, remaining beyond the range of the personal process of the court, refuses to come in voluntarily, the court never acquires jurisdiction over the person at all. Here the property itself is, in fact, the sole thing which is impleaded and is the responsible object which is the subject of the exercise of judicial power. It follows that the jurisdiction of the court in such case is based exclusively on the power which, under the law, it possesses over the property; and any discussion relative to the jurisdiction of the court over the person of the defendant is entirely apart from the case.