RULE 14

CIVIL PROCEDURE

117 SCRA 91
Patricio Bello vs Eugenia Ubo et al
Civil Procedure Service of Summons by a Police Officer

A land dispute arose between Bello and Ubo. Bello is claiming

ownership over the property that Ubo and her son have been
occupying for years even paying taxes therefor. Ubo and her son
(Porferio Regis) claimed that they inherited said land.
Bello then filed a civil suit against Ubo and Regis. Summons were
issued by the court.
A certain Patrolman Castulo Yobia served the summons. What he did
was go to where Ubo and her son was residing. Ubo and Regis
initially refused to accept the same. But Yobia explained the nature of
the Summons; that there is a civil case filed against them; that they
need to find a lawyer to assist them. Ubo and Regis then reluctantly
signed the summons. Thereafter, he detached the copy of the
complaint and handed it to Ubo and Regis. He however took back
the same afterwards; he also held on to the copy of the summons
and afterwards returned to his police station.

HELD: No. A police officer is not one of those enumerated as a

person authorized to serve summons. The list provided in the Rules
of Court is exclusive. Yobia was not a sheriff or a court officer of the
province where service was made; and neither was he a person
who, for special reasons, was specially authorized to serve the
summons by the judge who issued the same.

Furthermore, even assuming that Yobia could be considered as a

proper person to serve the summons, still there was no valid and
effective service since he brought back the summons with him
together with the copy of the complaint. Since there is no valid
service of summons, the trial court never acquired jurisdiction over
the persons of Ubo and Regis. Therefore, the ex parte proceedings
that took place as well as the decision favoring Bello is null and void.

Laus v. CA, 219 SCRA 688 (1993)

Facts: This is the 10-minute case. Torres filed a complaint for
Collection vs. Laus. Deputy Sheriff went to Laus residence to serve
summons, but found that there was no one in the house. He waited
for 10 minutes. Then a three-wheeled vehicle (tricykol) came w/ the
savior who claimed to be the maid in the house. The Sheriff served

Despite signing the summons, Ubo and Regis did not file any
responsive pleadings nor did they appear in court. Eventually, the
trial court declared them in default and decided in favor of Bello.

summons upon the latter. Laus was declared in default. Before he

received the final judgment, Laus filed an MTD on the ground that
there was ineffective service of summons bec. there was no
indication that S first exerted efforts to serve the same personally

ISSUE: Whether or not there is a proper service of summons in the

case at bar.

before resorting to substituted service.

Held: There was an ineffective service of summons.
General Rule: Must serve personally.

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CIVIL PROCEDURE
Exception: If cannot serve personally w/in reasonable period of time,
may resort to Substituted Service.
How can Impossibility of Service be shown? By stating efforts made
to find defendant personally & the fact that such efforts failed.

SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION; HOW
JURISDICTION OVER PERSON OF DEFENDANT ACQUIRED;
EFFECT OF INVALID SERVICE OF SUMMONS; CASE AT BAR.
The focal issue is whether or not the trial court acquired jurisdiction
over the persons of the petitioners by virtue of the substituted service
of summons effected by Deputy Sheriff Cruz. Since the petitioners
did not voluntarily submit to the jurisdiction of the trial court, proper
service of summons became imperative. If the service effected in the
case at bar was, as claimed by the petitioners, invalid, the trial court
acquired no jurisdiction over their persons. In such an instance, the
order of default, judgment by default and writ of execution issued by
the trial court would be null and void. . . . Since the substituted
service of summons in this case was not validly effected, the trial
court did not acquire jurisdiction over the persons of the petitioners.
The order of default, the judgment by default, the writ of execution
issued by it, as well as the auction sale of the petitioners' properties
levied on execution are, therefore, all null and void.
2. ID.; ID.; SUMMONS; PERSONAL SERVICE; GENERAL RULE;
SUBSTITUTED SERVICE NATURE THEREOF; PHRASE "WITHIN
A REASONABLE TIME" CONSTRUED. The general rule in this
jurisdiction is that summons must be personally served; pursuant to
Section 7, Rule 14 of the Revised Rules of Court, such personal
service is to be accomplished by "handing a copy thereof to the
defendant in person, or, if he refuses to receive it, by tendering it to
him." However, if this mode of service cannot be effected within a
reasonable time, substituted service may be resorted to under
Section 8 of the same Rule. Section 8 provides: "SEC. 8. Substituted
Service. If 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 dwelling
house or 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." This provision is a reproduction of Section 8, Rule 7
of the 1940 Rules of Court except that inter alia, "promptly" in the
latter was changed to "within a reasonable time" in the former.
"Within a reasonable time" contemplates a period of time longer than
that demarcated by the word "prompt," and presupposes that a prior
attempt at personal service, within a justifiable time frame as would
be necessary to bring the defendant within the jurisdiction of the
court, had failed. Since substituted service is in derogation of the
common law and is extraordinary in character, it must be used only
as prescribed and in the circumstances authorized by statute.
Statutes prescribing modes other than personal service of summons
must be strictly complied with to give the court jurisdiction, and such
compliance must appear affirmatively in the return.
3. ID.; ID.; ID.; HOW IMPOSSIBILITY OF PROMPT PERSONAL
SERVICE SHOWN; CASE AT BAR. In Keister vs. Navarro, this
Court described how the impossibility of personal service should be
shown: "Impossibility of prompt service should be shown by stating
the efforts made to find the defendant personally and the fact that
such efforts failed. This statement should be made in the proof of
service (I Moran, Comments on the Rules of Court, 1970 Ed., p.
444). This is necessary because substituted service is in derogation
of the usual method of service. It has been held that this method of
service is `in derogation of the common law; it is a method
extraordinary in character, and hence may be used only as
prescribed and in the circumstances authorized by statute.' . . . (72
C.J.S. 1053)." A perusal of the sheriff's return in the case at bar
readily reveals that it does not (a) indicate the impossibility of service
of summons within a reasonable time, (b) specify the efforts exerted
to locate the petitioners and (c) state that it was served on a person
of sufficient age and discretion residing therein. The fact of the
matter is that as disclosed in his testimony taken in connection with
the motion for reconsideration, and the affidavit he prepared in
conjunction with such hearing. Deputy Sheriff Cruz resorted to a
substituted service on his first and only attempt to effect a

RULE 14
CIVIL PROCEDURE
personal service. Upon being informed that the petitioners were not
around at that time, he immediately resorted to a substituted service
through Josephine Areola, a person whose age he did not even
know or attempt to discover. He did not even inquire about the
whereabouts of the petitioners, the time they were expected to return
home, the hours of the day they could be contacted at their house or
the location of their offices, if any, in order that he could faithfully
comply with the requirement of personal service.
4. ID.; ID.; ID.; SERVICE OF SUMMONS MAY BE MADE AT NIGHT,
DURING THE DAY, ON A SUNDAY OR A HOLIDAY; REASON
THEREFOR; CASE AT BAR. It is all too obvious that no earnest
efforts were exerted by Deputy Sheriff Cruz to effect the personal
service of summons. His testimony thus attests to an undue, if not
indecent, haste to serve the summons at the first attempt without
making sure that personal service was, by then and even thereafter,
an impossibility because either the petitioners had left for a foreign
country or an unknown destination with not definite date of returning
within a reasonable period or had gone into hiding to avoid service of
any process from the courts. If he had only made the inquiries
suggested above, he could have returned in the evening of 10
October 1989 or on any of the succeeding days including the
following Saturday and Sunday. Service of summons may be made
at night as well as during the day, or even on a Sunday or holiday
because of its ministerial character.
5. ID.; ID.; MOTION TO DISMISS ON GROUND OF LACK OF
JURISDICTION OVER DEFENDANT'S PERSON; PERIOD FOR
FILING DOES NOT COMMENCE TO RUN UNTIL DEFENDANT
VOLUNTARILY SUBMITS TO COURT'S JURISDICTION; REASON
THEREFOR; CASE AT BAR. Some further comments, en
passant, on the ratiocination of the respondent Court are in order. It
is not accurate for the latter to have said that the petitioners' motion
to dismiss was not filed seasonably because it was filed beyond the
reglementary period provided in the Revised Rules of Court. Such a
conclusion would doubtless be correct if there was a valid service of
summons. If, however, a defendant has not been properly
summoned, the period to file a motion to dismiss for lack of
jurisdiction over his person does not commence to run until he

voluntarily submits to the jurisdiction of the court, since the court has
no jurisdiction to adjudicate the controversy as to him until such time.
In this case, petitioners did not voluntarily submit to the jurisdiction of
the trial court. Consequently, the period to file a responsive pleading
did not even commence to run.
6. ID.; SPECIAL CIVIL ACTIONS; CERTIORARI; WHEN
INTERLOCUTORY ORDER MAY BE THE SUBJECT THEREOF;
CASE AT BAR. Nor are We persuaded by the respondent Court's
declaration that even if the motion to dismiss had been filed on time,
the trial court's order denying the same, being interlocutory, still
cannot be the subject of a petition for certiorari. To be sure, this rule
admits of an exception, as when the trial court clearly acted outside
of its jurisdiction or with grave abuse of discretion in denying the
motion to dismiss. This is exactly what happened in the case while it
was pending before the trial court; the denial of the motion to dismiss
was based solely on the ground that a judgment by default had
already been entered. Certainly, this does not constitute a valid
ground for the denial because the motion raises a fundamental and
prejudicial issue affecting the validity of the decision by default.
7.
ID.;
EVIDENCE
DISPUTABLE
PRESUMPTIONS;
PRESUMPTION OF REGULARITY IN PERFORMANCE OF
OFFICIAL FUNCTIONS; DOES NOT APPLY WHERE SHERIFF'S
RETURN IS PATENTLY DEFECTIVE. Finally, respondent Court's
reliance on the presumption of regularity in the performance of
official functions is misplaced. We have held that such a presumption
does not apply where it is patent that the sheriff's return is defective.
8. ID.; VOID JUDGMENT CAN NEVER BECOME FINAL AND
EXECUTORY; ACTION TO DECLARE NULLITY OF VOID
JUDGMENT IMPRESCRIPTIBLE; CASE AT BAR. Equally
unmeritorious is the respondent Court's statement that the failure of
the petitioners to appeal from the judgment by default rendered such
judgment final and unassailable. In the first place, it is axiomatic that
a void judgment can never become final and executory and may
even be assailed or impugned at any time. An action to declare the
nullity of a void judgment does not prescribe. Secondly, the motion to
dismiss in this case was filed before the petitioners received a copy

RULE 14
CIVIL PROCEDURE
of the decision by default. Since the said motion is based on the lack
of jurisdiction over the persons of the petitioners which, if true in
fact, We have found it to be so would result in the nullification not
only of the default order but of the decision as well, then for all legal
intents and purposes, the latter was covered by the motion. This was
precisely the orientation of the trial court when it allowed the parties
to submit evidence to support the motion to reconsider the Order of 5
March 1990 denying the motion to dismiss. It would certainly not
have gone that far if it thought otherwise for by then, the decision
had already become final.
[G.R. No. 108538. January 22, 1996]

LOURDES A. VALMONTE and ALFREDO D.

VALMONTE,
petitioners,
vs.
THE
HONORABLE COURT OF APPEALS, THIRD
DIVISION
and
ROSITA
DIMALANTA,
respondents.
Petitioner Lourdes A. Valmonte is a foreign resident. The
question is whether in an action for partition filed against her and her
husband, who is also her attorney, summons intended for her may be
served on her husband, who has a law office in the Philippines. The
Regional Trial Court of Manila, Branch 48, said no and refused to
declare Lourdes A. Valmonte in default, but the Court of Appeals said
yes. Hence this petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are
husband and wife. They are both residents of 90222 Carkeek Drive
South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte,
who is a member of the Philippine bar, however, practices his
profession in the Philippines, commuting for this purpose between
his residence in the state of Washington and Manila, where he holds
office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.

On March 9, 1992, private respondent Rosita Dimalanta, who is

the sister of petitioner Lourdes A. Valmonte, filed a complaint for
partition of real property and accounting of rentals against petitioners
Lourdes A. Valmonte and Alfredo D. Valmonte before the Regional
Trial Court of Manila, Branch 48. The subject of the action is a threedoor apartment located in Paco,Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident
of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the
defendants are spouses, of legal age and at present residents of
90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for
purposes of this complaint may be served with summons at Gedisco
Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant
Alfredo D. Valmonte as defendant Lourdes Arreola Valmontes
spouse holds office and where he can be found.
Apparently, the foregoing averments were made on the basis of
a letter previously sent by petitioner Lourdes A. Valmonte to private
respondents counsel
in which, in regard to the partition of the property in question,
she referred private respondents counsel to her husband as the
party to whom all communications intended for her should be sent.
The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I
received on 3 July 1991. Please address all communications to my
lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and fax
numbers appear below.
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila

RULE 14
CIVIL PROCEDURE
Telephone: 521-1736
Fax: 21-2095
Service of summons was then made upon petitioner Alfredo D.
Valmonte, who at the time, was at his office in Manila. Petitioner
Alfredo D. Valmonte accepted the summons, insofar as he was
concerned, but refused to accept the summons for his wife, Lourdes
A. Valmonte, on the ground that he was not authorized to accept the
process on her behalf. Accordingly the process server left without
leaving a copy of the summons and complaint for petitioner Lourdes
A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with
Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file
her Answer. For this reason private respondent moved to declare her
in default. Petitioner Alfredo D. Valmonte entered a special
appearance in behalf of his wife and opposed the private
respondents motion.
In its Order dated July 3, 1992, the trial court, denied private
respondents motion to declare petitioner Lourdes A. Valmonte in
default. A motion for reconsideration was similarly denied
on September 23, 1992. Whereupon, private respondent filed a
petition for certiorari, prohibition and mandamus with the Court of
Appeals.
On December 29, 1992, the Court of Appeals rendered a
decision granting the petition and declaring Lourdes A. Valmonte in
default. A copy of the appellate courts decision was received by
petitioner
Alfredo
D.
Valmonte
on January 15, 1993 at
his Manila office and on January 21, 1993 in Seattle, Washington.
Hence, this petition.
The issue at bar is whether in light of the facts set forth above,
petitioner Lourdes A. Valmonte was validly served with summons. In
holding that she had been, the Court of Appeals stated: [1]
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally
directed the aforementioned counsel of Dimalanta to address all
communications (evidently referring to her controversy with her sister
Mrs. Dimalanta over the Paco property, now the subject of the instant

case) to her lawyer who happens also to be her husband. Such

directive was made without any qualification just as was her
choice/designation of her husband Atty. Valmonte as her lawyer
likewise made without any qualification or reservation. Any disclaimer
therefore on the part of Atty. Valmonte as to his being his wifes
attorney (at least with regard to the dispute vis-a-vis [sic] the Paco
property) would appear to be feeble or trifling, if not incredible.
This view is bolstered by Atty. Valmontes subsequent alleged special
appearance made on behalf of his wife. Whereas Mrs. Valmonte had
manifestly authorized her husband to serve as her lawyer relative to
her dispute with her sister over the Paco property and to receive all
communications regarding the same and subsequently to appear on
her behalf by way of a so-called special appearance, she would
nonetheless now insist that the same husband would nonetheless
had absolutely no authority to receive summons on her behalf. In
effect, she is asserting that representation by her lawyer (who is also
her husband) as far as the Paco property controversy is concerned,
should only be made by him when such representation would be
favorable to her but not otherwise. It would obviously be inequitable
for this Court to allow private respondent Lourdes A. Valmonte to
hold that her husband has the authority to represent her when an
advantage is to be obtained by her and to deny such authority when
it would turn out to be her disadvantage. If this be allowed, Our Rules
of Court, instead of being an instrument to promote justice would be
made use of to thwart or frustrate the same.
xxx xxx xxx
Turning to another point, it would not do for Us to overlook the fact
that the disputed summons was served not upon just an ordinary
lawyer of private respondent Lourdes A. Valmonte, but upon her
lawyer husband. But that is not all, the same lawyer/husband
happens to be also her co-defendant in the instant case which
involves real property which, according to her lawyer/husband/ codefendant, belongs to the conjugal partnership of the defendants (the
spouses Valmonte). It is highly inconceivable and certainly it would
be contrary to human nature for the lawyer/husband/co-defendant to
keep to himself the fact that they (the spouses Valmonte) had been

RULE 14
CIVIL PROCEDURE
sued with regard to a property which he claims to be conjugal.
Parenthetically, there is nothing in the records of the case before Us
regarding any manifestation by private respondent Lourdes A.
Valmonte about her lack of knowledge about the case instituted
against her and her lawyer/husband/co-defendant by her sister
Rosita.
PREMISES CONSIDERED, the instant petition for certiorari,
prohibition and mandamus is given due course. This Court hereby
Resolves to nullify the orders of the court a quodated July 3,
1992 and September 23, 1992 and further declares private
respondent Lourdes Arreola Valmonte as having been properly
served with summons.
Petitioners assail the aforequoted decision, alleging that the
Court of Appeals erred (1) in refusing to apply the provisions of Rule
14, 17 of the Revised Rules of Court and applying instead Rule 14, 8
when the fact is that petitioner Lourdes A. Valmonte is a nonresident
defendant; and (2) because even if Rule 14, 8 is the applicable
provision, there was no valid substituted service as there was no
strict compliance with the requirement by leaving a copy of the
summons and complaint with petitioner Alfredo D. Valmonte. Private
respondent, upon the other hand, asserts that petitioners are
invoking a technicality and that strict adherence to the rules would
only result in a useless ceremony.
We hold that there was no valid service of process on Lourdes
A. Valmonte.
To provide perspective, it will be helpful to determine first the
nature of the action filed against petitioners Lourdes A. Valmonte and
Alfredo D. Valmonte by private respondent, whether it is an action in
personam, in rem or quasi in rem. This is because the rules on
service of summons embodied in Rule 14 apply according to whether
an action is one or the other of these actions.
In an action in personam, personal service of summons or, if
this is not possible and he cannot be personally served, substituted
service, as provided in Rule 14, 7-8[2] is essential for the acquisition
by the court of jurisdiction over the person of a defendant who does

not voluntarily submit himself to the authority of the court. [3] If

defendant cannot be served with summons because he is
temporarily abroad, but otherwise he is a Philippine resident, service
of summons may, by leave of court, be made by publication.
[4]
Otherwise stated, a resident defendant in an action in
personam, who cannot be personally served with summons, may be
summoned either by means of substituted service in accordance with
Rule 14, 8 or by publication as provided in 17 and 18 of the same
Rule.[5]
In all of these cases, it should be noted, defendant must be a
resident of the Philippines, otherwise an action in personam cannot
be brought because jurisdiction over his person is essential to make
a binding decision.
On the other hand, if the action is in rem or quasi in
rem, jurisdiction over the person of the defendant is not essential for
giving the court jurisdiction so long as the court acquires jurisdiction
over the res. If the defendant is a nonresident and he is not found in
the country, summons may be served extraterritorially in accordance
with Rule 14, 17, which provides:
17. 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 7; 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.

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CIVIL PROCEDURE
In such cases, what gives the court jurisdiction in an action in
rem or quasi in rem is that it has jurisdiction over the res, i.e. the
personal status of the plaintiff who is domiciled in the Philippines
or the property litigated or attached. Service of summons in the
manner provided in 17 is not for the purpose of vesting it with
jurisdiction but for complying with the requirements of fair play or due
process, so that he 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.[6]
Applying the foregoing rules to the case at bar, private
respondents action, which is for partition and accounting under Rule
69, is in the nature of an action quasi in rem. Such an action is
essentially for the purpose of affecting the defendants interest in a
specific property and not to render a judgment against him. As
explained in the leading case of Banco Espaol Filipino v. Palanca :[7]
[An action quasi in rem is] an action which while not strictly speaking
an action in rem partakes of that nature and is substantially such. . . .
The action quasi in 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.
As petitioner Lourdes A. Valmonte is a nonresident who is not
found in the Philippines, service of summons on her must be in
accordance with Rule 14, 17. Such service, to be effective outside
the Philippines, must be made either (1) by personal service; (2) 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 should be sent by registered mail to
the last known address of the defendant; or (3) in any other manner
which the court may deem sufficient.

Since in the case at bar, the service of summons upon petitioner

Lourdes A. Valmonte was not done by means of any of the first two
modes, the question is whether the service on her attorney, petitioner
Alfredo D. Valmonte, can be justified under the third mode, namely,
in any . . . manner the court may deem sufficient.
We hold it cannot. This mode of service, like the first two, must
be made outside the Philippines, such as through the Philippine
Embassy in the foreign country where the defendant resides.
[8]
Moreover, there are several reasons why the service of summons
on Atty. Alfredo D. Valmonte cannot be considered a valid service of
summons on petitioner Lourdes A. Valmonte. In the first place,
service of summons on petitioner Alfredo D. Valmonte was not made
upon the order of the court as required by Rule 14, 17 and certainly
was not a mode deemed sufficient by the court which in fact refused
to consider the service to be valid and on that basis declare
petitioner Lourdes A. Valmonte in default for her failure to file an
answer.
In the second place, service in the attempted manner on
petitioner was not made upon prior leave of the trial court as required
also in Rule 14, 17. As provided in 19, such leave must be applied
for by motion in writing, supported by affidavit of the plaintiff or some
person on his behalf and setting forth the grounds for the application.
Finally, and most importantly, because there was no order
granting such leave, petitioner Lourdes A. Valmonte was not given
ample time to file her Answer which, according to the rules, shall be
not less than sixty (60) days after notice. It must be noted that the
period to file an Answer in an action against a resident defendant
differs from the period given in an action filed against a nonresident
defendant who is not found in the Philippines. In the former, the
period is fifteen (15) days from service of summons, while in the
latter, it is at least sixty (60) days from notice.
Strict compliance with these requirements alone can assure
observance of due process. That is why in one case, [9] although the
Court considered publication in the Philippines of the summons
(against the contention that it should be made in the foreign state
where defendant was residing) sufficient, nonetheless the service

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was considered insufficient because no copy of the summons was
sent to the last known correct address in the Philippines.
Private respondent cites the ruling in De Leon v.
Hontanosas, 67 SCRA 458,462-463 (1975), in which it was held that
service of summons upon the defendants husband was binding on
her. But the ruling in that case is justified because summons were
served upon defendants husband in their conjugal home in Cebu
City and the wife was only temporarily absent, having gone to
Dumaguete City for a vacation. The action was for collection of a
sum of money. In accordance with Rule 14, 8, substituted service
could be made on any person of sufficient discretion in the dwelling
place of the defendant, and certainly defendants husband, who was
there, was competent to receive the summons on her behalf. In any
event, it appears that defendant in that case submitted to the
jurisdiction of the court by instructing her husband to move for the
dissolution of the writ of attachment issued in that case.
On the other hand, in the case of Gemperle v. Schenker,[10] it
was held that service on the wife of a nonresident defendant was
found sufficient because the defendant had appointed his wife as his
attorney-in-fact. It was held that although defendant Paul Schenker
was a Swiss citizen and resident of Switzerland, service of summons
upon his wife Helen Schenker who was in the Philippines was
sufficient because she was her husbands representative and
attorney-in-fact in a civil case, which he had earlier filed against
William Gemperle. In fact Gemperles action was for damages arising
from allegedly derogatory statements contained in the complaint filed
in the first case. As this Court said, i]n other words, Mrs. Schenker
had authority to sue, and had actually sued, on behalf of her
husband, so that she was, also, empowered to represent him in suits
filed against him, particularly in a case, like the one at bar, which is a
consequence of the action brought by her on his behalf. [11] Indeed, if
instead of filing an independent action Gemperle filed a counterclaim
in the action brought by Mr. Schenker against him, there would have
been no doubt that the trial court could have acquired jurisdiction
over Mr. Schenker through his agent and attorney-in-fact, Mrs.
Schenker.

wrote private respondent s attorney that all communications intended

for her should be addressed to her husband who is also her lawyer
at the latters address in Manila, no power of attorney to receive
summons for her can be inferred therefrom. In fact the letter was
written seven months before the filing of this case below, and it
appears that it was written in connection with the negotiations
between her and her sister, respondent Rosita Dimalanta,
concerning the partition of the property in question. As is usual in
negotiations of this kind, the exchange of correspondence was
carried on by counsel for the parties. But the authority given to
petitioners husband in these negotiations certainly cannot be
construed as also including an authority to represent her in
any litigation.
For the foregoing reasons, we hold that there was no valid
service on petitioner Lourdes A. Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and
the orders dated July 3, 1992 and September 23, 1992 of the
Regional Trial Court of Manila, Branch 48 areREINSTATED.
SO ORDERED.

G.R. No. L-58340

July 16, 1991

KAWASAKI PORT SERVICE CORPORATION, NAIKAI

SHIPPING CO. LTD., NAIKAI TUG BOAT SERVICE
CO., THE PORT SERVICE CORPORATION, LICENSED
LAND SEA PILOTS ASSOCIATION, HAYAKOMA UNYU
K.K., TOKYO KISEN COMPANY, LTD., OMORI
KAISOTEN, LTD., TOHOKU UNYU CO., LTD. AND
SEITETSU UNYU CO., LTD., petitioners,

In contrast, in the case at bar, petitioner Lourdes A. Valmonte

did not appoint her husband as her attorney-in-fact. Although she

RULE 14
CIVIL PROCEDURE

vs. THE HON. AUGUSTO M. AMORES, Judge of Br.

XXIV, Court of First Instance of Manila, and C.F.
SHARP & CO., INC., respondents.
BIDIN, J.:p

This is a petition for certiorari seeking to set aside the orders of the
then Court of First Instance of Manila, * Branch XXIV in Civil Case
No. 132077: (a) dated July 13, 1981 denying the special
appearances of petitioners as defendants in said case to question
the court's jurisdiction over the persons of the defendants and (b)
dated September 22, 1981, denying the motion for reconsideration of
said order.

The antecedents of this case are as follows:

On May 7, 1980, the private respondent C.F. Sharp & Co., Inc. filed a
complaint for injunction and/or declaratory relief in the then Court of
First Instance of Manila against seventy-nine (79) Japanese
corporations as defendants, among which are the petitioners herein.
Said complaint was docketed as Civil Case No. 132077. The
complaint alleges, among others, that the plaintiff is a corporation
organized and existing under the laws of the Philippines; that there is
another corporation organized under the law of Japan with the
corporate name C.F. Sharp Kabushiki Kaisha; that the plaintiff and
C.F. Sharp Kabushiki Kaisha are in all respects separate and distinct
from each other; that C.F. Sharp Kabushiki Kaisha appears to have
incurred obligations to several creditors amongst which are
defendants, also foreign corporations organized and existing under
the laws of Japan; that due to financial difficulties, C.F. Sharp
Kabushiki Kaisha failed and/or refused to pay its creditors; and that

in view of the failure and/or refusal of said C.F. Sharp Kabushiki

Kaisha to pay its alleged obligations to defendants, the latter have
been demanding or have been attempting to demand from C.F.
Sharp & Co., Inc., the payment of the alleged obligations to them of
C.F. Sharp Kabushiki Kaisha, notwithstanding that C.F. Sharp & Co.,
Inc. is a corporation separate and distinct from that of C.F. Sharp
Kabushiki Kaisha and that the former had no participation
whatsoever or liability in connection with the transactions between
the latter and the defendants.
As alleged in the complaint, the private respondent prayed for
injunctive relief against the petitioners' demand from the private
respondent for the payment of C.F. Sharp Kabushiki Kaisha's
liabilities to the petitioners.
As an alternative to injunction, the private respondent prayed that a
judicial declaration be made that, as a separate and independent
corporation, it is not liable for the obligations and liabilities of C.F.
Sharp Kabushiki Kaisha.
Since the defendants are non-residents, without business addresses
in the Philippines but in Japan, the private respondent prayed for
leave of court to effect extraterritorial service of summons.
On June 11, 1980, the respondent judge issued an order authorizing
the private respondent to effect extraterritorial service of summons
on defendants therein.

Subsequently, private respondent filed an urgent ex-parte motion

dated June 23, 1980 for Extraterritorial Service of Summons Upon
Defendants by registered mail with return cards pursuant to Section
17 of Rule 14 of the Rules of Court.
Acting on said motion, the respondent judge issued an order dated
June 30, 1980 granting the motion and authorizing extraterritorial
service of summons upon defendants to be effected by registered
mail with return cards.

RULE 14
CIVIL PROCEDURE
On March 11, 1981, five of the petitioners, Kawasaki Port Service
Corporation, Naikai Shipping Co., Ltd., Naikai Tug Boat Service Co.,
Ltd., The Port Service Corporation and Licensed Land Sea Pilots
Association filed their "Special Appearance to Question Jurisdiction
of This Honorable Court Over Persons of Defendants" contending
that the lower court does not and cannot acquire jurisdiction over the
persons of defendants on the grounds that private respondent's
action does not refer to its personal status; that the action does not
have for subject matter property contemplated in Section 17 of Rule
14 of the Rules of Court, that the action does not pray that
defendants be excluded from any interest or property in the
Philippines; that no property of the defendants has been attached;
that the action is in personam; and that the action does not fall within
any of the four cases mentioned in Section 17, Rule 14 of the Rules
of Court.
On March 17, 1981, another three of herein petitioners, Hayakoma
Unyu K.K., Tokyo Kisen Company, Ltd. and Omori Kaisoten, Ltd. also
filed their special appearance adopting the same arguments as that
of the first five.
On April 28, 1981, the two other petitioners, Tohoku Unyu Co., Ltd.
and Seitetsu Unyu Co., Ltd., filed their "Special Appearance to
Question the Jurisdiction of the Honorable Court" over their persons
adopting in toto as theirs the "Special Appearance" dated March 11,
1981 of Kawasaki Port Service.

On July 13, 1981, the respondent Court issued its order denying said
special appearances. The motion for reconsideration of said order
filed by the petitioners was also denied on September 22, 1981.
Hence, the present petition.
After the required pleadings were filed, the First Division of this
Court, in the resolution of April 14, 1982, gave due course to the
petition and required both parties to submit simultaneous

memoranda within thirty (30) days from notice. Both parties complied
by submitting the required memoranda.
The main issue in this case is whether or not private respondent's
complaint for injunction and/or declaratory relief is within the purview
of the provisions of Section 17, Rule 14 of the Rules of Court.
The petitioners contend that the respondent judge acted contrary to
the provisions of Section 17 of Rule 14 for the following reasons: (1)
private respondent's prayer for injunction, as a consequence of its
alleged non-liability to the petitioners for debts of C.F. Sharp
Kabushiki Kaisha of Japan, conclusively establishes that private
respondent's cause of action does not affect its status; (2) the
respondent court cannot take jurisdiction of actions against the
petitioners as they are non-residents and own no property within the
state; (3) the petitioners have not as yet claimed a lien or interest in
the property within the Philippines at the time the action was filed
which is a requirement under Section 17 of Rule 14; (4) extraterritorial service on a non-resident defendant is authorized, among
others, when the subject of the action is property within the
Philippines in which the relief demanded consists in excluding
defendant from any interest therein; and (5) inasmuch as the reliefs
prayed for by the private respondent in the complaint are in
personam, service by registered mail cannot be availed of because
Section 17 of Rule 14 authorized this mode of service only in actions
in rem or quasi in rem.
For its part, the private respondent countered that (1) the action
refers to its status because the basic issue presented to the lower
court for determination is its status as a corporation which has a
personality that is separate, distinct and independent from the
personality of another corporation, i.e., C.F. Sharp Kabushiki Kaisha
of Japan; (2) under Section 17 of Rule 14, the subject matter or
property involved in the action does not have to belong to the
defendants. The provisions of said section contemplate of a situation
where the property belongs to the plaintiff but the defendant has a
claim over said property, whether that claim be actual or contingent;
(3) the prayer of the plaintiff that the defendants be excluded from

10

RULE 14
CIVIL PROCEDURE
any interest in the properties of the plaintiff within the Philippines has
the effect of excluding the defendants from the properties of the
plaintiff in the Philippines for the purpose of answering for the debts
of C.F. Sharp Kabushiki Kaisha of Japan to the defendants in
accordance with Section 17 of Rule 14; and (4) the action before the
lower court is an action quasi in rem as the remedies raised in the
complaint affect the personal status of the plaintiff as a separate,
distinct and independent corporation and relates to the properties of
the plaintiff in the Philippines over which the petitioners have or claim
an interest, actual or contingent.
The petition is impressed with merit.
Section 17, Rule 14 of the Rules of Court provides:

Section 17.
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
7; or by publication in a newspaper of general circulation in such
places and for such times 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.
This Court had ruled that extraterritorial service of summons is
proper only in four (4) instances, namely: "(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 has or claims a lien or 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." (De Midgely v. Ferandos,
64 SCRA 23 [1975]; The Dial Corporation v. Soriano, 161 SCRA 737
[1988]).
In the case at bar, private respondent has two (2) alternative
principal causes of action, to wit: either for declaratory relief or for
injunction. Allegedly, in both cases, the status of the plaintiff is not
only affected but is the main issue at hand.
As defined, "Status means a legal personal relationship, not
temporary in nature nor terminable at the mere will of the parties,
with which third persons and the state are concerned" (Holzer v.
Deutsche Reichsbahn Gesellschaft, 290 NYS 181; cited in 40 Words
and Phrases, 129, Permanent Edition).
It is easy to see in the instant case, that what is sought is a
declaration not only that private respondent is a corporation for there
is no dispute on that matter but also that it is separate and distinct
from C.F. Sharp Kabushiki Kaisha and therefore, not liable for the
latter's indebtedness. It is evident that monetary obligations does not,
in any way, refer to status, lights and obligations. Obligations are
more or less temporary, but status is relatively permanent. But more
importantly, as cited in the case of (Dy Poco v. Commissioner of
Immigration, et al., 16 SCRA 618 [1966]), the prevailing rule is that
"where a declaratory judgment as to a disputed fact would be
determinative of issues rather than a construction of definite stated
rights, status and other relations, commonly expressed in written
instrument, the case is not one for declaratory judgment." Thus,
considering the nature of a proceeding for declaratory judgment,
wherein relief may be sought only to declare rights and not to
determine or try issues, there is more valid reason to adhere to the
principle that a declaratory relief proceeding is unavailable where
judgment would have to be made, only after a judicial investigation of
disputed issues (ibid). In fact, private respondent itself perceives that

11

RULE 14
CIVIL PROCEDURE
petitioners may even seek to pierce the veil of corporate identity
(Rollo, p. 63).

[1988] citing Section 3-a Interim Rules of Court, Section 21, subpar.
1, BP Blg. 129).

Private respondent alleges that most if not all, of the petitioners have
merely demanded or have attempted to demand from the former the
payment of the obligations of C.F. Sharp K.K., (Rollo, p. 63).
Otherwise stated, there is no action relating to or the subject of which
are the properties of the defendants in the Philippines for it is beyond
dispute that they have none in this jurisdiction nor can it be said that
they have claimed any lien or interest, actual or contingent over any
property herein, for as above stated, they merely demanded or
attempted to demand from private respondent payment of the
monetary obligations of C.F. Sharp K.K., No action in court has as
yet ensued. Verily, the fact that C.F. Sharp Philippines is an entity
separate and distinct from C.F. Sharp K.K., is a matter of defense
that can be raised by the former at the proper time.

Considering that extra-territorial service of summons on the

petitioners was improper, the same was null and void.

Finally, the alternative relief sought is injunction, that is to enjoin

petitioners from demanding from private respondent the payment of
the obligations of C.F. Sharp K.K., It was not prayed that petitioners
be excluded from any property located in the Philippines, nor was it
alleged, much less shown, that the properties of the defendants, if
any, have been attached.
Hence, as ruled by this Court, where the complaint does not involve
the personal status of plaintiff, nor any property in the Philippines in
which defendants have or claim an interest, or which the plaintiff has
attached, but purely an action for injunction, it is a personal action as
well as an action in personam, not an action in rem or quasi in rem.
As a personal action, personal or substituted service of summons on
the defendants, not extraterritorial service, is necessary to confer
jurisdiction on the court. In an action for injunction, extra-territorial
service of summons and complaint upon the non-resident
defendants cannot subject them to the processes of the regional trial
courts which are powerless to reach them outside the region over
which they exercise their authority. Extra-territorial service of
summons will not confer on the court jurisdiction or Power to compel
them to obey its orders (Dial Corporation v. Soriano, 161 SCRA 738

WHEREFORE, the petition is Granted and the questioned orders

dated July 13, 1981 and September 22, 1981 of the respondent
Judge, are Reversed and Set Aside.

SO ORDERED.
If the action is in personam, this mode of service will not be
available. There is no extraterritorial service of summons in an
action in personam. Hence, extraterritorial service upon a
nonresident in an action for injunction which is in personam is not
proper

G.R. No. L-58340

July 16, 1991

KAWASAKI PORT SERVICE CORPORATION, NAIKAI SHIPPING

CO. LTD., NAIKAI TUG BOAT SERVICE CO., THE PORT SERVICE
CORPORATION, LICENSED LAND SEA PILOTS ASSOCIATION,
HAYAKOMA UNYU K.K., TOKYO KISEN COMPANY, LTD., OMORI
KAISOTEN, LTD., TOHOKU UNYU CO., LTD. AND SEITETSU
UNYU CO., LTD., petitioners,
vs.
THE HON. AUGUSTO M. AMORES, Judge of Br. XXIV, Court of
First Instance of Manila, and C.F. SHARP & CO., INC.,
respondents.

BIDIN, J.:p

12

RULE 14
CIVIL PROCEDURE
This is a petition for certiorari seeking to set aside the orders of the
then Court of First Instance of Manila, * Branch XXIV in Civil Case
No. 132077: (a) dated July 13, 1981 denying the special
appearances of petitioners as defendants in said case to question
the court's jurisdiction over the persons of the defendants and (b)
dated September 22, 1981, denying the motion for reconsideration of
said order.

As alleged in the complaint, the private respondent prayed for

injunctive relief against the petitioners' demand from the private
respondent for the payment of C.F. Sharp Kabushiki Kaisha's
liabilities to the petitioners.

The antecedents of this case are as follows:

Since the defendants are non-residents, without business addresses

in the Philippines but in Japan, the private respondent prayed for
leave of court to effect extraterritorial service of summons.

On May 7, 1980, the private respondent C.F. Sharp & Co., Inc. filed a
complaint for injunction and/or declaratory relief in the then Court of
First Instance of Manila against seventy-nine (79) Japanese
corporations as defendants, among which are the petitioners herein.
Said complaint was docketed as Civil Case No. 132077. The
complaint alleges, among others, that the plaintiff is a corporation
organized and existing under the laws of the Philippines; that there is
another corporation organized under the law of Japan with the
corporate name C.F. Sharp Kabushiki Kaisha; that the plaintiff and
C.F. Sharp Kabushiki Kaisha are in all respects separate and distinct
from each other; that C.F. Sharp Kabushiki Kaisha appears to have
incurred obligations to several creditors amongst which are
defendants, also foreign corporations organized and existing under
the laws of Japan; that due to financial difficulties, C.F. Sharp
Kabushiki Kaisha failed and/or refused to pay its creditors; and that
in view of the failure and/or refusal of said C.F. Sharp Kabushiki
Kaisha to pay its alleged obligations to defendants, the latter have
been demanding or have been attempting to demand from C.F.
Sharp & Co., Inc., the payment of the alleged obligations to them of
C.F. Sharp Kabushiki Kaisha, notwithstanding that C.F. Sharp & Co.,
Inc. is a corporation separate and distinct from that of C.F. Sharp
Kabushiki Kaisha and that the former had no participation
whatsoever or liability in connection with the transactions between
the latter and the defendants.

On June 11, 1980, the respondent judge issued an order authorizing

the private respondent to effect extraterritorial service of summons
on defendants therein.

As an alternative to injunction, the private respondent prayed that a

judicial declaration be made that, as a separate and independent
corporation, it is not liable for the obligations and liabilities of C.F.
Sharp Kabushiki Kaisha.

Subsequently, private respondent filed an urgent ex-parte motion

dated June 23, 1980 for Extraterritorial Service of Summons Upon
Defendants by registered mail with return cards pursuant to Section
17 of Rule 14 of the Rules of Court.
Acting on said motion, the respondent judge issued an order dated
June 30, 1980 granting the motion and authorizing extraterritorial
service of summons upon defendants to be effected by registered
mail with return cards.
On March 11, 1981, five of the petitioners, Kawasaki Port Service
Corporation, Naikai Shipping Co., Ltd., Naikai Tug Boat Service Co.,
Ltd., The Port Service Corporation and Licensed Land Sea Pilots
Association filed their "Special Appearance to Question Jurisdiction
of This Honorable Court Over Persons of Defendants" contending
that the lower court does not and cannot acquire jurisdiction over the
persons of defendants on the grounds that private respondent's
action does not refer to its personal status; that the action does not
have for subject matter property contemplated in Section 17 of Rule
14 of the Rules of Court, that the action does not pray that
defendants be excluded from any interest or property in the

13

RULE 14
CIVIL PROCEDURE
Philippines; that no property of the defendants has been attached;
that the action is in personam; and that the action does not fall within
any of the four cases mentioned in Section 17, Rule 14 of the Rules
of Court.
On March 17, 1981, another three of herein petitioners, Hayakoma
Unyu K.K., Tokyo Kisen Company, Ltd. and Omori Kaisoten, Ltd. also
filed their special appearance adopting the same arguments as that
of the first five.
On April 28, 1981, the two other petitioners, Tohoku Unyu Co., Ltd.
and Seitetsu Unyu Co., Ltd., filed their "Special Appearance to
Question the Jurisdiction of the Honorable Court" over their persons
adopting in toto as theirs the "Special Appearance" dated March 11,
1981 of Kawasaki Port Service.
On July 13, 1981, the respondent Court issued its order denying said
special appearances. The motion for reconsideration of said order
filed by the petitioners was also denied on September 22, 1981.

Hence, the present petition.

After the required pleadings were filed, the First Division of this
Court, in the resolution of April 14, 1982, gave due course to the
petition and required both parties to submit simultaneous
memoranda within thirty (30) days from notice. Both parties complied
by submitting the required memoranda.
The main issue in this case is whether or not private respondent's
complaint for injunction and/or declaratory relief is within the purview
of the provisions of Section 17, Rule 14 of the Rules of Court.
The petitioners contend that the respondent judge acted contrary to
the provisions of Section 17 of Rule 14 for the following reasons: (1)
private respondent's prayer for injunction, as a consequence of its
alleged non-liability to the petitioners for debts of C.F. Sharp
Kabushiki Kaisha of Japan, conclusively establishes that private
respondent's cause of action does not affect its status; (2) the

respondent court cannot take jurisdiction of actions against the

petitioners as they are non-residents and own no property within the
state; (3) the petitioners have not as yet claimed a lien or interest in
the property within the Philippines at the time the action was filed
which is a requirement under Section 17 of Rule 14; (4) extraterritorial service on a non-resident defendant is authorized, among
others, when the subject of the action is property within the
Philippines in which the relief demanded consists in excluding
defendant from any interest therein; and (5) inasmuch as the reliefs
prayed for by the private respondent in the complaint are in
personam, service by registered mail cannot be availed of because
Section 17 of Rule 14 authorized this mode of service only in actions
in rem or quasi in rem.
For its part, the private respondent countered that (1) the action
refers to its status because the basic issue presented to the lower
court for determination is its status as a corporation which has a
personality that is separate, distinct and independent from the
personality of another corporation, i.e., C.F. Sharp Kabushiki Kaisha
of Japan; (2) under Section 17 of Rule 14, the subject matter or
property involved in the action does not have to belong to the
defendants. The provisions of said section contemplate of a situation
where the property belongs to the plaintiff but the defendant has a
claim over said property, whether that claim be actual or contingent;
(3) the prayer of the plaintiff that the defendants be excluded from
any interest in the properties of the plaintiff within the Philippines has
the effect of excluding the defendants from the properties of the
plaintiff in the Philippines for the purpose of answering for the debts
of C.F. Sharp Kabushiki Kaisha of Japan to the defendants in
accordance with Section 17 of Rule 14; and (4) the action before the
lower court is an action quasi in rem as the remedies raised in the
complaint affect the personal status of the plaintiff as a separate,
distinct and independent corporation and relates to the properties of
the plaintiff in the Philippines over which the petitioners have or claim
an interest, actual or contingent.

14

RULE 14
CIVIL PROCEDURE
The petition is impressed with merit.
Section 17, Rule 14 of the Rules of Court provides:

Section 17.
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
7; or by publication in a newspaper of general circulation in such
places and for such times 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.
This Court had ruled that extraterritorial service of summons is
proper only in four (4) instances, namely: "(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 has or claims a lien or 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." (De Midgely v. Ferandos,
64 SCRA 23 [1975]; The Dial Corporation v. Soriano, 161 SCRA 737
[1988]).
In the case at bar, private respondent has two (2) alternative
principal causes of action, to wit: either for declaratory relief or for
injunction. Allegedly, in both cases, the status of the plaintiff is not
only affected but is the main issue at hand.

As defined, "Status means a legal personal relationship, not

temporary in nature nor terminable at the mere will of the parties,
with which third persons and the state are concerned" (Holzer v.
Deutsche Reichsbahn Gesellschaft, 290 NYS 181; cited in 40 Words
and Phrases, 129, Permanent Edition).
It is easy to see in the instant case, that what is sought is a
declaration not only that private respondent is a corporation for there
is no dispute on that matter but also that it is separate and distinct
from C.F. Sharp Kabushiki Kaisha and therefore, not liable for the
latter's indebtedness. It is evident that monetary obligations does not,
in any way, refer to status, lights and obligations. Obligations are
more or less temporary, but status is relatively permanent. But more
importantly, as cited in the case of (Dy Poco v. Commissioner of
Immigration, et al., 16 SCRA 618 [1966]), the prevailing rule is that
"where a declaratory judgment as to a disputed fact would be
determinative of issues rather than a construction of definite stated
rights, status and other relations, commonly expressed in written
instrument, the case is not one for declaratory judgment." Thus,
considering the nature of a proceeding for declaratory judgment,
wherein relief may be sought only to declare rights and not to
determine or try issues, there is more valid reason to adhere to the
principle that a declaratory relief proceeding is unavailable where
judgment would have to be made, only after a judicial investigation of
disputed issues (ibid). In fact, private respondent itself perceives that
petitioners may even seek to pierce the veil of corporate identity
(Rollo, p. 63).
Private respondent alleges that most if not all, of the petitioners have
merely demanded or have attempted to demand from the former the
payment of the obligations of C.F. Sharp K.K., (Rollo, p. 63).
Otherwise stated, there is no action relating to or the subject of which
are the properties of the defendants in the Philippines for it is beyond
dispute that they have none in this jurisdiction nor can it be said that
they have claimed any lien or interest, actual or contingent over any
property herein, for as above stated, they merely demanded or

15

RULE 14
CIVIL PROCEDURE
attempted to demand from private respondent payment of the
monetary obligations of C.F. Sharp K.K., No action in court has as
yet ensued. Verily, the fact that C.F. Sharp Philippines is an entity
separate and distinct from C.F. Sharp K.K., is a matter of defense
that can be raised by the former at the proper time.
Finally, the alternative relief sought is injunction, that is to enjoin
petitioners from demanding from private respondent the payment of
the obligations of C.F. Sharp K.K., It was not prayed that petitioners
be excluded from any property located in the Philippines, nor was it
alleged, much less shown, that the properties of the defendants, if
any, have been attached.
Hence, as ruled by this Court, where the complaint does not involve
the personal status of plaintiff, nor any property in the Philippines in
which defendants have or claim an interest, or which the plaintiff has
attached, but purely an action for injunction, it is a personal action as
well as an action in personam, not an action in rem or quasi in rem.
As a personal action, personal or substituted service of summons on
the defendants, not extraterritorial service, is necessary to confer
jurisdiction on the court. In an action for injunction, extra-territorial
service of summons and complaint upon the non-resident
defendants cannot subject them to the processes of the regional trial
courts which are powerless to reach them outside the region over
which they exercise their authority. Extra-territorial service of
summons will not confer on the court jurisdiction or Power to compel
them to obey its orders (Dial Corporation v. Soriano, 161 SCRA 738
[1988] citing Section 3-a Interim Rules of Court, Section 21, subpar.
1, BP Blg. 129).
Considering that extra-territorial service of summons on the
petitioners was improper, the same was null and void.

WHEREFORE, the petition is Granted and the questioned orders

dated July 13, 1981 and September 22, 1981 of the respondent
Judge, are Reversed and Set Aside.

SO ORDERED.

[G.R. No. 82330. May 31, 1988.]

THE DIAL CORPORATION, C & T REFINERY INC., NALIN Sdn.

Bhb. BERISFORD COMMODITIES, LTD., and PACIFIC
MOLASSES COMPANY, Petitioners, v. THE HON. CLEMENTE M.
SORIANO, Presiding Judge, Regional Trial Court, Branch 3,
MANILA PUBLIC RESPONDENT and IMPERIAL VEGETABLE OIL
COMPANY, INC., Respondents.

RATIO DECIDENDI
Extraterritorial service of summons does not confer jurisdiction
on the courts over a non-resident defendant not found and
without property in the Philippines, especially when what is
involved is an action in personam against said defendant (i.e.
complaint for injunction and damages).

Only in four instances is extraterritorial service of

summons proper, namely: (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 has or
claims a lien or 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
16

RULE 14
CIVIL PROCEDURE
defendant non-residents property has been attached
within the Philippines. (See De Midgely v. Fernandos,
64 SCRA 23)

1.
REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS;
EXTRA-TERRITORIAL SERVICE THEREOF; INSTANCES. Only
in four (4) instances is extraterritorial service of summons proper,
namely:" (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 has or claims
a lien or 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-residents property has been attached within the
Philippines" (De Midgely v. Ferandos, 64 SCRA 23).

(Hernandez v. Rural Bank of Lucena, Inc. 76 SCRA 85). A personal

action is one brought for the recovery of personal property, for the
enforcement of some contract or recovery of damages for its breach,
or for the recovery of damages for the commission of an injury to the
person or property (Hernandez v. Development Bank of the
Philippines, 71 SCRA 292).

4.
ID.; PROVISIONAL REMEDIES; INJUNCTION. In an
action for injunction, extraterritorial service of summons and
complaint upon the non-resident defendants cannot subject them to
the processes of the regional trial courts which are powerless to
reach them outside the region over which they exercise their
authority (Sec. 3-a, Interim Rules of Court; Sec. 21, subpar. 1, B.P.
Blg. 129). Extraterritorial service of summons will not confer on the
court jurisdiction or power to compel them to obey its orders.
GRIO-AQUINO, J.:

2.
ID.; ID.; ID.; IN PERSONAL ACTIONS, EXTRATERRITORIAL SERVICE DOES NOT CONFER JURISDICTION.
The action is purely an action for injunction to restrain the defendants
from enforcing against Imperial Vegetable Oil company, Inc.
("abusing and harassing") its contracts for the delivery of coconut oil
to the defendants, and to recover from the defendants P21 million in
damages for such "harassment." It is clearly a personal action as
well as an action in personam, not an action in rem or quasi in rem.
As Civil Case No. 87-40166 is a personal action, personal or
substituted service of summons on the defendants, not
extraterritorial service, is necessary to confer jurisdiction on the
court.

3.
ID.; ID.; ACTION IN PERSONAM AND PERSONAL ACTION,
BOTH DEFINED. An action in personam is an action against a
person on the basis of his personal liability, while an action in rem is
an action against the thing itself, instead of against the person.

The petitioners are foreign corporations organized and existing under

the laws of the United States, the United Kingdom, and Malaysia, are
not domiciled in the Philippines, nor do they have officers or agents,
place of business, or property in the Philippines; they are not
licensed to engage, and are not engaged, in business here. The
respondent Imperial Vegetable Oil Company, Inc. (or "IVO" for
brevity) is a Philippine corporation which through its president,
Dominador Monteverde, had entered into several contracts for the
delivery of coconut oil to the petitioners. Those contracts stipulate
that any dispute between the parties will be settled through
arbitration under the rules of either the Federation of Oils Seeds and
Fats Association (FOSFA) or the National Institute of Oil Seed
Products (NIOP). Because IVO defaulted under the contracts, the
petitioners and 15 others, initiated arbitration proceedings abroad,
and some have already obtained arbitration awards against IVO.

17

RULE 14
CIVIL PROCEDURE
On April 8, 1987, IVO filed a complaint for injunction and damages
against nineteen (19) foreign coconut oil buyers including the
petitioners, with whom its president, Dominador Monteverde, had
entered into contracts for the delivery of coconut oil (Civil Case No.
87-40166, RTC Manila entitled "Imperial Vegetable Oil Co., Inc. v.
Dial Corporation Et. Al."). IVO repudiated Monteverdes contracts on
the grounds that they were mere "paper trading in futures" as no
actual delivery of the coconut oil was allegedly intended by the
parties; that the Board of Directors of IVO convened in a special
meeting on March 21, 1987 and removed Dominador Monteverde
from his position as president of the corporation, named in his place,
Rodrigo Monteverde, and disowned Dominador Monteverdes
allegedly illegal and unauthorized acts; that the defendants have
allegedly "harassed" IVO to comply with Dominadors contracts and
to come to a settlement with them. IVO prayed for the issuance of a
temporary restraining order or writ of preliminary injunction to stop
the defendants from harassing IVO with their insistent demands to
recognize the contracts entered into by Dominador Monteverde and
from portraying the IVO as one that defaults on its contracts and
obligations and has fallen into bad times and from interfering with
IVOs normal conduct of business. IVO also prayed that the
defendants pay it moral damages of P5 million, actual damages of
P10 million, exemplary damages of P5 million, attorneys fees of P1
million, P3,000 per appearance of counsel, and litigation
expenses.chanrobles virtual lawlibrary

On motion of IVO, respondent Judge authorized it to effect

extraterritorial service of summons to all the defendants through DHL
Philippines corporation (Annex B). Pursuant to that order, the
petitioners were served with summons and copy of the complaint by
DHL courier service.

On April 25, 1987, without submitting to the courts jurisdiction and

only for the purpose of objecting to said jurisdiction over their
persons, the petitioners filed motions to dismiss the complaint

against them on the ground that the extraterritorial service of

summons to them was improper and that hence the court did not
acquire jurisdiction over them. On December 15, 1987, the court
denied their motions to dismiss and upheld the validity of the
extraterritorial service of summons to them on the ground that "the
present action relates to property rights which he in contracts within
the Philippines, or which defendants claim liens or interests, actual or
inchoate, legal or equitable (par. 2, complaint). And one of the reliefs
demanded consists, wholly or in part, in excluding the defendants
from any interest in such property for the reason that their
transactions with plaintiffs former president are ultra vires."
Furthermore, "as foreign corporations doing business in the
Philippines without a license, they opened themselves to suit before
Philippine courts, pursuant to Sec. 133 of the Corporation Code of
the Philippines." (Annex H) The petitioners motions for
reconsideration of that order were also denied by the court (Annex
M), hence this petition for certiorari with a prayer for the issuance of
a temporary retraining order which We granted.

The petition is meritorious.

Section 17, Rule 14 of the Rules of Court provides:chanrob1es

virtual 1aw library

Section 17.
Extraterritorial service. When the defendant does
not recide 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 alien 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 undersection 7;

18

RULE 14
CIVIL PROCEDURE
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."cralaw
virtua1aw library

Only in four (4) instances is extraterritorial service of summons

proper, namely:" (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 has or claims
a lien or 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-residents property has been attached within the
Philippines" (De Midgely v. Ferandos, 64 SCRA 23).

The complaint in this case does not involve the personal status of the
plaintiff, nor any property in the Philippines in which the defendants
have or claim an interest, or which the plaintiff has attached. The
action is purely an action for injunction to restrain the defendants
from enforcing against IVO ("abusing and harassing") its contracts
for the delivery of coconut oil to the defendants, and to recover from
the defendants P21 million in damages for such "harassment." It is
clearly a personal action as well as an action in personam, not an
action in rem or quasi in rem. "An action in personam is an action
against a person on the basis of his personal liability, while an action
in rem is an action against the thing itself, instead of against the
person." (Hernandez v. Rural Bank of Lucena, Inc., 76 SCRA 85). A
personal action is one brought for the recovery of personal property,
for the enforcement of some contract or recovery of damages for its
breach, or for the recovery of damages for the commission of an

injury to the person or property (Hernandez v. Development Bank of

the Philippines, 71 SCRA 292).

As Civil Case No. 87-40166 is a personal action, personal or

substituted service of summons on the defendants, not
extraterritorial service, is necessary to confer jurisdiction on the
court. The rule is explained in Morans Comments on the Rules of
Court thus:jgc:chanrobles.com.ph

"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 Philippines 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 nonresident defendant is not essential. Venue in such cases may be laid
in the province where the property of the defendant or a part thereof
involved in the litigation is located." (5 Morans Comments on the
Rules of Court, 2nd Ed., p. 105.)

In an action for injunction, extraterritorial service of summons and

complaint upon the non-resident defendants cannot subject them to
the processes of the regional trial courts which are powerless to
reach them outside the region over which they exercise their
authority (Sec. 3-a, Interim Rules of Court; Sec. 21, subpar. 1, B.P.
Blg. 129). Extraterritorial service of summons will not confer on the
court jurisdiction or power to compel them to obey its
orders:chanrobles law library

19

RULE 14
CIVIL PROCEDURE
Neither may the court by extraterritorial service of summons acquire
jurisdiction to render and enforce a money judgment against a nonresident defendant who has no property in the Philippines for "the
fundamental rule is that jurisdiction in personam over non-residents,
so as to sustain a money judgment, must be based upon personal
service within the state which renders the judgment" (Boudard v. Tait,
67 Phil. 170, 174).

Respondents contention that "the action below is related to property

within the Philippines, specifically contractual rights that petitioners
are enforcing against IVO" is specious for the "contractual rights" of
the petitioners are not property found in the Philippines for the
petitioners have not filed an action in the local courts to enforce said
rights. They have not submitted to the jurisdiction of our courts.

The lower court invoked Section 33 of the Corporation Code which

provides that a "foreign corporation transacting business in the
Philippines without a license may be sued or proceeded against
before Philippine courts or administrative tribunal on any valid cause
of action recognized under Philippine laws." It assumed that the
defendants (herein petitioners) are doing business in the Philippines,
which allegation the latter denied. Even if they can be considered as
such, the Corporation Code did not repeal the rules requiring proper
service of summons to such corporations as provided in Rule 14 of
the Rules of Court and Section 128 of the Corporation Code.

which is resorted to when the defendant is not found in the

Philippines, does not transact business here, and has no resident
agent on whom the summons may be served.chanrobles virtual
lawlibrary

WHEREFORE, We hold that the extraterritorial service of summons

on the petitioners was improper, hence null and void.

The petition for certiorari is granted. The orders dated April 24, 1987
(Annex B) and December 15, 1987 (Annex II) of the respondent
Judge are hereby set aside. The complaint in Civil Case No. 8740166 is hereby dismissed as against the petitioners for failure of the
court to acquire jurisdiction over them.

SO ORDERED.

The respondent courts finding that, by filing motions to dismiss, the

petitioners hypothetically admitted the allegations of the complaint
that they are doing business in the Philippines without any license,
and that they may be served with summons and other court
processes through their agents or representatives enumerated in
paragraph 2 of the complaint, is contradicted by its order authorizing
IVO to summon them by extraterritorial service, a mode of service

20