G.R. No. 108538 January 22, 1996Ponente: Mendoza, J.:

Service of Summons

Facts:

1. Petitioner Lourdes A. Valmonte is a foreign resident. Petitioners Lourdes and Alfredo are husband and wife 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.

2. Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition against former and her husband. She alleged that, 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 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 Valmonte’s spouse holds office and where he can be found.He husband was also her counsel, who has a law office in the Philippines. The summons were served on her husband.

3. Petitioner in a letter, referred private respondent’s counsel to her husband as the party to whom all communications intended for her should be sent. Service of summons was then made upon petitioner Alfredo at his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes, 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.

4. 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 respondent’s motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default. Said decision was received by Alfredo hence this petition.

Issue: Whether or not petitioner Lourdes A. Valmonte was validly served with summons. NO.There was no valid service of summons on Lourdes.

1. The action herein is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendant’s interest in a specific property and not to render a judgment against him. 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.

2. 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. 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. The 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.

3. Secondly, the 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.

4. Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes was not given ample time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice.

295 SCRA 469 – Conflict of Laws – Private International Law – Service of Summons to a Non Resident – Processual Presumption 

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.

Similarly, HERAS, who was also an absentee, should have been served with summons in the same manner as a non-resident not found in Hong Kong. Section 17, Rule 14 of the Rules of Court providing for extraterritorial service will not apply because the suit against him was in personam. Neither can we apply Section 18, which allows extraterritorial service on a resident defendant who is temporarily absent from the country, because even if HERAS be considered as a resident of Hong Kong, the undisputed fact remains that he left Hong Kong not only "temporarily" but "for good."

Validity of judgment, service defective, served in hongkong personally, summons with leave of court

Hasegawa 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.

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pre-termination of respondent's ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus. Repalce by Kotake

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. (performance of contracts regulated by law prevailing at place of performance)

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

whether the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the state of the most significant relationship rule, or forum non conveniens.

HELD: YES

1. To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced?

2. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for one do not always provide the necessary significant contacts for the other

3. In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation

4. In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City. What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci celebrationis and lex contractus, and the state of the most significant relationship rule.

5. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties

6. Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules

7. It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or apply the law of some other State or States

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.- See more at: http://lawsandfound.blogspot.com/2012/12/hasegawa-v-kitamura-digest.html#sthash.foBpqxrm.dpuf

AREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian, and Spouses FEDERICO N. SALVACION, JR., and EVELINA E. SALVACION vs. CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI y NORTHCOTTG.R. No. 94723 August 21, 1997

FACTS: Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious illegal detention against Karen Salvacion. Police recovered from him several dollar checks and a dollar account in the China Banking Corp. He was, however, able to escape from prison. In a civil case filed against him, the trial court awarded Salvacion moral, exemplary and attorney’s fees amounting to almost P1,000,000.00.

Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but the latter refused arguing that Section 11 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Salvacion therefore filed this action for declaratory relief in the Supreme Court.

ISSUE: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as amended by PD 1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient?

HELD: NO.

The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of Republic Act No. 6426, are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are hereby required to comply with the writ of execution issued in the civil case and to release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the judgment.

Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and her parents fully deserve. It then proceeded to show that the economic basis for the enactment of RA No. 6426 is not anymore present; and even if it still exists, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us.

The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors and, subsequently, to give the latter protection. However, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few days in the country and, therefore, will maintain his deposit in the bank only for a short time. Considering that Bartelli is just a tourist or a transient, he is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246 against attachment, garnishment or other court processes.

Further, the SC said: “In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that “in case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail.”___________

NOTES:– On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February 7, 1989 and was able to rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account — China Banking Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.

HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC) vs. SHERMAN et alG.R. No. 72494August 11, 1989

FACTS: It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (COMPANY), a company incorporated in Singapore applied with and was granted by HSBC Singapore branch an overdraft facility in the maximum amount of Singapore dollars 200,000 with interest at 3% over HSBC prime rate, payable monthly, on amounts due under said overdraft facility.

As a security for the repayment by the COMPANY of sums advanced by HSBC to it through the aforesaid overdraft facility, in 1982, both private respondents and a certain Lowe, all of whom were directors of the COMPANY at such time, executed a Joint and Several Guarantee in favor of HSBC whereby private respondents and Lowe agreed to pay, jointly and severally, on demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft facility.

The Joint and Several Guarantee provides, inter alia, that:This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts of Singapore shall have jurisdiction over all disputes arising under this guarantee. …

The COMPANY failed to pay its obligation. Thus, HSBC demanded payment and inasmuch as the private respondents still failed to pay, HSBC filed A complaint for collection of a sum of money against private respondents Sherman and Reloj before RTC of Quezon City.Private respondents filed an MTD on the ground of lack of jurisdiction over the subject matter. The trial court denied the motion. They then filed before the respondent IAC a petition for prohibition with preliminary injunction and/or prayer for a restraining order. The IAC rendered a decision enjoining the RTC Quezon City from taking further cognizance of the case and to dismiss the same for filing with the proper court of Singapore which is the proper forum. MR denied, hence this petition.

ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the Guarantee stipulation regarding jurisdiction?

HELD: YES

One basic principle underlies all rules of jurisdiction in International Law: a State does not have jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on some minimum contacts that will not offend traditional notions of fair play and substantial justiceThe defense of private respondents that the complaint should have been filed in Singapore is based merely on technicality. They did not even claim, much less prove, that the filing of the action here will cause them any unnecessary trouble, damage, or expense. On the other hand, there is no showing that petitioner BANK filed the action here just to harass private respondents.

**

In the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., where the stipulation was “[i]n case of litigation, jurisdiction shall be vested in the Court of Davao City.” We held:

Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant under Section 2 (b), Rule 4, ROC, in the absence of qualifying or restrictive words in the agreement which would indicate that the place named is the only venue agreed upon by the parties.Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed in or marching through State territory with the permission of the latter’s authorities. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the State. A State is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them

NOTES:

The respondent IAC likewise ruled that:… In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum non conveniens. …However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. Thus, the IAC should not have relied on such principle.

G.R. No. 133876, Dec. 29, 1999

When foreign laws, despite having been duly presented and proven, may not be given application

FACTS:

Petitioner Bank of America (BANTSA) is an international banking and financing institution duly licensed to do business in the Philippines, organized and existing under and by virtue of the laws of the State of California, USA while private respondent American Realty (ARC) is a domestic corporation.

On numerous occasions, BANTSA and Bank of America International Limited (BAIL), organized under the laws of England, granted US Dollar loans to certain foreign corporate borrowers. These loans were later restructured, the restructured loans secured by two real estate mortgages with private respondent ARC as third-party mortgagor. When the corporate borrowers defaulted, BANTSA sued them for collection before foreign courts, without impleading ARC as party-defendant. While these civil suits are still pending before the foreign courts, BANTSA filed an extra-judicial foreclosure of real estate mortgage before the Office of the Provincial Sheriff of Bulacan, Philippines. The properties were sold at public auction, prompting ARC to file this action for damages against BANTSA.

The trial court ruled in favour of ARC and this was affirmed by the CA. Hence, this appeal.

ISSUES:

Whether or not the petitioner’s act of filing a collection suit against the principal debtors for the recovery of the loan before foreign courts constituted waiver of the remedy of foreclosure

Whether or not the award by the lower court of actual and exemplary damages in favour of private respondent ARC, as third-party mortgagor, is proper

HELD:

Available Remedies

THEORIES OF PETITIONER:

1. A waiver of the remedy of foreclosure requires the concurrence of 2 requisites: an ordinary civil action for collection should be filed and subsequently a final judgment be correspondingly rendered therein.

2. Under English law, which according to petitioner is the governing law with regard to the principal agreements, the mortgagee does not lose its security interest by simply filing civil actions for sums of money.

1.

REMEDIES ARE ALTERNATIVE, NOT CUMULATIVE: A mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage.

In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative. Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure of mortgage, pursuant to the provision of Rule 68 of the 1997 Rules of Civil Procedure. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any court of justice but with the Office of the Sheriff of the province where the sale is to be made.

In the case at bench, private respondent ARC constituted real estate mortgages over its properties as security for the debt of the principal debtors. By doing so, private respondent subjected itself to the liabilities of a third party mortgagor. Under the law, third persons who are not parties to a loan may secure the latter by pledging or mortgaging their own property.

Notwithstanding, there is no legal provision nor jurisprudence in our jurisdiction which makes a third person who secures the fulfillment of another‘s obligation by mortgaging his own property, to be solidarily bound with the principal obligor. The signatory to the principal contract—loan—remains to be primarily bound. It is only upon default of the latter that the creditor may have recourse on the mortgagors by foreclosing the mortgaged properties in lieu of an action for the recovery of the amount of the loan.

In the instant case, petitioner’s contention that the requisites of filing the action for collection and rendition of final judgment therein should concur, is untenable.

PHILIPPINE LAW, NOT ENGLISH LAW, SHALL APPLY: In the case at bench, Philippine law shall apply notwithstanding the evidence presented by petitioner to prove the English law on the matter.

In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that

there is judicial notice of any foreign law. A foreign law must be properly pleaded and proved as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our local or domestic or internal law. This is what we refer to as the doctrine of processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved xxx, said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting of a single cause of action.

Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws.

Clearly then, English Law is not applicable.

Award of Damages

As to the second pivotal issue, we hold that the private respondent is entitled to the award of actual or compensatory damages inasmuch as the act of petitioner BANTSA in extrajudicially foreclosing the real estate mortgages constituted a clear violation of the rights of herein private respondent ARC, as third-party mortgagor.

333 SCRA 545 – Conflict of Laws – Private International Law – Service of Summons in In Personam Cases

In 1989, Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former incurred when one of the latter’s ship ran aground causing losses to Urbino. Urbino impleaded Banco Do Brasil (BDB), a foreign corporation not engaged in business in the Philippines nor does it have any office here or any agent. BDB was impleaded simply because it has a claim over the sunken ship. BDB however failed to appear multiple times. Eventually, a judgment was rendered and BDB was adjudged to pay $300,000.00 in damages in favor of Urbino for BDB being a nuisance defendant.

BDB assailed the said decision as it argued that there was no valid service of summons because the summons was issued to the ambassador of Brazil. Further, the other summons which were made through publication is not applicable to BDB as it alleged that the action against them is in personam.

ISSUE: Whether or not the court acquired jurisdiction over Banco Do Brasil.

HELD: No. Banco Do Brasil is correct. Although the suit is originally in rem as it was BDB’s claim on the sunken ship which was used as the basis for it being impleaded, the action nevertheless became an in personam one when Urbino asked for damages in the said amount. As such, only a personal service of summons would have vested the court jurisdiction over BDB. Where the action is in personam, one brought against a person on the basis of his personal liability, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. When the defendant is a non-resident, personal service of summons within the state is essential to the acquisition of jurisdiction over the person. This cannot be done, however, if the defendant is not physically present in the country, and thus, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him.

Laurel vs GarciaGR 92013 July 25, 1990.

Facts:

Petitioners seek to stop the Philippine Government to sell the Roppongi Property, which is located in Japan. It is one of the properties given by the Japanese Government as reparations for damage done by the latter to the former during the war.

Petitioner argues that under Philippine Law, the subject property is property of public dominion. As such, it is outside the commerce of men. Therefore, it cannot be alienated.

Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because the property is located in Japan. They posit that the principle of lex situs applies.

Issues and Held:

1. WON the subject property cannot be alienated.

The answer is in the affirmative.

Under Philippine Law, there can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial. This, the respondents have failed to do. As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated.

2. WON Philippine Law applies to the case at bar.

The answer is in the affirmative.

We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined; and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which law should apply.

In the instant case, none of the above elements exists.

The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.

The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable.