El Banco Espanol-Filipino vs.

Palanca Facts: Engracio Palanca Tanquinyeng executed a mortgage upon various parcels of real property situated in Manila in favor of El Banco Espanol-Filipino as security for a loan. After he executed the mortgage, Engracio returned to China and never went back to RP until he eventually died. Because of non-payment, the bank filed a suit to foreclose the mortgage (at this point Engracio was still alive). Since defendant was a non-resident, the bank gave notice by publication. The Clerk of Court was also directed to send copy of the summons to the defendants last known address, which was in China. However, it was not shown whether the Clerk complied with this requirement. Nevertheless, the CFI proceeded with the case and a judgment by default was rendered in favor of the bank. Mortgage was foreclosed and the properties were sold in a public auction. After 7 years, Vicente Palanca, as administrator of Engracios estate, filed a motion to set aside the judgment by default and to vacate all subsequent proceedings on the ground that the judgment rendered was void since the court never acquired jurisdiction over the person of the defendant. Issue: WON the CFI acquired jurisdiction over the defendant Held: YES. Ratio: Tanquinyeng is a non-resident and having refused to appear in court voluntarily, the court never acquired jurisdiction over him. This is, however, not essential since the foreclosure of mortgage is an action quasi in rem and what is essential is the courts jurisdiction over the res. Jurisdiction over the property is based on the following: (1) That the property is located within the district; (2) That the purpose of the litigation is to subject the property by sale to an obligation fixed upon it by the mortgage; and (3) That the court at a proper stage of the proceedingstakes the property into custody, if necessary, andexpose it to sale for the purpose of satisfying themortgage debt. And since jurisdiction is exlusively over property, the relief granted by the court must be limited only to that which can beenforced against the property itself. Therefore, whatever may be the effect in other respects of the failure of the Clerk of the Court to mail the proper papers to the defendant in Amoy, China, such irregularity could impair or defeat the jurisdiction of the court.