Banco do Brasil vs CA

G.R. Nos. 121576-78

June 16, 2000

Petitioner: BANCO DO BRASIL

Respondents: THE COURT OF APPEALS, HON. ARSENIO M.

GONONG, and CESAR S. URBINO, SR.

Topic: Extra-territorial service of summons;

Facts:

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.

Significantly, the publication of summons effected by private

respondent is invalid and ineffective for the trial court to acquire
jurisdiction over the person of petitioner.