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* JURISDICTION, HOW ACQUIRED: Jurisdiction over the property which is the subject
of the litigation may result either from a seizure of the property under legal process,
whereby it is brought into the actual custody of the law, or it may result from the
institution of legal proceedings wherein, under special provisions of law, the power
of the court over the property is recognized and made effective.
* The action to foreclose a mortgage is said to be a proceeding quasi in rem, by
which is expressed the idea that while it is not strictly speaking an action in rem yet
it partakes of that nature and is substantially such.
* DUE PROCESS IN FORECLOSURE PROCEEDINGS: Property is always assumed to be
in the possession of its owner, in person or by agent; and he may be safely held,
under certain conditions, to be affected with knowledge that proceedings have been
instituted for its condemnation and sale.
FACTS:
the City of Manila, the cause proceeded and judgment by default was rendered. The
decision was likewise published and afterwards sale by public auction was held with
the bank as the highest bidder. On August 7, 1908, this sale was confirmed by the
court. However, about seven years after the confirmation of this sale, a motion was
made by Vicente Palanca, as administrator of the estate of the original defendant,
wherein the applicant requested the court to set aside the order of default and the
judgment, and to vacate all the proceedings subsequent thereto. The basis of this
application was that the order of default and the judgment rendered thereon were
void because the court had never acquired jurisdiction over the defendant or over
the subject of the action.
ISSUE:
* Whether or not the lower court acquired jurisdiction over the defendant and the
subject matter of the action
* Whether or not due process of law was observed
RULING:
On Jurisdiction
The word jurisdiction is used in several different, though related, senses since it
may have reference (1) to the authority of the court to entertain a particular kind of
action or to administer a particular kind of relief, or it may refer to the power of the
court over the parties, or (2) over the property which is the subject to the litigation.
The sovereign authority which organizes a court determines the nature and extent
of its powers in general and thus fixes its competency or jurisdiction with reference
to the actions which it may entertain and the relief it may grant.
Jurisdiction over the property which is the subject of the litigation may result either
from a seizure of the property under legal process, whereby it is brought into the
actual custody of the law, or it may result from the institution of legal proceedings
wherein, under special provisions of law, the power of the court over the property is
recognized and made effective. In the latter case the property, though at all times
within the potential power of the court, may never be taken into actual custody at
all. An illustration of the jurisdiction acquired by actual seizure is found in
attachment proceedings, where the property is seized at the beginning of the
action, or some subsequent stage of its progress, and held to abide the final event
of the litigation. An illustration of what we term potential jurisdiction over the res, is
found in the proceeding to register the title of land under our system for the
registration of land. Here the court, without taking actual physical control over the
property assumes, at the instance of some person claiming to be owner, to exercise
a jurisdiction in rem over the property and to adjudicate the title in favor of the
petitioner against all the world.
It is true that in proceedings of this character, if the defendant for whom publication
is made appears, the action becomes as to him a personal action and is conducted
as such. This, however, does not affect the proposition that where the defendant
fails to appear the action is quasi in rem; and it should therefore be considered with
reference to the principles governing actions in rem.
Hernandez & Atienza vs. Rural Bank of Lucena, Central Bank & Martinez
Facts:
Petitioners obtained from Rural Bank of Lucena a loan secured by a mortgage on
their two lots. About three months after the loan was obtained, the Lucena Bank
became a distress bank. Before the expiration of the one-year term of the loan,
Hernandez went to the bank and offered to pay the loan but was refused reasoning
that the operations of the Lucena Bank were suspended. Instead of filing a
consignation complaint, Hernandez enclosed the check with his letter to the clerk of
court of the CFI of Lipa City. Later on, petitioners filed an action in the CFI of Lipa
City to compel the respondents to accept the check and to execute the cancellation
of the real estate mortgage. Central Bank filed a motion to dismiss alleging that the
venue was improperly laid because the action of the petitioners is a real action
affecting title to rel property which should have been filed in the CFI of Rizal at QC
where the mortgaged lots are situated. The motion was denied.
Issue:
WON the action of the petitioners to compel the bank to honor the check and to
cancel the mortgage on their two lots is a real action.
Held: NO, it is not a real action, it is a personal action.
Section 2(a), Rule 4 of the Rules of Court provides that actions affecting title to, or
for recovery of possession, or for partition or condemnation of, or foreclosure of
mortgage on, real property, shall be commenced and tried in the province where
the property or any part thereof lies.
Note that the rule mentions an action for foreclosure of a real estate mortgage but
does not mention an action for the cancellation of a real mortgage. In the instant
case, the action is primarily to compel the mortgagee to accept payment of the
mortgage debt and to release the mortgage.
That action, which is not expressive included in the enumeration found in section
2(a) of Rule 4, does not involve the title to the mortgage lots. It is a personal action
and not a real action. The mortgagee has, not foreclosure the mortgage, Plaintiffs
title is not in question. They are in possession of the mortgaged lots.
Hence, the venue of plaintiffs personal action is the place where the defendant or
any of the defendants resides or may be found, or where the plaintiff or any of the
plaintiffs resides, at the election of the plaintiff.
******
A real action is not the same as an action in rem and a personal action is not the
same as an action in personam.
In a personal action, the plaintiff seeks the recovery of personal property, the
enforcement of a contract or the recovery of damages. In a real action, the plaintiff
seeks the recovery of real property. or, as indicated in section 2(a) of Rule 4, a real
action Is an action affecting tithe to real property or for the recovery of possession
or for partition or condemnation of, or foreclosure of a mortage on, real property.
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 (1 C. J. S. 943-4), Hence, a real action may at the same time be
an action in personam and not necessary an action in rem.
II.
JURISDICTION
Good Devt Corporation vs. Hon. Tutaan, Delos Reyes & Marcelo
Facts:
Good Devt Corp filed in the CFI a complaint against Delos Reyes & Marcelo for the
collection of a sum of money (P1,520.00) plus interest, and the sum equivalent to
25% of the total amount due as attys fees, and in default thereof to order the
foreclosure of the chattel mortgage covering personal properties valued at
P15,340.00. Subsequently, private respondents filed a motion to dismiss the
complaint for lack of jurisdiction for the reason that, among others, the petitioner in
its complaint prays for a sum of money amounting to P1,520.00 under the municipal
court. The trial court dismissed the complaint on the ground that the case being one
for a sum of money, the cause of action must be governed by the law on
jurisdiction. Assuming the validity of plaintiffs principal claim the total thereof
cannot and will not reach P10,000.00. It then becomes clear that this case must fall
within the exclusive original jurisdiction of the city court.
Issue:
WON the CFI was correct in dismissing the complaint; or WON the CFI has
jurisdiction over the case.
Held:
The CFI should not have dismissed the complaint for such has jurisdiction over the
case.
Based on jurisprudence, although the purpose of an action is to recover an amount
plus interest which comes within the original jurisdiction of the Justice of the Peace
Court, yet when said action involves the foreclosure of a chattel mortgage covering
personal properties valued at more than P2,000, (now P10,000.00) the action should
be instituted before the Court of First Instance.
In the instant case, the action is to recover the amount of P1,520.00 plus interest
and costs, and involves the foreclosure of a chattel mortgage of personal properties
valued at P15,340.00, so that it is clearly within the competence of the respondent
court to try and resolve.