CONSTITUTIONAL*LAW*II*DIGESTS*(2012*–*2013)* * * *********ATTY.

*SEDFREY*CANDELARIA*
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El#Banco#Espanol+Filipino#v.#Vicente#Palanca##[G.R.#11390,#March# court! for! publication.! It! appears! from! the! receipt! that! the!
26,1918]# envelope!used!by!Garcia!emanated!from!said!office!of!the!clerk.!!
# • The! cause! proceeded! in! usual! course! but! seeing! as! the!
Key#Concept:!Actual!notice!is!not!required!to!satisfy!judicial!due!process! defendant! did! not! appear,! judgment! was! taken! against! him! by!
! default!on!July!2,!1908.!On!July!3,!1908,!a!decision!was!rendered!
Summary:!The!judgment!appealed!from!is!without!error!and!it!stands,! in! favor! of! the! plaintiff.! In! the! judgment,! it! was! stated! that!
costs!to!Palanca.! publication!had!been!properly!made!in!a!periodical!but!nothing!
! was! mentioned! about! notice! given! by! mail.! E.! Palanca! was!
Facts:## directed! to! pay! the! debt! amount! of! P249,355.32! lest! his!
• On!March!31,!1908,!El!Banco!EspanolEFilipino!(Banco)!instituted! property!be!subjected!to!public!sale!in!the!event!that!payment!
an! action! to! foreclose! a! mortgage! on! real! property! owned! by! is!not!made.!The!payment!was!never!made!and!on!July!8,!1908,!
Engracio! Palanca! Tanquinyeng! y! Limquingco! (E.! Palanca),! who! the! court! ordered! the! sale.! The! property! was! bought! in! by!
executed!such!mortgage!on!June!16,!1906!as!security!for!a!debt! Banco! for! P110,200,! way! below! the! valued! price! and! such! sale!
owing! to! the! bank.! On! March! 31,! 1906,! the! debt! amounted! to! was!confirmed!by!the!court!on!Aug.!7,!1908.!
P218,294.10! and! drew! interest! at! the! rate! of! 8%! per! annum,! • After! 7! years,! Vicente! Palanca! (V.! Palanca),! administrator! of! E.!
payable! at! the! end! of! each! quarter.! At! the! time,! the! parties! Palanca’s! estate,! surfaced! to! petition! for! the! annulment! of! the!
estimated! the! value! of! the! property! at! P292,558,! P75,000! in! ruling!and!to!vacate!all!the!proceedings!subsequent!thereto!on!
excess!of!the!debt.!! the! basis! that! the! order! of! default! and! the! judgment! rendered!
• After! executing! the! mortgage,! E.! Palanca! returned! to! Amoy,! were! void! because! the! court! had! never! acquired! jurisdiction!
China,! his! native! country,! where! he! stayed! until! his! death! on! over!the!defendant!or!over!the!subject!of!the!action.!V.!Palanca!
January!29,!1910.!Since!E.!Palanca!was!a!nonresident!at!the!time! further! protested! that! there! had! been! no! due! process! as! they!
of!the!institution!of!the!action,!it!was!necessary!for!Banco!in!the! never!received!the!summons.!!
foreclosure! proceeding! to! give! notice! to! the! defendant! by! #
publication! pursuant! to! Sec.! 399! of! the! Civil! Code! Procedure.! Issues:##
Publication!was!made!in!due!form!in!a!newspaper!of!the!city!of! (1) W/N!the!court!acquired!the!necessary!jurisdiction!to!enable!
Manila.!The!court!further!directed!the!clerk!of!court!to!deposit! it!to!proceed!with!the!foreclosure!of!the!mortgage!
in!the!post!office!a!stamped!enveloped!containing!a!copy!of!the! (2) W/N!the!proceedings!were!conducted!in!such!a!manner!as!
summons!and!complaint!directed!to!E.!Palanca!to!be!sent!to!the! to!constitute!due!process!of!law!
city!of!Amoy,!Empire!of!China!(during!this!time,!it!was!still!called! !
the! “Empire! of! China”).! Whether! the! clerk! complied! or! not! is! Held:#
not!clear!but!there!exists!an!affidavit!dated!April!4,!1908,!signed! ISSUE!1!E!Yes,!the!court!acquired!the!necessary!jurisdiction!to!enable!it!
by! Bernardo! Chan! y! Garcia,! an! employee! of! the! attorneys! for! to!proceed!with!the!foreclosure!of!the!mortgage.!
the!bank,!showing!that!upon!that!date,!he!had!deposited!in!the! Ratio!
postEoffice! a! registered! letter,! addressed! to! E.! Palanca! I. Jurisdiction! over! the! person! is! acquired! by! the! voluntary!
containing! the! summons,! the! complaint! and! the! order! of! the! appearance! of! a! party! in! court! and! his! submission! to! its!

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Chan=Gonzaga*Evardone*Gutierrez*Lopez*Miclat*Nadal*Radoc*Superio*Tan*Tong*Valdez*Varela*
CONSTITUTIONAL*LAW*II*DIGESTS*(2012*–*2013)* * * *********ATTY.*SEDFREY*CANDELARIA*
*
authority,! or! it! is! acquired! by! the! coercive! power! of! legal! made! which! involves! a! determination! of! a! personal! liability! of!
process!exerted!over!the!person.!Jurisdiction!over!the!property! either!party!arising!out!of!the!contract!of!mortgaged!property.!
is! acquired! either! through! seizure! under! legal! process! or! from! III. The!failure!of!the!clerk!to!send!notice!by!mail!to!the!nonresident!
the! institution! of! legal! proceedings! wherein,! under! special! defendant!in!a!foreclosure!proceeding,!as!required!by!an!order!
provisions!of!the!law,!the!power!of!the!court!over!the!property! of! the! court,! does! not! defeat! the! jurisdiction! of! the! court! over!
is! recognized! and! made! effective.! In! the! latter! case,! the! the! mortgaged! property.! Such! irregularity! could! in! no! wise!
property!may!never!be!taken!into!actual!custody!at!all.!! impair!or!defeat!the!jurisdiction!of!the!court.!
• In! the! terminology! of! American! law,! the! action! to! ISSUE! 2! –! Yes,! proceedings! were! conducted! in! such! a! manner! as! to!
foreclose!a!mortgage!is!said!to!be!a!proceeding!quasi&in& constitute!due!process!of!law!
rem,! meaning! that! while! it! is! not! strictly! speaking! an! Ratio!
action! in& rem,! it! partakes! of! that! nature.! An! action! “in& I. As! applied! to! judicial! proceedings,! due! process! of! law! implies!
rem”! is! used! only! in! courts! of! admiralty! wherein! the! that!the!4!characteristics!are!present:!!
property!alone!is!treated!as!responsible!for!the!claim!or! 1. There! is! a! court! or! tribunal! clothed! with! judicial& power!
obligation! upon! which! the! proceedings! are! based.! The! to!hear!and!determine!the!matter!before!it!
action! quasi& in& rem! differs! from! in& rem! in! the! 2. The!court!or!tribunal!must!acquire!jurisdiction!over!the!
circumstance!that!in!the!former,!an!individual!is!named! person! of! the! defendant! or! the! property! that! is! the!
as! defendant,! and! the! purpose! of! the! proceeding! is! to! subject!of!the!proceeding!
subject! his! interest! to! the! obligation! or! lien! burdening! 3. The! defendant! must! be! given! an! opportunity& to& be&
the! property.! All! proceedings! having! for! their! sole! heard&
object! the! sale! or! disposition! of! the! property! of! the! 4. Judgment!must!be!rendered!upon!lawful&hearing&
defendant,! the! judgment! entered! in! these! proceedings! II. In! an! action! to! foreclose! a! mortgage! against! a! nonresident,!
is!conclusive!only!between!the!parties.! some! notification! of! the! proceedings! must! be! given! to! the!
II. Where!the!defendant!in!a!mortgage!foreclosure!is!a!nonresident! defendant.!Under!statutes!generally!prevailing,!this!notification!
and! refuses! to! appear! or! otherwise! submit! himself! to! the! commonly! takes! the! form! of! publication! in! a! newspaper! of!
authority!of!the!court,!the!jurisdiction!of!the!latter!is!limited!to! general!circulation!and!the!sending!of!notice,!by!mail,!by!which!
the!mortgage!property,!with!respect!to!which!the!jurisdiction!of! means!the!owner!is!admonished!that!his!property!is!the!subject!
the! court! is! based! upon! the! fact! that! the! property! is! located! of! judicial! proceedings.! The! provisions! of! law! providing! for!
within! the! district! and! that! the! court,! under! the! provisions! of! notice!of!this!character!must!be!complied!with.!
law!applicable!in!such!cases,!is!vested!with!the!power!to!subject! • Furthermore,! in! the! same! foreclosure! action! against! a!
the!property!to!the!obligation!created!by!the!mortgage.!In!such! nonresident! defendant,! the! court! is! required! to! make!
case,! personal! jurisdiction! over! nonresident! defendant! is! an! order! for! the! clerk! to! mail! a! copy! of! the! summons!
nonessential!and!in!fact!cannot!be!acquired.!Whether!in&rem&or! and! complaint! to! the! defendant! at! his! last! place! of!
quasi&in&rem!against!a!nonresident,!the!relief!must!be!confined! residence! IF! known.! In! the! present! case,! an! order! was!
to!the!res!(thing/property),!and!the!court!cannot!lawfully!render! made! directing! the! clerk! to! mail! the! required! copy! to!
a!personal!judgment!against!him.!Hence,!no!adjudication!can!be! the! defendant! at! Amoy,! Empire! of! China.! No! evidence!

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Chan=Gonzaga*Evardone*Gutierrez*Lopez*Miclat*Nadal*Radoc*Superio*Tan*Tong*Valdez*Varela*
CONSTITUTIONAL*LAW*II*DIGESTS*(2012*–*2013)* * * *********ATTY.*SEDFREY*CANDELARIA*
*
appeared!of!record!showing!that!such!notice!had!in!fact! foreclosure! against! a! nonresident! who! did! not! return!
been!mailed!by!the!clerk;!but!publication!was!regularly! and! submit! to! the! jurisdiction! of! the! court.! Such! act! of!
made! in! a! periodical! as! the! law! requires.! It! was! held! the!plaintiff!was!not!such!a!prejudice!to!the!defendant!
that! the! mere! making! of! the! order! by! the! court! as! would! justify! the! opening! of! the! judgment! of!
constituted! a! compliance! with! the! law,! in! so! far! as! foreclosure.!
necessary! to! constitute! due! process! of! law,! and! that! if! IV. It! is! held! that! under! the! circumstances! of! the! particular! case,!
the!clerk!failed!to!send!the!notice,!his!dereliction!in!the! knowledge! of! the! proceedings,! or! of! their! result,! should! be!
performance! of! his! duty! was! an! irregularity! which! did! imputed! to! him,! upon! the! legal! presumption! that! things! have!
not! constitute! an! infringement! of! the! provision! of! the! happened!according!to!the!ordinary!habits!of!life,!and!that!as!a!
Philippine!Bill!declaring!that!no!person!shall!be!deprived! consequence!his!failure!to!apply!for!relief!within!the!year!and!a!
of!property!without!due!process!of!law.! half!during!which!he!survived!the!foreclosure!proceedings!was!a!
• The! notification! is! constructive! or! substituted! service! circumstance!adversely!affecting!the!application!for!relief.!
and! it! does! not! constitute! a! service! of! process! in! any! • Where! the! court! makes! an! order! for! the! clerk! to! mail!
true! sense.! This! mode! of! notification! does! not! involve! notice! of! a! foreclosure! proceeding! to! a! nonresident!
any! absolute! assurance! that! the! absent! owner! shall! defendant! it! will! be! presumed! in! the! absence! of!
receive! the! notice! (due! to! address! problems! and! other! affirmative! proof! to! the! contrary! that! the! duty! was!
mishaps),!which!is!not!absolutely!necessary.!! performed.!!
• The!law!proceeds!from!the!presumption!that!property!is! • Once! in! Kentucky,! aside! from! publication! in! the!
to!be!in!the!possession!of!its!owner!and!he!may!safely! newspaper,! the! posting! of! the! summon! on! the! front!
be!held!to!be!affected!with!knowledge!that!proceedings! church! door! after! Sunday! service! was! also! required.!
have!been!instituted!for!its!condemnation!and!sale.!It!is! Some! time! after! this! transpired,! the! second!
the!duty!of!the!real!estate!owner!to!take!measures!that! requirement! of! posting! the! notice! was! questioned.!
he! will! be! represented! when! his! property! is! called! into! Seeing! at! there! is! no! evidence! to! prove! this,! the! fact!
question.! that! the! court! ordered! it! was! enough! to! act! as! a! legal!
III. A! defendant! who! seeks! to! vacate! a! judgment! in! a! foreclosure! presumption!that!such!requirement!was!satisfied.!
proceeding!on!the!ground!of!irregularity!in!the!sending!of!notice! !
by! post,! or! failure! to! send! such! notice! pursuant! to! an! order! of! Malcom,#J.#dissenting:#
the! court,! must! show! that! as! a! result! of! such! irregularity! he! ! “The! fundamental! idea! of! due! process! is! that! no! man! shall! be!
suffered!some!prejudice!of!which!the!law!can!take!account.!! condemned!in!his!person!or!property!without!notice!and!an!opportunity!
• As!to!the!matter!of!the!property!being!bought!at!a!price! of!being!heard!in!his!defense.!Literally!hundreds!of!precedents!could!be!
much! below! the! value! agreed! upon! as! constituting! cited! in! support! of! these! axiomatic! principles.! In! the! instant! case,! the!
prejudice,!it!was!held!that!if!any!liability!was!incurred!by! defendant!received!no!notice!and!had!no!opportunity!to!be!heard,!we!
the! plaintiff! by! purchasing! at! a! price! below! that! which! cannot!say!there!is!due!process.”!The!defendant!is!prejudiced.!
had! been! agreed! upon,! such! liability! was! of! a! personal!
nature!and!could!not!be!the!subject!of!adjudication!in!a!

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Chan=Gonzaga*Evardone*Gutierrez*Lopez*Miclat*Nadal*Radoc*Superio*Tan*Tong*Valdez*Varela*