SAHAGUN V CA (MADAYAG/FILINVEST CREDIT CORP.

)
G.R. NO. 78328
June 3 1991

FACTS

Petitioner Carmelita Pelaez Sahagun's spouse, Abel Sahagun (Alias Abelardo), manager of
Rallye Motor Co., Inc. (Rallye), allegedly made it appear that his company had sold a motor vehicle
to one Ernesto Salazar who issued a promissory note for the price and executed as security a
chattel mortgage on said vehicle in favor of Rallye. Rallye, through Abel, assigned the note and
chattel to respondent Filinvest for valuable consideration. When the note matured, Salazar failed to
pay, compelling Filinvest to sue. However, Filinvest found that the mortgaged car had not been
delivered to Salazar by Abel. A writ of attachment was issued and levied on a house and lot in Las
Pinas, registered in Abel's name. Petitioner and her children had been continuously residing in said
house and claims ownership, having allegedly paid for it with her own earnings.

The trial court denied the respondent's motion to declare Abel in default but directed it to
"take steps to effect service of summons and complaint upon defendant, whose whereabouts in the
United States was unknown. The court later dismissed the complaint of Filinvest for failure to serve
summons extra-territorially upon Abel despite said order. Filinvest filed an Motion for
Reconsideration praying that said order be set aside and that Abel be declared in default and to
deny petitioner's motion for leave to intervene. The trial court granted petitioner time to file
intervention and denied the motion to declare Abel in default.

Petitioner intervened, questioning the jurisdiction of the trial court but was later declared in
default for failure to appear at the pre-trial conference, as was Abel for failing to answer the
complaint. The court rendered judgment against Abel.

Petitioner elevated the case to the Intermediate Appellate Court which granted her petition
for certiorari with prohibition and set aside the trial court's aforesaid decision, ruling that petitioner
was deprived of opportunity to present evidence, including evidence she and Abel had been living
separately since 1970. Filinvest filed a petition for review with the Supreme Court which was denied.

Filinvest filed a motion for leave to serve summons by publication on Abel, which the court
granted, stating that pursuant to Sec. 17, Rule 14, the summons be effected out of the Philippines by
publication in a newspaper of general circulation, to which this matter may be assigned after due
raffle, for three successive days; said defendant was ordered to file his answer in Court within a
reasonable time; and that the Clerk of Court send copies of the summons and tills Order by
registered mail to last known address of said defendant in Las Pinas. Plaintiff is also ordered to
implead Rallye as co-defendant.

Filinvest filed an amended complaint, this time impleading petitioner and Rallye as additional
defendants. Respondent court admitted the amended complaint and directed service of summons
and the complaint upon Abel at a different last known address in Antipolo. Summons was
supposedly served on Abel through publication in the Manila Evening Post according to the affidavit
of publication of its president, with a confusing entry in the notice of order which stated the Las Pinas
address, contradicting the Antipolo address stated by the trial court. Petitioner filed her answer to the
amended complaint. Abel and Rallye filed no answer, so Filinvest filed a motion to declare them in
default which respondent Judge Madayag of the RTC of Makati granted, but not as to Rallye since
summons had not been served upon it. Petitoner went on certiorari to the Court of Appeals, assailing
as grave abuse of discretion the declaration of default of Abel. The appellate court dismissed the
petition and the subsequent Motion for Reconsideration.

ISSUE

Whether respondent court acquired jurisdiction over Abel by the publication of summons in the
Manila Evening Post

HELD

Yes, the publication of summons in the Manila Evening post, duly satisfied the requirements of
the law to acquire jurisdiction over the defendant.

Section 17, Rule 14 of the Rules of Court, authorizes extraterritorial service of summons by
publication. The instant case is based on the attachment of defendant's property, and as such is an action
quasi in rem, wherein summons by publication is allowed. Such is called constructive or substituted
service, which does not constitute a service of process in any true sense but serves as a means whereby
the owner may be admonished that his property is subject to judicial proceedings and that he should take
steps as he sees fit to protect it. Such is required to physically acquire jurisdiction over the person of the
defendant and for purposes of fair play by informing him of the pendency of the action against him. Even
then, there is no guarantee that the absent owner shall receive the actual notice; as such, under law,
actual notice is not considered to be absolutely necessary.

It was held in De Midgely that in actions quasi in rem, jurisdiction over the person of the
nonresident alien is not essential and service of summons is only required to satisfy due process. Relief
in an action against a nonresident defendant who chooses not to submit himself to Philippine courts is
limited to the res.

There is no specific proscription against resorting to foreign publication in the place where the
defendant resides, but publication in a local newspaper should not altogether be interdicted since the rule
specifically authorizes service of summons "in such places and for such time as the court concerned may
order". The matter should be left to the sound discretion of the TC in each particular case since it has the
facts before it. Still, the publication in the Manila Evening Post was defective as there was no showing
that copies of the summons and the amended complaint were duly served at the defendant's last know
correct address.

The Court is not inclined to dismiss the case for non-compliance of private respondent to serve
the amended complaint to Abel at his Antipolo address as there is prima facie justification for
extraterritorial service of summons, and transmission of copies of the summons to the wrong address is a
matter which the TC can more readily remedy. Even if Abel is declared in default, his interest can be duly
represented by the non-defaulting defendant since a common cause of action is involved.