Gomez vs. Court of Appeals

An action for specific performance and/or rescission of a contract to sell real property is an action in personam—even though it is a real action affecting title to land—and therefore requires personal service of summons upon the defendants for the court to validly acquire jurisdiction over their persons. Where summons is improperly served and the defendant does not voluntarily submit to the court's jurisdiction, any judgment rendered against that defendant is null and void for want of jurisdiction.

Sometime in 1975, the spouses Jesus and Caridad Trocino mortgaged two parcels of land covered by TCT Nos. 10616 and 31856 to Dr. Clarence Yujuico. The mortgage was subsequently foreclosed, and the properties were sold at public auction on July 11, 1988. Before the expiration of the redemption period, the spouses Trocino sold the properties to petitioners-spouses Fortunato and Aurora Gomez on December 12, 1989. The Gomez spouses thereafter redeemed the properties from Dr. Yujuico. Despite the redemption, the Trocino spouses refused to convey ownership to the Gomezes.

• Nature of the Underlying Action: Petitioners filed Civil Case No. CEB-11103, an action for specific performance and/or rescission, against the heirs of Jesus J. Trocino, Sr.—namely, Caridad, Jacob, Jesus Jr., Adolfo, Mariano, Consolacion, Alice, and Racheal Trocino. The complaint alleged that the Trocino spouses sold their rights to two foreclosed parcels of land to petitioners, who redeemed the property; however, the Trocino spouses and their heirs refused to execute the corresponding deed of sale and deliver the certificates of title.

• Service of Summons: The process server's Return of Service dated January 10, 1992 stated that on January 8, 1992, summons and copies of the complaint were served on "defendants Jacob, Jesus Jr., Adolfo, Mariano, Consolacion, Alice, Racheal thru defendant Caridad Trocino at their given address." Caridad Trocino acknowledged service by signing the original summons. The return contained no explanation of why personal service on the individual defendant-heirs could not be accomplished or what efforts were made toward personal service. No alias summons was ever sought by petitioners.

• Appearance and Trial: An Answer was filed on January 27, 1992 by Atty. Expedito P. Bugarin, purportedly on behalf of all defendants. Only Caridad Trocino verified the pleading. Throughout the proceedings—including pre-trial and trial—only Caridad Trocino appeared and testified; none of the other defendant-heirs were present. The RTC never inquired into the extent of Atty. Bugarin's authority to represent the absent defendants.

• Respondents' Circumstances: Adolfo Trocino had been a resident of Ohio, U.S.A. for 25 years and was not physically present in the Philippines at the time of service. Mariano Trocino had been residing in Talibon, Bohol since 1986 and was not at the Cebu City address where summons was served.

• RTC Judgment: The trial court ordered the defendants to jointly and severally execute a Deed of Sale, deliver the owner's duplicate certificates of title, and accept the balance of ₱2,000,000.00, or in default, the sale was rescinded and defendants were to return ₱500,000.00 with 12% annual interest, plus moral damages, exemplary damages, attorney's fees, and litigation expenses. Subsequently, the RTC ordered cancellation of the existing titles and issuance of new ones in petitioners' names.

• Annulment Proceedings: Respondents alleged that they had no knowledge of the RTC proceedings, that summons was never validly served on them, and that they had not authorized Atty. Bugarin to represent them. Caridad Trocino had filed a Motion to Withdraw Appeal representing herself as the principal defendant, without participation of the other heirs.

• Prior Knowledge and Violation of Circular 04-94: Petitioners argued that respondents had prior knowledge of the proceedings before the RTC and that the petition for annulment should have been dismissed for violation of Supreme Court Circular 04-94.

• Nature of Action as In Rem: Petitioners maintained that the cause of action was one in rem because it involved real property and affected title to land, and therefore personal service of summons was unnecessary; extraterritorial service was not required for the court to acquire jurisdiction.

• Futility of Annulment: Petitioners contended that annulling the judgment caused further useless litigation and unnecessary expense, especially since respondents had not shown any valid defense that would warrant reversal of the RTC judgment.

• Applicability to Caridad Trocino: Petitioners argued that the Court of Appeals erred in ruling that its judgment applied in favor of Caridad Trocino.

• Invalid Service of Summons: Respondents alleged that the trial court never acquired jurisdiction over their persons because summons was not validly served. Adolfo Trocino was a non-resident in Ohio, U.S.A., and Mariano Trocino was residing in Talibon, Bohol—neither was at the Cebu City address where service was purportedly effected through Caridad Trocino. The process server's return did not demonstrate impossibility of personal service.

• Absence of Voluntary Appearance: Respondents refuted that Atty. Bugarin represented them. They had not authorized his appearance, and no pleading was ever verified by them. Caridad Trocino alone engaged counsel and signed all verifications.

• Existence of Meritorious Defense: Respondents also contended that they possessed a meritorious defense against the complaint.

• Nature of Action: Whether the action for specific performance and/or rescission of a contract to sell real property is one in rem (permitting extraterritorial service or service by publication) or one in personam (requiring personal service of summons for jurisdiction over the defendant's person).

• Validity of Substituted Service on Mariano Trocino: Whether substituted service of summons through Caridad Trocino was valid as to Mariano Trocino, a resident of Bohol, absent any showing in the return of impossibility of personal service.

• Jurisdiction over Non-Resident Adolfo Trocino: Whether the trial court acquired jurisdiction over Adolfo Trocino, a non-resident who was not physically present in the Philippines and was not served with summons personally.

• Effect of Counsel's Appearance: Whether the filing of an Answer by Atty. Bugarin on behalf of all defendants constituted a voluntary appearance or waiver of summons by respondents, absent proof of authority to represent them.

• Validity of Judgment as to Caridad Trocino: Whether the annulment of the RTC judgment was properly made applicable only to respondents Adolfo and Mariano, and not to Caridad Trocino, who was validly served with summons.

• Nature of Action: The action for specific performance and/or rescission was one in personam. While it is a real action because it affects title to or possession of real property, it is not automatically an action in rem. In an action in personam, the plaintiff seeks to enforce a personal liability against the defendant; in an action in rem, the action is directed against the thing itself. Here, petitioners sought to establish a claim against respondents for their alleged refusal to convey title—this was an action against persons on the basis of their personal liability. Accordingly, personal service of summons was essential for the court to acquire jurisdiction.

• Validity of Substituted Service on Mariano Trocino: Substituted service on Mariano Trocino was invalid. Under Section 8, Rule 14 of the Rules of Court, substituted service is permitted only upon a showing of impossibility of personal service within a reasonable time. The process server's return contained no particulars as to why personal service on Mariano Trocino could not be effected, nor what efforts were exerted toward personal service. The facts and circumstances attendant must be stated in the proof of service; failure to do so invalidates all subsequent proceedings on jurisdictional grounds. Petitioners also failed to seek issuance of an alias summons under Section 5, Rule 14 when the original summons was returned without proper service.

• Jurisdiction over Non-Resident Adolfo Trocino: The trial court could not acquire jurisdiction over Adolfo Trocino. As a non-resident defendant in an action in personam who did not voluntarily submit to the court's authority, personal service within the Philippines was essential. Since he was not physically present in the country, no valid personal service could be effected, and the court could not validly try and decide the case against him. The exception in Gemperle vs. Schenker—where service through a resident spouse was deemed valid because the spouse was the non-resident's representative and attorney-in-fact in a prior case—did not apply.

• Effect of Counsel's Appearance: The appearance of Atty. Bugarin did not constitute a valid waiver of summons or voluntary submission to jurisdiction by respondents. There was no proof that respondents authorized Atty. Bugarin to appear on their behalf. Only Caridad Trocino engaged his services; all pleadings requiring verification were signed solely by her, and she represented herself as the principal defendant. The trial court should have verified the extent of counsel's authority when the other defendants failed to appear at pre-trial and trial. The fact that one defendant signs a pleading does not make it binding on co-defendants.

• Validity of Judgment as to Caridad Trocino: The judgment remained valid and binding as to Caridad Trocino alone. She was personally served with summons, and the trial court had validly acquired jurisdiction over her person. She was estopped from questioning her own authority to enter into the sale. The transmission of rights and obligations from Jesus Trocino to his heirs occurred by operation of law through succession, and the annulment applied only to those heirs over whom jurisdiction was not acquired. Caridad Trocino's liability stood, but only in proportion to her share.

• Distinction Between Real Action, Personal Action, Action in personam, and Action in rem — A real action is one where the plaintiff seeks recovery of real property or affects title to or possession of real property, or for partition, condemnation, or foreclosure of a mortgage on real property. A personal action is one for recovery of personal property, enforcement of a contract, or recovery of damages. Separately, 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. A real action may at the same time be an action in personam and not necessarily an action in rem. Hernandez vs. Rural Bank of Lucena, Inc. applied. Here, the complaint for specific performance and/or rescission of a contract to sell real property was a real action but also an action in personam because it sought to enforce a personal obligation against the defendants.

• Requisites for Valid Substituted Service of Summons — Substituted service under Section 8, Rule 14 of the Rules of Court requires (1) that the fact of impossibility of personal service be explained in the proof of service, and (2) that the pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer's Return. Failure to do so invalidates all subsequent proceedings on jurisdictional grounds.

• Jurisdiction over Non-Resident Defendants in Actions in personam — When the defendant in an action in personam is a non-resident who does not voluntarily submit himself to the authority of the court, personal service of summons within the State is essential to the acquisition of jurisdiction over his person. This cannot be done if the defendant is not physically present in the country; the court cannot acquire jurisdiction and therefore cannot validly try and decide the case against him. The exception is where service on a resident spouse or representative who was attorney-in-fact in a prior related case may suffice, as in Gemperle vs. Schenker.

• Effect of Appearance Without Authority — The mere filing of an Answer by counsel purportedly on behalf of multiple defendants does not constitute voluntary appearance or waiver of summons where there is no proof that the absent defendants authorized such appearance. The trial court has a duty to verify the extent of counsel's authority, especially when co-defendants fail to appear at pre-trial. A pleading signed and verified by one defendant is not binding on co-defendants.

• "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. Hence, a real action may at the same time be an action in personam and not necessarily an action in rem."

• "Due process of law requires personal service to support a personal judgment, and, when the proceeding is strictly in personam brought to determine the personal rights and obligations of the parties, personal service within the state or a voluntary appearance in the case is essential to the acquisition of jurisdiction so as to constitute compliance with the constitutional requirement of due process."

• "In substituted service, it is mandated that the fact of impossibility of personal service should be explained in the proof of service. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer's Return. Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds."

• "While Caridad Trocino may have engaged the services of Atty. Bugarin, it did not necessarily mean that Atty. Bugarin also had the authority to represent the defendant heirs... The fact that a pleading is signed by one defendant does not necessarily mean that it is binding on a co-defendant."

• Asiavest Limited vs. Court of Appeals, G.R. No. 128803, September 25, 1998, 296 SCRA 539 — Cited for the rule that the nature of the action (in personam, in rem, or quasi in rem) determines the applicable mode of service of summons under Rule 14, and for the authority that the impossibility of personal service must be explained in the proof of service.

• Hernandez vs. Rural Bank of Lucena, Inc., G.R. No. L-29791, January 10, 1978, 81 SCRA 75 — Cited for the ruling that a real action (affecting title to real property) may at the same time be an action in personam, not necessarily an action in rem, distinguishing the classifications.

• Banco de Brasil vs. Court of Appeals, G.R. Nos. 121576-78, June 16, 2000, 333 SCRA 545 — Cited for the rule that in actions in personam, personal service on a non-resident defendant within the State is essential and cannot be accomplished if the defendant is not physically present in the country.

• Arcenas vs. Court of Appeals, G.R. No. 130401, December 4, 1998, 299 SCRA 733 — Cited for the requirement of personal service in actions in personam as essential to the acquisition of jurisdiction and compliance with due process.

• Madrigal vs. Court of Appeals, G.R. No. 129955, November 26, 1999, 319 SCRA 331 — Cited for the rule that the facts and circumstances showing impossibility of personal service must be stated in the proof of service; otherwise, subsequent proceedings are invalid for want of jurisdiction.

• Emnace vs. Court of Appeals, G.R. No. 126334, November 23, 2001, 370 SCRA 431 — Cited for the principle that upon death, the rights and obligations of a person are transmitted to his heirs by operation of law through succession.

• Section 7 (now Section 6), Rule 14, Rules of Court — Personal service of summons: "The summons shall be served by handing a copy thereof to the defendant in person or, if he refuses to receive it, by tendering it to him." Applied to hold that personal service is the primary mode for actions in personam.

• Section 8 (now Section 7), Rule 14, Rules of Court — Substituted service: Permits substituted service by leaving copies at the defendant's dwelling house or residence with a person of suitable age and discretion residing therein, or at the defendant's office or regular place of business with a competent person in charge, only upon showing of impossibility of personal service. Applied to invalidate the substituted service on Mariano Trocino due to the return's failure to state the impossibility of personal service.

• Section 5, Rule 14, Rules of Court — Alias summons: Provides that when a summons is returned without being served on any or all defendants, the clerk, on demand of the plaintiff, may issue an alias summons. Applied to note petitioners' failure to seek alias summons after defective service.

• Section 15, Rule 14, Rules of Court — Extraterritorial service: Governs service on non-resident defendants in actions in rem or quasi in rem, allowing personal service out of the country, publication, or any other manner the court deems sufficient. Held inapplicable because the action was one in personam.

Justices Quisumbing (Acting Chairman), Callejo, Sr., and Tinga concurred. Justice Puno (Chairman) was on leave.

N/A — No dissenting opinion was recorded; the decision was unanimous among the participating justices.