EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellee, vs. VICENTE PALANCA, administrator of the estate of Engracio Palanca Tanquinyeng, defendant-appellant.1918 March 26

EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellee, vs. VICENTE PALANCA, administrator of the estate of Engracio Palanca Tanquinyeng, defendant-appellant.1918 March 26

FACTS: Engracio Palanca Tanquinyeng mortgaged various parcels of his lands in Manila to El Banco Espanol-Filipino as security for the debt he owed to the bank, which was executed on June 16, 1906. After the execution of the mortgage, he returned to China where he later died on January 29, 1910. Before his death, however, the bank instituted an action to foreclose the mortgage on the subject properties on March 31, 1908. Since Tanquinyeng was a non-resident, an order for publication of the foreclosure proceeding was obtained by the bank pursuant to the Code of Civil Procedure at that time. The court also directed the clerk of court to send a copy of the summons and complaint to Tanquinyeng. However, it was not clear or shown if the clerk complied with the order. Nevertheless, after the publication of the proceeding in the newspaper, the defendant Tanquinyeng did not appear, so judgment was rendered in favor of the bank by default. Consequently, the court ordered the sale of the property, and during which, the bank acquired the same.

            But, after seven years from the time of the confirmation of the sale, Vicente Palanca, the administrator of Tanquinyeng's estate, filed a motion to set aside the order of default and judgment rendered against Tanquinyeng, and to vacate all the proceedings subsequent  thereto. Palanca filed his action on the ground that the court had never acquired jurisdiction over the original defendant Tanquinyeng or over the subject of the action, hence, the order of default and the judgment rendered thereon should be declared void.

ISSUE: WON the lower court acquired the necessary jurisdiction over the defendant to enable it to proceed with the foreclosure of the mortgage.

RULING: Yes, jurisdiction was acquired by the court. The action to foreclose a morgage is a quasi in rem proceeeding. In this kind of action, an individual is named as a defendant but its object is to subject that person's interest in a property to a corresponding lien or obligation or an action pertaining to the status of a person. Moreover, the decision is binding only between the parties. Further, jurisdiction over the person of the defendant is not essential because the jurisdiction of the court is derived from the power which it possesses over the property, and the relief granted by the court is limited to such as can be enforced against the property itself.