GR 121576; (June, 2000) (Digest)
G.R. Nos. 121576-78; June 16, 2000
BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS, HON. ARSENIO M. GONONG, and CESAR S. URBINO, SR., respondents.
FACTS
The case originated from the seizure of the vessel M/V Star Ace and its cargo by the Bureau of Customs. Private respondent Cesar Urbino, Sr., representing Duraproof Services, entered into a salvage agreement with the vessel’s representative. To enforce a claimed salvor’s lien, Duraproof filed a Petition for Certiorari, Prohibition, and Mandamus in the Regional Trial Court (RTC) against several parties, including petitioner Banco do Brasil. Summons was served on the bank’s alleged representative, Atty. Joseph Capuyan, who entered a special appearance solely to deny that he represented Banco do Brasil. The RTC later granted Duraproof’s motion for leave to serve summons by publication on defendants without local representatives.
Despite the bank’s consistent denial of representation and lack of voluntary appearance, the RTC, in subsequent proceedings, declared several parties in default and allowed Duraproof to present evidence ex parte. The RTC eventually rendered a decision holding Banco do Brasil solidarily liable for damages. The Court of Appeals reinstated this RTC decision after it was initially set aside by another branch upon a petition for certiorari.
ISSUE
Whether the Regional Trial Court acquired jurisdiction over the person of petitioner Banco do Brasil.
RULING
No, the RTC did not acquire jurisdiction over Banco do Brasil. Jurisdiction over a defendant is acquired either by valid service of summons or by the defendant’s voluntary appearance. The records conclusively show that Atty. Joseph Capuyan entered a special appearance only to deny that he represented the bank. A special appearance for the specific purpose of challenging the court’s jurisdiction is not equivalent to voluntary appearance. Consequently, the service of summons through him was invalid and ineffective.
Furthermore, the subsequent order for summons by publication did not cure the jurisdictional defect. Service by publication is a mode of extraterritorial service under the Rules of Court, which requires prior leave of court. The Supreme Court found that the RTC granted leave for publication summons only in an order dated February 23, 1990. However, the motion to declare Banco do Brasil in default was filed months earlier, on August 24, 1990, and the ex parte presentation of evidence occurred before the publication was even effected. Therefore, the proceedings against the bank, including the default order and the ex parte judgment, were null and void for lack of jurisdiction. The decision of the Court of Appeals was reversed and set aside.