5. Tradition Asia Pacific v.
Moya (DE GUZMAN) and is not found in the Philippines, or on whom summons may be served by
December 13, 2017 | No Ponente. It’s a Notice | Rule 57- Purpose of a Writ of
Preliminary Attachment
PETITIONER: Tradition Asia Pacific Pte. Ltd.
RESPONDENTS: Hon. Encarnacion Jaja G. Moya, Presiding Judge of the RTC
Makati, Branch 146, and Tullet Prebon [Philippines], Inc.
SUMMARY:
Tradition Asia (Petitioner) is a Singaporean corporation. It established a
subsidiary in the Philippines to expand its business, known as Tradition Financial
Services Philippines, Inc. (Tradition-PH). Tullet Prebon [Philippines] Inc.
(Tullet-PH/Respondent) is a domestic corporation. The latter instituted in Makati
RTC a complaint for damages with prayer for the issuance of preliminary
attachment (among other provisional remedies) of Tradition Asia’s properties in
the Philippines, particularly its shares of stock in Tradition-PH.
Prior to the attachment of the said properties, Tullet-PH filed for the
extraterritorial service of summons upon Tradition Asia in Singapore. This was
granted and complied with, eventually leading to Makati RTC’s issuance of the
writ of attachment, which was implemented two days later.
Tradition Asia appealed in the CA, but the latter denied. It now appeals before
the SC arguing that: a) the complaint for damages against it is an action in
personam – consequently, jurisdiction over its person can only be acquired
through personal or substituted service; and b) the failure of Tullet-PH to attach
Tradition Asia’s properties prior to the extraterritorial service of summons is fatal
to the RTC’s acquisition of jurisdiction over it.
Did CA err in ruling that Makati RTC acquired jurisdiction over the
action due to the attachment of Tradition Asia’s shares of stocks in Tradition-
PH? - NO
While the complaint of damages is indeed an action in personam, which
jurisdiction is acquired either by personal or substituted services, a Philippine
court may still try a case against a defendant which is not found nor does reside in
the country by converting the action into a proceeding in rem or quasi in rem by
attaching the property to the defendant.
The seizure of property under legal process partakes a writ of preliminary
attachment, which may issue in an action against a party who does not reside
publication (Rule 57, Sec. 1[f]).
Here, the attachment of the shares of Tradition Asia in Tradition-PH was
clearly resorted to in order to vest trial court with jurisdiction over the res.
Although the extraterritorial service and publication of summons was resorted to
prior to the actual attachment of Tradition Asia’s property, jurisdiction over the
action had already been acquired by the trial court upon the actual implementation
of the writ of preliminary attachment.
DOCTRINE:
Jurisdiction over the res is acquired either a) by the seizure of the property under
legal process, whereby it is brought into actual custody of the law; or b) as a result
of the institution of legal proceedings, in which the power of the court is
recognized and made effective. Letter “a” partakes a writ of preliminary
attachment.
FACTS:
1. Tradition Asia Pacific Pte. Ltd. (Petitioner/Tradition Asia) is a corporation
operating under the laws of Singapore. It is part of one of the largest Inter-
dealer Brokers (IDB) in the world, the Compangie Financiere Tradition
(Tradition Goup). The latter serves an an intermediary that facilitates
transactions between brokers/dealers and dealer banks in the market.
2. Tradition Group used to cater to the Philippine market only through Tradition
Asia. However, the former had the objective of expanding and diversifying its
business in Asia, so it established a subsidiary in the Philippines known as
Tradition Financial Services Philippines, Inc. (Tradition-PH).
3. On the other hand, Tullet Prebon, [Philippines] Inc. (Private Respondent/
Tullet-PH) is a domestic corporation duly organized under our laws. It belongs
to the Tullet Prebon Plc Group, one of the competitors of the Tradition Group
in the global market.
4. In February 2009, Tullet-PH filed a complaint for damages, with prayer for
the issuance of preliminary attachment, TRO, and/or writ of preliminary
injunction against Tradition Asia, Tradition-PH, Tradition Asia’s Chief
Financial Officer Lent, Tradition Financial Services, LTF., London’s
(Tradition London) employee Schulze, and Tullet-PH’s former high-ranking
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 employees and/or members of the board (namely: Villalon, Chuidian,
Harvey).
Since Tradition Asia is not found nor does reside in the Philippines,
Tullet-PH prayed for the attachment of the former’s properties in the
Philippines.
5. April 16, 2009, Makati RTC issued an Order granting Tullet-PH’s application
for the issuance of a writ of preliminary attachment, and directed the
attachment of 139,995 shares of stock of Tradition Asia in Tradition-PH.
However, despite these developments, no writ of attachment was
issued by the RTC, neither was there any attachment made of
Tradition Asia’s properties in the Philippines.
6. Tullet-PH filed an Ex-Parte Motion for Leave of Court for Extraterritorial
Service of Summons, praying for the service of summons upon Tradition Asia
thru publication or registered mail. This was granted.
It later manifested its compliance as shown by its 1) Affidavit of
Publication of the Chief Editor of The Manila Times stating the
publication of the summons and complaint; and 2) Affidavit of
Service by Registered Mail, stating that the Order, Summons, and
Complaint were deposited in the post office of Tradition Asia’s last
known address at Singapore.
7. Tullet-PH then moved to declare Tradition Asia in default for failing to file its
answer to the complaint despite extraterritorial service.
8. As response, Tradition Asia filed its Special Appearance and Opposition,
alleging the impropriety of service of summons upon it because not one of its
properties located in the Philippines was attached at the time of the alleged
service of summons.
9. Makati RTC issued a writ of attachment on March 16, 2010, which was
implemented two days after.
It denied both the motion to dismiss filed by Tradition Asia and
Tullet-PH’ motion to declare defendants in default.
Tradition Asia’s MR was denied, so it appealed with the CA via Rule
65.
10. CA dismissed Tradition Asia’s appeal.
It conceded that since the instant case for damages is an action in
personam, the summons must be served by personal or substituted
service to Tradition Asia, otherwise, it will not acquire jurisdiction
over it.
However, since Tradition Asia does not reside nor is found in the
Philippines (hence, personal and substituted service cannot be
effected), Tullet-PH’ remedy is to convert the action into a
proceeding in rem or quasi in rem by attaching the former’s
properties in the Philippines.
Thereafter, the service of summons, either by publication coupled
with sending a copy of the court’s orders to the last known address
by registered mail will be for the purpose of complying with due
process requirements not for acquiring jurisdiction.
The case was properly converted into an in rem proceeding since
Tradition Asia’s properties in the Philippines had already been
attached.
11. With its subsequent MR being denied, Tradition Asia filed this Rule 45
petition arguing that –
The complaint for damages against it partakes of the nature of an
action in personam. Consequently, jurisdiction over its person can
only be acquired through personal or substituted service; and
That the failure of the respondent to actually attach its properties prior
to the extraterritorial service of summons is fatal to the RTC’s
acquisition of jurisdiction over it.
ISSUE: Did CA err in ruling that Makati RTC acquired jurisdiction over the action due
to the attachment of Tradition Asia’s shares of stocks in Tradition-PH? - NO
RATIO: Wherefore, petition is denied.
1. The Makati RTC has acquired jurisdiction over the res; therefore,
jurisdiction over the person of the petitioner is no longer required.
a. The complaint for damages is indeed in the nature of an action in
personam – that is, one brought against a person on the basis of personal
liability.
As such, jurisdiction over Tradition Asia is necessary for the
court to validly try and decide the case. Such jurisdiction in in
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 personam cases is acquired through personal service, or if not
possible, substituted service.
b. Philippine courts cannot try any case against a defendant who does not
reside and is not found in the Philippines because of the impossibility
of acquiring jurisdiction over its person, unless it voluntarily appears.
In such cases, the remedy of plaintiff is to convert the action
into a proceeding in rem or quasi in rem by attaching the
property to the defendant.
c. In a proceeding in rem or quasi in rem, jurisdiction over the person of
the defendant is not a prerequisite to confer jurisdiction on the court,
provided that the court acquires jurisdiction over the res.
Jurisdiction over the res is acquired either:
i. by the seizure of the property under legal process,
whereby it is brought into actual custody of the law;
or
ii. as a result of the institution of legal proceedings, in
which the power of the court is recognized and made
effective.
d. The seizure of property under legal process contemplated in the
foregoing partakes a writ of preliminary attachment.
Rule 57, Section 1. Grounds upon which attachment may issue. — At the
commencement of the action or at any time before entry of judgment, a plaintiff
or any proper party may have the property of the adverse party attached as security
for the satisfaction of any judgment that may be recovered in the following cases:
xxx
(f) In an action against a party who does not reside and is not found in the
Philippines, or on whom summons may be served by publication.
e. While the attachment of a defendant’s property is sufficient to confer
the trial court with jurisdiction over the action, summons must still be
served for the purpose of fair play or due process.
This is so the defendant may be informed of the pendency of
the action against it and that it could take steps to protect its
interest when its property in the Philippines or in which it has
an interest is subjected to a judgment against its favor.
f. [Application] Here, the attachment of the shares of Tradition Asia in
Tradition-PH was clearly resorted to in order to vest trial court with
jurisdiction over the res. Although the extraterritorial service and
publication of summons was resorted to prior to the actual attachment
of Tradition Asia’s property, jurisdiction over the action had already
been acquired by the trial court upon the actual implementation of the
writ of preliminary attachment on March 18, 2010. (See Fact No. 9)
2. However, the extraterritorial service of summons is improper.
a. There are only 4 instances when extraterritorial service of summons is
proper (Velayo-Fong v. Sps. Velayo): when the
i. action affects the personal status of the plaintiffs;
ii. defendant claims a lien or interest, actual or contingent;
iii. relief demanded in such action consists, wholly or in part, in
excluding the defendant from any interest in property located
in the Philippines; and
iv. defendant’s property has been attached within the Philippines.
In these instances, service of summons may be effected by:
i. personal service out of the country, with leave of court;
ii. publication, also with leave of court; or
iii. any other manner the court may deem sufficient.
b. [Application] The instant case does not fall into any of the 4 instances.
The extraterritorial service of summons made prior to the actual
attachment of Tradition Asia’s property did not serve to vest
jurisdiction to the trial court over it nor the res, since the operative
act that conferred the trial court with jurisdiction over the action
was the actual attachment of the property – which act converted the
action into an action quasi in rem.
c. Regardless of the nature of the action, proper service of summons is
imperative, and a decision rendered without proper service of summons
suffers a defect in jurisdiction.
[Application] Tradition Asia was not properly and formally
notified of the proceedings due to the improper service of
summons against it.
(-end)