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    49 Biaco Vs Countryside Rural Bank

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    zane
    This case involved a judicial foreclosure proceeding filed by Philippine Countryside Rural Bank (PCRB) against Ernesto and Teresa Biaco due to unpaid loans. While the trial court had jurisdiction over the property securing the loans, it did not have jurisdiction over Teresa as summons was only served to Ernesto. The Supreme Court granted Teresa's petition, finding that while the trial court had jurisdiction over the property, it could not enforce personal liability against Teresa without first acquiring jurisdiction over her person through proper service of summons, which violated her right to due process. The trial court's judgment was annulled.

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    49 Biaco Vs Countryside Rural Bank

    Uploaded by

    zane
    155 views2 pages
    This case involved a judicial foreclosure proceeding filed by Philippine Countryside Rural Bank (PCRB) against Ernesto and Teresa Biaco due to unpaid loans. While the trial court had jurisdiction over the property securing the loans, it did not have jurisdiction over Teresa as summons was only served to Ernesto. The Supreme Court granted Teresa's petition, finding that while the trial court had jurisdiction over the property, it could not enforce personal liability against Teresa without first acquiring jurisdiction over her person through proper service of summons, which violated her right to due process. The trial court's judgment was annulled.

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    49 Biaco vs Countryside Rural Bank

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    This case involved a judicial foreclosure proceeding filed by Philippine Countryside Rural Bank (PCRB) against Ernesto and Teresa Biaco due to unpaid loans. While the trial court had jurisdiction over the property securing the loans, it did not have jurisdiction over Teresa as summons was only served to Ernesto. The Supreme Court granted Teresa's petition, finding that while the trial court had jurisdiction over the property, it could not enforce personal liability against Teresa without first acquiring jurisdiction over her person through proper service of summons, which violated her right to due process. The trial court's judgment was annulled.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    155 views2 pages

    49 Biaco Vs Countryside Rural Bank

    Uploaded by

    zane
    This case involved a judicial foreclosure proceeding filed by Philippine Countryside Rural Bank (PCRB) against Ernesto and Teresa Biaco due to unpaid loans. While the trial court had jurisdiction over the property securing the loans, it did not have jurisdiction over Teresa as summons was only served to Ernesto. The Supreme Court granted Teresa's petition, finding that while the trial court had jurisdiction over the property, it could not enforce personal liability against Teresa without first acquiring jurisdiction over her person through proper service of summons, which violated her right to due process. The trial court's judgment was annulled.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Biaco vs Countryside Rural Bank

    G.R. No. 161417


    February 8, 2007

    Tinga, J:

    Facts:
    Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves Biaco. While employed in the
    Philippine Countryside Rural Bank (PCRB) as branch manager, Ernesto obtained several loans
    from the respondent bank as evidenced by the several promissory notes secured by OCT No.
    P-14423 in the name of Ernesto Biaco and petitioner. When Ernesto failed to settle the above-
    mentioned loans on its due date, respondent bank through counsel sent him a written demand
    which failed. Respondent bank filed a complaint for foreclosure of mortgage against the
    spouses Ernesto and Teresa Biaco before the RTC of Misamis Oriental. Summons was served
    to the spouses Biaco through Ernesto at his office (Export and Industry Bank) located at
    Jofelmor Bldg., Mortola Street, Cagayan de Oro City. Ernesto failed to file an answer and the
    spouses Biaco were declared in default upon motion of the respondent bank. The RTC
    rendered judgement in favor of respondent bank. By virtue of the writ of execution issued by the
    trial court, the mortgaged property was sold at public auction in favor of the respondent bank.
    When the property was insufficient to pay Ernesto Biaco’s obligation, the respondent bank filed
    an "ex parte motion for judgment" praying for the issuance of a writ of execution against the
    other properties of the spouses Biaco for the full settlement of the remaining obligation which
    was granted. Petitioner filed an action for the annulment of the RTC decision before the CA
    citing extrinsic fraud and lack of jurisdiction over her person which was denied as well as her
    Motion for Reconsideration.
    Issues:
    Whether or not jurisdiction was acquired over petitioner
    Held:
    The Court granted the petition. An action for judicial foreclosure is an action quasi in rem. An
    action quasi in rem is one wherein an individual is named as defendant and the purpose of the
    proceeding is to subject his interest therein to the obligation or lien burdening the property.
    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 (1) by the seizure of the property under legal
    process, whereby it is brought into actual custody of the law; or (2) as a result of the institution
    of legal proceedings, in which the power of the court is recognized and made effective.
    In this case, the judicial foreclosure proceeding instituted by respondent PCRB undoubtedly
    vested the trial court with jurisdiction over the res. Nonetheless, summons must be served upon
    the defendant not for the purpose of vesting the court with jurisdiction but merely for satisfying
    the due process requirements.
    While the trial court acquired jurisdiction over the res, its jurisdiction is limited to a rendition of
    judgment on the res. It cannot extend its jurisdiction beyond the res and issue a judgment
    enforcing petitioner’s personal liability. In doing so without first having acquired jurisdiction over
    the person of petitioner, as it did, the trial court violated her constitutional right to due process,
    warranting the annulment of the judgment rendered in the case.

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