Before us is a petition for review on certiorari of the Decision1 [Penned by Associate Justice Jainal D. Rasul and concurred in by Associate Justices Segundino G. Chua and Consuelo Ynares-Santiago, now Associate Justice of the Supreme Court, in CA-G.R. S.P. Nos. 24669, 28387 & 29317, Rollo, pp. 33-47.] and the Resolution2 [Id., pp. 49-53.] of the Court of Appeals3 [Former Special Eighth Division.] dated July 19, 1993 and August 15, 1995, respectively, which reinstated the entire Decision4 [Penned by Judge Arsenio M. Gonong, Civil Case No. 89-51451, Records, Vol. 2, pp. 517-528.] dated February 18, 1991 of the Regional Trial Court of Manila, Branch 8, holding, among others, petitioner Banco do Brasil liable to private respondent Cesar Urbino, Sr. for damages amounting to $300,000.00.5 [The Appellate Court erroneously declared in its decision that the amount of P300,000.00 was awarded by the trial court, Rollo, p. 36.]

At the outset, let us state that this case should have been consolidated with the recently decided case of Vlason Enterprises Corporation v. Court of Appeals and Duraproof Services, represented by its General Manager, Cesar Urbino Sr.6 [G.R. Nos. 121662-64, July 6, 1999, Third Division, penned by Associate Justice Artemio V. Panganiban and concurred in by Associate Justices Jose C. Vitug, Fidel P. Purisima, and Minerva P. Gonzaga-Reyes.], for these two (2) cases involved the same material antecedents, though the main issue proffered in the present petition vary with the Vlason case.

The material antecedents, as quoted from the Vlason7 [Decision in G.R. Nos. 121662-64, pp. 3-13.] case, are:

x x x

On April 10, 1991, petitioner Banco do Brasil filed, by special appearance, an Urgent Motion to Vacate Judgement and to Dismiss Case38 [Rollo, pp. 67-73.] on the ground that the February 18, 1991 Decision of the trial court is void with respect to it for having been rendered without validly acquiring jurisdiction over the person of Banco do Brasil. Petitioner subsequently amended its petition39 [Rollo, pp. 74-80.] to specifically aver that its special appearance is solely for the purpose of questioning the Court’s exercise of personal jurisdiction.

On May 20, 1991, the trial court issued an Order40 [Rollo, pp. 81-82.] acting favorably on petitioner’s motion and set aside as against petitioner the decision dated February 18, 1991 for having been rendered without jurisdiction over Banco do Brasil’s person. Private respondent sought reconsideration41 [Records, Vol. 3, pp. 103-105.] of the Order dated May 20, 1991. However, the trial court in an Order42 [Rollo, p. 83.] dated June 21, 1991 denied said motion.

Meanwhile, a certiorari petition43 [Docketed as CA-G.R. SP No. 24669.] was filed by private respondent before public respondent Court of Appeals seeking to nullify the cease and desist Order dated April 5, 1991 issued by Judge Arsenio M. Gonong. Two (2) more separate petitions for certiorari were subsequently filed by private respondent. The second petition44 [Docketed as CA-G.R. SP No. 28387.] sought to nullify the Order45 [Penned by Judge Bernardo P. Pardo, then Executive Judge, and now Associate Justice of the Supreme Court.] dated June 26, 1992 setting aside the Deputy Sheriff’s return dated April 1, 1991 as well as the certificate of sale issued by Deputy Sheriff Camañgon. The third petition46 [Docketed as CA-G.R. SP No. 29317.] sought to nullify the Order dated October 5, 1992 of the Court of Tax Appeals directing the Commissioner of Customs to place Bureau of Customs and PNP officers and guards to secure the M/V Star Ace and its cargoes, make inventory of the goods stored in the premises as indicated to belong to the private respondent. Likewise challenged was the Order dated August 17, 1992 authorizing the sale of M/V Star Ace and its cargoes.

These three (3) petitions were consolidated and on July 19, 1993, the appellate court rendered its Decision47 [See Note 1, supra.] granting private respondent’s petitions, thereby nullifying and setting aside the disputed orders and effectively "giving way to the entire [decision dated February 18, 1991 of the x x x Regional Trial Court of Manila, Branch 8, in Civil Case No. 89-51451 which remains valid, final and executory, if not yet wholly executed."48 [Rollo, p. 46.]

Private respondent Urbino, Vlason Enterprises and petitioner Banco do Brasil filed separate motions for reconsideration. For its part, petitioner Banco do Brasil sought reconsideration, insofar as its liability for damages, on the ground that there was no valid service of summons as service was on the wrong party – the ambassador of Brazil. Hence, it argued, the trial court did not acquire jurisdiction over petitioner Banco do Brasil.49 [Rollo, pp. 107.] Nonetheless, the appellate court denied the motions for reconsideration in its Resolution50 [See Note 2, supra.] dated August 15, 1995.

Hence, the instant petition.

Petitioner Banco do Brasil takes exception to the appellate court’s declaration that the suit below is in rem, not in personam,51 [Rollo, pp. 19-21.] thus, service of summons by publication was sufficient for the court to acquire jurisdiction over the person of petitioner Banco do Brasil, and thereby liable to private respondent Cesar Urbino for damages claimed, amounting to $300,000.00. Petitioner further challenges the finding that the February 18, 1991 decision of the trial court was already final and thus, cannot be modified or assailed.52 [Rollo, p. 22-23.]

Petitioner avers that the action filed against it is an action for damages, as such it is an action in personam which requires personal service of summons be made upon it for the court to acquire jurisdiction over it. However, inasmuch as petitioner Banco do Brasil is a non-resident foreign corporation, not engaged in business in the Philippines, unless it has property located in the Philippines which may be attached to convert the action into an action in rem, the court cannot acquire jurisdiction over it in respect of an action in personam.

The petition bears merit, thus the same should be as it is hereby granted.

First. When the defendant is a nonresident and he is not found in the country, summons may be served extraterritorially in accordance with Rule 14, Section 1753 [Section 17. Extraterritorial service – When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which, is property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached in the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer.] of the Rules of Court. Under this provision, there are only four (4) instances when extraterritorial service of summons is proper, namely: "(1) when the action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or interest, actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the defendant non-resident’s property has been attached within the Philippines."54 [Ibid., now Sec. 15 of the 1997 Rules of Civil Procedure.] In these instances, service of summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient.55 [Ibid..]

Clear from the foregoing, extrajudicial service of summons apply only where the action is in rem, an action against the thing itself instead of against the person, or in an action quasi in rem, where an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or loan burdening the property. This is so inasmuch as, in in rem and quasi in rem actions, 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.56 [Asiavest Limited v. Court of Appeals, 296 SCRA 539, 552-554 [1998]; Valmonte v. Court of Appeals, 252 SCRA 92, 99-102 [1996].]

However, where the action is in personam, one brought against a person on the basis of his personal liability, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. When the defendant is a non-resident, personal service of summons within the state is essential to the acquisition of jurisdiction over the person.57 [The Dial Corporation v. Soriano, 161 SCRA 737, 743 [1988] citing Boudard v. Tait, 67 Phil 170, 174 [1939].] This cannot be done, however, if the defendant is not physically present in the country, and thus, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him.58 [Asiavest Limited v. Court of Appeals, supra. at 554.]

In the instant case, private respondent’s suit against petitioner is premised on petitioner’s being one of the claimants of the subject vessel M/V Star Ace.59 [Records, Vol. 1, pp. 128-129.] Thus, it can be said that private respondent initially sought only to exclude petitioner from claiming interest over the subject vessel M/V Star Ace. However, private respondent testified during the presentation of evidence that, for being a nuisance defendant, petitioner caused irreparable damage to private respondent in the amount of $300,000.00.60 [Records, Vol. 2, p. 567.] Therefore, while the action is in rem, by claiming damages, the relief demanded went beyond the res and sought a relief totally alien to the action.

It must be stressed that any relief granted in rem or quasi in rem actions must be confined to the res, and the court cannot lawfully render a personal judgment against the defendant.61 [Villareal v. Court of Appeals, 295 SCRA 511, 525 [1998].] Clearly, the publication of summons effected by private respondent is invalid and ineffective for the trial court to acquire jurisdiction over the person of petitioner, since by seeking to recover damages from petitioner for the alleged commission of an injury to his person or property62 [The Dial Corporation v. Soriano, supra. at 742 citing Hernandez v. Development Bank of the Phil., 71 SCRA 290, 292-293 [1976].] caused by petitioner’s being a nuisance defendant, private respondent’s action became in personam. Bearing in mind the in personam nature of the action, personal or, if not possible, substituted service of summons on petitioner, and not extraterritorial service, is necessary to confer jurisdiction over the person of petitioner and validly hold it liable to private respondent for damages. Thus, the trial court had no jurisdiction to award damages amounting to $300,000.00 in favor of private respondent and as against herein petitioner.

Second. We settled the issue of finality of the trial court’s decision dated February 18, 1991 in the Vlason case, wherein we stated that, considering the admiralty case involved multiple defendants, "each defendant had a different period within which to appeal, depending on the date of receipt of decision."63 [Decision in G.R. Nos. 121662-64, p. 27.] Only upon the lapse of the reglementary period to appeal, with no appeal perfected within such period, does the decision become final and executory.64 [Ibid.]

In the case of petitioner, its Motion to Vacate Judgment and to Dismiss Case was filed on April 10, 1991, only six (6) days after it learned of the existence of the case upon being informed by the Embassy of the Federative Republic of Brazil in the Philippines, on April 4, 1991, of the February 18, 1991 decision.65 [Rollo, pp. 67-80.] Thus, in the absence of any evidence on the date of receipt of decision, other than the alleged April 4, 1991 date when petitioner learned of the decision, the February 18, 1991 decision of the trial court cannot be said to have attained finality as regards the petitioner.

WHEREFORE, the subject petition is hereby GRANTED. The Decision and the Resolution of the Court of Appeals dated July 19, 1993 and August 15, 1995, respectively, in CA-G.R. SP Nos. 24669, 28387 and 29317 are hereby REVERSED and SET ASIDE insofar as they affect petitioner Banco do Brasil. The Order dated May 20, 1991 of the Regional Trial Court of Manila, Branch 8 in Civil Case No. 89-51451 is REINSTATED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.