CITIZENS’ SURETY v.
MELENCIO-HERRERA (Justin) any losses, costs and expenses which it might sustain in connection with the
March 31, 1971 | Reyes, J.B.L., J | Rule 1 - General Provisions (In Personam)
Petitioner: CITIZENS’ SURETY & INSURANCE COMPANY, INC.
Respondents: HON. JUDGE A. MELENCIO-HERRERA, SANTIAGO DACANAY, and
JOSEFINA DACANAY
SUMMARY: Santiago Dacanay requested from Citizens’ Surety & Insurance Company to
issue 2 Surety Bonds (No. 4942 & 4944). The bonds were to guarantee payment of 2
separate promissory notes in favor of Gregorio Fajarco and Manufacturers Bank & Trust Co
respectively. Santiago and Josefina executed Indemnity Agreements to bind themselves
jointly and severally to indemnify Citizens’ Surety for any losses and other costs. Addition to
this, the two mortgaged a parcel of land in Baguio in favor of the Surety Company. The
promissory notes were not paid and hence the Surety Company had to pay Fajardo and the
Bank. The Dacanays also failed to reimburse the Surety company for the payments. The
Surety caused the extrajudicial foreclosure of the property and sought to recover other fees.
Judge Melencio-Herrera caused summons to be made in a publication (Philippines Herald).
The Dacanays failed to appear within the period as required in the summons. Judge
Melencio-Herrera dismissed the case due to the failure of the Dacanays to appear and such
case being in personam. Issue: W/N the court has jurisdiction over the case- NO. The court
cannot acquire jurisdiction. The Court could not validly acquire jurisdiction on a non-
appearing defendant, absent a personal service of summons within the forum. The
court held in Pantaleon v. Asuncion: “in an action strictly in personam, like the one at bar,
personal service of summons, within the forum. is essential to the acquisition of jurisdiction
over the person of the defendant, who does not voluntarily submit himself to the authority of
the court. In other words, summons by publication cannot — consistently with the due
process clause in the Bill of Rights — confer upon the court jurisdiction over said
defendants.” The proper recourse for a creditor is to locate properties, real or personal, of
the resident defendant debtor with unknown address and cause them to be attached under
Rule 57, section 1(f). The attachment converts the action into a proceeding in rem or quasi in
rem and the summons by publication may then accordingly be deemed valid and effective.
DOCTRINE: Being in personam, the Court could not validly acquire jurisdiction on a non-
appearing defendant, absent a personal service of summons within the forum. “in an action
strictly in personam, like the one at bar, personal service of summons, within the forum. is
essential to the acquisition of jurisdiction over the person of the defendant, who does not
voluntarily submit himself to the authority of the court.”
FACTS:
1. Citizens’ Surety & Insurance Company, Inc. seeks review of an order of respondent
Judge, entitled "Citizens’ Surety & Insurance Co., Inc. v. Santiago Dacanay and
Josefina Dacanay," dismissing the complaint for lack of proper service of
summons upon defendants.
2. Citizens’ Surety had filed its complaint in the Court of First Instance of Manila,
alleging that Santiago Dacanay requested Citizens’ Surety Company to issue Surety On whether the Petitioner has any other recourse over the defendants - YES
Bonds Nos. 4942 (to guarantee payment of a P5000 promissory note executed by the 1. The proper recourse for a creditor is to locate properties, real or personal, of the
defendant to Gregorio Fajardo) and 4944(to guarantee payment of another P5000
promissory note to Manufacturers Bank & Trust Co).
3. In consideration of said bonds, Santiago and Josefina Dacanay executed Indemnity 2. The attachment converts the action into a proceeding in rem or quasi in rem and the
Agreements, binding themselves jointly and severally to indemnify Citizens’ Surety for
issuance of the bonds (interest at 12% per annum) As additional security, the
Dacanays mortgaged to Citizens’ Surety a parcel of land in Baguio City.
4. The promissory notes were not paid and as a result, plaintiff Surety was compelled to
pay P5,000.00 to Gregorio Fajardo and P4,081.69 to the Manufacturers’ Bank
5. Since the Dacanays failed to reimburse the Surety for the payments, the Surety
caused the extrajudicial foreclosure of the mortgage to pay its claim of P12,941.69
representing its payments, interest and stipulated liquidated damages. Citizens’
Surety sought to recover from defendants Dacanay, plus 10% thereof as attorneys’
fees, and the costs.
6. At the request of the Surety Company, Judge Melencio-Herrera caused summons to
be made by publication in the newspaper(Philippines Herald). But despite the
publication and deposit of a prepaid copy of the complaint at the Manila post office,
the Dacanays did not appear within the period of 60 days from last publication, as
required by the summons.
7. Petitioner’s Contention: The Surety Company then asked that defendants be
declared in default due to the failure to appear within the period as required by the
summons given by the Judge.
8. Judge Melencio-Herrera asked the Surety Company to show cause why the action
should not be dismissed, the suit being in personam and defendants not having
appeared.
9. Judge Melencio-Herrera dismissed the case, despite plaintiff Surety’s argument that
the summons by publication was sufficient and valid under section 16 of Rule 14 of
the Revised Rules of Court.
ISSUE/S:
1. MAIN - W/N the court has jurisdiction over the case- NO, the court cannot acquire
jurisdiction
2. W/N the petitioner has any other recourse over the defendants - YES
RATIO:
On whether the court can acquire jurisdiction over the case - NO
1. The Court is in favor of the decision of Judge Melencio-Herrera regarding the lack of
jurisdiction of the court over the defendants in the case. The Court could not validly
acquire jurisdiction on a non-appearing defendant, absent a personal service of
summons within the forum.
2. In Pantaleon v. Asunción, the court ruled that any judgment on a non-appearing
defendant would be in violation of due process:
"it is well-settled principle of Constitutional Law that, in an action strictly in personam, like
the one at bar, personal service of summons, within the forum. is essential to the
acquisition of jurisdiction over the person of the defendant, who does not voluntarily
submit himself to the authority of the court. In other words, summons by publication
cannot — consistently with the due process clause in the Bill of Rights — confer upon
the court jurisdiction over said defendants.
resident defendant debtor with unknown address and cause them to be attached
under Rule 57, section 1(f).
summons by publication may then accordingly be deemed valid and effective.
OTHER NOTES:
1. Debtors who abscond and conceal themselves are also quite adept at concealing
their properties, the dismissal of the case below by Judge Melencio-Herrera should
be set aside until petitioner as plaintiff succeeds in determining the whereabouts of
the defendants’ person or properties and causes valid summons to be served
personally or by publication as the case may be.
2. Prescription - The tolling of the period of prescription for as long as the debtor
remains in hiding would properly be a matter of court records and he cannot emerge
after a sufficient lapse of time from the dismissal of the case to profit from his own
misdeed and claim prescription of his just debt.

DISPOSITION:
WHEREFORE, the order of dismissal of the case issued by the Court below is hereby set
aside, and in the interest of justice, the proceedings are ordered suspended, to be held pending
until the plaintiff petitioner succeeds in ascertaining the whereabouts of the defendants and/or
locating properties of the same, to enable proper summons to be issued conformably to this
Opinion. No costs.