EL BANCO ESPAÑOL FILIPINO, PLAINTIFF AND APPELLEE, VS. VICENTE PALANCA, ADMINISTRATOR OF THE ESTATE OF ENGRACIO PALANCA TANQUINYENG, DEFENDANT AND APPELLANT.

This action was instituted upon March 31, 1908, by “El Banco
Español-Filipino” to foreclose a mortgage upon various parcels of real property
situated in the city of Manila. The mortgage in question is dated June 16, 1906,
and was executed by the original defendant herein, Engracio Palanca Tanquinyeng
y Limquingco, as security for a debt owing by him to the bank. Upon March 31,
1906, the debt amounted to P218,294.10 and was drawing interest at the rate of 8
per centum per annum, payable at the end of each quarter. It appears that the
parties to this mortgage at that time estimated the value of the property in
question at P292,558, which was about P75,000 in excess of the indebtedness.
After the execution of this instrument by the mortgagor, he returned to China,
which appears to have been his native country; and he there died, upon January
29, 1910, without again returning to the Philippine Islands.

As the defendant was a nonresident at the time of the institution of the
present action, it was necessary for the plaintiff in the foreclosure proceeding
to give notice to the defendant by publication pursuant to section 399 of the
Code of Civil Procedure. An order for publication was accordingly obtained from
the court, and publication was made in due form in a newspaper of the city of
Manila. At the same time that the order of the court was entered directing that
publication should be made in a newspaper, the court further directed that the
clerk of the court should deposit in the post office in a stamped envelope a
copy of the summons and complaint directed to the defendant at his last place of
residence, to wit, the city of Amoy, in the Empire of China. This order was made
pursuant to the following provision contained in section 399 of the Code of
Civil Procedure:

“In case of publication, where the residence of a nonresident or absent
defendant is known, the judge must direct a copy of the summons and complaint to
be forthwith, deposited by the clerk in the post-office, postage prepaid,
directed to the person to be served, at his place of residence.”

Whether the clerk complied with this order, does not affirmatively appear.
There is, however, among the papers pertaining to this case, an affidavit, dated
April 4, 1908, signed by Bernardo Chan y Garcia, an employee of the attorneys
for the bank, showing that upon that date he had deposited in the Manila
post-office a registered letter, addressed to Engracio Palanca Tanquinyeng, at
Manila, containing copies of the complaint, the plaintiff’s affidavit, the
summons, and the order of the court directing publication as aforesaid. It
appears from the postmaster’s receipt that Bernardo probably used an envelope
obtained from the clerk’s office, as the receipt purports to show that the
letter emanated from said office.

The cause proceeded in usual course in the Court of First Instance; and the
defendant not having appeared, judgment was, upon July 2, 1908, taken against
him by default. Upon July 3, 1908, a decision was rendered in favor of the
plaintiff. In this decision it was recited that publication had been properly
made in a periodical, but nothing was said about notice having been given by
mail. The court, upon this occasion, found that the indebtedness of the
defendant amounted to P249,355.32, with interest from March 31, 1908.
Accordingly it was ordered that the defendant should, on or before July 6, 1908,
deliver said amount to the clerk of the court to be applied to the satisfaction
of the judgment, and it was declared that in case of the failure of the
defendant to satisfy the judgment within such period, the mortgage property
located in the city of Manila should be exposed to public sale. The payment
contemplated in said order was never made; and upon July 8, 1908, the court
ordered the sale of the property. The sale took place upon July 30, 1908, and
the property was bought in by the bank for the sum of P110,200. Upon August 7,
1908, this sale was confirmed by the court.

About seven years after the confirmation of this sale, or to be precise, upon
June 25, 1915, a motion was made in this cause by Vicente Palanca, as
administrator of the estate of the original defendant, Engracio Palanca
Tanquinyeng y Limquingco, wherein the applicant requested the court to set aside
the order of default of July 2, 1908, and the judgment rendered upon July 3,
1908, and to vacate all the proceedings subsequent thereto. The basis of this
application, as set forth in the motion itself, was that the order of default
and the judgment rendered thereon were void because the court had never acquired
jurisdiction over the defendant or over the subject of the action.

At the hearing in the court below the application to vacate the judgment was
denied, and from this action of the court Vicente Palanca, as administrator of
the estate of the original defendant, has appealed. No other feature of the case
is here under consideration than such as is related to the action of the court
upon said motion.

The case presents several questions of importance, which will be discussed in
what appears to be the sequence of most convenient development. In the first
part of this opinion we shall, for the purpose of argument, assume that the
clerk of the Court of First Instance did not obey the order of the court in the
matter of mailing the papers which he was directed to send to the defendant in
Amoy; and in this connection we shall consider, first, whether the court
acquired the necessary jurisdiction to enable it to proceed with the foreclosure
of the mortgage and, secondly, whether those proceedings were conducted in such
manner as to constitute due process of law.

The word “jurisdiction,” as applied to the faculty of exercising judicial
power, is used in several different, though related, senses since it may have
reference (1) to the authority of the court to entertain a particular kind of
action or to administer a particular kind of relief, or it may refer to the
power of the court over the parties, or (2) over the property which is the
subject to the litigation.

The sovereign authority which organizes a court determines the nature and
extent of its powers in general and thus fixes its competency or jurisdiction
with reference to the actions which it may entertain and the relief it may
grant.

Jurisdiction over the person is acquired by the voluntary appearance of a
party in court and his submission to its authority, or it is acquired by the
coercive power of legal process exerted over the person.

Jurisdiction over the property which is the subject of litigation may result
either from a seizure of the property under legal process, whereby it is brought
into the actual custody of the law, or it may result from the institution of
legal proceedings wherein, under special provisions of law, the power of the
court over the property is recognized and made effective. In the latter case the
property, though at all times within the potential power of the court, may never
be taken into actual custody at all. An illustration of the jurisdiction
acquired by actual seizure is found in attachment proceedings, where the
property is seized at the beginning of the action, or some subsequent stage of
its progress, and held to abide the final event of the litigation. An
illustration of what we term potential jurisdiction over the res, is
found in the proceeding to register the title of land under our system for the
registration of land. Here the court, without taking actual physical control
over the property assumes, at the instance of some person claiming to be owner,
to exercise a jurisdiction in rem over the property and to adjudicate the title
in favor of the petitioner against all the world.

In the terminology of American law the action to foreclose a mortgage is said
to be a proceeding quasi in rem, by which is expressed, the idea that
while it is not strictly speaking an action in rem yet it partakes of
that nature and is substantially such. The expression “action in rem”
is, in its narrow application, used only with reference to certain proceedings
in courts of admiralty wherein the property alone is treated as responsible for
the claim or obligation upon which the proceedings are based. The action quasi
in rem differs from the true action in rem in the circumstance that in
the former 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. All proceedings having for their sole object the sale or
other disposition of the property of the defendant, whether by attachment,
foreclosure, or other form of remedy, are in a general way thus designated. The
judgment entered in these proceedings is conclusive only between the
parties.

In speaking of the proceeding to foreclose a mortgage the author of a
well-known treatise, has said:

“Though nominally against persons, such suits are to vindicate liens; they
proceed upon seizure; they treat property as primarily indebted; and, with the
qualification above-mentioned, they are substantially property actions. In the
civil law, they are styled hypothecary actions, and their sole object is the
enforcement of the lien against the res; in the common law, they would
be different if chancery did not treat the conditional conveyance as a mere
hypothecation, and the creditor’s right as an equitable lien; so, in both, the
suit is a real action so far. as it is against property, and seeks the judicial
recognition of a property debt, and an order for the sale of the res.”
(Waples, Proceedings In Rem. sec. 607.)

It is true that in proceedings of this character, if the defendant for whom
publication is made appears, the action becomes as to him a personal action and
is conducted as such. This, however, does not affect the proposition that where
the defendant fails to appear the action is quasi in rem; and it should
therefore be considered with reference to the principles governing actions
in rem.

There is an instructive analogy between the foreclosure proceeding and an
action of attachment, concerning which the Supreme Court of the United States
has used the following language:

“If the defendant appears, the cause becomes mainly a suit in
personam, with the added incident, that the property attached remains
liable, under the control of the court, to answer to any demand which may be
established against the defendant by the final judgment of the court. But, if
there is no appearance of the defendant, and no service of process on him, the
case becomes, in its essential nature, a proceeding in rem, the only
effect of which is to subject the property attached to the payment of the demand
which the court may find to be due to the plaintiff.” (Cooper vs.
Reynolds, 10 Wall., 308.)

In an ordinary attachment proceeding, if the defendant is not personally
served, the preliminary seizure is to be considered necessary in order to confer
jurisdiction upon the court. In this case the lien on the property is acquired
by the seizure; and the purpose of the proceedings is to subject the property to
that lien. If a lien already exists, whether created by mortgage, contract, or
statute, the preliminary seizure is not necessary; and the court proceeds to
enforce such lien in the manner provided by law precisely as though the property
had been seized upon attachment. (Roller vs. Holly, 176 U. S.( 398,
405; 44 L. ed., 520.) It results that the mere circumstance that in an
attachment the property may be seized at the inception of the proceedings, while
in the foreclosure suit it is not taken into legal custody until the time comes
for the sale, does not materially affect the fundamental principle involved in
both cases, which is that the court is here exercising a jurisdiction over the
property in a proceeding directed essentially in rem.

Passing now to a consideration of the jurisdiction of the Court of First
Instance in a mortgage foreclosure, it is evident that the court derives its
authority to entertain the action primarily from the statutes organizing the
court. The jurisdiction of the court, in this most general sense, over the cause
of action is obvious and requires no comment. Jurisdiction over the person of
the defendant, if acquired at all in such an action, is obtained by the
voluntary submission of the defendant or by the personal service of process upon
him within the territory where the process is valid. If, however, the defendant
is a nonresident and, remaining beyond the range of the personal process of the
court,” refuses to come in voluntarily, the court never acquires jurisdiction
over the person at all. Here the property itself is in fact the sole thing which
is impleaded and is the responsible object which is the subject of the exercise
of judicial power. It follows that the jurisdiction of the court in such case is
based exclusively on the power which, under the law, it possesses over the
property; and any discussion relative to the jurisdiction of the court over the
person of the defendant is entirely apart from the case. The jurisdiction of the
court over the property, considered as the exclusive object of such an action,
is evidently based upon the following conditions and considerations, namely: (1)
that the property is located within the district; (2) that the purpose of the
litigation is to subject the property by sale to an obligation fixed upon it by
the mortgage; and (3) that the court at a proper stage of the proceedings takes
the property into its custody, if necessary, and exposes it to sale for the
purpose of satisfying the mortgage debt. An obvious corollary is that no other
relief can be granted in this proceeding than such as can be enforced against
the property.

We may then, from what has been stated, formulate the following propositions
relative to the foreclosure proceeding against the property of a nonresident
mortgagor who fails to come in and submit himself personally to the jurisdiction
of the court: (I) That the jurisdiction of the court is derived from the power
which it possesses over the property; (II) that jurisdiction over the person is
not acquired and is nonessential; (III) that the relief granted by the court
must be limited to such as can be enforced against the property itself.

It is important that the bearing of these propositions be clearly
apprehended, for there are many expressions in the American reports from which
it might be inferred that the court acquires personal jurisdiction over the
person of the defendant by publication and notice; but such is not the case. In
truth the proposition that jurisdiction over the person of a nonresident cannot
be acquired by publication and notice was never clearly understood even in the
American courts until after the decision had been rendered by the Supreme Court
of the United States in the leading case of Pennoyer vs. Neff (95 U.
S., 714; 24 L. ed., 565). In the light of that decision, and of other decisions
which have subsequently been rendered in that and other courts, the proposition
that jurisdiction over the person cannot be thus acquired by publication and
notice is no longer open to question; and it is now fully established that a
personal judgment upon constructive or substituted service against a nonresident
who does not appear is wholly invalid. This .doctrine applies to all kinds of
constructive or substituted process, including service by publication and
personal service outside of the jurisdiction in which the judgment is rendered;
and the only exception seems to be found in the case where the nonresident
defendant has expressly or impliedly consented to the mode of service. (Note to
Raher vs. Raher, 35 L.R.A. [N.S.], 292; see also 50 L.R.A., 585; 35 L.
R. A., [N.S.] 312.)

The idea upon which the decision in Pennoyer vs. Neff
(supra) proceeds is that the process from the tribunals of one State
cannot run into other States or countries and that due process of law requires
that the defendant shall be brought under the power of the court by service of
process within the State, or by his voluntary appearance, in order to authorize
the court to pass upon the question of his personal liability. The doctrine
established by the Supreme Court of the United States on this point, being based
upon the constitutional conception of due process of law, is binding upon the
courts of the Philippine Islands. Involved in this decision is the principle
that in proceedings in rem or quasi in rem against a
nonresident who is not served personally within the state, and who does not
appear, the relief must be confined to the res, and the court cannot
lawfully render a personal judgment against him. (Dewey vs. Des Moines,
173 U.S., 193; 43 L. ed., 665; Heidritter vs. Elizabeth Oil Cloth Co.,
112 U.S., 294; 28 L. ed., 729.) Therefore in an action to foreclose a mortgage
against a nonresident, upon whom service has been effected exclusively by
publication, no personal judgment for the deficiency can be entered. (Latta
vs. Tutton, 122 CaL, 279; Blumberg vs. Birch, 99 Cal.,
416.)

It is suggested in the brief of the appellant that the judgment entered in
the court below offends against the principle just stated and that this judgment
is void because the court in fact entered a personal judgment against the absent
debtor for “the full amount of the indebtedness secured by the mortgage. We do
not so interpret the judgment.

In a foreclosure proceeding against a nonresident owner it is necessary for
the court, as in all cases of foreclosure, to ascertain the amount due, as
prescribed in section 256 of the Code of Civil Procedure, and to make an order
requiring the defendant to pay the money into court. This step is a necessary
precursor of the order of sale. In the present case the judgment which was
entered contains the following words:

“Because it is declared that the said defendant Engracio Palanca Tanquinyeng
y Limquingco, is indebted in the amount of P249,355.32, plus the interest, to
the ‘Banco Español-Filipino’ * * * therefore said defendant is ordered to
deliver the above amount etc., etc.”

This is not the language of a personal judgment. Instead it is clearly
intended merely as a compliance with the requirement that the amount due shall
be ascertained and that the defendant shall be required to pay it. As a further
evidence of this it may be observed that according to the Code of Civil
Procedure a personal judgment against the debtor for the deficiency is not to be
rendered until after the property has been sold and the proceeds applied to the
mortgage debt (sec. 260).

The conclusion upon this phase of the case is that whatever may be the effect
in other respects of the failure of the clerk of the Court of First Instance to
mail the proper papers to the defendant in Amoy, China, such irregularity could
in no wise impair or defeat the jurisdiction of the court, for in our opinion
that jurisdiction rests upon a basis much more secure than would be supplied by
any form of notice that could be given to a resident of a foreign country.

Before leaving this branch of the case, we wish to observe that we are fully
aware that many reported cases can be cited in which it is assumed that the
question of the sufficiency of publication or notice in a case of this kind is a
question affecting the jurisdiction of the court, and the court is sometimes
said to acquire jurisdiction by virtue of the publication. This phraseology was
undoubtedly originally adopted by the court because of the analogy between
service by publication and personal service of process upon the defendant; and,
as has already been suggested, prior to the decision of Pennoyer vs.
Neff (supra) the difference between the legal effects of the two forms
of service was obscure. It is accordingly not surprising that the modes of
expression which had already been moulded into legal tradition before that case
was decided have been brought down to the present day. But it is clear that the
legal principle here involved is not effected by the peculiar language in which
the courts have expounded their ideas.

We now proceed to a discussion of the question whether the supposed
irregularity in the proceedings was of such gravity as to amount to a denial of
that “due process of law” which was secured by the Act of Congress in force in
these Islands at the time this mortgage was foreclosed. (Act of July 1, 1902,
sec. 5.) In dealing with questions involving the application of the
constitutional provisions relating to due process of law the Supreme Court of
the United States has refrained from attempting to define with precision the
meaning of that expression, the reason being that the idea expressed therein is
applicable under so many diverse conditions as to make any attempt at precise
definition hazardous and unprofitable. As applied to a judicial proceeding,
however, it may be laid down with certainty that the requirement of due process
is satisfied if the following conditions are present, namely; (1) There must be
a court or tribunal clothed with judicial power to hear and determine the matter
before it; (2) jurisdiction must be lawfully acquired over the person of the
defendant or over the property which is the subject of the proceeding; (3) the
defendant must be given an opportunity to be heard; and (4) judgment must be
rendered upon lawful hearing.

Passing at once to the requisite that the defendant shall have an opportunity
to be heard, we observe that in a foreclosure case some notification of the
proceedings to the nonresident owner, prescribing the time within which
appearance must be made, is everywhere recognized as essential. To answer this
necessity the statutes generally provide for publication, and usually in
addition thereto, for the mailing of notice to the defendant, if his residence
is known. Though commonly called constructive, or substituted service, such
notification does not constitute a service of process in any true sense. It is
merely a means provided by law whereby the owner may be admonished that his
property is the subject of judicial proceedings and that it is incumbent upon
him to take such steps as he sees fit to protect it. In speaking of notice of
this character a distinguished master of constitutional law has used the
following language:

“* * * if the owners are named in the proceedings, and personal notice is
provided for, it is rather from tenderness to their interests, and in order to
make sure that the opportunity for a hearing shall not be lost to them, than
from any necessity that the case shall assume that form.” (Cooley on Taxation
[2d. ed.], 527, quoted in Leigh vs. Green, 193 U.S., 79, 80.)

It will be observed that this mode of notification does not involve any
absolute assurance that the absent owner shall thereby receive actual notice.
The periodical containing the publication may never in fact come to his hands,
and the chances that he should discover the notice may often be very slight.
Even where notice is sent by mail the probability of his receiving it, though
much increased, is dependent upon the correctness of the address to which it is
forwarded as well as upon the regularity and security of the mail service. It
will be noted, furthermore, that the provision of our law relative to the
mailing of notice does not absolutely require the mailing of notice
unconditionally and in every event, but only in the case where the defendant’s
residence is known. In the light of all these facts, it is evident that actual
notice to the defendant in cases of this kind is not, under the law, to be
considered absolutely necessary.

The idea upon which the law proceeds in recognizing the efficacy of a means
of notification which may fall short of actual notice is apparently this:
Property is always assumed to be in the possession of its owner, in person or by
agent; and he may be safely held, under certain conditions, to be affected with
knowledge that proceedings have been instituted for its condemnation and
sale.

“It is the duty of the owner of real estate, who is a nonresident, to take
measures that in some way he shall be represented when his property is called
into requisition, and if he fails to do this, and fails to get notice by the
ordinary publications which have usually been required in such cases, it is his
misfortune, and he must abide the consequences.” (6 R.C.L., sec. 445 [p.
450]).

It has been well said by an American court:

“If property of a nonresident cannot be reached by legal process upon
constructive notice, then our statutes were passed in vain, and are mere empty
legislative declarations, without either force, or meaning; for if the person is
not within the jurisdiction of the court, no personal judgment can be rendered,
and if the judgment cannot operate upon the property, then no effective judgment
at all can be rendered, so that the result would be that the courts would be
powerless to assist a citizen against a nonresident Such a result would be a
deplorable one.” (Quarl vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662,
667.)

It is, of course, universally recognized that the statutory provisions
relative to publication or other form of notice against a nonresident owner
should be complied with; and in respect to the publication of notice in the
newspaper it may be stated that strict compliance with the requirements of the
law has been held to be essential. In Guaranty Trust etc. Co. vs. Green
Cove etc., Railroad Co. (139 U. S., 137, 138), it was held that where newspaper
publication was made for 19 weeks, when the statute required 20, the publication
was insufficient.

With respect to the provisions of our own statute, relative to the sending of
notice by mail, the requirement is that the judge shall direct that the notice
be deposited in the mail by the clerk of the court, and it is not in terms
declared that the notice must be deposited in the mail. We consider this to be
of some significance; and it seems to us that, having due regard to the
principles upon which the giving of such notice is required, the absent owner of
the mortgaged property must, so far as the due process of law is concerned, take
the risk incident to the possible failure of the clerk to perform his duty,
somewhat as he takes the risk that the mail clerk or the mail carrier might
possibly lose or destroy the parcel or envelope containing the notice before it
should reach its destination and be delivered to him; This idea seems to be
strengthened by the consideration that in placing upon the clerk the duty of
sending notice by mail, the performance of that act is put effectually beyond
the control of the plaintiff in the litigation. At any rate it is obvious that
so much of section 399 of the Code of Civil Procedure as relates to the sending
of notice by mail was complied with when the court made the order. The question
as to what may be the consequences of the failure of the record to show the
proof of compliance with that requirement will be discussed by us further
on.

The observations which have lust been made lead to the conclusion that the
failure of the clerk to mail the notice, if in fact he did so fail in his duty,
is not such an irregularity as amounts to a denial of due process of law; and
hence in our opinion that irregularity, if proved, would not avoid the judgment
in this case. Notice was given by publication in a newspaper and this is the
only form of notice which the law unconditionally requires. This in our opinion
is all that was absolutely necessary to sustain the proceedings.

It will be observed that in considering the effect of this irregularity, it
makes a difference whether it be viewed as a question involving jurisdiction or
as a question involving due process of law. In the matter of jurisdiction there
can be no distinction between the much and the little. The court either has
jurisdiction or it has not; and if the requirement as to the mailing of notice
should be considered as a step antecedent to the acquiring of jurisdiction,
there could be no escape from the conclusion that the failure to take that step
was fatal to the validity of the judgment. In the application of the idea of due
process of law, on the other hand, it is clearly unnecessary to be so rigorous.
The jurisdiction being once established, all that due process of law thereafter
requires is an opportunity for the defendant to be heard; and as publication was
duly made in the newspaper, it would seem highly unreasonable to hold that the
failure to mail the notice was fatal. We think that in applying the requirement
of due process of law, it is permissible to reflect upon the purposes of the
provision which is supposed to have been violated and the principle underlying
the exercise of. judicial power in these proceedings. Judged in the light of
these conceptions, we think that the provision of the Act of Congress declaring
that no person shall be deprived of his property without due process of law has
not been infringed.

In the progress of this discussion we have stated the two conclusions; (1)
that the failure of the clerk to send the notice to the defendant by mail did
not destroy the jurisdiction of the court and (2) that such irregularity did not
infringe the requirement of due process of law. As a consequence of these
conclusions the irregularity in question is in some measure shorn of its
potency. It is still necessary, however, to consider its effects considered as a
simple irregularity of procedure; and it would be idle to pretend that even in
this aspect the irregularity is not grave enough. From this point of view,
however, it is obvious that any motion to vacate the judgment on the ground of
the irregularity in question must fail unless “it shows that the defendant was
prejudiced by that irregularity. The least, therefore, that can be required of
the proponent of such a motion is to show that he had a good defense against the
action to foreclose the mortgage. Nothing of the kind is, however, shown either
in the motion or in the affidavit which accompanies the motion.

An application to open or vacate a judgment because of an irregularity or
defect in the proceedings is usually required to be supported by an affidavit
showing the grounds on which the relief is sought, and in addition to this
showing also a meritorious defense to the action. It is held that a general
statement that a party has a good defense to the action is insufficient. The
necessary facts must be averred. Of course if a judgment is void upon its face a
showing of the existence of a meritorious defense is not necessary. (10 R.C.L.,
718.)

The lapse of time is also a circumstance deeply affecting this aspect of the
case. In this connection we quote the following passage from an encyclopaedic
treatise now in course of publication:

“Where, however, the judgment is not void on its face, and may therefore be
enforced if permitted to stand on the record, courts in many instances refuse to
exercise their quasi equitable powers to vacate a judgment after the lapse of
the term at which it was entered, except in clear cases, to promote the ends of
justice, and where it appears that the party making the application is himself
without fault and has acted in good faith and with ordinary diligence. Laches on
the part of the applicant, if unexplained, is deemed sufficient ground for
refusing the relief to which he might otherwise be entitled. Something is due to
the finality of judgments, and acquiescence or unnecessary delay is fatal to
motions of this character, since courts are always reluctant to interfere with
judgments, and especially where they have been executed or satisfied. The moving
party has the burden of showing diligence, and unless it is shown affirmatively
the court will not ordinarily exercise its discretion in his favor.” (15 R.C.L.,
694, 695.)

It is stated in the affidavit that the defendant, Engracio Palanca
Tanquinyeng y Limquingco, died January 29, 1910. The mortgage under which the
property was sold was executed far back in 1906; and the proceedings in the
foreclosure were closed by the order of court confirming the sale dated August
7, 1908. It passes the rational bounds of human credulity to suppose that a man
who had placed a mortgage upon property worth nearly P300,000 and had then gone
away from the scene of his life activities to end his days in the city of Amoy,
China, should have long remained in ignorance of the fact that the mortgage had
been foreclosed and the property sold, even supposing that he had no knowledge
of those proceedings while they were being conducted. It is more in keeping with
the ordinary course of things that he should have acquired information as to
what was transpiring in his affairs at Manila; and upon the basis of this
rational assumption we are authorized, in the absence of proof to the contrary,
to presume that he did have, or soon acquired, information as to the sale of his
property.

The Code of Civil Procedure, indeed, expressly declares that there is a
presumption that things have happened according to the ordinary habits of life
(sec. 334 [26]) ; and we cannot conceive of a situation more appropriate than
this for applying the presumption thus defined by the lawgiver. In support of
this presumption, as applied to the present case, it is permissible to consider
the probability that the defendant may have received actual notice of these
proceedings from the unofficial notice addressed to him in Manila which was
mailed by an employee of the bank’s attorneys. Adopting almost the exact words
used by the Supreme Court of the United States in Grannis vs. Ordean
(234 U. S., 385; 58 L. ed., 1363), we may say that in view of the well-known
skill of postal officials and employees in making proper delivery of letters
defectively addressed, we think the presumption is clear and strong that this
notice reached the defendant, there being no proof that it was ever returned by
the postal officials as undelivered. And if it was delivered in Manila, instead
of being forwarded to Amoy, China, there is a probability that the recipient was
a person sufficiently interested in his affairs to send it or communicate its
contents to him.

Of course if the jurisdiction of the court or the sufficiency of the process
of law depended upon the mailing of the notice by the clerk, the reflections in
which we are now indulging would be idle and frivolous; but the considerations
mentioned are introduced in order to show the propriety of applying to this
situation the legal presumption to which allusion has been made. Upon that
presumption, supported by the circumstances of this case, we do not hesitate to
found the conclusion that the defendant voluntarily abandoned all thought of
saving his property from the obligation which he had placed upon it; that
knowledge of the proceedings should be imputed to him; and that he acquiesced in
the consequences of those proceedings after they had been accomplished. Under
these circumstances it is clear that the merit of this motion is, as we have
already stated, adversely affected in a high degree by the delay in asking for
relief. Nor is it an adequate reply to say that the proponent of this motion is
an administrator who only qualified a few months before this motion was made. No
disability on the part of the defendant himself existed from the time when the
foreclosure was effected until his death; and we believe that the delay in the
appointment of the administrator and institution of this action is a
circumstance which is imputable to the parties in interest whoever they may have
been. Of course if the minor heirs had instituted an action in their own right
to recover the property, it would have been different.

It is, however, argued that the defendant has suffered prejudice by reason of
the fact that the bank became the purchaser of the property at the forclosure
sale for a price greatly below that which had been agreed upon in the mortgage
as the upset price of the property. In this connection, it appears that in
article nine of the mortgage which was the subject of this foreclosure, as
amended by the notarial document of July 19,1206, the parties to this mortgage
made a stipulation to the effect that the value therein placed upon the
mortgaged properties should serve as a basis of sale in case the debt should
remain unpaid and the bank should proceed to a foreclosure. The upset price
stated in that stipulation for all the parcels involved in this foreclosure was
P286,000. It is said in behalf of the appellant that when the bank bought in the
property for the sum of P110,200 it violated that stipulation.

It has been held hy this court that a clause in a mortgage providing for a
tipo, or upset price, does not prevent a foreclosure, nor affect the
validity of a sale made in the foreclosure proceedings. (Yangco vs.
Cruz Herrera and Wy Piaco 11 Phil. Rep., 402; Banco-Español Filipino
vs. Donaldson, Sim & Co., 5 Phil. Rep., 418.) In both the cases
here cited the property was purchased at the foreclosure sale, not by the
creditor or mortgagee, but by a third party. Whether the same rule should be
applied in a case where the mortgagee himself becomes the purchaser has
apparently not been decided by this court in any reported decision, and this
question need not here be considered, since it is evident that if any liability
was incurred by the bank by purchasing for a price below that fixed in the
stipulation, its liability was a personal liability derived from the contract of
mortgage; and as we have already demonstrated such a liability could not be the
subject of adjudication in an action where the court had no jurisdiction over
the person of the defendant. If the plaintiff bank became liable to account for
the difference between the upset price and the price at which it bought in the
property, that liability remains unaffected by the disposition which the court
made of this case; and the fact that the bank may have violated such an
obligation can in no wise affect the validity of the judgment entered in the
Court of First Instance.

In connection with the entire failure of the motion to show either a
meritorious defense to the action or that the defendant had suffered any
prejudice of which the law can take notice, we may be permitted to add that in
our opinion a motion of this kind, which proposes to unsettle judicial
proceedings long ago closed, can not be considered with favor, unless based upon
grounds which appeal to the conscience of the court. Public policy requires that
judicial proceedings be upheld. The maxim here applicable is non quieta
movere. As was once said by Judge Brewer, afterwards a member of the
Supreme Court of the United States:

“Public policy requires that judicial proceedings be upheld, and that titles
obtained in those proceedings be safe from the ruthless hand of collateral
attack. If technical defects are adjudged potent to destroy such titles, a
judicial sale will never realize the value of the property, for no prudent man
will risk his money in bidding for and buying that title which he has reason to
fear may years thereafter be swept away through some occult and not readily
discoverable defect.” (Martin vs. Pond, 30 Fed., 15.)

In the case where that language was used an attempt was made to annul certain
foreclosure proceedings on the ground that the affidavit upon which the order of
publication was based erroneously stated that the absent party was a resident
of. a certain town in the State of Kansas, when he was in fact residing in
another State. It was held that this mistake did not affect the validity of the
proceedings.

In the preceding discussion we have assumed that the clerk failed to send the
notice by post as required by the order of the court. We now proceed, to
consider whether this is a proper assumption; and the proposition which we
propose to establish is that there is a legal presumption that the clerk
performed his duty as the ministerial officer of the court, which presumption is
not overcome by any other facts appearing in the cause.

In subsection 14 of section 334 of the Code of Civil Procedure it is declared
that there is a presumption “that official duty has been regularly performed;”
and in subsection 18 it is declared that there is a presumption “that the
ordinary course of business has been followed.” These presumptions are of course
in no sense novelties, as they express ideas which have always been recognized.
Omnia praesumuntur rite et solemniter esse acta donec probetur in
contrarium. There is therefore clearly a legal presumption that the clerk
performed his duty about mailing this notice; and we think that strong
considerations of policy require that this presumption should be allowed to
operate with full force under the circumstances of this case. A party to an
action has no control over the clerk of the court; and has no right to meddle
unduly with the business of the clerk in the performance of his duties. Having
no control over this officer, the litigant must depend upon the court to see
that the duties imposed on the clerk are performed.

Other considerations no less potent contribute to strengthen the conclusion
just stated. There is no principle of law better settled than that after
jurisdiction has once been acquired, every act of a court of general
jurisdiction shall be presumed to have been rightly done. This rule is applied
to every judgment or decree rendered in the various stages of the proceedings
from their initiation to their completion (Voorhees vs. United States
Bank, 10 Pet., 314; 35 U. S., 449); and if the record is silent with respect to
any fact which must have been established before the court could have rightly
acted, it will be presumed that such fact was properly brought to its knowledge.
(The Lessee of Grignon vs. Astor, 2 How., 319; 11 L. ed., 283.)

“In making the order of sale [of the real state of a decedent] the court are
presumed to have adjudged every question necessary to justify such order or
decree, viz: The death of the owners; that the petitioners were his
administrators; that the personal estate was insufficient to pay the debts of
the deceased; that the private acts of Assembly, as to the manner of sale, were
within the constitutional power of the Legislature, and that all the provisions
of the law as to notices which are directory to the administrators have been
complied with. * * * The court is not bound to enter upon the record the
evidence on which any fact was decided.” (Florentine vs. Barton, 2
Wall., 210; 17 L. ed., 785.) Especially does all this apply after long lapse of
time.

Applegate vs. Lexington and Carter County Mining Co. (117 U.S., 255)
contains an instructive discussion in a case. analogous to that which is now
before us. It there appeared that in order to foreclose a mortgage in the State
of Kentucky against a nonresident debtor it was necessary that publication
should be made in a newspaper for a specified period of time, also that the
order requiring the defendant to appear should be posted at the front door of
the court house and be published on some Sunday, immediately after divine
service, in such church as the court should direct. In a certain action judgment
had been entered against a nonresident, after publication in pursuance of these
provisions. Many years later the validity of the proceedings was called in
question in another action. It was proved from the files of an ancient
periodical that publication had been made in its columns as required by law; but
no proof was offered to show the publication of the order at the church, or the
posting of it at the front door of the court-house. It was insisted by one of
the parties that the judgment of the court was void for lack of jurisdiction.
But the Supreme Court of the United States said.”

“The court which made the decree * * * was a court of general jurisdiction.
Therefore every presumption not inconsistent with the record is to be indulged
in favor of its jurisdiction. * * * It is to be presumed that the court before
making its decree took care to see that its order for constructive service, on
which its right to make the decree depended, had been obeyed.”

It is true that in this case the former judgment was the subject of
collateral, or indirect attack, while in the case at bar the motion to vacate
the judgment is a direct proceeding for relief against it. The same general
presumption, however, is indulged in favor of the judgment of a court of general
jurisdiction, whether it is the subject of direct or indirect attack, the only
difference being that in case of indirect attack the judgment is conclusively
presumed to be valid unless the record affirmatively shows it to be void, while
in case of direct attack the presumption in favor of its validity may in certain
cases be overcome by proof extrinsic to the record.

The presumption that the clerk performed his duty and that the court made its
decree with knowledge that the requirements of law had been complied with appear
to be amply sufficient to support the conclusion that the notice was sent by the
clerk as required by the order. It is true that there ought to be found among
the papers on file in this cause an affidavit, as required by section 400 of the
Code of Civil Procedure, showing that the order was in fact so sent by the
clerk; and no such affidavit appears. The record is therefore silent where it
ought to speak. But the very purpose of the law in recognizing these
presumptions is to enable the court to sustain a prior judgment in the face of
such an omission. If we were to hold that the judgment in this case is void
because the proper affidavit is not present in the file of papers which we call
the record, the result would be that in the future every title in the Islands
resting upon a judgment like that now before us would depend, for its continued
security, upon the presence of such affidavit among the papers and would be
liable at any moment to be destroyed by the disappearance of that piece of
paper. We think that no court, with a proper regard for the security of judicial
proceedings and for the interests which have by law been confided to the courts,
would incline to favor such a conclusion. In our opinion the proper course in a
case of this kind is to hold that the legal presumption that the clerk performed
his duty still maintains notwithstanding the absence from the record of the
proper proof of that fact.

In this connection it is important to bear in mind that under the practice
prevailing in the Philippine Islands the word “record” is used in a loose and
broad sense, as indicating the collective mass of papers which contain the
history of all the successive steps taken in a case and which are finally
deposited in the archives of the clerk’s office as a memorial of the litigation.
It is a matter of general information that no judgment roll, or book of final
record, is commonly kept in our courts for the purpose of recording the
pleadings and principal proceedings in actions which have been terminated; and
in particular, no such record is kept in the Court of First Instance of the city
of Manila. There is, indeed, a section of the Code of Civil Procedure which
directs that such a book of final record shall be kept; but this provision has,
as a matter of common knowledge, been generally ignored. The result is that in
the present case we do not have the assistance of the recitals of such a record
to enable us to pass upon the validity of this judgment and as already stated
the question must be determined by examining the papers contained in the entire
file.

But it is insisted by counsel for this motion that the affidavit of Bernardo
Chan y Garcia showing that upon April 4, 1908, he sent a notification through
the mail addressed to the defendant at Manila, Philippine Islands, should be
accepted as affirmative proof that the clerk of the court failed in his duty and
that, instead of himself sending the requisite notice through the mail, he
relied upon Bernardo to send it for him. We do not think that this is by any
means a necessary inference. Of course if it had affirmatively appeared that the
clerk himself had attempted to comply with this order and had directed the
notification to Manila when he should have directed it to Amoy, this would be
conclusive that he had failed to comply with the exact terms of the order; but
such is not this case. That the clerk of the attorneys for the plaintiff
erroneously sent a notification to the defendant at a mistaken address affords
in our opinion very slight basis for supposing that the clerk may not have sent
notice to the right address.

There is undoubtedly good authority to support the position that when the
record states the evidence or makes an averment with reference to a
jurisdictional fact, it will not be presumed that there was other or different
evidence respecting the fact, or that the fact was otherwise than as stated. If,
to give an illustration, it appears from the return of the officer that the
summons was served at a particular place or in a particular manner, it will not
be presumed that service was also made at another place or in a different
manner; or if it appears that service was made upon a person other than the
defendant, it will not be presumed, in the silence of the record, that it was
made upon the defendant also (Galpin vs. Page, 18 Wall., 350, 366;
Settlemier vs. Sullivan, 97 U. S., 444, 449). While we believe that
these propositions are entirely correct as applied to the case where the person
making the return is the officer who is by law required to make the return, we
do not think that it is properly applicable where, as in the present case, the
affidavit was made by a person who, so far as the provisions of law are
concerned, was a mere intermeddler.

The last question of importance which we propose to consider is whether a
motion in the cause is admissible as a proceeding to obtain relief in such a
case as this. If the motion prevails the judgment of July 2, 1908, and all
subsequent proceedings will be set aside, and the litigation will be renewed,
proceeding again from the date mentioned as if the progress of the action had
not been interrupted. The proponent of the motion does not ask the favor of
being permitted to interpose a defense. His purpose is merely to annul the
effective judgment of the court, to the end that the litigation may again resume
its regular course.

There is only one section of the Code of Civil Procedure which expressly
recognizes the authority of a Court of First Instance to set aside a final
judgment and permit a renewal of the litigation in the same cause. This is as
follows:

“Sec. 113. Upon such term as may be just the court may relieve a party or his
legal representative from a judgment, order, or other proceeding taken against
him through his mistake, inadvertence, surprise, or excusable neglect;
Provided, That application therefor be made within a reasonable time,
but in no case exceeding six months after such judgment, order, or proceeding
was taken.”

An additional remedy by petition to the Supreme Court is supplied by section
513 of the same Code. The first paragraph of this section, in so far as
pertinent to this discussion, provides as follows:

“When a judgment is rendered by a Court of First Instance upon default, and a
party thereto is unjustly deprived of a hearing by fraud, accident, mistake or
excusable negligence, and the Court of First Instance which rendered the
judgment has finally adjourned so that no adequate remedy exists in that court,
the party so deprived of a hearing may present his petition to the Supreme Court
within sixty days after he first learns of the rendition of such judgment, and
not thereafter, setting forth the facts and praying to have judgment set aside.
* * * “

It is evident that the proceeding contemplated in this section is intended to
supplement the remedy provided by section 113; and we believe the conclusion
irresistible that there is no other means recognized by law whereby a defeated
party can, by a proceeding in the same cause, procure a judgment to be set
aside, with a view to the renewal of the litigation.

The Code of Civil Procedure purports to be a complete system of practice in
civil causes, and it contains provisions describing with much fulness the
various steps to be taken in the conduct of such proceedings. To this end it
defines with precision the method of beginning, conducting, and concluding the
civil action of whatever species; and by section 795 of the same Code it is
declared that the procedure in all civil action shall be in accordance with the
provisions of this Code. We are therefore of the opinion that the remedies
prescribed in sections 113 and 513 are exclusive of all others, so far as
relates to the opening and continuation of a litigation which has been once
concluded.

The motion in the present case does not conform to the requirements of either
of these provisions; and the consequence is that in our opinion the action of
the Court of First Instance in dismissing the motion was proper.

If the question were admittedly one relating merely to an irregularity of
procedure, we cannot suppose that this proceeding would have taken the form of a
motion in the cause, since it is clear that, if based on such an error, the
motion came too late for relief in the Court of First Instance. But as we have
already seen, the motion attacks the judgment of the court as void for want of
jurisdiction over the defendant. The idea underlying the motion therefore is
that inasmuch as the judgment is a nullity it can be attacked in any way and at
any time. If the judgment were in fact void upon its face, that is, if it were
shown to be a nullity by virtue of its own recitals, there might possibly be
something in this. Where a judgment or judicial order is void in this sense it
may be said to be a lawless thing, which can be treated as an outlaw and slain
at sight, or ignored wherever and whenever it exhibits its head.

But the judgment in question is not void in any such sense. It is entirely
regular in form, and the alleged defect is one which is not apparent upon its
face. It follows that even if the judgment could be shown to be void for want of
jurisdiction, or for lack of due process of law, the party aggrieved thereby is
bound to resort to some appropriate proceeding to obtain relief. Under accepted
principles of law and practice, long recognized in American courts, a proper
remedy in such case, after the time for appeal or review has passed, is for the
aggrieved party to bring an action to enjoin the judgment, if not already
carried into effect; or if the property has already been disposed of he may
institute suit to recover it. In every situation of this character an
appropriate remedy is at hand; and if property has been taken without due
process, the law concedes due process to recover it. We accordingly hold that,
assuming the judgment to have been void as alleged by the proponent of this
motion, the proper remedy was by an original proceeding and not by motion in the
cause. As we have already seen our Code of Civil Procedure defines the
conditions under which relief against a judgment may be obtained by motion; and
we think it would only be productive of confusion for this court to recognize
such a proceeding as proper under conditions different from those defined by
law. Upon the point of procedure here involved, we refer to the case of People
vs. Harrison (84 Cal., 607) wherein it was held that a motion will not
lie to vacate a judgment after the lapse of the time limited by statute if the
judgment is not void on its face; and in all cases, after the lapse of such
time, when an attempt is made to vacate the judgment by a proceeding in court
for that purpose an action regularly brought is preferable, and should be
required. It will be noted that section 113 of the Code of Civil Procedure was
taken verbatim from the California Code (sec. 473).

The conclusions stated in this opinion indicate that the judgment appealed
from is without error, and the same is accordingly affirmed, with costs. So
ordered.

Arellano, C. J., Torres, Carson, and Avanceña, JJ.,
concur.

---

DISSENTING OPINION

MALCOLM, J., dissenting:

I dissent. It will not take me long to state my reasons. An immutable
attribute—the fundamental idea—of due process of law is that no man shall be
condemned in his person or property without notice and an opportunity of being
heard in his defense. Protection of the parties demands a strict and an exact
compliance with this constitutional provision in our organic law and of the
statutory provisions in amplification. Literally hundreds of precedents could be
cited in support of these axiomatic principles. Where as in the instant case the
defendant received no notice and had no opportunity to be heard, certainly we
cannot say that there is due process of law. Resultantly, “A judgment which is
void upon its face, and which requires only an inspection of the judgment roll
to demonstrate its want of vitality is a dead limb upon the judicial tree, which
should be lopped off, if the power so to do exists. It can bear no fruit to the
plaintiff, but is a constant menace to the defendant.” (Mills vs.
Dickson, 6 Rich. [S. C], 487.)