G.R. No. 202114 - Apines vs. Elburg Shipmanagement Philippines, Inc.

On October 13, 1927, the defendant-appellee entered into a contract of agency with the plaintiff-appellant, Asiatic Petroleum (P. I.), Ltd.
Under the terms of the contract, the defendant agreed to act as a sales agent on commission, selling the plaintiff’s petroleum products—gasoline, kerosene, and others—in cash and under certain conditions, including the rendering of proper accounting.

By the filing of the complaint on May 24, 1933, the defendant had defaulted in the sum of P12,123.80 after deducting his cash bond, payments, allowances, and commissions.
The appellant sought recovery of two amounts: one item worth P2,123.80 and another for P109.67, along with a preliminary attachment of the defendant’s properties.

On May 26, 1933, the trial court issued a preliminary attachment upon the defendant’s deposit with the Mercantile Bank of China.
The Bank’s records indicated that the defendant had a current account deposit of P3,421.61 and a foreign currency savings account with Amoy $3,403.16.
The defendant later transferred these deposits to his son, Co Chio, as evidenced by the revisions in the Bank Commissioner’s reply dated August 21, 1933.

With the defendant’s whereabouts unknown, the trial court ordered his summons by publication, sending copies via mail to his last known address in Tarlac.
The defendant defaulted on the summons. Consequently, on November 17, 1933, the lower court rendered a decision ordering the defendant to pay the total amount claimed by the plaintiff.
A writ of execution was subsequently issued, executing a levy on the defendant’s deposits with the Mercantile Bank of China.

The execution was returned unsatisfied due to the transfer of the defendant’s deposits to his son.
An alias writ of execution was then issued targeting the defendant’s property in Tarlac, but the sheriff reported that the defendant possessed no property subject to execution in that locale.
A further alias writ was issued, and the bank maintained a notation of the levy and indicated that payment would be effected in due time.
Co Chio, the transferee, submitted a written statement (Exhibit H) asserting that the real owner of the deposits was the defendant, Co Quico.

On August 20, 1938, counsel for the appellee entered a special appearance solely to have all prior proceedings declared null and void.
A motion was filed alleging two grounds: that the court did not acquire jurisdiction over the nonresident defendant and that the defendant had been deprived of his property without due process.

After the submission of memoranda by both parties, the trial court issued an order setting aside all previous proceedings except for the filing of the complaint.
The order mandated that the action be reopened and that the defendant be summoned in accordance with law.

Whether the lower court had proper jurisdiction over the defendant, who was a nonresident and had been summoned by publication with no physical appearance.
The issue centered on whether the methods used to notify the defendant were constitutionally sufficient and procedurally valid.

Whether the seizure and garnishment of the defendant’s deposits, which were located in the Philippines despite his physical absence, complied with the due process requirements.
Whether the execution against property that had been transferred (and later challenged by the transferee) was legally tenable.