Facts:

• The case involves the Philippine National Bank (PNB) as the petitioner and the Court of Appeals, Regional Trial Court (RTC) of Judicial Region V, Branch 43, and spouses Epifanio and Florencia Matienzo as respondents.
• The Matienzos owned a 4,161 sq. meter lot in Cabinitan, Virac, Catanduanes, registered under OCT No. 5253.
• In May 1977, business partners Domingo, Orlando, and Ireneo Molina sought to purchase the lot for a furniture shop and 'chicharon' factory.
• The Matienzos agreed to sell the lot at P10 per square meter, but the Molinas only wanted half of the property.
• An affidavit was executed indicating that only half of the property (2,080 sq. meters) would be sold, while the other half would be used as collateral for a loan from PNB.
• Orlando Molina issued a promissory note for P20,800 for the 2,080 sq. meter portion.
• The Deed of Absolute Sale listed Domingo Molina as the vendee instead of Orlando.
• Domingo subsequently sold the entire property to Orlando, who mortgaged it to PNB for P15,000.
• The Molinas defaulted on both the payment to Matienzo and the PNB loan, leading PNB to foreclose the mortgage and purchase the property at a public auction on March 10, 1981.
• The Matienzos filed an action for reconveyance, recovery of ownership, and damages against the Molinas and the PNB manager.
• The RTC dismissed the case against the PNB manager and later dismissed the entire case, finding no actionable fraud.
• The Court of Appeals reversed this decision, ordering the reconveyance of half of the property to the Matienzos and including PNB as a party in the appeal.
• PNB filed a petition for certiorari, arguing that the Court of Appeals had no jurisdiction and that the decision deprived it of property without due process.

Issue:

• (Unlock)

Ruling:

1. The Court of Appeals did not have jurisdiction to render a judgment against PNB.
2. The decision of the Court of Appeals deprived PNB of its pro...(Unlock)

Ratio:

• The Supreme Court found that the Court of Appeals had no jurisdiction over PNB because the bank was not a party in the original suit; only its manager was sued and subsequently dropped from the complaint.
• Jurisdiction over a person is acquired by service of summons and a copy of the complaint, which did not occur in this case.
• The Court of Appeals' decision to order PNB to reconvey half of the land without giving the bank a chance to defend its title cons...continue reading