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Hang Lung Bank Ltd.

Hon. Felintriye G. Saulog

Belo, Abiera & Associates for petitioner.

Castelo Law Office for private respondent.



Petitioner Huang Lung Bank filed a collection suit in the Supreme Court of
Hongkong against Worlder and Cordova Chin San for sums of money due the
petitioner from the former on the basis of two (2) continuing guarantee agreements
petitioner entered into with Chin San in Hongkong. The foreign tribunal ordered
the payment to petitioner of the sum of HK$279,325 with interest and cost.
Demand was made in writing to Chin San at his Philippine address but no response
was made thereto. Hence, petitioner instituted in the RTC of Makati, Metro Manila
Branch CXLII an action for the enforcement of its claims against Chin San. Chin
San filed a motion to dismiss claiming petitioner had no legal capacity to sue and
the venue was improperly laid. The RTC granted the motion ruling that petitioner
does not do business in the Philippines and is barred from maintaining suit
pursuant to Sec. 14 of the General Banking Act. Its motion for reconsideration
having been denied, petitioner seeks the reversal of the orders of the RTC in a
petition for certiorari.


Whether or not petitioner has the capacity to file the action below.


Yes. A foreign corporation not licensed to do business in the Philippines may not
be denied the right to file an action in our courts for an isolated transaction in this
country. Petitioner foreign banking corporation may not be denied the privilege of
pursuing its claims against private respondent for a contract which was entered into
and consummated outside the Philippines. Otherwise, it will hamper the growth
and development of business relations between Filipino citizens and foreign
nationals. Worse, it would be allowing the law to serve as a protective shield for
unscrupulous Filipino citizens who have business relationships abroad. The
complaint appears to be one of the enforcement of the Hongkong judgment
because it prays for the grant of the affirmative relief given by said foreign
judgment. However, a foreign judgment may not be enforced if it is not recognized
in the jurisdiction where affirmative relief is being sought. Hence, in the interest of
justice, the complaint should be considered as a petition for the recognition of the
Hongkong judgment under Section 50 (b), Rule 39 of the Rules of Court in order
that the defendant, private respondent herein, may present evidence of lack of
jurisdiction, notice, collusion, fraud or clear mistake of fact and law, if applicable.
Philippine Columbia Enterprises Co., et. al.
Hon. Gregorio Lantin, et. al.

Lorenzo Sumulong for petitioner.

Bausa, Ampil & Suarez for respondents.

REYES, J.B.L., J.:


Private respondent Katoh & Co. Ltd., a Japanese firm, filed in the CFI of Manila
Branch VII a complaint alleging ten (10) causes of action against Manila-based
Philippine Columbia Enterprises Co. and its general partners Rufino Dy Chin and
Fermin Sy for the collection of payment of ten (10) different shipments of angle
bars, mild steel bars and cold rolled steel sheets allegedly ordered by petitioners
from private respondent. Petitioners moved to dismiss on the grounds that private
respondent had no legal capacity to sue and the complaint states no cause of action.
In the hearing of the motion, private respondent asked that the reception of
evidence thereon be deferred to another date. On the date set, respondent objected
to the presentation of evidence and filed a motion to defer hearing and
determination of the motion to dismiss. The Court issued the questioned order
deferring the determination of the motion to dismiss until the trial of the case on
the merits because the ground stated therein does not appear to be indubitable.
Petitioners moved to reconsider but their motion was denied, hence, this petition
for certiorari.


Whether or not the court committed grave abuse of discretion in deferring the
determination of the motion to dismiss until the trial of the case on the merits
because the ground stated therein does not appear to be indubitable.


No. Where the complaint filed by a foreign corporation for collection of the value
of angle bars states that plaintiff "is not engaged in business in the Philippines and
that the transactions averred in this complaint were exports made and
consummated in Tokyo, Japan in pursuance of International trade;" whereas the
motion to dismiss for lack of capacity to sue avers that the contracts were made in
the Philippines wherein plaintiff is not licensed to do business: the inconsistency
between the complaint and the motion to dismiss renders the ground of the latter
doubtful and may, therefore, be deferred by the trial -court until after hearing on
the merits. Actions by foreign corporations are governed by rules different from
those in actions against them. Since a counterclaim partakes of the nature of a
complaint or cause of action against plaintiff, if defendant local corporation files a
counterclaim against plaintiff foreign corporation, the latter would be a defendant
thereto, in which case said foreign corporation would not be maintaining a suit and,
consequently, Section 69 of the Corporation Law would not apply.

Ramirez and Ortigas for appellants.

Gibbs, McDonough and Ozaeta for appellee.



The deceased Marie Theodore Jerome Boudard was killed by his co-employees in
Hanoi, French Indo-China. The herein plaintiffs-appellants the widow Emilie
Elmira Renee Boudard and her children sued the deceased’s employer, Stewart
Eddie Tait and obtained a favorable judgment from the Court of First Instance
therein for the sum of 40,000 piastras or Php 56,905.77 plus unspecified interest. A
complaint for the execution of the judgment of the Hanoi court was instituted in
the Court of First Instance of Manila. The CFI of Manila dismissed the said
complaint based on lack of jurisdiction of the Hanoi court to render the impugned
judgment because Tait was neither resident nor domicile of Hanoi as shown in the
decision of the Hanoi court itself. The evidence adduced likewise showed that the
deceased was not his employee. Plaintiffs appealed.


Whether or not the lower court erred in dismissing the plaintiffs’ complaint


No. Appellants failed to show that the proceedings against the appellee in the
Court of Hanoi were in accordance with the laws of France then in force. The best
evidence of foreign judicial proceedings is a certified copy of the same with all the
formalities required in sections 304 and 305 of Act No. 190 for only thus can one
be absolutely sure of the authenticity of the record. Moreover, the evidence of
record shows that the appellee was not in Hanoi during the time mentioned in the
complaint of the appellants, nor were his employees or representatives. Judicial
proceedings in a foreign country, regarding payment of money, are only effective
against a party if summons is duly served on him within such foreign country
before the proceedings. The process of a court has no extraterritorial effect, and no
jurisdiction is acquired over the person of the defendant by serving him beyond the
boundaries of the state. Nor has a judgment of a court of a foreign country against
a resident of his country having no property in such foreign country based on
process served here, any effect here against either the defendant personally or his
property situated here.