PERKIN ELMER v.

DAKILA TRADING

Petitioner: PERKIN ELMER SINGAPORE PTE LTD

Respondent: DAKILA TRADING CORPORATION,.

G.R. NO. 172242 | August 14, 2007 |CHICO-NAZARIO, J.

Doctrine: Rule 14, Section 15 on Extraterritorial service of summons when allowed: (1) when the action affects the
personal status of the plaintiff; (2) when the action relates to, or the subject of which is property, within the Philippines,
in which the defendant claims a lien or an interest, actual or contingent; (3) when the relief demanded in such action
consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4)
when the defendant non-resident’s property has been attached within the Philippines. In these instances, service of
summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave
of court; or (c) any other manner the court may deem sufficient.

Facts:

Perkin Elmer Asia entered into a distribution agreement with RESP Dakila, a domestic corporation.

● Under the agreement, Dakila was appointed its sole distributor in the Philippines and thus, shall receive
commissions for its sales from Perkin Asia.
● RESP Dakila was supposed to order the products either from Perkin Elmer Asia or from Perkin Elmer Instruments
Philippines (PEIP), an affiliate of Perkin Asia, 99% of the shares of which is owned by Perkin Asia.

However, Perkin Elmer Asia unilaterally terminated the agreement with RESP Dakila.

RESP Dakila sued both Perkin Asia and PEIP, filing a Complaint for Collection of Money (an In Personam suit) with a
prayer for a Writ of Attachment (for the properties of PEIP since 99% is owned by Perkin Elmer Asia anyway).

● The Alias Summons was, however, served upon PET Perkin Elmer Asia, a Singapore based sole proprietorship
owned by Perkin Asia but was allegedly, a separate and distinct entity from it.

So in response to Dakila’s collection suit, PEIP filed a Motion to Dismiss for lack of cause of action.

● PET Perkin Elmer Singapore informed the court of the wrongful service of summons upon it.
● RESP Dakila then filed an amended complaint saying that Perkin Asia is now PET Perkin Elmer Singapore, it
became a sole proprietorship and changed its name but it’s the same people/interest so they should still be
accountable for their obligations.
○ PET Perkin Elmer Singapore filed a Motion to Dismiss on the ground that the RTC failed to acquire
jurisdiction over its person.

RTC denied PET’s Motion to Dismiss stating that since the action is one for damages, it relates to Perkin Asia’s property
and since RESP Dakila alleged in its complaint that Perkin Asia owns shares in PEIP, the extraterritorial service of
summons was sufficient to acquire jurisdiction.

● RTC relied on Sec. 15 of Rule 14 - (2) when the action relates to, or the subject of which is property, within the
Philippines, in which the defendant claims a lien or an interest, actual or contingent).

CA affirmed the RTC ruling.

Issue: WON the service was summons was defective/won jurisdiction was validly acquired - NO

SC: Extraterritorial service of summons applies only in in rem and quasi in rem cases, where only jurisdiction over the res
is required and such extraterritorial service of summons is done not for the purpose of acquiring jurisdiction over the
person of the defendant, but to inform the defendant that there is a suit involving his property (due process). On the
other hand, when the defendant or respondent does not reside and is not found in the Philippines, and the action
involved is in personam, Philippine courts cannot try any case against him because of the impossibility of acquiring
jurisdiction over his person unless he voluntarily appears in court.

The present case is an action in personam – because it deals with Perkin Asia’s personal liability to Dakila because of its
unilateral termination of the distribution agreement. Hence, there should have been personal service of summons.

● Dakila’s allegation that Perkin Asia had properties in the Philippines did not convert the case into an action quasi
in rem as to make the extraterritorial service valid.

SC: The RTC was incorrect in relying upon Sec. 15 of Rule 14 – mere allegations of personal property does not make the
action as one that relates to or the subject of which is, property within the Philippines as to warrant the extraterritorial
service of summons.

● For the action to be considered one that relates to, or the subject of which, is the property within
the Philippines, the main subject matter of the action must be the property itself of the petitioner in
the Philippines.

SC: If there was no valid summons served upon petitioner, RTC could not have acquired jurisdiction over the person of
the PET by the latter’s voluntary appearance.

● PET cannot be held estopped by the answer ad cautelam it filed since it was in a situation where it had no choice
but to file an answer and PET had been consistent in all its pleadings in questioning the lack of jurisdiction by
virtue of the defective service of summons.

*On issue of lack of cause of action: DENIED – because when a Motion to Dismiss is grounded on the failure to state a
cause of action, a ruling thereon should be based only on the facts alleged in the complaint. The court must pass upon
this issue based solely on such allegations, assuming them to be true. Petitioner’s defense that it is not the real party in
interest is evidentiary in nature and must be proven in trial.

*On issue on improper venue (that venue should be Singapore since Distribution Agreement stated that exclusive
jurisdiction is in Singapore): DENIED. Despite the stipulation that Sing has exclusive jurisdiction, a closer look at the
Distribution Agreement would reveal that the venue stipulation was really in the alternative i.e., courts of Singapore or
of the Territory, meaning, the Philippines; thus, the court a quo is not an improper venue for the present case.

What happens to PET’s compulsory counterclaim for damages and atty’s fees after the suit against it was dismissed?

SC: It should prosper because PET may have very well already incurred damages and litigation expenses such as
attorney’s fees since it was forced to engage legal representation in the Philippines to protect its rights and to assert lack
of jurisdiction of the courts over its person by virtue of the improper service of summons upon it.

● Hence, the cause of action of PET’s counterclaim is not eliminated by the mere dismissal of RESP’s complaint.