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Based on the syllabus of Atty. Kristine Mae M.

Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

CONFLICT OF LAWS vs. LAW OF NATIONS land (Article II, Section 3 of the Constitution), that a foreign state may
not be brought to suit before the courts of another state or its own
courts without its consent.
G.R. No. L-24294 May 3, 1974
The solidity of the stand of petitioner is therefore evident. What was
DONALD BAER, Commander U.S. Naval Base, Subic Bay, sought by private respondent and what was granted by respondent
Olongapo, Zambales, petitioner,  Judge amounted to an interference with the performance of the duties
vs. of petitioner in the base area in accordance with the powers possessed
HON. TITO V. TIZON, as Presiding Judge of the Court of First by him under the Philippine-American Military Bases Agreement. This
Instance of Bataan, and EDGARDO GENER, respondents. point was made clear in these words: "Assuming, for purposes of
argument, that the Philippine Government, through the Bureau of
Forestry, possesses the "authority to issue a Timber License to cut logs"
inside a military base, the Bases Agreement subjects the exercise of
FACTS: rights under a timber license issued by the Philippine Government to the
exercise by the United States of its rights, power and authority of
This certiorari proceeding against the then Judge Tito V. Tizon, filed by
control within the bases; and the findings of the Mutual Defense Board,
petitioner Donald Baer, then Commander of the United States Naval
an agency of both the Philippine and United States Governments, that
Base, Subic Bay, Olongapo, Zambales, seeking to nullify the orders of
"continued logging operation by Mr. Gener within the boundaries of the
respondent Judge denying his motion to dismiss a complaint filed
U.S. Naval Base would not be consistent with the security and operation
against him by the private respondent, Edgardo Gener, on the ground
of the Base," is conclusive upon the respondent Judge. .. The doctrine
of sovereign immunity of a foreign power, his contention being that it
of state immunity is not limited to cases which would result in a
was in effect a suit against the United States, which had not given its
pecuniary charge against the sovereign or would require the doing of an
consent.
affirmative act by it. Prevention of a sovereign from doing an affirmative
On November 17, 1964, respondent Edgardo Gener, as plaintiff, filed a act pertaining directly and immediately to the most important public
complaint for injunction with the Court of First Instance of Bataan function of any government - the defense of the state — is equally as
against petitioner, Donald Baer, alleging that he was engaged in the untenable as requiring it to do an affirmative act." 
business of logging in an area situated in Barrio Mabayo, Municipality of
There should be no misinterpretation of the scope of the decision
Morong, Bataan and that the American Naval Base authorities stopped
reached by this Court. Petitioner, as the Commander of the United
his logging operations. He prayed for a writ of preliminary injunction
States Naval Base in Olongapo, does not possess diplomatic immunity.
restraining petitioner from interfering with his logging operations. A
He may therefore be proceeded against in his personal capacity, or
restraining order was issued by respondent Judge on November 23,
when the action taken by him cannot be imputed to the government
1964. Counsel for petitioner, upon instructions of the American
which he represents.
Ambassador to the Philippines, entered their appearance for the
purpose of contesting the jurisdiction of respondent Judge on the The infirmity of the actuation of respondent Judge becomes even more
ground that the suit was one against a foreign sovereign without its glaring when it is considered that private respondent had ceased to
consent. have any right of entering within the base area.
Petitioner filed a motion to dismiss, pointing out that he is the chief or The renewal of his license expired on July 30, 1964, and to date his
head of an agency or instrumentality of the United States of America, license has not been renewed by the Bureau of Forestry.
with the subject matter of the action being official acts done by him for
and in behalf of the United States of America. An opposition and reply
to petitioner's motion to dismiss by respondent Gener, relying on the
principle that "a private citizen claiming title and right of possession of
certain property may, to recover possession of said property, sue as SOURCES OF CONFLICT OF LAWS AND JURISDICTION
individuals, officers and agents of the Government, who are said to be
illegally withholding the same from him, though in doing so, said
officers and agents claim that they are acting for the G.R. No. 122191 October 8, 1998
Government.Respondent Judge, on January 12, 1965, issued an order
granting respondent Gener's application for the issuance of a writ of SAUDI ARABIAN AIRLINES, petitioner, 
preliminary injunction and denying petitioner's motion to dismiss the vs.
opposition to the application for a writ of preliminary injunction. COURT OF APPEALS, MILAGROS P. MORADA and HON.
RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
ISSUE: Branch 89, Regional Trial Court of Quezon City, respondents.

Whether or not General Baer is immuned from suit in his capacity as Facts:
Commander of the US Naval Base in Zambales.
In 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its
RULING: airlines based in Jeddah, Saudi Arabia. In 1990, while on a lay-over in
Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew
The invocation of the doctrine of immunity from suit of a foreign state members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi
without its consent is appropriate. nationals. They agreed to have breakfast together at the room of
Thamer. Thamer attempted to rape plaintiff. Fortunately, a roomboy
Justice Hilado, speaking for the Court, cited from Coleman v. and several security personnel heard her cries for help and rescued her.
Tennessee, where it was explicitly declared: "It is well settled that a Later, the Indonesian police came and arrested Thamer and Allah Al-
foreign army, permitted to march through a friendly country or to be Gazzawi.
stationed in it, by permisYES.sion of its government or sovereign, is
exempt from the civil and criminal jurisdiction of the place."

To the same effect is Parreno v. McGranery, "It is a widely accepted


principle of international law, which is made a part of the law of the

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 1
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

When plaintiff returned to Jeddah a few days later, several SAUDIA and economic affairs of individuals and associations are rarely confined
officials interrogated her about the Jakarta incident. They then to the geographic limits of their birth or conception.
requested her to go back to Jakarta to help arrange the release of
Thamer and Allah, however, she refused to cooperate because she did In the instant case, the foreign element consisted is the fact that private
not understand the local dialect. respondent Morada is a resident Philippine national, and that petitioner
SAUDIA is a resident foreign corporation. Also, by virtue of the
In 1992, plaintiff’s superiors requested her to see Mr. Ali Meniewy, Chief employment of Morada with the petitioner Saudia as a flight stewardess,
Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, events did transpire during her many occasions of travel across national
he brought her to the police station where the police took her passport borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia,
and questioned her about the Jakarta incident. She was pressured to and vice versa, that caused a "conflicts" situation to arise.
drop the case against Thamer and Allah. Not until she agreed to do so
did the police return her passport and allowed her to catch the We thus find private respondent's assertion that the case is purely
afternoon flight out of Jeddah. domestic, imprecise. A conflicts problem presents itself here, and the
question of jurisdiction confronts the court a quo.
In 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of
her flight to Manila, plaintiff was not allowed to board the plane and After a careful study of the private respondent's Amended
instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Complaint, and the Comment thereon, we note that she aptly
Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the predicated her cause of action on Articles 19 and 21 of the New Civil
SAUDIA office brought her to a Saudi court where she was asked to Code.
sign a document written in Arabic. They told her that this was necessary
to close the case against Thamer and Allah. As it turned out, plaintiff
signed a notice to her to appear before the court on June 27, 1993.
Based on the allegations in the Amended Complaint, read in the light of
Plaintiff then returned to Manila.
the Rules of Court on jurisdiction we find that the Regional Trial Court
Defendant SAUDIA summoned plaintiff to report to Jeddah once again (RTC) of Quezon City possesses jurisdiction over the subject matter of
and see Miniewy on June 27, 1993 for further investigation. the suit.  Its authority to try and hear the case is provided for under
Section 1 of Republic Act No. 7691, to wit:
A SAUDIA legal officer again escorted plaintiff to the same court where
the judge, to her astonishment and shock, rendered a decision, BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall
translated to her in English, sentencing her to five months imprisonment exercise exclusive jurisdiction:
and to 286 lashes. Only then did she realize that the Saudi court had
xxx xxx xxx
tried her, together with Thamer and Allah, for what happened in
Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a
disco, dancing and listening to the music in violation of Islamic laws; (8) In all other cases in which demand, exclusive of interest, damages
and (3) socializing with the male crew, in contravention of Islamic of whatever kind, attorney`y’s fees, litigation expenses, and cots or the
tradition.  value of the property in controversy exceeds One hundred thousand
pesos (P100,000.00) or, in such other cases in Metro Manila, where the
SAUDIA denied her the assistance she requested, but because she was
demand, exclusive of the above-mentioned items exceeds Two hundred
wrongfully convicted, Prince of Makkah dismissed the case against her
Thousand pesos (P200,000.00).
and allowed her to leave Saudi Arabia. Shortly before her return to
Manila, she was terminated from the service by SAUDIA, without her
being informed of the cause. xxx xxx xxx
On November 23, 1993, Morada filed a Complaint for damages against
SAUDIA, and Khaled Al-Balawi (“Al-Balawi”), its country manager. Section 2 (b), Rule 4 of the Revised Rules of Court — the venue,
Quezon City, is appropriate:
SAUDIA ALLEGES: Private respondent’s claim for alleged abuse of rights
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of
a foreign element qualifies the instant case for the application of the law Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]
of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi
rule.
(a) xxx xxx xxx
Accoridng to Petitioner SAUDIA, the trial court has no jurisdiction to
hear and try the case based on Article 21 of the New Civil Code since
(b) Personal actions. — All other actions may be commenced and
the proper law applicable is the law of the Kingdom of Saudi Arabia
tried where the defendant or any of the defendants resides or
inasmuch as this case involves what is known in private international
may be found, or where the plaintiff or any of the plaintiff
law as a "conflicts problem". Otherwise, the Republic of the Philippines
resides, at the election of the plaintiff.
will sit in judgment of the acts done by another sovereign state which is
abhorred. Weighing the relative claims of the parties, the court a quo found it best
to hear the case in the Philippines. Had it refused to take cognizance of
On the other hand, private respondent contends that since her
the case, it would be forcing plaintiff (private respondent now) to seek
Amended Complaint is based on Articles 19 and 21 of the Civil Code,
remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where
then the instant case is properly a matter of domestic law. 
she no longer maintains substantial connections. That would have
Issue: WON the Philippine courts have jurisdiction to try the case? caused a fundamental unfairness to her.

Ruling: Yes. Moreover, by hearing the case in the Philippines no unnecessary


difficulties and inconvenience have been shown by either of the parties.
A factual situation that cuts across territorial lines and is affected by the The choice of forum of the plaintiff (now private respondent) should be
diverse laws of two or more states is said to contain a "foreign upheld.
element". The presence of a foreign element is inevitable since social

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 2
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

The trial court also acquired jurisdiction over the parties. MORADA applying the torts principle in a conflicts case, we find that the
through her act of filing, and SAUDIA by praying for the dismissal of the Philippines could be said as a situs of the tort (the place where the
Amended Complaint on grounds other than lack of jurisdiction. alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a
TORTS AND DAMAGES Filipina residing and working here. According to her, she had honestly
believed that petitioner would, in the exercise of its rights and in the
As to the choice of applicable law, we note that choice-of-law problems performance of its duties, “act with justice, give her due and observe
seek to answer two important questions: honesty and good faith.” Instead, petitioner failed to protect her, she
claimed. That certain acts or parts of the injury allegedly occurred in
(1) What legal system should control a given situation where
another country is of no moment. For in our view what is important
some of the significant facts occurred in two or more states;
here is the place where the over-all harm or the totality of the alleged
and
injury to the person, reputation, social standing and human rights of
(2) to what extent should the chosen legal system regulate the
complainant, had lodged, according to the plaintiff below (herein private
situation.
respondent). All told, it is not without basis to identify the Philippines as
Before a choice can be made, it is necessary for us to determine under the situs of the alleged tort.
what category a certain set of facts or rules fall. This process is known
In applying “State of the most significant relationship” rule, to
as "characterization", or the "doctrine of qualification". It is the "process
determine the State which has the most significant relationship, the
of deciding whether or not the facts relate to the kind of question
following contacts are to be taken into account and evaluated according
specified in a conflicts rule."  The purpose of "characterization" is to
to their relative importance with respect to the particular issue: (a) the
enable the forum to select the proper law. 
place where the injury occurred; (b) the place where the conduct
Our starting point of analysis here is not a legal relation, but a factual causing the injury occurred; (c) the domicile, residence, nationality,
situation, event, or operative fact.  An essential element of conflict rules place of incorporation and place of business of the parties, and (d) the
is the indication of a "test" or "connecting factor" or "point of contact". place where the relationship, if any, between the parties is centered.
Choice-of-law rules invariably consist of a factual relationship (such as
As already discussed, there is basis for the claim that over-all injury
property right, contract claim) and a connecting factor or point of
occurred and lodged in the Philippines. There is likewise no question
contact, such as the situs of the res, the place of celebration, the place
that private respondent is a resident Filipina national, working with
of performance, or the place of wrongdoing. 
petitioner, a resident foreign corporation engaged here in the business
Note that one or more circumstances may be present to serve as the of international air carriage. Thus, the “relationship” between the parties
possible test for the determination of the applicable law. These "test was centered here, although it should be stressed that this suit is not
factors" or "points of contact" or "connecting factors" could be any of based on mere labor law violations. From the record, the claim that the
the following: Philippines has the most significant contact with the matter in this
dispute, raised by private respondent as plaintiff below against
(1) The nationality of a person, his domicile, his residence, his place of defendant (herein petitioner), in our view, has been properly
sojourn, or his origin; established.

(2) the seat of a legal or juridical person, such as a corporation;

(3) the situs of a thing, that is, the place where a thing is, or is deemed JURISDICTION
to be situated. In particular, the lex situs is decisive when real rights are
involved;

(4) the place where an act has been done, the locus actus, such as the G.R. No. 149177 November 23, 2007
place where a contract has been made, a marriage celebrated, a will
signed or a tort committed. The lex loci actus is particularly important in KAZUHIRO HASEGAWA and NIPPON ENGINEERING
contracts and torts; CONSULTANTS CO., LTD., Petitioners,
vs.
(5) the place where an act is intended to come into effect, e.g., the MINORU KITAMURA, Respondent.
place of performance of contractual duties, or the place where a power
of attorney is to be exercised;
Facts: Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese
(6) the intention of the contracting parties as to the law that should consultancy firm providing technical and management support in the
govern their agreement, thelex loci intentionis; infrastructure projects of foreign governments, entered into an
Independent Contractor Agreement (ICA) with respondent Minoru
(7) the place where judicial or administrative proceedings are instituted
Kitamura, a Japanese national permanently residing in the Philippines.
or done. The lex fori  — the law of the forum — is particularly important
because, as we have seen earlier, matters of "procedure" not going to The ICA provides that Kitamura was to extend professional services
the substance of the claim involved are governed by it; and because to Nippon for a year starting on April 1, 1999. Nippon then assigned
the lex fori applies whenever the content of the otherwise applicable respondent to work as the project manager of the Southern Tagalog
foreign law is excluded from application in a given case for the reason Access Road (STAR) Project in the Philippines. When the STAR Project
that it falls under one of the exceptions to the applications of foreign was near completion, DPWH engaged the consultancy services
law; and of Nippon, on January 28, 2000, this time for the detailed engineering
and construction supervision of the Bongabon-Baler Road Improvement
(8) the flag of a ship, which in many cases is decisive of practically all
(BBRI) Project. Kitamura was named as the project manager in the
legal relationships of the ship and of its master or owner as such. It also
contract's Appendix 3.1. However, on Feb 28 2000, Hasegawa, Nippon’s
covers contractual relationships particularly contracts of affreightment. 
general manager for its International Division informed Kitamura that
Considering that the complaint in the court a quo is one involving torts, the company had no more intention of automatically renewing his ICA.
the “connecting factor” or “point of contact” could be the place or His services would be engaged by the company only up to the
places where the tortious conduct or lex loci actus occurred. And
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 3
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

substantial completion of the STAR Project on March 31, 2000, just in that the court or tribunal cannot act on the matter submitted to it
time for the ICA's expiry. because no law grants it the power to adjudicate the claims.

Kitamura requested for a negotiation conference but Nippon refused to In the instant case, petitioners, in their motion to dismiss, do not claim
do so. This prompted Kitamura to file a civil case for specific that the trial court is not properly vested by law with jurisdiction to hear
performance and damages with the Regional Trial Court of Lipa City. the subject controversy for, indeed, Civil Case No. 00-0264 for specific
Nippon moved to dismiss the case for lack of jurisdiction since performance and damages is one not capable of pecuniary estimation
the ICA had been perfected in Japan and executed by and between and is properly cognizable by the RTC of Lipa City. What they rather
Japanese nationals. raise as grounds to question subject matter jurisdiction are the
principles of lex loci celebrationis and lex contractus,  and the state of
RTC (Lipa) denied the MTD and ruled that the matters connected with the most significant relationship rule.
the performance of contracts are regulated by the law prevailing at the
place of performance. The subsequent MR was also denied. Hence The Court finds the invocation of these grounds unsound.
Nippon filed with the CA their first Petition for Certiorari under Rule 65
but it was denied. Note that petitioners adopted an additional but Lex loci celebrationis relates to the law of the place of the ceremony or
different theory when they elevated the case to the appellate court. In the law of the place where a contract is made.  The doctrine of lex
the Motion to Dismiss filed with the trial court, petitioners never contractus or lex loci contractus means the law of the place where a
contended that the RTC is an inconvenient forum. contract is executed or to be performed. It controls the nature,
construction, and validity of the contract and it may pertain to the law
A second Petition for Certiorari  under Rule 65 was filed but the same voluntarily agreed upon by the parties or the law intended by them
was denied. The CA ruled, among others, that the principle of lex loci either expressly or implicitly. Under the state of the most significant
celebrationis was not applicable to the case, because nowhere in the relationship rule, to ascertain what state law to apply to a dispute, the
pleadings was the validity of the written agreement put in issue. The CA court should determine which state has the most substantial connection
thus declared that the trial court was correct in applying instead the to the occurrence and the parties. In a case involving a contract, the
principle of lex loci solutionis. court should consider where the contract was made, was negotiated,
was to be performed, and the domicile, place of business, or place of
Hence this petition for review before this Court where Nippon dropped incorporation of the parties. This rule takes into account several
their other arguments, maintained the forum non conveniens  defense, contacts and evaluates them according to their relative importance with
and introduced their new argument that the applicable principle is the respect to the particular issue to be resolved.
[state of the] most significant relationship rule.
Since these three principles in conflict of laws make reference to the law
Issue: WON RTC has jurisdiction over the subject case. applicable to a dispute, they are rules proper for the second phase, the
choice of law. They determine which state's law is to be applied in
Ruling: Yes resolving the substantive issues of a conflicts problem. Necessarily, as
the only issue in this case is that of jurisdiction, choice-of-law rules are
To elucidate, in the judicial resolution of conflicts problems, three
not only inapplicable but also not yet called for.
consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these Further, petitioners' premature invocation of choice-of-law rules is
phases are the following questions: (1) Where can or should litigation exposed by the fact that they have not yet pointed out any conflict
be initiated? (2) Which law will the court apply? and (3) Where can the between the laws of Japan and ours. Before determining which law
resulting judgment be enforced? should apply, first there should exist a conflict of laws situation requiring
the application of the conflict of laws rules. Also, when the law of a
Analytically, jurisdiction and choice of law are two distinct
foreign country is invoked to provide the proper rules for the solution of
concepts. Jurisdiction considers whether it is fair to cause a defendant
a case, the existence of such law must be pleaded and proved.
to travel to this state; choice of law asks the further question whether
the application of a substantive law which will determine the merits of It should be noted that when a conflicts case, one involving a foreign
the case is fair to both parties. The power to exercise jurisdiction does element, is brought before a court or administrative agency, there are
not automatically give a state constitutional authority to apply forum three alternatives open to the latter in disposing of it: (1) dismiss the
law. While jurisdiction and the choice of the lex fori  will often coincide, case, either because of lack of jurisdiction or refusal to assume
the minimum contacts for one do not always provide the necessary jurisdiction over the case; (2) assume jurisdiction over the case and
significant contacts for the other. The question of whether the law of a apply the internal law of the forum; or (3) assume jurisdiction over the
state can be applied to a transaction is different from the question of case and take into account or apply the law of some other State or
whether the courts of that state have jurisdiction to enter a judgment. States. The courts power to hear cases and controversies is derived
from the Constitution and the laws. While it may choose to recognize
In this case, only the first phase is at issue --- jurisdiction. Jurisdiction,
laws of foreign nations, the court is not limited by foreign sovereign law
however, has various aspects. For a court to validly exercise its power
short of treaties or other formal agreements, even in matters regarding
to adjudicate a controversy, it must have jurisdiction over the plaintiff or
rights provided by foreign sovereigns.
the petitioner, over the defendant or the respondent, over the subject
matter, over the issues of the case and, in cases involving property, Neither can the other ground raised, forum non conveniens, be used to
over the res or the thing which is the subject of the litigation. In deprive the trial court of its jurisdiction herein. First, it is not a proper
assailing the trial court's jurisdiction herein, petitioners are basis for a motion to dismiss because Section 1, Rule 16 of the Rules of
actually referring to subject matter jurisdiction. Court does not include it as a ground.  Second, whether a suit should be
entertained or dismissed on the basis of the said doctrine depends
Jurisdiction over the subject matter in a judicial proceeding is conferred
largely upon the facts of the particular case and is addressed to the
by the sovereign authority which establishes and organizes the court. It
sound discretion of the trial court. In this case, the RTC decided to
is given only by law and in the manner prescribed by law. It is further
assume jurisdiction. Third, the propriety of dismissing a case based on
determined by the allegations of the complaint irrespective of whether
this principle requires a factual determination; hence, this conflicts
the plaintiff is entitled to all or some of the claims asserted therein. To
principle is more properly considered a matter of defense.
succeed in its motion for the dismissal of an action for lack of
jurisdiction over the subject matter of the claim, the movant must show

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 4
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

NAVIDA vs DIZON GR No. 125078. 125598, 126654, 128398, 3. RTC of General Santos City adjudged that Navida, et al., were
May 30, 2011 coerced into submitting their case to the Philippine courts
merely to comply with the U.S. District Court’s Order and in
Facts: order to keep open to the plaintiffs the opportunity to return
to the U.S. District Court.
Beginning 1993, a number of personal injury suits were filed in different
Texas state courts by citizens of twelve foreign countries, including the 4. RTC of General Santos City ruled that the act of NAVIDA, et
Philippines. The thousands of plaintiffs sought damages for injuries they al., of filing the case in the Philippine courts violated the rules
allegedly sustained from their exposure to dibromochloropropane on forum shopping and litis pendencia. This court frowns
(DBCP), a chemical used to kill nematodes (worms), while working on upon the fact that the parties herein are both vigorously
farms in 23 foreign countries. The cases were eventually transferred to, pursuing their appeal of the decision of the U.S. District court
and consolidated in, the Federal District Court for the Southern District dismissing the case filed thereat. To allow the parties to
of Texas, Houston Division. The cases therein that involved plaintiffs litigate in this court when they are actively pursuing the same
from the Philippines were "Jorge Colindres Carcamo, et al. v. Shell Oil cases in another forum, violates the rule on ‘forum shopping’
Co., et al.," and "Juan Ramon Valdez, et al. v. Shell Oil Co., et al.,". The so abhorred in this jurisdiction. Moreover, the filing of the
defendants in the consolidated cases prayed for the dismissal of all the case in the U.S. courts divested this court of its own
actions under the doctrine of forum non conveniens. jurisdiction. This court takes note that the U.S. District Court
did not decline jurisdiction over the cause of action. The case
In a Memorandum Order, the Federal District Court conditionally was dismissed on the ground of forum non conveniens, which
granted the defendants’ motion to dismiss provided the defendants: is really a matter of venue. By taking cognizance of the case,
the U.S. District Court has, in essence, concurrent jurisdiction
1) participated in expedited discovery in the United States
with this court over the subject matter of this case. It is
2) either waived or accepted service of process and waived any settled that initial acquisition of jurisdiction divests another of
other jurisdictional defense in any action commenced by a its own jurisdiction. 
plaintiff in these actions in his home country or the country in
The Consolidated Motion to Drop DOW, OCCIDENTAL, and SHELL as
which his injury occurred.
Party-Respondents filed by NAVIDA, et al. and ABELLA, et al.
3) waived any limitations-based defense that has matured since
Another joint complaint for damages against SHELL, DOW,
the commencement of these actions in the courts of Texas;
OCCIDENTAL, DOLE, DEL MONTE, and CHIQUITA was filed before
4) stipulated that any discovery conducted during the pendency Branch 16 of the RTC of Davao City by 155 plaintiffs from Davao City.
of these actions may be used in any foreign proceeding to the They alleged that as workers in the banana plantation and/or as
same extent as if it had been conducted in proceedings residents near the said plantation, they were made to use and/or were
initiated there; and exposed to nematocides, which contained the chemical DBCP. According
to ABELLA, et al., such exposure resulted in “serious and permanent
5) submitted an agreement binding them to satisfy any final injuries to their health, including, but not limited to, sterility and severe
judgment rendered in favor of plaintiffs by a foreign court. injuries to their reproductive capacities.”

In the event that the highest court of any foreign country finally affirms The RTC of Davao City, however, junked Civil Cases. The Court however
the dismissal for lack of jurisdiction of an action commenced by a is constrained to dismiss the case at bar not solely on the basis of the
plaintiff in these actions in his home country or the country in which he above but because it shares the opinion of former Justice Secretary
was injured, that plaintiff may return to this court and, upon proper Demetrio Demetria The Philippines should be an inconvenient forum to
motion, the court will resume jurisdiction over the action as if the case file this kind of damage suit against foreign companies since the causes
had never been dismissed for. of action alleged in the petition do not exist under Philippine laws. There
has been no decided case in Philippine Jurisprudence awarding to those
Civil Case No. 5617 before the RTC of General Santos City and G.R. Nos. adversely affected by DBCP. This means there is no available evidence
125078 and 125598 which will prove and disprove the relation between sterility and DBCP.

Facts: Abella, et al claim that the RTC of Davao City erred in dismissing the
case on the ground of lack of jurisdiction.
In accordance with the Memorandum, a total of 336 plaintiffs
from General Santos (hereinafter referred to as NAVIDA, et al.) filed a According to ABELLA, et al., the RTC of Davao City has jurisdiction over
Joint Complaint in the RTC of General Santos City on August 10, 1995. the subject matter of the case since Articles 2176 and 2187 of the Civil
Navida, et al., prayed for the payment of damages in view of the Code are broad enough to cover the acts complained of and to support
illnesses and injuries to the reproductive systems which they allegedly their claims for damages.
suffered because of their exposure to DBCP.
ABELLA, et al., further aver that the dismissal of the case, based on the
Defendant companies filed their various Motions for Bill of Particulars. opinions of legal luminaries reported in a newspaper, by the RTC of
However, the RTC of General Santos City, without resolving the motions Davao City is bereft of basis. According to them, their cause of action is
filed by the parties, issued an Order dismissing the complaint based on based on quasi-delict under Article 2176 of the Civil Code.
the following grounds:
ISSUE: Whether or not the RTC of General Santos City and Davao City
1. That the RTC does not have jurisdiction to hear the case. The have jurisdiction over the subject matter in these cases.
substance of the cause of action as stated in the complaint
against the defendant foreign companies cites activity on their RULING: YES
part which took place abroad and had occurred outside and
beyond the territorial domain of the Philippines.  JURISDICTION OVER THE SUBJECT MATTER

2. RTC of General Santos City declared that the tort alleged by I. The rule is settled that jurisdiction over the subject
Navida, et al., in their complaint is a tort category that is not matter of a case is conferred by law and is determined
recognized in Philippine laws. by the allegations in the complaint and the character of
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 5
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

the relief sought, irrespective of whether the plaintiffs as doctors, co-workers, family members and other members of the
are entitled to all or some of the claims asserted therein. community, would be easier to gather in the Philippines. 
Once vested by law, on a particular court or body, the
jurisdiction over the subject matter or nature of the JURISDICTION OF THE PERSON
action cannot be dislodged by anybody other than by the
legislature through the enactment of a law.  The RTC of General Santos City and the RTC of Davao City validly
acquired jurisdiction over the persons of all the defendant companies.
All parties voluntarily, unconditionally and knowingly appeared and
submitted themselves to the jurisdiction of the courts a quo. 
At the time of the filing of the complaints, the jurisdiction of the RTC in
civil cases under Batas Pambansa Blg. 129, as amended by Republic Act NOTE:
No. 7691, was:
It may also be pertinently stressed that “jurisdiction” is different from
In all other cases in which the demand, exclusive of interest, damages the “exercise of jurisdiction.” Jurisdiction refers to the authority to
of whatever kind, attorney’s fees, litigation expenses, and costs or the decide a case, not the orders or the decision rendered therein.
value of the property in controversy exceeds One hundred thousand Accordingly, where a court has jurisdiction over the persons of the
pesos (P100,000.00) or, in such other cases in Metro Manila, where the defendants and the subject matter, as in the case of the courts a quo,
demand, exclusive of the abovementioned items exceeds Two hundred the decision on all questions arising therefrom is but an exercise of such
thousand pesos (P200,000.00). jurisdiction. Any error that the court may commit in the exercise of its
jurisdiction is merely an error of judgment, which does not affect its
Supreme Court Administrative Circular No. 09-94, states: The exclusion authority to decide the case, much less divest the court of the
of the term “damages of whatever kind” in determining the jurisdictional jurisdiction over the case.
amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as
amended by R.A. No. 7691, applies to cases where the damages are CONTINENTAL MICRONESIA, INC v. BASSO
merely incidental to or a consequence of the main cause of action. GR Nos. 178382-83, Sept. 23, 2015
However, in cases where the claim for damages is the main cause of
action, or one of the causes of action, the amount of such claim shall be
considered in determining the jurisdiction of the court. Facts:
It is clear that the claim for damages is the main cause of action and Continental Micronesia, Inc. (CMI) is a foreign corporation organized
that the total amount sought in the complaints is approximately P2.7 and existing under the laws of and domiciled in the United States of
million for each of the plaintiff claimants. The RTCs unmistakably have America (US). It is licensed to do business in the Philippines. Basso, a
jurisdiction over the cases filed in General Santos City and Davao City.  US citizen, resided in the Philippines prior to his death. Mr. Keith R.
Braden (Mr. Braden), Managing Director-Asia of Continental Airlines,
II. The jurisdiction of the court cannot be made to depend Inc. (Continental), offered Basso the position of General Manager of the
upon the defenses set up in the answer, what Philippine Branch of Continental. Basso accepted the offer. On
determines the jurisdiction of the court is the nature of November 7, 1992, CMI took over the Philippine operations of
the action pleaded as appearing from the allegations in Continental, with Basso retaining his position as General Manager.
the complaint. However, Ms. Woodward terminated his employment effective January
31, 1996.
Clearly then, the acts and/or omissions attributed to the defendant
companies constitute a quasi-delict which is the basis for the claim for Basso filed a Complaint for Illegal Dismissal with Moral and Exemplary
damages filed by NAVIDA, et al., and ABELLA, et al., with individual Damages against CMI on December 19, 1996. Alleging the presence of
claims of approximately P2.7 million for each plaintiff claimant, which foreign elements, CMI filed a Motion to Dismiss dated February 10,
obviously falls within the purview of the civil action jurisdiction of the 1997 on the ground of lack of jurisdiction over the person of CMI and
RTCs. the subject matter of the controversy.
III. It is, therefore, error on the part of the courts a quo In an Order dated August 27, 1997, the Labor Arbiter granted the
when they dismissed the cases on the ground of lack of Motion to Dismiss. Applying the doctrine of lex loci contractus, the Labor
jurisdiction on the mistaken assumption that the cause Arbiter held that the terms and provisions of the employment contract
of action narrated by NAVIDA, et al., and ABELLA, et al., show that the parties did not intend to apply our Labor Code. The Labor
took place abroad and had occurred outside and beyond Arbiter also held that no employer-employee relationship existed
the territorial boundaries of the Philippines. between Basso and the branch office of CMI in the Philippines, but
between Basso and the foreign corporation itself.
Certainly, the cases below are not criminal cases where territoriality, or
the situs of the act complained of, would be determinative of jurisdiction
and venue for trial of cases. In personal civil actions, such as claims for On appeal, the NLRC remanded the case to the Labor Arbiter for the
payment of damages, the Rules of Court allow the action to be determination of certain facts to settle the issue on jurisdiction. NLRC
commenced and tried in the appropriate court, where any of the ruled that the issue on whether the principle of lex loci contractus or lex
plaintiffs or defendants resides, or in the case of a non-resident loci celebrationis should apply has to be further threshed out.17
defendant, where he may be found, at the election of the plaintiff.
Labor Arbiter's Ruling:
In a very real sense, most of the evidence required to prove the claims
of NAVIDA, et al., and ABELLA, et al., are available only in the The Labor Arbiter Madjayran H. Ajan agreed with CMI that the
Philippines. First, plaintiff claimants are all residents of the Philippines, employment contract was executed in the US "since the letter-offer was
either in General Santos City or in Davao City. Second, the specific areas under the Texas letterhead and the acceptance of Complainant was
where they were allegedly exposed to the chemical DBCP are within the returned there."19 Thus, applying the doctrine of lex loci celebrationis,
territorial jurisdiction of the courts a quo wherein NAVIDA, et al., and US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled
ABELLA, et al., initially filed their claims for damages. Third, the that the parties did not intend to apply Philippine laws, thus:
testimonial and documentary evidence from important witnesses, such

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 6
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Although the contract does not state what law shall apply, it is obvious originated from and was returned to the US, do not automatically
that Philippine laws were not written into it. More specifically, the preclude our labor tribunals from exercising jurisdiction to hear and try
Philippine law on taxes and the Labor Code were not intended by the this case.
parties to apply, otherwise Par. 7 on the payment by Complainant U.S.
Federal and Home State income taxes, and Pars. 22/23 on termination This case stemmed from an illegal dismissal complaint. The Labor Code,
by 30-day prior notice, will not be there. The contract was prepared in under Article 217, clearly vests original and exclusive jurisdiction to hear
contemplation of Texas or U.S. laws where Par. 7 is required and Pars. and decide cases involving termination disputes to the Labor Arbiter.
22/23 is allowed.20 Hence, the Labor Arbiter and the NLRC have jurisdiction over the
subject matter of the case.
The Labor Arbiter also ruled that Basso was terminated for a valid cause
based on the allegations of CMI that Basso committed a series of acts On the other hand, jurisdiction over the person of CMI was acquired
that constitute breach of trust and loss of confidence. through the coercive process of service of summons. We note that CMI
never denied that it was served with summons. CMI has, in fact,
voluntarily appeared and participated in the proceedings before the
The Labor Arbiter, however, found CMI to have voluntarily submitted to courts. Though a foreign corporation, CMI is licensed to do business in
his office's jurisdiction. CMI participated in the proceedings, submitted the Philippines and has a local business address here. The purpose of
evidence on the merits of the case, and sought affirmative relief the law in requiring that foreign corporations doing business in the
through a motion to dismiss.22 country be licensed to do so, is to subject the foreign corporations to
the jurisdiction of our courts.
NLRC's Ruling
Considering that the Labor Arbiter and the NLRC have jurisdiction over
The NLRC did not agree with the pronouncement of the Labor Arbiter the parties and the subject matter of this case, these tribunals may
that his office has no jurisdiction over the controversy. It ruled that the proceed to try the case even if the rules of conflict-of-laws or the
Labor Arbiter acquired jurisdiction over the case when CMI voluntarily convenience of the parties point to a foreign forum, this being an
submitted to his office's jurisdiction by presenting evidence, advancing exercise of sovereign prerogative of the country where the case is filed.
arguments in support of the legality of its acts, and praying for reliefs
on the merits of the case. Issue #2: Whether the Philippine court is an inconvenient forum.

No. Under the doctrine of forum non conveniens, a Philippine court in a


On the merits, the NLRC agreed with the Labor Arbiter that Basso was conflict-of-laws case may assume jurisdiction if it chooses to do so,
dismissed for just and valid causes on the ground of breach of trust and provided, that the following requisites are met: (1) that the Philippine
loss of confidence. The NLRC ruled that under the applicable rules on Court is one to which the parties may conveniently resort to; (2) that
loss of trust and confidence of a managerial employee, such as Basso, the Philippine Court is in a position to make an intelligent decision as to
mere existence of a basis for believing that such employee has the law and the facts; and (3) that the Philippine Court has or is likely to
breached the trust of his employer suffices. However, the NLRC found have power to enforce its decision. 
that CMI denied Basso the required due process notice in his dismissal.
All these requisites are present here.
Issue #1: Whether or not the LA and NLRC has jurisdiction over the
case.
Basso may conveniently resort to our labor tribunals as he and CMI lad
physical presence in the Philippines during the duration of the trial. CMI
Yes. The labor tribunals had jurisdiction over the parties and the has a Philippine branch, while Basso, before his death, was residing
subject matter of the case. here. Thus, it could be reasonably expected that no extraordinary
measures were needed for the parties to make arrangements in
CMI maintains that there is a conflict-of-laws issue that must be settled advocating their respective cases.
to determine proper jurisdiction over the parties and the subject matter
of the case. It also alleges that the existence of foreign elements calls The labor tribunals can make an intelligent decision as to the law and
or the application of US laws and the doctrines of lex loci facts. The incident subject of this case (i.e. dismissal of Basso)
celebrationis (the law of the place of the ceremony), lex loci happened in the Philippines, the surrounding circumstances of which
contractus (law of the place where a contract is executed), and lex loci can be ascertained without having to leave the Philippines. The acts that
intentionis(the intention of the parties as to the law that should govern allegedly led to loss of trust and confidence and Basso's eventual
their agreement). CMI also invokes the application of the rule of forum dismissal were committed in the Philippines.
non conveniens to determine the propriety of the assumption of
jurisdiction by the labor tribunals.

The Court agrees with CMI that there is a conflict-of-laws issue that JURISDICTION, HOW ACQUIRED
needs to be resolved first. Where the facts establish the existence of
foreign elements, the case presents a conflict-of-laws issue. The foreign
element in a case nay appear in different forms, such as in this case,
where one of the parties s an alien and the other is domiciled in another G.R. No. 112573 February 9, 1995
state.
NORTHWEST ORIENT AIRLINES, INC. petitioner, 
Jurisdiction is defined as the power and authority of the courts to hear, vs.
try and decide cases. Jurisdiction over the subject matter is conferred COURT OF APPEALS and C.F. SHARP & COMPANY
by the Constitution or by law and by the material allegations in the INC., respondents.
complaint, regardless of whether or not the plaintiff is entitled to
recover all or some of the claims or reliefs sought therein. It cannot be FACTS:
acquired through a waiver or enlarged by the omission of the parties or Petitioner Northwest Orient Airlines, Inc. (hereinafter NORTHWEST), a
conferred by the acquiescence of the court. That the employment corporation organized under the laws of the State of Minnesota, U.S.A.,
contract of Basso was replete with references to US laws, and that it sought to enforce in Civil Case No. 83-17637 of the Regional Trial Court
(RTC), Branch 54, Manila, a judgment rendered in its favor by a
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 7
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Japanese court against private respondent C.F. Sharp & Company, Inc., law. It may not be taken judicial notice of and must be pleaded and
(hereinafter SHARP), a corporation incorporated under Philippine laws. proved like any other fact.It was then incumbent upon SHARP to
present evidence as to what that Japanese procedural law is and to
Northwest Airlines and defendant C.F. Sharp & Company, through its show that under it, the assailed extraterritorial service is invalid. It did
Japan branch, entered into an International Passenger Sales Agency not. Accordingly, the presumption of validity and regularity of the
Agreement, whereby the former authorized the latter to sell its air service of summons and the decision thereafter rendered by the
transportation tickets. Unable to remit the proceeds of the ticket sales Japanese court must stand.
made by defendant on behalf of the plaintiff under the said agreement,
plaintiff on March 25, 1980 sued defendant in Tokyo, Japan, for Alternatively in the light of the absence of proof regarding
collection of the unremitted proceeds of the ticket sales, with claim for Japanese law, the presumption of identity or similarity or the so-called
damages. processual presumption may be invoked. Applying it, the Japanese
law on the matter is presumed to be similar with the Philippine law
After the two attempts of service were unsuccessful, the judge of the on service of summons on a private foreign corporation doing
Tokyo District Court decided to have the complaint and the writs of business in the Philippines. Section 14, Rule 14 of the Rules of Court
summons served at the head office of the defendant in Manila. On July provides that if the defendant is a foreign corporation doing business in
11, 1980, the Director of the Tokyo District Court requested the the Philippines, service may be made: (1) on its resident agent
Supreme Court of Japan to serve the summons through diplomatic designated in accordance with law for that purpose, or, (2) if there is no
channels upon the defendant's head office in Manila. such resident agent, on the government official designated by law to
that effect; or (3) on any of its officers or agents within the Philippines.
Defendant received from Deputy Sheriff Rolando Balingit the writ of
summons. Thus, the Tokyo Court proceeded to hear the plaintiff's If the foreign corporation has designated an agent to receive summons,
complaint and rendered judgment ordering the defendant to pay the the designation is exclusive, and service of summons is without force
plaintiff the sum of 83,158,195 Yen and damages for delay at the rate and gives the court no jurisdiction unless made upon him.
of 6% per annum from August 28, 1980 up to and until payment is
completed. Where the corporation has no such agent, service shall be made on the
government official designated by law, to wit: (a) the Insurance
Defendant not having appealed the judgment, the same became final Commissioner in the case of a foreign insurance company; (b) the
and executory. Plaintiff was unable to execute the decision in Japan, Superintendent of Banks, in the case of a foreign banking corporation;
hence, on May 20, 1983, a suit for enforcement of the judgment was and (c) the Securities and Exchange Commission, in the case of other
filed by plaintiff before the Regional Trial Court of Manila Branch 54. foreign corporations duly licensed to do business in the Philippines.
Defendant filed its answer averring that the judgment of the Japanese Whenever service of process is so made, the government office or
Court sought to be enforced is null and void and unenforceable in this official served shall transmit by mail a copy of the summons or other
jurisdiction having been rendered without due and proper notice to the legal proccess to the corporation at its home or principal office. The
defendant and/or with collusion or fraud and/or upon a clear mistake of sending of such copy is a necessary part of the service.
law and fact.
Nowhere in its pleadings did SHARP profess to having had a resident
ISSUE: agent authorized to receive court processes in Japan. This silence could
Whether or not a Japanese court can acquire jurisdiction over a only mean, or least create an impression, that it had none. Hence,
Philippine corporation doing business in Japan by serving summons service on the designated government official or on any of SHARP's
through diplomatic channels on the Philippine corporation at its principal officers or agents in Japan could be availed of.
office in Manila after prior attempts to serve summons in Japan had
failed. As found by the Court of Appeals, it was the Tokyo District Court which
ordered that summons for SHARP be served at its head office in the
RULING: Philippine's after the two attempts of service had failed.

YES. A foreign judgment is presumed to be valid and binding in the The Tokyo District Court requested the Supreme Court of Japan to
country from which it comes, until the contrary is shown. It is also cause the delivery of the summons and other legal documents to the
proper to presume the regularity of the proceedings and the giving of Philippines. Acting on that request, the Supreme Court of Japan sent the
due notice therein. summons together with the other legal documents to the Ministry of
Foreign Affairs of Japan which, in turn, forwarded the same to the
Under Section 50, Rule 39 of the Rules of Court, a judgment in an Japanese Embassy in Manila . Thereafter, the court processes were
action in personam  of a tribunal of a foreign country having jurisdiction delivered to the Ministry (now Department) of Foreign Affairs of the
to pronounce the same is presumptive evidence of a right as between Philippines, then to the Executive Judge of the Court of First Instance
the parties and their successors-in-interest by a subsequent title. The (now Regional Trial Court) of Manila, who forthwith ordered Deputy
judgment may, however, be assailed by evidence of want of Sheriff Rolando Balingit to serve the same on SHARP at its principal
jurisdiction, want of notice to the party, collusion, fraud, or office in Manila. This service is equivalent to service on the
clear mistake of law or fact. Also, under Section 3 of Rule 131, a proper government official under Section 14, Rule 14 of the
court, whether of the Philippines or elsewhere, enjoys the presumption Rules of Court, in relation to Section 128 of the Corporation
that it was acting in the lawful exercise of jurisdiction and has regularly Code.
performed its official duty.
The domicile of a corporation belongs to the state where it was
Being the party challenging the judgment rendered by the Japanese incorporated. In a strict technical sense, such domicile as a corporation
court, SHARP had the duty to demonstrate the invalidity of such may have is single in its essence and a corporation can have only one
judgment. domicile which is the state of its creation. 
It is settled that matters of remedy and procedure such as those Nonetheless, a corporation formed in one-state may, for certain
relating to the service of process upon a defendant are purposes, be regarded a resident in another state in which it has offices
governed by the lex fori  or the internal law of the forum. In this and transacts business. This is the rule in our jurisdiction.
case, it is the procedural law of Japan where the judgment was
rendered that determines the validity of the extraterritorial service of This court itself has already had occasion to hold [Claude Neon Lights,
process on SHARP. As to what this law is is a question of fact, not of Fed. Inc. vs. Philippine Advertising Corp., 57 Phil. 607] that a foreign
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 8
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

corporation licitly doing business in the Philippines, which is a defendant default. Petitioner Alfredo D. Valmonte entered a special appearance in
in a civil suit, may not be considered a non-resident  within the scope of behalf of his wife and opposed the private respondent's motion.
the legal provision authorizing attachment against a defendant not
residing in the Philippine Islands. Our laws and jurisprudence indicate a RTC- denied private respondent's motion to declare petitioner Lourdes
purpose to assimilate foreign corporations, duly licensed to do business A. Valmonte in default.
here, to the status of domestic corporations.
CA- rendered a decision granting the petition and declaring Lourdes A.
In as much as SHARP was admittedly doing business in Japan through Valmonte in default
its four duly registered branches at the time the collection suit against it
was filed, then in the light of the processual presumption, SHARP may Petitioners assail the aforequoted decision, alleging that the Court of
be deemed a resident of Japan, and, as such, was amenable to the Appeals erred (1) in refusing to apply the provisions of Rule 14, Sec. 17
jurisdiction of the courts therein and may be deemed to have assented of the Revised Rules of Court and applying instead Rule 14, Sec. 8 when
to the said courts' lawful methods of serving process. the fact is that petitioner Lourdes A. Valmonte is a nonresident
defendant; and (2) because even if Rule 14, Sec. 8 is the applicable
Accordingly, the extraterritorial service of summons on it by the provision, there was no valid substituted service as there was no strict
Japanese Court was valid not only under the processual presumption compliance with the requirement by leaving a copy of the summons and
but also because of the presumption of regularity of performance of complaint with petitioner Alfredo D. Valmonte.
official duty.
Private respondent, upon the other hand, asserts that petitioners are
invoking a technicality and that strict adherence to the rules would only
result in a useless ceremony.

Issue: WON petitioner Lourdes A. Valmonte was validly served with


summons.

Ruling: No.

We hold that there was no valid service of process on Lourdes A.


Valmonte.

Applying the foregoing rules to the case at bar, private respondent's


G.R. No. 108538             January 22, 1996 action, which is for partition and accounting under Rule 69, is in the
nature of an action quasi in rem. Such an action is essentially for the
LOURDES A. VALMONTE and ALFREDO D. purpose of affecting the defendant's interest in a specific property and
VALMONTE, petitioners,  not to render a judgment against him.
vs.
THE HONORABLE COURT OF APPEALS, THIRD DIVISION and As petitioner Lourdes A. Valmonte is a nonresident who is not found in
ROSITA DIMALANTA, respondents. the Philippines, service of summons on her must be in accordance with
Rule 14, §17. Such service, to be effective outside the Philippines, must
Facts: be made either (1) by personal service; (2) by publication in a
newspaper of general circulation in such places and for such time as the
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband court may order, in which case a copy of the summons and order of the
and wife. They are both residents of 90222 Carkeek Drive South Seattle, court should be sent by registered mail to the last known address of the
Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of defendant; or (3) in any other manner which the court may deem
the Philippine bar, however, practices his profession in the Philippines. sufficient.

On March 9, 1992, private respondent Rosita Dimalanta, who is the Since in the case at bar, the service of summons upon petitioner
sister of petitioner Lourdes A. Valmonte, filed a complaint for partition Lourdes A. Valmonte was not done by means of any of the first two
of real property and accounting of rentals against petitioners Lourdes A. modes, the question is whether the service on her attorney, petitioner
Valmonte and Alfredo D. Valmonte before the Regional Trial Court of Alfredo D. Valmonte, can be justified under the third mode, namely, "in
Manila. The subject of the action is a three-door apartment located in any . . . manner the court may deem sufficient."
Paco, Manila.
We hold it cannot. This mode of service, like the first two, must be
In her Complaint, private respondent alleged that for purposes of this made outside the Philippines, such as through the Philippine Embassy in
complaint, summons may be served at Gedisco Center, Unit 304, 1564 the foreign country where the defendant resides. 8 Moreover, there are
A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as several reasons why the service of summons on Atty. Alfredo D.
defendant Lourdes Arreola Valmonte's spouse holds office and where he Valmonte cannot be considered a valid service of summons on
can be found. petitioner Lourdes A. Valmonte. In the first place, service of summons
on petitioner Alfredo D. Valmonte was not made upon the order of the
Service of summons was then made upon petitioner Alfredo D. court as required by Rule 14, §17 and certainly was not a mode deemed
Valmonte, who at the time, was at his office in Manila. Petitioner Alfredo sufficient by the court which in fact refused to consider the service to be
D. Valmonte accepted the summons, insofar as he was concerned, but valid and on that basis declare petitioner Lourdes A. Valmonte in default
refused to accept the summons for his wife, Lourdes A. Valmonte, on for her failure to file an answer.
the ground that he was not authorized to accept the process on her
behalf. Accordingly the process server left without leaving a copy of the In the second place, service in the attempted manner on petitioner was
summons and complaint for petitioner Lourdes A. Valmonte. not made upon prior leave of the trial court as required also in Rule 14,
Sec. 17. As provided in Sec. 19, such leave must be applied for by
Petitioner Alfredo D. Valmonte thereafter filed his Answer with motion in writing, supported by affidavit of the plaintiff or some person
Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her on his behalf and setting forth the grounds for the application.
Answer. For this reason private respondent moved to declare her in

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 9
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Finally, and most importantly, because there was no order granting such In the case at bar, the action filed in Hong Kong against HERAS was in
leave, petitioner Lourdes A. Valmonte was not given ample time to file personam, since it was based on his personal guarantee of the
her Answer which, according to the rules, shall be not less than sixty obligation of the principal debtor.
(60) days after notice. It must be noted that the period to file an
Answer in an action against a resident defendant differs from the period The Supreme Court then relied on the stipulation of facts agreed upon
given in an action filed against a nonresident defendant who is not by the parties, whereby Heras referred to New Manila, Quezon City as
found in the Philippines. In the former, the period is fifteen (15) days his residence at the time jurisdiction over his person was being sought
from service of summons, while in the latter, it is at least sixty (60) days by the Hong Kong court.
from notice.
Thus, since Heras was not a resident of Hong Kong and the action
against him was one in personam, summons should have been
personally served on him in Hong Kong. The extraterritorial service in
G.R. No. 128803 September 25, 1998 the Philippines was invalid and did not confer on the Hong Kong court
jurisdiction over his person. It follows that the Hong Kong court
ASIAVEST LIMITED, petitioner, judgment cannot be given force and effect in the Philippines for having
vs. been rendered without jurisdiction.
THE COURT OF APPEALS and ANTONIO HERAS, respondents.
Even assuming Heras had been a resident of Hong Kong, he was no
longer such when the extraterritorial service of summons was attempted
Facts: to be made on him.
Asiavest Limited filed a complaint against Antonio Heras praying that he
be ordered to pay the amount awarded by the Hong Kong Court
sometime in December 1984, which was judgment was later amended Taking from the case of Brown vs. Brown where a proceeding quasi in
in April 1987. rem was instituted against a suspect who fled the Philippines, the
Supreme Court ruled that Heras, who was also an absentee, should
Antonio Heras admits the existence of the judgment, but cites that have been served with summons in the same manner as a non-resident
Asiavest is not doing business in the Philippines. He also cites that he not found in Hong Kong. Section 17, Rule 14 of the Rules of Court
resides in New Manila, Quezon City. providing for extraterritorial service will not apply because the suit
against him was in personam. Neither does Section 18, which allows
Heras presented two witnesses:
extraterritorial service on a resident defendant who is temporarily
1. His personal secretary who claimed that no writ of summons absent from the country, because even if Heras be considered as a
was served upon Heras’ office in Hong Kong or at his resident of Hong Kong, the undisputed fact remains that he left Hong
residence in New Manila. Kong not only temporarily but for good.

2. A representative from the law office of Antonio’s counsel who NOTES:


verified that there was no record of a writ of summons served
An action in personam is an action against a person on the basis of his
on the person of Antonio. The witness said that the service is
personal liability. An action in rem is an action against the thing itself
not a legal requirement to do so under Hong Kong laws.
instead of against the person.[19] An action quasi in rem is one wherein
The trial court ruled that the Hong Kong court judgment should be an individual is named as defendant and the purpose of the proceeding
given effect for Heras had failed to overcome the legal presumption in is to subject his interest therein to the obligation or lien burdening the
favor of the foreign judgment. property.

The Court of Appeals reversed the trial court’s decision, ruling that a In an action in personam, jurisdiction over the person of the defendant
foreign judgment does not itself have any extraterritorial application, is necessary for the court to validly try and decide the case. Jurisdiction
and to be given effect, the foreign tribunal should have acquired over the person of a resident defendant who does not voluntarily
jurisdiction over the person and the subject matter. Otherwise, the appear in court can be acquired by personal service of summons as
judgment is void. provided under Section 7, Rule 14 of the Rules of Court. If he cannot be
personally served with summons within a reasonable time, substituted
The Court of Appeals agreed with Heras that notice sent outside the service may be made in accordance with Section 8 of said Rule. If he is
state to a non-resident is unavailing to give jurisdiction in an action temporarily out of the country, any of the following modes of service
against him personally for money recovery. Summons should have been may be resorted to: (1) substituted service set forth in Section 8; (2)
personally served on Heras in Hong Kong, for, as claimed by ASIAVEST, personal service outside the country, with leave of court; (3) service by
Heras was physically present in Hong Kong for nearly 14 years. Since publication, also with leave of court; or (4) any other manner the court
there was not even an attempt to serve summons on Heras in Hong may deem sufficient.
Kong, the Hong Kong Supreme Court did not acquire jurisdiction over
Heras. However, in an action in personam wherein the defendant is a non-
resident who does not voluntarily submit himself to the authority of the
Issue: Whether the Hong Kong court had acquired jurisdiction over court, personal service of summons within the state is essential to the
Heras. NO acquisition of jurisdiction over her person. This method of service is
possible if such defendant is physically present in the country. If he is
Ruling: not found therein, the court cannot acquire jurisdiction over his person
and therefore cannot validly try and decide the case against him. An
Since there was failure to prove specifically any piece of Hong Kong law exception was laid down in Gemperle v. Schenker wherein a non-
regarding service of summons, the Supreme Court applied the doctrine resident was served with summons through his wife, who was a
of processual presumption. It then proceeded to identify whether the resident of the Philippines and who was his representative and attorney-
action filed in Hong Kong against Heras was one in personam, in rem, in-fact in a prior civil case filed by him; moreover, the second case was
or quasi in rem. a mere offshoot of the first case.

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 10
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

On the other hand, in a proceeding in rem or quasi in rem, jurisdiction publication, also with leave of court; or (c) any other manner the court
over the person of the defendant is not a prerequisite to confer may deem sufficient.
jurisdiction on the court provided that the court acquires jurisdiction
over the res. Nonetheless, summons must be served upon the Clear from the foregoing, extrajudicial service of summons apply only
defendant not for the purpose of vesting the court with jurisdiction but where the action is in rem, an action against the thing itself instead of
merely for satisfying the due process requirements. Thus, where the against the person, or in an action quasi in rem, where an individual is
defendant is a non-resident who is not found in the Philippines and (1) named as defendant and the purpose of the proceeding is to subject his
the action affects the personal status of the plaintiff; (2) the action interest therein to the obligation or loan burdening the property. This is
relates to, or the subject matter of which is property in the Philippines in so inasmuch as, in in rem and quasi in rem actions, jurisdiction over the
which the defendant has or claims a lien or interest; (3) the action person of the defendant is not a prerequisite to confer jurisdiction on
seeks the exclusion of the defendant from any interest in the property the court provided that the court acquires jurisdiction over the res.
located in the Philippines; or (4) the property of the defendant has been
attached in the Philippines -- service of summons may be effected by However, where the action is in personam, one brought against a
(a) personal service out of the country, with leave of court; (b) person on the basis of his personal liability, jurisdiction over the person
publication, also with leave of court; or (c) any other manner the court of the defendant is necessary for the court to validly try and decide the
may deem sufficient. case. When the defendant is a non-resident, personal service of
summons within the state is essential to the acquisition of jurisdiction
over the person.This cannot be done, however, if the defendant is not
physically present in the country, and thus, the court cannot acquire
jurisdiction over his person and therefore cannot validly try and decide
[G.R. Nos. 121576-78. June 16, 2000]
the case against him.
BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS,
In the instant case, Urbino’s suit against petitioner is premised on
HON. ARSENIO M. GONONG, and CESAR S. URBINO, SR.,
petitioners being one of the claimants of the subject vessel M/V Star
respondents.
Ace. Thus, it can be said that private respondent initially sought only to
Facts: In 1989, Duraproof services as represented by its manager exclude petitioner from claiming interest over the subject vessel M/V
Cesar Urbino, Sr.sued Poro Point Shipping Services for damages the Star Ace. However, private respondent testified during the presentation
former incurred when one of the latter’s ship ran aground because of a of evidence that, for being a nuisance defendant, petitioner caused
typhoon causing losses to Urbino. Urbino impleaded Banco Do Brasil irreparable damage to private respondent in the amount of
(BDB), a foreign corporation not engaged in business in the Philippines $300,000.00.Therefore, while the action is in rem, by claiming damages,
nor does it have any office here or any agent. BDB was impleaded the relief demanded went beyond the res and sought a relief totally
simply because it has a claim over the sunken ship. BDB however failed alien to the action.
to appear multiple times. Eventually, a judgment was rendered and BDB
It must be stressed that any relief granted in rem or quasi in rem
was adjudged to pay $300,000.00 in damages in favor of Urbino for
actions must be confined to the res, and the court cannot lawfully
BDB being a nuisance defendant.
render a personal judgment against the defendant.Clearly, the
BDB assailed the said decision as it argued that there was no valid publication of summons effected by private respondent is invalid and
service of summons because the summons was issued to the ineffective for the trial court to acquire jurisdiction over the person of
ambassador of Brazil. Further, the other summons which were made petitioner, since by seeking to recover damages from petitioner for the
through publication is not applicable to BDB as it alleged that the action alleged commission of an injury to his person or property caused by
against them is in personam. petitioners being a nuisance defendant, private respondents action
became in personam. Bearing in mind the in personam nature of the
Petitioner avers that the action filed against it is an action for damages, action, personal or, if not possible, substituted service of summons on
as such it is an action in personam which requires personal service of petitioner, and not extraterritorial service, is necessary to confer
summons be made upon it for the court to acquire jurisdiction over it. jurisdiction over the person of petitioner and validly hold it liable to
However, inasmuch as petitioner Banco do Brasil is a non-resident private respondent for damages. Thus, the trial court had no jurisdiction
foreign corporation, not engaged in business in the Philippines , unless it to award damages amounting to $300,000.00 in favor of private
has property located in the Philippines which may be attached to respondent and as against herein petitioner.
convert the action into an action in rem, the court cannot acquire
jurisdiction over it in respect of an action in personam. WHEREFORE, the subject petition is hereby GRANTED. The Decision
and the Resolution of the Court 29317 are hereby REVERSED and SET
ISSUE: Whether or not the court acquired jurisdiction over Banco Do ASIDE insofar as they affect petitioner Banco do Brasil.
Brasil?
Romualdez vs. Licaros
HELD: No. Banco Do Brasil is correct.
GR No. 150656
First. When the defendant is a nonresident and he is not found in the
country, summons may be served extraterritorially in accordance with Facts:
Rule 14, Section 17of the Rules of Court. Under this provision, there are
only four (4) instances when extraterritorial service of summons is Abelardo Licaros (Abelardo, for short) and Margarita Romualdez-
proper, namely: "(1) when the action affects the personal status of the Licaros (Margarita, hereafter) were lawfully married on December 15,
plaintiffs; (2) when the action relates to, or the subject of which is 1968. Ironically, marital differences, squabbles and irreconcilable
property, within the Philippines, in which the defendant claims a lien or conflicts transpired between the spouses, such that sometime in 1979,
interest, actual or contingent; (3) when the relief demanded in such they agreed to separate from bed and board.
action consists, wholly or in part, in excluding the defendant from any
interest in property located in the Philippines; and (4) when the In 1982, Margarita left for the United States and there, to settle down
defendant non-residents property has been attached within the with her two (2) children. In the United States, on April 26, 1989,
Philippines."In these instances, service of summons may be effected by Margarita applied for divorce before the Superior Court of California,
(a) personal service out of the country, with leave of court; (b) County of San Mateo. On August 6, 1990, Margarita was granted the

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 11
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

decree of divorce together with a distribution of properties between her Actions in personam and actions in rem or quasi in rem differ in that
and Abelardo. actions in personam are directed against specific persons and seek
personal judgments. On the other hand, actions in rem or quasi in
For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91- rem are directed against the thing or property or status of a person and
1757, for the declaration of nullity of his marriage with Margarita, based seek judgments with respect thereto as against the whole world.
on psychological incapacity under the New Family Code. As Margarita
was then residing at 96 Mulberry Lane, Atherton, California, U.S.A., At the time Abelardo filed the petition for nullity of the marriage in
Abelardo initially moved that summons be served through the 1991, Margarita was residing in the United States. She left the
International Express Courier Service. The court a quo denied the Philippines in 1982 together with her two children. The trial court
motion. Instead, it ordered that summons be served by publication in a considered Margarita a non-resident defendant who is not found in the
newspaper of general circulation once a week for three (3) consecutive Philippines. Since the petition affects the personal status of the plaintiff,
weeks, at the same time furnishing respondent a copy of the order, as the trial court authorized extraterritorial service of summons under
well as the corresponding summons and a copy of the petition at the Section 15, Rule 14 of the Rules of Court. The term "personal status"
given address in the United States through the Department of Foreign includes family relations, particularly the relations between husband and
Affairs, all at the expense of Abelardo. Respondent was given sixty (60) wife.
days after publication to file a responsive pleading.
Under Section 15 of Rule 14, a defendant who is a non-resident and is
On July 15, 1991, Process Server, Maximo B. Dela Rosa, submitted his not found in the country may be served with summons by
Officer’s Return quoted hereunder: extraterritorial service in four instances: (1) when the action affects
the personal status of the plaintiff ; (2) when the action relates to,
"OFFICER’S RETURN or the subject of which is property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent; (3)
THIS IS TO CERTIFY that on July 3, 1991, I have served a copy of when the relief demanded consists, wholly or in part, in excluding the
summons and complaint with annexes together with order dated June defendant from any interest in property located in the Philippines; or (4)
28, 1991 issued by the Court in the above-entitled case upon defendant when the property of the defendant has been attached within the
Margarita Romualdez-Licaros c/o DFA. (sent by Mail) thru Pat G. Philippines.
Martines receiving Clerk of Department of Foreign Affairs a person
authorized to receive this kind of process who acknowledged the receipt In these instances, extraterritorial service of summons may be effected
thereof at ADB Bldg., Roxas Blvd., Pasay City, Metro Manila." under any of three modes: (1) by personal service out of the country,
with leave of court; (2) by publication and sending a copy of the
On November 8, 1991, the Decision as handed down in Civil Case No. summons and order of the court by registered mail to the defendant’s
91-1757 declaring the marriage between Abelardo and Margarita null last known address, also with leave of court; or (3) by any other
and void. means the judge may consider sufficient.
Almost nine (9) years later, on April 28, 2000, the petition at bench was Applying the foregoing rule, the trial court required extraterritorial
commenced when Margarita received a letter dated November 18, 1991 service of summons to be effected on Margarita in the following
from a certain Atty. Angelo Q. Valencia informing her that she no longer manner:
has the right to use the family name "Licaros" inasmuch as her
marriage to Abelardo had already been judicially dissolved by the x x x, service of Summons by way of publication in a newspaper of
Regional Trial Court of Makati on November 8, 1991. general circulation once a week for three (3) consecutive weeks, at the
same time, furnishing respondent copy of this Order as well as the
Margarita insists that the trial court never acquired jurisdiction over her corresponding Summons and copy of the petition at her given address
person in the petition for declaration of nullity of marriage since she was at No. 96 Mulberry Lane, Atherton, California, U.S.A., thru the
never validly served with summons. Neither did she appear in court to Department of Foreign Affairs, all at the expense of petitioner.
submit voluntarily to its jurisdiction.
The trial court’s prescribed mode of extraterritorial service does not fall
On the other hand, Abelardo argues that jurisdiction over the person of under the first or second mode specified in Section 15 of Rule 14, but
a non-resident defendant in an action in rem or quasi in rem is not under the third mode. This refers to "any other means that the judge
necessary. The trial and appellate courts made a clear factual finding may consider sufficient.
that there was proper summons by publication effected through the
Department of Foreign Affairs as directed by the trial court. Thus, the The Process Server’s Return of 15 July 1991 shows that the summons
trial court acquired jurisdiction to render the decision declaring the addressed to Margarita together with the complaint and its annexes
marriage a nullity. were sent by mail to the Department of Foreign Affairs with
acknowledgment of receipt. The Process Server’s certificate of service of
Issue: Whether Margarita was validly served with summons in the case summons is prima facie evidence of the facts as set out in the
for declaration of nullity of her marriage with Abelardo? certificate. Before proceeding to declare the marriage between
Margarita and Abelardo null and void, the trial court stated in its
Held: YES. Summons is a writ by which the defendant is notified of the
Decision dated 8 November 1991 that "compliance with the
action brought against him. Service of such writ is the means by which
jurisdictional requirements hav(e)(sic) been duly established."
the court acquires jurisdiction over his person.
We hold that delivery to the Department of Foreign Affairs was
As a rule, when the defendant does not reside and is not found in the sufficient compliance with the rule. After all, this is exactly what the trial
Philippines, Philippine courts cannot try any case against him because of court required and considered as sufficient to effect service of summons
the impossibility of acquiring jurisdiction over his person unless he under the third mode of extraterritorial service pursuant to Section 15 of
voluntarily appears in court. But when the case is one of actions in Rule 14.
rem or quasi in rem enumerated in Section 15, Rule 14 of the Rules of
Court, Philippine courts have jurisdiction to hear and decide the case. In G.R. No. 127692             March 10, 2004
such instances, Philippine courts have jurisdiction over the res, and
jurisdiction over the person of the non-resident defendant is not FORTUNATO GOMEZ and AURORA GOMEZ, petitioners, 
essential. vs.

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 12
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

COURT OF APPEALS, ADOLFO TROCINO and MARIANO The objective sought in petitioners’ complaint was to establish a claim
TROCINO, respondents. against respondents for their alleged refusal to convey to them the title
to the two parcels of land that they inherited from their father, Jesus
FACTS: Trocino, who was one of the sellers of the properties to petitioners.
Hence, to repeat, Civil Case No. CEB-11103 is an action in
personam because it is an action against persons, namely, herein
Civil Case No. CEB-11103 is an action for specific performance and/or respondents, on the basis of their personal liability. As such, personal
rescission filed by herein petitioners, spouses Fortunato and Aurora service of summons upon the defendants is essential in order
Gomez, against the heirs of Jesus J. Trocino, Sr., which include herein for the court to acquire of jurisdiction over their persons.
respondents and their mother Caridad Trocino.
A distinction, however, must be made with regard to service of
summons on respondents Adolfo Trocino and Mariano Trocino. Adolfo
Trocino, as records show, is already a resident of Ohio, U.S.A. for 25
The complaint alleges: Some time in 1975, the spouses Jesus and years. Being a non-resident, the court cannot acquire
Caridad Trocino mortgaged two parcels of land covered by TCT Nos. jurisdiction over his person and validly try and decide the case
10616 and 31856 to Dr. Clarence Yujuico. The mortgage was against him.
subsequently foreclosed and the properties sold at public auction on
July 11, 1988, and before the expiry of the redemption period, the On the other hand, Mariano Trocino has been in Talibon, Bohol since
spouses Trocino sold the property to petitioners on December 12, 1989, 1986. To validly acquire jurisdiction over his person, summons must be
who in turn, redeemed the same from Dr. Yujuico. The spouses Trocino, served on him personally, or through substituted service, upon showing
however, refused to convey ownership of the properties to petitioners. of impossibility of personal service.

The trial court’s Process Server served summons and copies of the In the present case, the process server served the summons and copies
complaint to the defendants of the complaint on respondents through their mother, Caridad Trocino.

thru defendant Caridad Trocino evidence by her signature found at the The return did not contain any particulars as to the
lower portion of the original summons. impossibility of personal service on Mariano Trocino within a
reasonable time. Such improper service renders the same
ISSUE: ineffective.
Whether or not summons was effectively served on respondents. If in
the affirmative, the trial court had validly acquired jurisdiction over their Inasmuch as the sheriff’s return failed to state the facts and
persons and therefore its judgment is valid. circumstances showing the impossibility of personal service of summons
upon respondents within a reasonable time, petitioners should have
RULING: sought the issuance of an alias  summons.
Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the While Caridad Trocino may have engaged the services of Atty. Bugarin,
court acquires jurisdiction over his person. Any judgment without such it did not necessarily mean that Atty. Bugarin also had the authority to
service in the absence of a valid waiver is null and void. represent the defendant heirs. The fact that a pleading is signed by
one defendant does not necessarily mean that it is binding on a
To resolve whether there was valid service of summons on respondents, co-defendant.
the nature of the action filed against them must first be determined.
Consequently, the judgment sought to be executed against respondents
In the present case, petitioners’ cause of action in Civil Case No. CEB- were rendered without jurisdiction as there was neither a proper service
11103 is anchored on the claim that the spouses Jesus and Caridad of summons nor was there any waiver or voluntary submission to the
Trocino reneged on their obligation to convey ownership of the two trial court’s jurisdiction. Hence, the same is void, with regard to private
parcels of land subject of their sale. Thus, petitioners pray in their respondents except Caridad Trocino.
complaint that the spouses Trocino be ordered to execute the
appropriate deed of sale and that the titles be delivered to them
(petitioners); or in the alternative, that the sale be revoked and
rescinded; and spouses Trocino ordered to return to petitioners their
down payment in the amount of P500,000.00 plus interests. The action
instituted by petitioners affect the parties alone, not the whole world.
Hence, it is an action in personam, i.e., any judgment therein is
binding only upon the parties properly impleaded.

In a personal action, the plaintiff seeks the recovery of personal


property, the enforcement of a contract or the recovery of damages. In
a real action, the plaintiff seeks the recovery of real property, or, as G.R. No. 140288             October 23, 2006
indicated in section 2(a) of Rule 4, a real action is an action affecting
title to real property or for the recovery of possession, or for partition or ST. AVIATION SERVICES CO., PTE., LTD., petitioner, 
condemnation of, or foreclosure of a mortgage on, real property. vs.
GRAND INTERNATIONAL AIRWAYS, INC., respondent.
An action in personam is an action against a person on the basis of his
personal liability, while an action in rem is an action against the thing
itself, instead of against the person. Hence, a real action may at the Facts:
same time be an action in personam and not necessarily an action in
St. Aviation Services Co., Pte., Ltd., petitioner, is a foreign corporation
rem.
based in Singapore. It is engaged in the manufacture, repair, and
maintenance of airplanes and aircrafts. Grand International Airways,
Inc., respondent, is a domestic corporation engaged in airline
operations.

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 13
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Sometime in January 1996, petitioner and respondent executed an at Mercure Hotel (formerly Village Hotel), MIA Road, Pasay City. The
"Agreement for the Maintenance and Modification of Airbus A 300 B4- Sheriff's Return shows that it was received on May 2, 1998 by Joyce T.
103 Aircraft Registration No. RP-C8882" (First Agreement). Under this Austria, Secretary of the General Manager of respondent company. 10 But
stipulation, petitioner agreed to undertake maintenance and respondent completely ignored the summons, hence, it was declared in
modification works on respondent's aircraft. default.

At about the same time, or on January 12, 1996, the parties verbally Considering that the Writ of Summons was served upon respondent in
agreed that petitioner will repair and undertake maintenance works on accordance with our Rules, jurisdiction was acquired by the Singapore
respondent's other aircraft, Aircraft No. RP-C8881; and that the works High Court over its person. Clearly, the judgment of default rendered by
shall be based on a General Terms of Agreement (GTA). The GTA terms that court against respondent is valid.
are similar to those of their First Agreement.
(2) Yes.
Petitioner undertook the contracted works and thereafter promptly
delivered the aircrafts to respondent. During the period from March The conditions for the recognition and enforcement of a foreign
1996 to October 1997, petitioner billed respondent in the total amount judgment in our legal system are contained in Section 48, Rule 39 of the
of US$303,731.67 or S$452,560.18. But despite petitioner's repeated 1997 Rules of Civil Procedure, as amended, thus:
demands, respondent failed to pay, in violation of the terms agreed
upon. SEC. 48. Effect of foreign judgments. – The effect of a judgment or final
order of a tribunal of a foreign country, having jurisdiction to render the
On December 12, 1997, petitioner filed with the High Court of the judgment or final order is as follows:
Republic of Singapore an action for the sum of S$452,560.18, including
interest and costs, against respondent. Upon petitioner's motion, the (a) In case of a judgment or final order upon a specific thing, the
court issued a Writ of Summons to be served extraterritorially or outside judgment or final order is conclusive upon the title to the thing; and
Singapore upon respondent. The court sought the assistance of the
(b) In case of a judgment or final order against a person, the judgment
sheriff of Pasay City to effect service of the summons upon respondent.
or final order is presumptive evidence of a right as between the parties
However, despite receipt of summons, respondent failed to answer the
and their successors in interest by a subsequent title;
claim.
In either case, the judgment or final order may be repelled by evidence
On February 17, 1998, on motion of petitioner, the Singapore High
of a want of jurisdiction, want of notice to the party, collusion, fraud, or
Court rendered a judgment by default against respondent. Thus,
clear mistake of law or fact.
petitioner filed with the RTC a Petition for Enforcement of Judgment.
Under the above Rule, a foreign judgment or order against a person is
Respondent filed a Motion to Dismiss the Petition on two grounds: (1)
merely presumptive evidence of a right as between the parties. It may
the Singapore High Court did not acquire jurisdiction over its person;
be repelled, among others, by want of jurisdiction of the issuing
and (2) the foreign judgment sought to be enforced is void for having
authority or by want of notice to the party against whom it is enforced.
been rendered in violation of its right to due process.
The party attacking a foreign judgment has the burden of overcoming
RTC- denied respondent's motion to dismiss, holding that "neither one the presumption of its validity.
of the two grounds (of Grand) is among the grounds for a motion to
Generally, matters of remedy and procedure such as those relating to
dismiss under Rule 16 of the 1997 Rules of Civil Procedure."
the service of process upon a defendant are governed by the lex fori or
CA- ruled in favor of respondent, setting aside the Orders of the RTC. It the internal law of the forum, which in this case is the law of Singapore.
found: Here, petitioner moved for leave of court to serve a copy of the Writ of
Summons outside Singapore. In an Order dated December 24, 1997,
In the case at bar, the complaint does not involve the personal status of the Singapore High Court granted "leave to serve a copy of the Writ of
plaintiff, nor any property in which the defendant has a claim or Summons on the Defendant by a method of service authorized by the
interest, or which the private respondent has attached but purely an law of the Philippines for service of any originating process issued by
action for collection of debt. It is a personal action as well as an the Philippines  at ground floor, APMC Building, 136 Amorsolo corner
action in personam, not an action in rem or quasi in rem. As a personal Gamboa Street, 1229 Makati City, or elsewhere in the Philippines ." This
action, the service of summons should be personal or substituted, not service of summons outside Singapore is in accordance with Order 11, r.
extraterritorial, in order to confer jurisdiction on the court. 4(2) of the Rules of Court 19966 of Singapore, which provides.

Issue/s: (2) Where in accordance with these Rules, an originating process is to


be served on a defendant in any country with respect to which there
(1) whether the Singapore High Court has acquired jurisdiction over the does not subsist a Civil Procedure Convention providing for service in
person of respondent by the service of summons upon its office in the that country of process of the High Court, the originating process may
Philippines be served –

(2) whether the judgment by default in Suit No. 2101 by the Singapore a) through the government of that country, where that government is
High Court is enforceable in the Philippines. willing to effect service;

b) through a Singapore Consular authority in that country, except where


service through such an authority is contrary to the law of the country;
Ruling: or

(1) Yes. c) by a method of service authorized by the law of that country


for service of any originating process issued by that country.
In the Philippines, jurisdiction over a party is acquired by service of
summons by the sheriff, 7 his deputy or other proper court officer either
personally by handing a copy thereof to the defendant 8 or by
substituted service.9 In this case, the Writ of Summons issued by the G.R. No. 156848   October 11, 2007
Singapore High Court was served upon respondent at its office located
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 14
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

PIONEER INTERNATIONAL, LTD., petitioner, vs. HON. TEOFILO PIL questions the trial court’s exercise of jurisdiction over it on two
GUADIZ, JR., in his capacity as Presiding Judge of Regional levels.
Trial Court, Branch 147, Makati City, and ANTONIO D.
TODARO, respondents. 1) That PIL is a foreign corporation not doing business in the Philippines
and because of this, the service of summons on PIL did not follow the
Facts: Antonio D. Todaro was the managing director of Betonval mandated procedure; and
Readyconcrete, Inc. (Betonval) from June 1975 up to his resignation in
February 1996. 2) That Todaro’s claims are based on an alleged breach of an
employment contract so Todaro should have filed his complaint before
According to Todaro, PIL contacted him in May 1996 and asked if he the NLRC and not before the trial court.
could join it in establishing a pre-mixed concrete plant and in overseeing
its operations in the Philippines. Todaro confirmed his availability and Transacting Business in the Philippine
expressed interest in joining PIL. Todaro met with several of PIL’s
representatives and even gave PIL the names of three of his Section 12, Rule 14 of the 1997 Rules of Civil Procedure
subordinates in Betonval whom he would like to join him in PIL.
Service upon foreign private juridical entity. —  When the defendant is a
Several letters were exchanged between Todaro and PIL on the foreign juridical entity which has transacted business in the Philippines,
former’s willingness to serve as consultant of PIL on a permanent basis service may be made on its resident agent designated in accordance
should the company establish itself on a permanent basis in the with law for that purpose, or, if there be no such agent, on the
Philippines. government official designated by law to that effect, or any of its
officers or agents within the Philippines.
Todaro’s request for permanent employment with PPHI, however, was
unsuccessful. PIL insists that its sole act of "transacting" or "doing business" in the
Philippines consisted of its investment in PPHI. Under Philippine law,
PIL’s Executive General Manager (Folwell) authorized Klepzig (President PIL’s mere investment in PPHI does not constitute "doing business."
and Managing Director of PPHI and PCPI) to terminate the association
of PIL and Todaro. However, we affirm the lower courts’ ruling and declare that, based on
the allegations in Todaro’s complaint, PIL was doing business in the
Todaro then filed a complaint for sum of money and damages with Philippines when it negotiated Todaro’s employment with PPHI.
preliminary attachment against Pioneer Intl, LTD (PIL), Pioneer
Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings, Inc. Section 3(d) of Republic Act No. 7042, Foreign Investments Act of 1991,
(PPHI), John G. McDonald (McDonald), and Philip J. Klepzig (Klepzig). states:

Copies of the summons and of the complaint were served to PIL and its The phrase "doing business"  shall include
co-defendants at PPHI and PCPI’s office in Alabang, Muntinlupa, soliciting orders, service contracts, opening offices, xxx ; and any
through Cecille L. De Leon (De Leon), who was Klepzig’s Executive other act or acts that imply a continuity of commercial dealings
Assistant. or arrangements and contemplate to that extent the
performance of acts or works, or the exercise of some of the
Todaro alleged that PIL is a corporation duly organized under Australian functions normally incident to, and in progressive prosecution
laws, while PCPI and PPHI are corporations duly organized under of commercial gain or of the purpose and object of the business
Philippine laws. PIL is engaged in the ready-mix and concrete organization: Provided, however, That the phrase "doing
aggregates business. business" shall not be deemed to include mere investment as a
shareholder by a foreign entity in domestic corporations duly registered
PIL established PPHI as the holding company of the stocks of its to do business, and/or the exercise of rights as such investor; xxx
operating company in the Philippines, PCPI.
PIL’s alleged acts in actively negotiating to employ Todaro to
PIL filed, by special appearance, a motion to dismiss Todaro’s run its pre-mixed concrete operations in the Philippines, which acts are
complaint. PIL’s co-defendants, PCPI, PPHI, and Klepzig, filed a hypothetically admitted in PIL’s motion to dismiss, are not mere acts
separate motion to dismiss. of a passive investor in a domestic corporation. Such are
managerial and operational acts in directing and establishing
PIL’s contention: commercial operations in the Philippines. The annexes (referring to the
letters exchanged between the parties) that Todaro attached to his
o The trial court has no jurisdiction over PIL because complaint give us an idea on the extent of PIL’s involvement in the
PIL is a foreign corporation not doing business in negotiations regarding Todaro’s employment.
the Philippines; and
In Annex "E," McDonald of Pioneer Concrete Group HK confirmed his
o It questioned the service of summons on it. offer to engage Todaro as a consultant of PIL. In Annex "F," Todaro
Assuming arguendo that Klepzig is PIL’s agent in accepted the consultancy. In Annex "H," Klepzig of PPHI stated that PIL
the Philippines, it was not Klepzig but De Leon who authorized him to tell Todaro about the cessation of his consultancy.
received the summons for PIL; Finally, in Annex "I," Folwell of PIL wrote to Todaro to confirm that
"Pioneer" no longer wishes to be associated with Todaro and that
 Lower court ruled in favor of Todaro and asserted that it had Klepzig is authorized to terminate this association. In fact, in the letters
jurisdiction over PIL. to Todaro, the word "Pioneer" was used to refer not just to PIL alone
but also to all corporations negotiating with Todaro under the Pioneer
name.
Issue: W/N the trial court has jurisdiction over the person of PIL. NO
In this sense, the various Pioneer corporations were not acting as
due to improper service of summons
separate corporations. The various Pioneer corporations were all
Ruling: working in concert to negotiate an employment contract between
Todaro and PPHI, a domestic corporation.
Jurisdiction over PIL
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 15
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Finally, the phrase "doing business in the Philippines" in the former considering his physical state; that it was done without Luis’s lawyer;
version of Section 12, Rule 14 now reads "has transacted business in that the ratification made before he died is likewise void because of
the Philippines." The scope is thus broader in that it is enough for the similar circumstances.
application of the Rule that the foreign private juridical entity "has
transacted business in the Philippines." In the same year, Victoria filed a complaint to annul said deed.

Purpose of the summons The sheriff could not deliver the summons against Cynthia and Teresa
because apparently, although they are Filipinos, they are in California
The purpose of summons is not only to acquire jurisdiction over the and not in the PH.
person of the defendant, but also to give notice to the defendant that
an action has been commenced against it and to afford it an opportunity It was only in the year 2000 that one of the summons was served to
to be heard on the claim made against it. The requirements of the rule one of the sisters, Teresa, when she came back to the Philippines.
on summons must be strictly followed; otherwise, the trial court will not Teresa immediately filed a motion to dismiss on the ground of –
acquire jurisdiction over the defendant.
- Failure to prosecute her case for an unreasonable length of
When summons is served on a foreign juridical entity, there are three time.
prescribed ways:
- Alleged that the case should be dismissed because Cynthia,
(1) Service on its resident agent designated in accordance with law for who is an indispensable party, was not issued any summons,
that purpose, hence, since an indispensable party is not served with
summons, without her who has such an interest in the
(2) Service on the government official designated by law to receive controversy or subject matter there can be no proper
summons if the corporation does not have a resident agent, and determination of the case.

(3) Service on any of the corporation’s officers or agents within the The trial court ruled in favour of Teresa; this was affirmed by the Court
Philippines. of Appeals.

In the present case, service of summons on PIL failed to follow Issue: WON the court acquired jurisdiction.
any of the prescribed processes. PIL had no resident agent in the
Philippines. Summons was not served on the Securities and Exchange Ruling: NO. Dismissal of Victoria’s complaint is correct.
Commission (SEC), the designated government agency, since PIL is not
registered with the SEC. Cynthia is an indispensable party

Summons for PIL was served on De Leon, Klepzig’s Executive Rule 3, Section 7 of the Rules of Court, defines indispensable parties as
Assistant. Klepzig is PIL’s "agent within the Philippines" parties-in-interest without whom there can be no final determination of
because PIL authorized Klepzig to notify Todaro of the an action. As such, they must be joined either as plaintiffs or as
cessation of his consultancy. The authority given by PIL to Klepzig defendants. 
to notify Todaro implies that Klepzig was likewise authorized to receive
Cynthia and Teresa are indispensable parties. They allegedly derived
Todaro’s response to PIL’s notice. Todaro responded to PIL’s notice by
their rights to the subject property by way of donation from their father
filing a complaint before the trial court.
Luis. The country club membership certificate is undivided and it is
However, summons was not served personally on Klepzig as impossible to pinpoint which specific portion of the property belongs to
agent of PIL. Instead, summons was served on De Leon, Klepzig’s either Teresa or Cynthia, thus, making them indispensable parties.
Executive Assistant. In this instance, De Leon was not PIL’s agent but a
Action filed was a personal action
mere employee of Klepzig. In effect, the sheriff resorted to substituted
service. For symmetry, we apply the rule on substituted service of There are generally two types of actions: actions in rem and actions in
summons on a natural person and we find that no reason was given to personam. An action in personam is an action against a person on the
justify the service of PIL’s summons on De Leon. basis of his personal liability, while an action in rem is an action against
the thing itself, instead of against the person.
Thus, we rule that PIL transacted business in the Philippines and Klepzig
was its agent within the Philippines. However, there was improper The certificate, subject of the donation, is a personal property. The
service of summons on PIL since summons was not served personally action filed by Victoria is therefore a personal action. So in order for the
on Klepzig. court to acquire jurisdiction over the respondents, summons must be
served upon them. 
Case was remanded to the lower court for proper service of summons
and trial. Proper service of summons

G.R. No. 168747 October 19, 2007 VICTORIA REGNER, Petitioner, In personal actions, if the respondents are residents of the Philippines,
vs. CYNTHIA R. LOGARTA, TERESA R. TORMIS and CEBU they may be served summons in the following order:
COUNTRY CLUB, Inc., Respondents
1. Personal Service;
Facts: Luis Regner had 3 daughters with 1st wife: Cynthia Logarta,
Teresa Tormis (and Melinda Borja). Victoria Regner is the second wife 2. If not possible, Substituted Service;
of Luis.
3. If respondent can’t be found because he is abroad but still a
After Luis died, Victoria alleged that Cynthia and Teresa defrauded Luis resident of the Philippines, by publication with leave of court.
(who was then very ill and was unable to write) into placing his
thumbmark into a Deed of Donation. In said Deed, Luis purportedly In personal actions still, if the respondents are non-residents, they
donated a Proprietary Ownership Certificate for Cebu Country Club may be served summons in the following manner:
membership shares. Victoria alleged that it is void because Luis’
1. Personal service through the Philippine embassy;
thumbmark was placed without the his free will and voluntariness
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 16
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

2. By publication in a newspaper of general circulation in The Labor Arbiter also ruled that Basso was terminated for a valid cause
such places and for such time as the court may order, in based on the allegations of CMI that Basso committed a series of acts
which case a copy of the summons and order of the court that constitute breach of trust and loss of confidence.
should be sent by registered mail to the last known address of
the defendant; or The Labor Arbiter, however, found CMI to have voluntarily submitted to
his office's jurisdiction. CMI participated in the proceedings, submitted
3. In any other manner which the court may deem sufficient. evidence on the merits of the case, and sought affirmative relief
through a motion to dismiss.22
Conclusion
NLRC's Ruling
Cynthia was never served any summons in any of the manners
authorized by the Rules of Court. The summons served to Teresa The NLRC did not agree with the pronouncement of the Labor Arbiter
cannot bind Cynthia. It is incumbent upon Victoria to compel the court that his office has no jurisdiction over the controversy. It ruled that the
to authorize the extraterritorial service of summons against Cynthia. Labor Arbiter acquired jurisdiction over the case when CMI voluntarily
Her failure to do so for a long period of time constitutes a failure to submitted to his office's jurisdiction by presenting evidence, advancing
prosecute on her part. arguments in support of the legality of its acts, and praying for reliefs
on the merits of the case.
CONTINENTAL MICRONESIA v. BASSO
On the merits, the NLRC agreed with the Labor Arbiter that Basso was
GR No. 178382-83
dismissed for just and valid causes on the ground of breach of trust and
Facts: loss of confidence. The NLRC ruled that under the applicable rules on
loss of trust and confidence of a managerial employee, such as Basso,
Continental Micronesia, Inc. (CMI) is a foreign corporation organized mere existence of a basis for believing that such employee has
and existing under the laws of and domiciled in the United States of breached the trust of his employer suffices. However, the NLRC found
America (US). It is licensed to do business in the Philippines. Basso, a that CMI denied Basso the required due process notice in his dismissal.
US citizen, resided in the Philippines prior to his death. Mr. Keith R.
Braden (Mr. Braden), Managing Director-Asia of Continental Airlines, Issue #1: Whether or not the LA and NLRC has jurisdiction over the
Inc. (Continental), offered Basso the position of General Manager of the case.
Philippine Branch of Continental. Basso accepted the offer. On
November 7, 1992, CMI took over the Philippine operations of
Continental, with Basso retaining his position as General Manager. Yes. The labor tribunals had jurisdiction over the parties and the
However, Ms. Woodward terminated his employment effective January subject matter of the case.
31, 1996.
CMI maintains that there is a conflict-of-laws issue that must be settled
Basso filed a Complaint for Illegal Dismissal with Moral and to determine proper jurisdiction over the parties and the subject matter
Exemplary Damages against CMI on December 19, 1996. Alleging the of the case. It also alleges that the existence of foreign elements calls
presence of foreign elements, CMI filed a Motion to Dismiss dated or the application of US laws and the doctrines of lex loci
February 10, 1997 on the ground of lack of jurisdiction over the celebrationis (the law of the place of the ceremony), lex loci
person of CMI and the subject matter of the controversy. contractus (law of the place where a contract is executed), and lex loci
intentionis(the intention of the parties as to the law that should govern
In an Order dated August 27, 1997, the Labor Arbiter granted the their agreement). CMI also invokes the application of the rule of forum
Motion to Dismiss. Applying the doctrine of lex loci contractus, the Labor non conveniens to determine the propriety of the assumption of
Arbiter held that the terms and provisions of the employment contract jurisdiction by the labor tribunals.
show that the parties did not intend to apply our Labor Code. The Labor
Arbiter also held that no employer-employee relationship existed The Court agrees with CMI that there is a conflict-of-laws issue that
between Basso and the branch office of CMI in the Philippines, but needs to be resolved first. Where the facts establish the existence of
between Basso and the foreign corporation itself. foreign elements, the case presents a conflict-of-laws issue. The foreign
element in a case nay appear in different forms, such as in this case,
On appeal, the NLRC remanded the case to the Labor Arbiter for the where one of the parties s an alien and the other is domiciled in another
determination of certain facts to settle the issue on jurisdiction. NLRC state.
ruled that the issue on whether the principle of lex loci contractus or lex
loci celebrationis should apply has to be further threshed out.17 Jurisdiction is defined as the power and authority of the courts to hear,
try and decide cases. Jurisdiction over the subject matter is conferred
Labor Arbiter's Ruling: by the Constitution or by law and by the material allegations in the
complaint, regardless of whether or not the plaintiff is entitled to
The Labor Arbiter Madjayran H. Ajan agreed with CMI that the recover all or some of the claims or reliefs sought therein. It cannot be
employment contract was executed in the US "since the letter-offer was acquired through a waiver or enlarged by the omission of the parties or
under the Texas letterhead and the acceptance of Complainant was conferred by the acquiescence of the court. That the employment
returned there."19 Thus, applying the doctrine of lex loci celebrationis, contract of Basso was replete with references to US laws, and that it
US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled originated from and was returned to the US, do not automatically
that the parties did not intend to apply Philippine laws, thus: preclude our labor tribunals from exercising jurisdiction to hear and try
this case.
Although the contract does not state what law shall apply, it is obvious
that Philippine laws were not written into it. More specifically, the This case stemmed from an illegal dismissal complaint. The Labor Code,
Philippine law on taxes and the Labor Code were not intended by the under Article 217, clearly vests original and exclusive jurisdiction to hear
parties to apply, otherwise Par. 7 on the payment by Complainant U.S. and decide cases involving termination disputes to the Labor Arbiter.
Federal and Home State income taxes, and Pars. 22/23 on termination Hence, the Labor Arbiter and the NLRC have jurisdiction over the
by 30-day prior notice, will not be there. The contract was prepared in subject matter of the case.
contemplation of Texas or U.S. laws where Par. 7 is required and Pars.
22/23 is allowed.20 On the other hand, jurisdiction over the person of CMI was acquired
through the coercive process of service of summons. We note that CMI
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 17
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

never denied that it was served with summons. CMI has, in fact, (Marcopper’s) properties and assets in Marinduque. It was registered
voluntarily appeared and participated in the proceedings before the with the Register of Deeds on November 12, 1992.
courts. Though a foreign corporation, CMI is licensed to do business in
the Philippines and has a local business address here. The purpose of When Marcopper defaulted in the payment of its loan obligation,
the law in requiring that foreign corporations doing business in the Placer Dome, in fulfillment of its undertaking under the "Support and
country be licensed to do so, is to subject the foreign corporations to Standby Credit Agreement," agreed to have its subsidiary corporation,
the jurisdiction of our courts. petitioner MR Holding, Ltd., assumed Marcopper’s obligation to
ADB in the amount of US$ 18,453,450.02. Consequently, in an
Considering that the Labor Arbiter and the NLRC have jurisdiction over
"Assignment Agreement" dated March 20, 1997, ADB assigned to
the parties and the subject matter of this case, these tribunals may
proceed to try the case even if the rules of conflict-of-laws or the petitioner all its rights, interests and obligations under the principal and
convenience of the parties point to a foreign forum, this being an complementary loan agreements, ("Deed of Real Estate and Chattel
exercise of sovereign prerogative of the country where the case is filed. Mortgage," and "Support and Standby Credit Agreement"). On
December 8, 1997, Marcopper assigns, transfers, cedes and conveys to
Issue #2: Whether the Philippine court is an inconvenient forum. petitioner, its assigns and/or successors-in-interest all of its
(Marcopper’s) properties, mining equipment and facilities.
No. Under the doctrine of forum non conveniens, a Philippine court in a
conflict-of-laws case may assume jurisdiction if it chooses to do so, It appeared that on May 7, 1997, Solidbank Corporation (Solidbank)
provided, that the following requisites are met: (1) that the obtained a Partial Judgment9against Marcopper from the RTC, Branch
Philippine Court is one to which the parties may conveniently 26, Manila, in Civil Case No. 96-80083.Upon Solidbank’s motion, the
resort to; (2) that the Philippine Court is in a position to make RTC of Manila issued a writ of execution pending appeal directing Carlos
an intelligent decision as to the law and the facts; and (3) that P. Bajar, respondent sheriff, to require Marcopper "to pay the sums of
the Philippine Court has or is likely to have power to enforce its money to satisfy the Partial Judgment." Thereafter, respondent Bajar
decision.  issued two notices of levy on Marcopper’s personal and real properties,
All these requisites are present here. and over all its stocks of scrap iron and unserviceable mining
equipment.
Basso may conveniently resort to our labor tribunals as he and CMI lad
physical presence in the Philippines during the duration of the trial. CMI Having learned of the scheduled auction sale, petitioner served an
has a Philippine branch, while Basso, before his death, was residing
"Affidavit of Third-Party Claim" 13 upon respondent sheriffs on August 26,
here. Thus, it could be reasonably expected that no extraordinary
1998, asserting its ownership over all Marcopper’s mining properties,
measures were needed for the parties to make arrangements in
advocating their respective cases. equipment and facilities by virtue of the "Deed of Assignment."

The labor tribunals can make an intelligent decision as to the law and Upon the denial of its "Affidavit of Third–Party Claim" by the RTC of
facts. The incident subject of this case (i.e. dismissal of Basso)
Manila
happened in the Philippines, the surrounding circumstances of which
can be ascertained without having to leave the Philippines. The acts that Petitioner commenced with the RTC of Boac, Marinduque a complaint
allegedly led to loss of trust and confidence and Basso's eventual for reivindication of properties, etc., with prayer for preliminary
dismissal were committed in the Philippines.
injunction and temporary restraining order against respondents
Solidbank, Marcopper, and sheriffs Bajar and Jandusay.
JURISDICTION OVER FOREIGN CORPORATIONS
Judge Ansaldo denied petitioner’s application for a writ of preliminary
G.R. No. 138104            April 11, 2002 injunction on the ground that petitioner has no legal capacity to
sue, it being a foreign corporation doing business in the
Philippines without license, among others.
MR HOLDINGS, LTD., petitioner, 
vs. ISSUE:
SHERIFF CARLOS P. BAJAR, SHERIFF FERDINAND M. Whether or not petitioner have the legal capacity to sue?
JANDUSAY, SOLIDBANK CORPORATION, AND MARCOPPER
MINING CORPORATION, respondents. RULING:
YES. The principles governing a foreign corporation’s right to sue in
FACTS: local courts have long been settled by our Corporation Law.
November 4, 1992, Asian Development Bank (ADB), a multilateral
These principles may be condensed in three statements, to wit: a) if a
development finance institution, agreed to extend to Marcopper Mining
foreign corporation does business in the Philippines without a
Corporation (Marcopper) a loan in the aggregate amount of
license, it cannot sue before the Philippine courts;18 b) if a foreign
US$40,000,000.00 to finance the latter’s mining project at Sta. Cruz,
corporation is not doing business in the Philippines, it needs no
Marinduque.
license to sue before Philippine courts on an isolated transaction 19or
on a cause of action entirely independent of any business transaction; 20 
On even date, ADB and Placer Dome, Inc., (Placer Dome), a foreign and c) if a foreign corporation does business in the Philippines with
corporation which owns 40% of Marcopper, executed a "Support and the required license, it can sue before Philippine courts on any
Standby Credit Agreement" whereby the latter agreed to provide transaction.
Marcopper with cash flow support for the payment of its obligations to
ADB. In the case at bar, the Court of Appeals categorized as "doing business"
petitioner’s participation under the "Assignment Agreement" and the
"Deed of Assignment." This is simply untenable.
To secure the loan, Marcopper executed in favor of ADB a "Deed of Real
Estate and Chattel Mortgage covering substantially all of its
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 18
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

At this early stage and with petitioner’s acts or transactions limited to trademark and device in the Philippines which ASSIGNOR uses and has
the assignment contracts, it cannot be said that it had performed acts been using on the products manufactured by ASSIGNEE (respondent),
intended to continue the business for which it was organized. It may and for which ASSIGNOR is the authorized exclusive Dealer of the
not be amiss to point out that the purpose or business for ASSIGNEE in the Philippines.
which petitioner was organized is not discernible in the
records. No effort was exerted by the Court of Appeals to On February 16, 1993, in a meeting with a BMW representative and the
establish the nexus between petitioner’s business and the acts president of Columbia Motors Corporation (CMC), Jose Alvarez,
supposed to constitute "doing business." Thus, whether the petitioner was informed that BMW was arranging to grant the exclusive
assignment contracts were incidental to petitioner’s business dealership of BMW cars and products to CMC. BMW, in a letter,
or were continuation thereof is beyond determination. expressed dissatisfaction with various aspects of petitioner's business,
mentioning among other things, decline in sales, deteriorating services,
We cannot apply the case cited by the Court of Appeals, Far East Int’l and inadequate showroom and warehouse facilities, and petitioner's
Import and Export Corp. vs. Nankai Kogyo Co., Ltd.,  which held that a alleged failure to comply with the standards for an exclusive BMW
single act may still constitute "doing business" if "it is not merely dealer. BMW would have no alternative but to terminate petitioner's
incidental or casual, but is of such character as distinctly to indicate a exclusive dealership.
purpose on the part of the foreign corporation to do other business in
the state." In said case, there was an express admission from an official Petitioner protested, claiming that the termination of his exclusive
of the foreign corporation that he was sent to the Philippines to look dealership would be a breach of the Deed of Assignment. Hahn insisted
into the operation of mines, thereby revealing the foreign corporation’s that as long as the assignment of its trademark and device subsisted, he
desire to continue engaging in business here. But in the case at bar, remained BMW's exclusive dealer in the Philippines because the
there is no evidence of similar desire or intent. assignment was made in consideration of the exclusive dealership.

On May 14, 1993, Hahn filed a complaint for specific performance and
damages against BMW to compel it to continue the exclusive dealership.
Indeed, the Court of Appeals’ holding that petitioner was determined to Later he filed an amended complaint to include an application for
be "doing business" in the Philippines is based mainly on conjectures temporary restraining order and for writs of preliminary, mandatory and
and speculation. In concluding that the " unmistakable intention" of prohibitory injunction to enjoin BMW from terminating his exclusive
petitioner is to continue Marcopper’s business, the Court of Appeals dealership. Hahn's amended complaint alleged in pertinent part:
hangs on the wobbly premise that "there is no other way for petitioner
to recover its huge financial investments which it poured into 2. Defendant [BMW] is a foreign corporation doing business in the
Marcopper’s rehabilitation without it (petitioner) continuing Marcopper’s Philippines with principal offices at Munich, Germany. It may be served
business in the country." This is a mere presumption. Absent overt acts with summons and other court processes through the Secretary of the
of petitioner from which we may directly infer its intention to continue Department of Trade and Industry of the Philippines. . . .
Marcopper’s business, we cannot give our concurrence. In  Chittim vs.
Summons and copies of the complaint and amended complaint were
Belle Fourche Bentonite Products Co.,  it was held that even if a
thereafter served on the private respondent through the Department of
foreign corporation purchased and took conveyances of a
Trade and Industry, pursuant to Rule 14, Sec. 14 of the Rules of Court.
mining claim, did some assessment work thereon, and
The order, summons and copies of the complaint and amended
endeavored to sell it, its acts will not constitute the doing of
complaint were later sent by the DTI to BMW via registered mail on
business so as to subject the corporation to the statutory
June 15, 1993 and received by the latter on June 24, 1993.
requirements for the transacting of business.
Without proof of service on BMW, the hearing on the application for the
In the final analysis, we are convinced that petitioner was engaged only
writ of preliminary injunction proceeded ex parte, with petitioner Hahn
in isolated acts or transactions. Single or isolated acts, contracts, or
testifying.
transactions of foreign corporations are not regarded as a doing or
carrying on of business. BMW moved to dismiss the case, contending that the trial court did not
acquire jurisdiction over it through the service of summons on the
Department of Trade and Industry, because it (BMW) was a foreign
corporation and it was not doing business in the Philippines. It
G.R. No. 113074 January 22, 1997 contended that the execution of the Deed of Assignment was an
isolated transaction; that Hahn was not its agent because the latter
ALFRED HAHN, petitioner, 
undertook to assemble and sell BMW cars and products without the
vs.
participation of BMW and sold other products; and that Hahn was an
COURT OF APPEALS and BAYERSCHE MOTOREN WERKE
indentor or middleman transacting business in his own name and for his
AKTIENGSELLSCHAFT (BMW), respondents.
own account.
Facts:
Petitioner Alfred Hahn opposed the motion. He argued that BMW was
Petitioner Alfred Hahn is a Filipino citizen doing business under the doing business in the Philippines through him as its agent, as shown by
name and style "Hahn-Manila." On the other hand, private respondent the fact that BMW invoices and order forms were used to document his
Bayerische Motoren Werke Aktiengesellschaft (BMW) is a nonresident transactions; that he gave warranties as exclusive BMW dealer; that
foreign corporation existing under the laws of the former Federal BMW officials periodically inspected standards of service rendered by
Republic of Germany, with principal office at Munich, Germany. him; and that he was described in service booklets and international
publications of BMW as a "BMW Importer" or "BMW Trading Company"
On March 7, 1967, petitioner executed in favor of private respondent a in the Philippines.
"Deed of Assignment with Special Power of Attorney," where the
ASSIGNOR (petitioner) is the present owner and holder of the BMW

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 19
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Issue: WON jurisdiction over BMW was acquired Contrary to the appellate court's conclusion, this arrangement shows an
agency. An agent receives a commission upon the successful conclusion
Ruling: Yes. of a sale. On the other hand, a broker earns his pay merely by bringing
the buyer and the seller together, even if no sale is eventually made.
Rule 14, Sec.14 provides:
The fact that Hahn invested his own money to put up these service
§14. Service upon private foreign corporations. — If the defendant is a
centers and showrooms does not necessarily prove that he is not an
foreign corporation, or a nonresident joint stock company or
agent of BMW. For as already noted, there are facts in the record which
association, doing business in the Philippines, service may be made on
suggest that BMW exercised control over Hahn's activities as a dealer
its resident agent designated in accordance with law for that purpose,
and made regular inspections of Hahn's premises to enforce compliance
or, if there be no such agent, on the government official designated by
with BMW standards and specifications.
law to that effect, or on any of its officers or agents within the
Philippines. (Emphasis added). In addition, BMW held out private respondent Hahn as its exclusive
distributor in the Philippines, even as it announced in the Asian region
What acts are considered "doing business in the Philippines" are
that Hahn was the "official BMW agent" in the Philippines.
enumerated in §3(d) of the Foreign Investments Act of 1991 (R.A. No.
7042) as follows: It is now settled that, for purposes of having summons served on a
foreign corporation in accordance with Rule 14, §14, it is sufficient that
d) the phrase "doing business" shall include soliciting orders, service
it be alleged in the complaint that the foreign corporation is doing
contracts, opening offices, whether called "liaison" offices or
business in the Philippines. The court need not go beyond the
branches; appointing representatives or distributors domiciled in the
allegations of the complaint in order to determine whether it has
Philippines  or who in any calendar year stay in the country for a period
Jurisdiction. A determination that the foreign corporation is doing
or periods totalling one hundred eighty (180) days or more;
business is only tentative and is made only for the purpose of enabling
participating in the management, supervision or control of any domestic
the local court to acquire jurisdiction over the foreign corporation
business, firm, entity or corporation in the Philippines; and any other
through service of summons pursuant to Rule 14, §14. Such
act or acts that imply a continuity of commercial dealings or
determination does not foreclose a contrary finding should evidence
arrangements, and contemplate to that extent the performance of acts
later show that it is not transacting business in the country.
or works, or the exercise of some of the functions normally incident to,
and in progressive prosecution of, commercial gain or of the purpose
and object of the business organization : Provided, however, That the
phrase "doing business" shall not be deemed to include  mere G.R. No. 159586 July 26, 2004
investment as a shareholder by a foreign entity in domestic corporations
duly registered to do business, and/or the exercise of rights as such EUROPEAN RESOURCES AND TECHNOLOGIES, INC. and DELFIN
investor; nor having a nominee director or officer to represent its J. WENCESLAO, petitioners,
interests in such corporation; nor appointing a representative or
distributor domiciled in the Philippines which transacts business in its vs.
own name and for its own account.
INGENIEUBURO BIRKHAHN + NOLTE, Ingeniurgesellschaft
The question is whether petitioner Alfred Hahn is the agent or mbh and HEERS & BROCKSTEDT GMBH & CO., respondents.
distributor in the Philippines of private respondent BMW. If he is, BMW
may be considered doing business in the Philippines and the trial court Facts: European Resources and Technologies Inc. vs. Ingenieuburo
acquired jurisdiction over it (BMW) by virtue of the service of summons BirkhanFACTS: European Resources and Technologies Inc. (hereinafter
on the Department of Trade and Industry. Otherwise, if Hahn is not the “ERTI”), a corporation organized and existing under the laws of the
agent of BMW but an independent dealer, albeit of BMW cars and Republic of the Philippines , is joined by Delfin J. Wenceslao as
products, BMW, a foreign corporation, is not considered doing business petitioner in this case. Ingenieuburo Birkhan + Nolte Ingiurgesellschaft
in the Philippines within the meaning of the Foreign Investments Act of mbh and Heers & Brockstedt Gmbh & Co. are German corporations who
1991 and the IRR, and the trial court did not acquire jurisdiction over it are respondents in this case and shall be collectively referred to as the
(BMW). “German Consortium”.

There is nothing to support the appellate court's finding that Hahn The German Consortium tendered and submitted its bid to the Clark
solicited orders alone and for his own account and without "interference Development Corporation (“CDC”) to construct, operate and manage
from, let alone direction of, BMW." To the contrary, Hahn claimed he the Integrated Waste Management Center at the Clark Special Economic
took orders for BMW cars and transmitted them to BMW. Upon receipt Zone (“CSEZ”). CDC accepted the German Consortium’s bid and
of the orders, BMW fixed the downpayment and pricing charges, awarded the contract to it.
notified Hahn of the scheduled production month for the orders, and
On October 6, 1999, CDC and the German Consortium executed the
reconfirmed the orders by signing and returning to Hahn the acceptance
Contract for Services which embodies the terms and conditions of their
sheets. Payment was made by the buyer directly to BMW. Title to cars
agreement.The Contract for Services provides that the German
purchased passed directly to the buyer and Hahn never paid for the
Consortium shall be empowered to enter into a contract or agreement
purchase price of BMW cars sold in the Philippines. Hahn was credited
for the use of the integrated waste management center by corporations,
with a commission equal to 14% of the purchase price upon the
local government units, entities, and persons not only within the CSEZ
invoicing of a vehicle order by BMW. Upon confirmation in writing that
but also outside.
the vehicles had been registered in the Philippines and serviced by him,
Hahn received an additional 3% of the full purchase price. Hahn Article VIII, Section 7 of the Contract for Services provides that the
performed after-sale services, including warranty services, for which he German Consortium shall undertake to organize a local corporation as
received reimbursement from BMW. All orders were on invoices and its representative for this project. On April 18, 2000 , the German
forms of BMW.8
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 20
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Consortium entered into a Joint Venture with D.M. Wenceslao and Consortium which shall manage and conduct the operations of the
Associates, Inc. (“DMWAI”) and Ma. Elena B. Villarama (doing business waste management center for at least twenty-five years.
as LBV and Associates), embodied in a Memorandum of Understanding
(“MOU”) signed by the parties. Under the MOU, the parties agreed to Moreover, the German Consortium was allowed to transact with other
entities outside the CSEZ for solid waste collection. Thus, it is clear that
jointly form a local corporation to which the German Consortium shall
the local corporation to be established will merely act as a conduit or
assign its rights under the Contract for Services. Pursuant to this
extension of the German Consortium.As a general rule, unlicensed
agreement, petitioner European Resources and Technologies, Inc. was foreign non-resident corporations cannot file suits in the Philippines.
incorporated.
A corporation has legal status only within the state or territory in which
The parties likewise agreed to prepare and finalize a Shareholders’ it was organized. For this reason, a corporation organized in another
Agreement within one (1) month from the execution of the MOU,which country has no personality to file suits in the Philippines.
shall provide that the German Consortium shall own fifteen percent
(15%) of the equity in the joint venture corporation, DMWAI shall own In order to subject a foreign corporation doing business in the country
seventy percent (70%) and LBV&A shall own fifteen percent (15%). In to the jurisdiction of our courts, it must acquire a license from the
the event that the parties fail to execute the Shareholders’ Agreement, Securities and Exchange Commission (SEC) and appoint an agent for
service of process. Hence, the party is estopped from questioning the
the MOU shall be considered null and void.
capacity of a foreign corporation to institute an action in our courts
On August 1, 2000, without the Shareholders’ Agreement having been where it had obtained benefits from its dealings with such foreign
corporation and thereafter committed a breach of or sought to renege
executed, the German Consortium and petitioner ERTI entered into a
on its obligations.
Memorandum of Agreement (MOA) whereby the German Consortium
ceded its rights and obligations under the Contract for Services in favor
of ERTI and assigned unto ERTI, among others, “its license from CDC to
engage in the business of providing environmental services needed in G.R. No. 154618             April 14, 2004
the CSEZ in connection with the waste management within the CSEZ
and other areas.” AGILENT TECHNOLOGIES SINGAPORE (PTE) LTD., petitioner, 
vs.
On December 11, 2000, ERTI received a letter from BN Consultants INTEGRATED SILICON TECHNOLOGY PHILIPPINES
Philippines, Inc., signed by Mr. Holger Holst for and on behalf of the CORPORATION, TEOH KIANG HONG, TEOH KIANG SENG,
German Consortium, stating that the German Consortium’s contract with ANTHONY CHOO, JOANNE KATE M. DELA CRUZ, JEAN KAY M.
DMWAI, LBV&A and ERTI has been terminated or extinguished on the DELA CRUZ and ROLANDO T. NACILLA, respondents.
following grounds: (a) the CDC did not give its approval to the
Facts:
Consortium’s request for the approval of the assignment or transfer by
the German Consortium in favor of ERTI of its rights and interests under Agilent Technologies Singapore (Pte.), Ltd. ("Agilent") is a foreign
the Contract for Services; (b) the parties failed to prepare and finalize corporation, which, by its own admission, is not licensed to do business
the Shareholders’ Agreement pursuant to the provision of the MOU; (c) in the Philippines. Respondent Integrated Silicon Technology Philippines
there is no more factual or legal basis for the joint venture to continue; Corporation ("Integrated Silicon") is a private domestic corporation,
and (d) with the termination of the MOU, the MOA is also deemed 100% foreign owned, which is engaged in the business of
terminated or extinguished. manufacturing and assembling electronics components. Respondents
Teoh Kiang Hong, Teoh Kiang Seng and Anthony Choo, Malaysian
Issue: Whether or not the Consortium has legal personality to file nationals, are current members of Integrated Silicon’s board of
action. directors, while Joanne Kate M. dela Cruz, Jean Kay M. dela Cruz, and
Rolando T. Nacilla are its former members.
Ruling: There is no general rule or governing principle laid down as to
what constitutes “doing” or “engaging in” or “transacting” business in The juridical relation among the various parties in this case can be
the Philippines . traced to a 5-year Value Added Assembly Services Agreement
("VAASA"), entered into on April 2, 1996 between Integrated Silicon and
Thus, it has often been held that a single act or transaction may be the Hewlett-Packard Singapore (Pte.) Ltd., Singapore Components
considered as “doing business” when a corporation performs acts for Operation ("HP-Singapore").Under the terms of the VAASA, Integrated
which it was created or exercises some of the functions for which it was Silicon was to locally manufacture and assemble fiber optics for export
organized. We have held that the act of participating in a bidding to HP-Singapore. HP-Singapore, for its part, was to consign raw
process constitutes “doing business” because it shows the foreign materials to Integrated Silicon; transport machinery to the plant of
corporation’s intention to engage in business in the Philippines . Integrated Silicon; and pay Integrated Silicon the purchase price of the
finished products. The VAASA had a five-year term, beginning on April
In this regard, it is the performance by a foreign corporation of the acts 2, 1996, with a provision for annual renewal by mutual written consent.
for which it was created, regardless of volume of business, that On September 19, 1999, with the consent of Integrated Silicon, HP-
determines whether a foreign corporation needs a license or Singapore assigned all its rights and obligations in the VAASA to Agilent.
not.Consequently, the German Consortium is doing business in the
Philippines without the appropriate license as required by our laws. By On May 25, 2001, Integrated Silicon filed a complaint for "Specific
participating in the bidding conducted by the CDC for the operation of Performance and Damages" against Agilent alleging that it breached the
the waste management center, the German Consortium exhibited its parties’ oral agreement to extend the VAASA. Integrated Silicon thus
intent to transact business in the Philippines. prayed that defendant be ordered to execute a written extension of the
VAASA for a period of five years as earlier assured and promised; to
Although the Contract for Services provided for the establishment of a comply with the extended VAASA; and to pay actual, moral, exemplary
local corporation to serve as respondents’ representative, it is clear from damages and attorney’s fees.
the other provisions of the Contract for Services as well as the letter by
the CDC containing the disapproval that it will be the German Agilent filed a separate complaint against Integrated Silicon for "Specific
Performance, Recovery of Possession, and Sum of Money with Replevin,

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 21
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

Preliminary Mandatory Injunction, and Damages", before the Regional business in the Philippines. The Corporation Code itself is silent as to
Trial Court, Calamba, Laguna, praying that a writ of replevin or, in the what acts constitute doing or transacting business in the Philippines.
alternative, a writ of preliminary mandatory injunction, be issued
ordering defendants to immediately return and deliver to plaintiff its Section 1 of the Implementing Rules and Regulations of the FIA (as
equipment, machineries and the materials to be used for fiber-optic amended by Republic Act No. 8179), would demonstrate that the acts
components which were left in the plant of Integrated Silicon. enumerated in the VAASA do not constitute "doing business" in the
Philippines.
Integrated Silicon filed a Motion to Dismiss on the grounds of lack of
Agilent’s legal capacity to sue; litis pendentia; forum shopping; and Section 1 of the Implementing Rules and Regulations of the FIA (as
failure to state a cause of action. amended by Republic Act No. 8179) provides that the following
shall not be deemed "doing business":
The trial court denied the MTD and granted petitioner Agilent’s
application for a writ of replevin. Without filing a MR, respondents filed (1) Mere investment as a shareholder by a foreign entity in domestic
a petition for certiorari with the CA. The CA granted respondents’ corporations duly registered to do business, and/or the exercise of
petition for certiorari, set aside the assailed Order of the trial court rights as such investor;
(denying the MTD) and ordered the dismissal of the 2nd case. Hence,
the instant petition. (2) Having a nominee director or officer to represent its interest in such
corporation;
ISSUE: Whether a foreign corporation without a license is incapacitated
from bringing an action in Philippine courts.  (3) Appointing a representative or distributor domiciled in the
Philippines which transacts business in the representative’s or
RULING: distributor’s own name and account;

A foreign corporation without a license is not ipso facto incapacitated (4) The publication of a general advertisement through any print or
from bringing an action in Philippine courts. A license is necessary only broadcast media;
if a foreign corporation is "transacting" or "doing business" in the
country. The Corporation Code provides: (5) Maintaining a stock of goods in the Philippines solely for the purpose
of having the same processed by another entity in the Philippines;
Sec. 133. Doing business without a license.  — No foreign corporation
transacting business in the Philippines without a license, or its (6) Consignment by a foreign entity of equipment with a local company
successors or assigns, shall be permitted to maintain or intervene in any to be used in the processing of products for export;
action, suit or proceeding in any court or administrative agency of the
(7) Collecting information in the Philippines; and
Philippines; but such corporation may be sued or proceeded against
before Philippine courts or administrative tribunals on any valid cause of (8) Performing services auxiliary to an existing isolated contract of sale
action recognized under Philippine laws. which are not on a continuing basis, such as installing in the Philippines
machinery it has manufactured or exported to the Philippines, servicing
The aforementioned provision prevents an unlicensed foreign
the same, training domestic workers to operate it, and similar incidental
corporation "doing business" in the Philippines from accessing our
services.
courts.
By and large, to constitute "doing business", the activity to be
In a number of cases, however, we have held that an unlicensed foreign
undertaken in the Philippines is one that is for profit-making. 63
corporation doing business in the Philippines may bring suit in Philippine
courts against a Philippine citizen or entity who had contracted with and By the clear terms of the VAASA, Agilent’s activities in the Philippines
benefited from said corporation.44 Such a suit is premised on the were confined to (1) maintaining a stock of goods in the Philippines
doctrine of estoppel. A party is estopped from challenging the solely for the purpose of having the same processed by Integrated
personality of a corporation after having acknowledged the same by Silicon; and (2) consignment of equipment with Integrated Silicon to be
entering into a contract with it. This doctrine of estoppel to deny used in the processing of products for export. As such, we hold that,
corporate existence and capacity applies to foreign as well as domestic based on the evidence presented thus far, Agilent cannot be deemed to
corporations.45 The application of this principle prevents a person be "doing business" in the Philippines. Respondents’ contention that
contracting with a foreign corporation from later taking advantage of its Agilent lacks the legal capacity to file suit is therefore devoid of merit.
noncompliance with the statutes chiefly in cases where such person has As a foreign corporation not doing business in the Philippines, it needed
received the benefits of the contract.46 no license before it can sue before our courts.
The principles regarding the right of a foreign corporation to bring suit
in Philippine courts may thus be condensed in four statements: (1) if a G.R. No. 156848   October 11, 2007
foreign corporation does business in the Philippines without a license, it
cannot sue before the Philippine courts;47 (2) if a foreign corporation PIONEER INTERNATIONAL, LTD vs. HON. TEOFILO GUADIZ, JR.,
is not doing business in the Philippines, it needs no license to sue before in his capacity as Presiding Judge of Regional Trial Court,
Philippine courts on an isolated transaction or on a cause of action Branch 147, Makati City, and ANTONIO D. TODARO
entirely independent of any business transaction 48; (3) if a foreign
corporation does business in the Philippines without a license, a Facts:
Philippine citizen or entity which has contracted with said corporation
may be estopped from challenging the foreign corporation’s corporate Antonio D. Todaro was the managing director of Betonval
personality in a suit brought before Philippine courts; 49 and (4) if a
Readyconcrete, Inc. (Betonval) from June 1975 up to his resignation in
foreign corporation does business in the Philippines with the required
February 1996.
license, it can sue before Philippine courts on any transaction.

The challenge to Agilent’s legal capacity to file suit hinges on whether or According to Todaro, PIL contacted him in May 1996 and asked if he
not it is doing business in the Philippines. However, there is no definitive could join it in establishing a pre-mixed concrete plant and in overseeing
rule on what constitutes "doing", "engaging in", or "transacting" its operations in the Philippines. Todaro confirmed his availability and
expressed interest in joining PIL. Todaro met with several of PIL’s
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 22
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

representatives and even gave PIL the names of three of his Section 12, Rule 14 of the 1997 Rules of Civil Procedure
subordinates in Betonval whom he would like to join him in PIL. Service upon foreign private juridical entity. —  When the defendant is a
foreign juridical entity which has transacted business in the Philippines,
Several letters were exchanged between Todaro and PIL on the service may be made on its resident agent designated in accordance
former’s willingness to serve as consultant of PIL on a permanent basis with law for that purpose, or, if there be no such agent, on the
should the company establish itself on a permanent basis in the government official designated by law to that effect, or any of its
Philippines. officers or agents within the Philippines.

Todaro’s request for permanent employment with PPHI, however, was PIL insists that its sole act of "transacting" or "doing business" in the
unsuccessful. Philippines consisted of its investment in PPHI. Under Philippine law,
PIL’s mere investment in PPHI does not constitute "doing business."
PIL’s Executive General Manager (Folwell) authorized Klepzig (President
and Managing Director of PPHI and PCPI) to terminate the association However, we affirm the lower courts’ ruling and declare that, based on
of PIL and Todaro. the allegations in Todaro’s complaint, PIL was doing business in the
Philippines when it negotiated Todaro’s employment with PPHI.
Todaro then filed a complaint for sum of money and damages with
preliminary attachment against Pioneer Intl, LTD (PIL), Pioneer Section 3(d) of Republic Act No. 7042, Foreign Investments Act of 1991,
Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings, Inc. states:
(PPHI), John G. McDonald (McDonald), and Philip J. Klepzig (Klepzig). The phrase "doing business"  shall include soliciting orders, service
Copies of the summons and of the complaint were served to PIL and its contracts, opening offices, xxx ; and any other act or acts that imply a
co-defendants at PPHI and PCPI’s office in Alabang, Muntinlupa, continuity of commercial dealings or arrangements and contemplate to
through Cecille L. De Leon (De Leon), who was Klepzig’s Executive that extent the performance of acts or works, or the exercise of some of
Assistant. the functions normally incident to, and in progressive prosecution of
commercial gain or of the purpose and object of the business
Todaro alleged that PIL is a corporation duly organized under Australian organization: Provided, however, That the phrase "doing business" shall
laws, while PCPI and PPHI are corporations duly organized under not be deemed to include mere investment as a shareholder by a
Philippine laws. PIL is engaged in the ready-mix and concrete foreign entity in domestic corporations duly registered to do business,
aggregates business. and/or the exercise of rights as such investor; xxx

PIL established PPHI as the holding company of the stocks of its PIL’s alleged acts in actively negotiating to employ Todaro to run its
operating company in the Philippines, PCPI. pre-mixed concrete operations in the Philippines, which acts are
hypothetically admitted in PIL’s motion to dismiss, are not mere acts of
PIL filed, by special appearance, a motion to dismiss Todaro’s a passive investor in a domestic corporation. Such are managerial and
complaint. PIL’s co-defendants, PCPI, PPHI, and Klepzig, filed a operational acts in directing and establishing commercial operations in
separate motion to dismiss. the Philippines. The annexes (referring to the letters exchanged
between the parties) that Todaro attached to his complaint give us an
PIL’s contention: idea on the extent of PIL’s involvement in the negotiations regarding
o The trial court has no jurisdiction over PIL because Todaro’s employment.
PIL is a foreign corporation not doing business in In Annex "E," McDonald of Pioneer Concrete Group HK confirmed his
the Philippines; and offer to engage Todaro as a consultant of PIL. In Annex "F," Todaro
o It questioned the service of summons on it. accepted the consultancy. In Annex "H," Klepzig of PPHI stated that PIL
Assuming arguendo that Klepzig is PIL’s agent in authorized him to tell Todaro about the cessation of his consultancy.
the Philippines, it was not Klepzig but De Leon who Finally, in Annex "I," Folwell of PIL wrote to Todaro to confirm that
received the summons for PIL; "Pioneer" no longer wishes to be associated with Todaro and that
o Klepzig is authorized to terminate this association. In fact, in the letters
Lower court ruled in favor of Todaro and asserted that it had jurisdiction to Todaro, the word "Pioneer" was used to refer not just to PIL alone
over PIL. but also to all corporations negotiating with Todaro under the Pioneer
name.
Issue: W/N the trial court has jurisdiction over the person of PIL. NO
due to improper service of summons In this sense, the various Pioneer corporations were not acting as
separate corporations. The various Pioneer corporations were all
Ruling: working in concert to negotiate an employment contract between
Todaro and PPHI, a domestic corporation.
Jurisdiction over PIL
PIL questions the trial court’s exercise of jurisdiction over it on two Finally, the phrase "doing business in the Philippines" in the former
levels. version of Section 12, Rule 14 now reads "has transacted business in
1) That PIL is a foreign corporation not doing business in the Philippines the Philippines." The scope is thus broader in that it is enough for the
and because of this, the service of summons on PIL did not follow the application of the Rule that the foreign private juridical entity "has
mandated procedure; and transacted business in the Philippines."
2) That Todaro’s claims are based on an alleged breach of an
employment contract so Todaro should have filed his complaint before Purpose of the summons
the NLRC and not before the trial court. The purpose of summons is not only to acquire jurisdiction over the
person of the defendant, but also to give notice to the defendant that
Transacting Business in the Philippine an action has been commenced against it and to afford it an opportunity

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 23
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

to be heard on the claim made against it. The requirements of the rule February 10, 1997 on the ground of lack of jurisdiction over the
on summons must be strictly followed; otherwise, the trial court will not person of CMI and the subject matter of the controversy.
acquire jurisdiction over the defendant. In an Order dated August 27, 1997, the Labor Arbiter granted the
Motion to Dismiss. Applying the doctrine of lex loci contractus, the Labor
When summons is served on a foreign juridical entity, there are three Arbiter held that the terms and provisions of the employment contract
prescribed ways: show that the parties did not intend to apply our Labor Code. The Labor
(1) Service on its resident agent designated in accordance with law for Arbiter also held that no employer-employee relationship existed
that purpose, between Basso and the branch office of CMI in the Philippines, but
(2) Service on the government official designated by law to receive between Basso and the foreign corporation itself.
summons if the corporation does not have a resident agent, and
(3) Service on any of the corporation’s officers or agents within the On appeal, the NLRC remanded the case to the Labor Arbiter for the
Philippines. determination of certain facts to settle the issue on jurisdiction. NLRC
ruled that the issue on whether the principle of lex loci contractus or lex
In the present case, service of summons on PIL failed to follow any of loci celebrationis should apply has to be further threshed out.17
the prescribed processes. PIL had no resident agent in the Philippines. Labor Arbiter's Ruling:
Summons was not served on the Securities and Exchange Commission The Labor Arbiter Madjayran H. Ajan agreed with CMI that the
(SEC), the designated government agency, since PIL is not registered employment contract was executed in the US "since the letter-offer was
with the SEC. under the Texas letterhead and the acceptance of Complainant was
returned there."19 Thus, applying the doctrine of lex loci celebrationis,
Summons for PIL was served on De Leon, Klepzig’s Executive Assistant. US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled
Klepzig is PIL’s "agent within the Philippines" because PIL authorized that the parties did not intend to apply Philippine laws, thus:
Klepzig to notify Todaro of the cessation of his consultancy. The Although the contract does not state what law shall apply, it is obvious
authority given by PIL to Klepzig to notify Todaro implies that Klepzig that Philippine laws were not written into it. More specifically, the
was likewise authorized to receive Todaro’s response to PIL’s notice. Philippine law on taxes and the Labor Code were not intended by the
Todaro responded to PIL’s notice by filing a complaint before the trial parties to apply, otherwise Par. 7 on the payment by Complainant U.S.
court. Federal and Home State income taxes, and Pars. 22/23 on termination
by 30-day prior notice, will not be there. The contract was prepared in
However, summons was not served personally on Klepzig as agent of contemplation of Texas or U.S. laws where Par. 7 is required and Pars.
PIL. Instead, summons was served on De Leon, Klepzig’s Executive 22/23 is allowed.
Assistant. In this instance, De Leon was not PIL’s agent but a mere
employee of Klepzig. In effect, the sheriff resorted to substituted The Labor Arbiter also ruled that Basso was terminated for a valid cause
service. For symmetry, we apply the rule on substituted service of based on the allegations of CMI that Basso committed a series of acts
summons on a natural person and we find that no reason was given to that constitute breach of trust and loss of confidence.
justify the service of PIL’s summons on De Leon.
The Labor Arbiter, however, found CMI to have voluntarily submitted to
Thus, we rule that PIL transacted business in the Philippines and Klepzig his office's jurisdiction. CMI participated in the proceedings, submitted
was its agent within the Philippines. However, there was improper evidence on the merits of the case, and sought affirmative relief
service of summons on PIL since summons was not served personally through a motion to dismiss.
on Klepzig.
NLRC's Ruling
Case was remanded to the lower court for proper service of summons The NLRC did not agree with the pronouncement of the Labor Arbiter
and trial. that his office has no jurisdiction over the controversy. It ruled that the
Labor Arbiter acquired jurisdiction over the case when CMI voluntarily
submitted to his office's jurisdiction by presenting evidence, advancing
New Cases:
arguments in support of the legality of its acts, and praying for reliefs
on the merits of the case.
Continental Micronesia, Inc. v. Basso
GR Nos. 178382-83 Sept. 23, 2015
On the merits, the NLRC agreed with the Labor Arbiter that Basso was
dismissed for just and valid causes on the ground of breach of trust and
Facts:
loss of confidence. The NLRC ruled that under the applicable rules on
Continental Micronesia, Inc. (CMI) is a foreign corporation organized
loss of trust and confidence of a managerial employee, such as Basso,
and existing under the laws of and domiciled in the United States of
mere existence of a basis for believing that such employee has
America (US). It is licensed to do business in the Philippines. Basso, a
breached the trust of his employer suffices. However, the NLRC found
US citizen, resided in the Philippines prior to his death. Mr. Keith R.
that CMI denied Basso the required due process notice in his dismissal.
Braden (Mr. Braden), Managing Director-Asia of Continental Airlines,
Inc. (Continental), offered Basso the position of General Manager of the
Issue #1: Whether or not the LA and NLRC has jurisdiction over the
Philippine Branch of Continental. Basso accepted the offer. On
case.
November 7, 1992, CMI took over the Philippine operations of
Continental, with Basso retaining his position as General Manager.
However, Ms. Woodward terminated his employment effective January Yes. The labor tribunals had jurisdiction over the parties and the subject
31, 1996. matter of the case.

Basso filed a Complaint for Illegal Dismissal with Moral and CMI maintains that there is a conflict-of-laws issue that must be settled
Exemplary Damages against CMI on December 19, 1996. Alleging the to determine proper jurisdiction over the parties and the subject matter
presence of foreign elements, CMI filed a Motion to Dismiss dated of the case. It also alleges that the existence of foreign elements calls
AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 24
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

or the application of US laws and the doctrines of lex loci has a Philippine branch, while Basso, before his death, was residing
celebrationis (the law of the place of the ceremony), lex loci here. Thus, it could be reasonably expected that no extraordinary
contractus (law of the place where a contract is executed), and lex loci measures were needed for the parties to make arrangements in
intentionis(the intention of the parties as to the law that should govern advocating their respective cases.
their agreement). CMI also invokes the application of the rule of forum
non conveniens to determine the propriety of the assumption of The labor tribunals can make an intelligent decision as to the law and
jurisdiction by the labor tribunals. facts. The incident subject of this case (i.e. dismissal of Basso)
happened in the Philippines, the surrounding circumstances of which
The Court agrees with CMI that there is a conflict-of-laws issue that can be ascertained without having to leave the Philippines. The acts that
needs to be resolved first. Where the facts establish the existence of allegedly led to loss of trust and confidence and Basso's eventual
foreign elements, the case presents a conflict-of-laws issue. The foreign dismissal were committed in the Philippines.
element in a case nay appear in different forms, such as in this case,
where one of the parties s an alien and the other is domiciled in another
state.
G.R. No. 202505
Jurisdiction is defined as the power and authority of the courts to hear, EXPRESS PADALA (ITALIA) S.P.A., now BDO REMITTANCE
try and decide cases. Jurisdiction over the subject matter is conferred (ITALIA) S.P.A., Petitioner 
by the Constitution or by law and by the material allegations in the vs.
complaint, regardless of whether or not the plaintiff is entitled to HELEN M. OCAMPO, Respondent
recover all or some of the claims or reliefs sought therein. It cannot be
acquired through a waiver or enlarged by the omission of the parties or Facts: BDO Remittance, a corporation with principal office in Italy,
conferred by the acquiescence of the court. That the employment hired respondent Ocampo as a remittance processor in September
contract of Basso was replete with references to US laws, and that it 2002. She was dismissed in February 2004 for misappropriating the sum
originated from and was returned to the US, do not automatically of €24,035.60 by falsifying invoices of money payments relating to
preclude our labor tribunals from exercising jurisdiction to hear and try customers' money transfer orders from February to December 2003.
this case.
Accordingly, BDO Remittance filed a criminal complaint against Ocampo
This case stemmed from an illegal dismissal complaint. The Labor Code, for the same acts before the Court of Turin, Italy. The Honorable Court
under Article 217, clearly vests original and exclusive jurisdiction to hear of Turin convicted and sentenced her to suffer imprisonment of six
and decide cases involving termination disputes to the Labor Arbiter. months and a penalty of €300.00, but granted her the benefit of
Hence, the Labor Arbiter and the NLRC have jurisdiction over the suspension of the enforcement of sentence on account of her guilty
subject matter of the case. plea.

On the other hand, jurisdiction over the person of CMI was acquired On September 22, 2008, BDO Remittance filed a petition for recognition
through the coercive process of service of summons. We note that CMI of foreign judgment with the RTC of Mandaluyong City. BDO Remittance
never denied that it was served with summons. CMI has, in fact, prayed for the recognition of the Court of Turin Decision and the
voluntarily appeared and participated in the proceedings before the cancellation or restriction of Ocampo' s Philippine passport by the
courts. Though a foreign corporation, CMI is licensed to do business in Department of Foreign Affairs (DFA).
the Philippines and has a local business address here. The purpose of
the law in requiring that foreign corporations doing business in the On November 21, 2008, the sheriff attempted to personally serve the
country be licensed to do so, is to subject the foreign corporations to summons on Ocampo in her local address alleged in the petition. Victor
the jurisdiction of our courts. P. Macahia (Macahia), uncle of Ocampo and present occupant, informed
the sheriff that Ocampo and her family were already in Italy, and that
Considering that the Labor Arbiter and the NLRC have jurisdiction over he was only a caretaker of the house. The sheriff then proceeded to
the parties and the subject matter of this case, these tribunals may serve the summons upon Macahia.
proceed to try the case even if the rules of conflict-of-laws or the
convenience of the parties point to a foreign forum, this being an After Ocampo failed to file an answer, BDO Remittance filed a motion to
exercise of sovereign prerogative of the country where the case is filed. declare Ocampo in default. The RTC granted the motion.

Issue #2: Whether the Philippine court is an inconvenient forum. RTC rendered a Decision in favor of BDO Remittance (RTC Decision). It
recognized as valid and binding in the Philippines the Court of Turin
No. Under the doctrine of forum non conveniens, a Philippine court in a Decision and ordered the DFA to cancel or restrict Ocampo's Philippine
conflict-of-laws case may assume jurisdiction if it chooses to do so, passport and not to allow its renewal until she has served her sentence.
provided, that the following requisites are met: (1) that the
Philippine Court is one to which the parties may conveniently On February 11, 2010, Ocampo's mother, Laureana Macahia, received a
resort to; (2) that the Philippine Court is in a position to make copy of the RTC Decision and forwarded it to Ocampo.Ocampo
an intelligent decision as to the law and the facts; and (3) that principally argued that the RTC acted in grave abuse of discretion in
the Philippine Court has or is likely to have power to enforce its recognizing and ordering the enforcement of the Court of Turin
decision.  Decision.

All these requisites are present here. The CA set aside the RTC Decision and revoked the order to cancel or
restrict Ocampo's Philippine passport (CA Decision).
Basso may conveniently resort to our labor tribunals as he and CMI lad
physical presence in the Philippines during the duration of the trial. CMI

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 25
Based on the syllabus of Atty. Kristine Mae M. Quibod, EnP
1st Semester, S.Y. 2019-2020
(WEEK 1-2 Case Digests)

ISSUE: Since the RTC never acquired jurisdiction over the person of Ocampo,
Whether or not service of summons was validly effected upon the judgment rendered by the court could not be considered binding
respondent, who lives in Italy, through substituted service. upon her.

RULING:
NO. The general rule in this jurisdiction is that summons must be
served personally on the defendant. Section 6, Rule 14 of the Rules of
Court provides:
Sec. 6. Service in person on defendant. - Whenever practicable, the
summons shall be served by handing a copy thereof to the defendant in
person, or, if he refuses to receive and sign for it, by tendering it to
him.

For justifiable reasons, however, other modes of serving summons may


be resorted to. When the defendant cannot be served personally
within a reasonable time after efforts to locate him have failed,
the rules allow summons to be served by substituted service.
Substituted service is effected by leaving copies of the summons at the
defendant's residence with some person of suitable age and discretion
then residing therein, or by leaving the copies at defendant's office or
regular place of business with some competent person in charge
thereof.

When the defendant's whereabouts are unknown, the rules


allow service of summons by publication.As an exception to the
preferred mode of service, service of summons by publication may only
be resorted to when the whereabouts of the defendant are not only
unknown, but cannot be ascertained by diligent inquiry. The diligence
requirement means that there must be prior resort to personal service
under Section 7 and substituted service under Section 8, and proof that
these modes were ineffective before summons by publication may be
allowed. This mode also requires the plaintiff to file a written motion for
leave of court to effect service of summons by publication, supported by
affidavit of the plaintiff or some person on his behalf, setting forth the
grounds for the application.

In the present case, the sheriff resorted to substituted service upon


Ocampo through her uncle, who was the caretaker of Ocampo's old
family residence in Tanauan, Batangas. The CA held that substituted
service was improperly resorted to. It found that since Ocampo' s
"whereabouts are unknown and cannot be ascertained by diligent
inquiry, service may be effected only by publication in a newspaper of
general circulation”.

We agree with the CA that substituted service is improper under the


facts of this case. Substituted service presupposes that the place where
the summons is being served is the
defendant's current residence or office/regular place of business.
Thus, where the defendant neither resides nor holds office in
the address stated in the summons, substituted service cannot
be resorted to.

BDO Remittance's reliance on Palma v. Galvez is misplaced for the


simple reason that the case involved service of summons to a person
who is temporarily out of the country. In this case, however, Ocampo's
sojourn in Italy cannot be classified as temporary considering that she
already resides there, albeit her precise address was not known.
The service of summons is a vital and indispensable ingredient of a
defendant's constitutional right to due process. As a rule, if a
defendant has not been validly summoned, the court acquires
no jurisdiction over his person, and a judgment rendered
against him is void.

AREVALO.CAYETANO.CATARMAN.DE PERALTA.PRESTO.ROBLE.ROXAS.USMAN 26

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