U.S.

Supreme Court
Hilton v. Guyot, 159 U.S. 113 (1895)
Hilton v. Guyot
Nos. 130, 34
Argued April 10, 1894
Decided June 3, 1895
159 U.S. 113

Syllabus
A citizen and resident of this country who has his principal place of business here but has an agent in a foreign country and is accustomed to purchase and store large quantities of goods there,
and, in a suit brought against him by a citizen and in a court of that country, appears and defends with the sole object of preventing his property within the jurisdiction, but not in the custody of that
court, from being taken in satisfaction of any judgment that may be recovered against him there cannot, in an action brought against him in this country upon such a judgment, impeach it for want
of jurisdiction of his person.
The admission at the trial in a court of a foreign country, according to its law and practice, of testimony not under oath and without opportunity of cross-examination, and of documents with which
the defendant had no connection and which by our law would not be admissible against him, is not of itself a sufficient ground for impeaching the judgment of that court in an action brought upon it
in this country.
When an action is brought in a court of this country by a citizen of a foreign country against one of our own citizens to recover a sum of money adjudged by a court of that country to be due from
the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a competent court, having jurisdiction of the cause and of the parties, and upon due allegations and
proofs and opportunity to defend against them, and its proceedings are according to the course of a civilized jurisprudence, and are stated in a clear and formal record, the judgment is prima facie
evidence, at least, of the truth of the matter adjudged, and the judgment is conclusive upon the merits tried in the foreign court unless some special ground is shown for impeaching it, as by
showing that it was affected by fraud or prejudice or that, by the principles of international law and by the comity of our own country, it is not entitled to full credit and credit.
A judgment for a sum of money, rendered by a court of a foreign country, having jurisdiction of the cause and of the parties, in a suit brought by
Page 159 U. S. 114
one of its citizens against one of ours, is prima facie evidence only, and not conclusive of the merits of the claim in an action brought here upon the judgment if by the law of the foreign country, as
in France, judgments of our own courts are not recognized as conclusive.
The first of these two cases was an action at law, brought December 18, 1885, in the Circuit Court of the United States for the Southern District of New York, by GustaveBertinGuyot, as
official liquidator of the firm of Charles Fortin & Co., and by the surviving members of that firm, all aliens and citizens of the Republic of France, against Henry Hilton and William
Libbey, citizens of the United States and of the State of New York and trading as copartners in the cities of New York and Paris and elsewhere under the firm name of A. T. Stewart &
Co. The action was upon a judgment recovered in a French court at Paris, in the Republic of France, by the firm of Charles Fortin & Co., all of whose members were French citizens, against Hilton
&Libbey, trading as copartners, as aforesaid, and citizens of the United States and of the State of New York.
The complaint alleged that in 1886 and since, during the time of all the transactions included in the judgment sued on, Hilton and Libbey, as successors to Alexander T. Stewart and
Libbey, under the firm name of A. T. Stewart & Co., carried on a general business as merchants in the Cities of New York and Paris and elsewhere, and maintained a regular store and
place of business at Paris; that during the same time, Charles Fortin & Co. carried on the manufacture and sale of gloves at Paris, and the two firms had there large dealings in that
business, and controversies arose in the adjustment of accounts between them.

The complaint further alleged that between March 1, 1879, and December 1, 1882, five suits were brought by Fortin & Co. against Stewart & Co. for sums alleged to be due, and three suits by
Stewart & Co. against Fortin & Co., in the Tribunal of Commerce of the Department of the Seine, a judicial tribunal or court organized and existing under the laws of France, sitting at Paris and
having jurisdiction of suits and controversies between merchants or traders growing
Page 159 U. S. 115
out of commercial dealings between them; that Stewart & Co. appeared by their authorized attorneys in all those suits, and that, after full hearing before an arbitrator appointed by that court and
before the court itself, and after all the suits had been consolidated by the court, final judgment was rendered on January 20, 1883, that Fortin & Co. recover of Stewart & Co. various
sums, arising out of the dealings between them, amounting to 660,847 francs, with interest, and dismissed part of Fortin & Co.'s claim.
The complaint further alleged that appeals were taken by both parties from that judgment to the Court of Appeal of Paris, Third Section, an appellate court of record organized and existing under
the laws of the Republic of France and having jurisdiction of appeals from the final judgments of the Tribunal of Commerce of the Department of the Seine, where the amount in dispute exceeded
the sum of 1,500 francs, and that the said Court of Appeal, by a final judgment rendered March 19, 1884, and remaining of record in the office of its clerk at Paris, after hearing the several parties
by their counsel, and upon full consideration of the merits, dismissed the appeal of the defendants, confirmed the judgment of the lower court in favor of the plaintiffs, and ordered, upon the
plaintiffs' appeal, that they recover the additional sum of 152,528 francs, with 182,849 francs for interest on all the claims allowed, and 12,559 francs for costs and expenses.
The complaint further alleged that Guyot had been duly appointed by the Tribunal of Commerce of the Department of the Seine official liquidator of the firm of Forth & Co., with full powers,
according to law and commercial usage, for the verification and realization of its property, both real and personal, and to collect and cause to be executed the judgments aforesaid.
The complaint further alleged that the judgment of the Court of Appeals of Paris, and the judgment of the Tribunal of Commerce, as modified by the judgment of the appellate court, still remain in
full force and effect;
"that the said courts respectively had jurisdiction of the subject matter of the controversies so submitted to them, and of the parties, the
Page 159 U. S. 116
said defendants having intervened, by their attorneys and counsel, and applied for affirmative relief in both courts; that the plaintiffs have hitherto been unable to collect the said judgments
or any part thereof, by reason of the absence of the said defendants, they having given up their business in Paris prior to the recovery of the said judgment on appeal, and having left
no property within the jurisdiction of the Republic of France out of which the said judgments might be made;"
and that there are still justly due and owing from the defendants to the plaintiffs upon those said judgments certain sums, specified in the complaint, and amounting in all to 1,008,783 francs in the
currency of the Republic of France, equivalent to $195,122.47.
The defendants, in their answer, set forth in detail the original contracts and transactions in France between the parties and the subsequent dealings between them modifying those contracts, and
alleged that the plaintiffs had no just claim against the defendants, but that, on the contrary, the defendants, upon a just settlement of the accounts, were entitled to recover large sums from the
plaintiffs.
The answer admitted the proceedings and judgments in the French courts and that the defendants gave up their business in France before the judgment on appeal, and had no property within the
jurisdiction of France out of which that judgment could be collected.
The answer further alleged that the Tribunal of Commerce of the Department of the Seine was a tribunal whose judges were merchants, ship captains, stockbrokers, and persons engaged in
commercial pursuits, and of which Charles Fortin had been a member until shortly before the commencement of the litigation.

The answer further alleged that in the original suits brought against the defendants by Fortin & Co., the citations were left at their storehouse in Paris; that they were then residents
and citizens of the State of New York, and neither of them at that time, or within four years before, had been within, or resident or domiciled within, the jurisdiction of that tribunal or
owed any allegiance to France, but that
Page 159 U. S. 117
they were the owners of property situated in that country which would by the law of France have been liable to seizure if they did not appear in that tribunal, and that they unwillingly, and solely for
the purpose of protecting that property, authorized and caused an agent to appear for them in those proceedings, and that the suits brought by them against Fortin & Co. were brought for the same
purpose, and in order to make a proper defense, and to establish counterclaims arising out of the transactions between the parties, and to compel the production and inspection of Fortin & Co.'s
books, and that they sought no other affirmative relief in that tribunal.
The answer further alleged that, pending that litigation, the defendants discovered gross frauds in the accounts of Fourtin& Co., that the arbitrator and the tribunal declined to compel Fortin & Co.
to produce their books and papers for inspection, and that, if they had been produced, the judgment would not have been obtained against the defendants.
The answer further alleged that without any fault or negligence on the part of the defendants, there was not a full and fair trial of the controversies before the arbitrator, in that no witness was sworn
or affirmed; in that Charles Fortin was permitted to make, and did make, statements not under oath containing many falsehoods; in that the privilege of cross-examination of Fortin and other
persons who made statements before the arbitrator was denied to the defendants, and in that extracts from printed newspapers, the knowledge of which was not brought home to the defendants,
and letters and other communications in writing between Fortin & Co. and third persons, to which the defendants were neither privy nor party, were received by the arbitrator; that without such
improper evidence, the judgment would not have been obtained, and that the arbitrator was deceived and misled by the false and fraudulent accounts introduced by Fortin & Co. and by the
hearsay testimony given, without the solemnity of an oath and without cross-examination, and by the fraudulent suppression of the books and papers.
The answer further alleged that Fortin & Co. made up their statements and accounts falsely and fraudulently, and with
Page 159 U. S. 118
intent to deceive the defendants and the arbitrator and the said courts of France, and those courts were deceived and misled thereby; that owing to the fraudulent suppression of the books and
papers of Fortin & Co. upon the trial and the false statements of Fortin regarding matters involved in the controversy, the arbitrator and the courts of France
"were deceived and misled in regard to the merits of the controversies pending before them, and wrongfully decided against said Stewart & Co., as hereinbefore stated; that said judgment,
hereinbefore mentioned, is fraudulent, and based upon false and fraudulent accounts and statements, and is erroneous in fact and in law, and is void; that the trial hereinbefore
mentioned was not conducted according to the usages and practice of the common law, and the allegations and proofs given by said Fortin & Co., upon which said judgment is
founded, would not be competent or admissible in any court or tribunal of the United States, in any suit between the same parties involving the same subject matter, and it is
contrary to natural justice and public policy that the said judgment should be enforced against a citizen of the United States, and that, if there had been a full and fair trial upon the
merits of the controversies so pending before said tribunals, no judgment would have been obtained against said Stewart & Co."
"Defendants, further answering, allege that it is contrary to natural justice that the judgment hereinbefore mentioned should be enforced without an examination of the merits thereof; that by the
laws of the Republic of France, to-wit, article 181 [121] of the Royal Ordinance of June 15, 1629, it is provided namely:"
"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and sovereignties, for any cause whatever shall give rise to no lien or execution in our Kingdom. Thus, the contracts
shall stand for simple promises, and, notwithstanding such judgments, our subjects against whom they have been rendered may contest their rights anew before our own judges."
"And it is further provided by the laws of France, by article 546 of the Code de Procedure Civile, as follows:"
" Judgments rendered by foreign tribunals shall be capable of execution

Page 159 U. S. 119

in France only in the manner and in the cases set forth by articles 2123 and 2128 of the Civil Code."
"And it is further provided by the laws of France, by article 2128 [2123] of the Code de Procedure Civile [Civil Code]:"
" A lien cannot, in like manner, arise from judgments rendered in any foreign country, save only as they have been declared in force by a French tribunal, without prejudice, however,
to provisions to the contrary, contained in public laws and treaties."
"[And by article 2128 of that Code: 'Contracts entered into in a foreign country cannot give a lien upon property in France if there are no provisions contrary to this principle in public
laws or in treaties.']"
"That the construction given to said statutes by the judicial tribunals of France is such that no comity is displayed towards the judgments of tribunals of foreign countries against the citizens of
France, when sued upon in said courts of France, and the merits of the controversies upon which the said judgments are based are examined anew, unless a treaty to the contrary effect exists
between the said Republic of France and the country in which such judgment is obtained. That no treaty exists between the said Republic of France and the United States, by the terms or effect of
which the judgments of either country are prevented from being examined anew upon the merits, when sued upon in the courts of the country other than that in which it is obtained. That the
tribunals of the Republic of France give no force and effect, within the jurisdiction of the said country, to the duly rendered judgments of courts of competent jurisdiction of the United States against
citizens of France, after proper personal service of the process of said courts is made thereon in this country."
The answer further set up, by way of counterclaim and in detail, various matters arising out of the dealings between the parties, and alleged that none of the plaintiffs had since 1881 been
residents of the State of New York, or within the jurisdiction of that state, but the defendants were, and always had been, residents of that state.
The answer concluded by demanding that the plaintiffs'
Page 159 U. S. 120
complaint be dismissed, and that the defendants have judgment against them upon the counterclaims, amounting to $102,942.91.
The plaintiffs filed a replication to so much of the answer as made counterclaims, denying its allegations and setting up in bar thereof the judgment sued on.
The defendants, on June 22, 1888, filed a bill in equity against the plaintiffs setting forth the same matters as in their answer to the action at law and praying for a discovery and for an injunction
against the prosecution of the action. To that bill a plea was filed setting up the French judgments, and upon a hearing, the bill was dismissed. 42 F. 249. From the decree dismissing the bill an
appeal was taken, which is the second case now before this Court.
The action at law afterwards came on for trial by a jury, and the plaintiffs put in the records of the proceedings and judgments in the French courts, and evidence that the jurisdiction of those courts
was as alleged in the complaint and that the practice followed and the method of examining the witnesses were according to the French law, and also proved the title of Guyot as liquidator.
It was admitted by both parties that for several years prior to 1876, the firm of Alexander T. Stewart & Co., composed of Stewart and Libbey, conducted their business as merchants in the City of
New York, with branches in other cities of America and Europe; that both partners were citizens and residents of the City and State of New York during the entire period mentioned in the complaint,
and that in April, 1876, Stewart died, and Hilton and Libbeyformed a partnership to continue the business under the same firm name, and became the owners of all the property and rights of the
old firm.

The defendants made numerous offers of evidence in support of all the specific allegations of fact in their answer, including the allegations as to the law and comity of France. The plaintiffs, in their
brief filed in this Court, admitted that most of these offers
"were offers to prove matters in support of the defenses and counterclaims set up by the defendants in the cases tried before the French courts, and which, or most
Page 159 U. S. 121
of which, would have been relevant and competent if the plaintiffs in error are not concluded by the result of those litigations, and have now the right to try those issues, either on the ground that
the French judgments are only prima facie evidence of the correctness of those judgments, or on the ground that the case is within the exception of a judgment obtained by fraud."
The defendants, in order to show that they should not be concluded by having appeared and litigated in the suits brought against them by the plaintiffs in the French courts, offered to prove that
they were residents and citizens of the State of New York, and neither of them had been, within four years prior to the commencement of those suits, domiciled or resident within the jurisdiction of
those courts; that they had a purchasing agent and a storehouse in Paris, but only as a means or facility to aid in the transaction of their principal business, which was in New York, and they were
never otherwise engaged in business in France; that neither of them owed allegiance to France, but they were the owners of property there which would, according to the laws of France, have
been liable to seizure if they had not appeared to answer in those suits; that they unwillingly, and solely for the purpose of protecting their property within the jurisdiction of the French tribunal,
authorized an agent to appear, and he did appear in the proceedings before it, and that their motion to compel an inspection of the plaintiffs' books, as well as the suits brought by the defendants
in France, were necessary by way of defense or counterclaim to the suits there brought by the plaintiffs against them.
Among the matters which the defendants alleged and offered to prove in order to show that the French judgments were procured by fraud were that Fortin & Co., with intent to deceive and defraud
the defendants, and the arbitrator and the courts of France, entered in their books, and presented to the defendants, and to the French courts, accounts bearing upon the transactions in
controversy which were false and fraudulent, and contained excessive and fraudulent charges against the defendants in various particulars, specified; that the
Page 159 U. S. 122
defendants made due application to the Tribunal of Commerce to compel Fortin & Co. to allow their account books and letter books to be inspected by the defendants, and the application was
opposed by Fortin & Co., and denied by the tribunal; that the discovery and inspection of those books were necessary to determine the truth of the controversies between the parties; that before
the Tribunal of Commerce, Charles Fortin was permitted to and did give in evidence statements not under oath relating to the merits of the controversies there pending, and falsely represented
that a certain written contract made in 1873 between Stewart & Co. and Fortin & Co. concerning their dealings was not intended by the parties to be operative according to its terms, and in support
of that false representation made statements as to admissions by Stewart in a private conversation with him, and that the defendants could not deny those statements, because Stewart was dead,
and they were not protected from the effect of Fortin's statements by the privilege of cross-examining him under oath, and that the French judgments were based upon false and fraudulent
accounts presented and statements made by Fortin & Co. before the Tribunal of Commerce during the trial before it.
The records of the judgments of the French courts, put in evidence by the plaintiffs, showed that all the matters now relied on to show fraud were contested in and considered by
those courts.
The plaintiffs objected to all the evidence offered by the defendants on the grounds that the matters offered to be proved were irrelevant, immaterial, and incompetent; that in respect
to them the defendants were concluded by the judgment sued on and given in evidence, and that none of those matters, if proved, would be a defense to this action upon that
judgment.
The court declined to admit any of the evidence so offered by the defendants, and directed a verdict for the plaintiffs in the sum of $277,775.44, being the amount of the French
judgment and interest. The defendants, having duly excepted to the rulings and direction of the court, sued out a writ of error.
Page 159 U. S. 123

The writ of error in the action at law and the appeal in the suit in equity were argued together in this Court in January, 1894, and, by direction of the Court, were reargued in April,
1894, before a full Bench.
Page 159 U. S. 162
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CASE SYNOPSIS
Defendants appealed an order from the Circuit Court of the United States (SDNY), which directed a verdict for plaintiffs in the amount that a French court had awarded.
Defendants alleged fraud on the plaintiff's part.
CASE FACTS
Plaintiffs sued the defendants in a French court under a contract claim.
The defendants alleged fraud on the (Ps) part, and the (Ds) sought an injunction from bringing suit. The court, however, would not admit evidence and entered a directed verdict for plaintiff.
A French appeals court affirmed the judgment.
Defendants sought review in the United States.
DISCUSSION

The court stated that comity was reciprocal.

Because France did not recognize final judgments of the U.S., and would try such judgments anew, judgements given by France would be given the same treatment.

Therefore, the comity of the United States did not require the court to give conclusive effect to the judgments of the courts of France.

Defendants could be granted a new trial.

CONCLUSION
The
judgment
was
reversed
and
the
cause
Comity
was
not
afforded
to
foreign
judgments
when
- See more at: http://www.lawschoolcasebriefs.net/2013/12/hilton-v-guyot-case-brief.html#sthash.QKmQMSRf.dpuf

was
the

remanded
country

for
did

a
not

new
reciprocate

trial.
comity.

G.R. No. 112573 February 9, 1995

NORTHWEST
ORIENT
AIRLINES,
INC.
petitioner,
vs.
COURT OF APPEALS and C.F. SHARP & COMPANY INC., respondents.

PADILLA, JR., J.:

This petition for review on certiorari seeks to set aside the decision of the Court of Appeals affirming
the dismissal of the petitioner's complaint to enforce the judgment of a Japanese court. The
principal issue here is whether a Japanese court can acquire jurisdiction over a Philippine

corporation doing business in Japan by serving summons through diplomatic channels on the Philippine corporation at its principal office in Manila after prior attempts to serve
summons in Japan had failed.
Petitioner Northwest Orient Airlines, Inc. (hereinafter NORTHWEST), a corporation organized under the laws of the State of Minnesota, U.S.A., sought to enforce in Civil Case No. 8317637 of the Regional Trial Court (RTC), Branch 54, Manila, a judgment rendered in its favor by a Japanese court against private respondent C.F. Sharp & Company, Inc., (hereinafter
SHARP), a corporation incorporated under Philippine laws.
As found by the Court of Appeals in the challenged decision of 10 November 1993, 1the following are the factual and procedural antecedents of this controversy:
On May 9, 1974, plaintiff Northwest Airlines and defendant C.F. Sharp & Company, through its Japan branch, entered into an International Passenger Sales Agency
Agreement, whereby the former authorized the latter to sell its air transportation tickets. Unable to remit the proceeds of the ticket sales made by defendant on behalf
of the plaintiff under the said agreement, plaintiff on March 25, 1980 sued defendant in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with
claim for damages.
On April 11, 1980, a writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan against defendant at its office at the Taiheiyo Building,
3rd floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. The attempt to serve the summons was unsuccessful because the bailiff was advised by a person
in the office that Mr.Dinozo, the person believed to be authorized to receive court processes was in Manila and would be back on April 24, 1980.
On April 24, 1980, bailiff returned to the defendant's office to serve the summons. Mr.Dinozo refused to accept the same claiming that he was no longer an employee of the
defendant.
After the two attempts of service were unsuccessful, the judge of the Tokyo District Court decided to have the complaint and the writs of summons served at the head
office of the defendant in Manila. On July 11, 1980, the Director of the Tokyo District Court requested the Supreme Court of Japan to serve the summons through
diplomatic channels upon the defendant's head office in Manila.
On August 28, 1980, defendant received from Deputy Sheriff Rolando Balingit the writ of summons (p. 276, Records). Despite receipt of the same, defendant failed to
appear at the scheduled hearing. Thus, the Tokyo Court proceeded to hear the plaintiff's complaint and on [January 29, 1981], rendered judgment ordering the
defendant to pay the plaintiff the sum of 83,158,195 Yen and damages for delay at the rate of 6% per annum from August 28, 1980 up to and until payment is completed
(pp. 12-14, Records).
On March 24, 1981, defendant received from Deputy Sheriff Balingit copy of the judgment. Defendant not having appealed the judgment, the same became final and
executory.
Plaintiff was unable to execute the decision in Japan, hence, on May 20, 1983, a suit for enforcement of the judgment was filed by plaintiff before the Regional Trial Court of Manila
Branch 54. 2
On July 16, 1983, defendant filed its answer averring that the judgment of the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having
been rendered without due and proper notice to the defendant and/or with collusion or fraud and/or upon a clear mistake of law and fact (pp. 41-45, Rec.).

Unable to settle the case amicably, the case was tried on the merits. After the plaintiff rested its case, defendant on April 21, 1989, filed a Motion for Judgment on a Demurrer to
Evidence
based
on
two
grounds:
(1) the foreign judgment sought to be enforced is null and void for want of jurisdiction and (2) the said judgment is contrary to Philippine law and public policy and rendered without
due process of law. Plaintiff filed its opposition after which the court a quo rendered the now assailed decision dated June 21, 1989 granting the demurrer motion and dismissing
the complaint (Decision, pp. 376-378, Records). In granting the demurrer motion, the trial court held that:
The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over the person of the defendant considering that this is an
action in personam; the Japanese Court did not acquire jurisdiction over the person of the defendant because jurisprudence requires that the defendant be served
with summons in Japan in order for the Japanese Court to acquire jurisdiction over it, the process of the Court in Japan sent to the Philippines which is outside
Japanese jurisdiction cannot confer jurisdiction over the defendant in the case before the Japanese Court of the case at bar. Boudard versus Tait 67 Phil. 170. The
plaintiff contends that the Japanese Court acquired jurisdiction because the defendant is a resident of Japan, having four (4) branches doing business therein and
in fact had a permit from the Japanese government to conduct business in Japan (citing the exhibits presented by the plaintiff); if this is so then service of
summons should have been made upon the defendant in Japan in any of these alleged four branches; as admitted by the plaintiff the service of the summons
issued by the Japanese Court was made in the Philippines thru a Philippine Sheriff. This Court agrees that if the defendant in a foreign court is a resident in the
court of that foreign court such court could acquire jurisdiction over the person of the defendant but it must be served upon the defendant in the territorial
jurisdiction of the foreign court. Such is not the case here because the defendant was served with summons in the Philippines and not in Japan.
Unable to accept the said decision, plaintiff on July 11, 1989 moved for reconsideration of the decision, filing at the same time a conditional Notice of Appeal, asking the court to
treat the said notice of appeal "as in effect after and upon issuance of the court's denial of the motion for reconsideration."
Defendant opposed the motion for reconsideration to which a Reply dated August 28, 1989 was filed by the plaintiff.
On October 16, 1989, the lower court disregarded the Motion for Reconsideration and gave due course to the plaintiff's Notice of Appeal. 3
In its decision, the Court of Appeals sustained the trial court. It agreed with the latter in its reliance upon Boudard vs.Tait4wherein it was held that "the process of the court has no extraterritorial
effect and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of the state." To support its position, the Court of Appeals further stated:
In an action strictly in personam, such as the instant case, personal service of summons within the forum is required for the court to acquire jurisdiction over the defendant
(Magdalena Estate Inc. vs. Nieto, 125 SCRA 230). To confer jurisdiction on the court, personal or substituted service of summons on the defendant not extraterritorial service is
necessary (Dial Corp vs. Soriano, 161 SCRA 739).
But while plaintiff-appellant concedes that the collection suit filed is an action in personam, it is its theory that a distinction must be made between an action in personam against a
resident defendant and an action in personamagainst a non-resident defendant. Jurisdiction is acquired over a non-resident defendant only if he is served personally within the
jurisdiction of the court and over a resident defendant if by personal, substituted or constructive service conformably to statutory authorization. Plaintiff-appellant argues that since
the defendant-appellee maintains branches in Japan it is considered a resident defendant. Corollarily, personal, substituted or constructive service of summons when made in
compliance with the procedural rules is sufficient to give the court jurisdiction to render judgment in personam.
Such an argument does not persuade.

It is a general rule that processes of the court cannot lawfully be served outside the territorial limits of the jurisdiction of the court from which it issues (Carter vs.
Carter; 41 S.E. 2d 532, 201) and this is regardless of the residence or citizenship of the party thus served (Iowa-Rahr vs. Rahr, 129 NW 494, 150 Iowa 511, 35 LRC, NS,
292, Am. Case 1912 D680). There must be actual service within the proper territorial limits on defendant or someone authorized to accept service for him. Thus, a
defendant, whether a resident or not in the forum where the action is filed, must be served with summons within that forum.
But even assuming a distinction between a resident defendant and non-resident defendant were to be adopted, such distinction applies only to natural persons and not in the
corporations. This finds support in the concept that "a corporation has no home or residence in the sense in which those terms are applied to natural persons" (Claude Neon Lights
vs. Phil. Advertising Corp., 57 Phil. 607). Thus, as cited by the defendant-appellee in its brief:
Residence is said to be an attribute of a natural person, and can be predicated on an artificial being only by more or less imperfect analogy. Strictly speaking, therefore, a
corporation can have no local residence or habitation. It has been said that a corporation is a mere ideal existence, subsisting only in contemplation of law an invisible being
which can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place. (18 Am. Jur. 2d, p. 693 citing Kimmerle v. Topeka, 88 370, 128 p. 367;
Wood v. Hartfold F. Ins. Co., 13 Conn 202)
Jurisprudence so holds that the foreign or domestic character of a corporation is to be determined by the place of its origin where its charter was granted and not by the location of
its business activities (Jennings v. Idaho Rail Light & P. Co., 26 Idaho 703, 146 p. 101), A corporation is a "resident" and an inhabitant of the state in which it is incorporated and no
other (36 Am. Jur. 2d, p. 49).
Defendant-appellee is a Philippine Corporation duly organized under the Philippine laws. Clearly, its residence is the Philippines, the place of its incorporation, and
not Japan. While defendant-appellee maintains branches in Japan, this will not make it a resident of Japan. A corporation does not become a resident of another by
engaging in business there even though licensed by that state and in terms given all the rights and privileges of a domestic corporation (Galveston H. & S.A.R. Co. vs.
Gonzales, 151 US 496, 38 L ed. 248, 4 S Ct. 401).
On this premise, defendant appellee is a non-resident corporation. As such, court processes must be served upon it at a place within the state in which the action is
brought and not elsewhere (St. Clair vs. Cox, 106 US 350, 27 L ed. 222, 1 S. Ct. 354). 5
It then concluded that the service of summons effected in Manila or beyond the territorial boundaries of Japan was null and did not confer jurisdiction upon the Tokyo District Court
over the person of SHARP; hence, its decision was void.
Unable to obtain a reconsideration of the decision, NORTHWEST elevated the case to this Court contending that the respondent court erred in holding that SHARP was not a resident of Japan
and that summons on SHARP could only be validly served within that country.
A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to presume the regularity of the proceedings and the giving
of due notice therein. 6
Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personamof a tribunal of a foreign country having jurisdiction to pronounce the same is presumptive evidence of a right
as between the parties and their successors-in-interest by a subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere, enjoys the presumption that it was acting in the lawful exercise of
jurisdiction and has regularly performed its official duty.

Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity. 7Being the party challenging the judgment rendered by the Japanese court,
SHARP had the duty to demonstrate the invalidity of such judgment. In an attempt to discharge that burden, it contends that the extraterritorial service of summons effected at its home office in the
Philippines was not only ineffectual but also void, and the Japanese Court did not, therefore acquire jurisdiction over it.
It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lexforior the internal law of the forum. 8In this case, it is the
procedural law of Japan where the judgment was rendered that determines the validity of the extraterritorial service of process on SHARP. As to what this law is is a question of fact, not of law. It
may not be taken judicial notice of and must be pleaded and proved like any other fact. 9Sections 24 and 25, Rule 132 of the Rules of Court provide that it may be evidenced by an official
publication or by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to present evidence as to what that Japanese procedural law is and to show that under it, the
assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the Japanese court
must stand.
Alternatively
in
the
light
of
the
absence
of
proof
regarding
Japanese
law, the presumption of identity or similarity or the so-called processual presumption 10may be invoked. Applying it, the Japanese law on the matter is presumed to be similar with the
Philippine law on service of summons on a private foreign corporation doing business in the Philippines. Section 14, Rule 14 of the Rules of Court provides that if the defendant is a
foreign corporation doing business in the Philippines, service may be made: (1) on its resident agent designated in accordance with law for that purpose, or, (2) if there is no 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.
If the foreign corporation has designated an agent to receive summons, the designation is exclusive, and service of summons is without force and gives the court no jurisdiction unless made upon
him. 11
Where the corporation has no such agent, service shall be made on the government official designated by law, to wit: (a) the Insurance Commissioner in the case of a foreign insurance company;
(b) the Superintendent of Banks, in the case of a foreign banking corporation; and (c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do
business in the Philippines. Whenever service of process is so made, the government office or official served shall transmit by mail a copy of the summons or other legal proccess to the
corporation at its home or principal office. The sending of such copy is a necessary part of the service. 12
SHARP contends that the laws authorizing service of process upon the Securities and Exchange Commission, the Superintendent of Banks, and the Insurance Commissioner, as the case may be,
presuppose a situation wherein the foreign corporation doing business in the country no longer has any branches or offices within the Philippines. Such contention is belied by the pertinent
provisions of the said laws. Thus, Section 128 of the Corporation Code 13and Section 190 of the Insurance Code 14clearly contemplate two situations: (1) if the corporation had left the Philippines or
had ceased to transact business therein, and (2) if the corporation has no designated agent. Section 17 of the General Banking Act 15does not even speak a corporation which had ceased to
transact business in the Philippines.
Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive court processes in Japan. This silence could only mean, or least create an impression, that it had
none. Hence, service on the designated government official or on any of SHARP's officers or agents in Japan could be availed of. The respondent, however, insists that only service of any of its
officers or employees in its branches in Japan could be resorted to. We do not agree. As found by the respondent court, two attempts at service were made at SHARP's Yokohama branch. Both
were unsuccessful. On the first attempt, Mr.Dinozo, who was believed to be the person authorized to accept court process, was in Manila. On the second, Mr.Dinozo was present, but to accept the
summons because, according to him, he was no longer an employee of SHARP. While it may be true that service could have been made upon any of the officers or agents of SHARP at its three
other branches in Japan, the availability of such a recourse would not preclude service upon the proper government official, as stated above.
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 Philippine's after the two attempts of service had failed.
16
The Tokyo District Court requested the Supreme Court of Japan to cause the delivery of the summons and other legal documents to the Philippines. Acting on that request, the Supreme Court of

Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan which, in turn, forwarded the same to the Japanese Embassy in Manila . Thereafter, the
court processes were delivered to the Ministry (now Department) of Foreign Affairs of the Philippines, then to the Executive Judge of the Court of First Instance (now Regional Trial Court) of
Manila, who forthwith ordered Deputy Sheriff Rolando Balingit to serve the same on SHARP at its principal office in Manila. This service is equivalent to service on the proper government official
under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code. Hence, SHARP's contention that such manner of service is not valid under Philippine laws
holds no water. 17
In deciding against the petitioner, the respondent court sustained the trial court's reliance on Boudard vs.Tait18where this Court held:
The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgment, must be based upon personal service within the state which renders
the judgment.
xxxxxxxxx
The process of a court, has no extraterritorial effect, and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of the state. Nor has a
judgment of a court of a foreign country against a resident of this country having no property in such foreign country based on process served here, any effect here against either
the defendant personally or his property situated here.
Process issuing from the courts of one state or country cannot run into another, and although a nonresident defendant may have been personally served with such process in the
state or country of his domicile, it will not give such jurisdiction as to authorize a personal judgment against him.
It further availed of the ruling in Magdalena Estate, Inc. vs. Nieto19and Dial Corp. vs. Soriano, 20as well as the principle laid down by the Iowa Supreme Court in the 1911 case of Raher vs.Raher. 21
The first three cases are, however, inapplicable. Boudardinvolved the enforcement of a judgment of the civil division of the Court of First Instance of Hanoi, French Indo-China. The trial court
dismissed the case because the Hanoi court never acquired jurisdiction over the person of the defendant considering that "[t]he, evidence adduced at the trial conclusively proves that neither the
appellee [the defendant] nor his agent or employees were ever in Hanoi, French Indo-China; and that the deceased Marie Theodore Jerome Boudard had never, at any time, been his employee."
In Magdalena Estate, what was declared invalid resulting in the failure of the court to acquire jurisdiction over the person of the defendants in an action in personam was the service of summons
through publication against non-appearing resident defendants. It was claimed that the latter concealed themselves to avoid personal service of summons upon them. In Dial, the defendants were
foreign corporations which were not, domiciled and licensed to engage in business in the Philippines and which did not have officers or agents, places of business, or properties here. On the other
hand, in the instant case, SHARP was doing business in Japan and was maintaining four branches therein.
Insofar as to the Philippines is concerned, Raher is a thing of the past. In that case, a divided Supreme Court of Iowa declared that the principle that there can be no jurisdiction in a court of a
territory to render a personal judgment against anyone upon service made outside its limits was applicable alike to cases of residents and non-residents. The principle was put at rest by the United
States Supreme Court when it ruled in the 1940 case of Milliken vs. Meyer 22that domicile in the state is alone sufficient to bring an absent defendant within the reach of the state's jurisdiction for
purposes of a personal judgment by means of appropriate substituted service or personal service without the state. This principle is embodied in section 18, Rule 14 of the Rules of Court which
allows service of summons on residents temporarily out of the Philippines to be made out of the country. The rationale for this rule was explained in Milliken as follows:
[T]he authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The state which accords him privileges and affords protection to
him and his property by virtue of his domicile may also exact reciprocal duties. "Enjoyment of the privileges of residence within the state, and the attendant right to invoke the
protection of its laws, are inseparable" from the various incidences of state citizenship. The responsibilities of that citizenship arise out of the relationship to the state which domicile
creates. That relationship is not dissolved by mere absence from the state. The attendant duties, like the rights and privileges incident to domicile, are not dependent on continuous

presence in the state. One such incident of domicile is amenability to suit within the state even during sojourns without the state, where the state has provided and employed a
reasonable method for apprising such an absent party of the proceedings against him. 23
The domicile of a corporation belongs to the state where it was incorporated.
have only one domicile which is the state of its creation. 25

24

In a strict technical sense, such domicile as a corporation may have is single in its essence and a corporation can

Nonetheless, a corporation formed in one-state may, for certain purposes, be regarded a resident in another state in which it has offices and transacts business. This is the rule in our jurisdiction
and aproposthereto, it may be necessery to quote what we stated in State Investment House, Inc, vs. Citibank, N.A., 26to wit:
The issue is whether these Philippine branches or units may be considered "residents of the Philippine Islands" as that term is used in Section 20 of the Insolvency Law . . . or
residents of the state under the laws of which they were respectively incorporated. The answer cannot be found in the Insolvency Law itself, which contains no definition of the
term, resident, or any clear indication of its meaning. There are however other statutes, albeit of subsequent enactment and effectivity, from which enlightening notions of the term
may be derived.
The National Internal Revenue Code declares that the term "'resident foreign corporation' applies to a foreign corporation engaged in trade or business within the Philippines," as
distinguished from a "'non-resident foreign corporation' . . . (which is one) not engaged in trade or bussiness within the Philippines." [Sec. 20, pars. (h) and (i)].
The Offshore Banking Law, Presidential Decree No. 1034, states "that branches, subsidiaries, affiliation, extension offices or any other units of corporation or juridical person
organized under the laws of any foreign country operating in the Philippines shall be considered residents of the Philippines. [Sec. 1(e)].
The General Banking Act, Republic Act No. 337, places "branches and agencies in the Philippines of foreign banks . . . (which are) called Philippine branches," in the same
category as "commercial banks, savings associations, mortgage banks, development banks, rural banks, stock savings and loan associations" (which have been formed and
organized under Philippine laws), making no distinction between the former and the latter in so far as the terms "banking institutions" and "bank" are used in the Act [Sec. 2],
declaring on the contrary that in "all matters not specifically covered by special provisions applicable only to foreign banks, or their branches and agencies in the Philippines, said
foreign banks or their branches and agencies lawfully doing business in the Philippines "shall be bound by all laws, rules, and regulations applicable to domestic banking
corporations of the same class, except such laws, rules and regulations as provided for the creation, formation, organization, or dissolution of corporations or as fix the relation,
liabilities, responsibilities, or duties of members, stockholders or officers of corporation. [Sec. 18].
This court itself has already had occasion to hold [Claude Neon Lights, Fed. Inc. vs. Philippine Advertising Corp., 57 Phil. 607] that a foreign corporation licitly doing business in the
Philippines, which is a defendant in a civil suit, may not be considered a non-resident within the scope of the legal provision authorizing attachment against a defendant not
residing in the Philippine Islands; [Sec. 424, in relation to Sec. 412 of Act No. 190, the Code of Civil Procedure; Sec. 1(f), Rule 59 of the Rules of 1940, Sec. 1(f), Rule 57, Rules of
1964] in other words, a preliminary attachment may not be applied for and granted solely on the asserted fact that the defendant is a foreign corporation authorized to do business
in the Philippines and is consequently and necessarily, "a party who resides out of the Philippines." Parenthetically, if it may not be considered as a party not residing in the
Philippines, or as a party who resides out of the country, then, logically, it must be considered a party who does reside in the Philippines, who is a resident of the country. Be this as
it may, this Court pointed out that:
. . . Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here, to the status of domestic corporations. (Cf.
Section 73, Act No. 1459, and Marshall Wells Co. vs. Henry W. Elser& Co., 46 Phil. 70, 76; Yu Cong Eng vs. Trinidad, 47 Phil. 385, 411) We think it would be
entirely out of line with this policy should we make a discrimination against a foreign corporation, like the petitioner, and subject its property to the harsh writ of

seizure by attachment when it has complied not only with every requirement of law made specially of foreign corporations, but in addition with every requirement of
law made of domestic corporations. . . .
Obviously, the assimilation of foreign corporations authorized to do business in the Philippines "to the status of domestic corporations, subsumes their being found and operating
as corporations, hence, residing, in the country.
The same principle is recognized in American law: that the residence of a corporation, if it can be said to have a residence, is necessarily where it exercises corporate
functions . . .;" that it is considered as dwelling "in the place where its business is done . . .," as being "located where its franchises are exercised . . .," and as being "present where
it is engaged in the prosecution of the corporate enterprise;" that a "foreign corporation licensed to do business in a state is a resident of any country where it maintains an office or
agent for transaction of its usual and customary business for venue purposes;" and that the "necessary element in its signification is locality of existence." [Words and Phrases,
Permanent Ed., vol. 37, pp. 394, 412, 493].
In as much as SHARP was admittedly doing business in Japan through 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 be deemed a resident of Japan, and, as such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful
methods of serving process. 27
Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption but also because of the presumption of regularity of
performance of official duty.
We find NORTHWEST's claim for attorney's fees, litigation expenses, and exemplary damages to be without merit. We find no evidence that would justify an award for attorney's fees and litigation
expenses under Article 2208 of the Civil Code of the Philippines. Nor is an award for exemplary damages warranted. Under Article 2234 of the Civil Code, before the court may consider the
question of whether or not exemplary damages should be awarded, the plaintiff must show that he is entitled to moral, temperate, or compensatory damaged. There being no such proof presented
by NORTHWEST, no exemplary damages may be adjudged in its favor.
WHEREFORE, the instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for attorneys fees, litigation expenses, and
exemplary damages but REVERSED insofar as in sustained the trial court's dismissal of NORTHWEST's complaint in Civil Case No. 83-17637 of Branch 54 of the Regional Trial Court of Manila,
and another in its stead is hereby rendered ORDERING private respondent C.F. SHARP L COMPANY, INC. to pay to NORTHWEST the amounts adjudged in the foreign judgment subject of said
case, with interest thereon at the legal rate from the filing of the complaint therein until the said foreign judgment is fully satisfied.
Costs against the private respondent.
SO ORDERED.
FACTS:

Northwest Airlines (Northwest) and C.F. Sharp & Company (C.F.), through its Japan branch, entered into an International Passenger Sales Agency Agreement, whereby the Northwest
authorized the C.F. to sell its air transportation tickets

March 25, 1980: Unable to remit the proceeds of the ticket sales, Northwest sued C.F. in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim for
damages

April 11, 1980: writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan
The attempt to serve the summons was unsuccessful because Mr. Dinozo was in Manila and would be back on April 24, 1980

April 24, 1980: Mr. Dinozo returned to C.F. Office to serve the summons but he refused to receive claiming that he no longer an employee

After the 2 attempts of service were unsuccessful, Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan>
Japanese Embassy in Manila>Ministry (now Department) of Foreign Affairs of the Philippines>Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila who
ordered Deputy Sheriff Rolando Balingit>C.F. Main Office

August 28, 1980: C.F. received from Deputy Sheriff Rolando Balingit the writ of summons but failed to appear at the scheduled hearing.

January 29, 1981: Tokyo Court rendered judgment ordering the C.F. to pay 83,158,195 Yen and damages for delay at the rate of 6% per annum from August 28, 1980 up to and until
payment is completed

March 24, 1981: C.F. received from Deputy Sheriff Balingit copy of the judgment. C.F. did not appeal so it became final and executory

May 20, 1983: Northwest filed a suit for enforcement of the judgment a RTC

July 16, 1983: C.F. averred that the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice
and/or with collusion or fraud and/or upon a clear mistake of law and fact. The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over
the person of the defendant considering that this is an action in personam. The process of the Court in Japan sent to the Philippines which is outside Japanese jurisdiction cannot confer
jurisdiction over the defendant in the case before the Japanese Court of the case at bar

CA sustained RTC: Court agrees that if the C.F. in a foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the person of C.F. but it
must be served in the territorial jurisdiction of the foreign court

ISSUE: W/N the Japanese Court has jurisdiction over C.F.

HELD: YES. instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for attorneys fees, litigation expenses, and exemplary
damages

Consequently, the party attacking (C.F.) a foreign judgment has the burden of overcoming the presumption of its validity

Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the Japanese court must stand.

Applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on service of summons on a private foreign corporation doing business in the
Philippines. Section 14, Rule 14 of the Rules of Court provides that if the defendant is a foreign corporation doing business in the Philippines, service may be made:

(1) on its resident agent designated in accordance with law for that purpose, or,

(2) if there is no 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.

If the foreign corporation has designated an agent to receive summons, the designation is exclusive, and service of summons is without force and gives the court no
jurisdiction unless made upon him.

Where the corporation has no such agent, service shall be made on the government official designated by law, to wit:

(a) the Insurance Commissioner in the case of a foreign insurance company

(b) the Superintendent of Banks, in the case of a foreign banking corporation

(c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do business in the Philippines. Whenever service of process is
so made, the government office or official served shall transmit by mail a copy of the summons or other legal proccess to the corporation at its home or principal office. The sending of
such copy is a necessary part of the service.

The service on the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code

Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here, to the status of domestic corporations

We think it would be entirely out of line with this policy should we make a discrimination against a foreign corporation, like the petitioner, and subject its property to the harsh writ of
seizure by attachment when it has complied not only with every requirement of law made specially of foreign corporations, but in addition with every requirement of law made of
domestic corporations

In as much as SHARP was admittedly doing business in Japan through 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 be deemed a resident of Japan, and, as such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the
said courts' lawful methods of serving process.

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption but also because of the presumption of
regularity of performance of official duty.

DECISION
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, vs. THE
HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA,
respondents.

MENDOZA, J.:

Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an action for
partition filed against her and her husband, who is also her attorney, summons intended for
her may be served on her husband, who has a law office in the Philippines. The Regional Trial Court of Manila, Branch 48, said no and refused to declare Lourdes A. Valmonte in default, but
the Court of Appeals said yes. Hence this petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They are both residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A. Petitioner Alfredo D.
Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for this purpose between his residence in the state of Washington
and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.

On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner Lourdes A. Valmonte, filed a complaint for partition of real property and accounting of rentals
against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte before the Regional Trial Court of Manila, Branch 48. The subject of the action is a three-door apartment located in Paco,
Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses, of legal age and at present residents of
90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for purposes of this complaint may be served with summons at GediscoCenter, Unit 304, 1564 A. Mabini St., Ermita, Manila where
defendant Alfredo D. Valmonte as defendant Lourdes ArreolaValmontes spouse holds office and where he can be found.
Apparently, the foregoing averments were made on the basis of a letter previously sent by petitioner Lourdes A. Valmonte to private respondents counsel
in which, in regard to the partition of the property in question, she referred private respondents counsel to her husband as the party to whom all communications intended for her should be sent.
The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I received on 3 July 1991. Please address all communications to my lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and
fax numbers appear below.
c/o Prime Marine
GediscoCenter, Unit 304
1564 A. Mabini, Ermita
Metro Manila
Telephone:
521-1736
Fax: 21-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the summons, insofar
as he was concerned, but refused to accept the summons for his wife, Lourdes A. Valmonte, on 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 summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent
moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondents motion.
In its Order dated July 3, 1992, the trial court, denied private respondents motion to declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied on
September 23, 1992. Whereupon, private respondent filed a petition for certiorari, prohibition and mandamus with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the petition and declaring Lourdes A. Valmonte in default. A copy of the appellate courts decision was received by
petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila office and on January 21, 1993 in Seattle, Washington. Hence, this petition.

The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A. Valmonte was validly served with summons. In holding that she had been, the Court of Appeals stated: 1[1]
[I]n her above-quoted reply, Mrs.Valmonte clearly and unequivocally directed the aforementioned counsel of Dimalanta to address all communications (evidently referring to her controversy with
her sister Mrs.Dimalanta over the Paco property, now the subject of the instant case) to her lawyer who happens also to be her husband. Such directive was made without any qualification just as
was her choice/designation of her husband Atty. Valmonte as her lawyer likewise made without any qualification or reservation. Any disclaimer therefore on the part of Atty. Valmonte as to his being
his wifes attorney (at least with regard to the dispute vis-a-vis [sic] the Paco property) would appear to be feeble or trifling, if not incredible.
This view is bolstered by Atty. Valmontes subsequent alleged special appearance made on behalf of his wife. Whereas Mrs.Valmonte had manifestly authorized her husband to serve as her lawyer
relative to her dispute with her sister over the Paco property and to receive all communications regarding the same and subsequently to appear on her behalf by way of a so-called special
appearance, she would nonetheless now insist that the same husband would nonetheless had absolutely no authority to receive summons on her behalf. In effect, she is asserting that
representation by her lawyer (who is also her husband) as far as the Paco property controversy is concerned, should only be made by him when such representation would be favorable to her but
not otherwise. It would obviously be inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that her husband has the authority to represent her when an advantage is to
be obtained by her and to deny such authority when it would turn out to be her disadvantage. If this be allowed, Our Rules of Court, instead of being an instrument to promote justice would be
made use of to thwart or frustrate the same.
xxx

xxx

xxx

Turning to another point, it would not do for Us to overlook the fact that the disputed summons was served not upon just an ordinary lawyer of private respondent Lourdes A. Valmonte, but upon
her lawyer husband. But that is not all, the same lawyer/husband happens to be also her co-defendant in the instant case which involves real property which, according to her lawyer/husband/ codefendant, belongs to the conjugal partnership of the defendants (the spouses Valmonte). It is highly inconceivable and certainly it would be contrary to human nature for the lawyer/husband/codefendant to keep to himself the fact that they (the spouses Valmonte) had been sued with regard to a property which he claims to be conjugal. Parenthetically, there is nothing in the records of the
case before Us regarding any manifestation by private respondent Lourdes A. Valmonte about her lack of knowledge about the case instituted against her and her lawyer/husband/co-defendant by
her sister Rosita.
PREMISES CONSIDERED, the instant petition for certiorari, prohibition and mandamus is given due course. This Court hereby Resolves to nullify the orders of the court a quo dated July 3, 1992
and September 23, 1992 and further declares private respondent Lourdes ArreolaValmonte as having been properly served with summons.
Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred (1) in refusing to apply the provisions of Rule 14, 17 of the Revised Rules of Court and applying instead Rule
14, 8 when the fact is that petitioner Lourdes A. Valmonte is a nonresident defendant; and (2) because even if Rule 14, 8 is the applicable provision, there was no valid substituted service as there
was no strict compliance with the requirement by leaving a copy of the summons and complaint with petitioner Alfredo D. Valmonte. 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.
We hold that there was no valid service of process on Lourdes A. Valmonte.
To provide perspective, it will be helpful to determine first the nature of the action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte by private respondent, whether it is an
action in personam, in rem or quasi in rem. This is because the rules on service of summons embodied in Rule 14 apply according to whether an action is one or the other of these actions.

In an action in personam, personal service of summons or, if this is not possible and he cannot be personally served, substituted service, as provided in Rule 14, 7-8 2[2] is essential for the
acquisition by the court of jurisdiction over the person of a defendant who does not voluntarily submit himself to the authority of the court. 3[3] If defendant cannot be served with summons because
he is temporarily abroad, but otherwise he is a Philippine resident, service of summons may, by leave of court, be made by publication. 4[4] Otherwise stated, a resident defendant in an action in
personam, who cannot be personally served with summons, may be summoned either by means of substituted service in accordance with Rule 14, 8 or by publication as provided in 17 and 18 of
the same Rule.5[5]
In all of these cases, it should be noted, defendant must be a resident of the Philippines, otherwise an action in personamcannot be brought because jurisdiction over his person is essential to
make a binding decision.
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction over
the res. If the defendant is a nonresident and he is not found in the country, summons may be served extraterritorially in accordance with Rule 14, 17, which provides:
17. Extraterritorial service. - When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which is,
property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant
from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under
Section 7; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent
by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not
be less than sixty (60) days after notice, within which the defendant must answer.
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is domiciled in the Philippines or
the property litigated or attached. Service of summons in the manner provided in 17 is not for the purpose of vesting it with jurisdiction but for complying with the requirements of fair play or due
process, so that he will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to
a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so minded. 6[6]
Applying the foregoing rules to the case at bar, private respondents 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 purpose of affecting the defendants interest in a specific property and not to render a judgment against him. As explained in the leading case of BancoEspaol Filipino v.
Palanca :7[7]

2
3
4
5
6
7

[An action quasi in rem is] an action which while not strictly speaking an action in rem partakes of that nature and is substantially such. . . . The action quasi in rem differs from the true action in
rem in the circumstance that in the former an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way thus
designated. The judgment entered in these proceedings is conclusive only between the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, 17. Such service, to be effective outside the
Philippines, must 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 court may order, in which case a copy of
the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient.
Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes, the question is whether the service on her attorney,
petitioner Alfredo D. Valmonte, can be justified under the third mode, namely, in any . . . manner the court may deem sufficient.
We hold it cannot. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant
resides.8[8] Moreover, there are several reasons why the service of summons on Atty. Alfredo D. Valmonte cannot be considered a valid service of summons on petitioner Lourdes A.
Valmonte. In the first place, service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, 17 and certainly was not a mode
deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an
answer.
In the second place, service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, 17. As provided in 19, such leave must
be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application.
Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes A. Valmonte was not given ample time to file her Answer which, according to the
rules, shall be not less than sixty (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 given in an action filed
against a nonresident defendant who is not found in the Philippines. In the former, the period is fifteen (15) days from service of summons, while in the latter, it is at least sixty (60) days from
notice.
Strict compliance with these requirements alone can assure observance of due process. That is why in one case, 9[9]although the Court considered publication in the Philippines of the summons
(against the contention that it should be made in the foreign state where defendant was residing) sufficient, nonetheless the service was considered insufficient because no copy of the summons
was sent to the last known correct address in the Philippines.
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463 (1975), in which it was held that service of summons upon the defendants husband was binding on her. But
the ruling in that case is justified because summons were served upon defendants husband in their conjugal home in Cebu City and the wife was only temporarily absent, having gone to
Dumaguete City for a vacation. The action was for collection of a sum of money. In accordance with Rule 14, 8, substituted service could be made on any person of sufficient discretion in the
dwelling place of the defendant, and certainly defendants husband, who was there, was competent to receive the summons on her behalf. In any event, it appears that defendant in that case
submitted to the jurisdiction of the court by instructing her husband to move for the dissolution of the writ of attachment issued in that case.
On the other hand, in the case of Gemperle v. Schenker,10[10]it was held that service on the wife of a nonresident defendant was found sufficient because the defendant had appointed his wife as
his attorney-in-fact. It was held that although defendant Paul Schenker was a Swiss citizen and resident of Switzerland, service of summons upon his wife Helen Schenker who was in the
Philippines was sufficient because she was her husbands representative and attorney-in-fact in a civil case, which he had earlier filed against William Gemperle. In fact Gemperles action was for

8
9

damages arising from allegedly derogatory statements contained in the complaint filed in the first case. As this Court said, i]n other words, Mrs.Schenker had authority to sue, and had actually
sued, on behalf of her husband, so that she was, also, empowered to represent him in suits filed against him, particularly in a case, like the one at bar, which is a consequence of the action
brought by her on his behalf. 11[11] Indeed, if instead of filing an independent action Gemperle filed a counterclaim in the action brought by Mr.Schenker against him, there would have been no
doubt that the trial court could have acquired jurisdiction over Mr.Schenker through his agent and attorney-in-fact, Mrs.Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her husband as her attorney-in-fact. Although she wrote private respondent s attorney that all communications
intended for her should be addressed to her husband who is also her lawyer at the latters address in Manila, no power of attorney to receive summons for her can be inferred therefrom. In fact the
letter was written seven months before the filing of this case below, and it appears that it was written in connection with the negotiations between her and her sister, respondent Rosita Dimalanta,
concerning the partition of the property in question. As is usual in negotiations of this kind, the exchange of correspondence was carried on by counsel for the parties. But the authority given to
petitioners husband in these negotiations certainly cannot be construed as also including an authority to represent her in any litigation.
For the foregoing reasons, we hold that there was no valid service on petitioner Lourdes A. Valmonte in this case.

10

11

MARGARITA ROMUALDEZ-LICAROS, petitioner, vs. ABELARDO B. LICAROS, respondent.

DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari[1] to annul the Decision[2] dated 9 August 2001 of the Court of Appeals in CA-G.R. SP No. 58487, as well as the Resolution dated 23
October 2001 denying the motion for reconsideration. The Court of Appeals dismissed the petition to annul the following decisions[3] rendered by Branch 143 of the Regional Trial
Court of Makati:
(1) The Decision dated 27 December 1990[4] granting the dissolution of the conjugal partnership of gains of the spouses Abelardo B. Licaros and Margarita Romualdez-Licaros;
(2) The Decision dated 8 November 1991[5] declaring the marriage between the same spouses null and void.
The Facts
The antecedent facts as found by the Court of Appeals are as follows:

WHEREFORE, the decision appealed from is REVERSED and the orders dated July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch 48 are REINSTATED.
SO ORDERED.
BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS, HON. ARSENIO M. GONONG, and CESAR S. URBINO, SR., respondents.
DECISION

x xxAbelardoLicaros (Abelardo, for short) and Margarita Romualdez-Licaros (Margarita, hereafter) were lawfully married on December 15, 1968. Out of this marital
union were born Maria Concepcion and Abelardo, Jr. Ironically, marital differences, squabbles and irreconcilable conflicts transpired between the spouses, such that
sometime in 1979, they agreed to separate from bed and board.
In 1982, Margarita left for the United States and there, to settle down with her two (2) children. In the United States, on April 26, 1989, Margarita applied for divorce
before the Superior Court of California, County of San Mateo (Annex 1, Rejoinder, pp. 164-165) where she manifested that she does not desire counseling at that time
(Quotation, p. 166, Rollo). On August 6, 1990, Margarita was granted the decree of divorce (Annex 2, Answer, p. 108, Rollo) together with a distribution of properties
between her and Abelardo(pp. 167-168, Rollo).
Not long after, on August 17, 1990, Abelardo and Margarita executed an Agreement of Separation of Properties (pp. 60-64, Rollo). This was followed-up by a petition
filed on August 21, 1990 before the Regional Trial Court of Makati for the dissolution of the conjugal partnership of gains of the spouses and for the approval of the
agreement of separation of their properties. This was docketed as Special Proceeding No. 2551. On December 27, 1990, a decision was issued granting the petition and
approving the separation of property agreement.
For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91-1757, for the declaration of nullity of his marriage with Margarita, based on psychological
incapacity under the New Family Code. As Margarita was then residing at 96 Mulberry Lane, Atherton, California, U.S.A., Abelardo initially moved that summons be
served through the International Express Courier Service. The court a quo denied the motion. Instead, it ordered that summons be served by publication in a newspaper
of general circulation once a week for three (3) consecutive weeks, at the same time furnishing respondent a copy of the order, as well as the corresponding summons and
a copy of the petition at the given address in the United States through the Department of Foreign Affairs, all at the expense of Abelardo. Respondent was given sixty (60)
days after publication to file a responsive pleading.
On July 15, 1991, Process Server, Maximo B. Dela Rosa, submitted his Officers Return quoted hereunder:
OFFICERS RETURN
THIS IS TO CERTIFY that on July 3, 1991, I have served a copy of summons and complaint with annexes together with order dated June 28, 1991 issued by the Court in the
above-entitled case upon defendant Margarita Romualdez-Licaros c/o DFA. (sent by Mail) thru Pat G. Martines receiving Clerk of Department of Foreign Affairs a person

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision1 [Penned by Associate Justice Jainal D. Rasul and concurred in by Associate Justices Segundino G. Chua and Consuelo YnaresSantiago, now Associate Justice of the Supreme Court, in CA-G.R. S.P. Nos. 24669, 28387 & 29317, Rollo, pp. 33-47.] and the Resolution2 [Id., pp. 49-53.] of the Court of Appeals3 [Former
Special Eighth Division.] dated July 19, 1993 and August 15, 1995, respectively, which reinstated the entire Decision 4 [Penned by Judge Arsenio M. Gonong, Civil Case No. 89-51451, Records,
Vol. 2, pp. 517-528.] dated February 18, 1991 of the Regional Trial Court of Manila, Branch 8, holding, among others, petitioner Banco do Brasilliable to private respondent Cesar Urbino, Sr. for
damages amounting to $300,000.00.5 [The Appellate Court erroneously declared in its decision that the amount of P300,000.00 was awarded by the trial court, Rollo, p. 36.]
At the outset, let us state that this case should have been consolidated with the recently decided case of Vlason Enterprises Corporation v. Court of Appeals and Duraproof Services, represented
by its General Manager, Cesar Urbino Sr.6 [G.R. Nos. 121662-64, July 6, 1999, Third Division, penned by Associate Justice Artemio V. Panganiban and concurred in by Associate Justices Jose C.

authorized to receive this kind of process who acknowledged the receipt thereof at ADB Bldg., Roxas Blvd., Pasay City, Metro Manila. (p. 40, Rollo)
As required by law, the case was referred to Trial Prosecutor Bruselas, Jr. to find out any possible collusion between the parties in the case. Thereafter, with the negative report of
collusion, Abelardo was allowed to present his evidence ex-parte. On November 8, 1991, the Decision (Annex A, Petition) was handed down in Civil Case No. 91-1757 declaring
the marriage between Abelardo and Margarita null and void.
Almost nine (9) years later, on April 28, 2000, the petition at bench was commenced when Margarita received a letter dated November 18, 1991 from a certain Atty.
Angelo Q. Valencia informing her that she no longer has the right to use the family name Licarosinasmuch as her marriage to Abelardo had already been judicially
dissolved by the Regional Trial Court of Makati on November 8, 1991. Asseverating to have immediately made some verifications and finding the information given to be true,
petitioner commenced the instant petition on the following grounds:
(A) THERE WAS EXTRINSIC FRAUD IN THE PREPARATION AND FILING BY ABELARDO OF THE PETITION FOR DISSOLUTION OF THE CONJUGAL
PARTNERSHIP OF GAINS AND ITS ANNEX, THE AGREEMENT OF SEPARATION OF PROPERTIES.
(B) THE TRIAL COURT LACKED JURISDICTION TO HEAR AND DECIDE THE PETITION FOR DECLARATION OF NULLITY OF MARRIAGE. [6]
The Ruling of the Court of Appeals
The Court of Appeals debunked the claim of Margarita that there was extrinsic fraud in the preparation and filing by Abelardo of the Petition forDissolution of Conjugal
Partnership of Gains and its annex, the Agreement ofSeparation of Properties. The Court of Appeals stated:
x xx, the extrinsic fraud alluded to consists of Abelardo coercing Margarita into signing the petition to dissolve their conjugal partnership of gains together with the agreement of
separation of properties, by threatening to cut-off all financial and material support of their children then still studying in the United States; that petitioner had no hand directly or
indirectly in the preparation of the petition and agreement of separation of properties; that petitioner never met the counsel for the petitioner, nor the notary public who notarized
the deed; and, petitioner never received any notice of the pendency of the petition nor a copy of the decision.

Vitug, Fidel P. Purisima, and Minerva P. Gonzaga-Reyes.], for these two (2) cases involved the same material antecedents, though the main issue proffered in the present petition vary with the
Vlason case.
The material antecedents, as quoted from the Vlason7 [Decision in G.R. Nos. 121662-64, pp. 3-13.] case, are:
Poro Point Shipping Services, then acting as the local agent of Omega Sea Transport Company of Honduras & Panama, a Panamanian Company (hereafter referred to as
Omega), requested permission for its vessel M/V Star Ace, which had engine trouble, to unload its cargo and to store it at the Philippine Ports Authority (PPA) compound in San
Fernando, La Union while awaiting transhipment to Hongkong. The request was approved by the Bureau of Customs.8 [Records, Vol. 1, pp. 27-31.] Despite the approval, the
customs personnel boarded the vessel when it docked on January 7, 1989, on suspicion that it was the hijacked M/V Silver Med owned by Med Line Philippines Co., and that its

Antithetically, a meticulous perusal of the controversial petition (Annex B-1) and the agreement of separation of properties (pp. 60-64, Rollo) readily shows that the same were
signed by the petitioner on the proper space after the prayer and on the portion for the verification of the petition. The same is true with the agreement of separation of properties.
What is striking to note is that on August 6, 1990, Margarita appeared before Amado P. Cortez, Consul of the Republic of the Philippines at the San Francisco, California, United
States Consulate Office, to affirm and acknowledge before said official that she executed the agreement of separation of properties of her own free will and deed, after being
informed of the contents thereof. And yet, there is no showing that Abelardo was with her at the Philippine Consulate Office in confirming the separation of property agreement.
Moreover, on page 2 of the same agreement, it is specifically stated that such property separation document shall be subject to approval later on by the proper court of competent
jurisdiction. The clear import of this is that the agreement must have to be submitted before the proper court for approval, which explains and confirms petitioners signature on the
petition filed in court.
In main, We see no indication nor showing of coercion or fraud from these facts, which could very well be considered as extrinsic or collateral fraud to justify a petition under Rule
47. From all indications, the pretended coerced documents were rather freely and voluntarily executed by the parties therein knowing fully well the imports thereof. This
conclusion finds more weight if We consider the fact that the separation of property was fully implemented and enforced, when apparently both parties correspondingly received
the properties respectively assigned to each of them under the said document.[7]
The Court of Appeals also rejected Margaritas claim that the trial court lacked jurisdiction to hear and decide the Petition for Declaration of Nullity of Marriage for improper
service of summons on her. The case involves the marital status of the parties, which is an action in rem or quasi in rem. The Court of Appeals ruled that in such an action the
purpose of service of summons is not to vest the trial court with jurisdiction over the person of the defendant, but only to comply with due process. The Court of Appeals concluded
that any irregularity in the service of summons involves due process which does not destroy the trial courts jurisdiction over the res whichis the parties marital status. Neither does
such irregularity invalidate the judgment rendered in the case. Thus, the Court of Appeals dismissed the petition for annulment of judgment, stating that:
At bar, the case involves the personal (marital) status of the plaintiff and the defendant. This status is the res over which the Philippine court has acquired jurisdiction. This is also
the kind of action which the Supreme Court had ruled that service of summons may be served extraterritorially under Section 15 (formerly Section 17) of Rule 14 and where such
service of summons is not for the purpose of vesting the trial court with jurisdiction over the person of the defendant but only for the purpose of complying with the requirements
of fair play and due process. A fortiori, the court a quo had properly acquired jurisdiction over the person of herein petitioner-defendant when summons was served by publication
and a copy of the summons, the complaint with annexes, together with the Order of June 28, 1991, was served to the defendant through the Department of Foreign Affairs by
registered mail and duly received by said office to top it all. Such mode was upon instruction and lawful order of the court and could even be treated as any other manner the court

cargo would be smuggled into the country.9 [Records, Vol. 1, p. 32.] The district customs collector seized said vessel and its cargo pursuant to Section 2301, Tariff and Customs
Code. A notice of hearing of SFLU Seizure Identification No. 3-89 was served on its consignee, Singkong Trading Co. of Hongkong, and its shipper, Dusit International Co., Ltd. of
Thailand.
While seizure proceedings were ongoing, La Union was hit by three typhoons, and the vessel ran aground and was abandoned. On June 8, 1989, its authorized representative,
Frank Cadacio, entered into salvage agreement with private respondent to secure and repair the vessel at the agreed consideration of $1 million and "fifty percent (50%) [of] the
cargo after all expenses, cost and taxes."10 [Records, Vol. 1, pp. 36-39.]
Finding that no fraud was committed, the District Collector of Customs, Aurelio M. Quiray, lifted the warrant of seizure on July 1989. 11 [Decision dated July 17, 1989, in SFLU
Seizure Identification No. 3-89; Records, Vol. 1, pp. 54-68.] However, in a Second Indorsement dated November 11, 1989, then Customs Commissioner Salvador M. Mison
declined to issue a clearance for Quirays Decision; instead, he forfeited the vessel and its cargo in accordance with Section 2530 of the Tariff and Customs Code. 12 [2nd

may deem sufficient.[8]

Hence, the instant petition.
The Issues
The issues raised by Margarita are restated as follows:
I. Whether Margarita was validly served with summons in the case for declaration of nullity of her marriage with Abelardo;
II. Whether there was extrinsic fraud in the preparation and filing by Abelardo of the Petition for Dissolution of the Conjugal Partnership of Gains and its annex, the Agreement of
Separation of Properties.
The Courts Ruling
The petition is bereft of merit.
First Issue: Validity of the Service of Summons on Margarita
Margarita insists that the trial court never acquired jurisdiction over her person in the petition for declaration of nullity of marriage since she was never validly served with
summons. Neither did she appear in court to submit voluntarily to its jurisdiction.
On the other hand, Abelardo argues that jurisdiction over the person of a non-resident defendant in an action in rem or quasi in rem is not necessary. The trial and appellate courts
made a clear factual finding that there was proper summons by publication effected through the Department of Foreign Affairs as directed by the trial court. Thus, the trial court
acquired jurisdiction to render the decision declaring the marriage a nullity.

Indorsement dated November 1989; Records, Vol. 1, pp. 70-71.] Accordingly, acting District Collector of Customs John S. Sy issued a Decision decreeing the forfeiture and the
sale of the cargo in favor of the government.13 [Decision dated November 17, 1989, Records, Vol. 1, pp. 74-86.]
To enforce its preferred salvors lien, herein Private Respondent Duraproof Services filed with the Regional Trial Court of Manila a Petition for Certiorari, Prohibition and
Mandamus14 [Docketed as Civil Case No. 89-51451 and raffled to Branch 8; Records, Vol. 1, pp. 1-26.] assailing the actions of Commissioner Mison and District Collector Sy. Also
impleaded as respondents were PPA Representative SilverioMangaoang and Med Line Philippines, Inc.

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 court acquires jurisdiction over his person.
[9]

As a rule, when the defendant does not reside and is not found in the Philippines, Philippine courts cannot try any case against him because of the impossibility of
acquiring jurisdiction over his person unless he voluntarily appears in court. But when the case is one of actions in rem or quasi in rem enumerated in Section 15,[10] Rule
14 of the Rules of Court, Philippine courtshave jurisdictiontohear and decide the case. In such instances, Philippine courts have jurisdiction over the res, and jurisdiction
over the person of the non-resident defendant is not essential.[11]
Actions in personam[12] and actions in rem or quasi in rem differ in that actions in personam are directed against specific persons and seek personal judgments. On the other hand,
actions in rem or quasi in rem are directed against the thing or property or status of a person and seek judgments with respect thereto as against the whole world.[13]
At the time Abelardo filed the petition for nullity of the marriage in 1991, Margarita was residing in the United States. She left the Philippines in 1982 together with her
two children. The trial court considered Margarita a non-resident defendant who is not found in the Philippines. Since the petition affects the personal status of the
plaintiff, the trial court authorized extraterritorial service of summons under Section 15, Rule 14 of the Rules of Court. The term personal status includes family
relations, particularly the relations between husband and wife.[14]
Under Section 15 of Rule 14, a defendant who is a non-resident and is not found in the country may be served with summons by extraterritorial service in four instances: (1) when
the action affects the personal status of theplaintiff; (2) when the action relates to, 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) when the relief demanded consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines;
or (4) when the property of the defendant has been attached within the Philippines.
In these instances, extraterritorial service of summons may be effected 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 summons and order of the court by registered mail to the defendants last known address, also with leave of court; or (3) by any other means the judge
may consider sufficient.
Applying the foregoing rule, the trial court required extraterritorial service of summons to be effected on Margarita in the following manner:

On January 10, 1989, private respondent amended its Petition15 [Ibid., pp. 122-145.] to include former District Collector Quiray; PPA Port Manager Adolfo Ll. Amor, Jr.; x Vlason
Enterprises as represented by its president, Vicente Angliongto; Singkong Trading Company as represented by Atty. Eddie Tamondong; Banco Du Brasil; Dusit International Co.;
Thai-Nan Enterprises Ltd., and Thai-United Trading Co., Ltd.16 [Amended Petition, id., pp. 122 & 128-129.] x xx
Summonses for the amended Petition were served on Atty. Joseph Capuyan for Med Line Philippines: Anglionto (through his secretary, Betty Bebero), Atty. Tamondong and
Commissioner Mison.17 [Sheriffs Return, id., pp. 160-164 & 171.] Upon motion of the private respondent, the trial court allowed summons by publication to be served upon
defendants who were not residents and had no direct representative in the country.18 [Id., pp. 153-156.]
On January 29, 1990, private respondent moved to declare respondents in default, but the trial court denied the motion in its February 23, 1990 Order 19 [Id., pp. 214-215.],
because Mangaoang and Amor had jointly filed a Motion to Dismiss, while Mison and Med Line had moved separately for an extension to file a similar motion. 20 [Eventually, both

x xx, service of Summons by way of publication in a newspaper of general circulation once a week for three (3) consecutive weeks, at the same time, furnishing respondent copy
of this Order as well as the corresponding Summons and copy of the petition at her given address at No. 96 Mulberry Lane, Atherton, California, U.S.A., thru the Department of
Foreign Affairs, all at the expense of petitioner.[15] (Emphasis ours)
The trial courts prescribed mode of extraterritorial service does not fall under the first or second mode specified in Section 15 of Rule 14, but under the third mode. This refers to
any other means that the judge may consider sufficient.
The Process Servers Return of 15 July 1991 shows that the summons addressed to Margarita together with the complaint and its annexes were sent by mail to the Department of
Foreign Affairs with acknowledgment of receipt. The Process Servers certificate of service of summons is prima facie evidence of the facts as set out in the certificate.[16] Before
proceeding to declare the marriage between Margarita and Abelardo null and void, the trial court stated in its Decision dated 8 November 1991 that compliance with the
jurisdictional requirements hav(e) (sic) been duly established. We hold that delivery to the Department of Foreign Affairs was sufficient compliance with the rule. After all, this is
exactly what the trial court required and considered as sufficient to effect service of summons under the third mode of extraterritorial service pursuant to Section 15 of Rule 14.
Second Issue: Validity of the Judgment Dissolving the
Conjugal Partnership of Gains
Margarita claims that Abelardo coerced her into signing the Petition for Dissolution of the Conjugal Partnership of Gains (Petition) and its annex, the Agreement of Separation of
Properties (Agreement). Abelardo allegedly threatened to cut off all financial and material support to their children if Margarita did not sign the documents.
The trial court did not find anything amiss in the Petition and Agreement that Abelardo filed, and thus the trial court approved the same. The Court of Appeals noted that a
meticulous perusal of the Petition and Agreement readily shows that Margarita signed the same on the proper space after the prayer and on the portion for the verification of the
petition. The Court of Appeals observed further that on 6 August 1990, Margarita appeared before Consul Amado Cortez in the Philippine Consulate Office in San Francisco,
California, to affirm that she executed the Agreement of her own free will. There was no showing that Abelardo was at that time with her at the Philippine Consulate Office.
Abelardo secured judicial approval of the Agreement as specifically required in the Agreement.

separately filed their motions to dismiss.] Later it rendered an Order dated July 2, 1990, giving due course to the motions to dismiss filed by Mangaoang and Amor on the ground of
litispendentia, and by the commissioner and district collector of customs on the ground of lack of jurisdiction. 21 [Records, Vol. 1, pp. 325-326.] In another Order, the trial court
dismissed the action against Med Line Philippines on the ground of litis pendentia.22 [Order dated September 10, 1990; Records, Vol. 2, p. 359.]
On two other occasions, private respondent again moved to declare the following in default: [Vlason], Quiray, Sy and Mison on March 26, 1990; 23 [Records, Vol. 1, pp. 237-238.]
and Banco [do] Bra[s]il, Dusit International Co., Inc., Thai-Nan Enterprises Ltd. and Thai-United Trading Co., Ltd. on August 24, 1990. 24 [Ibid., pp. 351-352.] There is no record,
however, that the trial court acted upon the motions. On September 18, 1990, [private respondent] filed another Motion for leave to amend the petition, 25 [Records, Vol. 2, pp. 370371.] alleging that its counsel failed to include "necessary and/or indispensable parties": Omega represented by Cadacio; and M/V Star Ace represented by Capt. NahonRada,
relief captain. Aside from impleading these additional respondents, private respondent also alleged in the Second (actually, third) Amended Petition 26 [Motion for Leave to Admit
Second Amended Petition and Supplemental Petition, ibid., p. 370; Second Amended Petition with Supplemental Petition, ibid., pp. 372-398.] that the owners of the vessel
intended to transfer and alienate their rights and interest over the vessel and its cargo, to the detriment of the private respondent.

The Court is bound by the factual findings of the trial and appellate courts that the parties freely and voluntarily executed the documents and that there is no showing of coercion or
fraud. As a rule, in an appeal by certiorari under Rule 45, the Court does not pass upon questions of fact as the factual findings of the trial and appellate courts are binding on the
Court. The Court is not a trier of facts. The Court will not examine the evidence introduced by the parties below to determine if the trial and appellate courts correctly assessed and
evaluated the evidence on record.[17]
The due and regular execution of an instrument acknowledged before an officer authorized to administer oaths cannot be overthrown by bare allegations of coercion but only by
clear and convincing proof.[18] A person acknowledging an instrument before an officer authorized to administer oaths acknowledges that he freely and voluntarily executed the
instrument, giving rise to a prima facie presumption of such fact.
In the instant case, Margarita acknowledged the Agreementbefore Consul Cortez. The certificate of acknowledgment signed by Consul Cortez states that Margarita personally
appeared before him and acknowledged before me that SHE executed the same of her own free will and deed.[19] Thus, there is a prima facie presumption that Margarita freely
and voluntarily executed the Agreement. Margarita has failed to rebut this prima facie presumption with clear and convincing proof of coercion on the part of Abelardo.
A document acknowledged before a notary public is prima facie evidence of the due and regular execution of the document.[20] A notarized document has in its favor the
presumption of regularity in its execution, and to contradict the same, there must be evidence that is clear, convincing and more than merely preponderant.[21]
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 58487 dismissing the petition to annul judgment is AFFIRMED.
SO ORDERED.

The trial court granted leave to private respondent to amend its Petition, but only to exclude the customs commissioner and the district collector. 27 [Order dated September 28,
1990, Records, Vol. 2, p. 407.] Instead, private respondent filed the "Second Amended Petition with Supplemental Petition" against Singkong Trading Company; and Omega and
M/V Star Ace,28 [Records, Vol. 2, pp. 414-415.] to which Cadacio and Rada filed a Joint Answer.29 [Ibid., pp. 425-288.]
Declared in default in an Order issued by the trial court on January 23, 1991, were the following: Singkong Trading Co., Commissioner Mison, M/V Star Ace and Omega. 30 [Id., p.
506.] Private respondent filed, and the trial court granted, an ex parte Motion to present evidence against the defaulting respondents. 31 [Order dated December 10, 1990, id., p.
492.] Only private respondent, Atty. Tamondong, Commissioner Mison, Omega and M/V Star Ace appeared in the next pretrial hearing; thus, the trial court declared the other
respondents in default and allowed private respondent to present evidence against them.32 [Order dated January 23, 1991, Records, Vol. 2, p. 506. The records (pp. 493-495),
however, show that only Duraproof Service, Singkong Trading and M/V Star Ace were served summons.] Cesar Urbino, general manager of private respondent, testified and
adduced evidence against the other respondents, x x x.33 [RTC Decision, p. 7; Rollo, p. 92; penned by Judge Arsenio M. Gonong.]
On December 29, 1990, private respondent and Rada, representing Omega, entered into a Memorandum of Agreement stipulating that Rada would write and notify Omega
regarding the demand for salvage fees of private respondent; and that if Rada did not receive any instruction from his principal, he would assign the vessel in favor of the salvor. 34
[Memorandum of Agreement, id., pp. 511-512.]
On February 18, 1991, the trial court disposed as follows:
"WHEREFORE, IN VIEW OF THE FOREGOING, based on the allegations, prayer and evidence adduced, both testimonial and documentary, the Court is convinced, that,
indeed, defendants/respondents are liable to [private respondent] in the amount as prayed for in the petition for which it renders judgment as follows:
1. Respondent M/V Star Ace, represented by Capt. Nahum Rada, [r]elief [c]aptain of the vessel and Omega Sea Transport Company, Inc., represented by Frank Cadacio[,] is
ordered to refrain from alienating or [transferring] the vessel M/V Star Ace to any third parties;
2. Singkong Trading Company to pay the following:
a. Taxes due the government;
b. Salvage fees on the vessel in the amount of $1,000,000.00 based on xxx Lloyds Standard Form of Salvage Agreement;
c. Preservation, securing and guarding fees on the vessel in the amount of $225,000.00;
d. Maintenance fees in the amount of P2,685,000.00;
e. Salaries of the crew from August 16, 1989 to December 1989 in the amount of $43,000.00 and unpaid salaries from January 1990 up to the present;
f. Attorneys fees in the amount of P656,000.00;
3. [Vlason] Enterprises to pay [private respondent] in the amount of P3,000,000.00 for damages;
4. Banco [Du] Brasil to pay [private respondent] in the amount of $300,000.00 in damages;35 [Italics supplied.] and finally,

5. Costs of [s]uit."
Subsequently, upon the motion of Omega, Singkong Trading Co., and private respondent, the trial court approved a Compromise Agreement36 [Records, Vol. 2, pp. 535-538.]
among the movants, reducing by 20 percent the amounts adjudged. For their part, respondents-movants agreed not to appeal the Decision.37 [Order dated March 6, 1991, ibid.,
pp. 539-541. Private respondent entered into two separate compromise agreements with Singkong Trading Co. (id., pp. 535-536) and another with Omega (id., pp. 537-538). Both
agreements were dated March 4, 1991.] On March 8, 1991, private respondent moved for the execution of judgment, claiming that the trial court Decision had already become final
and executory. The Motion was granted and a Writ of Execution was issued. To satisfy the Decision, Sheriffs Jorge Victorino, Amado Sevilla and DionisioCamagon were
deputized on March 13, 1991 to levy and to sell on execution the defendants vessel and personal property.
x xx
On March 18, 1991, the Bureau of Customs also filed an ex parte Motion to recall the execution, and to quash the notice of levy and the sale on execution. Despite this Motion, the
auction sale was conducted on March 21, 1991 by Sheriff Camagon, with private respondent submitting the winning bid. The trial court ordered the deputy sheriffs to cease and
desist from implementing the Writ of Execution and from levying on the personal property of the defendants. Nevertheless, Sheriff Camagon issued the corresponding Certificate
of Sale on March 27, 1991.
On April 10, 1991, petitioner Banco do Brasil filed, by special appearance, an Urgent Motion to Vacate Judgement and to Dismiss Case 38 [Rollo, pp. 67-73.] on the ground that the February 18,
1991 Decision of the trial court is void with respect to it for having been rendered without validly acquiring jurisdiction over the person of Banco do Brasil. Petitioner subsequently amended its
petition39 [Rollo, pp. 74-80.] to specifically aver that its special appearance is solely for the purpose of questioning the Courts exercise of personal jurisdiction.
On May 20, 1991, the trial court issued an Order40 [Rollo, pp. 81-82.] acting favorably on petitioners motion and set aside as against petitioner the decision dated February 18, 1991 for having
been rendered without jurisdiction over Banco do Brasils person. Private respondent sought reconsideration 41 [Records, Vol. 3, pp. 103-105.] of the Order dated May 20, 1991. However, the trial
court in an Order42 [Rollo, p. 83.] dated June 21, 1991 denied said motion.
Meanwhile, a certiorari petition43 [Docketed as CA-G.R. SP No. 24669.] was filed by private respondent before public respondent Court of Appeals seeking to nullify the cease and desist Order
dated April 5, 1991 issued by Judge Arsenio M. Gonong. Two (2) more separate petitions for certiorari were subsequently filed by private respondent. The second petition44 [Docketed as CA-G.R.
SP No. 28387.] sought to nullify the Order45 [Penned by Judge Bernardo P. Pardo, then Executive Judge, and now Associate Justice of the Supreme Court.] dated June 26, 1992 setting aside the
Deputy Sheriffs return dated April 1, 1991 as well as the certificate of sale issued by Deputy Sheriff Camagon. The third petition 46 [Docketed as CA-G.R. SP No. 29317.] sought to nullify the
Order dated October 5, 1992 of the Court of Tax Appeals directing the Commissioner of Customs to place Bureau of Customs and PNP officers and guards to secure the M/V Star Ace and its
cargoes, make inventory of the goods stored in the premises as indicated to belong to the private respondent. Likewise challenged was the Order dated August 17, 1992 authorizing the sale of
M/V Star Ace and its cargoes.
These three (3) petitions were consolidated and on July 19, 1993, the appellate court rendered its Decision 47 [See Note 1, supra.] granting private respondents petitions, thereby nullifying and
setting aside the disputed orders and effectively "giving way to the entire [decision dated February 18, 1991 of the x xx Regional Trial Court of Manila, Branch 8, in Civil Case No. 89-51451 which
remainsvalid,finalandexecutory, if not yet wholly executed."48 [Rollo, p. 46.]
Private respondent Urbino, Vlason Enterprises and petitioner Banco do Brasil filed separate motions for reconsideration. For its part, petitioner Banco do Brasil sought reconsideration, insofar as
its liability for damages, on the ground that there was no valid service of summons as service was on the wrong party the ambassador of Brazil. Hence, it argued, the trial court did not acquire
jurisdiction over petitioner Banco do Brasil.49 [Rollo, pp. 107.] Nonetheless, the appellate court denied the motions for reconsideration in its Resolution 50 [See Note 2, supra.] dated August 15,
1995.

Hence, the instant petition.

Petitioner Banco do Brasil takes exception to the appellate courts declaration that the suit below is in rem, not in personam,51 [Rollo, pp. 19-21.] thus, service of summons by publication was
sufficient for the court to acquire jurisdiction over the person of petitioner Banco do Brasil, and thereby liable to private respondent Cesar Urbino for damages claimed, amounting to $300,000.00.
Petitioner further challenges the finding that the February 18, 1991 decision of the trial court was already final and thus, cannot be modified or assailed.52 [Rollo, p. 22-23.]
Petitioner avers that the action filed against it is an action for damages, as such it is an action in personam which requires personal service of summons be made upon it for the court to acquire
jurisdiction over it. However, inasmuch as petitioner Banco doBrasil is a non-resident foreign corporation, not engaged in business in the Philippines, unless it has property located in the
Philippines which may be attached to convert the action into an action in rem, the court cannot acquire jurisdiction over it in respect of an action in personam.
The petition bears merit, thus the same should be as it is hereby granted.
First. When the defendant is a nonresident and he is not found in the country, summons may be served extraterritorially in accordance with Rule 14, Section 1753 [Section 17. Extraterritorial
service When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which, is property within the
Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which relief demanded consists, wholly or in part, in excluding the defendant from any interest therein,
or the property of the defendant has been attached in the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by publication in a
newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last
known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer.]of the Rules of Court. Under this provision, there are only four (4) instances when extraterritorial service of summons is proper, namely: "(1)
when the action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or interest,
actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the
defendant non-residents property has been attached within the Philippines."54 [Ibid., now Sec. 15 of the 1997 Rules of Civil Procedure.] In these instances, service of summons may be effected
by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient.55 [Ibid..]
Clear from the foregoing, extrajudicial service of summons apply only where the action is in rem, an action against the thing itself instead of against the person, or in an action quasi in rem, where
an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or loan burdening the property. This is so inasmuch as, in in rem and quasi
in rem actions, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res.56 [Asiavest Limited v.
Court of Appeals, 296 SCRA 539, 552-554 [1998]; Valmontev. Court of Appeals, 252 SCRA 92, 99-102 [1996].]
However, where the action is in personam, one brought against a person on the basis of his personal liability, jurisdiction over the person of the defendant is necessary for the court to validly try
and decide the 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. 57 [The Dial Corporation v.
Soriano, 161 SCRA 737, 743 [1988] citing Boudardv. Tait, 67 Phil 170, 174 [1939].] 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 the case against him.58 [Asiavest Limited v. Court of Appeals, supra. at 554.]
In the instant case, private respondents suit against petitioner is premised on petitioners being one of the claimants of the subject vessel M/V Star Ace. 59 [Records, Vol. 1, pp. 128-129.] Thus, it
can be said that private respondent initially sought only to exclude petitioner from claiming interest over the subject vessel M/V Star Ace. However, private respondent testified during the
presentation of evidence that, for being a nuisance defendant, petitioner caused irreparable damage to private respondent in the amount of $300,000.00. 60 [Records, Vol. 2, p. 567.] Therefore,
while the action is in rem, by claiming damages, the relief demanded went beyond the res and sought a relief totally alien to the action.

It must be stressed that any relief granted in rem or quasi in rem actions must be confined to the res, and the court cannot lawfully render a personal judgment against the defendant.61 [Villarealv.
Court of Appeals, 295 SCRA 511, 525 [1998].] Clearly, the publication of summons effected by private respondent is invalid and ineffective for the trial court to acquire jurisdiction over the person of
petitioner, since by seeking to recover damages from petitioner for the alleged commission of an injury to his person or property 62 [The Dial Corporation v. Soriano, supra. at 742 citing Hernandez
v. Development Bank of the Phil., 71 SCRA 290, 292-293 [1976].] caused by petitioners being a nuisance defendant, private respondents action became in personam. Bearing in mind the in
personam nature of the action, personal or, if not possible, substituted service of summons on petitioner, and not extraterritorial service, is necessary to confer jurisdiction over the person of
petitioner and validly hold it liable to private respondent for damages. Thus, the trial court had no jurisdiction to award damages amounting to $300,000.00 in favor of private respondent and as
against herein petitioner.
Second. We settled the issue of finality of the trial courts decision dated February 18, 1991 in the Vlason case, wherein we stated that, considering the admiralty case involved multiple defendants,
"each defendant had a different period within which to appeal, depending on the date of receipt of decision." 63 [Decision in G.R. Nos. 121662-64, p. 27.] Only upon the lapse of the reglementary
period to appeal, with no appeal perfected within such period, does the decision become final and executory.64 [Ibid.]
In the case of petitioner, its Motion to Vacate Judgment and to Dismiss Case was filed on April 10, 1991, only six (6) days after it learned of the existence of the case upon being informed by the
Embassy of the Federative Republic of Brazil in the Philippines, on April 4, 1991, of the February 18, 1991 decision. 65 [Rollo, pp. 67-80.] Thus, in the absence of any evidence on the date of
receipt of decision, other than the alleged April 4, 1991 date when petitioner learned of the decision, the February 18, 1991 decision of the trial court cannot be said to have attained finality as
regards the petitioner.
WHEREFORE, the subject petition is hereby GRANTED. The Decision and the Resolution of the Court of Appeals dated July 19, 1993 and August 15, 1995, respectively, in CA-G.R. SP Nos.
24669, 28387 and 29317 are hereby REVERSEDandSETASIDEinsofar as they affect petitioner Banco do Brasil. The Order dated May 20, 1991 of the Regional Trial Court of Manila, Branch 8 in
Civil Case No. 89-51451 is REINSTATED.
SO ORDERED.
G.R. No. 77085 April 26, 1989
PHILIPPINE INTERNATIONAL SHIPPING CORPORATION (PISC), GEORGE LIM, MARCOS BAUTISTA, CARLOS LAUDE, TAN SING LIM, ANTONIO LIU LAO, ONG TEH, PHILIPPINE
CONSORTIUM
CONSTRUCTION
CORPORATION,
PACIFIC
MILLS,
INC.,
and
UNIVERSAL
STEEL
SMELTING
CO.,
INC.,
petitioners,
vs.
THE HON. COURT OF APPEALS, HON. JOSE C. DE GUZMAN, as Judge presiding Branch 93 of the Regional Trial Court of Quezon City, INTERPOOL, LTD. and SHERIFF NORBERTO V.
DOBLADA JR., respondents.
RESOLUTION

FELICIANO, J.:
The subject of the present Petition is the Decision of the Court of Appeals dated 12 December 1986, in CA-G.R. SP No. 10614. The appellate court upheld the Order of Branch 93 of the Regional
Trial Court of Quezon City granting the issuance of a writ of execution, in Civil Case No. Q-39927.

The undisputed facts are stated in the appealed decision:

Plaintiff [respondent Interpool, Ltd.] is a foreign corporation, duly organized and existing under the laws of Bahamas Islands with office and business address at 630, 3rd Avenue,
New York, New York, and not licensed to do, and not doing business, in the Philippines.
Defendants Philippine International Shipping Corporation, Philippine Construction Consortium Corporation, Pacific Mills Inc., and Universal Steel Smelting Company, Inc., are
corporations duly organized and existing under and by virtue of the laws of the Philippines. The other defendants, George Lim Marcos Bautista, Carlos Laude, Tan Sing Lim,
Antonio Liu Lao and OngTeh are Philippine residents.
In 1979 to 1981, the defendant, Philippine International Shipping Corporation (PISC) leased from the plaintiff and its wholly owned subsidiary, the Container Trading Corporation,
several containers pursuant to the Membership Agreement and Hiring Conditions (Exhibit B) 1 and the Master Equipment Leasing Agreement (Exhibit C ), 2 both dated June 8,
1979.
Defendants Philippine Construction Consortium Corporation, Pacific Mills Inc. and Universal Steel Smelting Company, guaranteed to pay (sic) all monies due, or to become due, to
the plaintiff from (PISC) and any liability of the latter arising out of the leasing or purchasing of equipment from the plaintiff or any of its subsidiaries, affiliates and/or agents of I.S.C.
dry cargo containers and/or chassis, including but not limited, to per diem leasing charges, damages protection plan charges, damages charge and/or replacement costs of
constructively and/or totally lost containers as well as handling and drop-off charges (Exhibit J). 3
The other defendants, namely: 1) George Lim; 2) Marcos Bautista; 3) Carlos Laude 4) Tan Sing Lim; 5) Antonio Liu Lao and 6) OngTeh, unconditionally and irrevocably guaranteed
to pay (sic) plaintiff all payments due to it under the Master Equipment Leasing Agreement (Exhibit C) and Membership Agreement and Hiring Conditions (Exhibit B) dated June 8,
1979, in the amounts at the time and in the manner set out in the said agreements and to indemnify plaintiff against all claims, liabilities, costs, damages and expenses (including
legal fees) suffered or incurred by plaintiff, arising out of or in connection with any failure by defendant Philippine International Shipping Corporation to perform any of its obligations
under the aforesaid Agreements (Exhibit D, E, F, G, H, and I). 4
In 1979 to 1981, defendant Philippine International Shipping Corporation incurred outstanding and unpaid obligations with the plaintiff, in the amount of $94,456.28, representing
unpaid per diems, drop-off charges, interest and other agreed charges.
The plaintiff sent letters to the defendants (Exhibit K, L, M, N 0, P, Q, R, S and T ), 5 demanding payment of their outstanding and unpaid obligations, but to no avail, so plaintiff was
constrained to file a case against the principal defendant, (PISC) before the United States District Court, Southern District of New York, which was docketed as 83 Civil 290 (EW)
Plaintiff obtained a Default Judgment on July 3, 1983 against (PISC) ordering it to pay the plaintiff the sum of $80,779.33, as liquidated damages, together with interest in the
amount of $13,676.95 and costs in the amount of $80.00. or for a total judgment of $94,456.28 (Exhibit A). 6
Because of the unjustifiable failure and refusal of PISC and its guarantors to jointly and severally pay their obligations to the plaintiff, the latter filed on November 16, 1983 a
complaint [docketed as Civil Case No. Q-39927, Branch 93, Regional Trial Court of Quezon City] (Annex A) 7 to enforce the default judgment of the U.S. District Court against the
defendant PISC and also to enforce the individually executed Continuing Guaranties of the other defendants (Annexes D, E, F, G, H, I, and J of the Complaint).
The defendants (herein petitioners) were duly summoned, but they failed to answer the complaint. On motion of the plaintiff, they were declared in default 8 and the plaintiff (herein
private respondent) was allowed to present its evidence ex parte.
On April 11, 1985 the court rendered judgment for the plaintiff, 9 the dispositive part reading as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants, ordering:
1) The defendant, Philippine International Shipping Corporation, and the defendants-Guarantors, to jointly and severally pay plaintiff the liquidated amount of $80,779.33, together
with interest in the amount of $13,676.95 and costs in the amount of $80.00 or a total of $94,456.28, pursuant to the Default Judgment rendered by the United States District Court,
Southern District of New York, or in the Philippine currency equivalent of the aforesaid amount of $94,456.28, computed at the time of payment, with interest for late payment at the
rate of 18% per annum from July 4, 1983, until fully paid;
2) The defendant, Philippine International Shipping Corporation, and the defendants-Guarantors, to jointly and severally pay plaintiff the sum equivalent to twenty (20%) percent of
the total amount due from the defendants by way of attorney's fees; and
3) To pay the costs.
On May 17, 1985, the defendants appealed the decision to this Appellate Court (AC-G.R. UDK No. 7383) which dismissed the appeal on November 13, 1985 for failure of the
appellants to pay the docketing fee despite their receipt of the notice to do so on August 26, 1985. 10 Entry of that final resolution was made on December 6,1985.
In view of the finality of the decision, the plaintiff filed on July 23, 1986 a motion for execution and for appointment of a special sheriff to enforce it. 11
Over the defendants' opposition, the trial court issued an order of execution on October 15, 1986 and appointed Norberto V. Doblado, Jr., of the office of the Makati Sheriff, as
special sheriff for the purpose (Annex D). 12
On 20 November 1986, petitioners (defendants below) filed with the Court of Appeals a Petition to Annul Judgment (docketed as C.A.-GR SP No. 10614) 13 directed at the 15 October 1986 Order
of the Regional Trial Court. On 12 December 1986, the appellate court rendered a Decision 14 denying that petition for lack of merit. A Motion for Reconsideration was likewise denied for lack of
merit.15
In the instant Petition for Review, filed with this Court on 27 February 1987, petitioners allege that both the Default Judgment rendered by the U.S. District Court, Southern District of New York, in
83 Civil 290 (EW), and the Decision of the Regional Trial Court of Quezon City, in Civil Case No. Q-39927, are null and void essentially on jurisdictional grounds. In the first instance, petitioners
contend that the U.S. District Court never acquired jurisdiction over their persons as they had not been served with summons and a copy of the Complaint in 83 Civil 290 (EW). In the second
instance, petitioners contend that such jurisdictional ty effectively prevented the Regional Trial Court of Quezon City from taking cognizance of the Complaint in Civil Case No. Q-39927 and from
enforcing the U.S. District Court's Default Judgment against them. Petitioners contend, finally, that assuming the validity of the disputed Default Judgment, the same may be enforced only against
petitioner Philippine International Shipping Corporation (PISC) the other nine (9) petitioners not having been impleaded originally in the case filed in New York, U.S.A.
The Petition must fail.
1. To begin with, the evidence of record clearly shows that the U.S. District Court had validly acquired jurisdiction over petitioner (PISC) under the procedural law applicable in that
forum i.e., the U.S. Federal Rules on Civil Procedure. Copies of the Summons and Complaint 16 in 83 Civil 290 (EW) which were in fact attached to the Petition for Review filed
with this Court, were stamped "Received, 18 Jan 1983, PISC Manila." indicating that service thereof had been made upon and acknowledged by the (PISC) office in Manila on, 18
January 1983, and that (PISC) had actual notice of such Complaint and Summons. Moreover, copies of said Summons and Complaint had likewise been served upon PrenticeHall Corporation System, Inc. (New York), petitioner PISCs agent, expressly designated by it in the Master Equipment Leasing Agreement with respondent Interpool. "for the
purpose of accepting service of any process within the State of New York, USA with respect to any claim or controversy arising out of or relating to directly or indirectly, this Lease."
17 The record also shows that petitioner PISC, without, however, assailing the jurisdiction of the U.S. District Court over the person of petitioner, had filed a Motion to Dismiss 18

the Complaint in 83 Civil 290 (EW) which Motion was denied. All of the foregoing matters, which were stated specifically in the U.S. District Court's disputed Default Judgement, 19
have not been disproven or otherwise overcome by petitioners, whose bare and unsubstantiated allegations cannot prevail over clear and convincing evidence of record to the
contrary.
That foreign judgment-which had become final and executory, no appeal having been taken therefrom and perfected by petitioner PISC-is thus "presumptive evidence of a right as between the
parties [i.e., PISC and Interpool] and their successors in interest by a subsequent title." 20 We note, further that there has been in this case no showing by petitioners that the Default Judgment
rendered by the U.S. District Court in 83 Civil 290 (EW) was vitiated by "want of notice to the party, collusion, fraud, or clear mistake of law or fact. " 21 In other words, the Default Judgment
imposing upon petitioner PISC a liability of U.S.$94,456.28 in favor of respondent Interpool, is valid and may be enforced in this jurisdiction.
2. The existence of liability (i.e., in the amount of U.S.$94,456.28) on the part of petitioner PISC having been duly established in the U.S. case, it was not improper for respondent
Interpool, in seeking enforcement in this jurisdiction of the foreign judgment imposing such liability, to have included the other nine (9) petitioners herein (i.e., George Lim, Marcos
Bautista, Carlos Laude,Tan Sing Lim, Antonio Liu Lao, OngTeh Philippine Consortium Construction Corporation, Pacific Mills, Inc. and Universal Steel Smelting Co., Inc.) as
defendants in Civil Case No. Q- 39927, filed with Branch 93 of the Regional Trial Court of Quezon City. With respect to the latter, Section 6, Rule 3 of the Revised Rules of Court
expressly provides:
Sec. 6.Permissive joinder of parties. All persons in whom or against whom any right to relief in respect to or arising out of the same transaction or series of transactions is alleged
to exist, whether jointly, severally, or in the alternative, may, except as otherwise provided in these rules, join as plaintiffs or be joined as defendants in one complaint, where any
question of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff or
defendant from being embarrassed or put to expense in connection with any proceedings in which he may have no interest. (Emphasis supplied)
The record shows that said nine (9) petitioners had executed continuing guarantees" to secure performance by petitioner PISC of its contractual obligations, under the Membership Agreement and
Hiring Conditions and Master Equipment Leasing Agreement with respondent Interpool. As guarantors, they had held themselves out as liable. "whether jointly, severally, or in the alternative," to
respondent Interpool under their separate "continuing guarantees" executed in the Philippines, for any breach of those Agreements on the part of (PISC) The liability of the nine (9) other petitioners
was, in other words, not based upon the Membership Agreement and the Master Equipment Leasing Agreement to which they were not parties. The New York award of U.S.$94,456.28 is precisely
premised upon a breach by PISC of its own obligations under those Agreements. We, therefore, consider the nine (9) other petitioners as persons 44 against whom [a] right to relief in respect to or
arising out of the same transaction or series of transactions [has been] alleged to exist." as contemplated in the Rule quoted above and, consequently, properly impleaded as defendants in Civil
Case No. Q-39927. There was, in other words, no need at all, in order that Civil Case No. Q-39927 would prosper, for respondent Interpool to have first impleaded the nine (9) other petitioners in
the New York case and there obtain judgment against all ten (10) petitioners.
3. Petitioners' argument of lack or absence of jurisdiction on the part of the Quezon City Regional Trial Court, on the alleged ground of non-service of notice or summons in Civil
Case No. Q-39927, does not persuade. But we do not need to address this specific argument. For even assuming (though merely arguendo) that none of the ten (10) petitioner
herein had been served with notice or summons below, the record shows, however, that they did in fact file with the Regional Trial Court a Motion for Extension of Time to file
Answer 22 (dated 9 December 1983) as well as Motion for Bill of Particulars 23 (dated 15 December 1983), both addressing respondent Interpool's .Complaint in Civil Case No. Q39927. In those pleadings, petitioners not only manifested their intention to controvert the allegations in the Complaint, but they neither questioned nor assailed the jurisdiction of
the trial court, either over the case filed against them or over their individual persons, as defendants therein. There was here, in effect, voluntary submission to the jurisdiction of
the Quezon City trial court by petitioners, who are thereby estopped from asserting otherwise before this Court. 24
ACCORDINGLY, the Petition for Review is DENIED and the Decision dated 12 December 1986 of the Court of Appeals in C.A.-G.R. SP No. 10614, is hereby AFFIRMED. This Resolution is
immediately executory. Costs against petitioners.

SO ORDERED.
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD.,
Petitioners,
- versus MINORU KITAMURA,
Respondent.
G.R. No. 149177
Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:
November 23, 2007

x------------------------------------------------------------------------------------x

DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the
July 25, 2001 Resolution[2] denying the motion for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and management support in the infrastructure projects of
foreign governments,[3] entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines.[4] The agreement
provides that respondent was to extend professional services to Nippon for a year starting on April 1, 1999.[5] Nippon then assigned respondent to work as the project manager of the Southern
Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the Philippine Government.[6]
When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.[7] Respondent was named as the project manager in the contract's Appendix 3.1.[8]
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent that the company had no more intention of automatically
renewing his ICA. His services would be engaged by the company only up to the substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.[9]
Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted that
respondents contract was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA.[10]
As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the
Regional Trial Court of Lipa City.[11]
For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They
asserted that the claim for improper pre-termination of respondent's ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and
lexcontractus.[12]
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI Project.[13]
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank[14] that matters connected with the performance of contracts are regulated by the law prevailing at the place of
performance,[15] denied the motion to dismiss.[16] The trial court subsequently denied petitioners' motion for reconsideration,[17] prompting them to file with the appellate court, on August 14,
2000, their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved to dismiss the petition on procedural groundsfor lack of
statement of material dates and for insufficient verification and certification against forum shopping.[19] An Entry of Judgment was later issued by the appellate court on September 20, 2000.[20]
Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the
material dates and attaching thereto the proper verification and certification. This second petition, which substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No.
60827.[21

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision[22] finding no grave abuse of discretion in the trial court's denial of the motion to
dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in
issue. The CA thus declared that the trial court was correct in applying instead the principle of lex loci solutionis.[23]
Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution.[24]
Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review on Certiorari[25] imputing the following errors to the appellate court:
A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE
THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE
JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE
LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.[26]
The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts
executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lexcontractus, the state of the most significant relationship rule, or forum non
conveniens.
However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally
raising the same issues as those in the first one) and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non-forum shopping, it was a dismissal without prejudice.[27] The same
holds true in the CA's dismissal of the said case due to defects in the formal requirement of verification[28] and in the other requirement in Rule 46 of the Rules of Court on the statement of the
material dates.[29] The dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate verification and certificationas they, in fact
didand stating therein the material dates, within the prescribed period[30] in Section 4, Rule 65 of the said Rules.[31]
The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the parties free to litigate the matter in a subsequent action as though the dismissed action
had not been commenced. In other words, the termination of a case not on the merits does not bar another action involving the same parties, on the same subject matter and theory.[32]
Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in the verification and certification of the second certiorari petition
that the first had already been dismissed on procedural grounds,[33] petitioners are no longer required by the Rules to indicate in their certification of non-forum shopping in the instant petition for
review of the second certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum shopping about any event that will not
constitute res judicata and litispendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils sought to
be prevented by the said certificate are no longer present.[34]
The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the
instant petition. True, the Authorization[35] dated September 4, 2000, which is attached to the second certiorari petition and which is also attached to the instant petition for review, is limited in

scopeits wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and that authority cannot extend to the
instant petition for review.[36] In a plethora of cases, however, this Court has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a subsequent
fulfillment of the requirements have been made.[37] Given that petitioners herein sufficiently explained their misgivings on this point and appended to their Reply[38] an updated Authorization[39]
for Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized
to act on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief
executive officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no person, not even its officers,
can bind the corporation, in the absence of authority from the board.[40] Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of the other petitioner, the
petition has to be denied pursuant to Loquias v. Office of the Ombudsman.[41] Substantial compliance will not suffice in a matter that demands strict observance of the Rules.[42] While technical
rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court
dockets.[43]
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion to dismiss. It is a well-established rule that an order denying a
motion to dismiss is interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses the
objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course.[44] While there are recognized exceptions to this rule,
[45] petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the civil case for specific performance and damages filed by the respondent.
The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have
no substantial relationship to the parties[46] following the [state of the] most significant relationship rule in Private International Law.[47]
The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate court. In the Motion to Dismiss[48] filed with the trial court, petitioners never
contended that the RTC is an inconvenient forum. They merely argued that the applicable law which will determine the validity or invalidity of respondent's claim is that of Japan, following the
principles of lex loci celebrationis and lexcontractus.[49] While not abandoning this stance in their petition before the appellate court, petitioners on certiorari significantly invoked the defense of
forum non conveniens.[50] On petition for review before this Court, petitioners dropped their other arguments, maintained the forum non conveniensdefense, and introduced their new argument
that the applicable principle is the [state of the] most significant relationship rule.[51]
Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained in Philippine Ports Authority v. City of Iloilo.[52] We only pointed out
petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to
these phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced?[53]
Analytically, jurisdiction and choice of law are two distinct concepts.[54] Jurisdiction considers whether it is fair to cause a defendant 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 the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional

authority to apply forum law. While jurisdiction and the choice of the lexfori will often coincide, the minimum contacts for one do not always provide the necessary significant contacts for the other.
[55] The question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment.[56]
In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over
the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject
of the litigation.[57] In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is given only by law and in the manner prescribed
by law.[58] It is further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.[59] To succeed in its motion for the
dismissal of an action for lack of jurisdiction over the subject matter of the claim,[60] the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants
it the power to adjudicate the claims.[61]
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 000264 for specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City.[62] What they rather raise as grounds to question
subject matter jurisdiction are the principles of lex loci celebrationis and lexcontractus, and the state of the most significant relationship rule.
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the law of the place of the ceremony[63] or the law of the place where a contract is made.[64] The doctrine of lexcontractus or lex loci contractus means the law of
the place where a contract is executed or to be performed.[65] It controls the nature, construction, and validity of the contract[66] and it may pertain to the law voluntarily agreed upon by the parties
or the law intended by them either expressly or implicitly.[67] Under the state of the most significant relationship rule, to ascertain what state law to apply to a dispute, the court should determine
which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to
be performed, and the domicile, place of business, or place of incorporation of the parties.[68] This rule takes into account several contacts and evaluates them according to their relative
importance with respect to the particular issue to be resolved.[69]
Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law.[70] They determine which state's law
is to be applied in resolving the substantive issues of a conflicts problem.[71] Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also
not yet called for.
Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the laws of Japan and ours. Before determining which
law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules.[72] Also, when the law of a foreign country is invoked to provide the proper
rules for the solution of a case, the existence of such law must be pleaded and proved.[73]
It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are three alternatives open to the latter in disposing of it: (1)
dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume
jurisdiction over the case and take into account or apply the law of some other State or States.[74] The courts power to hear cases and controversies is derived from the Constitution and the laws.
While it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by
foreign sovereigns.

Neither can the other ground raised, forum non conveniens,[76] be used to deprive the trial court of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1,
Rule 16 of the Rules of Court does not include it as a ground.[77] Second, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the
particular case and is addressed to the sound discretion of the trial court.[78] In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this principle
requires a factual determination; hence, this conflicts principle is more properly considered a matter of defense.[79]
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate,
the trial and appellate courts correctly denied the petitioners motion to dismiss.
WHEREFORE, premises considered, the petition for review on certiorari is DENIED.
SO ORDERED.
G.R. No. 162894

February 26, 2008

RAYTHEON
vs.
STOCKTON W. ROUZIE, JR., respondent.

INTERNATIONAL,

INC.,

petitioner,

DECISION
TINGA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks the reversal of the Decision 1 and Resolution2 of the Court of Appeals in CAG.R. SP No. 67001 and the dismissal of the civil case filed by respondent against petitioner with the trial court.
As culled from the records of the case, the following antecedents appear:
Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton
W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines
for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers
affected by the Mt. Pinatubo eruption and mudflows. 3
On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert
and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract. 4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered
judgment ordering BMSI and RUST to pay respondents money claims. 5 Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed respondents complaint on the
ground of lack of jurisdiction.6 Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997. The Resolution became final and executory on 09
November 1998.
On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court (RTC) of Bauang, La Union. The Complaint, 7 docketed as Civil Case
No. 1192-BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially

reiterated the allegations in the labor case that BMSI verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions due
him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself had combined and functioned as one
company.
In its Answer,8 petitioner alleged that contrary to respondents claim, it was a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement with
respondent or paying the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies. 9 Petitioner also
referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as "Special Sales Representative Agreement," the rights and
obligations of the parties shall be governed by the laws of the State of Connecticut. 10 Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non
conveniens and prayed for damages by way of compulsory counterclaim. 11
On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment 12 seeking the dismissal of the complaint on grounds of
forum non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the
Philippine Consulate General in Chicago.13
In an Order14 dated 13 September 2000, the RTC denied petitioners omnibus motion. The trial court held that the factual allegations in the complaint, assuming the same to be admitted, were
sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on petitioner,
it being a foreign corporation licensed to do business in the Philippines. 15
Petitioner filed a Motion for Reconsideration 16 of the order, which motion was opposed by respondent. 17 In an Order dated 31 July 2001, 18 the trial court denied petitioners motion. Thus, it filed a
Rule 65 Petition19 with the Court of Appeals praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July
2001 and to enjoin the trial court from conducting further proceedings. 20
On 28 August 2003, the Court of Appeals rendered the assailed Decision 21 denying the petition for certiorari for lack of merit. It also denied petitioners motion for reconsideration in the assailed
Resolution issued on 10 March 2004.22
The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving petitioners
omnibus motion, it found the evidence presented by petitioner, that is, the deposition of Walter Browning, insufficient for purposes of determining whether the complaint failed to state a cause of
action. The appellate court also stated that it could not rule one way or the other on the issue of whether the corporations, including petitioner, named as defendants in the case had indeed merged
together based solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out during trial. 23 Moreover, the appellate court deferred to the discretion of the trial
court when the latter decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens.
Hence, this petition raising the following issues:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON
INTERNATIONAL, INC.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.24

Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law Office, counsel on record for respondent, manifested that the lawyer handling the case, Atty.
Rogelio Karagdag, had severed relations with the law firm even before the filing of the instant petition and that it could no longer find the whereabouts of Atty. Karagdag or of respondent despite
diligent efforts. In a Resolution25 dated 20 November 2006, the Court resolved to dispense with the filing of a comment.
The instant petition lacks merit.
Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of
Connecticut. It also mentions the presence of foreign elements in the dispute namely, the parties and witnesses involved are American corporations and citizens and the evidence to be
presented is located outside the Philippines that renders our local courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the immediate application
of the doctrine of forum non conveniens.
Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition
and enforcement of judgments. Thus, in the instances 27 where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the following requisites
had to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the
facts; and (3) that the Philippine Court has or is likely to have the power to enforce its decision. 28
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may
or can 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 is an exercise of sovereign prerogative of the country where the
case is filed.29
Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law 30 and by the material allegations in the complaint, irrespective of whether or not the plaintiff
is entitled to recover all or some of the claims or reliefs sought therein. 31 Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the
action and the amount of damages prayed are within the jurisdiction of the RTC.
As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person
of petitioner (as party defendant) was acquired by its voluntary appearance in court. 32
That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for
that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant 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 the case is fair to both parties. 33 The choice of law stipulation will become
relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court.
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most "convenient" or available forum and the parties are
not precluded from seeking remedies elsewhere. 34 Petitioners averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No.
1192-BG and the parties involved.
Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it
is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require
the courts desistance.35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the
same manner, the Court defers to the sound discretion of the lower courts because their findings are binding on this Court.
Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against petitioner. Failure to state a cause of action refers to the insufficiency of allegation in
the pleading.36 As a general rule, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded. 37
The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner contends that the deposition of Walter Browning rebutted this allegation. On this
score, the resolution of the Court of Appeals is instructive, thus:
x xx Our examination of the deposition of Mr. Walter Browning as well as other documents produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete
a ruling that the complaint fails to state a cause of action.
Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that Raytheon Engineers and Constructors, Inc. (REC) assumed the warranty obligations of
defendant Rust International in the Makar Port Project in General Santos City, after Rust International ceased to exist after being absorbed by REC. Other documents already submitted in
evidence are likewise meager to preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine Service, Inc. have combined into one company, so
much so that Raytheon International, Inc., the surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for unpaid commissions. Neither these
documents clearly speak otherwise.38
As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged together requires the presentation of further evidence, which only a full-blown trial on
the merits can afford.
WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED.Costs against
petitioner.
SO ORDERED.
SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional
Trial Court of Quezon City, respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside the Resolution[1] dated September 27, 1995 and the Decision[2] dated April 10, 1996 of the Court
of Appeals[3] in CA-G.R. SP No. 36533,[4] and the Orders[5] dated August 29, 1994[6] and February 2, 1995[7] that were issued by the trial court in Civil Case No. Q-93-18394.[8]
The pertinent antecedent facts which gave rise to the instant petition, as stated in the questioned Decision[9], are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. x xx

On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it
was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly after he
did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer
and Allah Al-Gazzawi, the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release
of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not
succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined
to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were
again put in service by defendant SAUDI (sic). In September 1990, defendant SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah,
Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put
pressure on her to make a statement dropping 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 afternoon flight out
of Jeddah.
One year and a half later or on June 16, 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 instead ordered
to take a later flight to Jeddah to see Mr.Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to 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. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from
SAUDIAs Manila manager, AslamSaleemi, that the investigation was routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had
forbidden her to take flight. At the Inflight Service Office where she was told to go, the secretary of Mr.YahyaSaddick took away her passport and told her to remain in Jeddah, at the crew quarters,
until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her
to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had 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; and (3) socializing with the male crew, in contravention of Islamic tradition.[10]
Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help
her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights.[11]

Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila,[12] she was terminated
from the service by SAUDIA, without her being informed of the cause.
On November 23, 1993, Morada filed a Complaint[13] for damages against SAUDIA, and Khaled Al-Balawi (Al- Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss[14] which raised the following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; (2) that
defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no
jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)[15] Saudia filed a reply[16] thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint[17] wherein Al-Balawi was dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss Amended
Complaint[18].
The trial court issued an Order[19] dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge[20] denying the Motion to Dismiss, SAUDIA filed on September 20, 1994, its Motion for Reconsideration[21] of the Order dated August 29, 1994. It alleged
that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 14,
1994, Morada filed her Opposition[22] (To Defendants Motion for Reconsideration).
In the Reply[23] filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule
does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant
case, and hence, without jurisdiction to adjudicate the same.

Respondent Judge subsequently issued another Order[24] dated February 2, 1995, denying SAUDIAs Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October
14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one
for the recovery of actual, moral and exemplary damages plus attorneys fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within
the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the
motion for reconsideration of the defendant, is DENIED.
SO ORDERED.[25]
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order[26] with
the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order[27] dated February 23, 1995, prohibiting the respondent Judge from further conducting any proceeding,
unless otherwise directed, in the interim.
In another Resolution[28] promulgated on September 27, 1995, now assailed, the appellate court denied SAUDIAs Petition for the Issuance of a Writ of Preliminary Injunction dated February 18,
1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after considering the Answer, with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply and
Rejoinder, it appearing that herein petitioner is not clearly entitled thereto (Unciano Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April 7, 1993, Second Division).
SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition[29] for Review with Prayer for Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision[30] dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate
forum considering that the Amended Complaints basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that
certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining Order[31] dated April 30, 1996, given due course by this Court. After both parties
submitted their Memoranda,[32] the instant case is now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21 of the New Civil Code since the proper law applicable is the law of the Kingdom of Saudi Arabia
inasmuch as this case involves what is known in private international law as a conflicts problem. Otherwise, the Republic of the Philippines will sit in judgment of the acts done by another
sovereign state which is abhorred.
II.
Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides, the matter as to absence of leave of court is now moot and academic when this Honorable Court
required the respondents to comment on petitioners April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice Thereof.
Further, the Revised Rules of Court should be construed with liberality pursuant to Section 2, Rule 1 thereof.
III.

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al. and filed its April 30, 1996 Supplemental
Petition For Review With Prayer For A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1, Rule 45 of the Revised
Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this Honorable Court can take cognizance of this case.[33]
From the foregoing factual and procedural antecedents, the following issues emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q93-18394 ENTITLED MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES.
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THE CASE PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondents 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 of the Kingdom of Saudi Arabia, by virtue of the lex loci delicticommissi rule.
[34]
On the other hand, private respondent contends that since her Amended Complaint is based on Articles 19[35] and 21[36] of the Civil Code, then the instant case is properly a matter of domestic
law.[37]
Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint[38] dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing business in the Philippines. It may be served with summons and other court processes at Travel Wide
Associated Sales (Phils.), Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.
x xxxxxxxx
6. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were
again put in service by defendant SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see MR. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah,
Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put
pressure on her to make a statement dropping 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 afternoon flight out
of Jeddah.

8. One year and a half later or on June 16, 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 instead
ordered to take a later flight to Jeddah to see Mr.Meniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was
asked to 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. Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance
from SAUDIAs Manila manager, AslamSaleemi, that the investigation was routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had
forbidden her to take that flight. At the Inflight Service Office where she was told to go, the secretary of Mr.YahyaSaddick took away her passport and told her to remain in Jeddah, at the crew
quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing
her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had 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; (3) socializing with the male crew, in contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the help of the Philippine Embassy in Jeddah. The latter helped her pursue an appeal from the decision of the court. To
pay for her upkeep, she worked on the domestic flights of defendant SAUDIA while, ironically, Thamer and Allah freely served the international flights.[39]
Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a conflicts case.
A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a foreign element. The presence of a foreign element is inevitable since
social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception.[40]
The forms in which this foreign element may appear are many.[41] The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or
that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form.[42]
In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by
virtue of the employment of Morada with the petitioner Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila,
Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise.
We thus find private respondents assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the question of jurisdiction[43] confronts the court a quo.
After a careful study of the private respondents Amended Complaint,[44] and the Comment thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the New Civil
Code.
On one hand, Article 19 of the New Civil Code provides;
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice give everyone his due and observe honesty and good faith.

On the other hand, Article 21 of the New Civil Code provides:

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,[45] this Court held that:
The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is
impossible for human foresight to specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondents assertion that violations of Articles 19 and 21 are actionable,
with judicially enforceable remedies in the municipal forum.
Based on the allegations[46] in the Amended Complaint, read in the light of the Rules of Court on jurisdiction[47] we find that the Regional Trial Court (RTC) of Quezon City possesses jurisdiction
over the subject matter of the suit.[48] Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691, to wit:
Section 1. Section 19 of Batas PambansaBlg. 129, otherwise known as the Judiciary Reorganization Act of 1980, is hereby amended to read as follows:
SEC. 19.Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive jurisdiction:
x xxxxxxxx
(8) In all other cases in which demand, exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses, and costs or the value of the property in controversy exceeds One
hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the above-mentioned items exceeds Two hundred Thousand pesos
(P200,000.00). (Emphasis ours)
x xxxxxxxx
And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue, Quezon City, is appropriate:
SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
(a) xxxxxxxxx
(b) Personal actions. All other actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff resides, at
the election of the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of the litigant.
Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, vex,
harass, or oppress the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should
rarely be disturbed.[49]

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 the case, it would be forcing plaintiff (private
respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness
to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice of forum of the plaintiff (now private
respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntary
submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several motions[50] praying for the dismissal of Moradas Amended Complaint. SAUDIA also filed an Answer In Ex AbundanteCautelam dated
February 20, 1995. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to
the trial courts jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.:[51]
We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the lower courts jurisdiction over defendants person, prayed for dismissal of the complaint on the ground that
plaintiffs cause of action has prescribed. By interposing such second ground in its motion to dismiss, Ker and Co., Ltd. availed of an affirmative defense on the basis of which it prayed the court to
resolve controversy in its favor. For the court to validly decide the said plea of defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction upon the latters person, who, being the proponent
of the affirmative defense, should be deemed to have abandoned its special appearance and voluntarily submitted itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that:
When the appearance is by motion for the purpose of objecting to the jurisdiction of the court over the person, it must be for the sole and separate purpose of objecting to the jurisdiction of the
court. If his motion is for any other purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court. A special appearance by motion
made for the purpose of objecting to the jurisdiction of the court over the person will be held to be a general appearance, if the party in said motion should, for example, ask for a dismissal of the
action upon the further ground that the court had no jurisdiction over the subject matter.[52]
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that the trial court has jurisdiction over the case and that its exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the
significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation.[53]
Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice-of-law theories should intrinsically advance both notions of
justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed.[54]
Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as characterization, or the doctrine of qualification. It
is the process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule.[55] The purpose of characterization is to enable the forum to select the proper law.[56]

Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact.[57] An essential element of conflict rules is the indication of a test or connecting factor or
point of contact. Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the
place of celebration, the place of performance, or the place of wrongdoing.[58]
Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law.[59] These test factors or points of contact or connecting factors could
be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) thesitus of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lexsitus is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the 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 contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done. The lexforithe law of the forumis particularly important because, as we have seen earlier, matters of procedure not
going to the substance of the claim involved are governed by it; and because the lexfori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given
case for the reason that it falls under one of the exceptions to the applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts
of affreightment.[60] (Underscoring ours.)
After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed submitted for purposes of the motion to dismiss, we are convinced that there is
reasonable basis for private respondents assertion that although she was already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an
investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very
serious charges, including adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the handing over or turning over of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as
employer. Petitioners purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly
facilitated the arrest, detention and prosecution of private respondent under the guise of petitioners authority as employer, taking advantage of the trust, confidence and faith she reposed upon it.
As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person
and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact could be the place or places where the tortious conduct or lex loci actus occurred.
And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in

the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its
rights and in the performance of its duties, act with justice, give her her due and observe honesty and good faith. Instead, petitioner failed to protect her, she claimed. That certain acts or parts of
the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the fatality of the alleged injury to the person,
reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the
situsof the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicticommissi, modern theories and rules on tort liability[61] have been advanced to offer fresh judicial approaches to
arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the most significant relationship rule, which in our view should be
appropriate to apply now, given the factual context of this case.
In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance
with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of
incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.[62]
As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national,
working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the relationship between the parties was centered here, although it should be
stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute,[63] raised by private
respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established.
Prescinding from this premise that the Philippines is the situs of the tort complaint of and the place having the most interest in the problem, we find, by way of recapitulation, that the Philippine law
on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has
jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable petitioners
insistence that [s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter.[64] As aptly said by private respondent, she has no
obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21 of the Civil Code of the Philippines. In her Amended Complaint and
subsequent pleadings she never alleged that Saudi law should govern this case.[65] And as correctly held by the respondent appellate court, considering that it was the petitioner who was
invoking the applicability of the law of Saudi Arabia, thus the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is.[66]
Lastly, no error could be imputed to the respondent appellate court in upholding the trial courts denial of defendants (herein petitioners) motion to dismiss the case. Not only was jurisdiction in
order and venue properly laid, but appeal after trial was obviously available, and the expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state
intimately concerned with the ultimate outcome of the case below not just for the benefit of all the litigants, but also for the vindication of the countrys system of law and justice in a transnational
setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements
involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby REMANDED to Regional Trial
Court of Quezon City, Branch 89 for further proceedings.
SO ORDERED.

Valmonte v. CA Digest
G.R. No. 108538 January 22, 1996
Ponente: Mendoza, J.:
Service of Summons
Facts:
1. Petitioner Lourdes A. Valmonte is a foreign resident. Petitioners Lourdes and Alfredo are husband and wife both residents of 90222 Carkeek Drive
South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the
Philippines, commuting for this purpose between his residence in the state of Washington and Manila, where he holds office at S-304 Gedisco Centre,
1564 A. Mabini, Ermita, Manila.
2.

Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition against former and her husband. She alleged that, the plaintiff is of legal age, a
widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses but, for purposes of this complaint may be served

with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmontes spouse holds office
and where he can be found.He husband was also her counsel, who has a law office in the Philippines. The summons were served on her husband.
3. Petitioner in a letter, referred private respondents counsel to her husband as the party to whom all communications intended for her should be sent.
Service of summons was then made upon petitioner Alfredo at his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for
Lourdes, on 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 summons and complaint for petitioner Lourdes A. Valmonte.
4.

Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For
this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and
opposed the private respondents motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default. Said decision was received
by Alfredo hence this petition.

Issue: Whether or not petitioner Lourdes A. Valmonte was validly served with summons.
NO.
There was no valid service of summons on Lourdes.
1. The action herein is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendants interest in a specific
property and not to render a judgment against him. As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of
summons on her must be in accordance with Rule 14, 17. Such service, to be effective outside the Philippines, must 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 court may order, in which case a copy of the
summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court
may deem sufficient.

2.

In the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes. This mode of
service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant
resides. The service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, 17 and certainly
was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A.
Valmonte in default for her failure to file an answer.

3.

Secondly, the service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, 17. As provided
in 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the
grounds for the application.

4.

Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes was not given ample time to file her Answer which,
according to the rules, shall be not less than sixty (60) days after notice.

ROMUALDEZ-LICAROS vs. LICAROS

G.R. No. 150656 April 29, 2003
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 court acquires jurisdiction over his
person.
Facts:
Abelardo and Margarita were lawfully married. Marital differences, squabbles and irreconcilable conflicts transpired between the spouses, such that sometime in 1979, they
agreed to separate from bed and board. Margarita then left for the United States with her children. She filed with the courts of California a petition to divorce her husband,
and it was granted.
Abelardo and Margarita executed an Agreement of Separation of Properties, which was duly granted by the RTC Makati.
Meanwhile, Abelardo commenced the proceeding on the voiding his marriage with Margarita on account of psychological incapacity. As Margarita was in the US, Abelardo
initially moved that summons be served through the International Express Courier Service. The court a quo denied the motion. Instead, it ordered that summons be served
by publication in a newspaper of general circulation once a week for three (3) consecutive weeks, at the same time furnishing respondent a copy of the order, as well as
the corresponding summons and a copy of the petition at the given address in the United States through the Department of Foreign Affairs, all at the expense of Abelardo.
An Officers return was duly submitted declaring the completion of the service of summons. Finally, the marriage was declared void through Article 36 Family Code by the
RTC.
Margarita appeared before the Consulate Office in San Francisco to sign the agreement on separation of property. Abelardo allegedly threatened to cut off all financial and
material support to their children if Margarita did not sign the documents.
9 years later, Margarita contested such declaration of nullity of marriage on account of extrinsic fraud and questioned the court that it did not acquire jurisdiction over her,
hence such decision is void and ineffectual.
Issue:
WON Margarita was validly served with summons in the case for declaration of nullity of her marriage with Abelardo? YES

WON there was extrinsic fraud in the preparation and filing by Abelardo of the Petition for Dissolution of the Conjugal Partnership of Gains and its annex, the Agreement of
Separation of Properties? NO
Held:
As a rule, when the defendant does not reside and is not found in the Philippines, Philippine courts cannot try any case against him because of the impossibility of
acquiring jurisdiction over his person unless he voluntarily appears in court. But when the case is one of actions in 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 such instances, Philippine courts have jurisdiction over the res, and jurisdiction over
the person of the non-resident defendant is not essential.
Jurisdiction over the person of a non-resident defendant in an action in rem or quasi in rem is not necessary. The trial and appellate courts made a clear factual finding that
there was proper summons by publication effected through the Department of Foreign Affairs as directed by the trial court. Thus, the trial court acquired jurisdiction to
render the decision declaring the marriage a nullity.
Under Section 15 of Rule 14, a defendant who is a non-resident and is not found in the country may be served with summons by extraterritorial service in four instances:
(1)when the action affects the personal status of the plaintiff; (2) when the action relates to, or the subject of which is property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent; (3) when the relief demanded consists, wholly or in part, in excluding the defendant from any interest in
property located in the Philippines; or (4) when the property of the defendant has been attached within the Philippines.
In these instances, extraterritorial service of summons may be effected 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 summons and order of the court by registered mail to the defendants last known address, also with leave of court; or (3) by any
other means the judge may consider sufficient. The trial courts prescribed mode of extraterritorial service does not fall under the first or second mode specified in Section
15 of Rule 14, but under the third mode.
On the Issue of Fraud: A meticulous perusal of the Petition and Agreement readily shows that Margarita signed the same on the proper space after the prayer and on the
portion for the verification of the petition. In the instant case, Margarita acknowledged the Agreement before Consul Cortez. The certificate of acknowledgment signed by
Consul Cortez states that Margarita personally appeared before him and acknowledged before me that SHE executed the same of her own free will and deed. Thus, there
is a prima facie presumption that Margarita freely and voluntarily executed the Agreement. Margarita has failed to rebut this prima facie presumption with clear and
convincing proof of coercion on the part of Abelardo.

Banco Do Brasil vs Court of Appeals

In 1989, Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former incurred when one of the latters ship ran aground causing losses to Urbino. Urbino impleaded Banco Do Brasil (BDB), a foreign
corporation not engaged in business in the Philippines nor does it have any office here or any agent. BDB was impleaded simply because it has a claim over the sunken ship. BDB however failed to appear multiple
times. Eventually, a judgment was rendered and BDB was adjudged to pay $300,000.00 in damages in favor of Urbino for BDB being a nuisance defendant.
BDB assailed the said decision as it argued that there was no valid service of summons because the summons was issued to the ambassador of Brazil. Further, the other summons which were made through
publication is not applicable to BDB as it alleged that the action against them is in personam.
ISSUE: Whether or not the court acquired jurisdiction over Banco Do Brasil.
HELD: No. Banco Do Brasil is correct. Although the suit is originally in rem as it was BDBs claim on the sunken ship which was used as the basis for it being impleaded, the action nevertheless became an in
personam one when Urbino asked for damages in the said amount. As such, only a personal service of summons would have vested the court jurisdiction over BDB. Where the action is in personam, one brought
against a person on the basis of his personal liability, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the 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 the case against him.