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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 Ong Teh 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) Ong Teh, 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 defendantsGuarantors, 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 (ACG.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 Prentice-Hall 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, Ong Teh 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. Q-39927. 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.
AFIFE ABDO CHEYBAN GORAYEB, plaintiff-appellee,
vs.
NADJIB TANNUS HASHIM, defendant and appellant.
C. A. Sobral for appellant.
Gibbs and McDonough for appellee.
STREET, J.:
This appeal is an incident arising out of civil case No. 19115 instituted in the Court of
First Instance of Manila on November 12, 1920, wherein the plaintiff, Afife Abdo
Cheyban Gorayeb ,has obtained a judgment requiring the defendant (who is also her
husband) Nadjib Tannus Hashim, to pay to her a monthly stipend by way of support.
In connection with the institution of said action the plaintiff procured an order
requiring the defendant to pay to the plaintiff the sum of P1,000 per month as
alimony, pendente lite. Vigorous efforts were made by the defendant to precure the

abrogation of this order not only in the court of origin but in this court by writ of
certiorari; but these efforts was unsuccessful.1 Upon finally hearing the cause upon its
merits, the Honorable Vicente Nepomuceno, presiding in the court of First Instance,
under date of December 24, 1923, awarded the plaintiff permanent alimony at the rate
of P500 per month, beginning November 12, 1920, the date of the filing of the
complaint. This judgment was subsequent affirmed by this court upon appeal.2 On
January 23, 1926, the lower court, after due hearing, reduced the rate of alimony to
P100, at which amount it now stands.
Meanwhile, the plaintiff had caused execution to issue against the defendant to
enforce the payment of the provisional allowance of P1,000 per month, and various
valuable properties belonging to the defendant were sold under execution for the
amount of P34,000. After judgment had become final under the order of December
24, 1923, still another property belonging to the defendant was sold under execution
for the sum of P6,710. The proceeds of these sales were paid in due course to the
plaintiff.
It appears that for more than twelve years the plaintiff and defendant have been
wholly estranged and living apart. During this period each has attempted to convict
the other of infidelity; but the prosecution instituted by the defendant against the
plaintiff for adultery and the later prosecution for concubinage instituted by the
plaintiff against the defendant were both unsuccessful.
While the question of the defendant's civil liability for the support claimed by the
plaintiff was still undetermined, the defendant sought refuge in the State of Nevada;
and, on December 1, 1924, there obtained a decree of divorce from the plaintiff in the
court of the Second Judicial District of the State of Nevada. He then returned to the
Philippine Islands, and on October 20, 1925, the plaintiff filed a motion in civil case
No. 19115, alleging that the defendant had failed to pay the pension of P500 per
month, which had been awarded to her in the decision of December 24, 1923, and
praying that he be adjudged to be in contempt of court and that he be fined and
sentenced to imprisonment for six months and until he should comply with the order.
In response to this motion the defendant pleaded the decree of divorce obtained by
him from the Nevada court, claiming that said decree had the effect of dissolving the
bonds of matrimony between himself and the plaintiff and of relieving him from all
liability to pay the persion claimed.
Upon hearing the cause the trial court found that, while, as a matter of fact, the
defendant was in arrears in the payment of the pension, nevertheless the defense
asserted by him had been put forth in good faith. His Honor therefore absolved the
defendant from the contempt charge, with costs de oficio. At the same time it was
declared that the civil obligation created by the previous orders of the court remained
in full force and effect, notwithstanding the decree of divorce upon which the
defendant relied, and he was ordered to continue the payment of the pension at the
reduced rate of P100 per month. From so much of this order as declares the defendant
civilly liable for the pension claimed by the plaintiff the defendant appealed, and it is
this appeal that is now before us.
The only question necessary to be here considered relates to the civil liability of the
defendant for the monthly stipend which has been judicially awarded to the plaintiff

and the amount of said liability, supposing the obligation still to subsist. Upon the first
point the trial court held that the obligation of the defendant to pay the stipend had the
opinion that this conclusion is correct. There can be no other reasonable inference
drawn from the defendant's acts than that the procuring of the divorce in Nevada was
a mere device on the part of the defendant to rid himself of the obligation created by
the judgment of the Philippine court and that his temporary sojourn in the State of
Nevada was a mere ruse unaccompanied by any genuine intention his part to acquire a
legal domicile in that State. This being true, the divorce granted by the Nevada court
cannot be recognized by the courts of this country.
In Ramirez vs. Gmur (42 Phil., 855), this court held, in conformity with the rule
declared by the Supreme Court of the United States, that the court of a country in
which neither of the spouses is domiciled and to which one or both of them may resort
merely for the purpose of obtaining a divorce has no jurisdiction to determine their
matrimonial status; and a divorce granted by such a court is not entitled to recognition
elsewhere. The voluntary appearance of the defendant before such a tribunal does not
invest the court with jurisdiction. In the same case this court went on to say: "It
follows that, to give a court jurisdiction on the ground of the plaintiff's residence in
the State or country of the judicial forum, his residence must be bona fide. If a spouse
leaves the family domicile and goes to another State for the sole purpose of obtaining
a divorce, and with no intention of remaining, his residence there is not sufficient to
confer jurisdiction on the courts of that State. This is especially true where the cause
of divorce is one not recognized by the laws of the State of his own domicile. (14
Cyc., 817, 818).
From this it will be seen that a divorce granted in one State may be called in question
in the courts of another and its validity determined upon the evidence relating to
domicile of the parties to the divorce. This undoubtedly involves a collateral attack
upon the decree of divorce; but, as has been said by the Supreme Court of the United
States, it is now too late to deny the right collaterally to impeach a decree of divorce
in the courts of another State by proof that the court granting the divorce had no
jurisdiction, even though the record purports to show jurisdiction and the appearance
of the parties (German Savings and Loan Society vs. Dormitzer, 192, U.S., 125).
The rule above referred to has been held by the Supreme Court of the United States to
prevail in the courts of the various States of the American Union, not withstanding the
existence of the constitutional provision requiring the courts of every State to give full
faith and credit to judgments obtained in other States. There is no similar
constitutional provision in force in these Islands, but, under section 309 of the Code of
Civil Procedure, the judicial records of the courts of the United States and of the
several states and Territories of the United States have the same force in the
Philippine Islands as in the place where the judgment was obtained. But there is
nothing in this provision that would require the courts of this country to give any
greater consideration to the judgment of the court of an American State than is
conceded to it in other States and districts of the United States, in conformity with the
doctrine sustained by the Supreme Court of the United States and upheld in the courts
of those States where the marriage tie is best guarded.
In the application of the rule above stated the circumstance that the parties to the
present action contracted marriage in Syria, instead of the Philippine Islands, is not

material to the case. The fact that they contracted marriage lawfully, wherever the act
may have been accomplished, created the status of married persons between them;
and the question with which we are here concerned is not as to the marriage, but as to
the divorce conceded to the defendant in the State of Nevada.
Section 309 of the Code of the Civil Procedure, declaring that a judgment obtained in
an American court shall have the same effect in the Philippine Islands as in the place
where such judgment was obtained, contains a qualification expressed in the
following words: "except that it can only be enforce here by an action or special
proceeding." Upon this provision the attorneys for the plaintiff plant a proposition to
the effect that a Philippine court cannot recognized the decree of divorce granted by
the Nevada court upon the mere exemplification of a certified copy of the decree; and
it is insisted that, in order to get the benefit of said decree, it is necessary for the
defendant to institute an independent action or special proceeding in one of our courts
for the purpose of obtaining a judicial ratification of the decree of divorce. But it will
be remembered that the defendant pleaded the decree of divorce by way of defense in
his answer; and if the decree of divorce had been such as to have entitled it to
recognition here, the defendant could in our opinion have obtained the benefit of it in
this action. The provision in question no doubt contemplates primarily the situation
where affirmative action has to be taken in the Philippine Islands to give effect to the
foreign judgment as where the plaintiff desires to obtain execution upon property in
these Islands to satisty a judgment obtained abroad. But a decree of divorce operates
on the marriage status; and if effective at all, it dissolves the marriage tie, without the
necessity of any affirmative proceeding in any other court. At any rate, all that was
intended to be secured by the provision requiring an action or proceeding here was
that the courts of this country should have an opportunity to pass judicially upon the
efficacy of the judgment. This purpose is accomplished as well where the foreign
judgment is relied upon in an answer and duly proved, as where the original action is
actually brought by the holder of the judgment. It could not have been intended by the
authors of section 309 that the holder of the foreign judgment must be deprived of the
benefit of it merely because he happens to be defendant rather than plaintiff in an
action brought in our courts.
From what has been said it follows that the objections interposed by the plaintiff to
the manner in which the defendant seeks to avail himself of his alleged decree of
divorce are not well taken; but for reasons already stated, the decree itself is of no
force in this jurisdiction. It supplies therefore no justification for the defendant's
failure to pay alimony.
But it is said that, even conceding that the defendant is technically liable for alimony,
he should nevertheless be relieved from the order requiring him to pay alimony, in
view of the fact that the plaintiff has been overpaid upon account of alimony. In this
connection reliance is placed upon the supposed retroactive effect of the order of
December 24, 1923, fixing the plaintiff's stipend definitely at P500 per month, while
the original order granting alimony, pendente lite, was at the rate of P1,000 per
month; and, as will be remembered, judgment was executed at that rate for an amount
much in excess of what have been obtained if the rate of P500 per month had been
allowed from the beginning. It is insisted that the plaintiff should be required to
refund this excess or at least that it should be considered an equitable set-off against
the claim for present alimony.

It is true that the original order granting alimony at the rate of P1,000 per month was
of a provisional character, and the final order fixing the alimony at P500 per month
was given retroactive effect to the beginning of the litigation. At first blush, therefore,
the facts appear to supply an equitable consideration in favor of the defendant as
regards his alimony account; but upon examining the situation more minutely, it will
be found that the case is not precisely such as it appears to on the surface. It is true
that the plaintiff secured execution of the order for alimony in an amount in excess of
what she finally became entitled to upon alimony account, but it is nevertherless true
that the property thus acquired by the plaintiff was made subject in her hands to the
preexisting debts properly chargeable against the conjugal partnership; and litigation
already determined in this court, or now pending before it, shows that the plaintiff has
already lost, or is in a way to lose, a great part, if not all, of the property so secured
upon execution . Furthermore, it is evident that she has not yet received in cash the
amount actually due her for alimony. It is therefore evident that there is nothing in the
supposed over execution of the claim for alimony which raises any equitable
consideration in the defendant's favor.
In addition to this, it must be remembered that alimony is an allowance for support
and is fixed with a view to enable the party entitled thereto to confront obligations for
current necessities. The demands of to-day and tomorrow cannot always be
satisfactorily met from the resources of yesterday, and it seems inconsistent with the
very nature of the obligation to offset against claims for current alimony sums of
money that have been improperly taken under previous orders. It has accordingly
been held by American courts that excessive payments made under valid, though
erroneous, prior orders cannot be offset against claims for current alimony (19 C. J.,
p. 226; Lishey vs. Lishey, 6 Lea [Tenn.], 418; Johnson vs. Johnson [Tenn. Ch. A.], 49
S. W., 305). Spanish jurisprudence appears to confirm this view (6 Manresa, Ley de
Enjuiciamiento Civil, p. 80; 20 Jur. Civ., Recurcos y Competencias, p. 566). This
doctrine would seem to be applicable with full force so far as regards the right to the
amount strictly necessary to maintain respectable existence. In the case before use the
amount accruing to the plaintiff is only P100 per month, which is an exceedingly
modest amount, considered from any point of view.
It results that we find no error whatever in the appealed judgment, either as regards
the liability of the defendant for alimony or its amount.
The judgment appealed from will therefore be affirmed, and it is so ordered, with
costs against the appellant.
Villamor, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur.
SOORAJMULL NAGARMULL, plaintiff-appellee,
vs.
BINALBAGAN-ISABELA SUGAR COMPANY, INC., defendant-appellant.
S. Emiliano Calma for plaintiff-appellee.
Salonga, Ordoez & Associates for defendant-appellant.

DIZON, J.:
Appeal taken by Binalbagan-Isabela Sugar Company, Inc. from the decision of the
Court of First Instance of Manila in Civil Case No. 41103 entitled Soorajmull
Nagarmull vs. Binalbagan-Isabela Sugar Company, Inc." of the following tenor:
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of the
plaintiff, Soorajmull Nagarmull, ordering the defendant, Binalbagan-Isabela Sugar
Co., Inc. to pay said plaintiff the sum of 18,562 rupees and 8 annas, with reservation
for the plaintiff to prove its equivalent in Philippine pesos on the date of the filing of
the complaint, plus the costs of suit.
The parties submitted to the trial court the following, stipulation of facts:
1.
Under Contract G/14370 dated May 6, 1949, plaintiff, a foreign corporation
with offices at No. 8 Dalhousie Square (East) Calcutta, India, agreed to sell to
defendant, a domestic corporation with offices at the Chronicle Building, Aduana
Street, Manila, 1,700,000 pieces of Hessian bags at $26.20 per 100 bags, C.I.F. Iloilo.
Shipment of these bags was to be made in equal installments of 425,000 pcs. or 425
bales (1,000 pcs. to a bale during each of the months of July, August, September and
October, 1949. A copy of this contract marked Annex 'A' and the Calcutta Jute Fabrics
Shippers Association Form 1935 which was made a part of the contract and marked as
Annex 'A-l' are hereto attached.
2.
This agreement was confirmed in a letter by the plaintiff to the defendant on
May 7, 1949, copy of which is attached hereto and made a part hereof as Annex 'B'; .
3.
On September 8, 1949, plaintiff advised defendant that of the 850 bales
scheduled for shipment in July and August, the former was able to ship only 310 bales
owing to the alleged failure of the Adamjee Jute Mills to supply the goods in due
time. Copy of plaintiff's letter is attached hereto as Annex 'C' and made an integral
part hereof; "4. In a letter dated September 29, 1949, defendant requested plaintiff to
ship 100 bales of the 540 bales defaulted from the July and August shipments. A copy
of this letter marked Annex 'D' is hereto attached. In this connection, it may also be
mentioned that of the 425 bales scheduled for shipment in September, 54 bales were
likewise defaulted resulting in a total of 154 bales which is now the object of the
controversy.
5.
Defendant requested plaintiff to pay 5% of the value of the 154 bales defaulted
as penalty which plaintiff did.
6.
Meanwhile, on October 1, 1949, the Government of India increased the export
duty of jute bags from 80 to 350 rupees per ton, and on October 5, 1949, plaintiff
requested defendant to increase its letter of credit to cover the enhanced rate of export
duty imposed upon the goods that were to be shipped in October, reminding the latter
that under their agreement, any alteration in export duty was to be for the buyer's
account. Copy of plaintiff's letter is attached hereto as Annex 'E';

7.
On October 25, 1949, defendant, in compliance with plaintiff's request,
increased the amount of its letter of credit by $10,986.25 to cover the increase in
export duty on 425 bales scheduled under the contract for the shipment in October,
1949. A copy of defendants letter marked Annex 'F' is hereto attached;
8.
On October 27, 1949, plaintiff wrote to defendant for a further increase of
$4,000.00 in its letter of credit to cover the shipment of 154 bales which under the
contract should have been included in the July, August and September shipments. A
copy of said letter is attached hereto as Annex 'G';
9.
On November 17, 1949, plaintiff wrote defendant a letter reiterating its claim
for $4,000.00 corresponding to the increased export taxes on the 154 bales delivered
to defendant from the defaulted shipments for the months of July, August and
September, 1949. A copy of said letter is attached hereto as Annex 'H';
10.
On February 6, 1951, defendant received notification from the Bengal
Chamber of Commerce Tribunal of Arbitration in Calcutta, India, advising it that on
December 28, 1950, Plaintiff applied to said Tribunal for arbitration regarding their
claim. The Tribunal requested the defendant to send them its version of the case. This,
defendant did on March 1, 1951, thru the then Government Corporate Counsel,
former Justice Pompeyo Diaz. A copy of the letter of authority is attached as Annex
'I';
11.
The case was heard by the Tribunal of Arbitration on July 5, 1951. Having
previously requested the Secretary Foreign Affairs for Assistance, defendant was
represented at the hearing by the Philippine Consulate General in Calcutta, India, by
Consul Jose Moreno. A copy of the authority, consisting of the letter of Government
Corporate Counsel Pompeyo Diaz, dated March 1, 1951, and 1st Indorsement thereon,
dated March 2, 1951, are attached hereto as Annexes 'J' and 'J-1';
12.
As presented to the Tribunal of Arbitration, the whole case revolved on the
question of whether or not defendant is liable to the plaintiff for the payment of
increased export taxes imposed by the Indian Government on the shipments of jute
sacks. Defendant contended that if the jute sacks in question were delivered by
plaintiff in the months of July, August, and September, 1949, pursuant to the terms of
the contract, then there would have been no increased export taxes to pay because said
increased taxes became effective only on October 1, 1949, while on the other hand,
plaintiff argued that the contract between the parties and all papers and documents
made parts thereto should prevail, including defendant's letter of September 29, 1949;
13.
The Bengal Chamber of Commerce, Tribunal of Arbitration, refused to sustain
defendant's contention and decided in favor of the plaintiff, ordering the defendant to
pay to the plaintiff the sum of 18,562 rupees and 8 annas. This award was thereafter
referred to the Calcutta High Court which issued a decree affirming the award;
14.
For about two years, the plaintiff attempted to enforce the said award through
the Philippine Charge de'Affaires in Calcutta, the Indian Legation here in the
Philippines, and the Department of Foreign Affairs. On September 22, 1952, plaintiff,
thru the Department of Foreign Affairs, sought to enforce its claim to which letter
defendant replied on August 11, 1952, saying that they are not bound by the decision

of the Bengal Chamber of Commerce and consequently are not obligated to pay the
claim in question. Copies of said letters are attached hereto as Annexes 'K' and 'L',
respectively;
15.
For more than three years thereafter, no communication was received by
defendant from the plaintiff regarding their claim until January 26, 1956, when Atty.
S. Emiliano Calma wrote the defendant a letter of demand, copy of which is attached
hereto as Annex 'M';
16.
On February 3, 1956, defendant's counsel replied informing Atty. S. Emiliano
Calma that it refuses to pay plaintiff's claim because the same has no foundation in
law and in fact. A copy of this letter is attached hereto as Annex 'N';
17.
Thereafter, no communication was received by defendant from plaintiff or its
lawyers regarding their claim until June, 1959, when the present complaint was filed.
FINALLY, parties thru their respective counsel, state that much as they have
endeavored to agree on all matters of fact, they have failed to do so on certain points.
It is, therefore respectfully prayed of this Honorable Court that parties be allowed to
present evidence on the disputed facts.
Thereafter the parties submitted additional evidence pursuant to the reservation they
made in the above stipulation.
The appeal was elevated to the Court of Appeals but the latter, by its resolution of
January 27, 1964, elevated it to this Court because the additional documents and oral
evidence presented by the parties did not raise any factual issue, and said court further
found that "the three assigned errors quoted above all pose questions of law."
As may be gathered from the pleadings and the facts stipulated, the action below was
for the enforcement of a foreign judgment: the decision rendered by the Tribunal of
Arbitration of the Bengal Chamber of Commerce in Calcutta, India, as affirmed by
the High Court of Judicature of Calcutta. The appealed decision provides for its
enforcement subject to the right reserved to appellee to present evidence on the
equivalent in Philippine currency of the amount adjudged in Indian currency. The
record does not disclose any evidence presented for that purpose subsequent to the
rendition of judgment.
To secure a reversal of the appealed decision appellant claims that the lower court
committed the following errors:
I
THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF-APPELLEE, A
FOREIGN CORPORATION NOT LICENSED TO TRANSACT BUSINESS IN THE
PHILIPPINES, HAS THE RIGHT TO SUE IN PHILIPPINE COURTS.
II

THE LOWER COURT ERRED WHEN IT FAILED TO CONSIDER PLAINTIFFAPPELLEE'S DEFAULT, AND INSTEAD RELIED SOLELY ON THE AWARD OF
THE BENGAL CHAMBER OF COMMERCE TRIBUNAL OF ARBITRATION.
III
THE LOWER COURT ERRED WHEN IT HELD THAT PLAINTIFF-APPELLEE
WAS NOT GUILTY OF LACHES.
The main issue to be resolved is whether or not the decision of the Tribunal of
Arbitration of the Bengal Chamber of Commerce, as affirmed by the High Court of
Judicature of Calcutta, is enforceable in the Philippines.
For the purpose of this decision We shall assume that appellee contrary to
appellant's contention has the right to sue in Philippine courts and that, as far as the
instant case is concerned, it is not guilty of laches. This notwithstanding, We are
constrained to reverse the appealed decision upon the ground that it is based upon a
clear mistake of law and its enforcement will give rise to a patent injustice.
It is true that under the provisions of Section 50 of Rule 39, Rules of Court, a
judgment for a sum of money rendered by a foreign court "is presumptive evidence of
a right as between the parties and their successors in interest by a subsequent title",
but when suit for its enforcement is brought in a Philippine court, said judgment "may
be repelled by evidence of a want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact" (Emphasis supplied.)
Upon the facts of record, We are constrained to hold that the decision sought to be
enforced was rendered upon a "clear mistake of law" and because of that it makes
appellant an innocent party suffer the consequences of the default or breach of
contract committed by appellee.
There is no question at all that appellee was guilty of a breach of contract when it
failed to deliver one-hundred fifty-four Hessian bales which, according to the contract
entered into with appellant, should have been delivered to the latter in the months of
July, August and September, all of the year 1949. It is equally clear beyond doubt that
had these one-hundred fifty-four bales been delivered in accordance with the contract
aforesaid, the increase in the export tax due upon them would not have been imposed
because said increased export tax became effective only on October 1, 1949.
To avoid its liability for the aforesaid increase in the export tax, appellee claims that
appellant should be held liable therefor on the strength of its letter of September 29,
1949 asking appellee to ship the shortage. This argument is unavailing because it is
not only illogical but contrary to known principles of fairness and justice. When
appellant demanded that appellee deliver the shortage of 154 bales it did nothing more
than to demand that to which it was entitled as a matter of right. The breach of
contract committed by appellee gave appellant, under the law and even under general
principles of fairness, the right to rescind the contract or to ask for its specific
performance, in either case with right to demand damages. Part of the damages
appellant was clearly entitled to recover from appellee growing out of the latter's
breach of the contract consists precisely of the amount of the increase decreed in the

export tax due on the shortage which, because of appellee's fault, had to be
delivered after the effectivity of the increased export tax.
To the extent, therefore, that the decisions of the Tribunal of Arbitration of the Bengal
Chamber of Commerce and of the High Court of Judicature of Calcutta fail to apply
to the facts of this case fundamental principles of contract, the same may be
impeached, as they have been sufficiently impeached by appellant, on the ground of
"clear mistake of law". We agree in this regard with the majority opinion in Ingenohl
vs. Walter E. Olsen & Co. (47 Phil. 189), although its view was reversed by the
Supreme Court of the United States (273 U.S. 541, 71 L. ed. 762) which at that time
had jurisdiction to review by certiorari decisions of this Court. We can not sanction a
clear mistake of law that would work an obvious injustice upon appellant.
WHEREFORE, the appealed judgment is reversed and set aside, with costs.
EMILIE ELMIRA RENEE BOUDARD, RAYMOND ANTONIN BOUDARD,
GINETTE ROSE ADELAIDE BOUDARD and MONIQUE VICTOIRE BOUDARD,
plaintiffs-appellants,
vs.
STEWART EDDIE TAIT, defendant-appellee.
Ramirez and Ortigas for appellants.
Gibbs, McDonough and Ozaeta for appellee.
DIAZ, J.:
Plaintiffs appeal from a judgment of the Court of First Instance of Manila dismissing
the case instituted by them, thereby overruling their complaint, and sentencing them
to pay the costs. They now contend in their brief that:
I. The lower court erred in not admitting Exhibits D, E, F and H to M-1 of plaintiffs.
II. The lower court erred in declaring that it was indispensable for the defendant to be
served with summons in Hanoi.
III. The lower court erred in declaring that service by publication, with personal notice
by the French Consul in Manila, was not sufficient.
IV. The lower court erred in declaring that the Court of Hanoi had no jurisdiction over
the person of the defendant.
V. The lower court erred in dismissing this case, instead of sentencing the defendant
to pay to the plaintiffs the amounts claimed in the complaint as adjudged by the Court
of Hanoi; and
VI. The lower court erred in denying the motion for new trial on the ground that the
decision is contrary to the law and the evidence.
Briefly stated, the pertinent facts of the case, that we glean from the records, are as
follows: The appellant Emilie Elmira Renee Boudard, in her capacity as widow of

Marie Theodore Jerome Boudard and as guardian of her coappellants, her children
born during her marriage with the deceased, obtained a judgment in their favor from
the civil division of the Court of First Instance of Hanoi, French Indo-China, on June
27, 1934, for the sum of 40,000 piastras, equivalent, according to the rate of exchange
at the time of the rendition of the judgment, to P56,905.77, Philippine currency, plus
interest the amount or rate of which is not given. The judgment was rendered against
Stewart Eddie Tait who had been declared in default for his failure to appear at the
trial before said court.
Appellants' action, by virtue of which they obtained the foregoing judgment, was
based on the fact that Marie Theodore Jerome Boudard, who was an employee of
Stewart Eddie Tait, was killed in Hanoi by other employees of said Tait, although
"outside of the fulfillment of a duty", according to the English translation of a
certified copy of the decision in French, presented by the appellants. The dismissal of
appellants' complaint by the lower court was based principally on the lack of
jurisdiction of the Court of Hanoi to render the judgment in question, for the
execution of which this action was instituted in this jurisdiction. The lack of
jurisdiction was discovered in the decision itself of the Court of Hanoi which states
that the appellee was not a resident of, nor had a known domicile in, that country.
The evidence adduced at the trial conclusively proves that neither the appellee 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. The
appellee's first intimation of his having been sued and sentenced to pay a huge sum by
the civil division of the Court of First Instance of Hanoi was when he was served with
summons in the present case.
Passing now to the consideration of the errors assigned by the appellants, we must say
that it was really unnecessary for the lower court to admit Exhibit D, E, F and H to M1, nor can these exhibits be admitted as evidence, for, as to the first point, the
appellants failed to show that the proceedings against the appellee in the Court of
Hanoi were in accordance with the laws of France then in force; and as to the second
point, it appears that said documents are not of the nature mentioned in sections 304
and 305 of Act No. 190. They are not copies of the judicial record of the proceedings
against the appellee in the Court of Hanoi, duly certified by the proper authorities
there, whose signatures should be authenticated by the Consul or some consular agent
of the United States in said country. The appellants argue that the papers are the
original documents and that the Honorable French Consul in the Philippines had
confirmed this fact. Such argument is not sufficient to authorize a deviation from a
rule established and sanctioned by law. To comply with the rule, the best evidence of
foreign judicial proceedings is a certified copy of the same with all the formalities
required in said sections 304 and 305 for only thus can one be absolutely sure of the
authenticity of the record. On the other hand said exhibits or documents, if admitted,
would only corroborate and strengthen the evidence of the appellee which in itself is
convincing, and the conclusion of the lower court that the appellee is not liable for the
amount to which he was sentenced, as alleged, for he was not duly tried or even
summoned in conformity with the law. It is said that the French law regarding
summons, according to its English translation presented by the appellants, is of the
following tenor:

"SEC. 69 (par. 8). Those who have no known residence in France, in the place of their
present residence: if the place is unknown, the writ shall be posted at the main door of
the hall of the court where the complaint has been filed; a second copy shall be given
to the Attorney-General of the Republic who shall visae the original." But then,
Exhibits E, E-1, F and F-1 show that the summons alleged to have been addressed to
the appellee, was delivered in Manila on September 18, 1933, to J. M. Shotwell, a
representative or agent of Churchill & Tait Inc., which is an entity entirely different
from the appellee.
Moreover, the evidence of record shows that the appellee was not in Hanoi during the
time mentioned in the complaint of the appellants, nor were his employees or
representatives. The rule in matters of this nature is that judicial proceedings in a
foreign country, regarding payment of money, are only effective against a party if
summons is duly served on him within such foreign country before the proceedings.
The 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. (Pennoyer vs. Neff, 95 U. S., 714; 24 Law. ed., 565;
Twining vs. New Jersy, 211 U. S., 78; 29 S. Ct., 14; 53 Law. ed., 97; Continental
National Bank of Boston vs. Thurber, 143 N. Y., 648; 37 N. E., 828.)
The process of a court of one state cannot run into another and summon a party there
domiciled to respond to proceedings against him. (Hess vs. Pawloski, 274 U. S., 352,
355; 47 S. Ct., 632, 633 [71 Law. ed., 109].) Notice sent outside the state to a
nonresident is unavailing to give jurisdiction in an action against him personally for
money recovery. (Pennoyer vs. Neff, 95 U. S., 741 [24 Law. ed., 565].) There must be
actual service within the State of notice upon him or upon some one authorized to
accept service for him. (Goldey vs. Morning News, 156 U. S., 518 [15 S. Ct., 559; 39
Law. ed., 517].) A personal judgment rendered against a nonresident, who has neither
been served with process nor appeared in the suit, is without validity. (McDonald vs.
Mabee, 243 U. S., 90 [37 S. Ct., 343; 61 Law, ed., 608; L. R. A. 1917F, 485].) The
mere transaction of business in a state by nonresident natural persons does not imply
consent to be bound by the process of its courts. (Flexner vs. Farson, 248 U. S., 289
[39 S. Ct., 97; 63 Law. ed., 250].)" (Cited in Skandinaviska Granit Aktiebolaget vs.
Weiss, 234 N. Y. S., 202, 206, 207.)
The process of a court has no extraterritorial effect, and no jurisdiction is acquired
over the person of the defendant by serving him beyond the boundaries of the state.
Nor has a judgment of a court of a foreign country against a resident of his country
having no property in such foreign country based on process served here, any effect
here against either the defendant personally or his property situated here. (5 R. C. L.,
912.)
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. (23 Cyc., 688.)
It can not be said that the decision rendered by the Court of Hanoi should be
conclusive to such an extent that it cannot be contested, for it merely constitutes, from

the viewpoint of our laws, prima facie evidence of the justness of appellants' claim,
and, as such, naturally admits proof to the contrary. This is precisely the provision of
section 311 of Act No. 190, as interpreted in the case of Ingenohl vs. Walter E. Olsen
& Co. (47 Phil., 189):0
The effect of a judgment of any other tribunal of a foreign country, having jurisdiction
to pronounce the judgment, is as follows:
1. In case of a judgment against a specific thing, the judgment is conclusive upon the
title to the thing;
2. In case of a judgment against a person, the judgment is presumptive evidence of a
right as between the parties and their successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact. (Sec. 311 of Act No. 190.)
In view of the foregoing considerations, our conclusion is that we find no merit in the
errors assigned to the lower court and the appealed judgment is in accordance with the
law.
Wherefore, the judgment is affirmed, with costs against the appellants. So ordered.
IMELDA MANALAYSAY PILAPIL, petitioner,
vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the Regional
Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the
City Fiscal of Manila; and ERICH EKKEHARD GEILING, respondents.

REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended in a foreign absolute
divorce, only to be followed by a criminal infidelity suit of the latter against the
former, provides Us the opportunity to lay down a decisional rule on what hitherto
appears to be an unresolved jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and
private respondent Erich Ekkehard Geiling, a German national, were married before
the Registrar of Births, Marriages and Deaths at Friedensweiler in the Federal
Republic of Germany. The marriage started auspiciously enough, and the couple lived
together for some time in Malate, Manila where their only child, Isabella Pilapil
Geiling, was born on April 20, 1980. 1
Thereafter, marital discord set in, with mutual recriminations between the spouses,
followed by a separation de facto between them.
After about three and a half years of marriage, such connubial disharmony eventuated
in private respondent initiating a divorce proceeding against petitioner in Germany

before the Schoneberg Local Court in January, 1983. He claimed that there was failure
of their marriage and that they had been living apart since April, 1982. 2
Petitioner, on the other hand, filed an action for legal separation, support and
separation of property before the Regional Trial Court of Manila, Branch XXXII, on
January 23, 1983 where the same is still pending as Civil Case No. 83-15866. 3
On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic of
Germany, promulgated a decree of divorce on the ground of failure of marriage of the
spouses. The custody of the child was granted to petitioner. The records show that
under German law said court was locally and internationally competent for the
divorce proceeding and that the dissolution of said marriage was legally founded on
and authorized by the applicable law of that foreign jurisdiction. 4
On June 27, 1986, or more than five months after the issuance of the divorce decree,
private respondent filed two complaints for adultery before the City Fiscal of Manila
alleging that, while still married to said respondent, petitioner "had an affair with a
certain William Chia as early as 1982 and with yet another man named Jesus Chua
sometime in 1983". Assistant Fiscal Jacinto A. de los Reyes, Jr., after the
corresponding investigation, recommended the dismissal of the cases on the ground of
insufficiency of evidence. 5 However, upon review, the respondent city fiscal
approved a resolution, dated January 8, 1986, directing the filing of two complaints
for adultery against the petitioner. 6 The complaints were accordingly filed and were
eventually raffled to two branches of the Regional Trial Court of Manila. The case
entitled "People of the Philippines vs. Imelda Pilapil and William Chia", docketed as
Criminal Case No. 87-52435, was assigned to Branch XXVI presided by the
respondent judge; while the other case, "People of the Philippines vs. Imelda Pilapil
and James Chua", docketed as Criminal Case No. 87-52434 went to the sala of Judge
Leonardo Cruz, Branch XXV, of the same court. 7
On March 14, 1987, petitioner filed a petition with the Secretary of Justice asking that
the aforesaid resolution of respondent fiscal be set aside and the cases against her be
dismissed. 8 A similar petition was filed by James Chua, her co-accused in Criminal
Case No. 87-52434. The Secretary of Justice, through the Chief State Prosecutor, gave
due course to both petitions and directed the respondent city fiscal to inform the
Department of Justice "if the accused have already been arraigned and if not yet
arraigned, to move to defer further proceedings" and to elevate the entire records of
both cases to his office for review. 9
Petitioner thereafter filed a motion in both criminal cases to defer her arraignment and
to suspend further proceedings thereon. 10 As a consequence, Judge Leonardo Cruz
suspended proceedings in Criminal Case No. 87-52434. On the other hand,
respondent judge merely reset the date of the arraignment in Criminal Case No. 8752435 to April 6, 1987. Before such scheduled date, petitioner moved for the
cancellation of the arraignment and for the suspension of proceedings in said Criminal
Case No. 87-52435 until after the resolution of the petition for review then pending
before the Secretary of Justice. 11 A motion to quash was also filed in the same case
on the ground of lack of jurisdiction, 12 which motion was denied by the respondent
judge in an order dated September 8, 1987. The same order also directed the
arraignment of both accused therein, that is, petitioner and William Chia. The latter

entered a plea of not guilty while the petitioner refused to be arraigned. Such refusal
of the petitioner being considered by respondent judge as direct contempt, she and her
counsel were fined and the former was ordered detained until she submitted herself
for arraignment. 13 Later, private respondent entered a plea of not guilty. 14
On October 27, 1987, petitioner filed this special civil action for certiorari and
prohibition, with a prayer for a temporary restraining order, seeking the annulment of
the order of the lower court denying her motion to quash. The petition is anchored on
the main ground that the court is without jurisdiction "to try and decide the charge of
adultery, which is a private offense that cannot be prosecuted de officio (sic), since the
purported complainant, a foreigner, does not qualify as an offended spouse having
obtained a final divorce decree under his national law prior to his filing the criminal
complaint." 15
On October 21, 1987, this Court issued a temporary restraining order enjoining the
respondents from implementing the aforesaid order of September 8, 1987 and from
further proceeding with Criminal Case No. 87-52435. Subsequently, on March 23,
1988 Secretary of Justice Sedfrey A. Ordoez acted on the aforesaid petitions for
review and, upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints against the
petitioner. 16
We find this petition meritorious. The writs prayed for shall accordingly issue.
Under Article 344 of the Revised Penal Code, 17 the crime of adultery, as well as four
other crimes against chastity, cannot be prosecuted except upon a sworn written
complaint filed by the offended spouse. It has long since been established, with
unwavering consistency, that compliance with this rule is a jurisdictional, and not
merely a formal, requirement. 18 While in point of strict law the jurisdiction of the
court over the offense is vested in it by the Judiciary Law, the requirement for a sworn
written complaint is just as jurisdictional a mandate since it is that complaint which
starts the prosecutory proceeding 19 and without which the court cannot exercise its
jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for adultery and concubinage
the person who can legally file the complaint should be the offended spouse, and
nobody else. Unlike the offenses of seduction, abduction, rape and acts of
lasciviousness, no provision is made for the prosecution of the crimes of adultery and
concubinage by the parents, grandparents or guardian of the offended party. The socalled exclusive and successive rule in the prosecution of the first four offenses above
mentioned do not apply to adultery and concubinage. It is significant that while the
State, as parens patriae, was added and vested by the 1985 Rules of Criminal
Procedure with the power to initiate the criminal action for a deceased or
incapacitated victim in the aforesaid offenses of seduction, abduction, rape and acts of
lasciviousness, in default of her parents, grandparents or guardian, such amendment
did not include the crimes of adultery and concubinage. In other words, only the
offended spouse, and no other, is authorized by law to initiate the action therefor.
Corollary to such exclusive grant of power to the offended spouse to institute the
action, it necessarily follows that such initiator must have the status, capacity or legal

representation to do so at the time of the filing of the criminal action. This is a


familiar and express rule in civil actions; in fact, lack of legal capacity to sue, as a
ground for a motion to dismiss in civil cases, is determined as of the filing of the
complaint or petition.
The absence of an equivalent explicit rule in the prosecution of criminal cases does
not mean that the same requirement and rationale would not apply. Understandably, it
may not have been found necessary since criminal actions are generally and
fundamentally commenced by the State, through the People of the Philippines, the
offended party being merely the complaining witness therein. However, in the socalled "private crimes" or those which cannot be prosecuted de oficio, and the present
prosecution for adultery is of such genre, the offended spouse assumes a more
predominant role since the right to commence the action, or to refrain therefrom, is a
matter exclusively within his power and option.
This policy was adopted out of consideration for the aggrieved party who might prefer
to suffer the outrage in silence rather than go through the scandal of a public trial. 20
Hence, as cogently argued by petitioner, Article 344 of the Revised Penal Code thus
presupposes that the marital relationship is still subsisting at the time of the institution
of the criminal action for, adultery. This is a logical consequence since the raison
d'etre of said provision of law would be absent where the supposed offended party had
ceased to be the spouse of the alleged offender at the time of the filing of the criminal
case. 21
In these cases, therefore, it is indispensable that the status and capacity of the
complainant to commence the action be definitely established and, as already
demonstrated, such status or capacity must indubitably exist as of the time he initiates
the action. It would be absurd if his capacity to bring the action would be determined
by his status before or subsequent to the commencement thereof, where such capacity
or status existed prior to but ceased before, or was acquired subsequent to but did not
exist at the time of, the institution of the case. We would thereby have the anomalous
spectacle of a party bringing suit at the very time when he is without the legal
capacity to do so.
To repeat, there does not appear to be any local precedential jurisprudence on the
specific issue as to when precisely the status of a complainant as an offended spouse
must exist where a criminal prosecution can be commenced only by one who in law
can be categorized as possessed of such status. Stated differently and with reference to
the present case, the inquiry ;would be whether it is necessary in the commencement
of a criminal action for adultery that the marital bonds between the complainant and
the accused be unsevered and existing at the time of the institution of the action by the
former against the latter.
American jurisprudence, on cases involving statutes in that jurisdiction which are in
pari materia with ours, yields the rule that after a divorce has been decreed, the
innocent spouse no longer has the right to institute proceedings against the offenders
where the statute provides that the innocent spouse shall have the exclusive right to
institute a prosecution for adultery. Where, however, proceedings have been properly
commenced, a divorce subsequently granted can have no legal effect on the
prosecution of the criminal proceedings to a conclusion. 22

In the cited Loftus case, the Supreme Court of Iowa held that
'No prosecution for adultery can be commenced except on the complaint of the
husband or wife.' Section 4932, Code. Though Loftus was husband of defendant when
the offense is said to have been committed, he had ceased to be such when the
prosecution was begun; and appellant insists that his status was not such as to entitle
him to make the complaint. We have repeatedly said that the offense is against the
unoffending spouse, as well as the state, in explaining the reason for this provision in
the statute; and we are of the opinion that the unoffending spouse must be such when
the prosecution is commenced. (Emphasis supplied.)
We see no reason why the same doctrinal rule should not apply in this case and in our
jurisdiction, considering our statutory law and jural policy on the matter. We are
convinced that in cases of such nature, the status of the complainant vis-a-vis the
accused must be determined as of the time the complaint was filed. Thus, the person
who initiates the adultery case must be an offended spouse, and by this is meant that
he is still married to the accused spouse, at the time of the filing of the complaint.
In the present case, the fact that private respondent obtained a valid divorce in his
country, the Federal Republic of Germany, is admitted. Said divorce and its legal
effects may be recognized in the Philippines insofar as private respondent is
concerned 23 in view of the nationality principle in our civil law on the matter of
status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a divorce was
granted by a United States court between Alice Van Dornja Filipina, and her American
husband, the latter filed a civil case in a trial court here alleging that her business
concern was conjugal property and praying that she be ordered to render an
accounting and that the plaintiff be granted the right to manage the business.
Rejecting his pretensions, this Court perspicuously demonstrated the error of such
stance, thus:
There can be no question as to the validity of that Nevada divorce in any of the States
of the United States. The decree is binding on private respondent as an American
citizen. For instance, private respondent cannot sue petitioner, as her husband, in any
State of the Union. ...
It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered by the policy against absolute divorces
the same being considered contrary to our concept of public policy and morality.
However, aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law. ...
Thus, pursuant to his national law, private respondent is no longer the husband of
petitioner. He would have no standing to sue in the case below as petitioner's husband
entitled to exercise control over conjugal assets. ... 25

Under the same considerations and rationale, private respondent, being no longer the
husband of petitioner, had no legal standing to commence the adultery case under the
imposture that he was the offended spouse at the time he filed suit.
The allegation of private respondent that he could not have brought this case before
the decree of divorce for lack of knowledge, even if true, is of no legal significance or
consequence in this case. When said respondent initiated the divorce proceeding, he
obviously knew that there would no longer be a family nor marriage vows to protect
once a dissolution of the marriage is decreed. Neither would there be a danger of
introducing spurious heirs into the family, which is said to be one of the reasons for
the particular formulation of our law on adultery, 26 since there would thenceforth be
no spousal relationship to speak of. The severance of the marital bond had the effect
of dissociating the former spouses from each other, hence the actuations of one would
not affect or cast obloquy on the other.
The aforecited case of United States vs. Mata cannot be successfully relied upon by
private respondent. In applying Article 433 of the old Penal Code, substantially the
same as Article 333 of the Revised Penal Code, which punished adultery "although
the marriage be afterwards declared void", the Court merely stated that "the
lawmakers intended to declare adulterous the infidelity of a married woman to her
marital vows, even though it should be made to appear that she is entitled to have her
marriage contract declared null and void, until and unless she actually secures a
formal judicial declaration to that effect". Definitely, it cannot be logically inferred
therefrom that the complaint can still be filed after the declaration of nullity because
such declaration that the marriage is void ab initio is equivalent to stating that it never
existed. There being no marriage from the beginning, any complaint for adultery filed
after said declaration of nullity would no longer have a leg to stand on. Moreover,
what was consequently contemplated and within the purview of the decision in said
case is the situation where the criminal action for adultery was filed before the
termination of the marriage by a judicial declaration of its nullity ab initio. The same
rule and requisite would necessarily apply where the termination of the marriage was
effected, as in this case, by a valid foreign divorce.
Private respondent's invocation of Donio-Teves, et al. vs. Vamenta, hereinbefore cited,
27 must suffer the same fate of inapplicability. A cursory reading of said case reveals
that the offended spouse therein had duly and seasonably filed a complaint for
adultery, although an issue was raised as to its sufficiency but which was resolved in
favor of the complainant. Said case did not involve a factual situation akin to the one
at bar or any issue determinative of the controversy herein.
WHEREFORE, the questioned order denying petitioner's motion to quash is SET
ASIDE and another one entered DISMISSING the complaint in Criminal Case No.
87-52435 for lack of jurisdiction. The temporary restraining order issued in this case
on October 21, 1987 is hereby made permanent.
SO ORDERED.
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. 83-17637 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, 1
the 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. Tait 4 wherein 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 personam against a nonresident 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 personam
of 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. 7 Being 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 lex fori or the internal law of the
forum. 8 In 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. 9 Sections 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
10 may 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 13 and Section 190 of the Insurance Code
14 clearly 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 15 does 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. Tait 18 where 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.
xxx

xxx

xxx

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. Nieto 19 and Dial Corp.
vs. Soriano, 20 as 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. Boudard involved the enforcement of
a judgment of the civil division of the Court of First Instance of Hanoi, French IndoChina. 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 nonresidents. The principle was put at rest by the United States Supreme Court when it
ruled in the 1940 case of Milliken vs. Meyer 22 that 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. 24 In a
strict technical sense, such domicile as a corporation may have is single in its essence
and a corporation can have only one domicile which is the state of its creation. 25
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 apropos thereto, it may be necessery to quote what we
stated in State Investment House, Inc, vs. Citibank, N.A., 26 to 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.
HANG LUNG BANK, LTD., petitioner,
vs.
HON. FELINTRIYE G. SAULOG, Presiding Judge, Regional Trial Court, National
Capital Judicial Region, Branch CXLII, Makati, Metro Manila, and CORDOVA
CHIN SAN, respondents.
Belo, Abiera & Associates for petitioner.
Castelo Law Office for private respondent.

FERNAN, C.J.:p
Challenged in this petition for certiorari which is anchored on grave abuse of
discretion, are two orders of the Regional Trial Court, Branch CXLII of Makati,
Metro Manila dismissing the complaint for collection of a sum of money and denying
the motion for reconsideration of the dismissal order on the ground that petitioner, a
Hongkong-based bank, is barred by the General Banking Act from maintaining a suit
in this jurisdiction.
The records show that on July 18, 1979, petitioner Hang Lung Bank, Ltd., which was
not doing business in the Philippines, entered into two (2) continuing guarantee
agreements with Cordova Chin San in Hongkong whereby the latter agreed to pay on
demand all sums of money which may be due the bank from Worlder Enterprises to

the extent of the total amount of two hundred fifty thousand Hongkong dollars (HK
$250,000). 1
Worlder Enterprises having defaulted in its payment, petitioner filed in the Supreme
Court of Hongkong a collection suit against Worlder Enterprises and Chin San.
Summonses were allegedly served upon Worlder Enterprises and Chin San at their
addresses in Hongkong but they failed to respond thereto. Consequently, the Supreme
Court of Hongkong issued the following:
JUDGMENT
THE 14th DAY OF JUNE, 1984
No notice of intention to defend having been given by the 1st and 2nd Defendants
herein, IT IS THIS DAY ADJUDGED that:
(1)
the 1st Defendant (Ko Ching Chong Trading otherwise known as the Worlder
Enterprises) do pay the Plaintiff the sum of HK$1,117,968.36 together with interest
on the respective principal sums of HK$196,591.38, HK$200,216.29,
HK$526,557.63, HK$49,350.00 and HK$3,965.50 at the rates of 1.7% per month (or
HK$111.40 per day), 18.5% per annum (or HK$101.48 per day), 1.85% per month (or
HK$324.71 per day), 1.55% per month (or HK$25.50 per day) and 1.7% per month
(or HK$2.25 per day) respectively from 4th May 1984 up to the date of payment; and
(2)

the 2nd Defendant (Cordova Chin San) do pay the Plaintiff the sum of
HK$279,325.00 together with interest on the principal sum of HK$250,000.00
at the rate
of 1.7% per month (or HK$141.67 per day) from 4th May 1984 up to
the date of payment.
AND IT IS ADJUDGED that the 1st and 2nd Defendants do pay the Plaintiff the
sum of HK$970.00 fixed costs.
N.J. BARNETT
Registrar
Thereafter, petitioner through counsel sent a demand letter to Chin San at his
Philippine address but again, no response was made thereto. Hence, on October 18,
1984, petitioner instituted in the court below an action seeking "the enforcement of its
just and valid claims against private respondent, who is a local resident, for a sum of
money based on a transaction which was perfected, executed and consummated
abroad." 2
In his answer to the complaint, Chin San raised as affirmative defenses: lack of cause
of action, incapacity to sue and improper venue. 3
Pre-trial of the case was set for June 17, 1985 but it was postponed to July 12, 1985.
However, a day before the latter pre-trial date, Chin San filed a motion to dismiss the
case and to set the same for hearing the next day. The motion to dismiss was based on
the grounds that petitioner had no legal capacity to sue and that venue was improperly
laid.

Acting on said motion to dismiss, on December 20, 1985, the lower court 4 issued the
following order:
On defendant Chin San Cordova's motion to dismiss, dated July 10, 1985; plaintiff's
opposition, dated July 12, 1985; defendant's reply, dated July 22, 1985; plaintiff's
supplemental opposition, dated September 13, 1985, and defendant's rejoinder filed
on September 23, 1985, said motion to dismiss is granted.
Section 14, General Banking Act provides:
"No foreign bank or banking corporation formed, organized or existing under any
laws other than those of the Republic of the Philippines, shall be permitted to transact
business in the Philippines, or maintain by itself any suit for the recovery of any debt,
claims or demands whatsoever until after it shall have obtained, upon order of the
Monetary Board, a license for that purpose."
Plaintiff Hang Lung Bank, Ltd. with business and postal address at the 3rd Floor,
United Centre, 95 Queensway, Hongkong, does not do business in the Philippines.
The continuing guarantee, Annexes "A" and "B" appeared to have been transacted in
Hongkong. Plaintiff's Annex "C" shows that it had already obtained judgment from
the Supreme Court of Hongkong against defendant involving the same claim on June
14, 1984.
The cases of Mentholatum Company, Inc. versus Mangaliman, 72 Phil. 524 and
Eastern Seaboard Navigation, Ltd. versus Juan Ysmael & Company, Inc., 102 Phil. 18, relied upon by plaintiff, deal with isolated transaction in the Philippines of foreign
corporation. Such transaction though isolated is the one that conferred jurisdiction to
Philippine courts, but in the instant case, the transaction occurred in Hongkong.
Case dismissed. The instant complaint not the proper action.
SO ORDERED. 5
Petitioner filed a motion for the reconsideration of said order but it was denied for
lack of merit. 6 Hence, the instant petition for certiorari seeking the reversal of said
orders "so as to allow petitioner to enforce through the court below its claims against
private respondent as recognized by the Supreme Court of Hongkong." 7
Petitioner asserts that the lower court gravely abused its discretion in: (a) holding that
the complaint was not the proper action for purposes of collecting the amount
guaranteed by Chin San "as recognized and adjudged by the Supreme Court of
Hongkong;" (b) interpreting Section 14 of the General Banking Act as precluding
petitioner from maintaining a suit before Philippine courts because it is a foreign
corporation not licensed to do business in the Philippines despite the fact that it does
not do business here; and (c) impliedly sustaining private respondent's allegation of
improper venue.
We need not detain ourselves on the issue of improper venue. Suffice it to state that
private respondent waived his right to invoke it when he forthwith filed his answer to

the complaint thereby necessarily implying submission to the jurisdiction of the court.
8
The resolution of this petition hinges on a determination of whether petitioner foreign
banking corporation has the capacity to file the action below.
Private respondent correctly contends that since petitioner is a bank, its capacity to
file an action in this jurisdiction is governed by the General Banking Act (Republic
Act No. 337), particularly Section 14 thereof which provides:
SEC. 14.
No foreign bank or banking corporation formed, organized or existing
under any laws other than those of the Republic of the Philippines shall be permitted
to transact business in the Philippines, or maintain by itself or assignee any suit for the
recovery of any debt, claims, or demand whatsoever, until after it shall have obtained,
upon order of the Monetary Board, a license for that purpose from the Securities and
Exchange Commissioner. Any officer, director or agent of any such corporation who
transacts business in the Philippines without the said license shall be punished by
imprisonment for not less than one year nor more than ten years and by a fine of not
less than one thousand pesos nor more than ten thousand pesos. (45 O.G. No. 4, 1647,
1649-1650)
In construing this provision, we adhere to the interpretation given by this Court to the
almost identical Section 69 of the old Corporation Law (Act No. 1459) which reads:
SEC. 69.
No foreign corporation or corporation formed, organized, or existing
under any laws other than those of the Philippines shall be permitted to transact
business in the Philippines or maintain by itself or assignee any suit for the recovery
of any debt, claim, or demand whatever, unless it shall have the license prescribed in
the section immediately preceding. Any officer, director or agent of the corporation or
any person transacting business for any foreign corporation not having the license
prescribed shall be punished by imprisonment for not less than six months nor more
than two years or by a fine of not less than two hundred pesos nor more than one
thousand pesos, or by both such imprisonment and fine, in the discretion of the Court.
In a long line of cases, this Court has interpreted this last quoted provision as not
altogether prohibiting a foreign corporation not licensed to do business in the
Philippines from suing or maintaining an action in Philippine courts. 9 What it seeks
to prevent is a foreign corporation doing business in the Philippines without a license
from gaining access to Philippine courts. As elucidated in Marshall-Wells Co. vs.
Elser & Co., 46 Phil. 70:
The object of the statute was to subject the foreign corporation doing business in the
Philippines to the jurisdiction of its courts. The object of the statute was not to prevent
it from performing single acts but to prevent it from acquiring a domicile for the
purpose of business without taking the steps necessary to render it amenable to suit in
the local courts. The implication of the law is that it was never the purpose of the
Legislature to exclude a foreign corporation which happens to obtain an isolated order
for business from the Philippines from securing redress from Philippine courts, and
thus, in effect, to permit persons to avoid their contract made with such foreign
corporation. The effect of the statute preventing foreign corporations from doing

business and from bringing actions in the local courts, except on compliance with
elaborate requirements, must not be unduly extended or improperly applied. It should
not be construed to extend beyond the plain meaning of its terms, considered in
connection with its object, and in connection with the spirit of the entire law.
The fairly recent case of Universal Shipping Lines vs. Intermediate Appellate Court,
10 although dealing with the amended version of Section 69 of the old Corporation
Law, Section 133 of the Corporation Code (Batas Pambansa Blg. 68), but which is
nonetheless apropos, states the rule succinctly: "it is not the lack of the prescribed
license (to do business in the Philippines) but doing business without license, which
bars a foreign corporation from access to our courts."
Thus, we have ruled that a foreign corporation not licensed to do business in the
Philippines may file a suit in this country due to the collision of two vessels at the
harbor of Manila 11 and for the loss of goods bound for Hongkong but erroneously
discharged in Manila. 12
Indeed, the phraseologies of Section 14 of the General Banking Act and its almost
identical counterpart Section 69 of the old Corporation Law are misleading in that
they seem to require a foreign corporation, including a foreign bank or banking
corporation, not licensed to do business and not doing business in the Philippines to
secure a license from the Securities and Exchange Commission before it can bring or
maintain an action in Philippine courts. To avert such misimpression, Section 133 of
the Corporation Code is now more plainly worded thus:
No foreign corporation transacting business in the Philippines without a license, or its
successors or assigns, shall be permitted to maintain or intervene in any action, suit or
proceeding in any court or administrative agency of the Philippines.
Under this provision, we have ruled that a foreign corporation may sue in this
jurisdiction for infringement of trademark and unfair competition although it is not
doing business in the Philippines 13 because the Philippines was a party to the
Convention of the Union of Paris for the Protection of IndustrialProperty. 14
We even went further to say that a foreign corporation not licensed to do business in
the Philippines may not be denied the right to file an action in our courts for an
isolated transaction in this country. 15
Since petitioner foreign banking corporation was not doing business in the
Philippines, it may not be denied the privilege of pursuing its claims against private
respondent for a contract which was entered into and consummated outside the
Philippines. Otherwise we will be hampering the growth and development of business
relations between Filipino citizens and foreign nationals. Worse, we will be allowing
the law to serve as a protective shield for unscrupulous Filipino citizens who have
business relationships abroad.
In its pleadings before the court, petitioner appears to be in a quandary as to whether
the suit below is one for enforcement or recognition of the Hongkong judgment. Its
complaint states:

COMES NOW Plaintiff, by undersigned counsel, and to this Honorable Court, most
respectfully alleges that:
1.
Plaintiff is a corporation duly organized and existing under and by virtue of
the laws of Hongkong with business and postal address at the 3rd Floor, United
Centre, 95 Queensway, Hongkong, not doing business in the Philippines, but is suing
for this isolated transaction, but for purposes of this complaint may be served with
summons and legal processes of this Honorable Court, at the 6th Floor, Cibeles
Building, 6780 Ayala Avenue, Makati, Metro Manila, while defendant Cordova Chin
San, may be served with summons and other legal processes of this Honorable Court
at the Municipality of Moncada, Province of Tarlac, Philippines;
2.
On July 18, 1979 and July 25, 1980, the defendant executed Continuing
Guarantees, in consideration of plaintiff's from time to time making advances, or
coming to liability or discounting bills or otherwise giving credit or granting banking
facilities from time to time to, or on account of the Wolder Enterprises (sic),
photocopies of the Contract of Continuing Guarantees are hereto attached as Annexes
"A" and "B", respectively, and made parts hereof;
3.
In June 1984, a complaint was filed by plaintiff against the Wolder Enterprises
(sic) and defendant Cordova Chin San, in The Supreme Court of Hongkong, under
Case No. 3176, and pursuant to which complaint, a judgment dated 14th day of July,
1984 was rendered by The Supreme Court of Hongkong ordering to (sic) defendant
Cordova Chin San to pay the plaintiff the sum of HK$279,325.00 together with
interest on the principal sum of HK$250,000.00 at the rate of HK$1.7% per month or
(HK$141.67) per day from 4th May, 1984 up to the date the said amount is paid in
full, and to pay the sum of HK$970.00 as fixed cost, a photocopy of the Judgment
rendered by The Supreme Court of Hongkong is hereto attached as Annex "C" and
made an integral part hereof.
4.
Plaintiff has made demands upon the defendant in this case to pay the
aforesaid amount the last of which is by letter dated July 16, 1984 sent by undersigned
counsel, a photocopy of the letter of demand is hereto attached as Annex "D" and the
Registry Return Card hereto attached as Annex "E", respectively, and made parts
hereof. However, this notwithstanding, defendant failed and refused and still continue
to fail and refuse to make any payment to plaintiff on the aforesaid amount of
HK$279,325.00 plus interest on the principal sum of HK$250,000.00 at the rate of
(HK$141.67) per day from May 4, 1984 up to the date of payment;
5.
In order to protect and safeguard the rights and interests of herein plaintiff, it
has engaged the services of undersigned counsel, to file the suit at bar, and for whose
services it has agreed to pay an amount equivalent to 25% of the total amount due and
owing, as of and by way of attorney's fees plus costs of suit.
WHEREFORE, premises considered, it is most respectfully prayed of this Honorable
Court that judgment be rendered ordering the defendant:
a) To pay plaintiff the sum of HK$279,325.00 together with interest on the principal
sum of HK$260,000.00 at the rate of HK$1.7% (sic) per month (or HK$141.67 per
day) from May 4, 1984 until the aforesaid amount is paid in full;

b) To pay an amount equivalent to 25% of the total amount due and demandable as of
and by way of attorney's fees; and
c) To pay costs of suit, and
Plaintiff prays for such other and further reliefs, to which it may by law and equity, be
entitled. 16
The complaint therefore appears to be one of the enforcement of the Hongkong
judgment because it prays for the grant of the affirmative relief given by said foreign
judgment. 17 Although petitioner asserts that it is merely seeking the recognition of its
claims based on the contract sued upon and not the enforcement of the Hongkong
judgment 18 it should be noted that in the prayer of the complaint, petitioner simply
copied the Hongkong judgment with respect to private respondent's liability.
However, a foreign judgment may not be enforced if it is not recognized in the
jurisdiction where affirmative relief is being sought. Hence, in the interest of justice,
the complaint should be considered as a petition for the recognition of the Hongkong
judgment under Section 50 (b), Rule 39 of the Rules of Court in order that the
defendant, private respondent herein, may present evidence of lack of jurisdiction,
notice, collusion, fraud or clear mistake of fact and law, if applicable.
WHEREFORE, the questioned orders of the lower court are hereby set aside. Civil
Case No. 8762 is reinstated and the lower court is directed to proceed with dispatch in
the disposition of said case. This decision is immediately executory. No costs.
SO ORDERED.
CONRADO HABAA and ROSARIO R. HABAA, petitioners,
vs.
HON. CIPRIANO VAMENTA, JR., Judge of the Court of First Instance of Negros
Oriental, JOSE T. IMBO and CONCEPCION TEVES, Co-Administrators of the
Estates of PEDRO TEVES and MARIA PASTOR, and MARIANO TEVES, Executor
of the Last Will and Testament of PEDRO TEVES, respondents.
Salvador H. Laurel and Gregorio R. Puruganan for petitioners.
Rodrigo R. Tugade for respondent Jose T. Imbo. Luz A. Teves for respondents
Mariano Teves, et al.

TEEHANKEE, J.:
Original action for the issuance of a writ of certiorari, prohibition and/or mandamus
for annulment of the questioned orders of respondent court taking cognizance of a
new action filed by respondent Jose T. Imbo and his co-plaintiffs that would question
again the validity of the sale made to petitioners on June 28, 1955 of two lots, as

previously adjudicated by this Court in a 1964 decision and denying the issuance of a
writ of execution for the enforcement of said decision.
This case is a sequel of Habaa vs. Imbo, 1 decided by the Court on March 31, 1964,
against respondents and plaintiffs in the new case below, and upholding the sale made
on June 28, 1955 in favor of therein petitioners, the spouses Conrado Habaa, and
Rosario Habaa, (likewise petitioners at bar) by Concepcion Teves, (a daughter and
principal heir of the estates of the deceased spouses Maria Pastor de Teves and Pedro
Teves) of two large coconut plantations identified as Lots Nos. 6272 and 1932 of the
cadastral survey of Dumaguete, Negros Oriental, to whom the said lots had been
distributed in the partition by will executed by the deceased testator Pedro Teves.
The principal parties involved, aside from petitioners, are identified in the opening
portion of the Court's decision penned by Justice Paredes: "(P)edro Teves and Maria
Pastor were husband and wife, residing in Dumaguete City, Negros Oriental. Maria
Pastor died on February 22, 1937, and was survived by her husband and three
children, named Concepcion Teves, of age; Jose Teves (now deceased), who left no
legitimate heirs (except his father and a natural child); and Asuncion Teves, also
deceased, who was survived by her husband Luciano Imbo and her children named
Jesusa, 24; Jose, 23; Maria, 22; Remedios, 21; Corazon, 17; Mariano, 14; and
Luciano, Jr., 13.
"On December 12, 1949, Pedro Teves applied for letters of Administration in the CFI
of Negros Oriental, Sp. Proc. No. 675, and was appointed administrator of the estate
of his deceased wife Maria Pastor on May 9, 1951. On June 2, 1951, Concepcion
Teves was appointed as co-administratrix of the estate.
"On December 15, 1954, Pedro Teves died, leaving a will and testament, which was
presented to the same Court for probate on January 8, 1955, in Sp. Proc. No. 1010 of
said Court. The court on February 25, 1955, allowed the said will and admitted the
same to probate. On January 26, 1955, Dr. Jose T. Imbo was appointed as coadministrator of the estate in Sp. Proceeding No. 675, in place of the deceased Pedro
Teves and Dr. Imbo, qualified as such administrator on January 28, 1955. Mariano
Teves, named executor of the will of Pedro Teves was, on February 24, 1955,
appointed by the Court as such, with a will annexed in Sp. Proc. No. 1010. The
properties of Maria Pastor inventoried under Sp. Proc. No. 675, and the properties of
Pedro Teves inventoried under Sp. Proc. No. 1010, are the same conjugal properties of
the deceased spouses."
As narrated in the said decision, the testator Pedro Teves partitioned and divided in his
will most of the real properties of the estates among the heirs, adjudicating the two
lots in question to Concepcion Teves as her share. "With respect to this adjudication,"
the Court's decision expressly found that "Dr. (Jose T.) Imbo and all the heirs, on
October 20, 1956, made a Joint Manifestation in court of the following tenor:
'5.
That in view of the fact that the only properties of the intestate Maria Pastor de
Teves now remaining and of the testate Pedro Teves are their conjugal and undivided
properties and in view of the further fact that the legal heirs of the said intestate are in
conformity with the disposition of the will of the said testate, which also covers all
said conjugal properties, thereby including the intestate properties, it would be to the

convenience of all parties if the aforesaid two proceedings ... be considered either
jointly or simultaneously.' 2
Concepcion Teves had on June 28, 1965 previously sold for P10,000.00 the said two
lots, in her capacity as heir and devisee thereof, in favor of petitioners. When she filed
on August 10, 1956 a motion in the joint estate proceedings to sell a part of the estate
for the purpose of finally liquidating and settling the two estates, the executor and
other heirs filed an opposition alleging that "a disposal of any of the properties
...would be prejudicial to the interest of the heir to whom said property have (sic) been
assigned" and that "(Concepcion) has lost all her rights and interest in the estate of the
deceased due to the fact that she has already sold all her shares and participation
(therein)." The probate court nevertheless ordered on October 4, 1956 the sale of
some properties, preferably those mentioned in paragraph XVIII of the testator's will,
referring to "some parcels of land which are not mentioned in this will, but it is my
wish that these lands be divided in equal shares by nine (9) children these of my
children by the first and second wife."
Thereafter, as recounted in our said decision, from November 8, 1956 and thereafter,
respondents Jose T. Imbo and Concepcion Teves, administrator and co-administratrix
of the intestate estate of the deceased Maria Pastor de Teves, and respondent Mariano
Teves, executor of the testate estate of the deceased Pedro Teves, embarked on a series
of maneuvers to disregard and nullify Concepcion's sale of the two lots to petitioners.
First came an aborted sale on December 21, 1956 of the same two lots to the
administrator Jose T. Imbo, with prior authority and immediate approval of the
probate court, which was opposed at the time by Concepcion "on the ground that such
sale was made in bad faith, because the purchaser knew that said lots were
adjudicated by will to Concepcion Teves as her share, with the conformity of all the
heirs, and the same were already sold to Dr. and Mrs. Habaa, for valid and sufficient
consideration." After the probate court had overruled the opposition of Concepcion
and petitioners, the sale to respondent-administrator Jose T. Imbo was "rescinded" by
the probate court on November 7, 1957 upon the latter's own motion, thus
discontinuing the appeal that had been timely appealed by petitioners. But on March
19, 1958, barely four months after said "rescission", the executor filed another motion
asking for the sale again of the same two lots for the same price of P10,000.00, to be
joined later on October 21, 1958, by respondent Concepcion Teves, the very same heir
and devisee who had already sold the same to petitioners. As the probate court on
January 7, 1959 overruled anew the petitioners' opposition and granted anew the
motion to sell the same lots again, notwithstanding their having been already sold to
petitioners, the matter was elevated to this Court upon petitioners' appeal.
In this Court's decision of March 31, 1964, we upheld the validity of the sale by
Concepcion Teves of the two lots in favor of petitioners:
The distribution made in the Will of Pedro Teves, ... is in accordance with article 1080
of the Civil Code, which provides that "Should a person make a partition of his estate
by an act inter vivos, or by will, such partition shall be respected, insofar as it does not
prejudice the legitime of the compulsory heirs." There was no showing that said
distribution ever prejudiced the legitime of the compulsory heirs herein, and as a
matter of fact all the heirs gave their express conformity to the said distribution (see
joint manifestation, supra). There was not even a vague suggestion of unfairness with

respect to the disposition of the legitimes. Concepcion Teves by operation of law,


became the absolute owner of said lots because 'A partition legally made confers upon
each heir the exclusive ownership of the property adjudicated to him' (Article 1091,
New Civil Code), from the death of her ancestors, subject to rights and obligations of
the latter, and, she can not be deprived of her rights thereto except by the methods
provided for by law ... Concepcion Teves could, as she did, sell the lots in question as
part of her share of the estate of the deceased, even before the approval of the
proposed partition of the properties, especially when, as in the present case, the sale
has been expressly recognized by herself and her co-heirs; ... The executor of the will
and all other heirs of the late Pedro Teves should be precluded from questioning the
validity of the sale of the lots in question in favor of the appellants, Dr. and Mrs.
Habaa; rather they should comply with the lawful provisions of the Will of the
testator, for it has been well provided that 'should a person make a partition of his
estate by an inter vivos or by will (as in this case), such partition shall be respected, in
so far as it does not prejudice the legitime of the compulsory heirs' (Art. 1080, Civ.
Code). 3
and rendered judgment as follows:
WHEREFORE, judgment is rendered reversing the Order of the Court, dated January
7, 1959, authorizing the executor to enter into a contract to sell anew lots 1932 and
6272, and remanding the case to the Court of origin for further proceedings, with
instructions to sell other undisposed or unencumbered properties of the estate, or the
undisposed or unencumbered properties of any of the heirs, should there be any
obligation of the estate still unpaid, in conformity with law as in such cases provided,
reserving the right, if any, upon any authorized party to question the validity of the
sale made by Concepcion Teves to appellants herein, in the proper Court. Cost against
the appellees. 4
After the said decision became final and executory on May 4, 1964, petitioner' in
implementation thereof, filed with respondent court in the estate proceedings their
motion for execution of August 19, 1964 for respondent court to direct respondents to
deliver possession of the two lots involved (the use and enjoyment of which had been
denied them all these years) and to issue other appropriate orders necessary for the
transfer of the title thereof in their favor. Opposition thereto was filed on September
10, 1964 by respondent Jose T. Imbo and his six brothers and sisters (all
grandchildren of the deceased Teves spouses, by their pre-deceased daughter,
Asuncion Teves, supra), invoking the reservation clause in this Court's decision of
"any authorized party to question the validity of the sale made by Concepcion Teves
to appellants herein (petitioners), in the proper court," and questioning anew the
validity of said sale on the ground that the testator Pedro Teves could not dispose by
will of the said two lots entirely in favor of Concepcion as the same pertained to his
conjugal partnership and estate with the deceased Maria Pastor de Teves and that they
had the right to be subrogated to the rights of petitioners as strangers-purchasers under
Article 1088 of the Civil Code. No action on petitioners' motion was taken by the
probate court.
Meanwhile, the same respondent Jose T. Imbo and his six brothers and sisters, joined
by Ariston Teves and others, alleging themselves to be "legitimated children of the
said Pedro Teves and of his widow, plaintiff Maria Dizon de Teves" as well as by said

Maria Dizon de Teves, filed under date of April 20, 1965 an entirely new and separate
complaint against petitioners and Concepcion Teves as defendants, likewise
questioning anew the validity of the sale of the same properties by Concepcion Teves
to petitioners, invoking the same reservation clause in this Court's decision, alleging
that Concepcion had surreptitiously and without notice to them executed the sale of
June 28, 1955 in favor of petitioners, and praying the court to declare the sale null and
void and to grant them the preferential right to purchase the properties for the same
consideration of P10,000.00. This action was taken cognizance of by the same
respondent court. 5 Petitioners' motion to dismiss the complaint for being barred by
res judicata and the conclusiveness of this Court's judgment of March 31, 1964 and
for lack of cause of action was denied by respondent court on June 8, 1965 as
concerning "matters which could only be properly threshed out and resolved after the
case shall have been tried on the merits." 6 Petitioners thereupon filed their answer
with counterclaim and cross-claim against Concepcion Teves for actual and
exemplary damages and attorney's fees. As more than a year and a half had already
intervened without their motion for execution in the estate proceedings having been
resolved by respondent court, petitioners moved anew on April 13, 1966 for the
granting thereof, but respondent court, two months later, issued its order of June 28,
1966, denying execution, "considering that the court is still conducting further
proceedings ... as directed by the Supreme Court per its decision in the appealed
case ... and in view of the pendency of Civil Case No. 4390 before this court
involving the two lots in question" and that it had no legal justification to order
execution "until after said proceedings shall have been duly terminated." 7 Petitioners'
reasoned motion for reconsideration was peremptorily denied by respondent court in
its order of August 1, 1966. 8 Hence, the present, plea of petitioners, which we find to
be meritorious.<re||an1w>
1.
Respondent court acted with grave abuse of discretion and in excess of its
jurisdiction in taking cognizance of the new and separate complaint filed by
respondent Jose T. Imbo and the six other grandchildren of the decedent spouses and
their other co-plaintiffs seeking anew to nullify the sale of the two lots in question by
Concepcion Teves to petitioners notwithstanding that a re-litigation of the same
question is already barred by this Court's judgment of March 31, 1964. There could be
no such further proceedings. This Court, in upholding the validity of the sale of the
said lots to petitioners, remanded the case to respondent court, with express
instructions "to sell other undisposed or unencumbered properties of any of the heirs,
should there be any obligation of the estate still unpaid."
We then found that the only unpaid obligation of the estate, per information of the
executor himself was an insignificant amount of P3,186.40, and that Concepcion
Teves, "according to unrebutted disclosure in the records had paid her share." In the
remote event that the remaining considerable properties of the estate were not
sufficient to discharge its obligations, (and we noted that this was not the case), we
further indicated that a notation of a lien in favor of the estate on the certificates of
title of the two lots to guarantee that its obligations would be met, to which notation
petitioners had expressed their conformity, would be a feasible procedure to "expedite
the delivery of said lots to (petitioners)."
This Court then unequivocably ruled that "(T)he executor of the will and all other
heirs of the late Pedro Teves should be precluded from questioning the validity of the

sale of the lots in question in favor of (petitioners); rather, they should comply with
the lawful provisions of the will of the testator ..." The questions raised by respondent
Imbo and his co-plaintiffs in their new action, as to the alleged surreptitious sale by
Concepcion Teves of the properties and their alleged legal right to be subrogated to
the rights of petitioners as vendees are matters that are no longer triable, since they are
foreclosed by this Court's prior judgment in the 1964 case. The complaint in said Case
No. 4390 therefore clearly stated no cause of action, besides being barred by res
judicata, and since respondent court patently has no jurisdiction to even attempt to
take cognizance of the action to nullify or modify a final judgment of this Court,
certiorari and prohibition lie to annul and set aside the proceedings and to direct
respondent court to desist from further proceedings in the matter, as reiterated recently
by the Court in Sterling Investment Corporation vs. Ruiz. 9
2.
Respondent court also neglected the performance of its ministerial function of
issuing the writ of execution prayed for by petitioners in the estate proceedings to
which they were entitled as a matter of right, by virtue of this Court's final judgment.
Its stated grounds in its long delayed order for denying the writ of execution, viz, that
it "is still conducting proceedings ... as directed by the Supreme Court per its decision
in the appealed case" and that the new civil case (No. 4390) involving the two lots in
question pending before it should first be duly terminated, are legally untenable for
the reasons already stated. Clearly, respondent court failed to take due note that the
"further proceedings in the estate proceedings, as remanded by this Court, were
delimited by the express instructions given in the judgment to sell other undiposed or
unencumbered properties of any of the heirs to meet the unpaid obligations, if any, of
the estate and that it could not deal any longer with the two lots validly sold to
petitioners or entertain any further claim thereto of the executor or any of the heirs
questioning the validity of said sale, except to annotate, if necessary, a lien in favor of
the estate on the titles thereof, to guarantee the discharge of any obligations of the
estate in the event of insufficiency of the remaining properties, as above stated.
3.
The reservation clause in the dispositive part of the judgment "reserving the
right, if any, upon any authorized party, to question the validity of the sale made by
Concepcion Teves to (petitioners), in the proper Court" could in no sense be invoked
by respondents for justifying respondent court's denial of the writ of execution or the
institution anew by plaintiffs-heirs of their new and separate civil action questioning
the same sale. For by express terms of the judgment, the executor and all other heirs
of the estate were precluded from questioning the validity of the sale in question. This
should readily have been perceived by respondents for the Court in its said judgment
never referred to the executor or administrator or their other co-heirs as parties to the
case, much less as an "authorized party" but always referred to them therein either in
their official capacity as executor or administrator or by name or collectively as heirs,
and expressly precluded them collectively as heirs from questioning the validity of the
sale. The reservation clause was obviously intended as a saving clause to protect third
parties (non-heirs) who may have had any title or rights to the two lots prior or
superior to those of the decedent spouses whose estates were being settled or of
Concepcion Teves, (to whom the said lots had been adjudicated in the will of the
testator Pedro Teves) whose sale thereof in favor of petitioners was declared valid as
against the adverse claims of all other heirs. (This was merely a cautionary reservation
as to third parties, since it was not clear in the record, although the two lots' numbers

apparently correspond to the cadastral survey of Dumaguete, that the lots were duly
registered in the name of either or both of the decedent spouses).<re||an1w>
4.
Then new action filed by respondent Imbo and his co-plaintiffs is clearly
barred by res judicata by virtue of this Court's final verdict in the 1964 case. The
"new" questions raised by said respondents-plaintiffs now, per their answer to the
petition and their memorandum, pertain to the allegation that one of them, Luciano T.
Imbo, was at the time of the "surreptitious sale" of the lots by Concepcion Teves to
petitioners, "was still a minor of less than eighteen (18) years of age, he having been
born on December 1, 1938," as a basis for their alleged right of subrogation to
petitioners' rights; and to the contention, that assuming that they are barred as heirs
from questioning the sale, "would they not be considered as the creditors, since out of
the sale in favor of Jose T. Imbo, most of the obligations of the estate were paid" 10 as
to be considered third parties authorized to question the sale under this Court's
reservation clause.
These bare allegations have no factual basis, because they are contrary to the factual
findings in this Court's judgment and as to Luciano Imbo's alleged minority, assuming
that he was born on December 1, 1938 as alleged, then he was already of age at the
time that respondent court ordered in 1959 for a second time the sale anew of the lots
and during the pendency of petitioners' appeal therefrom to this Court so it cannot
be truthfully alleged that he had no knowledge or notice of the "surreptitious sale" of
the properties to petitioners. Aside from these allegations being belatedly raised now
only in this case, for they were not pleaded at all in the complaint below in Case No.
4390, even if they were taken as true, they would have no legal merit or significance,
for as repeatedly stated, since the lots in question were partitioned by will to
Concepcion Teves, she became the absolute owner thereof by operation of law from
the death of her parents, free to sell the same to petitioners, more so, when the sale
was expressly recognized by herself and her co-heirs, as held by this Court in the
1964 judgment; and therefore, there could be no legal right of subrogation to
petitioners' rights as vendees under Article 1088 of the Civil Code, as invoked by
them.
All these allegations and contentions of respondents and the co-plaintiffs are now
barred by res judicata which has set the controversy at rest. A party cannot be
permitted to urge one ground at a time and indulge in "piece-meal and endless
litigation", and "by varying the form of action or adopting a different method of
presenting his case, escape the operation of the principle that one and the same cause
of action shall not be twice litigated between the same parties and their privies." 11 As
reaffirmed by the Court in the recent case of Zambales Academy, Inc. vs. Villanueva,
12 respondents "should finally realize that public policy and sound practice enshrine
the fundamental principle of res judicata that parties ought not to be permitted to
litigate the same issue more than once, as the very object for which courts were
constituted was to put an end to controversies. Thus, the provisions of Rule 39,
section 49 (b) that the effect of a judgment or final order rendered by a court or judge
of the Philippines, having jurisdiction to pronounce the judgment or order, is 'with
respect to the matter directly adjudged or as to any other matter that could have been
raised in relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the same capacity.'" The

corollary principle of res judicata that courts of the present day are not concerned so
much with the form of actions as with their 'substance' and that 'despite a difference in
the form of the action nevertheless the doctrine of res judicata would be applied
"where it appeared that the parties in the two suit were in truth 'litigating for the same
thing,' has just as long been enunciated by this Court." 13
5.
We noted that petitioners committed a procedural error in not having formally
impleaded in this action as respondents plaintiffs in Civil Case 4390 below, namely,
the six brothers and sisters of respondent Jose T. Imbo and the widow of the testator's
second marriage and their six alleged "legitimated children." 14 This might have been
a serious error resulting in further delay in the disposition of this case, since said
plaintiffs as indispensable parties would have needed to be formally impleaded herein
and the corresponding summons issued to them. 15 At any rate, the defect has been
cured by the voluntary appearance herein of said plaintiffs through their counsel, Atty.
Luz A. Teves, plaintiffs' counsel of record in the case below and who filed the answer
and memorandum in lieu of oral argument as "counsel for respondent Mariano Teves
16 and counsel for plaintiffs in Civil Case No. 4390." The answer to the petition thus
filed by Atty. Teves is further verified by Mariano T. Imbo, one of the plaintiffs.
Furthermore, by the very nature of the issues, even if said plaintiffs had not thus
appeared in this case, the Court's pronouncement as to their action below being barred
by res judicata, since copies of the pleadings therein were annexed to the petition,
would not be affected.
6.
Finally, the Court has noted the unduly long number of years that the estate
proceedings have been pending since December 12, 1949 in the case of the decedent
Maria Pastor de Teves (Sp. Proc. No. 675) and since January 8, 1955 in the case of the
decedent Pedro Teves (Sp. Proc. No. 1010), notwithstanding that it is of record in the
1964 case that on October 20, 1956, all the heirs made a joint manifestation for the
two proceedings to be considered either jointly or simultaneously, as the properties
left by the two decedents consisted of their conjugal properties. It is likewise of record
in the said case that the indebtedness left by the joint estate was insignificant and that
most of the real properties of the estate were partitioned by the will of the deceased
testator among the heirs including the children of the second wife, and that all the
heirs expressed their conformity with the disposition of the said will, with no legitime
of any compulsory heir having been prejudiced. Yet, as late as respondents'
memorandum of August 29, 1967, it is therein manifested that "up to now, there has
been no declaration of heirs and distribution of the estate" in the said proceeding
pending before the probate court. Respondent court and respondents executor and
administrators are enjoined to exert their best efforts towards expeditiously effecting
such final distribution and closing of the joint estate proceedings.
ACCORDINGLY, the writs prayed for are hereby granted. The writ of certiorari is
granted and the questioned orders of respondent court (Annexes "E"; "H" and "J") of
the petition are annulled and set aside;
The writ of prohibition is granted, hereby perpetually enjoining respondent court from
further taking cognizance of the complaint in Civil Case No. 4390 of said court and
from further taking any proceedings in connection therewith, other than to dismiss the
complaint, except that it may proceed to try and decide on the merits the counterclaim

and cross-claim for actual and exemplary damages and attorneys' fees and costs filed
by petitioners in their answer as defendants therein; and
The writ of mandamus is likewise granted and respondent court is directed to
forthwith issue the writ of execution and corresponding orders in implementation of
this Court's judgment of March 31, 1964 in Habaa vs. Imbo, G.R. Nos. L-15598 and
L-15726, as prayed for in the petitioners' motion dated August 19, 1964 filed in the
estate proceedings (Annex "A" of the petition).
With reference to the Court's observations in paragraph 6 of this decision, respondent
court is directed to advise the Court through the Secretary of Justice of the action
taken by it to effect the final distribution of the estate and the closing of the settlement
proceedings.
With costs jointly and severally against private respondents.
Let a copy of this decision be furnished the Secretary of Justice for his information
and notation.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando and
Barredo, JJ., concur.
Villamor, J., is on leave.

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