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I. SHORT TITLE: Far East Intl Import and Export Corp. vs. Nankai Kogyo Co., Ltd.

II. FULL TITLE: FAR EAST INTERNATIONAL IMPORT and EXPORT


CORPORATION, plaintiff-appellee, vs. NANKAI KOGYO CO., LTD.,
ET AL., defendants, NANKAI KOGYO CO., LTD., defendant-appellant.
No. L-13525. November 30, 1962. 6 SCRA 725.
PAREDES, J.

III. TOPIC: Corporation Law; Sec. 123, Corporation Code; What constitutes doing
business in the Philippines.

IV. STATEMENT OF THE FACTS:


Far East International Import and Export Corporation (Far East), a domestic corporation,
and Nankai Kogyo Co. Ltd. (Nankai), a foreign corporation, entered into a contract of sale of
steel scrap. It was stipulated that Far East, the seller in this case, will not be liable for any delay
in the delivery of the steel scrap due to government intervention. A letter of credit was opened by
Nankai with the China Banking Corporation.

Far East had an export permit which was to expire on March 18, 1957. Upon the
expiration of the said permit, the loading of the steel scrap for shipment was stopped. An
agreement was entered into whereby Far East would ask for the extension of its permit.
However, after then President Magsaysay died, Garcia took over as President who, or its agents,
denied the extension asked for. As a result, only a portion of the steel scrap was delivered to
Nankai. Nankai acknowledged receipt of the portion delivered, but demanded damages from Far
East.

Far East wrote the Everett Steamship Corporation (Everett), requesting the issuance of a
complete set of the Bill of Lading for the shipment, in order that payment thereof be effected
against the Letter of Credit. Everett informed Far East that they were not in a position to comply
because the Bill of Lading was issued and signed in Tokyo by the Master of the boat, upon
request of the Charterer, defendant herein.

As repeated requests, both against the shipping agent and the buyers (Nankai), for the
issuance of the Bill of Lading were ignored, Far East instituted a complaint for Specific
Performance, damages, a writ of preliminary mandatory injunction directed against Nankai and
the shipping company, to issue and deliver to Far East, a complete set of negotiable Bill of
Lading for the scrap delivered and a writ of preliminary injunction against the China Banking
Corporation and Nankai to maintain the Letter of Credit.

V. STATEMENT OF THE CASE:


Nankai, by special appearance, filed a motion to dismiss and dissolve writ of preliminary
mandatory injunction on the ground of lack of jurisdiction over the person of Nankai and over
the subject matter and failure to state a cause of action. But before the trial court had the
opportunity to rule on these motions, Far East filed a motion to file amended complaint alleging
in said amended complaint, among other things, that Nankai is doing business in the Philippines
having an address at R-517 Luneta Hotel, Manila.
The trial court denied the motions of Nankai and Far East, but upon motion for
reconsideration by the latter, the trial court admitted the amended complaint.

The trial court ruled in favor of Far East and absolved the co-defendants of Nankai.

Upon appeal to the Supreme Court (SC), Nankai contends that Philippine Courts have no
jurisdiction to take cognizance of the case because Nankai is not doing business in the islands;
and that while it has entered into the transaction in question, same, however, does not constitute
doing business, so as to make it amenable to summons and subject it to the Courts
jurisdiction.

VI. ISSUE/S:
Whether or not the trial court acquired jurisdiction over Nankai, a foreign corporation.

VII. RULING:
Yes. Three modes of effecting service of summons upon private foreign corporations are
provided in section 14, Rule 7 of the Rules of Court, to wit: (1) by serving upon the agent
designated in accordance with law to accept service of summons; (2) if there is no resident
agent, by service on the government official designated by law to that effect; and (3) by
serving on any officer or agent of said corporation within the Philippines.

Far East complied with the third mode stated above, for it has been shown that Mr.
Ishida, who personally signed the contract for the purchase of the scrap in question in behalf of
Nankai, is the Trade Manager of said Company, Mr. Tominaga was the Chief of the Petroleum
Section of the same company and Mr. Yoshida was the man-in-charge of the Import Section of
the companys Tokyo Branch. All these three, including the first two who were served with
Summons, were officers of Nankai.

In the instant case, the testimony of Atty. Pablo Ocampo, that Nankai was doing business
in the Philippines was corroborated by no less than Nabuo Yoshida, one of Nankais officers, that
he was sent to the Philippines by his company to look into the operation of mines, thereby
revealing Nankais desire to continue engaging in business here, after receiving the shipment of
the scrap iron under consideration, making the Philippines a base thereof.

Where a single act or transaction of a foreign corporation is not merely incidental or


casual, but is of such character as distinctly to indicate a purpose on the part, of the
corporation to do other business in the state, and to make the state a basis of operation for
the conduct of a part of the corporations ordinary business, such act or transaction
constitutes doing of business within the meaning of statutes prescribing the conditions
under which a foreign corporation may be served with summons.

Even though the defendant objects to the jurisdiction of the court, if at the same
time he alleges any non-jurisdictional ground for dismissing the action, the Court acquires
jurisdiction over him. Even though he does not intend to confer jurisdiction upon the court,
his appearance for some other purpose than to object to the jurisdiction subjects him to the
jurisdiction of the court. Even though he does not wish to submit to the jurisdiction of the
court, he cannot ask the court to act upon any question except the question of jurisdiction,
without conferring jurisdiction upon the court. In the case at bar, not only did Nankai allege
non-jurisdictional grounds in its pleadings to have the complaint dismissed, but it also went into
trial on the merits and presented evidence destined to resist Far Easts claim. Verily, there could
not be a better situation of acquired jurisdiction based on consent.

VIII. DISPOSITIVE PORTION:


WHEREFORE, the judgment appealed from is hereby affirmed, with costs against
defendant-appellant Nankai Kogyo.