21. VILLAREAL v.

COURT OF APPEALS

FACTS: Petitioner Patricia Villareal filed a complaint for damages against private respondents Eliseo and
Erna
Sevilla and certain John Does for the killing of Jose Villareal, Patricia’s husband.

Soon after the killing and before the filing of the complaint, the Sevillas disposed of their properties in
the Philippines, pulled out their children from school, and escaped to the United States.

The trial court ordered the Sevillas’ properties in the Philippines attached. Petitioners filed a Motion for
Leave for Extraterritorial Service alleging that private respondents were non-residents.

The judge granted the motion and authorized the service of summons by registered mail at private
respondents’ address in California, U.S.A.

ISSUE: Did the trial court acquire jurisdiction over private respondents notwithstanding that they are
non-resident defendants and petitioner’s action is purely in personam?

HELD: Yes. It is true that where the defendant in an action in personam is a non-resident, as in this case,
and refuses to appear and submit to the jurisdiction of the court, the jurisdiction of the latter is limited
to the property within the country which the court may have ordered attached.

In this case, not only was property in the Philippines of private respondents attached, but, what is more,
private respondents subsequently appeared in the trial court and submitted to its jurisdiction.
Consequently, the jurisdiction of the trial court to render a judgment in personam against them is
undoubted.

22. Pennoyer v. Neff 95 U.S. 714 (1878)

Facts. Mitchell sued Defendant in Oregon state court for unpaid legal fees. At the time Defendant was a
non-resident of the state who was not personally served with process. Constructive service was issued
upon Defendant by publication. Defendant did not come to court or otherwise resist the lawsuit, and
default judgment was entered against him. After the default judgment, Defendant acquired 300 acres of
land in Oregon. To satisfy his judgment against Defendant, Mitchell had the sheriff seize and sell
Defendant’s land. The land was purchased by Plaintiff, who received a sheriff’s deed as evidence of title.
The sheriff then turned the sale proceeds over to Mitchell. Shortly after the sheriff’s sale, Defendant
discovered what had happened to his land and brought suit against Plaintiff to recover the land.

Issue. Can judgments obtained against non-residents who fail to appear in court be sustained by default
judgments where service of process is accomplished solely through publication (i.e. constructive
service)?
Is constructive service sufficient notice to attach property within the forum state owned by a non-
resident?

Held: No.

When a suit is merely in personam (i.e. against a person), constructive service through publication upon
a non-resident is ineffective.
No state can exercise direct jurisdiction and authority over persons or property without its territory.
However, a state may subject property within its boundaries to the payments of its citizens, even when
the land is owned by a non-resident, without infringing upon the sovereignty of the state of residency of
the landowner.

23. International Shoe Co. v. Washington 326 U.S. 310 (1945)

Facts. International Shoe Co. employed salesmen that resided in Washington to sell their product in the
state of Washington. Defendant regularly shipped orders to the salesmen who accepted them, the
salesmen would display the products at places in Washington, and the salesmen were compensated by
commission for sale of the products. The salesmen were also reimbursed for the cost of renting the
places of business in Washington.

Washington sued Defendant after Defendant failed to make contributions to an unemployment

compensation fund exacted by state statutes.

The Washington statute said that the commissioner could issue personal service if Defendant was found
within the state, or by mailing it to Defendant if Defendant was not in the state.

The notice of assessment was served upon Defendant’s salesperson and a copy of the notice was mailed
to Defendant.

The trial court found for Washington and the Supreme Court of Washington affirmed, reasoning that the
continuous flow of Defendant’s product into Washington was sufficient to establish personal
jurisdiction. Defendant appealed.

Issue. Is service of process upon Defendant’s agent sufficient notice when the corporation’s activities
result in a large volume of interstate business so that the corporation receives the protection of the laws
of the state and the suit is related to the activities which make the corporation present?

Held. Yes.

The general rule is that in order to have jurisdiction with someone outside the state, the person must
have certain minimum contacts with it such that the maintenance of the suit does not offend
“traditional notions of fair play and substantial justice.

For a corporation, the “minimum contacts” required are not just continuous and systematic activities
but also those that give rise to the liabilities sued on. Defendant could have sued someone in
Washington. It was afforded the protection of the laws of that state, and therefore it should be subject
to suit.

24. Northwest Orient Airlines, Inc. v. CA GR. No. 112573 February 9, 1995

FACTS: Northwest Airlines (Northwest) and C.F. Sharp & Company (C.F.), through its Japan branch,
entered into an International Passenger Sales Agency Agreement, whereby the Northwest authorized
the C.F. to sell its air transportation tickets
Unable to remit the proceeds of the ticket sales, Northwest sued C.F. in Tokyo, Japan, for collection of
the unremitted proceeds of the ticket sales, with claim for damages.

Writ of summons was issued by the Tokyo District Court of Japan. The attempt to serve the summons
was unsuccessful because Mr. Dinozo was in Manila Supreme Court of Japan sent the summons
together with the other legal documents to the Ministry of Foreign Affairs of Japan> Japanese Embassy
in Manila>Ministry (now Department) of Foreign Affairs of the Philippines>Executive Judge of the Court
of First Instance (now Regional Trial Court) of Manila

C.F. received from Deputy Sheriff Balingit copy of the judgment. C.F. did not appeal so it became final
and executory. Northwest filed a suit for enforcement of the judgment a RTC.

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

HELD: YES.
The presumption of validity and regularity of the service of summons and the decision thereafter
rendered by the Japanese court must stand.

Applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on service
of summons on a private foreign corporation doing business in the Philippines.

In as much as SHARP was admittedly doing business in Japan through its four duly registered branches at
the time the collection suit against it was filed, then in the light of the processual presumption, SHARP
may be deemed a resident of Japan, and, as such, was amenable to the jurisdiction of the courts therein
and may be deemed to have assented to the said courts' lawful methods of serving process.

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

25. THE HOME INSURANCE COMPANY vs. EASTERN SHIPPING LINES G. R. L-34382, July 20, 1983

FACTS: On 1967, S. Kajikita & Co. on board the SS „Eastern Jupiter,‟ which is owned by the respondent,
from Osaka, Japan coils of “Black Hot Rolled Copper Wires Rods.”

The coils discharged from the vessel were in bad order, consisting of loose and partly cut coils which had
to be considered scrap.

Plaintiff, a foreign insurance company duly

authorized to do business in the Philippines, made demands for payment of the aforesaid amount
against
the carrier and transportation company for reimbursement of the aforesaid amount, but each refused
to pay the same.

The Eastern Shipping Lines filed its answer and denied the allegations of Paragraph I which refer to the
plaintiff‟s capacity to sue for lack of knowledge or information sufficient to form a belief as to the truth
thereof.

ISSUE: Whether or not that the trial court erred in dismissing the finding that plaintiff-appellant has no
capacity to sue.

RULING: The court held that the objective of the law is to subject the foreign corporation to the
jurisdiction
of our court.

The court find the general denials inadequate to attack the foreign corporations lack of capacity to
sue in the light of its positive averment that it is authorized to do so.

Section 4, Rule 8 requires that "a party desiring to raise an issue as to the legal existence of any party or
the capacity of any party to sue or be sued in a representative capacity shall do so by specific denial,
which shall include such supporting particulars as are particularly within the pleader's knowledge.

At the very least, the private respondents should have stated particulars in their answers upon which a
specific denial of the petitioner's capacity to
sue could have been based or which could have supported its denial for lack of knowledge. And yet,
even if the plaintiff's lack of capacity to sue was not properly raised as an issue by the answers, the
petitioner introduced documentary evidence that it had the authority to engage in the insurance
business at the time it filed the complaints.

The Supreme Court granted the petition, reversing the decision of the lower court.

26. European Resources and Technologies Inc. vs. Ingenieuburo Birkhan

FACTS: The German Consortium tendered and submitted its bid to the Clark Development Corporation
(CDC) to construct, operate and manage the Integrated Waste Management Center at the Clark Special
Economic Zone (CSEZ).

CDC accepted the German Consortiums bid and awarded the contract to it.

CDC and the German Consortium executed the Contract for Services which embodies the terms and
conditions of their agreement.

On 2001, without the Shareholders Agreement having been executed, the German Consortium and
petitioner ERTI entered into a Memorandum of Agreement (MOA) whereby the German Consortium
ceded its rights and obligations under the Contract for Services, including its license from CDC to engage
in the business of providing environmental services needed in the CSEZ.

ERTI received a letter from BN Consultants Philippines, Inc., stating that the German Consortiums
contract with DMWAI, LBV&A and ERTI has been terminated or extinguished, the MOA also deemed
terminated or extinguished.

ISSUE: Whether or not the Consortium has legal personality to file action.

HELD: As a general rule, unlicensed foreign non-resident corporations cannot file suits in the Philippines
. A corporation has legal status only within the state or territory in which it was organized. For this
reason, a corporation organized in another country has no personality to file suits in the Philippines .
In order to subject a foreign corporation doing business in the country to the jurisdiction of our courts, it
must acquire a license from the Securities and Exchange Commission (SEC) and appoint an agent for
service of process.

Hence, the party is estopped from questioning the capacity of a foreign corporation to institute an
action in our courts where it had obtained benefits from its dealings with such foreign corporation and
thereafter committed a breach of or sought to renege on its obligations.

27. AGILENT TECHNOLOGIES SINGAPORE (PTE) LTD., vs. INTEGRATED SILICON TECHNOLOGY PHILIPPINES
CORP et al G.R. No. 154618 April 14, 2004

FACTS: Under the terms of the Value Added Assembly Services Agreement (VAASA), between Integrated
Silicon and HP-Singapore, Integrated Silicon was to locally manufacture and assemble fiber optics for
export to HP-Singapore. HP-Singapore, for its part, was to consign raw materials to Integrated Silicon.

With the consent of Integrated Silicon, HP-Singapore assigned all its rights and obligations in the VAASA
to petitioner Agilent, a foreign corporation not licensed to do business in the Philippines

Later, Integrated Silicon filed a complaint for “Specific Performance and Damages” against Agilent. It
alleged that Agilent breached the parties’ oral agreement to extend the VAASA.

ISSUE: WON an unlicensed foreign corporation not doing business in the Philippines lacks the legal
capacity to file suit.

HELD: A foreign corporation without a license is not ipso facto incapacitated from bringing an action in
Philippine courts. A license is necessary only if a foreign corporation is “transacting” or “doing business”
in the country.

By and large, to constitute “doing business”, the activity to be undertaken in the Philippines is one that
is for profit-making.

As such, we hold that, based on the evidence presented thus far, Agilent cannot be deemed to be “doing
business” in the Philippines.

As a foreign corporation not doing business in the Philippines, it needed no license before it can sue
before our courts.

28. National Equipment Rental, Ltd. v. Szukhent 375 U.S. 311 (1964)

Facts. Respondents, the Szukhents, were residents of Michigan. They rented equipment from National
Equipment Rental, Ltd., Petitioner, pursuant to a lease.

Petitioner filed suit against Respondents for failure to make payments under the lease.

The complaint and summons were served on Weinberg and Petitioner notified Respondents via certified
mail of said service.
Issue. Did the term in the lease between Petitioner and Respondent create an agency relationship
between Respondents and the alleged agent such that the agent could validly accept service of process
on behalf of Respondents?

Held. Yes. Both parties acknowledge that the term of the lease was agreed to by Petitioner and
Respondents. Respondents received notice in a complete and timely fashion, so they cannot argue that
there has been a due process violation. Parties can agree to designate an agent to accept service of
process or to even waive service. The prompt acceptance and delivery of the complaint and summons to
Respondents was enough to create an agency relationship.

29. Perkins v. Benguiet Consolidated Mining Co.

342 U.S. 437 (1952)

Facts. The company’s mining properties were in the Philippine Islands. During the occupation of the
Islands by the Japanese operations were halted and the president returned to his home in Ohio. He
maintained an office where he conducted his affairs and conducted business of the company and its
employees (drew salary checks, maintaining bank accounts, hosting Directors’ meetings, supervising
policies to rehabilitate the properties in the Philippines etc.).

Issue. whether as a matter of federal due process, the business done in Ohio by the respondent mining
company was sufficiently substantial and of such a nature as to permit Ohio to entertain a cause of
action against a foreign corporation, where the cause of action arose from activities entirely distinct
from its activities in Ohio.

Held. Under these particular circumstances it would not violate federal due process for Ohio to either
take or decline jurisdiction of the corporation.

Although no mining properties were located in Ohio, the operations and supervision of the company
and wartime activities being directed by the president in the State of Ohio are enough not to violate
federal due process.

30. McGee v. International Life Insurance Co 355 U.S. 220, 1957

Facts. Lowell Franklin, a resident of California, purchased a life insurance policy form an insurer
subsequently bought by Defendant International Life Insurance Co., who then mailed a reinsurance
certificate to Franklin in California offering to insure him.

Franklin accepted the offer and paid premiums by mail from his California home to Defendant’s office in
Texas until his death in 1950.

When the beneficiary, Plaintiff McGee, notified Defendant of Franklin’s death, they refused to pay.

Neither the original insurer nor respondent ever had any office or agent in California.

Issue. Whether a non-resident corporation is subject to jurisdiction in a state in which it never had any
agent or office, merely because it was a party to a contract with a resident of the state.
Held. No. The Supreme Court of the United States ruled that the Due Process clause did not preclude the
California court from entering a judgment binding on Defendant.

The Supreme Court found that it is sufficient for purposes of due process that the suit was based on a
contract that had substantial connection with California. A state has a manifest interest in providing
effective means of redress for its residents when their insurers refuse to pay claims.

31. PHILSEC INVESTMENT et al vs.CA et al
G.R. No. 103493
June 19, 1997

FACTS: Private respondent Ducat obtained separate loans from petitioners AYALA and PHILSEC, secured
by shares of stock owned by Ducat.

In order to facilitate the payment of the loans, Daic assumed Ducat’s obligation under an Agreement, by
selling to petitioner Athona a parcel of land in Texas, U.S.A.while PHILSEC and AYALA extended a loan to
ATHONA as initial payment of the purchase price.

As ATHONA failed to pay the interest on the balance, Daic sued petitioners PHILSEC, AYALA, and
ATHONA in the United States for payment of the balance and for damages for breach of contract and for
fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock.

While the Civil Case was pending in the United States, petitioners filed a complaint “For Sum of Money
with Damages and Writ of Preliminary Attachment” against private respondents in the RTC Makati.

ISSUE: Is the Civil Case in the RTC-Makati barred by the judgment of the U.S. court?

HELD: NO. In the case at bar, it cannot be said that petitioners were given the opportunity to challenge
the judgment of the U.S. court as basis for declaring it res judicata or conclusive of the rights of private
respondents.

The proceedings in the trial court were summary. Neither the trial court nor the appellate court was
even furnished copies of the pleadings in the U.S. court or apprised of the evidence presented thereat,
to assure a proper determination of whether the issues then being litigated in the U.S. court were
exactly the issues raised in this case such that the judgment that might be rendered would constitute res
judicata.

Second. Nor is the trial court’s refusal to take cognizance of the case justifiable under the principle of
forum non conveniens:

First, a MTD is limited to the grounds under Rule 16, sec.1, which does not include forum non
conveniens. The propriety of dismissing a case based on this principle requires a factual determination,
hence, it is more properly considered a matter of defense.
Second, while it is within the discretion of the trial court to abstain from assuming jurisdiction on this
ground, it should do so only after “vital facts are established, to determine whether special
circumstances” require the court’s desistance.

32. World Wide Volkswagen Corp. v. Woodson

444 U.S. 286 (1980)
Facts. Plaintiffs, bought a car in New York from Seaway, Defendant. Plaintiffs drove the car to Oklahoma
where they were in a car accident and injured.

Plaintiffs sued Seaway, Audi (the manufacturer), Volkswagen of America (the importer) and World-Wide
Volkswagen (Worldwide; the regional distributor) as Defendants in a strict liability action in Oklahoma
state court claiming the gas tank and fuel system were defective.

There was no evidence that the retailers and distributors had ever made any transactions in Oklahoma.

Issue. Can a state exercise in personam jurisdiction on the distributor and retailer of a product when the
distributor and retailer do not utilize the privileges of conducting activities within that state, and do not
distribute their product with the expectation that it will be purchased by consumers within the state?

Held. No.

The two goals of International Shoe Co. v. Washington,, are to avoid unfair inconveniences for the
defendant and to maintain the system of co-equal sovereignty among the states.

Although the rule in McGee v. International Life Ins. Co., demonstrates that contact with the forum for
an out-of-state defendant is not always inconvenient, jurisdictional boundaries are still relevant.
Contacts with the forum state are still required.

The defendant must purposely avail himself of the laws of the forum state in order for to satisfy the
minimum contacts test.

The foreseeability inquiry asks not whether the manufacturer or distributor can foresee his product
ending up in a particular state, but whether he can foresee being hailed into court there.

33. Calder v. Jones

465 U.S. 783, 1984

Facts. South, a reporter wrote an article that accused Respondent of a drinking problem that was so
severe that it affected her acting career. Calder reviewed the article and edited it to its final form for
publication. Respondent brought a suit for libel, and South and Calder challenged California’s personal
jurisdiction since neither had any physical contacts with California, particularly as it pertained to this
article.

Issue. The issue is whether California has personal jurisdiction over South and Calder through their
targeting of Respondent with this article.

Held. The United States Supreme Court held that California had personal jurisdiction over Petitioners.
The first step in the analysis is to determine the focal point of the harm suffered, and that was in
California. The Court then determined that Petitioners’ actions intentionally aimed at a California
resident, and the injuries suffered would be in that state.