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September 17, 1998

FACTS: Petitioner Patricia Villareal filed a complaint to recover damages from private
respondents Eliseo and Erna Sevilla and certain John Does for the killing of her husband Jose
Villareal. Prior to the filing of the complaint, the Sevillas had abruptly left the country and
started disposing of their properties in the Philippines; allegedly their address in the United
States was divulged. The trial court then ordered the Sevillas properties in the Philippines
attached, upon the posting of a bond. Petitioners filed a Motion for Leave for Extraterritorial
Service pursuant to Rule 14, 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.; it was received by a certain D. Pyle, whose signature
appears on the registry return card.
ISSUE: Whether or not the extraterritorial service of summons confer on the trial court
jurisdiction to render and enforce a money judgment against the private respondents who are
RULING: No. On the authority of BancoEspaol-Filipino v. Palanca, it held that the only effect of
the conversion of an action in personam filed against non-resident defendants into one quasi-in
rem by virtue of the attachment of their properties in the country was to subject such properties
to the payment of the demand which the court might find to be due petitioners, the plaintiffs
below. Otherwise, the trial court could not render a personal judgment against the private
respondents, as it did in this case, and enforce it against them. 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 such a case, the property itself is the sole thing
which is impleaded and is the responsible object which is the subject of the judicial power.
However, private respondents in the present case subsequently appeared in the trial court and
submitted to its jurisdiction. Hence, when the defendant appears, the action in personam may
proceed without the courts loss of jurisdiction over the res and the latter remaining liable.

MR HOLDINGS, LTD. V. BAJAR, G.R. No. 138104. April 11, 2002

FACTS:Asian Development Bank (ADB), finance institution, extended to Marcopper Mining
Corporation (Marcopper) a loan to finance the latters mining project, executing thereon a Deed
of Real Estate and Chattel Mortgageas a security. On default in payment of Marcopper, petitioner
MR Holding, Ltd., assumed its obligation to ADB, the former having assigned all its rights,
interests and obligations under the Deed of Real Estate and Chattel Mortgage, as well as all of its
properties to petitioner. Meanwhile, Solidbank obtained a Partial Judgment against Marcopper
from the RTC in another case, and a writ of execution pending appeal was issued directing
Carlos P. Bajar, respondent sheriff, to require Marcopper tosatisfy the judgment. Respondent
Bajar issued two notices of levy; and thereafter issued two notices setting the public auction sale
of the levied Marcoppersproperties. Learning of the sale, petitioner served an Affidavit of ThirdParty Claim upon respondent sheriffs, asserting its ownership over all Marcoppers mining
properties by virtue of the Deed of Assignment, but was denied for herein petitioner allegedly
has no legal capacity to sue, it being a foreign corporation doing business in the Philippines
ISSUE: Whether or not petitioner foreign corporation has legal capacity to sue.
RULING: No. The principles governing a foreign corporations right to sue in local courts may
be condensed in three statements, to wit: a) if a foreign corporation does business in the
Philippines without a license, it cannot sue before the Philippine courts; b) if a foreign
corporation is not doing business in the Philippines, it needs no license to sue before Philippine
courts on an isolated transaction or on a cause of action entirely independent of any business
transaction; and c) if a foreign corporation does business in the Philippines with the required
license, it can sue before Philippine courts on any transaction. Apparently, it is not the absence of
the prescribed license but the doing of business in the Philippines without such license which
debars the foreign corporation from access to our courts. Jurisprudence has supplied what
constitutes doing or transacting business in the Philippines and has held to imply a continuity of
commercial dealings and arrangements, and contemplates, to that extent, the performance of acts
or works or the exercise of some of the functions normally incident to, and in progressive
prosecution of, the purpose and object for which the corporation was organized. The Court, with
its final analysis, is convinced that petitioner was engaged only in isolated acts or transactions.
Single or isolated acts, contracts, or transactions of foreign corporations are not regarded as a
doing or carrying on of business.

HAHN V. CA AND BMW, G.R. No. 113074. January 22, 1997

FACTS: Petitioner Hahn is a Filipino citizen doing business under the name and style "HahnManila; while private respondent, BayerischeMotorenWerkeAktiengesellschaft (BMW) is a
nonresident foreign corporation. Petitioner executed in favor of private respondent a "Deed of
Assignment with Special Power of Attorney, stating therein that the Assignor is the authorized
exclusive Dealer of the ASSIGNEE of BMW trademark and device in the Philippines. But later,
in a meeting with a BMW representative and the president of Columbia Motors Corporation
(CMC), Jose Alvarez, petitioner was informed and thereafter confirmed that BMW has granted
of the exclusive dealership of BMW cars and products to CMC, due to the dissatisfaction of
BMW with various aspects of petitioner's business. Hence, Hahn filed a complaint for specific
performance and damages against BMW to compel it to continue the exclusive dealership. BMW
moved to dismiss the case, contending that the trial court did not acquire jurisdiction over it
through the service of summons on the Department of Trade and Industry, because it was a
foreign corporation and it was not doing business in the Philippines.
ISSUE: Whether or not private respondent BMW is not doing business in the Philippines and, for
this reason, must dismiss petitioner's case.
RULING: No. The acts considered "doing business in the Philippines" are enumerated in 3(d) of
the Foreign Investments Act of 1991. However, the phrase "doing business" shall not be deemed
to include mere investment as a shareholder by a foreign entity in domestic corporations duly
registered to do business, and/or the exercise of rights as such investor; nor having, a nominee
director or officer to represent its interests in such corporation; nor appointing a representative or
distributor domiciled in the Philippines which transacts business in its own name and for its own
account. The question is whether petitioner is the agent or distributor in the Philippines of private
respondent BMW. If he is, BMW may be considered doing business in the Philippines and the
trial court acquired jurisdiction over it (BMW) by virtue of the service of summons on the
Department of Trade and Industry. Otherwise, if Hahn is not the agent of BMW but an
independent dealer, albeit of BMW cars and products, BMW, a foreign corporation, is not
considered doing business in the Philippines, and the trial court did not acquire jurisdiction over
it (BMW). In the case of the petitioner, however, the Court found evidence and has concluded
that Hahn was really an agent of BMW, and that therefore BMW was doing business in the


FACTS: Petitioner Agilent is a foreign corporation, which, by its own admission, is not licensed
to do business in the Philippines. Respondent Integrated Silicon is a private domestic
corporation, 100% foreign owned, which is engaged in the business of manufacturing and
assembling electronics components. A Value Added Assembly Services Agreement (VAASA)
was entered into between Integrated Silicon and HP Singapore, having a five-year term to be
renewed annually by mutual written consent. With the consent of Integrated Silicon, HPSingapore assigned all its rights and obligations in the VAASA to Agilent. Subsequently,
Integrated Silicon filed a complaint for Specific Performance and Damages against Agilent and
its officers alleging that Agilent breached the parties oral agreement to extend the VAASA.
Consequently, Agilent filed a separate complaint against Integrated Silicon for Specific
Performance, Recovery of Possession, and Sum of Money with Replevin; while Integrated
Silicon filed motion to dismiss on the ground of lack of Agilents legal capacity to sue.
ISSUE: Whether or not Agilent, an unlicensed foreign corporation doing business in the
Philippines, lacks legal capacity to sue.
RULING: No. 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. The challenge to Agilents legal capacity to file suit
hinges on whether or not it is doing business in the Philippines. In Mentholatum, the Supreme
Court discoursed on the two general tests to determine whether or not a foreign corporation can
be considered as doing business in the Philippines. The first of these is the substance test,
expressing whether the foreign corporation is continuing the body of the business or enterprise
for which it was organized or whether it has substantially retired from it and turned it over to
another. The second test is the continuity test, which implies a continuity of commercial dealings
and arrangements, and contemplates, to that extent, the performance of acts or works or the
exercise of some of the functions normally incident to, and in the progressive prosecution of, the
purpose and object of its organization. Based on the evidence presented thus far, Agilent cannot
be deemed to be doing business in the Philippines. Respondents contention that Agilent lacks the
legal capacity to file suit is therefore devoid of merit. As a foreign corporation not doing business
in the Philippines, it needed no license before it can sue before our courts.

LICAROS v. LICAROS, G.R. No. 150656. April 29, 2003

FACTS: AbelardoLicaros and Margarita Romualdez-Licaros were lawfully married. Ironically,
marital differences, squabbles and irreconcilable conflicts transpired between them, hence, they
agreed to separate from bed and board. Margarita left for the United States, applied for divorce in
California and the same was granted. For his part, Abelardo commenced an action for the
declaration of nullity of his marriage, based on psychological incapacity. The trial court ordered
that summons be served by publication in a newspaper of general circulation once a week for
three (3) consecutive weeks, at the same time furnishing respondent a copy of the order, as well
as the corresponding summons and a copy of the petition at the given address in the United
States through the Department of Foreign Affairs, all at the expense of Abelardo. Decision was
handed down by the trial court and declared the marriage between Abelardo and Margarita null
and void.
ISSUE: Whether or not Margarita validly served with summons in the case for declaration of
nullity of her marriage with Abelardo.
RULING: Yes. As a rule, when the defendant does not reside and is not found in the Philippines,
Philippine courts cannot try any case against him because of the impossibility of acquiring
jurisdiction over his person unless he voluntarily appears in court. But when the case is one of
actions in rem or quasi in rem enumerated in Section 15,[10] Rule 14 of the Rules of Court,
Philippine courts have jurisdiction to hear and decide the case. In such instances, Philippine
courts have jurisdiction over the res, and jurisdiction over the person of the non-resident
defendant is not essential. Since the petition affects the personal status of the plaintiff, the trial
court authorized extraterritorial service of summons under Section 15, Rule 14 of the Rules of
Court. A defendant who is a non-resident and is not found in the country may be served with
summons by extraterritorial service, and this may be effected by three modes. One of which is,
by any other means the judge may consider sufficient. The Supreme Court ruled that the
delivery to the Department of Foreign Affairs was sufficient compliance with the rule. After all,
this is exactly what the trial court required and considered as sufficient to effect service of
summons under the third mode of extraterritorial service that is, by any other means the judge
may consider sufficient.

LLORENTE v. COURT OF APPEALS, G.R. No. 124371. November 23, 2000

FACTS: Deceased Lorenzo Llorente was an enlisted serviceman of the U.S. Navy and married
to petitioner Paula Llorente in Camarines Sur. Lorenzo was admitted to U.S. Citizenship, and
when granted of an accrued leave, went homein the Philippines. Having discovered that his wife
was having an adulterous relationship with his brother, they agreed to execute a written
agreement regarding their marital relations and properties, and notarized the same. When
Lorenzo returned to the U.S., he filed for divorce in California; Paula being represented by her
counsel and participated in the proceedings. The divorce decree was issued in favor of Lorenzo
and became final. In the meantime, Lorenzo returned to the Philippines. He married Alicia
Llorente, herein private respondent, in Manila, and had three children in their 25 year union.
Lorenzo executed a Last Will and Testament bequeathing all his property to Alicia and their
children. The trial court admitted the will for probate but before the proceedings could be
terminated, Lorenzo died. Paula filed with the same court a petition for letters of administration
over Lorenzos estate in her favor. She contended that she was Lorenzos surviving spouse; that
the various property were acquired during their marriage; and that the disposition of the will
encroaches her legitime and 1/2 share in the conjugal property.
ISSUE: Whether or not private respondent Alicia and her children to Lorenzo are entitled to
inherit from the latter, and that the will executed was valid.
RULING:Yes. In intestate and testamentary succession, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person whose succession is under
consideration, whatever may be the nature of the property and regardless of the country wherein
said property may be found. True, foreign laws do not prove themselves in our jurisdiction and
our courts are not authorized to take judicial notice of them. Like any other fact, they must be
alleged and proved. While the substance of the foreign law was pleaded, the Court of Appeals
did not admit the foreign law. The Court of Appeals and the trial court called to the fore the
renvoi doctrine, where the case was referred back to the law of the decedents domicile, in this
case, Philippine law. As to the will, Article 17 of the New Civil Code provides that, the forms
and solemnities of contracts, wills, and other public instruments shall be governed by the laws of
the country in which they are executed. When the acts referred to are executed before the
diplomatic or consular officials of the Republic of the Philippines in a foreign country, the
solemnities established by Philippine laws shall be observed in their execution. Whether the will
is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law
which must be pleaded and proved.