6 Perkin Elmer Singapore Pte Ltd v Dakila Trading Corporation

Perkin Elmer Singapore Pte Ltd v Dakila Trading Corporation GR No. 172242; Aug 14, 2007; Chico-Nazario J Digest prepared by Mara Recto (sorry ang haba!) FACTS  Perkin Elmer Singapore Pte Ltd (Petitioner) is a corporation from Singapore NOT considered as a foreign corporation doing business in the PH.  Dakila Trading Corporation (Respondent) is a Philippine corporation engaged in the business of selling and leasing out laboratory instrumentation, process control instrumentation and trading of laboratory chemicals and supplies.  Respondent entered into a Distribution Agreement with Perkin-Elmer Instruments Asia Pte Ltd (PEIA), a Singapore corporation manufacturing, producing, selling or distributing laboratory/analytical instruments with the ff. terms: o PEIA appointed Respondent as sole distributor in the PH, with right to purchase and sell PEIA products and subject to a commission for sales. o Respondent was to order products of PEIA either from PEIA itself or from Perkin-Elmer Instruments (Philippines) Corporation (PEIP), an affiliate of PEIP involved in wholesale of scientific, biotechnical, and analytical instruments and appliances. PEIA allegedly owned 99% shares of PEIP  PEIA unilaterally terminated the Distribution Agreement. Respondent filed before RTC of Mandaluyong a Complaint for Collection of Sum of Money and Damages with Prayer for Issuance of Writ of Attachment against PEIA and PEIP  Respondent filed Ex Parte Motions for Issuance of Summons and for Leave of Court to Deputize Respondent’s General Manager Richard Tee to serve summons outside of the PH. This was granted by RTC. Alias Summons was issued to PEIA. Summons was served on Perkin Elmer Asia, sole proprietorship owned by Perkin Elmer Singapore Pte Ltd (Petitioner), allegedly separate and distinct from PEIA  PEIP moved to dismiss on ground that complaint states no cause of action  Perkin Elmer Asia wrote RTC and respondent about wrongful service of summons upon them.  Respondent filed Ex Parte Motion to Admit Amended Complaint claiming PEIA had become a sole proprietorship owned by Petitioner and changed its name to Perkin Elmer Asia. Amended Complaint was to change the name of PEIA to that of Petitioner. RTC admitted amended complaint.  Respondent filed Motion for Issuance of Summons and for Leave of Court to Deputize Respondent’s General Manager Richard Tee to Serve Summons outside of the PH. General Manager went to SG and served summons on Petitioner  RTC denied Motion to Dismiss of PEIP  Petitioner filed with RTC Special Appearance and Motion to Dismiss on the ff. grounds: 1. RTC did not acquire jurisdiction over the person of the petitioner 2. Respondent failed to state cause of action against petitioner because it is not the real party in interest 3. Assuming arguendo that case was correctly filed, Distribution Agreement which was the basis of claim grants PEIA right to terminate at any time 4. Venue improperly laid  RTC denied Motion to Dismiss of Petitioner o Respondent alleges Petitioner owns shares of stocks in PEIP and reveals that there is also an allegation of personal property in the PH. Shares of stock represent personal property. o Even though Amended Complaint is primarily for damages, it relates to property of Petitioner to which it claims interest or an actual or contingent lien making it fall under Extraterritorial service under Rule 14.15. Service of Summons was VALID.

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MTD was for failure to state Cause of Action. MTD hypothetically admits the truth of the facts alleged in the complaint.  When MTD is under this ground, it can only be determined from the facts alleged in the complaint and cannot consider matters aliunde. Issue must be passed upon on basis of allegations otherwise, procedural error or denial of due process would result.  All essential elements of Cause of Action are present o Stipulation as to venue of prospective action does not preclude the filing of the suit in the residence of Respondent under Rule 4.2 o Full blown trial is necessary Petitioner filed Petition for Certiorari under Rule 65 with TRO and or Preliminary Injunction with CA. CA affirmed RTC

1. W/N service of summons was proper and RTC acquire jurisdiction over the person of the Petitioner – NO, there was no valid summons served upon petitioner and RTC erroneously exercised jurisdiction over its person Petitioner:  Case involves action for collection of sum of money and damages arising from the alleged breach of the Distribution Agreement (in personam)  Personal service is proper and not extraterritorial service of summons which is only proper in in rem and quasi in rem cases  Allegations in the Amended Complain that petitioner has personal properties in the PH does not make this case one that relates to, or the subject of which is, property within the Philippines to warrant extraterritorial service. o For this to be considered as one that relates to, or the subject of which is property within the Philippines, the main subject matter of the action must be property within the PH itself.  Prayer in the Amended Complaint for issuance of writ of attachment over personal property of PEIP (99% owned by Petitioner as the supposed successor of PEIA) did not convert it to quasi in rem.  Service of Summons is NOT valid, RTC has no jurisdiction SC:  For the court to have authority to dispose of the case on the merits, it must acquire jurisdiction over the subject matter and the parties. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. Courts acquire jurisdiction over the defendants either through service of summons as required by law or through voluntary appearance and submission to authority of the courts. Proper service of summons depends on the nature of the civil case: whether in personam, in rem or quasi in rem  When the defendant or respondent does not reside and is not found in the Philippines and the action involves in personam, Philippine courts cannot try the case against them because of impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court  Rule 14.15 requires not mere allegation of existence of personal property belonging to non-resident defendant but that the personal property located in the PH must have been actually attached. Respondent’s allegation that petitioner had personal property in the PH in the form of shares of stock in PEIP does not convert the case from in personam to in rem. o Venturanza v CA: when attachment was void from the beginning, the action in personam was never converted to in rem o Respondent’s prayer in its amended complaint for issuance of writ of attachment over shares of stock in PEIP was DENIED, shares of stock in PEIP had NOT been atttached  Extraterritorial service of summons is not valid because the case involves collection of sum of money and damages, action in personam which is neither related nor connected to any property of petitioner to which it claims lien or interest.

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Petitioner did not voluntarily appear or submit to the court’s authority as it was consistent in all its pleadings assailing service of summons and jurisdiction of the RTC, thus it is not in estoppel when it filed an Answer with compulsory counterclaim. It had no other choice but to file an answer otherwise RTC would have declared petitioner to waive its right to file responsive pleadings. Compulsory counterclaim cannot be considered as voluntary appearance. Petitioner only sought damages and atty’s fees as a consequence of the unfounded suit filed by respondent. Compulsory counterclaim is consistent with position on RTC’s lack of jurisdiction While RTC has no jurisdiction over respondent’s complaint, it has jurisdiction over the counterclaim as it can be treated as a separate action. Although other grounds for Motion to Dismiss was raised by petitioner, it is not voluntary appearance. o De Midgely held that MTD with grounds other than lack of jurisdiction over the person of the defendant with prayer for “other reliefs” is voluntary appearance o De Midgely is superseded by La Naval Drug Corporation v CA: estoppel by jurisdiction must be unequivocal and intentional. o Allegation of grounds other than lack of jurisdiction over the person of the defendant with prayer for “other reliefs” is NOT considered as unequivocal and intentional estoppel. Rule 14.20 Voluntary appearance - last sentence

2. W/N cause of action exists against Petitioner in Respondent’s Amended Complaint - YES Petitioner:  CA should have granted their petition for certiorari on ground of GAD of RTC in refusing to dismiss Amended Complaint for failure to state cause of action  Never used name of PEIA as its corporate name and did not change its name from that of PEIA  PEIA is entirely different corporate entity  Assuming arguendo that petitioner is real party in interest or that they are one and the same entity, still failed to state cause of action because the Distribution Agreement expressly grants PEIA right to terminate contract at any time SC:  RTC was correct: When a motion to dismiss is grounded on failure to state a cause of action, ruling there should be based solely on the facts alleged in the complaint, assuming them to be true otherwise procedural error and denial of plaintiff’s right to due process would result.  There are exceptions to the rule but none of the exceptions apply in this case.  Defense of petitioner that it was not a real party in interest is evidentiary and must be proven in trial 3. W/N venue is proper for Respondent’s civil case against petitioner - YES Petitioner:  Both Respondent and PEIA mutually agreed in the Distribution Agreement to the exclusive jurisdiction of courts of Singapore or Philippines as elected by PEIA. Absent any waiver from PEIA, Complaint filed by Respondent before RTC in the Philippines should be dismissed for improper venue SC:  Despite venue stipulation in the Distribution Agreement, RTC of the PH cannot be considered as improper venue as the stipulation of venue was alternative  Civil Case is dismissible for RTC never acquired jurisdiction over the person of the petitioner