VILLAREAL vs.

CA
G.R. No. 107314 September 17, 1998
FACTS: The complaint to recover damages for killing petitioner's husband
Jose Villareal was filed with the RTC of Makati, Metro Manila. It was found that
prior to the filing of the complaint, the Sevillas had abruptly left the country
and had started disposing of their properties in the Philippines. On August
39, 1988, petitioners filed a Motion for Leave to Serve Summons by
Publication which was later granted by the trial court. Meanwhile, at the
instance of petitioner Patricia, an information charging private respondents
with murder was filed on October 10, 1988 with the RTC of Makati.
Defendants were declared in Default for failure to file their Answer within the
60-day period counted from the last day of publication and petitioners were
then allowed to present evidence ex-parte. After presenting their evidence,
petitioners amended their complaint to make it conform to the evidence. The
trial court admitted the Amended Complaint and granted petitioners' Motion
for Extra-territorial Service of Summons. Accordingly, summons was
published
once
a
week for
three
consecutive
weeks
in
the
newspaper Abante. Copies of the Amended Complaint, the summons, and
the order were sent by registered mail to the last known addresses of private
respondents at Paraaque, Metro Manila and the United States. On February
7, 1990, counsel for private respondents, Teresita Marbibi, filed a Notice of
Appearance on their behalf. On February 14, 1990, again through counsel,
private respondents filed a verified Motion to Lift Order of Default with
Motion for Reconsideration. On March 27, 1990, the trial court issued an
order denying the Motion to Lift Order of Default with Motion for
Reconsideration, on the ground that private respondents herein failed to
comply with the requirements of Rule 18. On April 2, 1990, the trial court
rendered a decision finding private respondents liable for the killing of Jose
Villareal. Subsequent motions, without questioning courts jurisdiction, were
later filed by the private respondents but were also later denied by the trial
court. Thus on September 11, 1991, private respondents filed in the CA a
petition for certiorari, prohibition, and mandamus with preliminary
injunction, alleging (1) that the trial court never acquired jurisdiction over
them since they are non-resident defendants and petitioners' action is
purely in personam and (2) that they were denied due process of law. CA
granted the petition. Petitioners moved for reconsideration, but their motion
was denied by the appellate court in a resolution dated September 30, 1992.
Hence, this petition for review.

ISSUE: Whether or not the trial court acquired jurisdiction over the private
respondents.
RULING: 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." Accordingly,
"the relief must be confined to the res, and the court cannot lawfully render a
personal judgment against him." But the Court also acknowledged in Banco
Espaol-Filipino that if property is attached and later the defendant appears,
"the cause becomes mainly a suit in personam, with the added incident that
the property attached remains liable, under the control of the court, to
answer to any demand which may be established against the defendant by
the final judgment of the court." 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. There can be no question
regarding the trial court's acquisition of jurisdiction over the persons of
respondents when the latter's counsel entered her appearance on their
behalf on February 7, 1990. Through counsel, private respondents voluntarily
appeared by filing a Notice of Appearance without qualification and a Motion
to Lift Order of Default with Motion for Reconsideration, in which they prayed
for affirmative reliefs, thus submitting to the jurisdiction of the court. The
following instances have been considered voluntary submission to the
jurisdiction of the court: the filing by defendant of a motion to admit answer;
the filing of a motion for reconsideration of the judgment by default; and the
filing of a petition to set aside the judgment of default. Not only did private
respondents voluntarily submit themselves to the jurisdiction of the trial
court, they never questioned the validity of the mode of service of summons,
that is, by extraterritorial service upon them. As already stated, private
respondents filed a notice of appearance without qualification.

G.R. No. 138104

April 11, 2002

MR HOLDINGS, LTD., petitioner,

vs.

SHERIFF CARLOS P. BAJAR, SHERIFF FERDINAND M. JANDUSAY, SOLIDBANK

CORPORATION, AND MARCOPPER MINING CORPORATION, respondents.

Marcopper Mining Corporation was unable to pay its loans from the Asian Development
Bank (ADB). Later, ADB transferred all its rights to collect from Marcopper to MR Holdings,
Ltd. In order to pay MR Holdings, Marcopper assigned all its assets to MR Holdings and
executed therefor a Deed of Assignment in MR Holdings favor.
Meanwhile, another creditor of Marcopper, Solidbank Corporation, won a case against
Marcopper. The court then issued a writ of execution directing Sheriff Carlos Bajar to levy
Marcoppers assets.
MR Holdings then filed an opposition asserting that it is now the owner of Marcoppers
assets hence, Bajar cannot levy them. The lower court denied MR Holdings on the ground
that the Deed of Assignment was made in bad faith and that MR Holdings was a foreign
corporation doing business without a license in the Philippines (by virtue of the Deed of
Assignment) and as such cannot sue in the Philippines.
ISSUE: Whether or not MR Holdings may sue on this particular transaction.
HELD: Yes. The Supreme Court emphasized the following rules when it comes to foreign
corporations doing business here in the Philippines:
1.

if a foreign corporation does business in the Philippines without a license,

it cannot sue before the Philippine courts;

2.

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;

3.

if a foreign corporation does business in the Philippines with the required

license, it can sue before Philippine courts on any transaction.
Being a mere assignee does not constitute doing business in the Philippines. MR
Holdings, a foreign corporation, cannot be said to be doing business simply because it
became an assignee of Marcopper. MR Holdings was not doing anything else other than
being a mere assignee. The only time that MR Holdings is considered to be doing business
here is that if it continues the business of Marcopper which it did not.

Therefore, since it is not doing business here, pursuant to the rules above, it can sue
without any license before Philippine courts on an isolated transaction or on a cause of
action entirely independent of any business transaction.
Anent the issue of bad faith, the same was not proven. It appears that the deed of
assignment was an earlier agreement incidental to the loan agreement between ADB and
Marcopper which precedes the action brought by Solidbank against Marcopper.