court, and for sixty days thereafter.

In the case at bar, the pendency of the taxpayer's

No. L-21609. September 29, 1966.
appeal in the Court of Tax Appeals and in the Supreme Court had the effect of
REPUBLIC OF THE PHILIPPINES, plaintiff and appellant. vs. KER & COMPANY, temporarily staying the hands of the said Commissioner. If the taxpayer's stand that
LTD., defendant and appellant. the pendency of the appeal did not stop the running of the period because the Court of
Tax Appeals did not have jurisdiction over the case is upheld, taxpayers would be
Summons; Service upon counsel of a domestic corporation is valid.—Section encouraged to delay the payment of taxes in the hope of ultimately avoiding the same.
13, Rule 7, (now Section 13, Rule 14) of the. Rules of Court provides that service of Under the circumstances, the running of the prescriptive period was suspended.
summons upon a domestic corporation may be made on its agent. In the case at bar, Same; Accrual of delinquency interest.—Where the letter of assessment shows
when defendant corporation's counsel in the administrative stage of the present tax that the deficiency income tax for 1948 and 1949 became due on March 15, 1953 and
case received the summons, they were still acting for and in behalf of defendant in that for 1950 accrued on February 15, 1954 and the tax in question remained unpaid,
connection with its tax liability involved in the case. Perforce, they were the taxpayer's the delinquency interest accrued and became due starting from said due dates.
agent, and under the aforecited rule service upon them is sufficient.
Same; Pleading and practice; Jurisdiction; Effect of voluntary submission to
APPEAL from a judgment of the Court of First Instance of Manila. Reyes, J.
jurisdiction of court.—In interposing, in its motion to dismiss, prescription of plaintiff's The facts are stated in the opinion of the Court.
cause of action, defendant availed of an affirmative defense on the basis of which it Solicitor General for plaintiff and appellant.
prayed the court to resolve the controversy in its favor. For the court to validly decide
Leido, Andrada, Perez ,& Associates for defendant and appellant.
the said plea, it necessarily had to acquire jurisdiction upon the latter's person, which,
being the proponent of the affirmative defense, should be deemed to have abandoned
its special appearance and voluntarily submitted itself to the jurisdiction of the court. BENGZON, J.P., J.:
(Flores vs. Zurbito, 37 Phil. 746; Menghra vs. Tarachand and Rewachand, 67 Phil.
286). Ker ,& Co., Ltd., a domestic corporation, filed its income tax returns for the years
Same: When defects of summons were cured by filing of answer.—Defects of 1947, 1948, 1949 and 1950 on the following dates:
summons are cured by voluntary appearance and by the filing of an answer to the
complaint. (Ramos vs. Mañalac, 89 Phil. 270). A defendant can not be permitted to Year Date Filed
speculate upon the judgment of the court by objecting to the court's jurisdiction over its 1947 April 12, 1948
person if the judgment is adverse to it, and acceding to jurisdiction over its person if
and when the judgment sustains its defenses. 1948 April 30, 1949
Taxation; Deficiency income tax; Prescription of actions; Degree of proof 1949 May 15, 1950
required to establish fraud.—Fraud is a question of fact (Gutierrez vs. Court of Tax
Appeals, 101 Phil. 713) which must be alleged and proved (Section 12, Rule 15 [now 1950 May 9, 1951
Section 5, Rule 8], Rules of Court). It is a serious charge and, to be sustained, it must It amended its income tax returns for 1948 and 1949 on May 11, 1949 and June 30,
be supported by clear and convincing proof (Collector of Internal 1950, respectively.
Revenue vs. Benipayo, L-13656, January 31, 1962). In the instant case the filing by In 1953 the Bureau of Internal Revenue examined and audited Ker ,& Co., Ltd.'s
the taxpayer of a false return was neither alleged in the complaint nor proved in court. returns and books of accounts and subsequently issued the following assessments for
Hence, the lower court correctly resolved the issue of prescription without touching deficiency income tax:
upon fraudulence of the return.
Year Amount Date Assessed
Same; Failure to object to the setting up of defense of prescription.—The
assessment for deficiency income tax for 1947 has become final and executory, and, 1947 P42,342.30 July 25, 1953
therefore, defendant may not anymore raise defenses which go into the merits of the
assessment, i.e., prescription of the Commissioner's right to assess the tax. (Republic 1948 18,651.87 Feb. 16, 1953
of the Philippines vs. Albert, L-12996, 1949 139.67 Feb. 16, 1953
December 28, 1961; Republic of the Philippines vs. Lim Tian Teng Sons ,& Co.,
Inc., L-21731, March 31, 1966). However, defendant raised the defense of prescription 1950 12,813.00 Feb. 16, 1953
in the proceedings below, and the Republic of the Philippines, instead of questioning due and. payable on dates indicated in the accompanying notices of assessment. The
the right of the defendant to raise such defense, litigated on it and submitted the issue assessments for 1948 and 1950 carried the surcharge of 50% authorized under
for resolution of the court. By its actuation, the government should be considered to Section 72 of the Tax Code for the filing of fraudulent returns,
have waived its right to object to the setting up of such defense. Upon request of Ker vs Co., Ltd., through Atty. Jose Leido, its counsel, the
Same; Suspension of prescriptive period; Effect of pendency of appeal.—Under Bureau of Internal Revenue reduced the assessments for the year 1947 from
Section 333 of the Tax Code the running of the prescriptive period to collect deficiency P42,342.30 to P27,026.28 and for the year 1950 from P12,813.00 to P8,542.00,
taxes shall be suspended for the period during which the Commissioner of Internal imposed the 50% surcharge for the year 1947 and eliminated the same surcharge
Revenue is prohibited from beginning a distraint and levy or instituting a proceeding in

1
from the assessment for the year 1950. The assessments 'for years 1948 and 1949
remained the same.
On March 1, 1956 Ker ,& Co., Ltd. filed with the Court of Tax Appeals a petition
for review with preliminary injunction. No preliminary injunction was issued, for said
court dismissed the appeal for having been instituted beyond the 30-day period
provided for in Section 11 of Republic Act 1125. We affirmed the order of dismissal in
L-12396.1
On March 15, 1962, the Bureau of Internal Revenue demanded payment of the
aforesaid assessments together with a surcharge of 5% for late payment 'and interest
at the rate of 1% monthly. Ker ,& Co., Ltd. refused to pay, instead in its letters dated
March 28, 1962 and April 10, 1962 it set up the defense of prescription of the
Commissioner's right to collect the tax. Subsequently, the Republic of the Philippines 'f
iled on March 27, 1962 a complaint with the Court of First Instance of Manila seeking
collection of the aforesaid deficiency income tax for the years 1947, 1948, 1949 and
1950. The complaint did not allege fraud in the filing of any of the income tax returns
for the years involved, nor did it pray for the payment of the corresponding 50%
surcharge, but it prayed for the payment of 5% surcharge for late payment and interest
of 1% per month without however specifying from what date interest started to accrue.
Summons was served not on the defendant taxpayer but upon Messrs. Leido and.
Associates, its counsel in the proceedings before the Bureau of Internal Revenue and
the Court of Tax Appeals.
On April 14, 1962 Ker & Co., Ltd. through its counsel, Leido, Andrada, Perez ,&
Associates, moved for the dismissal of the complaint on the ground that the court did
not acquire jurisdiction over the person of the defendant and that plaintiff's cause of
action has prescribed. This motion was denied and defendant filed a motion for
reconsideration. Resolution on said motion, however, was deferred until trial of the
case on the merits.
On May 18, 1962, Ker ,& Co., Ltd. filed its answer to the complaint interposing
therein the defense set up in its motion to dismiss of April 14, 1962,
On September 18, 1962 the Republic of the Philippines amended its' complaint, in
answer to which Ker ,& Co., Ltd. adopted the same answer which it had filed on May
18, 1962.
On January 30, 1963 the Court of First Instance rendered judgment, the
dispositive portion of which states:
"WHEREFORE, this Court dismisses the claim for the collection of deficiency income
taxes for 1947, but orders defendant taxpayer to pay the deficiency income taxes for
1948, 1949 and 1950, in the amounts of P18,651.87, P139.67 and P8,542.00,
respectively, plus 5% surcharge thereon on each amount and interest of 1% a month
computed from March 27, 1962 and until full payment thereof is made, plus the costs
of suit"
On February 20, 1963 the Republic of the Philippines filed a motion for
reconsideration contending that the right of the Commissioner of Internal Revenue to
collect the deficiency assessment for 1947 has not prescribed by a lapse of merely
five years and three months, because the taxpayer's income tax return was fraudulent
in which case prescription sets in ten years from October 31, 1951, the date of
discovery of the fraud, pursuant to Section 332 (a) of the Tax Code; and that the
payment of delinquency interest of 1% per month should commence from the date it
fell due as indicated in the assessment notices instead of on the date the complaint
was filed.
2
On March 6, 1963 Ker ,& Co., Ltd. also filed a motion for reconsideration
reiterating its assertion that the Court of First Instance did not acquire jurisdiction over
its person, and maintaining that since the complaint was filed nine years, one month
and eleven days after the deficiency assessments for 1948, 1949 and 1950 were
made and since the filing of its petition for review in the Court of Tax Appeals did not
stop the running of the period of limitations, the right of the Commissioner of Internal
Revenue to collect the tax in question has prescribed.
The two motions for reconsideration having been denied, both parties appealed
directly to this Court.
The issues in this case are:
1. 1.Did the Court of First Instance acquire jurisdiction over the person of
defendant Ker ,& Co., Ltd.?
2. 2.Did the right of the Commissioner of Internal Revenue to assess
deficiency income tax for the year 1947 prescribe?
3. 3.Did the filing of a petition for review by the taxpayer in the Court of Tax
Appeals suspend the running of the statute of limitations to collect the
deficiency income for the years 1948, 1949 and 1950?
4. 4.When did the delinquency interest on the deficiency income tax for the
years 1948, 1949 and 1950 accrue?
First Issue
Ker & Co., Ltd. maintains that the court a quo did not acquire jurisdiction over its
person inasmuch as summons was not served upon it but upon Messrs. Leido and
Associates who do not come under any of the class of persons upon whom summons
should be served as enumerated in Section 13, Rule 7, of the Rules of Court, 2 which
reads:
"SEC. 13. Service upon private domestic corporation or partnership.—If the defendant
is a corporation formed under the laws of the Philippines or a partnership duly
registered, service may be made on the president, manager, secretary, cashier, agent,
or any of its directors."
Messrs, Leido and Associates acted as counsel for Ker & Co., Ltd. when this tax case
was in its administrative stage. The same counsel represented Ker ,& Co., Ltd., when
it appealed said case to the Court of Tax Appeals and later to this Court.
Subsequently, when the Deputy Commissioner of Internal Revenue, by letter dated
March 15, 1962, demanded the payment of the deficiency income tax in question, it
was Messrs. Leido, Andrada, Perez ,& Associates who replied in behalf of Ker ,& Co.,
Ltd. in two letters, dated March 28, 1962 and April 10, 1962, both after the complaint
in this case was filed. At least therefore on April 2. 1962 when Messrs. Leido and
Associates received the summons, they were still acting for and in behalf of Ker ,&
Co., Ltd. in connection with Its tax liability involved in this case. Perforce, they were
the taxpayer's agent when summons was served. Under Section 13 of Rule 7,
aforequoted, service upon the agent of a corporation is sufficient.
We observe that the motion to dismiss filed on April 14, 1962, aside from
disputing the lower court's juris-diction over defendant's person, prayed for dismissal
of the complaint on the ground that plaintiff's cause of action has prescribed. By
interposing such second ground in its motion to dismiss. Ker ,& Co., Ltd. availed of an
affirmative defense on the basis of which it prayed the court to resolve controversy in
its favor. For the court to validly decide the said plea of defendant Ker ,& Co., Ltd., it
necessarily had to acquire jurisdiction upon the latter's person, who, being the
proponent of the affirmative defense, should be deemed to have abandoned its
special appearance and voluntarily submitted itself to the jurisdiction of the court. 3
Voluntary appearance cures defects of summons, if any.4 Such defect, if any, was
further cured when defendant filed its answer to the complaint. 5 A defendant can not
be permitted to speculate upon the judgment of the court by objecting to the court's
jurisdiction over its person if the judgment is adverse to it, and acceding to jurisdiction
over its person if and when the judgment sustains its defenses.
Second Issue
Ker 22 Co., Ltd. contends that under Section 331 of the Tax Code the right of the
Commissioner of Internal Revenue to assess against it a deficiency income tax for the
year 1947 has prescribed because the assessment was issued on July 25, 1953 after
a lapse of five years, three months and thirteen days from the date (April 12, 1948) it
filed Its income tax return. On the other hand, the Republic of the Philippines Insists
that the taxpayer's, income tax return was fraudulent, therefore the Commissioner of
Internal Revenue may assess the tax within ten years from discovery of the fraud on
October 31, 1951 pursuant to Section 322(a) of the Tax Code.
The stand of the Republic of the Philippines hinges on whether or not taxpayer's
income tax return for 1947 was fraudulent
The court a quo, conf ining itself to determining whether or not the assessment of
the tax for 1947 was issued within the five-year period provided for in Section 331 of
the Tax Code, ruled that the right of the Commissioner of Internal Revenue to assess
the tax has prescribed. Said the lower court:
"The Court resolves the second issue in the negative, because Section 331 of the
Revenue Code explicitly provides, in mandatory terms, that 'lnternal Revenue taxes
shall be assessed within 5, years after the return was filed, and no proceedings
in court without assessment, for the collection of such taxes, shall be begun after
expiration of such period. The attempt by the Commissioner of Internal Revenue to
make an assessment on July 25, 1953, on the basis of a return filed on April 12, 1948,
is an exercise of authority against the afore-quoted explicit and mandatory limitations
of statutory law. Settled in our system is the rule that acts committed against the
provisions of mandatory or prohibitory laws shall be void (Art. 5, New Civil Code). x x
x"
Said court resolved the issue without touching upon fraudulence of the return. The
reason is that the complaint alleged no fraud, nor did the plaintiff present evidence to
prove fraud.
In reply to the lower court's conclusion, the Republic of the Philippines maintains
in its brief that Ker ,& Co., Ltd. filed a false return and since the fraud penalty of 50%
surcharge was imposed in the deficiency income tax assessment, which has become
final and executory, the finding of the Commissioner of Internal Revenue as to the
existence of the fraud has also become final and need not be proved. This contention
suffers from a flaw in that it fails to consider the well-settled principle that fraud is a
question of fact6 which must be alleged and proved.7 Fraud is a serious charge and, to
be sustained, it must be supported by clear and convincing proof. 8 Accordingly, fraud
should have been alleged and proved in the lower court. On these premises We
therefore sustain the ruling of the lower court upon the point of prescription.
It would be worth mentioning that since the assessment for deficiency income tax
for 1947 has become 'f inal and executory, Ker & Co., Ltd. may not anymore raise
defenses which go into the merits of the assessment, i.e., prescription of the
3
Commissioner's right to assess the tax. Such was our ruling in previous cases. 9 In this
case however, Ker ,& Co., Ltd. raised the defense of prescription in the proceedings
below and the Republic of the Philippines, instead of questioning the right of the
defendant to raise such defense, litigated on it and submitted the issue for resolution
of the court. By its actuation, the Republic of the Philippines should be considered to
have waived its right to object to the setting up of such defense.
Third Issue
Ker & Co., Ltd. impresses upon Us that since the Republic of the Philippines filed the
complaint for the collection of the deficiency income tax for the years 1948, 1949 and
1950 only on March 27, 1962, or nine years, one month and eleven days from
February 16, 1953, the date the tax was assessed, the right to collect the same has
prescribed pursuant to Section 332(c) of the Tax Code. The Republic of the
Philippines however contends that the running ,of the prescriptive period was
interrupted by the filing of the taxpayer's petition for review in the Court of Tax Appeals
on March 1, 1956,
If the period during which the case was pending in the Court of Tax Appeals and
in the Supreme Court were not counted in reckoning the prescriptive period, less than
five years would have elapsed, hence, the right to collect the tax has not prescribed.
The taxpayer counters that the filing of the petition for review in the Court of Tax
Appeals could not have stopped the running of the prescriptive period to collect
because said court did not have jurisdiction over the case, the appeal having been
interposed beyond the 30-day .period set forth in Section 11 of Republic Act 1125.
Precisely, it adds, the Tax Court dismissed the appeal for lack of jurisdiction and said
dismissal was affirmed by the Supreme Court in L-12396 aforementioned.
Under Section 333 of the Tax Code, quoted hereunder:
"SEC. 333. Suspension of running of statute.—The running of the statute of limitations
provided in Section 331 or three hundred thirty-two on the making of assessments and
the beginning of distraint or levy or a proceeding in court for collection, in respect of
any deficiency, shall be suspended for the period during which the Collector of Internal
Revenue is prohibited from making the assessment or beginning distraint or levy or a
proceeding in court, and for sixty days thereafter." the running of the prescriptive
period to collect the tax shall be suspended 'f or the period during which the
Commissioner of Internal .Revenue is prohibited from beginning a distraint and levy or
instituting a proceeding in court, and for. sixty days thereafter.
Did the pendency of the taxpayer's appeal in the Court of Tax Appeals and in the
Supreme Court have the effect of legally preventing the Commissioner of Internal
Revenue from instituting an action in the Court of First Instance for the collection of
the tax? Our view is that it did.
From March 1, 1956 when Ker ,& Co., Ltd. filed a petition for review in the Court
of Tax Appeals contesting the legality of the assessments in question, until the
termination of its appeal in the Supreme Court, the Commissioner of Internal Revenue
was prevented, as recognized in this Court's ruling in Ledesma, et al. v. Court of Tax
Appeals,10 from filing an ordinary action in the Court of First Instance to collect the tax.
Besides, to do so would be to violate the judicial policy of avoiding multiplicity of suits
and the rule on lis pendens.11
It would be interesting to note that when the Commissioner of Internal Revenue
issued the final deficiency assessments on January 5, 1954, he had already lost, by
prescription, the right to collect the tax (except that for 1950) by the summary method
of warrant of distraint and levy. Ker ,& Co., Ltd. immediately thereafter requested
suspension of the collection of the tax without penalty incident to late payment
pending the filing of a memorandum in support of its views. As requested, no tax was
collected. On May 22, 1954 the projected memorandum was filed, but as of that date
the Commissioner's right to collect by warrant of distraint and levy the deficiency tax
for 1950 had already prescribed. So much so, that on March 1, 1956 when Ker ,& Co.,
Ltd. filed a petition for review in the Court of Tax Appeals, the Commissioner of
Internal Revenue had but one remedy left to collect the tax, that is, by judicial
action.12 However, as stated, an independent ordinary action in the Court of First
Instance was not available to the Commissioner pursuant to Our ruling in Ledesma, et
al. v. Court of Tax Appeals, supra, in view of the pendency of the taxpayer's petition
for review in the Court of Tax Appeals. Precisely he urgently filed a motion to dismiss
the taxpayer's petition for review with a view to terminating therein the proceedings in
the shortest possible time in order that he could file a collection case in the Court of
First Instance before his right to do so is cut off by the passage of time. As moved, the
Tax Court dismissed the case and Ker & Co., Ltd. appealed to the Supreme Court. By
the time the Supreme Court affirmed the order of dismissal of the Court of Tax
Appeals in L-12396 on January 31, 1962 more than five years had elapsed since the
final assessments were made on January 5, 1954. Thereafter, the. Commissioner of
Internal Revenue demanded extra-judicially the payment of the deficiency tax in
question and in reply the taxpayer, by its letter dated March 28, 1962, advised the
Commissioner of Internal Revenue \that the right to collect the tax has prescribed
pursuant to Section 332 (c) of the Tax Code.
Thus, did the taxpayer produce the effect of temporarily staying the hands of the
Commissioner of Internal Revenue simply through a choice of remedy, And, if We
were to sustain the taxpayer's stand, We would be encouraging taxpayers to delay the
payment of taxes in the hope of ultimately avoiding the same,
Under the circumstances, the Commissioner of Internal Revenue was in effect
prohibited from collecting the tax in question. This being so, the provisions of Section
333 of the Tax Code will apply.
Fourth Issue
The Republic of the Philippines maintains"that 'the delinquency interest on the
deficiency income tax for 1948, 1949 and 1950 accrued and should commence from
the date of the assessments as shown in the assessment notices, pursuant to Section
51 (e) of the Tax Code, instead of from the date the complaint was filed as determined
in the decision appealed from.
Section 51 (e) of the Tax Code states:
"SEC. 51(e). Surcharge and interest in case of delinquency.—To any sum or ,sums
due and unpaid after the dates prescribed in subsections (b), (c) and (d) for the
payment of the same,. there shall be added the sum of five per centum on the amount
of tax unpaid and interest at the rate of one per centum a month upon said tax 'f rom
the time the same became due, except from the estates of insane, deceased, or
insolvent persons." (italics supplied)
Exhibit "F"—the letter of assessment—shows that the deficiency income tax for 1948
and 1949 became due 011 March 15, 1953 and that for 1950 accrued on February 15,
1954 in accordance with Section 51 (d) of the Tax Code. Since the tax in question
remained unpaid, delinquency interest accrued and became due starting from said
due dates. The decision appealed from should therefore be modified accordingly.
WHEREFORE, the decision appealed from is affirmed with the modification that
the delinquency interest at the rate of 1% per month shall be computed from March
4
15, 1953; for the deficiency income tax for 1948 and 1949 and from February 15, 1954
for the deficiency income tax for 1950. With costs against Ker ,& Co., Ltd. So ordered,
Concepcion, C.J., Reyes,
J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.
Judgment modified.
A N N O T A T I O N
SERVICE OF SUMMONS
Generally, service of summons on the lawyer is not sufficient—The rule is that “an
attorney cannot, without authority to do so, accept service of process which
commences action against his client. Moreover, as a general rule, "an attorney-at-law
has no authority merely by virtue of his general employment as such, to waive or
admit service for his client of original process by which the court for the first time
acquires jurisdiction of the client." (5 Am. Jur. 313; Johnlo Trading Company vs.
Flores, 88 Phil. 741).
Service of summons on attorney-in-fact or lessee—Service upon the attorney-in-
fact does not have the effect of service on his principal. No rule allows service of
summons upon an agent. Service must be made on the principal himself (a non-
resident) by substituted service or by registered mail, or by publication, if his
properties are desired to be affected by the proceedings. (Banco Español Filipino vs.
Palanca, 37 Phil. 921; Idonah Slade Perkins vs. Dizon, 69 Phil. 186; Ng Si Choc vs.
Vera, 64 Phil. 1066; Brown vs. Brown, L-17953, Oct. 31, 1961).
An order of default should be set aside when summons was served on a lessee of
the defendant, who is not in anyway authorized to receive any paper or pleading in her
behalf and defendant was at the time residing at another place, which is quite apart
from the residence of the lessee. (J. M. Tuason ,& Co., Inc. vs. Fernandez, L-19556,
Oct. 30, 1964).
Effect of failure to serve summons validly—Courts acquire jurisdiction over the
person of a party defendant and of the subject matter of the action by virtue of the
service of summons in the manner required by law. Hence, when there is no service of
summons or a general voluntary appearance by the defendant the Court acquires no
jurisdiction to pronounce a judgment in the cause. (Salmon vs. Tan Cueco, 36 Phil.
556).
The filing by the defendant of a motion praying for the dissolution of an
attachment without impugning the jurisdiction of the trial court and the subsequent
giving of a counterbond for its dissolution could be regarded as a voluntary
appearance, equivalent to service of summons. (Flores vs. Zurbito, 37 Phil.
746; Monteverde vs. Jaranilla, 60 Phil. 306; Lim Cay vs. Del Rosario, 55 Phil.
962; Lezama vs. Piccio, 95 Phil. 899).
A judgment against a defendant, who was not properly summoned, is
void (Echevarria, vs. Parsons Hardware Co., 51 Phil. 980; Reyes vs. Paz, 60 Phil.
440; Caneda, vs. Narvasa, L-18076, August 31, 1962).
Defective service of summons may, however, be waived—Where the appellant
altogether failed to raise the question of the defective service of summons upon him at
anytime in the justice of the peace court and it was only in the Court of First Instance
that the appellant raised the question of defective service of summons for the first
time, the lower court correctly ruled that the appellant had waived the lack of valid
service of summons upon him in the inferior court. Defects in jurisdiction arising from
defective process, or even absence of process, may be waived by failure to make the process and the jurisdiction of the local courts. And in order that a foreign
seasonable objection, (Punzalan vs. Papica, No. L-13804, Feb. 29, 1960). corporation may be regarded as doing business within a State, there must be
The defect in the service of summons was cured when the petitioners voluntarily continuity of conduct and intention to establish a continuous business. Consequently,
appeared and answered the complaint through their attorney of record, who appeared since petitioner is a corporation, exclusively engaged in the business of carrying
in their behalf in all the stages of the case (Ramos vs. Mañalac, 89 Phil. 270; Jaranilla goods and passengers by sea between the territory of Guam and the Trust Territories
vs. Gonzales, 96 Phil. 3). of the Pacific Islands; it has no property or office in the Philippines and the only act it
Service upon a general counsel or a lawyer likewise acting in a representative did was to secure the services of the deceased to act as cook and chief steward,
capacity is valid.—In Johnlo Trading Company vs. Flores, 88 Phil. 741, it was held: authorizing to that ef fect a domestic corporation, service of summons on such
"Granting', however, for the sake of argument that Balcoff merely acted as counsel for domestic corporation did not bring the petitioner, within the jurisdiction of our
the petitioner, still we are of the opinion that, upon the strength of the authorities we courts. (Pacific Micronisian Line, Inc. vs. del Rosario, 96 Phil. 23).—MARIA LUISA A.
have quoted, the service made upon him of the summons intended for the petitioner MENDOZA.
can be deemed sufficient in contemplation of law, or within the meaning of Section 14,
Rule 7, (now Section 14, Rule 14), of our Rules of Court, to bind his client Johnlo
Trading Company, upon the theory that, as the only person in the Philippines charged
with the duty of settling claims against it, he must be presumed, as was said in the
Saunders case, to communicate to his client the service made upon him of any
process that may result in a judgment and execution that may deprive it.of its property,
and the probabilities are, under such circumstances, that the corporation will be duly
informed of the pendency of the suit. And this is a very realistic interpretation 01 the
law, for it goes on the assumption that men holding such relationship 'will be prompt to
protect their own interest, and diligent in the discharge of their duties to those who
have reposed confidence in them.' "

As explained in Saunders vs. Sioux City Nursery, 6, Utah 431, 24 Pac. 532, the
principle involved is similar to that when the law authorizes service made by a copy
left at the defendant's usual place of abode with some person of sufficient age and
capacity, or in cases of constructive notice. The legislature doubtless thought the
authority to make such service might be necessary to meet the contingencies which
might arise in the administration of public justice. Conceding human motives, their
usual play, such service is likely to result in actual notice to persons whose rights may
be affected by such methods and modes of procedure.
Service of summons on foreign corporations.—A foreign corporation actually
doing business in this jurisdiction, with or without license or authority to do so, is
amenable to process and the jurisdiction of local courts. If such corporation has a
license to do business, then summons will be served on the agent designated by it for
the purpose, or otherwise in accordance with the provisions of the Corporation Law.
Where such foreign corporation actually doing business here has not applied for
license to do so and has not designated an agent to receive summons, then service of
summons on it will be made pursuant to the provisions of the Rules of Court,
particularly Section 14, Rule 14 of the Revised Rules of Court. Service upon a settling
agent or adjusting agent of a foreign corporation was, held. sufficient. (General
Corporation of the Philippines vs. Union Insurance Society of Canton, 88 Phil.
313; Salonga vs. Warner, Barnes & Co., Ltd., 88 Phil. 125).
Doing business in the Philippines is a sine qua non in order that summons may be
effected and jurisdiction acquired over foreign corporations.—In order that service of
processes may be effected in the manner stated in Section 14, Rule 14 of the Revised
Rules of Court, said section also requires that the foreign corporation be one which
is doing business in the Philippines. This fact must first be established in order that
summons can be made and jurisdiction acquired. As long as a foreign private
corporation engages in business in this jurisdiction, it should and will be amenable to