G.R. No. 126477 September 11, 1998
FRENCH OIL MILL MACHINERY CO., INC., petitioner, vs. COURT OF APPEALS, REGIONAL TRIAL COURT, CEBU CITY, BR. 11, and LUDO & LUYM OLEOCHEMICAL CO., respondents.

FACTS

Private respondent Ludo & Luym Oleochemical Co. filed a complaint for breach of contract with damages against petitioner French Oil Mill Machinery Co., Inc. (FOMMCO), a foreign corporation, and Trans-World Trading Company, alleged to be FOMMCO’s Philippine agent. The complaint alleged that FOMMCO was engaged in business in the Philippines through its agent Trans-World. Summons was served on Trans-World. Trans-World moved to dismiss, arguing it was not petitioner’s agent. Petitioner itself filed a special appearance with a motion to dismiss, contending the court had no jurisdiction over its person due to improper service of summons, arguing it was not doing business in the Philippines and Trans-World was not its agent. The trial court initially dismissed the complaint for lack of jurisdiction but, on reconsideration, reversed itself, ruling summons was properly served as petitioner was doing business and Trans-World was its agent. The Court of Appeals affirmed. Petitioner elevated the case to the Supreme Court via a petition for review.

ISSUE

Whether the Regional Trial Court acquired jurisdiction over the person of petitioner foreign corporation through the service of summons on Trans-World Trading Company.

RULING

The Supreme Court DENIED the petition, upholding the validity of the service of summons. The Court ruled that for purposes of summons under Rule 14, Section 14 (now Section 12, Rule 14), it is sufficient that the complaint alleges the foreign corporation is doing business in the Philippines. The allegations that petitioner entered into a contract to supply machineries and that a shipment was received were sufficient to establish, preliminarily for jurisdiction purposes, that petitioner was doing business. This preliminary determination does not foreclose a contrary finding based on evidence later. On the agency issue, while a general allegation of agency is insufficient, specific allegations connecting the principal and agent to the transaction are necessary. The Court clarified that a headnote/syllabi in a reporter (referring to Signetics Corporation v. CA) stating summons can be served on an alleged agent without prior evidence is not part of the court’s decision and was a misinterpretation. The determination of an agency relationship from the complaint is also preliminary. The factual findings of the lower courts that petitioner treated Trans-World as its agent in the transaction are binding and supported. The Court also noted that filing an answer to object to jurisdiction is not voluntary appearance. Since petitioner did not file an answer, this point needed no further discussion.