G.R. No. 175799, November 28, 2011
NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED, Petitioner, vs. LEPANTO CONSOLIDATED MINING COMPANY, Respondent.

FACTS

Respondent Lepanto Consolidated Mining Company filed a Complaint in the Regional Trial Court (RTC) of Makati against petitioner NM Rothschild & Sons (Australia) Limited, praying for a judgment declaring their loan and hedging contracts void under Article 2018 of the Civil Code and for damages. The trial court authorized service of summons on petitioner through the Philippine Consulate General in Sydney, Australia. Petitioner filed a Special Appearance With Motion to Dismiss on grounds including lack of jurisdiction due to defective service of summons and failure of the Complaint to state a cause of action. The RTC denied the Motion to Dismiss, ruling summons was proper as petitioner had neither applied for a Philippine business license nor designated an agent for service with the SEC, and that the Complaint sufficiently stated a cause of action. The RTC also denied petitioner’s Motion for Reconsideration and disallowed its Motions for Leave to take a deposition and serve interrogatories. Petitioner filed a Petition for Certiorari with the Court of Appeals, alleging grave abuse of discretion by the RTC. The Court of Appeals dismissed the Petition, ruling that an order denying a motion to dismiss is interlocutory and not a proper subject of certiorari, reviewable only by appeal after trial. The Court of Appeals denied petitioner’s Motion for Reconsideration. Petitioner filed the present Petition for Review on Certiorari.

ISSUE

1. Whether the present Petition should be dismissed for not being filed by a real party in interest.
2. Whether a Petition for Certiorari is a proper remedy to assail the denial of a Motion to Dismiss.
3. Whether the RTC committed grave abuse of discretion in denying the Motion to Dismiss, specifically regarding:
a. Acquisition of jurisdiction over petitioner; and
b. Sufficiency of the Complaint’s statement of a cause of action.

RULING

1. On the Real Party in Interest: The Supreme Court ruled the Petition should not be dismissed. Petitioner presented evidence of a change of its corporate name from NM Rothschild & Sons (Australia) Limited to Investec Australia Limited with the Australian Securities & Investment Commission. The Court found the identification adequate, holding the filing party is the real party in interest as it stands to be benefited or injured by the judgment. Objections to the verification and certificate against forum shopping based on corporate name were likewise dismissed.
2. On the Propriety of Certiorari: The Supreme Court reiterated the general rule that an order denying a motion to dismiss is interlocutory and not appealable, nor is it a proper subject for certiorari, as it does not terminate the case. However, the Court recognized an exception: when the denial is tainted with grave abuse of discretion amounting to lack or excess of jurisdiction, certiorari may be granted. “Grave abuse of discretion” means a capricious, whimsical, arbitrary, or despotic exercise of judgment equivalent to an evasion of a positive duty or a virtual refusal to act.
3. On the Merits of the Motion to Dismiss:
a. Regarding Jurisdiction: The Supreme Court found the RTC did not commit grave abuse of discretion. The Court noted that the propriety of extraterritorial service of summons on a foreign corporation doing business in the Philippines without a license is a factual matter requiring determination of whether petitioner was indeed doing business in the country. The RTC’s finding that petitioner was doing business based on the allegations was a preliminary determination for purposes of service, not a final adjudication. The Court held this issue involved an exercise of judgment, not jurisdiction, and was not attended by grave abuse of discretion. The Court also noted that by seeking affirmative relief (filing motions for leave to take deposition and serve interrogatories), petitioner may have voluntarily submitted to the RTC’s jurisdiction.
b. Regarding Cause of Action: The Supreme Court found the RTC did not commit grave abuse of discretion. The Complaint alleged the hedging contracts were void under Article 2018 as they were essentially wagering or gambling contracts on commodity prices, with no intention of actual delivery, seeking only payment of price differences. The Court ruled these allegations sufficiently stated a cause of action for declaration of nullity. Whether the contracts were truly wagering contracts or legitimate hedging agreements involved evidentiary matters to be threshed out during trial, not proper for resolution in a motion to dismiss. The RTC’s denial was thus not arbitrary or despotic.
The Supreme Court DENIED the Petition, affirming the Court of Appeals’ dismissal of the certiorari petition. The RTC’s orders were sustained, and the case was remanded for trial on the merits. Costs were imposed on petitioner.