G.R. No. L-82330. May 31, 1988.
The Dial Corporation, et al., petitioners, vs. The Hon. Clemente M. Soriano, Presiding Judge, Regional Trial Court, Branch 3, Manila, public respondent, and Imperial Vegetable Oil Company, Inc., respondents.

FACTS

The petitioners are foreign corporations not licensed to do business, domiciled, or possessing agents, offices, or property in the Philippines. Respondent Imperial Vegetable Oil Company (IVO), a Philippine corporation, entered into contracts for coconut oil delivery through its then-president, Dominador Monteverde. These contracts contained arbitration clauses. After IVO defaulted, petitioners initiated and obtained arbitration awards abroad. Subsequently, IVO filed a complaint for injunction and damages in the Regional Trial Court of Manila against the petitioners and other foreign buyers. IVO repudiated the contracts, alleging they were unauthorized “paper trades” by its removed president, and claimed the defendants were “harassing” it to recognize the contracts. The trial court granted IVO’s motion for extraterritorial service of summons via courier to the petitioners abroad.
The petitioners, without submitting to the court’s jurisdiction, filed motions to dismiss specifically challenging the improper extraterritorial service and the court’s lack of jurisdiction over their persons. The respondent judge denied the motions, ruling the action related to property rights (contracts) within the Philippines and that, as unlicensed foreign corporations doing business in the country, they were subject to suit under the Corporation Code. The petitioners’ motions for reconsideration were also denied, prompting this certiorari petition.

ISSUE

Whether the Regional Trial Court acquired jurisdiction over the persons of the non-resident foreign corporate petitioners through the extraterritorial service of summons.

RULING

The Supreme Court granted the petition, ruling that the extraterritorial service was improper and void. The Court clarified that extraterritorial service under Section 17, Rule 14 of the Rules of Court is allowed only in four specific instances: actions affecting the plaintiff’s personal status; actions relating to property within the Philippines in which the defendant claims an interest; actions seeking to exclude the defendant from an interest in Philippine property; or when the defendant’s property in the Philippines has been attached. The complaint was a personal action for injunction and damages to stop the enforcement of contracts and alleged harassment; it did not involve any property within the Philippines in which the petitioners had a claim or interest. The “contractual rights” cited by IVO were not property situated in the Philippines, as the petitioners had not filed any action locally to enforce them.
The Court further held that the lower court’s reliance on Section 133 of the Corporation Code (now Section 133) regarding suits against unlicensed foreign corporations was misplaced. Even assuming the petitioners were doing business without a license, the Code did not dispense with the fundamental rules on proper service of summons necessary to acquire jurisdiction over their persons. Extraterritorial service is precisely for defendants not found and not doing business in the country. The court could not acquire jurisdiction to render an in personam judgment, such as a money judgment for damages, against non-residents with no property in the Philippines through improper service. Consequently, the orders authorizing and upholding the extraterritorial service were set aside, and the complaint against the petitioners was dismissed for lack of jurisdiction.