FBA Aircraft, S.A. v. Zosa
REITERATIONFacts
1. The Antecedents: The underlying dispute involves Summit Philippines Airways, Inc. (formerly Sterling Philippine Airways, Inc.) seeking to sue FBA Aircraft, S.A. and ITL, Inc., foreign corporations, in the Philippines. The core issue revolves around whether these foreign corporations, allegedly not doing business in the Philippines, can be sued within Philippine jurisdiction for actions affecting a Philippine entity. 2. Procedural History: Summit Philippines Airways, Inc. filed a complaint against FBA Aircraft, S.A. and ITL, Inc., and obtained a writ of attachment for three aircraft and engines. The respondent court, the Court of First Instance of Rizal, Makati Station, Branch XXXVI, initially dismissed the complaint for lack of jurisdiction over the persons of the defendants and dissolved the writ of attachment. However, the court later maintained the attachment until its dismissal order became final, acknowledging that the plaintiff would be helpless if the aircraft were removed from the Philippines. The respondent-plaintiff appealed this dismissal order. 3. The Petition: FBA Aircraft, S.A. and ITL, Inc. filed a petition for mandamus with preliminary mandatory injunction, seeking the release of the attached aircraft and engines. They argued against the respondent court's orders, particularly the maintenance of the attachment. The Supreme Court, in its resolution, considered the petition, the respondents' comments, and the lower court's orders. The Court dismissed the petition, finding no clear entitlement for the petitioners to the release of the aircraft, and directed the respondent court to grant leave for extraterritorial service of summons, thereby allowing the case to proceed on the merits without requiring a new complaint.
Issue(s)
Whether the respondent court erred in dismissing the complaint for lack of jurisdiction over the persons of the foreign corporate defendants and in dissolving the writ of attachment. Whether the respondent court erred in maintaining the attachment until the dismissal order became final, despite the dismissal of the complaint.
Ruling
The Court resolved to DISMISS the petition for lack of clear showing by petitioners that they are entitled to the release of the attached aircraft. The Court directed the respondent court to grant leave for extraterritorial service of summons upon the petitioners-defendants and to proceed with due dispatch in the hearing and determination of the case on the merits.
Ratio Decidendi
On Issue 1: The Court found it unnecessary to await a definitive ruling from the appellate court on the suability of foreign corporations, citing the principle that if a foreign corporation not engaged in business in the Philippines is not barred from seeking redress from Philippine courts, then a fortiori it cannot claim exemption from being sued in Philippine courts for acts done against persons in the Philippines. The filing of the petition by the petitioners themselves seeking redress from the Supreme Court underscored this point, rendering the question of the respondent's appeal moot. The Court also ruled that it was unnecessary for the respondent-plaintiff to file a new complaint asking for extraterritorial service of summons. Since the petitioners-defendants' properties were attached within the Philippines, extraterritorial service of summons could clearly be effected under Rule 14, Section 17 of the Rules of Court. Therefore, the respondent court was directed to grant such leave for extraterritorial service of summons without the ritual of filing a new complaint. On Issue 2: The Court implicitly addressed this by directing the respondent court to proceed with the hearing and determination of the case on the merits after granting leave for extraterritorial service of summons. By allowing extraterritorial service, the Court effectively allowed the case to proceed, thereby validating the continued attachment of the properties as a basis for jurisdiction until the merits are resolved. The Court's reasoning that the plaintiff would be "completely helpless if these planes are pirated out of the Philippines" further supported the necessity of maintaining the attachment to secure the subject matter of the litigation.
Main Doctrine
The Court held that a foreign corporation, even if not engaged in business in the Philippines, cannot claim exemption from being sued in Philippine courts for acts done against persons or entities in the Philippines. Furthermore, when a foreign corporation's properties are attached within the Philippines, extraterritorial service of summons is permissible under Rule 14, Section 17 of the Rules of Court, rendering the filing of a new complaint for this purpose unnecessary.