Wang Laboratories, Inc. v. Mendoza
REITERATIONFacts
The Antecedents: Petitioner, Wang Laboratories, Inc. (Wang), a US corporation, sells computers worldwide and exclusively through EXXBYTE TECHNOLOGIES CORPORATION (EXXBYTE) in the Philippines. Private respondent, Angara, Concepcion, Regala & Cruz Law Offices (ACCRALAW), entered into two contracts with EXXBYTE: one for the acquisition and installation of a Wang 2200 US Integrated Information System, and another for the development of a data processing software program. ACCRALAW opened a letter of credit in favor of petitioner for the first contract. The hardware was delivered and installed by EXXBYTE. The software development contract was not implemented. Procedural History: ACCRALAW filed a complaint for breach of contract with damages, replevin, and attachment against petitioner in the Regional Trial Court (RTC) of Makati. Petitioner filed a Motion to Dismiss, asserting improper service of summons and lack of jurisdiction over its person as it is a foreign corporation not doing business in the Philippines. Petitioner also filed a Motion for Deposition by Oral Examination to support its motion to dismiss. ACCRALAW filed an Ex-Abundante Cautela Motion for leave to effect extraterritorial service of summons. Respondent Judge Mendoza granted the motion for extraterritorial service, denied petitioner's motion to dismiss on the ground of voluntary submission to jurisdiction, and declined to consider the issues raised in the motion to dismiss. The Petition: Petitioner filed a petition for Certiorari, Prohibition, and Mandamus with Preliminary Injunction, seeking to annul the RTC order, prohibit further proceedings, and compel the court to rule on its Motion to Dismiss.
Issue(s)
Whether the respondent court acquired jurisdiction over the person of the petitioner, a foreign corporation. Whether the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in ruling that petitioner had voluntarily submitted to the jurisdiction of the court below. Whether the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in ruling that ACCRALAW could serve summons on petitioner extraterritorially. Whether the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in not holding that there was improper service of summons on petitioner, and whether petitioner was doing business in the Philippines.
Ruling
The petition is dismissed for lack of merit. The temporary restraining order is lifted immediately.
Ratio Decidendi
On the issue of jurisdiction over the person of the petitioner: The Court held that the service of summons on EXXBYTE, petitioner's exclusive distributor in the Philippines, was a valid mode of service. Evidence showed that EXXBYTE was publicly advertised and represented itself as Wang's authorized exclusive representative in the Philippines. Petitioner itself admitted in its reply that it deals exclusively with EXXBYTE for the sale of its products in the Philippines. Therefore, EXXBYTE could be considered an agent of petitioner for service of process. The Court further noted that even if EXXBYTE were not considered an agent, petitioner's subsequent actions in the RTC constituted a voluntary submission to the court's jurisdiction. Petitioner sought affirmative reliefs, such as authority to take depositions and extensions of time to file pleadings, which are acts that require the exercise of jurisdiction. Such actions, even while objecting to jurisdiction, amount to a waiver of the objection to the court's jurisdiction over its person. The Court reiterated the principle that a voluntary appearance is a waiver of the necessity of formal notice, and if an appearance is for any purpose other than solely objecting to jurisdiction, the defendant is deemed to have submitted to the court's jurisdiction. On the issue of whether the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in ruling that petitioner had voluntarily submitted to the jurisdiction of the court below: The Court further noted that even if EXXBYTE were not considered an agent, petitioner's subsequent actions in the RTC constituted a voluntary submission to the court's jurisdiction. Petitioner sought affirmative reliefs, such as authority to take depositions and extensions of time to file pleadings, which are acts that require the exercise of jurisdiction. Such actions, even while objecting to jurisdiction, amount to a waiver of the objection to the court's jurisdiction over its person. The Court reiterated the principle that a voluntary appearance is a waiver of the necessity of formal notice, and if an appearance is for any purpose other than solely objecting to jurisdiction, the defendant is deemed to have submitted to the court's jurisdiction. On the issue of extraterritorial service of summons: The Court found that the RTC did not err in granting the motion for extraterritorial service. The private respondent presented evidence that petitioner had properties in the Philippines, specifically trademarks registered with the Philippine Patent Office, and had designated a resident agent for service of process. These trademarks were judicially attached. The Court also cited the principle that a foreign corporation, even if not doing business in the Philippines, may be sued for acts done against persons in the Philippines. The ability of a foreign corporation to seek redress in Philippine courts implies its amenability to be sued in the same courts for acts committed within the jurisdiction. This principle supports the validity of extraterritorial service when justified by the circumstances, especially when the foreign corporation has assets or has engaged in acts within the Philippines. On the issue of whether petitioner was doing business in the Philippines and whether the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in not holding that there was improper service of summons on petitioner: The Court found that petitioner could not unilaterally declare it was not doing business in the Philippines. The evidence presented showed that petitioner had installed at least 26 different products in various corporations in the Philippines since 1976, registered its trade name, and its Asian Controller had visited the Philippines multiple times to conduct training programs. Wang also allowed EXXBYTE to use its registered logo and trademark and made it known that EXXBYTE was its designated distributor. The Court cited precedents holding that a single act or transaction, if not merely incidental or casual but indicative of a purpose to do other business, constitutes doing business within the meaning of statutes prescribing conditions for service of summons. Therefore, the petitioner's activities went beyond mere isolated transactions.
Main Doctrine
A foreign corporation, even if not doing business in the Philippines, may be sued in Philippine courts for acts done within the Philippines. Furthermore, a foreign corporation waives any objection to the court's jurisdiction over its person if it seeks affirmative reliefs from the court or alleges non-jurisdictional grounds in its pleadings.