Philippine International Shipping Corporation v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Respondent Interpool, Ltd., a foreign corporation, leased shipping containers to petitioner Philippine International Shipping Corporation (PISC) between 1979 and 1981. PISC incurred outstanding obligations totaling $94,456.28 for unpaid per diems, drop-off charges, and other fees. The other corporate petitioners, Philippine Construction Consortium Corporation, Pacific Mills Inc., and Universal Steel Smelting Co., Inc., guaranteed PISC's liabilities. Individual petitioners George Lim, Marcos Bautista, Carlos Laude, Tan Sing Lim, Antonio Liu Lao, and Ong Teh also unconditionally guaranteed PISC's payments and indemnified Interpool against any losses arising from PISC's failure to meet its obligations. 2. Procedural History: Interpool, Ltd. obtained a default judgment against PISC from the U.S. District Court for the Southern District of New York for $94,456.28. Subsequently, Interpool filed a complaint in the Regional Trial Court (RTC) of Quezon City to enforce this judgment against PISC and its guarantors. The petitioners failed to answer, were declared in default, and the RTC rendered judgment in favor of Interpool. The petitioners appealed to the Court of Appeals (CA), which dismissed the appeal for failure to pay docketing fees. Interpool then moved for execution, which the RTC granted, appointing a special sheriff. The petitioners filed a petition with the CA to annul the RTC's order of execution, which the CA denied. This denial led to the present petition before the Supreme Court. 3. The Petition: Petitioners seek review of the CA's decision, arguing that both the U.S. District Court's default judgment and the RTC's enforcement judgment are void due to lack of jurisdiction. They contend they were not properly served with summons in the U.S. case, and that this alleged jurisdictional defect prevented the RTC from acquiring jurisdiction. They also argue that even if the U.S. judgment were valid, it could only be enforced against PISC, as the other petitioners were not parties to the New York action. The petition is filed under Rule 45 of the Rules of Court.
Issue(s)
Whether the U.S. District Court validly acquired jurisdiction over petitioner PISC. Whether the Philippine Regional Trial Court acquired jurisdiction over the petitioners in Civil Case No. Q-39927, and whether the other nine petitioners could be impleaded in the Philippine case to enforce the U.S. default judgment against PISC. Whether the petitioners voluntarily submitted to the jurisdiction of the Philippine Regional Trial Court and are estopped from asserting lack of jurisdiction.
Ruling
The Petition for Review is DENIED, and the Decision dated 12 December 1986 of the Court of Appeals in C.A.-G.R. SP No. 10614 is AFFIRMED. The Resolution is immediately executory.
Ratio Decidendi
On the jurisdiction of the U.S. District Court over PISC: The Supreme Court held that the U.S. District Court validly acquired jurisdiction over PISC. Evidence showed that PISC's Manila office received and stamped the Summons and Complaint, indicating actual notice. Furthermore, PISC's designated agent in New York was served, as per the Master Equipment Leasing Agreement. PISC's subsequent filing of a Motion to Dismiss without assailing the court's jurisdiction constituted a voluntary submission to its authority. The foreign judgment, having become final and executory without being vitiated by fraud, collusion, or clear mistake, is presumptive evidence of a right and enforceable in the Philippines. On the jurisdiction of the Philippine Regional Trial Court and the joinder of other petitioners: The Court found no impropriety in Interpool impleading the other nine petitioners in the Philippine case to enforce the foreign judgment. Pursuant to Section 6, Rule 3 of the Revised Rules of Court, permissive joinder of parties is allowed when a right to relief arises from the same transaction or series of transactions, and a common question of law or fact exists. The nine petitioners had executed continuing guarantees, making them liable jointly and severally for PISC's obligations. Their liability stemmed from these guarantees, which were executed in the Philippines and arose from the same transaction (PISC's breach of agreements). On the voluntary submission to jurisdiction and estoppel: Even assuming, arguendo, that none of the petitioners were properly served with notice or summons in Civil Case No. Q-39927, the Court noted that they voluntarily submitted to the jurisdiction of the RTC. They filed a Motion for Extension of Time to file an Answer and a Motion for Bill of Particulars, which addressed the merits of Interpool's complaint. In these pleadings, they did not question the trial court's jurisdiction over the case or their persons. By their actions, they manifested an intention to controvert the allegations and thereby submitted themselves to the court's authority, estopping them from later asserting lack of jurisdiction.
Main Doctrine
A foreign judgment that has become final and executory, and is not vitiated by want of notice, collusion, fraud, or clear mistake of law or fact, is presumptive evidence of a right and may be enforced in the Philippines. Furthermore, parties who voluntarily submit to the jurisdiction of a court, by filing pleadings that do not assail its jurisdiction, are estopped from later claiming lack of jurisdiction.