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Perkin Elmer vs.

Dakila Trading Doctrine: Rule 14, Section 15 on Extraterritorial service of summons when allowed: (1) when the action affects the personal status of the plaintiff; (2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or an interest, actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the defendant non-residents property has been attached within the Philippines. In these instances, service of summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient. Facts: Perkin Elmer Asia entered into a distribution agreement with Dakila, a domestic corp. Under the agreement, Dakila was appointed its sole distributor in the Phils and thus, shall receive commissions for its sales from Perkin Asia. Dakila was supposed to order the products either from Perkin Asia or from Perkin Elmer Instruments Philippines (PEIP), an affiliate of Perkin Asia, 99% of the shares of which is owned by Perkin Asia. However, Perkin Asia unilaterally terminated the agreement with Dakila. So Dakila sued both Perkin Asia and PEIP Dakila filed a Complaint for Collection of Money (an In Personam suit) with a prayer for a Writ of Attachment (for the properties of PEIP since 99% is owned by Perkin Asia anyway). The Alias Summons was, however, served upon Perkinelmer Asia, a Singapore based sole proprietorship owned by Perkin Asia but was allegedly, a separate and distinct entity from it. So in response to Dakilas collection suit, PEIP filed a Motion to Dismiss for lack of cause of action. Perkinelmer Asia informed the court of the wrongful service of summons upon it. Dakila then filed an amended complaint saying that Perkin Asia is now Perkinelmer, it became a sole proprietorship and changed its name but its the same people/interest so they should still be accountable for their obligations. Perkin Asia, herein petitioner and the proper party, on the other hand, filed a Motion to Dismiss on the ground that the RTC failed to acquire jurisdiction over its person. RTC denied petitioners Motion to Dismiss stating that since the action is one for damages, it relates to Perkin Asias property and since Dakila alleged in its complaint that Perkin Asia owns shares in PEIP, the extraterritorial service of summons was sufficient to acquire jurisdiction ( RTC relied on Sec. 15 of Rule 14 - (2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or an interest, actual or contingent). CA affirmed the RTC ruling. Issue: WON the service was summons was defective/won jurisdiction was validly acquired Held: No, SC reversed CA (and RTC). Extraterritorial service of summons applies only in in rem and quasi in rem cases, where only jurisdiction over the res is required and such extraterritorial service of summons is done not for the purpose of acquiring jurisdiction over the person of the defendant, but to inform the defendant that there is a suit involving his property (due process). On the other hand, when the defendant or respondent does not reside and is not found in the Philippines, and the action involved is in personam, Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. The present case is an action in personam because it deals with Perkin Asias personal liability to Dakila because of its unilateral termination of the distribution agreement. Hence, there should have been personal service of summons. Dakilas allegation that Perkin Asia had properties in the Philippines did not convert the case into an action quasi in rem as to make the extraterritorial service valid. The RTC was incorrect in relying upon Sec. 15 of Rule 14 mere allegations of personal property does not make the action as one that relates to or the subject of which is, property within the

Philippines as to warrant the extraterritorial service of summons. For the action to be considered one that relates to, or the subject of which, is the property within the Philippines, the main subject matter of the action must be the property itself of the petitioner in the Philippines. If there was no valid summons served upon petitioner, could RTC have acquired jurisdiction over the person of the petitioner by the latters voluntary appearance? No. SC said that petitioner cannot be held estopped by the answer ad cautelam it filed since it was in a situation where it had no choice but to file an answer and petitioner had been consistent in all its pleadings in questioning the lack of jurisdiction by virtue of the defective service of summons. *On issue of lack of cause of action: DENIED because when a Motion to Dismiss is grounded on the failure to state a cause of action, a ruling thereon should be based only on the facts alleged in the complaint. The court must pass upon this issue based solely on such allegations, assuming them to be true. Petitioners defense that it is not the real party in interest is evidentiary in nature and must be proven in trial. *On issue on improper venue (that venue should be Singapore since Distribution Agreement stated that exclusive jurisdiction is in Singapore): DENIED. Despite the stipulation that Sing has exclusive jurisdiction, a closer look at the Distribution Agreement would reveal that the venue stipulation was really in the alternative i.e., courts of Singapore or of the Territory, meaning, the Philippines; thus, the court a quo is not an improper venue for the present case. Finally, what happens to petitioners compulsory counterclaim for damages and attys fees after the suit against it was dismissed? SC said it should prosper because petitioner may have very well already incurred damages and litigation expenses such as attorneys fees since it was forced to engage legal representation in the Philippines to protect its rights and to assert lack of jurisdiction of the courts over its person by virtue of the improper service of summons upon it. Hence, the cause of action of petitioners counterclaim is not eliminated by the mere dismissal of respondents complaint.