I.

Title:

II.

Doctrine
Instances wherein a defendant who is a nonresident and is not found in the country may be
served with summons by extraterritorial service; 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; Extraterritorial service of summons applies only where the action is in rem
or quasi in rem but not if an action is in personam.

III.

Facts

Dakila Trading Co. (DAKILA) engaged in the business of selling and leasing lab.
intruments and trading of lab. chemicals; Perkin-Elmer Instruments Asia Pte Ltd.
(PEIA) engaged in the business of manufacturing, producing, selling or distributing
lab. instruments; PEIA of Perkin-Elmer Instru. Phil. Corp. (PEIP) involved in the
business of wholesale trading of all kinds of scientific instruments.

DAKILA and PEIA entered into a Distribution Agreement whereby DAKILA will be
the sole distributor of PEIA products in the PH and was granted the right to purchase
and sell the products subject to terms under the Agreement. DAKILA was to order
products from either PEIA or PEIP. PEIA allegedly owned 99% of the shares of PEIP.

PEIA unilaterally terminated the Agreement prompting DAKILA to file a Complaint

for Collection of Sum of Money and Damages with Prayer for Issuance of a Writ of
Attachment against PEIA and PEIP. RTC: denied application for attachment; MR
denied.

DAKILA to RTC: Ex Parte Motions for Issuance of Summons and for Leave of Court
to Deputize DAKILAs General Manager Tee to Serve Summons Outside of the
Philippines. granted by RTC alias summons issued but was served to
PERKINELMER ASIA (PERKIN), sole proprietorship owned by PERKIN,
allegedly a separate & distinct entity from PEIA.

Perkin Elmer Singapore Pte Ltd. vs. Dakila Trading Corporation

G.R. No. 172242 August 14, 2007

PEIP to RTC: Motion to Dismiss*, no cause of action.

PERKIN to RTC & DAKILA: Service of Summons erroneous.

DAKILA to RTC: Ex Parte Motion to Admit Amended Complaint, which sought to

change name of PEIA to PERKIN. DAKILA claims PEIA become a sole
proprietorship owned by PERKIN and changed its name to Perkinelmer Asia, change
in PEIAs name and juridical status did not detract from the fact that it assume
obligations to 3rd parties. RTC admitted the Amended Complaint. Another
motion by DAKILA for Issuance of Summons and for Leave of Court to Deputize
DAKILAs General Manager Tee to Serve Summons Outside of the Philippines.
RTC deputized GM Tee & issued summons. GM Tee went to SG and served
summons to PERKIN.

RTC denied MD* of PEIP compelling PEIP to file Answer to Amended Complaint.

PERKIN to RTC: Special Appearance and Motion to Dismiss DAKILAs Amended

Complaint. Grounds: 1) no jurisdiction 2) failed to state cause of action v PERKIN,
DAKILA no a real party-in-interest 3) assuming arguendo that DAKILA correctly
filed the case, Agreement expressly grants PEIA right to terminate the same anytime.

RTC: denied MD; MR denied. Ratio:

Re: Service of Summons:

DAKILA alleges ownership by PERKIN over personal prop in the

form of shares of stocks in PEIP. The allegation reveals that even if the
main complaint is one for damages, it relates to a prop which PERKIN
has claim or interest or lien, which makes it fall under one reqs for
extraterritorial service under Sec 15 Rule 14, hence summons was
validly served.

Re: MD for failure to state cause of action

In a Motion to Dismiss, it hypothetically admits the truth of the facts

alleged in a complaint. When the ground for dismissal is no cause of
action, such fact is determined only from facts alleged in the
complaint; otherwise, it would be a procedural error and a denial of
due process to DAKILA.

Elements of a cause of action: a) The plaintiffs legal rights; b) A

correlative obligation of the defendant; c) The omission of the
defendant in violation of the legal rights. all attendant to the case.

Re: Venue improperly laid

Stipulation on venue in the Agreement does not preclude filing of the

suit in the residence of DAKILA, especially if the venue stipulated
was imposed by PERKIN for its own benefit.

PERKIN to CA: Petition for Certiorari under Rule 65 with application for
temporary restraining order and/or preliminary injunction, ground: refusal to
dismiss Amended Complaint.

CA: did not issue TRO/prelim. injunction; affirmed RTC.

Hence this petition for review on Certiorari by PERKIN.

IV.

Issues
(1) Whether service of summons was proper. (NO)
(2) Whether a cause of action exist in DAKILAs Amended Complaint. (YES)
(3) Whether venue was properly laid. (YES)
(4) Whether the compulsory counterclaim by reason of the unfounded suit may prosper
even if the main complaint had been dismissed. (YES)

V.

Held
(1) The proper service of summons differs depending on the nature of the civil case
instituted by DAKILA. Instances wherein a defendant who is a nonresident and is not
found in the country may be served with summons by extraterritorial service; 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; Extraterritorial service of summons applies only where the
action is in rem or quasi in rem, but not if an action is in personam.
In this case there can never be a valid extraterritorial service of summons upon it,
because the case before the RTC involving collection of a sum of money and damages is
an action in personam, as it deals with the personal liability of the PERKIN to the
DAKILA by reason of the alleged unilateral termination by PERKIN of the Distribution
Agreement.
Being an action in personam, personal service of summons within the Philippines is
necessary in order for the RTC to validly acquire jurisdiction over the person of the
petitioner, and this is not possible in the present case because the petitioner is a non resident and is not found within the Phil. Mere allegation that PERKIN had personal prop

did not make collection case converted to in rem or quasi in rem and subsequently make
extraterritorial service of summons valid.
As regards the decision of RTC that the same falls under the second instance under Sec 15
Rule 14 when the action relates to, or the subject of which is property, within the
Philippines, in which the defendant claims a lien or interest, actual or contingent DOES
NOT APPLY IN THIS CASE Amended Complaint was for collection of sum of money,
it is neither related nor connected to any prop which PERKIN had claims or lien. Case was
purely based on personal liab of PERKIN. For action to fall under the second instance,
the main subject matter of the action must be the property itself of the petitioner in
the Philippines.
To fall under the fourth instance under Sec 15 Rule 14, what is required is not a mere
allegation of the existence of personal property belonging to the nonresident defendant but
that the nonresident defendants personal property located within the Philippines must
have been actually attached. The prayer for attachment was denied (likewise in MR) by
RTC. Stocks were never attached; hence action remains an action in personam. RTC
thus failed to acquire jurisdiction.
Court can still acquire jurisdiction over his person when he voluntary appears in court or
submits himself NOT APPLICABLE IN THIS CASE it is settled that a party who
makes a special appearance in court for the purpose of challenging the jurisdiction of said
court, based on the invalidity of the service of summons, cannot be considered to have
voluntarily submitted himself to the jurisdiction.
PERKIN was consistent in assailing the service of summons and the RTC jurisdiction.
PERKIN cannot be declared in estoppel when it filed an Answer ad cautelam with
compulsory counterclaim, it had no other choice but to file an Answer; otherwise, the RTC
would have already declared PERKIN had waived its right to file responsive pleadings.
Neither can the compulsory counterclaim be considered as voluntary appearance, seeks to
recover damages and attorneys fees as a consequence of the unfounded suit.
RTC may exercise jurisdiction over the collection case, the compulsory counterclaim
attached to PERKINs Answer ad cautelam can be treated as a separate action, wherein
PERKIN is the plaintiff while DAKILA is the defendant.
Re: Whether the raising of PERKIN of other grounds in its Motion to Dismiss aside from
lack of jurisdiction tantamount to voluntary appearance, hence RTC acquired jurisdiction
over it. (NO)
Even though PERKIN raised other grounds in its Motion to Dismiss aside from lack of
jurisdiction over its person, the same is not tantamount to its voluntary appearance or
submission to the authority of the court a quo. Estoppel by jurisdiction must be
unequivocal and intentional; The allegation of grounds other than lack of jurisdiction with
a prayer for such other reliefs as may be deemed appropriate and proper cannot be
considered as unequivocal and intentional estoppel.
In La Naval Drug Corporation v. Court of Appeals, the Court stated that estoppel by
jurisdiction must be unequivocal and intentional. It would be absurd to hold that petitioner
unequivocally and intentionally submitted itself to the jurisdiction of the court by seeking
other reliefs to which it might be entitled when the only relief that it could properly ask
from the trial court is the dismissal of the complaint against it.

Thus, the allegation of grounds other than lack of jurisdiction with a prayer for such other
reliefs as may be deemed appropriate and proper cannot be considered as unequivocal
and intentional estoppel. Under Rule 14 Sec. 20, inclusion in a motion to dismiss of
other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance.
(2) 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. For it to do
otherwise would be a procedural error and a denial of PERKINs right to due process.
There are wellrecognized exceptions however none apply in this case. Hence, general rule
applies.
As regards the issue on proper party, evidentiary in nature, which must be proven in trial.
(3) Despite the venue stipulation found in the Distribution Agreement stipulating that the
exclusive jurisdiction over disputes arising from the same shall lie in the courts of the
Singapore or Philippines whichever is elected by PEIA or PERKINS as PEIAs alleged
successor.
Truly, the venue stipulation used the word exclusive, however, a closer look on 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.
However, case still dismissible still dismissible, for the RTC never acquired jurisdiction
over the person of PERKIN. The extraterritorial service of summons upon PERKIN
produces no effect because it can only be done if the action is in rem or quasi in rem. The
case for collection of sum of money and damages filed by the DAKILA against the
PERKIN being an action in personam, then personal service of summons upon the
PERKIN within the Philippines is essential.
(4) If the dismissal of the complaint somehow eliminates the cause of the counterclaim,
then the counterclaim cannot survive. If the counterclaim itself states sufficient cause of
action then it should stand independently of and survive the dismissal of the complaint.
In this case, PERKIN;s counterclaim is for damages and attys fees arisinf from the
unfounded suit. While DAKILAs Complaint against PERKIN is already dismissed,
PERKIN may have very well already incurred damages and litigation expenses forced to
engage legal representation in the Philippines to protect its rights and to assert lack of
jurisdiction. Hence, the cause of action of PERKINs counterclaim is not eliminated by the
mere dismissal of DAKILAs complaint.
It will then be iniquitous and the height of injustice to require PERKIN to make the
compulsory counterclaim in the present action, under threat of losing his right to claim yet
make his right totally dependent on the fate of the DAKILAs complaint.
Petition granted.