01 Northwest Orient Airlines Inc vs Court of Appeals 241 SCRA 192 February 09 1995

Subject Matter: venue of action against non-residents (Sec. 3, Rule 4); jurisdiction of courts over corporations, domiciled and resident.

Facts: Northwest Orient Airlines Inc (Northwest) filed an action for collection of unremitted proceeds of ticket sales with damages
against CF Sharp & Co. (Sharp). CF Sharp is a corporation registered in the Philippines operating, with four branches, in Japan was
authorized by Northwest to sell its international passenger tickets flights in Japan. When Sharp failed to remit the ticket sales for
Northwest, the latter sued Sharp in the District Court of Yokohama, Kanagawa Prefecture in Japan. To acquire jurisdiction said district
court send writ of summons to Sharp’s bailiff, Mr. Dinozo, in Japan but twice if failed to attain jurisdiction. The first was that Mr. Dinozo
was then on a trip to Manila and the second when Mr. Dinozo at the time was no more an employee of Sharp. Thus, the district court
decided to send the complaint and notice to Sharp’s head office in Manila. Sharp received the notice through the Sheriff in Manila,
ignored it and failed to appear in the trial in Japan. The judgment of the case in Japan having been final and executory but unable to
execute it in Japan; Northwest sued for enforcement of judgment in the RTC of Manila. Sharp in its Answer claim that the judgment of
the Japanese Court acquired no jurisdiction in the Philippines.

RTC Ruling: After the plaintiff rested its case, defendant filed a Motion for Judgment on a Demurrer to Evidence based on two
grounds: (1) the foreign judgment sought to be enforced is null and void for want of jurisdiction and (2) the said judgment is contrary to
Philippine law and public policy and rendered without due process of law. The RTC Manila find for Sharp, it agreed that the Sharp in a
foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the person of the Sharp but it must
be served upon Sharp in the territorial jurisdiction of the foreign court. Such is not the case here because the defendant was served
with summons in the Philippines and not in Japan.

CA Ruling: CA concluded that the service of summons effected in Manila or beyond the territorial boundaries of Japan was null and
did not confer jurisdiction upon the Tokyo District Court over the person of SHARP.

Issue: How does foreign courts of justice acquire jurisdiction over corporations? (Corollary, how does Philippine court acquire
jurisdiction over foreign corporations?)

Ruling: To acquire jurisdiction over foreign corporations is different from that of natural persons. The latter, generally its jurisdiction, is
determined whether as a resident or non-resident of a state, however, for corporations it is based on domicile and the law of the
domicile on which it was incorporated to transact business. Thus, a court proceeding has no extraterritorial effect, and no jurisdiction is
acquired over the person of the defendant by serving him beyond the boundaries of the state. Nor has a judgment of a court of a
foreign country against a resident of this country having no property in such foreign country based on process served here, any effect
here against either the defendant personally or his property situated here. Process issuing from the courts of one state or country
cannot run into another, and although a nonresident defendant may have been personally served with such process in the state or
country of his domicile, it will not give such jurisdiction as to authorize a personal judgment against him.
Exception: when courts have jurisdiction over resident foreign corporations. A foreign corporation who resides and transacts business
in a certain state is considered to have subsumed the status of domestic corporation and is treated as a resident.

SHARP was admittedly doing business in Japan through its four duly registered branches at the time the collection suit against it was
filed, then in the light of the processual presumption, SHARP may be deemed a resident of Japan, and, as such, was amenable to the
jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful methods of serving process.

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption
but also because of the presumption of regularity of performance of official duty.

Mackoy Willchurch