Time, Inc. v. Hon. Andres Reyes (As Judge of CFI of Rizal) : G.R. No. L-28882 May 31, 1971 Nature of The Case

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Time, Inc. v. Hon.

Andres Reyes (as Judge of CFI of Rizal)


G.R. No. L-28882
May 31, 1971

Nature of the Case:

This is a petition for certiorari and prohibition, with preliminary injunction, to


annul certain orders of the respondent Court of First Instance of Rizal, issued in its Civil
Case entitled "Antonio J. Villegas and Juan Ponce Enrile vs. Time, Inc., and Time-Life
International, Publisher of 'Time' Magazine (Asia Edition)", and to prohibit the said
court from further proceeding with the said civil case.

Facts of the Case:

The petition alleges that petitioner Time, Inc., is an American corporation with
principal offices at Rocketfeller Center, New York City, N. Y., and is the publisher of
"Time", a weekly news magazine; the petition, however, does not allege the petitioner's
legal capacity to sue in the courts of the Philippine.

In the aforesaid civil case, therein plaintiffs-respondents Antonio J. Villegas and


Juan Ponce Enrile seek to recover from petitioner Time, Inc. damages upon an alleged
libel arising from a publication of Time (Asia Edition) magazine, in its issue of Aug. 18,
1967, of an essay, entitled "Corruption in Asia", which talks about the investigation of
Manila mayor Antonio Villegas due to the discovery of his excessive and unreasonable
resources. More specifically, the plaintiffs' complaint alleges that Time magazine
published a libelous article, publicly, falsely and maliciously imputing to plaintiffs the
commission of the crimes of graft, corruption and nepotism, that said publication
particularly referred to plaintiff Mayor Antonio J. Villegas as a case in point in
connection with graft, corruption and nepotism in Asia; that said publication without
any doubt referred to co-plaintiff Juan Ponce Enrile as the high government official who
helped under curious circumstances plaintiff Mayor Villegas in lending the latter
approximately P30,000.00 without interest because he was the Mayor's compadre; that
the purpose of said Publications is to cause the dishonor, discredit and put in public
contempt the plaintiffs. At the time of the publication of the allegedly offending essay,
private respondents Antonio Villegas and Juan Ponce Enrile were the Mayor Of the City
of Manila and Undersecretary of Finance and concurrently Acting Commissioner of
Customs, respectively, with offices in the City of Manila.

On motion of the respondents-plaintiffs, the respondent judge of CFI-Rizal on


November 25, 1967, granted them leave to take the depositions "of Mr. Anthony
Gonzales, Time-Life international", and "Mr. Cesar B. Enriquez, Muller & Phipps
(Manila) Ltd.", in connection with the activities and operations in the Philippines of the
petitioner, and, on November 27, 1967, issued a writ of attachment on the real and
personal estate of Time, Inc. Petitioner received the summons and a copy of the
complaint at its offices in New York on December 13, 1967. It filed a motion to dismiss
the complaint for lack of jurisdiction and improper venue on Dec. 27, 1967, relying upon
the provisions of Republic Act 4363. Private respondents opposed the motion.
On February 26, 1968, respondent court deferred the determination of the
motion to dismiss until after trial of the case on the merits, the court having considered
that the grounds relied upon in the motion do not appear to be indubitable. Petitioner
moved for reconsideration of the deferment private respondents again opposed.
Respondent judge issued an order re-affirming the previous order of deferment for the
reason that "the rule laid down under Republic Act. No. 4363, amending Article 360 of
the Revised Penal Code, is not applicable to actions against non-resident defendants,
and because questions involving harassment and inconvenience, as well as disruption of
public service do not appear indubitable. ..."

Failing in its efforts to discontinue the taking of the depositions, previously


adverted to, and to have action taken, before trial, on its motion to dismiss, petitioner
filed the instant petition for certiorari and prohibition.

Issues:

1. Whether or not, under the provisions of RA 4363 the respondent CFI of Rizal has
jurisdiction to take cognizance of the civil suit for damages arising from an allegedly
libelous publication, considering that the action was instituted by public officers whose
offices were in the City of Manila at the time of the publication; if it has no jurisdiction,
whether or not its erroneous assumption of jurisdiction may be challenged by a foreign
corporation by writ of certiorari or prohibition;

2. Whether or not RA 4363 is applicable to action against a foreign corporation or non-


resident defendant.

RULING OF THE COURT:

Issue No. 1:

The respondent Court of First Instance of Rizal is without jurisdiction to take


cognizance of its Civil Case.

Provisions of RA No. 4363 provides that Art. 360 of the of the Revised Penal
Code is further amended to read that any person who shall publish, exhibit, or cause the
publication or exhibition of any defamation in writing or by similar means, shall be
responsible for the same. The complaint lodged in the court of Rizal by respondents
does not allege that the libelous article was printed and first published in the province of
Rizal and, since the respondents-plaintiffs are public officers with offices in Manila at
the time of the commission of the alleged offense, it is clear that the only place left for
them wherein to file their action, is the Court of First Instance of Manila.

The limitation of the choices of venue, as introduced into the Penal Code through
its amendments by Republic Act 4363, was intended " to minimize or limit the filing of
out-of-town libel suits" to protect an alleged offender from "hardships, inconveniences
and harassments" and, furthermore, to protect "the interest of the public service" where
one of the offended parties is a public officer. But since the offending publication was
not printed in the Philippines, the alternative venue was not open to respondent Mayor
Villegas of Manila and Undersecretary of Finance Enrile, who were the offended parties.

Issue No. 2:

Time, Inc, argue that RA No. 4363 is not applicable where the action is against
non-existent defendant. They urge that, in enacting RA No. 4363, Congress did not
intend to protect non-resident defendants because since a non-resident defendant is not
in a position to comply with the conditions imposed for the effectivity of the statute,
such defendant may not invoke its provisions. Time Inc. also reasoned that a foreign
corporation is not inconvenienced by an out-of-town libel suit and that it would be
absurd in the absence of an extradition treaty, for the law to give to public officers with
office in Manila the second option of filing a criminal case in the court of the place
where the libelous article is printed and first published if the defendant is a foreign
corporation and that, under the "single publication" rule which originated in the United
States and imported into the Philippines, the rule was understood to mean that
publications in another state are not covered by venue statutes of the forum.

The Court see nothing in the text of the law that would sustain unequal protection
as invoked by Time, Inc. to some of those who may be charged with libel. In the
promulgation of RA 4364 no terms are employed therein to indicate that the law can or
will be effective only as to some, but not all, of those that may be charged with libeling
public officers. The assertion that a foreign corporation or a non-resident defendant is
not inconvenienced by an out-of-town suit is irrelevant and untenable, for venue and
jurisdiction are not dependent upon convenience or inconvenience to a party. Venue
was fixed under RA 4363 to protect the interest of the public service when the offended
party is a public officer, by minimizing as much as possible any interference with the
discharge of his duties.

The contention of Time, Inc. that respondents-plaintiffs could not file a criminal
case for libel against a non-resident defendant does not make RA No. 4363 incongruous
or absurd, for such inability to file a criminal case against a non-resident natural person
equally exists in crimes other than libel. It is a fundamental rule of international
jurisdiction that no state can by its laws, and no court which is only a creature of the
state, can by its judgments or decrees, directly bind or affect property or persons beyond
the limits of the state. But if the accused is a corporation, no criminal action can lie
against it, whether such corporation or resident or non-resident. At any rate, the case
filed by respondents-plaintiffs is case for damages. The rule is that where a statute
creates a right and provides a remedy for its enforcement, the remedy is exclusive. And
where it confers jurisdiction upon a particular court, that jurisdiction is likewise
exclusive, unless otherwise provided. Hence, the venue provisions of RA No. 4363
should be deemed mandatory for the party bringing the action, unless the question of
venue should be waived by the defendant, which was not the case here. Only thus can
the policy of the Act be upheld and maintained.
Respondents asked for the dismissal of the present petition on the ground that
Time, Inc. as a foreign corporation failed to allege its capacity to sue in the courts of the
Philippines. Respondents rely on Section 69 of the Corporation law, which provides that
no foreign corporation or corporations formed, organized, or existing under any laws
other than those of the Philippines shall be permitted to maintain by itself or assignee
any suit for the recovery of any debt, claim, or demand whatever, unless it shall have the
license prescribed in the section immediately preceding. Respondent also cited several
jurisprudence stating that no foreign corporation may be permitted to maintain any suit
in the local courts unless it shall have the license required by the law. The Court ruled
that the respondents contention is wrong since the petitioner Time, Inc. is not
"maintaining any suit" but is merely defending one against itself; it did not file any
complaint but only a corollary defensive petition to prohibit the lower court from further
proceeding with a suit that it had no jurisdiction to entertain. Petitioner's failure to aver
its legal capacity to institute the present petition however is not fatal, for a foreign
corporation may, by writ of prohibition, seek relief against the wrongful assumption of
jurisdiction. The writ of preliminary injunction heretofore issued by this Supreme Court
is made permanent.

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