Supreme Court of the Philippines

357 Phil. 536

FIRST DIVISION
G.R. No. 128803, September 25, 1998
ASIAVEST LIMITED, PETITIONER, VS. THE COURT OF APPEALS AND
ANTONIO HERAS, RESPONDENTS.

DECISION

DAVIDE, JR., J.:

In issue is the enforceability in the Philippines of a foreign judgment. The

antecedents are summarized in the 24 August 1990 Decision[1] of Branch 107 of
the Regional Trial Court of Quezon City in Civil Case No. Q-52452; thus:
The plaintiff Asiavest Limited filed a complaint on December 3, 1987 against
the defendant Antonio Heras praying that said defendant be ordered to pay to
the plaintiff the amounts awarded by the Hong Kong Court Judgment dated
December 28, 1984 and amended on April 13, 1987, to wit:

1) US$1,810,265.40 or its equivalent in Hong Kong currency at the time of

payment with legal interest from December 28, 1984 until fully paid;

2) interest on the sum of US$1,500.00 at 9.875% per annum from October 31,
1984 to December 28, 1984; and

3) HK$905.00 at fixed cost in the action; and

4) at least $80,000.00 representing attorneys fees, litigation expenses and cost,

with interest thereon from the date of the judgment until fully paid.

On March 3, 1988, the defendant filed a Motion to Dismiss. However, before

the court could resolve the said motion, a fire which partially razed the Quezon
City Hall Building on June 11, 1988 totally destroyed the office of this Court,
together with all its records, equipment and properties. On July 26, 1988, the
plaintiff, through counsel filed a Motion for Reconstitution of Case Records.
The Court, after allowing the defendant to react thereto, granted the said
Motion and admitted the annexes attached thereto as the reconstituted records
of this case per Order dated September 6, 1988. Thereafter, the Motion to
Dismiss, the resolution of which had been deferred, was denied by the Court in
its Order of October 4, 1988.

On October 19, 1988, defendant filed his Answer. The case was then set for
pre-trial conference. At the conference, the parties could not arrive at any
settlement. However, they agreed on the following stipulations of facts:

1) The defendant admits the existence of the judgment dated December 28,
1984 as well as its amendment dated April 13, 1987, but not necessarily the
authenticity or validity thereof;

2) The plaintiff is not doing business and is not licensed to do business in the
Philippines;

3) The residence of defendant, Antonio Heras, is New Manila, Quezon City.

The only issue for this Court to determine is, whether or not the judgment of
the Hong Kong Court has been repelled by evidence of want of jurisdiction,
want of notice to the party, collusion, fraud or clear mistake of law or fact, such
as to overcome the presumption established in Section 50, Rule 39 of the Rules
of Court in favor of foreign judgments.

In view of the admission by the defendant of the existence of the

aforementioned judgment (Pls. See Stipulations of Facts in the Order dated
January 5, 1989 as amended by the Order of January 18, 1989), as well as the
legal presumption in favor of the plaintiff as provided for in paragraph (b), Sec.
50, (Ibid.), the plaintiff presented only documentary evidence to show rendition,
existence, and authentication of such judgment by the proper officials
concerned (Pls. See Exhibits A thru B, with their submarkings). In addition,
the plaintiff presented testimonial and documentary evidence to show its
entitlement to attorneys fees and other expenses of litigation.

On the other hand, the defendant presented two witnesses, namely, Fortunata
dela Vega and Russel Warren Lousich.

The gist of Ms. dela Vegas testimony is to the effect that no writ of summons
or copy of a statement of claim of Asiavest Limited was ever served in the office
of the Navegante Shipping Agency Limited and/or for Mr. Antonio Heras, and
that no service of the writ of summons was either served on the defendant at his
residence in New Manila, Quezon City. Her knowledge is based on the fact that
she was the personal secretary of Mr. Heras during his JD Transit days up to the
latter part of 1972 when he shifted or diversified to shipping business in Hong
Kong; that she was in-charge of all his letters and correspondence, business
commitments, undertakings, conferences and appointments, until October 1984
when Mr. Heras left Hong Kong for good; that she was also the Officer-in-
Charge or Office Manager of Navegante Shipping Agency LTD, a Hong Kong
registered and based company acting as ships agent, up to and until the
company closed shop sometime in the first quarter of 1985, when shipping
business collapsed worldwide; that the said company held office at 34-35
Connaught Road, Central Hong Kong and later transferred to Caxton House at
Duddel Street, Hong Kong, until the company closed shop in 1985; and that she
was certain of such facts because she held office at Caxton House up to the first
quarter of 1985.

Mr. Lousich was presented as an expert on the laws of Hong Kong, and as a
representative of the law office of the defendants counsel who made a
verification of the record of the case filed by the plaintiff in Hong Kong against
the defendant, as well as the procedure in serving Court processes in Hong
Kong.

In his affidavit (Exh. 2) which constitutes his direct testimony, the said
witness stated that:

The defendant was sued on the basis of his personal guarantee of the
obligations of Compania Hermanos de Navegacion S.A. There is no record that
a writ of summons was served on the person of the defendant in Hong Kong,
or that any such attempt at service was made. Likewise, there is no record that a
copy of the judgment of the High Court was furnished or served on the
defendant; anyway, it is not a legal requirement to do so under Hong Kong laws;

a) The writ of summons or claim can be served by the solicitor (lawyer) of the
claimant or plaintiff. In Hong Kong there are no Court personnel who serve
writs of summons and/or most other processes.

b) If the writ of summons or claim (or complaint) is not contested, the claimant
or the plaintiff is not required to present proof of his claim or complaint nor
present evidence under oath of the claim in order to obtain a Judgment.

c) There is no legal requirement that such a Judgment or decision rendered by

the Court in Hong Kong [to] make a recitation of the facts or the law upon
which the claim is based.

d) There is no necessity to furnish the defendant with a copy of the Judgment or

decision rendered against him.

e) In an action based on a guarantee, there is no established legal requirement or

obligation under Hong Kong laws that the creditor must first bring proceedings
against the principal debtor. The creditor can immediately go against the
guarantor.

On cross examination, Mr. Lousich stated that before he was commissioned by

the law firm of the defendants counsel as an expert witness and to verify the
records of the Hong Kong case, he had been acting as counsel for the defendant
in a number of commercial matters; that there was an application for service of
summons upon the defendant outside the jurisdiction of Hong Kong; that there
was an order of the Court authorizing service upon Heras outside of Hong
Kong, particularly in Manila or any other place in the Philippines (p. 9, TSN,
2/14/90); that there must be adequate proof of service of summons, otherwise
the Hong Kong Court will refuse to render judgment (p. 10, ibid); that the mere
fact that the Hong Kong Court rendered judgment, it can be presumed that
there was service of summons; that in this case, it is not just a presumption
because there was an affidavit stating that service was effected in [sic] a
particular man here in Manila; that such affidavit was filed by one Jose R.
Fernandez of the firm Sycip Salazar on the 21st of December 1984, and stated
in essence that on Friday, the 23rd of November 1984 he served the 4th
defendant at No. 6 First Street, Quezon City by leaving it at that address with
Mr. Dionisio Lopez, the son-in-law of the 4th defendant the copy of the writ
and Mr. Lopez informed me and I barely believed that he would bring the said
writ to the attention of the 4th defendant (pp. 11-12, ibid.); that upon filing of
that affidavit, the Court was asked and granted judgment against the 4th
defendant; and that if the summons or claim is not contested, the claimant of
the plaintiff is not required to present proof of his claim or complaint or present
evidence under oath of the claim in order to obtain judgment; and that such
judgment can be enforced in the same manner as a judgment rendered after full
hearing.
The trial court held that since the Hong Kong court judgment had been duly
proved, it is a presumptive evidence of a right as between the parties; hence, the
party impugning it had the burden to prove want of jurisdiction over his person.
HERAS failed to discharge that burden. He did not testify to state categorically
and under oath that he never received summons. Even his own witness Lousich
admitted that HERAS was served with summons in his Quezon City residence.
As to De la Vegas testimony regarding non-service of summons, the same was
hearsay and had no probative value.

As to HERAS contention that the Hong Kong court judgment violated the
Constitution and the procedural laws of the Philippines because it contained no
statements of the facts and the law on which it was based, the trial court ruled
that since the issue related to procedural matters, the law of the forum, i.e.,
Hong Kong laws, should govern. As testified by the expert witness Lousich,
such legalities were not required under Hong Kong laws. The trial court also
debunked HERAS contention that the principle of excussion under Article
2058 of the Civil Code of the Philippines was violated. It declared that matters
of substance are subject to the law of the place where the transaction occurred;
in this case, Hong Kong laws must govern.

The trial court concluded that the Hong Kong court judgment should be
recognized and given effect in this jurisdiction for failure of HERAS to
overcome the legal presumption in favor of the foreign judgment. It then
decreed; thus:
WHEREFORE, judgment is hereby rendered ordering defendant to pay to the
plaintiff the following sums or their equivalents in Philippine currency at the
time of payment: US$1,810,265.40 plus interest on the sum of US$1,500,000.00
at 9.875% per annum from October 31, 1984 to December 28, 1984, and
HK$905 as fixed cost, with legal interests on the aggregate amount from
December 28, 1984, and to pay attorneys fees in the sum of P80,000.00.
ASIAVEST moved for the reconsideration of the decision. It sought an award
of judicial costs and an increase in attorneys fees in the amount of
US$19,346.45 with interest until full payment of the said obligations. On the
other hand, HERAS no longer opposed the motion and instead appealed the
decision to the Court of Appeals, which docketed the appeal as CA-G.R. CV
No. 29513.

In its order[2] November 1990, the trial court granted ASIAVESTs motion for
reconsideration by increasing the award of attorneys fees to "US$19,345.65 OR
ITS EQUIVALENT IN PHILIPPINE CURRENCY, AND TO PAY THE
COSTS OF THIS SUIT," provided that ASIAVEST would pay the
corresponding filing fees for the increase. ASIAVEST appealed the order
requiring prior payment of filing fees. However, it later withdrew its appeal and
paid the additional filing fees.

On 3 April 1997, the Court of Appeals rendered its decision[3] reversing the
decision of the trial court and dismissing ASIAVESTs complaint without
prejudice. It underscored the fact that a foreign judgment does not of itself have
any extraterritorial application. For it to be given effect, the foreign tribunal
should have acquired jurisdiction over the person and the subject matter. If such
tribunal has not acquired jurisdiction, its judgment is void.

The Court of Appeals agreed with the trial court that matters of remedy and
procedure such as those relating to service of summons upon the defendant are
governed by the lex fori, which was, in this case, the law of Hong Kong.
Relative thereto, it gave weight to Lousichs testimony that under the Hong
Kong law, the substituted service of summons upon HERAS effected in the
Philippines by the clerk of Sycip Salazar Hernandez & Gatmaitan firm would be
valid provided that it was done in accordance with Philippine laws. It then
stressed that where the action is in personam and the defendant is in the
Philippines, the summons should be personally served on the defendant
pursuant to Section 7, Rule 14 of the Rules of Court.[4] Substituted service may
only be availed of where the defendant cannot be promptly served in person,
the fact of impossibility of personal service should be explained in the proof of
service. It also found as persuasive HERAS argument that instead of directly
using the clerk of the Sycip Salazar Hernandez & Gatmaitan law office, who was
not authorized by the judge of the court issuing the summons, ASIAVEST
should have asked for leave of the local courts to have the foreign summons
served by the sheriff or other court officer of the place where service was to be
made, or for special reasons by any person authorized by the judge.
The Court of Appeals agreed with HERAS that "notice sent outside the state to
a non-resident is unavailing to give jurisdiction in an action against him
personally for money recovery." Summons should have been personally served
on HERAS in Hong Kong, for, as claimed by ASIAVEST, HERAS was
physically present in Hong Kong for nearly 14 years. Since there was not even
an attempt to serve summons on HERAS in Hong Kong, the Hong Kong
Supreme Court did not acquire jurisdiction over HERAS. Nonetheless, it did
not totally foreclose the claim of ASIAVEST; thus:
While We are not fully convinced that [HERAS] has a meritorious defense
against [ASIAVESTs] claims or that [HERAS] ought to be absolved of any
liability, nevertheless, in view of the foregoing discussion, there is a need to
deviate from the findings of the lower court in the interest of justice and fair
play. This, however, is without prejudice to whatever action [ASIAVEST] might
deem proper in order to enforce its claims against [HERAS].
Finally, the Court of Appeals also agreed with HERAS that it was necessary that
evidence supporting the validity of the foreign judgment be submitted, and that
our courts are not bound to give effect to foreign judgments which contravene
our laws and the principle of sound morality and public policy.

ASIAVEST forthwith filed the instant petition alleging that the Court of
Appeals erred in ruling that
I.

... IT WAS NECESSARY FOR [ASIAVEST] TO PRESENT EVIDENCE

SUPPORTING THE VALIDITY OF THE JUDGMENT;

II.

... THE SERVICE OF SUMMONS ON [HERAS] WAS DEFECTIVE

UNDER PHILIPPINE LAW;

III.

... SUMMONS SHOULD HAVE BEEN PERSONALLY SERVED ON

HERAS IN HONG KONG;

IV.
... THE HONG KONG SUMMONS SHOULD HAVE BEEN SERVED
WITH LEAVE OF PHILIPPINE COURTS;

V.

... THE FOREIGN JUDGMENT CONTRAVENES PHILIPPINE LAWS,

THE PRINCIPLES OF SOUND MORALITY, AND THE PUBLIC POLICY
OF THE PHILIPPINES.
Being interrelated, we shall take up together the assigned errors.

Under paragraph (b) of Section 50, Rule 39 of the Rules of Court,[5] which was
the governing law at the time this case was decided by the trial court and
respondent Court of Appeals, a foreign judgment against a person rendered by a
court having jurisdiction to pronounce the judgment is presumptive evidence of
a right as between the parties and their successors in interest by the subsequent
title. However, the judgment may be repelled by evidence of want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law
or fact.

Also, Section 3(n) of Rule 131 of the New Rules of Evidence provides that in
the absence of proof to the contrary, a court, or judge acting as such, whether in
the Philippines or elsewhere, is presumed to have acted in the lawful exercise of
jurisdiction.

Hence, once the authenticity of the foreign judgment is proved, the burden to
repel it on grounds provided for in paragraph (b) of Section 50, Rule 39 of the
Rules of Court is on the party challenging the foreign judgment -- HERAS in
this case.

At the pre-trial conference, HERAS admitted the existence of the Hong Kong
judgment. On the other hand, ASIAVEST presented evidence to prove
rendition, existence, and authentication of the judgment by the proper officials.
The judgment is thus presumed to be valid and binding in the country from
which it comes, until the contrary is shown.[6] Consequently, the first ground
relied upon by ASIAVEST has merit. The presumption of validity accorded
foreign judgment would be rendered meaningless were the party seeking to
enforce it be required to first establish its validity.
The main argument raised against the Hong Kong judgment is that the Hong
Kong Supreme Court did not acquire jurisdiction over the person of HERAS.
This involves the issue of whether summons was properly and validly served on
HERAS. It is settled that matters of remedy and procedure such as those
relating to the service of process upon the defendant are governed by the lex fori
or the law of the forum,[7] i.e., the law of Hong Kong in this case. HERAS
insisted that according to his witness Mr. Lousich, who was presented as an
expert on Hong Kong laws, there was no valid service of summons on him.

In his counter-affidavit,[8] which served as his direct testimony per agreement of

the parties,[9] Lousich declared that the record of the Hong Kong case failed to
show that a writ of summons was served upon HERAS in Hong Kong or that
any such attempt was made. Neither did the record show that a copy of the
judgment of the court was served on HERAS. He stated further that under
Hong Kong laws (a) a writ of summons could be served by the solicitor of the
claimant or plaintiff; and (b) where the said writ or claim was not contested, the
claimant or plaintiff was not required to present proof under oath in order to
obtain judgment.

On cross-examination by counsel for ASIAVEST, Lousich testified that the

Hong Kong court authorized service of summons on HERAS outside of its
jurisdiction, particularly in the Philippines. He admitted also the existence of an
affidavit of one Jose R. Fernandez of the Sycip Salazar Hernandez & Gatmaitan
law firm stating that he (Fernandez) served summons on HERAS on 13
November 1984 at No. 6, 1st St., Quezon City, by leaving a copy with HERASs
son-in-law Dionisio Lopez.[10] On redirect examination, Lousich declared that
such service of summons would be valid under Hong Kong laws provided that
it was in accordance with Philippine laws.[11]

We note that there was no objection on the part of ASIAVEST on the

qualification of Mr. Lousich as an expert on the Hong Kong law. Under
Sections 24 and 25, Rule 132 of the New Rules of Evidence, the record of
public documents of a sovereign authority, tribunal, official body, or public
officer may be proved by (1) an official publication thereof or (2) a copy attested
by the officer having the legal custody thereof, which must be accompanied, if
the record is not kept in the Philippines, with a certificate that such officer has
the custody. The certificate may be issued by a secretary of the embassy or
legation, consul general, consul, vice consul, or consular agent, or any officer in
the foreign service of the Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of his office. The attestation
must state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be, and must be under the official seal of
the attesting officer.

Nevertheless, the testimony of an expert witness may be allowed to prove a

foreign law. An authority[12] on private international law thus noted:
Although it is desirable that foreign law be proved in accordance with the above
rule, however, the Supreme Court held in the case of Willamette Iron and Steel
Works v. Muzzal,[13] that Section 41, Rule 123 (Section 25, Rule 132 of the
Revised Rules of Court) does not exclude the presentation of other competent
evidence to prove the existence of a foreign law. In that case, the Supreme
Court considered the testimony under oath of an attorney-at-law of San
Francisco, California, who quoted verbatim a section of California Civil Code
and who stated that the same was in force at the time the obligations were
contracted, as sufficient evidence to establish the existence of said law.
Accordingly, in line with this view, the Supreme Court in the Collector of Internal
Revenue v. Fisher et al.,[14] upheld the Tax Court in considering the pertinent law of
California as proved by the respondents witness. In that case, the counsel for
respondent "testified that as an active member of the California Bar since 1951,
he is familiar with the revenue and taxation laws of the State of California.
When asked by the lower court to state the pertinent California law as regards
exemption of intangible personal properties, the witness cited Article 4, Sec.
13851 (a) & (b) of the California Internal and Revenue Code as published in
Derrings California Code, a publication of Bancroft-Whitney Co., Inc. And as
part of his testimony, a full quotation of the cited section was offered in
evidence by respondents." Likewise, in several naturalization cases, it was held
by the Court that evidence of the law of a foreign country on reciprocity
regarding the acquisition of citizenship, although not meeting the prescribed
rule of practice, may be allowed and used as basis for favorable action, if, in the
light of all the circumstances, the Court is "satisfied of the authenticity of the
written proof offered."[15] Thus, in a number of decisions, mere authentication
of the Chinese Naturalization Law by the Chinese Consulate General of Manila
was held to be competent proof of that law.[16]
There is, however, nothing in the testimony of Mr. Lousich that touched on the
specific law of Hong Kong in respect of service of summons either in actions in
rem or in personam, and where the defendant is either a resident or nonresident of
Hong Kong. In view of the absence of proof of the Hong Kong law on this
particular issue, the presumption of identity or similarity or the so-called
processual presumption shall come into play. It will thus be presumed that the
Hong Kong law on the matter is similar to the Philippine law.[17]

As stated in Valmonte vs. Court of Appeals,[18] it will be helpful to determine first

whether the action is in personam, in rem, or quasi in rem because the rules on
service of summons under Rule 14 of the Rules of Court of the Philippines
apply according to the nature of the action.

An action in personam is an action against a person on the basis of his personal

liability. An action in rem is an action against the thing itself instead of against the
person.[19] An action quasi in rem is one wherein an individual is named as
defendant and the purpose of the proceeding is to subject his interest therein to
the obligation or lien burdening the property.[20]

In an action in personam, jurisdiction over the person of the defendant is

necessary for the court to validly try and decide the case. Jurisdiction over the
person of a resident defendant who does not voluntarily appear in court can be
acquired by personal service of summons as provided under Section 7, Rule 14
of the Rules of Court. If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance with Section 8
of said Rule. If he is temporarily out of the country, any of the following modes
of service may be resorted to: (1) substituted service set forth in Section 8;[21] (2)
personal service outside the country, with leave of court; (3) service by
publication, also with leave of court;[22] or (4) any other manner the court may
deem sufficient.[23]

However, in an action in personam wherein the defendant is a non-resident who

does not voluntarily submit himself to the authority of the court, personal
service of summons within the state is essential to the acquisition of jurisdiction
over her person.[24] This method of service is possible if such defendant is
physically present in the country. If he is not found therein, the court cannot
acquire jurisdiction over his person and therefore cannot validly try and decide
the case against him.[25] An exception was laid down in Gemperle v. Schenker[26]
wherein a non-resident was served with summons through his wife, who was a
resident of the Philippines and who was his representative and attorney-in-fact
in a prior civil case filed by him; moreover, the second case was a mere offshoot
of the first case.

On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the
person of the defendant is not a prerequisite to confer jurisdiction on the court
provided that the court acquires jurisdiction over the res. Nonetheless,
summons must be served upon the defendant not for the purpose of vesting the
court with jurisdiction but merely for satisfying the due process requirements.[27]
Thus, where the defendant is a non-resident who is not found in the Philippines
and (1) the action affects the personal status of the plaintiff; (2) the action
relates to, or the subject matter of which is property in the Philippines in which
the defendant has or claims a lien or interest; (3) the action seeks the exclusion
of the defendant from any interest in the property located in the Philippines; or
(4) the property of the defendant has been attached in the Philippines -- 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.[28]

In the case at bar, the action filed in Hong Kong against HERAS was in
personam, since it was based on his personal guarantee of the obligation of the
principal debtor. Before we can apply the foregoing rules, we must determine
first whether HERAS was a resident of Hong Kong.

Fortunata de la Vega, HERASs personal secretary in Hong Kong since 1972

until 1985,[29] testified that HERAS was the President and part owner of a
shipping company in Hong Kong during all those times that she served as his
secretary. He had in his employ a staff of twelve.[30] He had "business
commitments, undertakings, conferences, and appointments until October 1984
when [he] left Hong Kong for good."[31] HERASs other witness, Russel Warren
Lousich, testified that he had acted as counsel for HERAS "for a number of
commercial matters."[32] ASIAVEST then infers that HERAS was a resident of
Hong Kong because he maintained a business there.

It must be noted that in his Motion to Dismiss,[33] as well as in his Answer[34] to

ASIAVESTs complaint for the enforcement of the Hong Kong court
judgment, HERAS maintained that the Hong Kong court did not have
jurisdiction over him because the fundamental rule is that jurisdiction in personam
over non-resident defendants, so as to sustain a money judgment, must be based
upon personal service of summons within the state which renders the
judgment.[35]

For its part, ASIAVEST, in its Opposition to the Motion to Dismiss[36]

contended: "The question of Hong Kong courts want of jurisdiction is
therefore a triable issue if it is to be pleaded by the defendant to repel the
foreign judgment. Facts showing jurisdictional lack (e.g. that the Hong Kong
suit was in personam, that defendant was not a resident of Hong Kong when the
suit was filed or that he did not voluntarily submit to the Hong Kong courts
jurisdiction) should be alleged and proved by the defendant."[37]

In his Reply (to the Opposition to Motion to Dismiss),[38] HERAS argued that
the lack of jurisdiction over his person was corroborated by ASIAVESTs
allegation in the complaint that he "has his residence at No. 6, 1st St., New
Manila, Quezon City, Philippines." He then concluded that such judicial
admission amounted to evidence that he was and is not a resident of Hong
Kong.

Significantly, in the pre-trial conference, the parties came up with stipulations of

facts, among which was that "the residence of defendant, Antonio Heras, is
New Manila, Quezon City."[39]

We note that the residence of HERAS insofar as the action for the enforcement
of the Hong Kong court judgment is concerned, was never in issue. He never
challenged the service of summons on him through a security guard in his
Quezon City residence and through a lawyer in his office in that city. In his
Motion to Dismiss, he did not question the jurisdiction of the Philippine court
over his person on the ground of invalid service of summons. What was in issue
was his residence as far as the Hong Kong suit was concerned. We therefore
conclude that the stipulated fact that HERAS "is a resident of New Manila,
Quezon City, Philippines" refers to his residence at the time jurisdiction over his
person was being sought by the Hong Kong court. With that stipulation of fact,
ASIAVEST cannot now claim that HERAS was a resident of Hong Kong at the
time.

Accordingly, since HERAS was not a resident of Hong Kong and the action
against him was, indisputably, one in personam, summons should have been
personally served on him in Hong Kong. The extraterritorial service in the
Philippines was therefore invalid and did not confer on the Hong Kong court
jurisdiction over his person. It follows that the Hong Kong court judgment
cannot be given force and effect here in the Philippines for having been
rendered without jurisdiction.

Even assuming that HERAS was formerly a resident of Hong Kong, he was no
longer so in November 1984 when the extraterritorial service of summons was
attempted to be made on him. As declared by his secretary, which statement was
not disputed by ASIAVEST, HERAS left Hong Kong in October 1984 "for
good."[40] His absence in Hong Kong must have been the reason why summons
was not served on him therein; thus, ASIAVEST was constrained to apply for
leave to effect service in the Philippines, and upon obtaining a favorable action
on the matter, it commissioned the Sycip Salazar Hernandez & Gatmaitan law
firm to serve the summons here in the Philippines.

In Brown v. Brown,[41] the defendant was previously a resident of the Philippines.

Several days after a criminal action for concubinage was filed against him, he
abandoned the Philippines. Later, a proceeding quasi in rem was instituted against
him. Summons in the latter case was served on the defendants attorney-in-fact
at the latters address. The Court held that under the facts of the case, it could
not be said that the defendant was "still a resident of the Philippines because he
ha[d] escaped to his country and [was] therefore an absentee in the Philippines."
As such, he should have been "summoned in the same manner as one who does
not reside and is not found in the Philippines."

Similarly, HERAS, who was also an absentee, should have been served with
summons in the same manner as a non-resident not found in Hong Kong.
Section 17, Rule 14 of the Rules of Court providing for extraterritorial service
will not apply because the suit against him was in personam. Neither can we apply
Section 18, which allows extraterritorial service on a resident defendant who is
temporarily absent from the country, because even if HERAS be considered as a
resident of Hong Kong, the undisputed fact remains that he left Hong Kong
not only "temporarily" but "for good."

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered

DENYING the petition in this case and AFFIRMING the assailed judgment
of the Court of Appeals in CA-G.R. CV No. 29513.
No costs.

SO ORDERED.

Bellosillo, Vitug, and Panganiban, JJ., concur.

Quisumbing, J., no part., former partner of a counsel.

Annex "B" of Petition; Rollo, 66-74. Per Judge (now Associate Justice of the
[1]

Court of Appeals) Delilah Vidallon Magtolis.

[2] Original Record (OR), 326.2 of

Annex "A" of Petition; Rollo, 49-65. Per Mabutas, R., Jr., J., with the
[3]

concurrence of Imperial, J., and Alio-Hormachuelos, P., JJ.

This section (now Section 6, Rule 14 of the 1997 Rules of Civil Procedure)
[4]

provided:

SEC. 7. Personal Service of Summons. - The summons shall be served by

handing a copy thereof to the defendant in person, or, if he refuses to receive it,
by tendering it to him.

[5]This Section is now Section 48 of Rule 39 of the 1997 Rules of Civil

Procedure with the following amendments: (1) inclusion of final orders of a
tribunal of a foreign country; and (2) clarification that the grounds to repel a
foreign judgment or final order are applicable to both judgment or final order
upon a title to a specific thing and one against a person.

Northwest Orient Airlines, Inc. v. Court of Appeals, 241 SCRA 192, 199
[6]

[1995].

[7] Ibid.

[8] Exhibit "2," OR, Civil Case No. Q-52452, 197-200.

[9] TSN, 14 February 1990, 5.

[10] Id., 11-12.

[11] Id., 13-15.

JOVITO R. SALONGA, PRIVATE INTERNATIONAL LAW 101-102

[12]

[1995].

[13] 61 Phil. 471 [1935].

[14] 1 SCRA 93 [1961].

Citing Pardo v. Republic, 85 Phil. 323 [1950]; Delgado v. Republic, G.R. No.
[15]

L-2546, January 28, 1950.

Citing Yap v. Solicitor General, 81 Phil. 468; Yee Bo Mann v. Republic, 83

[16]

Phil. 749; Go v. Anti-Chinese League, 47 O.G. 716; Leelin v. Republic, 47 O.G.

694.

[17] Northwest Orient Airlines, Inc. v. Court of Appeals, supra note 6, at 200.

[18] 252 SCRA 92, 99 [1996].

[19] Dial Corp. v. Soriano, 161 SCRA 737 [1988].

[20] Brown v. Brown, 3 SCRA 451, 456 [1961].

Montalban v. Maximo, 22 SCRA 1070, 1078-1081 [1968]; Valmonte v. Court

[21]

of Appeals, supra note 18, at 100; 1 MANUEL V. MORAN, COMMENTS ON

THE RULES OF COURT 459 [1979] (hereafter 1 MORAN).

Section 18 in relation to Section 17, Rule 14 of the Rules of Court;

[22]

Montalban v. Maximo, supra note 21 at 1080-1081; Valmonte v. Court of

Appeals, supra note 18, at 100; 1 MORAN 459.

Section 18 in relation to Section 17, Rule 14 of the Rules of Court. These

[23]

provisions read:

SEC. 18. Residents temporarily out of the Philippines. - When an action is

commenced against a defendant who ordinarily resides within the Philippines,
but who is temporarily out of it, service may, by leave of court, be effected out
of the Philippines, as under the preceding section.

SEC. 17. Extraterritorial service. - When the defendant does not reside and is
not found in the Philippines and the action affects the personal status of the
plaintiff or relates to, or the subject of which is, property within the Philippines,
in which the defendant has or claims a lien or interest, actual or contingent, or in
which the relief demanded consists, wholly or in part, in excluding the
defendant from any interest therein, or the property of the defendant has been
attached within the Philippines, service may, by leave of court, be effected out
of the Philippines by personal service as under section 7; or by publication in a
newspaper of general circulation in such places and for such time as the court
may order, in which case a copy of the summons and order of the court shall be
sent by registered mail to the last known address of the defendant, or in any
other manner the court may deem sufficient. Any order granting such leave shall
specify a reasonable time, which shall not be less than sixty (60) days after
notice, within which the defendant must answer.

[24] Boudart v. Tait, 67 Phil. 170, 174-175 1 [1939].

[25] 1 MORAN 456.

[26] 19 SCRA 45 [1967].

[27] Valmonte v. Court of Appeals, supra note 18 at 100-101.

[28] Section 17, Rule 14 of the Rules of Court.

[29] TSN, 5 July 1989, 7, 13-14, 23.

[30] Id., 13-14, 20-23.

[31] Exhibit, "1," OR, 189.

[32] TSN, 14 February 1990, 7.

[33] OR, 31-40.

[34] Id., 101-110.

[35] Citing Boudart v. Tait, supra note 24.

[36] OR, 47-53.

[37] Id., 52. Emphasis supplied.

[38] OR, 61-69.

[39] OR, 127.

[40] Exhibit "1."

[41] Supra note 20.

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