French Oil Mill Machinery Co., Inc. vs Court of Appeals

written by Howard

G.R. No. 126477 – 356 Phil. 780 – 295 SCRA 463 – Remedial Law – Civil Procedure – Service of Summons; Extraterritorial Service – Foreign Corporation Doing Business in the Philippines

In May 1992, the Ludo & Luym Oleochemical Co. (LLOC) filed a complaint against French Oil Mill Machinery Co., Inc. (FOMMCO), a foreign corporation. In its Complaint, LLOC alleged that FOMMCO’s agent in conducting business here in the Philippines is Trans-World Trading Company. RTC-Cebu took cognizance of the case and it issued summons which was served to Trans-World.

FOMMCO filed a Motion to Dismiss on the ground that Trans-World is not its agent; and that FOMMCO is not doing business in the Philippines hence, since it is not doing business in the Philippines the summons should have been served in accordance with Section 17, Rule 14 of the Rules of Court (extraterritorial service) and should not have been served upon Trans-World.

In sum, FOMMCO denies the allegations in the complaint which states that it is a foreign corporation doing business in the Philippines and that its agent here is Trans-World.

ISSUE: Whether or not FOMMCO is correct.

HELD: No. For purposes of the Rules on Summons, the allegation in the complaint stating the fact that a certain foreign corporation is doing business in the Philippines and that said foreign corporation has an agent here is merely a preliminary determination that a corporation is “doing business” in the Philippines. It is not however conclusive since the foreign corporation can later on adduce evidence to prove the contrary.

The complainant has to make, in the words of the Supreme Court, appropriate allegations in its Complaint that the defendant foreign corporation is doing business in the Philippines just so summons may be properly served. The determination of such fact shall be during the trial. In fact, at that stage, the court does not have to go beyond the allegations in the complaint. It can already issue summons if it deems fit.

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