Case Digest (G.R. No. 128803)
Facts:
The case Asiavest Limited vs. The Court of Appeals and Antonio Heras (G.R. No. 128803) revolves around the enforceability of a foreign judgment in the Philippines. The petitioner, Asiavest Limited, filed a complaint on December 3, 1987, against the respondent, Antonio Heras, seeking to enforce a judgment rendered by the Hong Kong Court on December 28, 1984, which was amended on April 13, 1987. The amounts claimed included US$1,810,265.40, interest on US$1,500.00, HK$905.00 for costs, and at least $80,000.00 for attorney's fees, all with legal interest from the date of the judgment until fully paid.
On March 3, 1988, Heras filed a Motion to Dismiss, but before the court could rule on it, a fire on June 11, 1988, destroyed the Quezon City Hall Building, including court records. Asiavest subsequently filed a Motion for Reconstitution of Case Records, which was granted. The Motion to Dismiss was denied on October 4, 1988, and Heras filed his Answer on October 19, 1988. Duri...
Case Digest (G.R. No. 128803)
Facts:
Background of the Case
- Asiavest Limited filed a complaint against Antonio Heras in the Regional Trial Court (RTC) of Quezon City, seeking enforcement of a Hong Kong court judgment dated December 28, 1984, and amended on April 13, 1987. The judgment ordered Heras to pay:
- US$1,810,265.40 with legal interest from December 28, 1984;
- Interest on US$1,500.00 at 9.875% per annum from October 31, 1984, to December 28, 1984;
- HK$905.00 as fixed costs; and
- At least $80,000.00 for attorney’s fees and litigation expenses.
Procedural History
- Heras filed a Motion to Dismiss, but before the court could resolve it, a fire destroyed the Quezon City Hall Building, including the court’s records. The case was reconstituted, and the Motion to Dismiss was denied.
- During pre-trial, the parties stipulated that:
- Heras admitted the existence of the Hong Kong judgment but not its validity;
- Asiavest was not doing business in the Philippines; and
- Heras’s residence was in Quezon City.
Evidence Presented
- Asiavest presented documentary evidence to prove the existence and authentication of the Hong Kong judgment. Heras presented two witnesses:
- Fortunata dela Vega, his former secretary, testified that no summons or statement of claim was served on Heras in Hong Kong or his residence in Quezon City.
- Russel Warren Lousich, an expert on Hong Kong law, testified that:
- No summons was served on Heras in Hong Kong;
- Under Hong Kong law, a writ of summons could be served by the claimant’s solicitor;
- If the writ is uncontested, no proof of claim is required to obtain judgment.
Trial Court Decision
- The RTC ruled in favor of Asiavest, holding that the Hong Kong judgment was presumptively valid under Section 50, Rule 39 of the Rules of Court. Heras failed to prove lack of jurisdiction, notice, collusion, fraud, or mistake of law or fact. The court ordered Heras to pay the amounts awarded in the Hong Kong judgment.
Appeal to the Court of Appeals
- The Court of Appeals reversed the RTC decision, holding that the Hong Kong court did not acquire jurisdiction over Heras because summons was not personally served on him in Hong Kong. The extraterritorial service in the Philippines was invalid under Philippine law.
Issue:
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Ruling:
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Ratio:
Jurisdiction Over the Person:
- In an action in personam, jurisdiction over the defendant is acquired through personal service of summons within the forum’s jurisdiction. If the defendant is a non-resident, personal service within the forum is essential.
- Heras was not a resident of Hong Kong at the time of the suit, as evidenced by the stipulation that his residence was in Quezon City. Therefore, summons should have been personally served on him in Hong Kong.
Extraterritorial Service:
- The extraterritorial service of summons on Heras in the Philippines was invalid because:
- The action was in personam, and Heras was not a resident of Hong Kong.
- Under Philippine law, substituted service is only valid if personal service is impossible, and the impossibility must be explained in the proof of service.
- The extraterritorial service of summons on Heras in the Philippines was invalid because:
Presumption of Validity of Foreign Judgments:
- Under Section 50, Rule 39 of the Rules of Court, a foreign judgment is presumptively valid unless rebutted by evidence of lack of jurisdiction, notice, collusion, fraud, or mistake of law or fact.
- Heras successfully rebutted the presumption by proving that the Hong Kong court did not acquire jurisdiction over him due to improper service of summons.
Lex Fori Governs Procedural Matters:
- Matters of procedure, such as service of summons, are governed by the law of the forum (lex fori). Since the Hong Kong court did not comply with Philippine procedural laws, its judgment cannot be enforced in the Philippines.
Public Policy and Sound Morality:
- The Court of Appeals and the Supreme Court emphasized that foreign judgments must not contravene Philippine laws, public policy, or principles of sound morality. The improper service of summons rendered the Hong Kong judgment unenforceable in the Philippines.
Conclusion:
The Supreme Court upheld the Court of Appeals’ decision, ruling that the Hong Kong judgment is unenforceable in the Philippines due to the Hong Kong court’s lack of jurisdiction over Heras. The extraterritorial service of summons in the Philippines was invalid under Philippine law, and Heras successfully rebutted the presumption of validity accorded to foreign judgments.