Facts:

• The case involves The Dial Corporation, C & T Refinery Inc., NALIN Sdn. Bhb., Berisford Commodities, Ltd., and Pacific Molasses Company (petitioners), which are foreign corporations from the United States, the United Kingdom, and Malaysia.
• These corporations are not domiciled in the Philippines, have no officers, agents, places of business, or property in the country, and are not licensed to engage in business there.
• The respondent, Imperial Vegetable Oil Company, Inc. (IVO), is a Philippine corporation.
• IVO, through its president Dominador Monteverde, entered into several contracts for the delivery of coconut oil to the petitioners, which included arbitration clauses under FOSFA or NIOP rules.
• Due to IVO's default under these contracts, the petitioners initiated arbitration proceedings abroad and obtained arbitration awards against IVO.
• On April 8, 1987, IVO filed a complaint for injunction and damages against nineteen foreign coconut oil buyers, including the petitioners, in the RTC of Manila (Civil Case No. 87-40166).
• IVO claimed Monteverde's contracts were unauthorized "paper trading in futures" and that he was replaced by Rodrigo Monteverde.
• IVO alleged harassment by the defendants and sought a temporary restraining order, damages totaling P21 million, and other reliefs.
• The RTC authorized extraterritorial service of summons via DHL, which the petitioners contested.
• The RTC denied the petitioners' motions to dismiss, leading them to file for certiorari.

Issue:

• (Unlock)

Ruling:

1. The extraterritorial service of summons on the petitioners was improper and null and void.
2. The complaint in Civil Case No. 87-40166 is dismissed as against the peti...(Unlock)

Ratio:

• The Supreme Court held that extraterritorial service of summons is only proper in four specific instances:
  1. When the action affects the personal status of the plaintiffs.
  2. When the action relates to property within the Philippines in which the defendant has or claims a lien or interest.
  3. When the relief demanded includes excluding the defendant from any interest in property located in the Philippines.
  4. When the defendant's property has been attached within the Philippines.
• The Court found that the action filed by IVO was purely a personal action for injunction and damages, not involving any property in the Philippines in which the defendants had an interest.
• Personal or substituted service of summons was necessary to confer jurisdiction on the court.
• An action in personam is against a person based on personal liability, whereas an action in rem is against the thing itself.
• Since the case was an action in personam, extraterritorial service of summons could not confer jurisdiction on the RTC.
• The petitioners had not submitted to the ju...continue reading