Facts:

The case involves Signetics Corporation (petitioner) and Fruehauf Electronics Phils., Inc. (respondent), with the decision rendered by the Supreme Court of the Philippines on August 31, 1993. Signetics Corporation is a foreign corporation organized under the laws of the United States. It entered into a lease agreement with Fruehauf Electronics Phils., Inc. through its wholly-owned subsidiary, Signetics Filipinas Corporation (SigFil). On March 15, 1990, Fruehauf filed a complaint against Signetics in the Regional Trial Court of Pasig, Metro Manila (Civil Case No. 59264), seeking damages, accounting, the return of certain machinery and equipment, and the transfer of title and possession of buildings and improvements on the leased land. The complaint alleged that Signetics had caused SigFil to include specific terms in the lease that allowed the withdrawal of assets from a cost-free transfer provision.

Service of summons was executed on Signetics through TEAM Pacific Corporat...

Facts:

1. Parties Involved:

   • Petitioner: Signetics Corporation, a foreign corporation organized under the laws of the United States of America.
   • Respondents: Fruehauf Electronics Phils., Inc. (Fruehauf) and the Court of Appeals.

2. Background of the Case:

   • Signetics, through its wholly-owned subsidiary Signetics Filipinas Corporation (SigFil), entered into a lease contract with Fruehauf for a piece of land in the Philippines.
   • Fruehauf filed a complaint on March 15, 1990, before the Regional Trial Court of Pasig, Metro Manila (Civil Case No. 59264), alleging that Signetics caused SigFil to insert terms in the lease contract that allowed the withdrawal of certain machinery, equipment, and accessories from the cost-free transfer provision.
   • Fruehauf sought damages, accounting, return of machinery, and transfer of title and possession of buildings and improvements on the leased land.

3. Service of Summons:

   • Summons was served on Signetics through TEAM Pacific Corporation, based on the allegation that Signetics was a subsidiary of US Philips Corporation and could be served at Philips Electrical Lamps, Inc., Las Piñas, or TEAM Pacific Corporation.
   • Signetics, by special appearance, filed a motion to dismiss on May 14, 1990, arguing lack of jurisdiction over its person, claiming it had ceased doing business in the Philippines.

4. Trial Court’s Decision:

   • The trial court denied the motion to dismiss, citing the case of Wang Laboratories, Inc. v. Mendoza, which held that a foreign corporation not doing business in the Philippines may still be sued for acts done against persons in the Philippines.
   • Signetics filed a motion for reconsideration, which was also denied.

5. Appeal to the Court of Appeals:

   • Signetics elevated the case to the Court of Appeals via a petition for certiorari and prohibition.
   • The Court of Appeals dismissed the petition and affirmed the trial court’s orders.

6. Petition to the Supreme Court:

   • Signetics filed a petition for review on certiorari, raising the issue of whether a foreign corporation can be sued in the Philippines without prior proof that it was doing business in the country at the time of the suit.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Jurisdiction Based on Allegations in the Complaint:

   • Jurisdiction and venue are determined by the allegations in the complaint, not by the defenses raised in a motion to dismiss.
   • The complaint alleged that Signetics had engaged in business in the Philippines through its subsidiary, SigFil, and had entered into a lease contract involving properties in the Philippines. These allegations were sufficient to establish jurisdiction.

2. No Prior Proof of Doing Business Required:

   • The Court clarified that prior proof of a foreign corporation doing business in the Philippines is not required before summons can be served. The allegations in the complaint are sufficient to establish jurisdiction.
   • The Court rejected Signetics’ reliance on Pacific Micronisian Line, Inc. v. Del Rosario, stating that the case did not require prior proof but rather emphasized that the fact of doing business must be established through the allegations in the complaint.

3. Doctrine of Piercing the Corporate Veil:

   • The Court noted that Fruehauf invoked the doctrine of piercing the corporate fiction, alleging that Signetics used SigFil and later TEAM Pacific Corporation to perpetrate fraud. This justified the service of summons on TEAM Pacific as an agent of Signetics.

4. Foreign Corporations Not Doing Business in the Philippines:

   • The Court reiterated that even if a foreign corporation is not doing business in the Philippines, it may still be sued for acts done against persons in the Philippines, provided that court processes can reach the corporation.

5. Defenses Require Full Trial:

   • Signetics’ defense that it was not doing business in the Philippines and that TEAM Pacific was not its agent required a full trial and could not be resolved in a motion to dismiss.