Case Summary (G.R. No. 175799)
Factual Background
Lepanto Consolidated Mining Company filed a complaint seeking a declaration that certain loan and hedging contracts with NM Rothschild & Sons (Australia) Limited were void under Article 2018 for being wagers and for damages. Service of summons was effected by respondents’ counsel personally delivering the summons and complaint to the Philippine Consulate General in Sydney and routing service through the Department of Foreign Affairs. Petitioner later advised the Court that it had changed its corporate name to Investec Australia Limited and submitted Australian Securities & Investment Commission documents evidencing the change.
Trial Court Proceedings
The trial court denied petitioner’s Motion to Dismiss by Order dated December 9, 2005. The court held that service through the Department of Foreign Affairs was proper because petitioner had neither applied for a license to do business in the Philippines nor filed with the Securities and Exchange Commission a written power of attorney to accept summons. The trial court also ruled that the complaint stated a cause of action and dismissed other objections as defenses to be tried on the merits. Petitioner filed a motion for reconsideration which the trial court denied on March 6, 2006, at which time the court also disallowed petitioner’s motions for leave to take deposition and to serve interrogatories.
Proceedings in the Court of Appeals
Petitioner sought relief by filing a Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 94382. The Court of Appeals dismissed the petition in a decision dated September 8, 2006, holding that the denial of a Motion to Dismiss was an interlocutory order generally not subject to Certiorari, and that review should await an appeal from final judgment after trial. The Court of Appeals denied petitioner’s motion for reconsideration by Resolution dated December 12, 2006.
Issues Presented
Petitioner argued that the denial of its Motion to Dismiss could properly be the subject of a petition for Certiorari and that the trial court committed grave abuse of discretion by failing to find lack of jurisdiction over petitioner and by erroneously finding that the complaint stated a cause of action. Respondent contended that the petition should be dismissed because the petitioner was not the real party in interest and because the petition lacked proper verification and a certificate of non-forum shopping, and maintained that the Court of Appeals and the trial court correctly ruled.
Real Party in Interest
Respondent maintained that NM Rothschild & Sons (Australia) Limited no longer existed under that name at the time the petition was filed. Petitioner produced documentary proof that it had changed its name to Investec Australia Limited. The Supreme Court accepted this evidence as satisfactory and declined to dismiss the petition for lack of a real party in interest. The Court reiterated the principle in Philips Export B.V. v. Court of Appeals concerning the importance of a corporate name, but held that adequate identification of the plaintiff under a former name would forestall dismissal where the identity of the party was established. The Court recalled the definition of a real party in interest under Rule 3, Section 2.
Propriety of the Petition for Certiorari
The Court reaffirmed the general rule that an order denying a Motion to Dismiss is interlocutory and not ordinarily subject to Certiorari, which corrects jurisdictional errors and not mere errors of judgment. The Court noted the narrow exception for orders tainted by grave abuse of discretion, which it defined as a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction. The resolution of the petition therefore rested on whether the trial court’s denial was tainted by such grave abuse.
Issues Properly Resolved at Trial
The Court held that petitioner’s defenses alleging absence of a cause of action, estoppel, and in pari delicto are evidentiary in nature and are not proper grounds for dismissal under Section 1, Rule 16. The Court explained that a motion to dismiss on the ground of failure to state a cause of action requires a complaint that on its face shows no possible claim; legal conclusions and conclusions of law cannot be assumed true for purposes of a demurrer. The Court relied on Tan v. Court of Appeals and related jurisprudence to state that courts may consider documents incorporated into the complaint and that where resolution of a demurrer requires probing the merits, the matter must await trial.
Jurisdiction over the Person
Petitioner argued that service through the DFA and consular channels was improper and that the trial court therefore lacked personal jurisdiction. The Court observed that the 1997 Rules provided a broader Section 12, Rule 14 for service on foreign private juridical entities that had transacted business in the Philippines, but that the summons in this case was effected under Section 15, Rule 14 governing extraterritorial service. The Court explained that extraterritorial service under Section 15, Rule 14 applied only in in rem or quasi in rem actions where the court already had jurisdiction over the res, citing Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation and Domagas v. Jensen. The Court concluded that the complaint seeking declaration of nullity and damages was an action in personam and that extraterritorial service could not confer personal jurisdiction over a nonresident defendant absent voluntary appearance.
Voluntary Appearance and Waiver of Objection to Jurisdiction
The Court addressed whether petitioner’s participation in discovery amounted to voluntary submission to the trial court’s jurisdiction. Petitioner relied on La Naval Drug Corporation v. Court of Appeals to argue that a defendant may raise jurisdictional objections while asserting defenses and seeking relief. The Co
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Case Syllabus (G.R. No. 175799)
Parties and Posture
- NM Rothschild & Sons (Australia) Limited was the Petitioner before the Supreme Court seeking review of the Court of Appeals' dismissal of its petition for certiorari.
- Lepanto Consolidated Mining Company was the Respondent and original plaintiff in Civil Case No. 05-782 filed in the Regional Trial Court of Makati.
- The petition assailed the Court of Appeals Decision dated September 8, 2006 and Resolution dated December 12, 2006 in CA-G.R. SP No. 94382.
- The trial court denied petitioner's Motion to Dismiss and later denied petitioner's Motion for Reconsideration, prompting the appellate and supreme court proceedings.
Key Facts
- Lepanto Consolidated Mining Company filed a complaint seeking a declaration that certain loan and hedging contracts were void under Article 2018 of the Civil Code and claiming damages.
- Summons and the complaint were delivered to the Philippine Consulate General in Sydney and served through the Department of Foreign Affairs.
- NM Rothschild filed a Special Appearance with Motion to Dismiss alleging defective service, absence of cause of action, estoppel, and unclean hands.
- While the Motion to Dismiss was pending, NM Rothschild filed discovery requests including motions for depositions and interrogatories, and sought affirmative reliefs from the trial court.
Procedural History
- The trial court denied the Motion to Dismiss on December 9, 2005 and denied reconsideration on March 6, 2006.
- NM Rothschild filed a petition for certiorari with the Court of Appeals, which dismissed the petition as certiorari was not the proper remedy for an interlocutory denial of a Motion to Dismiss.
- NM Rothschild filed the present Petition for Review on Certiorari before the Supreme Court, which affirmed the Court of Appeals' decision.
Issues
- Whether NM Rothschild was a real party in interest entitled to prosecute the petition.
- Whether the denial of the Motion to Dismiss was reviewable by certiorari because it constituted grave abuse of discretion.
- Whether the trial court acquired jurisdiction over petitioner's person by the extraterritorial service employed or by petitioner's conduct in seeking affirmative reliefs.
Petitioner's Contentions
- NM Rothschild contended that the trial court lacked jurisdiction over its person due to defective service of summons.
- NM Rothschild argued that the complaint failed to state a cause of action and that the contracts were void under Article 2018.
- NM Rothschild asserted that the denial of the Motion to Dismiss was subject to certiorari review because the trial court allegedly committed grave abuse of discretion.
Respondent's Contentions
- Lepanto Consolidated Mining Company argued that the petition should be dismissed for lack of a real party in interest and for defective verification and certification against forum shopping.
- Lepanto maintained that certiorari was not the proper remedy for an interlocutory denial of a Motion to Dismiss.
- Lepanto asserted that the trial court correctly denied the Motion to Dismiss and that petitioner had voluntarily submitted to jurisdiction by seeking affirmative reliefs.