G.R.
No. L-58340
July
16, 1991
FACTS:
This case
started when private respondent C.F. Sharp & Co., Inc. filed a complaint
for injunction and/or declaratory relief in the then Court of First Instance of
Manila against seventy-nine Japanese corporations as defendants including the petitioners
in this case. Private respondent alleges: (1) that the plaintiff is a corporation
organized and existing under the laws of the Philippines; (2) that there is
another corporation organized under the law of Japan with the corporate name
C.F. Sharp Kabushiki Kaisha; (3) that the plaintiff and C.F. Sharp Kabushiki
Kaisha are in all respects separate and distinct from each other;(4) that C.F.
Sharp Kabushiki Kaisha appears to have incurred obligations to several
creditors amongst which are defendants, also foreign corporations organized and
existing under the laws of Japan;(5) that due to financial difficulties, C.F.
Sharp Kabushiki Kaisha failed and/or refused to pay its creditors; and (6) that
in view of the failure and/or refusal of said C.F. Sharp Kabushiki Kaisha to pay
its alleged obligations to defendants, the latter have been demanding or have
been attempting to demand from C.F. Sharp & Co., Inc., the payment of the
alleged obligations to them of C.F. Sharp Kabushiki Kaisha, notwithstanding
that C.F. Sharp & Co., Inc. is a corporation separate and distinct from
that of C.F. Sharp Kabushiki Kaisha and that the former had no participation
whatsoever or liability in connection with the transactions between the latter
and the defendants.
Since the
defendants are non-residents, without business addresses in the Philippines but
in Japan, the private respondent prayed for leave of court to effect
extraterritorial service of summons. Subsequently, the respondent judge
issued an order authorizing the private respondent to effect extraterritorial
service of summons on defendants therein.
Thereafter,
five of the petitioners questioned the jurisdiction of this honorable court
over the persons of the defendant contending that the lower court does not and
cannot acquire jurisdiction over the persons of defendants on the grounds that
private respondent's action does not refer to its personal status; that the
action does not have for subject matter property contemplated in Section 17 of
Rule 14 of the Rules of Court, that the action does not pray that defendants be
excluded from any interest or property in the Philippines; that no property of
the defendants has been attached; that the action is in
personam; and that the action does not fall
within any of the four cases mentioned in Section 17, Rule 14 of the Rules of
Court.
ISSUE:
Whether or
not private respondent's complaint for injunction and/or declaratory relief is
within the purview of the provisions of Section 17, Rule 14 of the Rules of
Court.
RULING:
The Supreme
Court ruled that extraterritorial service of summons is proper only in four instances,
namely: (1) when the action affects the personal status of the plaintiffs: (2)
when the action relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest, actual or
contingent; (3) when the relief demanded in such action consists, wholly or in
part, in excluding the defendant from any interest in property located in the
Philippines; and (4) when the defendant non-resident's property has been attached
within the Philippines.
In the case at bar, private
respondent have two alternative principal causes of action, to wit: either for
declaratory relief or for injunction. In both cases, the status of the
plaintiff is not only affected but is the main issue at hand. Status means a
legal personal relationship, not temporary in nature or terminable at the mere
will of the parties, with which third persons and the state are concerned.
In the
instant case, that what is sought is a declaration not only that private
respondent is a corporation for there is no dispute on that matter but also
that it is separate and distinct from C.F. Sharp Kabushiki Kaisha and
therefore, not liable for the latter's indebtedness. It is evident that
monetary obligations do not, in any way, refer to status, lights and
obligations. Obligations are more or less temporary, but status is relatively
permanent.
Hence, Considering the nature of a proceeding for declaratory
judgment, wherein relief may be sought only to declare rights and not to
determine or try issues, there is more valid reason to adhere to the principle
that a declaratory relief proceeding is unavailable where judgment would have
to be made, only after a judicial investigation of disputed issues.
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