Northwest Orient Airlines v. CA 241 SCRA 192 [1995]

FACTS

[In 1974, an International Passenger Sales Agency Agreement was entered into by plaintiff Northwest Orient Airlines (Northwest) and defendant C.F. Sharp & Co. (Sharp), through its Japan branch, whereby Northwest authorized Sharp to sell the former's airlines tickets.
Sharp failed to remit the proceeds of the ticket sales it made on behalf of Northwest under the agreement which led the latter to sue in Tokyo for collection of the unremitted amount, with claim for damages.

The Tokyo District Court of Japan issued a writ of sum­mons against Sharp at its office in Yokohama, Japan but the bailiff failed twice to serve the writs. Finally, the Tokyo District Court decided to have the writs of summons served at Sharp's head office in Manila. Sharp accepted the writs but despite such receipt, it failed to appear at the hearings. The District Court proceeded to hear the complaint and rendered judgment ordering Sharp to pay Northwest the sum of 83,158,195 Yen plus damages. Sharp failed to appeal and the judgment became final and executory.

Northwest failed to execute the decision in Japan, hence, it filed a suit for enforcement of the judgment before the Regional Trial Court of Manila. Sharp filed its answer averring that the judgment of the Japanese court is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice to Sharp.

The case for enforcement of judgment was tried on the merits. Sharp filed a Motion for Judgment on a Demurrer to Evidence. The trial court granted the demurrer motion, hold­ing that the foreign judgment in the Japanese court sought to be enforced is null and void for want of jurisdiction over the person of the defendant. Northwest appealed but the Court of Appeals sustained the trial court, holding that the process of the court has no extraterritorial effect and no jurisdiction was acquired over the person of the defendant by serving him beyond the boundaries of the state. Hence, this appeal by Northwest.]

RULING

"A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to presume the regularity of the proceedings and the giving of due notice therein.

Under Section 50, Rule 39 of the Rules of Court, a judg­ment in an action in personam of a tribunal of a foreign country having jurisdiction to pronounce the same is pre­sumptive evidence of a right as between the parties and their successors-in-interest by a subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere, enjoys the presump­tion that it was acting in the lawful exercise of jurisdiction and has regularly performed its official duty.

Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity. Being the party challenging the judgment rendered by the Japanese court, SHARP had the duty to demonstrate the invalidity of such judgment. In an attempt to discharge that burden, it contends that the extraterritorial service of sum­mons effected as its home office in the Philippines was not only ineffectual but also void, and the Japanese Court did not, therefore, acquire jurisdiction over it.

It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex fori or the internal law of the forum. In this case, it is the procedural law of Japan where the judgment was rendered that determines the validity of the extraterritorial service'of process on SHARP. As to what this law is is a question of fact, not of law. It may not be taken judicial notice of and must be pleaded and proved like any other fact. Sections 24 and 25, Rule 132 of the Rules of Court provide that it may be evidenced by an official publication or by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to present evidence as to what that Japanese procedural law is and to show taat under it, the assailed extraterritorial service is invalid. It did not. Accord­ingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the Japanese court must stand.

Alternatively, in the light of the absence of proof re­garding Japanese law, the presumption of identity or similar­ity or the so-called processual presumpcion may be invoked. Applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on service of summons on a private foreign corporation doing business ir, the Philippines. Section 14 of the Rules of Court provides that if the defendant is a foreign corporation doing business in the Philippines, service may be made: 1) on its resident agent designated in accordance with law for that purpose, or 2) if there is no such resident agent, on the government official designated by law to that effect, or 3) on any of its officers or agents within the Philippines.

If the foreign corporation has designated an agent to re­ceive summons, the designation is exclusive, and service of summons is without force and gives the court no jurisdiction unless made upon him.

Where the corporation has no such great agent, service shall be made on the government official designated by law, to wit: (a) the Insurance Commissioner, in the case of a foreign insurance company; (b) the Superintendent of Banks, in the case of a foreign banking corporation; and (c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do business in the Philippines. Whenever service of process is so made, the government office or official served shall transmit by mail a copy of the sum­mons or other legal process to the corporation at its home or principal office. The sending of such copy is a necessary part of the service.

Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive court processes in Japan. This silence could only mean, or at least create an impression, that it had none. Hence, service on the designated government official or any of its officers or agents in Japan could be availed of.

As found by the Court of Appeals, it was the Tokyo Dis­trict Court which ordered that summons for SHARP be served at its head office in the Philippines after the two attempts of service had failed. The Tokyo District Court requested the Supreme Court of Japan to cause the delivery of the summons and other legal documents to the Philippines. Acting on that request, the Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan, which in turn, forwarded the same to the Japanese Embassy in Manila. Thereafter, the court processes were delivered to the Ministry (now Department) of Foreign Affairs of the Philippines then to the Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila, who forthwith ordered Deputy Sheriff Rolando Balingit to serve the same on SHARP at its principal office in Manila. This service is equivalent to service on the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code. Hence, SHARP's contention that such manner of service is not valid under Philippine law holds no water.

Inasmuch as SHARP was admittedly doing business in Japan through its four registered branches at the time the collection suit against it was filed, then in the light of the processual presumption, SHARP may be deemed a resident of JAPAN, and, as such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful methods of serving process.

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the proces­sual presumption but also because of the presumption of regularity of performance of official duty.