Asiavest vs CA

GR No. 128803
September 25, 1998

FACTS:
Plaintiff Asiavest Limited filed a complaint against the defendant Antonio Heras praying
that said defendant be ordered to pay to the plaintiff the amounts awarded by the Hong Kong
Court Judgment.

The defendant admits the existence of the judgment as well as its amendment, but not
necessarily the authenticity or validity thereof.

One of the defendant’s witness was Mr. Lousich, an expert on the laws of Hong Kong, as
a representative of the law office of the defendant's counsel who made a verification of the
record of the case filed by the plaintiff in Hong Kong against the defendant, as well as the
procedure in serving Court processes in Hong Kong.

The trial court concluded that the Hong Kong court judgment should be recognized and
given effect in this jurisdiction for failure of HERAS to overcome the legal presumption in favor
of the foreign judgment.

The Court of Appeals rendered its decision reversing the decision of the trial court and
dismissing ASIAVEST's complaint without prejudice. It underscored the fact that a foreign
judgment does not of itself have any extraterritorial application. 

ISSUE:
Whether the HK Judgment is enforceable here in the Philippines

DECISION:
Yes, the HK Judgment is enforceable in the Philippines but due to invalid service of
summons, the Judgment was invalidated.

Under paragraph (b) of Section 50, Rule 39 of the Rules of Court, a foreign judgment
against a person rendered by a court having jurisdiction to pronounce the judgment is
presumptive evidence of a right as between the parties and their successors in interest by the
subsequent title. However, the judgment may be repelled by evidence of want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact. Hence, once the
authenticity of the foreign judgment is proved, the burden to repel it on grounds provided for in
paragraph (b) of Section 50, Rule 39 of the Rules of Court is on the party challenging the foreign
judgment.

Here, Heras admitted the existence of the Hong Kong judgment. On the other hand,
ASIAVEST presented evidence to prove rendition, existence, and authentication of the judgment
by the proper officials.
 The judgment is thus presumed to be valid and binding in the country from which it
comes, until the contrary is shown.

FOR RECIT PURPOSES:

DOCTRINE OF PROSESSUAL PRESUMPTION:

The main argument raised against the Hong Kong judgment is that the Hong Kong
Supreme Court did not acquire jurisdiction over the person of HERAS. This involves the issue of
whether summons was properly and validly served on HERAS.

It is settled that matters of remedy and procedure such as those relating to the service of
process upon the defendant are governed by the  lex fori or the law of the forum, i.e., the law of
Hong Kong in this case. HERAS insisted that according to his witness Mr. Lousich, who was
presented as an expert on Hong Kong laws, there was no valid service of summons on him.

On cross-examination by counsel for ASIAVEST, Lousich' testified that the Hong Kong
court authorized service of summons on HERAS outside of its jurisdiction, particularly in the
Philippines. He admitted also the existence of an affidavit of one Jose R. Fernandez of the Sycip
Salazar Hernandez & Gatmaitan law firm stating that he (Fernandez) served summons on
HERAS on at Quezon City, by leaving a copy with HERAS's son-in-law Dionisio Lopez.

On redirect examination, Lousich declared that such service of summons would be valid
under Hong Kong laws provided that it was in accordance with Philippine laws.

We note that there was no objection on the part of ASIAVEST on the qualification of Mr.
Lousich as an expert on the Hong Kong law. Under Sections 24 and 25, Rule 132 of the New
Rules of Evidence, the record of public documents of a sovereign authority, tribunal, official
body, or public officer may be proved by (1) an official publication thereof or (2) a copy attested
by the officer having the legal custody thereof, which must be accompanied, if the record is not
kept in the Philippines, with a certificate that such officer has the custody. The certificate may be
issued by a secretary of the embassy or legation, consul general, consul, vice consul, or consular
agent, or any officer in the foreign service of the Philippines stationed in the foreign country in
which the record is kept, and authenticated by the seal of his office. The attestation must state, in
substance, that the copy is a correct copy of the original, or a specific part thereof, as the case
may be, and must be under the official seal of the attesting officer.

Nevertheless, the testimony of an expert witness may be allowed to prove a foreign law.

There is, however, nothing in the testimony of Mr. Lousich that touched on the specific
law of Hong Kong in respect of service of summons either in actions in rem or in personam, and
where the defendant is either a resident or nonresident of Hong Kong. In view of the absence of
proof of the Hong Kong law on this particular issue, the presumption of identity or similarity or
the so-called processual presumption shall come into play. It will thus be presumed that the Hong
Kong law on the matter is similar to the Philippine law.
DISTINCTIONS OF action is  in personam,  in rem, or  quasi in rem:

As stated in Valmonte vs. Court of Appeals, it will be helpful to determine first whether
the action is in personam, in rem, or quasi in rem because the rules on service of summons
under Rule 14 of the Rules of Court of the Philippines apply according to the nature of the
action.

An action in personam  is an action against a person on the basis of his personal liability.
An action  in rem is an action against the thing itself instead of against the person. An
action quasi in rem is one wherein an individual is named as defendant and the purpose of the
proceeding is to subject his interest therein to the obligation or lien burdening the property.

In an action  in personam, jurisdiction over the person of the defendant is necessary for
the court to validly try and decide the case. Jurisdiction over the person of a resident defendant
who does not voluntarily appear in court can be acquired by personal service of summons as
provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with
summons within a reasonable time, substituted service may be made in accordance with Section
8 of said Rule. If he is temporarily out of the country, any of the following modes of service may
be resorted to: (1) substituted service set forth in Section 8; (2) personal service outside the
country, with leave of court; (3) service by publication, also with leave of court; or (4) any other
manner the court may deem sufficient.

However, in an action in personam wherein the defendant is a non-resident who does not

voluntarily submit himself to the authority of the court, personal service of summons within the
state is essential to the acquisition of jurisdiction over her person. This method of service is
possible if such defendant is physically present in the country. If he is not found therein, the
court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the
case against him. An exception was laid down in Gemperle v. Schenker wherein a non-resident
was served with summons through his wife, who was a resident of the Philippines and who was
his representatives and attorney-in-fact in a prior civil case filed by him; moreover, the second
case was a mere offshoot of the first case.

On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the person of
the defendant is not a prerequisite to confer jurisdiction on the court provided that the court
acquires jurisdiction over the  res. Nonetheless summons must be served upon the defendant not
for the purpose of vesting the court with jurisdiction but merely for satisfying the due process
requirements. Thus, where the defendant is a non-resident who is not found in the Philippines
and (1) the action affects the personal status of the plaintiff; (2) the action relates to, or the
subject matter of which is property in the Philippines in which the defendant has or claims a lien
or interest; (3) the action seeks the exclusion of the defendant from any interest in the property
located in the Philippines; or (4) the property of the defendant has been attached in the
Philippines — service of summons may be effected by (a) personal service out of the country,
with leave of court; (b) publication, also with leave of court, or (c) any other manner the court
may deem sufficient.

EFFECTIVITY OF SUMMONS IN THIS CASE:

We note that the residence of HERAS insofar as the action for the enforcement of the
Hong Kong court judgment is concerned, was never in issue. He never challenged the service of
summons on him through a security guard in his Quezon City residence and through a lawyer in
his office in that city. In his Motion to Dismiss, he did not question the jurisdiction of the
Philippine court over his person on the ground of invalid service of summons. What was in issue
was his residence as far as the Hong Kong suit was concerned. We therefore conclude that the
stipulated fact that HERAS "is a resident of New Manila, Quezon City, Philippines" refers to his
residence at the time jurisdiction over his person was being sought by the Hong Kong court.
With that stipulation of fact, ASIAVEST cannot now claim that HERAS was a resident of Hong
Kong at the time.

Accordingly, since HERAS was not a resident of Hong Kong and the action against him
was, indisputably, one  in personam, summons should have been personally served on him in
Hong Kong. The extraterritorial service in the Philippines was therefore invalid and did not
confer on the Hong Kong court jurisdiction over his person. It follows that the Hong Kong court
judgment cannot be given force and effect here in the Philippines for having been rendered
without jurisdiction.

Even assuming that HERAS was formerly a resident of Hong Kong, he was no longer so
in November 1984 when the extraterritorial service of summons was attempted to be made on
him. As declared by his secretary, which statement was not disputed by ASIAVEST, HERAS
left Hong Kong in October 1984 "for good." His absence in Hong Kong must have been the
reason why summons was not served on him therein; thus, ASIAVEST was constrained to apply
for leave to effect service in the Philippines, and upon obtaining a favorable action on the matter,
it commissioned the Sycip Salazar Hernandez & Gatmaitan law firm to serve the summons here
in the Philippines.

Similarly, HERAS, who was also an absentee, should have been served with summons in
the same manner as a non-resident not found in Hong Kong. Section 17, Rule 14 of the Rules of
Court providing for extraterritorial service will not apply because the suit against him was in
personam. Neither can we apply Section 18, which allows extraterritorial service on a resident
defendant who is temporarily absent from the country, because even if HERAS be considered as
a resident of Hong Kong, the undisputed fact remains that he left Hong Kong not only
"temporarily" but "for good."

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered DENYING the

petition in this case and AFFIRMING the assailed judgment of the Court of Appeals