SECOND DIVISION

[G.R. No. 97642. August 29, 1997.]

AVON INSURANCE PLC, BRITISH RESERVE INSURANCE CO.

LTD., CORNHILL INSURANCE PLC, IMPERIO REINSURANCE
CO. (UK) LTD., INSTITUTE DE RESERGURROS DO BRAZIL,
INSURANCE CORPORATION OF IRELAND PLC, LEGAL AND
GENERAL ASSURANCE SOCIETY LTD., PROVINCIAL
INSURANCE PLC, QBL INSURANCE (UK) LTD., ROYAL
INSURANCE CO. LTD., TRINITY INSURANCE CO. LTD.,
GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORP.
LTD., COOPERATIVE INSURANCE SOCIETY and PEARL
ASSURANCE CO. LTD., petitioners, vs. COURT OF APPEALS,
REGIONAL TRIAL COURT OF MANILA, BRANCH 51,
YUPANGCO COTTON MILLS, WORLDWIDE SURETY &
INSURANCE CO., INC., respondents.

Syquia Law Offices for petitioners.

O.F. Santos & P.C. Nolasco for Yupangco Cotton Mills.
Ricardo E. Reyes for World-Wide Insurance & Surety.

SYNOPSIS

This is a petition for certiorari filed by herein petitioners questioning the

decision of respondent Court of Appeals dated October 11, 1990 finding that
the summons were properly served to petitioners and whatever defects, if
any, in the service of summons were cured by their voluntary appearance in
the lower court, via a motion to dismiss. It appears in the records of the case
that it all started when private respondent filed a collection suit against herein
petitioners being the reinsurers of the property owned by private respondents.
Petitioners, by way of a motion to dismiss, questioned the jurisdiction of the
lower court alleging that being a foreign company not doing business in the
Philippines, the court did not acquire jurisdiction on its person, even though
the summons where served to the insurance commissioner. The lower court
denied the motion. Thereafter, petitioner filed a petition to the Court of
Appeals but likewise respondent court denied the petition. Henceforth,
petitioner brought the matter to the Supreme Court. In its petition, herein
petitioners maintained that the trial court's jurisdiction does not extend to
them, since they are foreign reinsurance companies that are not doing
business in the Philippines. Moreover, petitioners assert that since the
complaint for sum of money filed by private respondent was a personal action
not affecting status or relating to property, extraterritorial service of summons
on petitioners — all not doing business in the Philippines is null and void.
The Honorable Supreme Court ruled that there is no sufficient basis in
the records which would merit the institution of this collection suit in the
Philippines. More specifically, there is nothing to substantiate the private
respondent's submission that petitioners had engaged in business activities in
this country. This is not an instance where the erroneous service of summons
upon the defendant can be cured by the issuance and service of alias
summons, as in the absence of showing that petitioners had been doing
business in the country, they cannot be summoned to answer for the charges
leveled against them. Moreover, the fact that herein petitioners voluntarily
appeared in the lower court does not mean that they voluntarily submitted to
the jurisdiction of the court because petitioners, from time to time filed their
motion to dismiss, their submissions have been consistently and unfailingly to
object to the trial court's assumption of jurisdiction, anchored on the fact that
they are all foreign corporations not doing business in the Philippines.
Accordingly, the decision appealed from is set aside and the petition is hereby
granted.

SYLLABUS

1.COMMERCIAL LAW; OMNIBUS INVESTMENTS CODE OF 1987;

DOING OR ENGAGING IN OR TRANSACTING BUSINESS IN THE
PHILIPPINES; CONSTRUED. — In Communication Materials and Design,
Inc. et. al. vs. Court of Appeals, G.R. No. 102223, August 22, 1996, it was
observed that: "There is no exact rule or governing principle as to what
constitutes doing or engaging in or transacting business. Indeed, such case
must be judged in the light of its peculiar circumstances, upon its peculiar
facts and upon the language of the statute applicable. The true test, however,
seems to be whether the foreign corporation is continuing the body or
substance of the business or enterprise for which it was organized. Article 44
of the Omnibus Investments Code of 1987 defines the phrase to include:
'soliciting orders, purchases, service contracts, opening offices, whether
called 'liaison' offices or branches; appointing representatives or distributors
who are domiciled in the Philippines or who in any calendar year stay in the
Philippines for a period or periods totaling one hundred eighty (180) days or
more; participating in the management, supervision or control of any domestic
business firm, entity or corporation in the Philippines, and any other act or
acts that imply a continuity or commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in progressive prosecution of,
commercial gain or of the purpose and object of the business organization.'"
The term ordinarily implies a continuity of commercial dealings and
arrangements, and contemplates, to that extent, the performance of acts or
works or the exercise of the functions normally incident to and in progressive
prosecution of the purpose and object of its organization. A single act or
transaction made in the Philippines, however, could qualify a foreign
corporation to be doing business in the Philippines, if such singular act is not
merely incidental or casual, but indicates the foreign corporation's intention to
do business in the Philippines. HECTaA

2.ID.; CORPORATION CODE; FOREIGN CORPORATION; STATUS

THEREOF, CONSTRUED. — A foreign corporation, is one which owes its
existence to the laws of another state, [Section 123, Corporation Code of the
Philippines] and generally, has no legal existence within the state in which it is
foreign. In Marshall Wells Co. vs. Elser, No. 22015, September 1, 1924, 46
Phil. 70, it was held that corporations have no legal status beyond the bounds
of the sovereignty by which they are created. Nevertheless, it is widely
accepted that foreign corporations are, by reason of state comity, allowed to
transact business in other states and to sue in the courts of such fora. In the
Philippines foreign corporations are allowed such privileges, subject to certain
restrictions, arising from the state's sovereign right of regulation. Before a
foreign corporation can transact business in the country, it must first obtain a
license to transact business here [Section 125, 126, Corporation Code of the
Philippines] and secure the proper authorizations under existing law. If a
foreign corporation engages in business activities without the necessary
requirements, it opens itself to court actions against it, but it shall not be
allowed to maintain or intervene in an action, suit or proceeding for its own
account in any court or tribunal or agency in the Philippines. [Section 133, id.]
3.ID.; ID.; ID.; WHEN REQUIRED TO BE LICENSED; RATIONALE. —
The purpose of the law in requiring that foreign corporations doing business in
the country be licensed to do so, is to subject the foreign corporations doing
business in the Philippines to the jurisdiction of the courts, otherwise, a
foreign corporation illegally doing business here because of its refusal or
neglect to obtain the required license and authority to do business may
successfully though unfairly plead such neglect or illegal act so as to avoid
service and thereby impugn the jurisdiction of the local courts. The same
danger does not exist among foreign corporations that are indubitably not
doing business in the Philippines. Indeed, if a foreign corporation does not do
business here, there would be no reason for it to be subject to the State's
regulation. As we observed, in so far as the State is concerned, such foreign
corporation has no legal existence. Therefore, to subject such corporation to
the courts' jurisdiction would violate the essence of sovereignty.
4.REMEDIAL LAW; JURISDICTION OVER DEFENDANT WHEN
ACQUIRED. — In civil cases, jurisdiction over the person of the defendant is
acquired either by his voluntary appearance in court and his submission to its
authority or by service of summons. Fundamentally, the service of summons
is intended to give official notice to the defendant or respondent that an action
has been commenced against it. The defendant or respondent is thus put on
guard as to the demands of the plaintiff as stated in the complaint. The
service of summons upon the defendant becomes an important element in the
operation of a court's jurisdiction upon a party to a suit, as service of
summons upon the defendant is the means by which the court acquires
jurisdiction over his person. Without service of summons, or when summons
are improperly made, both the trial and the judgment, being in violation of due
process, are null and void, unless the defendant waives the service of
summons by voluntarily appearing and answering the suit. The Court is
cognizant of the doctrine in Signetics Corp. vs. Court of Appeals G.R. No.
105141, August 31, 1993, 225 SCRA 737, that for the purpose of acquiring
jurisdiction by way of summons on a defending foreign corporation, there is no
need to prove first the fact that defendant is doing business in the Philippines.
The plaintiff only has to allege in the complaint that the defendant has an
agent in the Philippines for summons to be validly served thereto, even
without prior evidence advancing such factual allegation.
5.ID.; ID.; MAYBE ACQUIRED THRU VOLUNTARY APPEARANCE;
EXCEPTION. — When defendant voluntarily appears, he is deemed to have
submitted himself to the jurisdiction of the court. This is not, however, always
the case. Admittedly, and without subjecting himself to the court's jurisdiction,
the defendant in an action can, by special appearance object to the court's
assumption on the ground of lack of jurisdiction. If he so wishes to assert this
defense, he must do so seasonably by motion for the purpose of objecting to
the jurisdiction of the court, otherwise, he shall be deemed to have submitted
himself to that jurisdiction. In the case of foreign corporations, it has been held
that they may seek relief against the wrongful assumption of jurisdiction by
local courts. In Time, Inc. vs. Reyes, G.R. No. L-28882, May 31, 1971, 39
SCRA 303, it was held that the action of a court in refusing to rule or deferring
its ruling on a motion to dismiss for lack or excess of jurisdiction is correctable
by a writ of prohibition or certiorari sued out in the appellate court even before
trial on the merits is had. The same remedy is available should the motion to
dismiss be denied, and the court, over the foreign corporation's objections,
threatens to impose its jurisdiction upon the same. If the defendant, besides
setting up in a motion to dismiss his objection to the jurisdiction of the court,
alleges at the same time any other ground for dismissing the action, or seeks
an affirmative relief in the motion, he is deemed to have submitted himself to
the jurisdiction of the court. As was consistently held, if the appearance of a
party in a suit is precisely to question the jurisdiction of the said tribunal over
the person of the defendant, then this appearance is not equivalent to service
of summons, nor does it constitute an acquiescence to the court's
jurisdiction. 
TADIHE

DECISION

TORRES, JR., J  : p

Just how far can our courts assert jurisdiction over the persons of
foreign entities being charged with contractual liabilities by residents of the
Philippines?
Appealing from the Court of Appeals' October 11, 1990 Decision 1 in
CA-G.R. No. 22005, petitioners claim that the trial court's jurisdiction does not
extend to them, since they are foreign reinsurance companies that are not
doing business in the Philippines. Having entered into reinsurance contracts
abroad, petitioners are beyond the jurisdictional ambit of our courts and
cannot be served summons through extraterritorial service, as under Section
17, Rule 14 of the Rules of Court, nor through the Insurance Commissioner,
under Section 14. Private respondent Yupangco Cotton Mills contends on the
other hand that petitioners are within our courts' cognitive powers, having
submitted voluntarily to their jurisdiction by filing motions to dismiss 2 the
private respondent's suit below.  cdtech

The antecedent facts, as found by the appellate court, are as follows:

"Respondent Yupangco Cotton Mills filed a complaint against
several foreign reinsurance companies (among which are petitioners) to
collect their alleged percentage liability under contract treaties between
the foreign insurance companies and the international insurance broker
C.J. Boatright, acting as agent for respondent Worldwide Surety and
Insurance Company. Inasmuch as petitioners are not engaged in
business in the Philippines with no offices, places of business or agents
in the Philippines, the reinsurance treaties having been entered abroad,
service of summons upon motion of respondent Yupangco, was made
upon petitioners through the Office of the Insurance Commissioner.
Petitioners, by counsel on special appearance, seasonably filed motions
to dismiss disputing the jurisdiction of respondent Court and the extra-
territorial service of summons. Respondent Yupangco filed its opposition
 to the motions to dismiss, petitioners filed their reply, and respondent
Yupangco filed its rejoinder. In an Order dated April 30, 1990,
respondent Court denied the motions to dismiss and directed petitioners
to file their answer. On May 29, 1990, petitioners filed their notice of
appeal. In an order dated June 4, 1990, respondent court denied due
course to the appeal." 3
To this day, trial on the merits of the collection suit has not proceeded
as in the present petition, petitioners continue vigorously to dispute the trial
court's assumption of jurisdiction over them.
It will be remembered that in the plaintiff's complaint, 4 it was contended
that on July 6, 1979 and on October 1, 1980, Yupangco Cotton Mills engaged
to secure with Worldwide Security and Insurance Co. Inc., several of its
properties for the periods July 6, 1979 to July 6, 1980 as under Policy No.
20719 for a coverage of P100,000,000.00 and from October 1, 1980 to
October 1, 1981, under Policy No. 25896, also for P100,000,000.00. Both
contracts were covered by reinsurance treaties between Worldwide Surety
and Insurance and several foreign reinsurance companies, including the
petitioners. The reinsurance arrangements had been made through
international broker C.J. Boatwright and Co. Ltd., acting as agent of
Worldwide Surety and Insurance.
As fate would have it, on December 16, 1979 and May 2, 1981, within
the respective effectivity periods of Policies 20719 and 25896, the properties
therein insured were razed by fire, thereby giving rise to the obligation of the
insurer to indemnify the Yupangco Cotton Mills. Partial payments were made
by Worldwide Surety and Insurance and some of the reinsurance companies.
On May 2, 1983, Worldwide Surety and Insurance, in a Deed of
Assignment, acknowledged a remaining balance of P19,444,447.75 still due
Yupangco Cotton Mills, and assigned to the latter all reinsurance proceeds
still collectible from all the foreign reinsurance companies. Thus, in its interest
as assignee and original insured, Yupangco Cotton Mills instituted this
collection suit against the petitioners.
Service of summons upon the petitioners was made by notification to
the Insurance Commissioner, pursuant to Section 14, Rule 14 of the Rules of
Court. 5
In a Petition for Certiorari filed with the Court of Appeals, petitioners
submitted that respondent Court has no jurisdiction over them, being all
foreign corporations not doing business in the Philippines with no office, place
of business or agents in the Philippines. The remedy of Certiorari was
resorted to by the petitioners on the premise that if petitioners had filed an
answer to the complaint as ordered by the respondent court, they would risk
abandoning the issue of jurisdiction. Moreover, extra-territorial service of
summons on petitioners is null and void because the complaint for collection
is not one affecting plaintiff's status and not relating to property within the
Philippines.
The Court of Appeals found the petition devoid of merit, stating that:
1.Petitioners were properly served with summons and whatever defect,
if any, in the service of summons were cured by their voluntary appearance in
court, via motion to dismiss.
2.Even assuming that petitioners have not yet voluntarily appeared as
co-defendants in the case below even after having filed the motions to dismiss
adverted to, still the situation does not deserve dismissal of the complaint as
far as they are concerned, since as held by this Court in Lingner Fisher
GMBH vs. IAC, 125 SCRA 523;
"A case should not be dismissed simply because an original
summons was wrongfully served. It should be difficult to conceive for
example, that when a defendant personally appears before a court
complaining that he had not been validly summoned, that the case filed
against him should be dismissed. An alias summons can be actually
served on said defendant."
3.Being reinsurers of respondent Worldwide Surety and Insurance of
the risk which the latter assumed when it issued the fire insurance policies in
dispute in favor of respondent Yupangco, petitioners cannot now validly argue
that they do not do business in this country. At the very least, petitioners must
be deemed to have engaged in business in the Philippines no matter how
isolated or singular such business might be, even on the assumption that
among the local domestic insurance corporations of this country, it is only in
favor of Worldwide Surety and Insurance that they have ever reinsured any
risk arising from any reinsurance within the territory.
4.The issue of whether or not petitioners are doing business in the
country is a matter best referred to a trial on the merits of the case, and so
should be addressed there.
Maintaining its submission that they are beyond the jurisdiction of
Philippine Courts, petitioners are now before us, stating:
"Petitioners, being foreign corporations, as found by the trial
court, not doing business in the Philippines with no office, place of
business or agents in the Philippines, are not subject to the jurisdiction of
Philippine courts.
The complaint for sum of money being a personal action not
affecting status or relating to property, extraterritorial service of
 summons on petitioners — all not doing business in the Philippines — is
null and void.
The appearance of counsel for petitioners being explicitly 'by
special appearance without waiving objections to the jurisdiction over
their persons or the subject matter' and the motions to dismiss having
excluded non-jurisdictional grounds, there is no voluntary submission to
the jurisdiction of the trial court." 6
For its part, private respondent Yupangco counter-submits:
"1.Foreign corporations, such as petitioners, not doing business in
the Philippines, can be sued in Philippine Courts, notwithstanding
petitioners' claim to the contrary.
2.While the complaint before the Honorable Trial Court is for a
sum of money, not affecting status or relating to property, petitioners
(then defendants) can submit themselves voluntarily to the jurisdiction of
Philippine Courts, even if there is no extra-judicial (sic) service of
summons upon them.
3.The voluntary appearance of the petitioners (then defendants)
before the Honorable Trial Court amounted, in effect, to voluntary
submission to its jurisdiction over their persons." 7
In the decisions of the courts below, there is much left to speculation
and conjecture as to whether or not the petitioners were determined to be
"doing business in the Philippines" or not.
To qualify the petitioners' business of reinsurance within the Philippine
forum, resort must be made to the established principles in determining what
is meant by "doing business in the Philippines." In Communication
Materials and Design, Inc. et. al. vs. Court of Appeals, 8 it was observed that:
"There is no exact rule or governing principle as to what
constitutes doing or engaging in or transacting business. Indeed, such
case must be judged in the light of its peculiar circumstances, upon its
peculiar facts and upon the language of the statute applicable. The true
test, however, seems to be whether the foreign corporation is continuing
the body or substance of the business or enterprise for which it was
organized. cdtech

Article 44 of the Omnibus Investments Code of 1987 defines the

phrase to include:
'soliciting orders, purchases, service contracts, opening
offices, whether called 'liaison' offices or branches; appointing
representatives or distributors who are domiciled in the
 Philippines or who in any calendar year stay in the Philippines for
a period or periods totaling one hundred eighty (180) days or
more; participating in the management, supervision or control of
any domestic business firm, entity or corporation in the
Philippines, and any other act or acts that imply a continuity or
commercial dealings or arrangements and contemplate to that
extent the performance of acts or works, or the exercise of some
of the functions normally incident to, and in progressive
prosecution of, commercial gain or of the purpose and object of
the business organization.'"
The term ordinarily implies a continuity of commercial dealings and
arrangements, and contemplates, to that extent, the performance of acts or
works or the exercise of the functions normally incident to and in progressive
prosecution of the purpose and object of its organization. 9
A single act or transaction made in the Philippines, however, could
qualify a foreign corporation to be doing business in the Philippines, if such
singular act is not merely incidental or casual, but indicates the foreign
corporation's intention to do business in the Philippines. 10
There is no sufficient basis in the records which would merit the
institution of this collection suit in the Philippines. More specifically, there is
nothing to substantiate the private respondent's submission that the
petitioners had engaged in business activities in this country. This is not an
instance where the erroneous service of summons upon the defendant can be
cured by the issuance and service of alias summons, as in the absence of
showing that petitioners had been doing business in the country, they cannot
be summoned to answer for the charges leveled against them.
The Court is cognizant of the doctrine in Signetics Corp. vs. Court of
Appeals 11 that for the purpose of acquiring jurisdiction by way of summons on
a defendant foreign corporation, there is no need to prove first the fact that
defendant is doing business in the Philippines. The plaintiff only has to allege
in the complaint that the defendant has an agent in the Philippines for
summons to be validly served thereto, even without prior evidence advancing
such factual allegation.
As it is, private respondent has made no allegation or demonstration of
the existence of petitioners' domestic agent, but avers simply that they are
doing business not only abroad but in the Philippines as well. It does not
appear at all that the petitioners had performed any act which would give the
general public the impression that it had been engaging, or intends to engage
in its ordinary and usual business undertakings in the country. The
reinsurance treaties between the petitioners and Worldwide Surety and
Insurance were made through an international insurance broker, and not
through any entity or means remotely connected with the Philippines.
Moreover, there is authority to the effect that a reinsurance company is not
doing business in a certain state merely because the property or lives which
are insured by the original insurer company are located in that state. 12 The
reason for this is that a contract of reinsurance is generally a separate and
distinct arrangement from the original contract of insurance, whose contracted
risk is insured in the reinsurance agreement. 13 Hence, the original insured
has generally no interest in the contract of reinsurance. 14
A foreign corporation, is one which owes its existence to the laws of
another state, 15 and generally, has no legal existence within the state in
which it is foreign. In Marshall Wells Co. vs. Elser, 16 it was held that
corporations have no legal status beyond the bounds of the sovereignty by
which they are created. Nevertheless, it is widely accepted that foreign
corporations are, by reason of state comity, allowed to transact business in
other states and to sue in the courts of such fora. In the Philippines foreign
corporations are allowed such privileges, subject to certain restrictions, arising
from the state's sovereign right of regulation.
Before a foreign corporation can transact business in the country, it
must first obtain a license to transact business here 17 and secure the proper
authorizations under existing law.
If a foreign corporation engages in business activities without the
necessary requirements, it opens itself to court actions against it, but it shall
not be allowed to maintain or intervene in an action, suit or proceeding for its
own account in any court or tribunal or agency in the Philippines. 18
The purpose of the law in requiring that foreign corporations doing
business in the country be licensed to do so, is to subject the foreign
corporations doing business in the Philippines to the jurisdiction of the
courts, 19 otherwise, a foreign corporation illegally doing business here
because of its refusal or neglect to obtain the required license and authority to
do business may successfully though unfairly plead such neglect or illegal act
so as to avoid service and thereby impugn the jurisdiction of the local courts.
The same danger does not exist among foreign corporations that are
indubitably not doing business in the Philippines. Indeed, if a foreign
corporation does not do business here, there would be no reason for it to be
subject to the State's regulation. As we observed, in so far as the State is
concerned, such foreign corporation has no legal existence. Therefore, to
subject such corporation to the courts' jurisdiction would violate the essence
of sovereignty.
In the alternative, private respondent submits that foreign corporations
not doing business in the Philippines are not exempt from suits leveled
against them in courts, citing the case of Facilities Management Corporation
vs. Leonardo Dela Osa, et. al. 20 where we ruled "that indeed, if a foreign
corporation, not engaged in business in the Philippines, is not barred from
seeking redress from Courts in the Philippines, a fortiori, that same
corporation cannot claim exemption from being sued in Philippine Courts for
acts done against a person or persons in the Philippines."
We are not persuaded by the position taken by the private respondent.
In Facilities Management case, the principal issue presented was whether the
petitioner had been doing business in the Philippines, so that service of
summons upon its agent as under Section 14, Rule 14 of the Rules of
Court can be made in order that the Court of First Instance could assume
jurisdiction over it. The Court ruled that the petitioner was doing business in
the Philippines, and that by serving summons upon its resident agent, the trial
court had effectively acquired jurisdiction. In that case, the court made no
prescription as the absolute suability of foreign corporations not doing
business in the country, but merely discounts the absolute exemption of such
foreign corporations from liabilities particularly arising from acts done against
a person or persons in the Philippines.
As we have found, there is no showing that petitioners had performed
any act in the country that would place it within the sphere of the court's
jurisdiction. A general allegation standing alone, that a party is doing business
in the Philippines does not make it so. A conclusion of fact or law cannot be
derived from the unsubstantiated assertions of parties, notwithstanding the
demands of convenience or dispatch in legal actions, otherwise, the Court
would be guilty of sorcery; extracting substance out of nothingness. In
addition, the assertion that a resident of the Philippines will be inconvenienced
by an out-of-town suit against a foreign entity, is irrelevant and unavailing to
sustain the continuance of a local action, for jurisdiction is not dependent
upon the convenience or inconvenience of a party. 21
It is also argued that having filed a motion to dismiss in the proceedings
before the trial court, petitioners have thus acquiesced to the court's
jurisdiction, and they cannot maintain the contrary at this juncture.
This argument is at the most, flimsy. cdta

In civil cases, jurisdiction over the person of the defendant is acquired

either by his voluntary appearance in court and his submission to its authority
or by service of summons. 22
Fundamentally, the service of summons is intended to give official
notice to the defendant or respondent that an action has been commenced
against it. The defendant or respondent is thus put on guard as to the
demands of the plaintiff as stated in the complaint. 23 The service of summons
upon the defendant becomes an important element in the operation of a
court's jurisdiction upon a party to a suit, as service of summons upon the
defendant is the means by which the court acquires jurisdiction over his
person. 24 Without service of summons, or when summons are improperly
made, both the trial and the judgment, being in violation of due process, are
null and void, 25 unless the defendant waives the service of summons by
voluntarily appearing and answering the suit. 26
When a defendant voluntarily appears, he is deemed to have submitted
himself to the jurisdiction of the court. 27 This is not, however, always the
case. Admittedly, and without subjecting himself to the court's jurisdiction, the
defendant in an action can, by special appearance object to the court's
assumption on the ground of lack of jurisdiction. If he so wishes to assert this
defense, he must do so seasonably by motion for the purpose of objecting to
the jurisdiction of the court, otherwise, he shall be deemed to have submitted
himself to that jurisdiction. 28 In the case of foreign corporations, it has been
held that they may seek relief against the wrongful assumption of jurisdiction
by local courts. In Time, Inc. vs. Reyes, 29 it was held that the action of a court
in refusing to rule or deferring its ruling on a motion to dismiss for lack or
excess of jurisdiction is correctable by a writ of prohibition or certiorari sued
out in the appellate court even before trial on the merits is had. The same
remedy is available should the motion to dismiss be denied, and the court,
over the foreign corporation's objections, threatens to impose its jurisdiction
upon the same.
If the defendant, besides setting up in a motion to dismiss his objection
to the jurisdiction of the court, alleges at the same time any other ground for
dismissing the action, or seeks an affirmative relief in the motion, 30 he is
deemed to have submitted himself to the jurisdiction of the court.
In this instance, however, the petitioners from the time they filed their
motions to dismiss, their submissions have been consistently and unfailingly
to object to the trial court's assumption of jurisdiction, anchored on the fact
that they are all foreign corporations not doing business in the Philippines.
As we have consistently held, if the appearance of a party in a suit is
precisely to question the jurisdiction of the said tribunal over the person of the
defendant, then this appearance is not equivalent to service of summons, nor
does it constitute an acquiescence to the court's jurisdiction. 31 Thus, it cannot
be argued that the petitioners had abandoned their objections to the
jurisdiction of the court, as their motions to dismiss in the trial court, and all
their subsequent posturings, were all in protest of the private respondent's
insistence on holding them to answer a charge in a forum where they believe
they are not subject to. Clearly, to continue the proceedings in a case such as
those before Us would just "be useless and a waste of time." 32
 ACCORDINGLY, the decision appealed from dated October 11, 1990,
is SET ASIDE and the instant petition is hereby GRANTED. The respondent
Regional Trial Court of Manila, Branch 51 is declared without jurisdiction to
take cognizance of Civil Case No. 86-37932, and all its orders and issuances
in connection therewith are hereby ANNULLED and SET ASIDE. The
respondent court is hereby ORDERED to DESIST from maintaining further
proceeding in the case aforestated.  cdt

SO ORDERED.
Romero, Puno and Mendoza, JJ ., concur.
Regalado, J ., is on leave.
 

Footnotes

1.Penned by Associate Justice Nicolas R. Lapena, Jr. and concurred into by Associate
Justices Ricardo L. Pronove, Jr. and Salome A. Montoya.
2.Annexes "A" and "B", CA-Petition, pp. 15 and 17, CA-Record.
3.Court of Appeals Decision, pp. 124-125, Rollo.
4.Filed with the Regional Trial Court of Manila, Branch 51, docketed as Civil Case No.
86-37392, CA-Record, p. 14.
5.Sec. 14. Service upon private foreign corporations. — If the defendant is a foreign
corporation, or a nonresident joint stock company or association, doing
business in the Philippines, service may be made on its resident agent
designated in accordance with law for that purpose, or if there be no such
agent, on the government official designated by law to that effect, or on any of
its officers or agents within the Philippines.
6.Memorandum for Petitioners, p. 256, Rollo.
7.Memorandum for Private Respondent, pp. 226-227, Rollo.
8.G.R. No. 102223, August 22, 1996.
9.Mentholatum Co. Inc., vs. Mangaliman, G.R. No. 47701, June 27, 1941, 72 Phil 524.
10.Far East International Import and Export Corporation vs. Nankai Kogyo Co., G.R.
No. 13525, November 30, 1962, 6 SCRA 725.
11.G.R. No. 105141, August 31, 1993, 225 SCRA 737.
12.Moris & Co. vs. Scandinavia Ins. Co., 279 U.S. 405 (1929), cited in Vance, p. 1074.
13.Section 95. A contract of reinsurance is one by which an insurer procures a third
person to insure him against loss or liability by reason of such original
 insurance. (Presidential Decree No. 1460, otherwise known as the Insurance
Code of the Philippines)
14.Section 98, P.D. 1460.
15.Section 123, Corporation Code of the Philippines.
16.No. 22015, September 1, 1924, 46 Phil 70.
17.Section 125, 126, Corporation Code of the Philippines.
18.Section 133, id.
19.Marshall Wells Co. vs. Elser, supra.
20.G.R. No. L-38649, March 26, 1979, 89 SCRA 131.
21.Time, Inc. vs. Reyes, G.R. No. L-28882, May 31, 1971, 39 SCRA 303.
22.Minucher vs. Court of Appeals, G.R. No. 97765, September 24, 1992, 214 SCRA
242.
23.Munar vs. Court of Appeals, G.R. No. 100740, November 25, 1994, 238 SCRA
372.
24.Vda. de Macoy vs. Court of Appeals, G.R. No. 95871, February 13, 1992, 206
SCRA 244.
25.C.E. Salmon vs. Tan Cueco, No. 12286, March 27, 1917, 36 Phil 556.
26.Gov't. vs. Rotor, No. 46438, November 7, 1939, 69 Phil 130.
27.Paramount Insurance Corporation vs. Japson, G.R. No. 68037, July 29, 1992, 211
SCRA 879.
28.La Naval Drug Corporation vs. Court of Appeals , G.R. No. 103200, August 31,
1994, 236 SCRA 78.
29.Supra.
30.Wang Laboratories vs. Mendoza, G.R. No. 72147, December 1, 1987, 156 SCRA
44.
31.Delos Santos vs. Montesa, Jr., G.R. No. 73531, April 6, 1993, 221 SCRA 15.
32.Philippine International Fair, Inc., et. al., vs. Ibañez, et. al., 50 Off. Gaz. 1036.

 (Avon Insurance PLC v. Court of Appeals, G.R. No. 97642, [August 29, 1997],
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343 PHIL 849-865)