FIRST DIVISION

[G.R. No. 112573. February 9, 1995.]

NORTHWEST ORIENT AIRLINES, INC. , petitioner, v s . COURT OF

APPEALS and C.F. SHARP & COMPANY, INC. , respondents.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; FOREIGN JUDGMENT; EFFECT; RULE

IN CASE OF AN ACTION IN PERSONAM. — 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 o cial 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 at its home o ce in the
Philippines was not only ineffectual but also void, and the Japanese Court did not,
therefore, acquire jurisdiction over it.
2. ID.; ID.; ID.; ID.; ID.; DUTY OF THE PARTY ASSAILING THEREOF. — 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 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 o cial 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 that 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.
3. ID.; ID.; SUMMONS; SERVICE UPON PRIVATE FOREIGN CORPORATION
DOING BUSINESS IN THE PHILIPPINES; RULE; CASE AT BAR. — Alternatively, in the light
of the absence of proof regarding Japanese law, the presumption of identity or
similarity or the so-called processual presumption 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 in the Philippines. Section
14, Rule 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
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 agent, on the government o cial designated by law to that effect, or (3) on any of its
o cers 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 agent, service shall be made on the government o cial
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 o ce or o cial served shall transmit by mail a
copy of the summons or other legal process to the corporation at its home or principal
o ce. The sending of such copy is a necessary part of the service. SHARP contends
that the laws authorizing service of process upon the Securities and Exchange
Commission, the Superintendent of Banks, and the Insurance Commissioner, as the
case may be, presuppose a situation wherein the foreign corporation doing business in
the country no longer has any branches or o ces within the Philippines. Such
contention is belied by the pertinent provisions of the said laws. Thus, Section 128 of
the Corporation Code and Section 190 of the Insurance Code clearly contemplate two
situations: (1) if the corporation had left the Philippines or had ceased to transact
business therein, and (2) if the corporation has no designated agent. Section 17 of the
General Banking Act does not even speak of a corporation which had ceased to
transact business in the Philippines. 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 lest create an impression, that it had none. Hence, service
on the designated government o cial or on any of SHARP's o cers or agents in Japan
could be availed of. The respondent, however, insists that only service on any of its
o cers or employees in its branches in Japan could be resorted to. We do not agree.
As found by the respondent court, two attempts at service were made at SHARP's
Yokohama branch. Both were unsuccessful. On the rst attempt, Mr. Dinozo, who was
believed to be the person authorized to accept court process, was in Manila. On the
second, Mr. Dinozo was present, but he refused to accept the summons because,
according to him, he was no longer an employee of SHARP. While it may be true that
service could have been made upon any of the o cers or agents of SHARP at its three
other branches in Japan, the availability of such a recourse would not preclude service
upon the proper government o cial, as stated above. As found by the Court of
Appeals, it was the Tokyo District Court which ordered that summons for SHARP be
served at its head o ce 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
o ce in Manila. This service is equivalent to service on the proper government o cial
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 laws holds no water.
4. ID.; ID.; ID.; SUBSTITUTED SERVICE; RULE; RATIONALE. — The United
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 States Supreme Court ruled in the 1940 case of Milliken vs. Meyer (311 U.S. 457) that
domicile in the state is alone su cient to bring an absent defendant within the reach of
the state's jurisdiction for purposes of a personal judgment by means of appropriate
substituted service or personal service without the state. This principle is embodied in
Section 18, Rule 14 of the Rules of Court which allows service of summons on residents
temporarily out of the Philippines to be made out of the country. The rationale for this
rule was explained in Milliken as follows: [T]he authority of a state over one of its citizen
is not terminated by the mere fact of his absence from the state. The state which
accords him privileges and affords protection to him and his property by virtue of his
domicile may also exact reciprocal duties. "Enjoyment of the privileges of residence
within the state, and the attendant right to invoke the protection of its laws, are
inseparable" from the various incidences of state citizenship. The responsibilities of
that citizenship arise out of the relationship to the state which domicile creates. That
relationship is not dissolved by mere absence from the state. The attendant duties, like
the rights and privileges incident to domicile, are not dependent on continuous
presence in the state. One such incident of domicile is amenability to suit within the
state even during sojourns without the state, where the state has provided and
employed a reasonable method for apprising such an absent party of the proceedings
against him.
5. COMMERCIAL LAW; CORPORATION; DOMICILE OF CORPORATION
FORMED IN ONE STATE BUT HAS OFFICES AND TRANSACTING BUSINESS IN OTHER
STATE; RULE. — The domicile of a corporation belongs to the state where it was
incorporated. In a strict technical sense, such domicile as a corporation may have is
single in its essence and a corporation can have only one domicile which is the state of
its creation. Nonetheless, a corporation formed in one state may, for certain purposes,
be regarded a resident in another state in which it has o ces and transacts business.
This is the rule in our jurisdiction and apropos thereof, it may be necessary to quote
what we stated in State Investment House, Inc. vs. Citibank, N.A., (203 SCRA 9, 18-20
[1991] ) to wit: . . . This Court itself has already had occasion to hold [ Claude Neon
Lights, Fed. Inc. vs. Philippine Advertising Corp., 57 Phil. 607] that a foreign corporation
licitly doing business in the Philippines, which is a defendant in a civil suit, may not be
considered a non-resident within the scope of the legal provision authorizing
attachment against a defendant not residing in the Philippine Islands; [Sec. 424, in
relation to Sec. 412 of Act No. 190, the Code of Civil Procedure; Sec. 1(f), Rule 59 of the
Rules of 1940; Sec. 1 (f), Rule 57, Rules of 1964] in other words, a preliminary
attachment may not be applied for and granted solely on the asserted fact that the
defendant is a foreign corporation authorized to do business in the Philippines — and is
consequently and necessarily, "a party who resides out of the Philippines."
Parenthetically, if it may not be considered as a party not residing in the Philippines, or
as a party who resides out of the country, then, logically, it must be considered a party
who does reside in the Philippines, who is a resident of the country. Be this as it may,
this Court pointed out that: ". . . Our laws and jurisprudence indicate a purpose to
assimilate foreign corporations, duly licensed to do business here, to the status of
domestic corporations. (Cf. Section 73, Act No. 1459, and Marshall Wells Co. vs. Henry
W. Elser & Co ., 46 Phil. 70, 76; Yu Cong Eng vs. Trinidad , 47 Phil. 385, 411) We think it
would be entirely out of line with this policy should we make a discrimination against a
foreign corporation, like the petitioner, and subject its property to the harsh writ of
seizure by attachment when it has complied not only with every requirement of law
made specially of foreign corporations, but in addition with every requirement of law
made of domestic corporations. . . ." Obviously, the assimilation of foreign corporations
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 authorized to do business in the Philippines "to the status of domestic corporations,"
subsumes their being found and operating as corporations, hence, residing, in the
country. The same principle is recognized in American law: that the "residence of a
corporation, if it can be said to have a residence, is necessarily where it exercises
corporate functions . . .;" that it is considered as dwelling "in the place where its
business is done, . . .," as being "located where its franchises are exercised . . .," and as
being "present where it is engaged in the prosecution of the corporate enterprise;" that
at "foreign corporation licensed to do business in a state is a resident of any country
where it maintains an o ce or agent for transaction of its usual and customary
business for venue purposes;" and that the "necessary element in its signi cation is
locality of existence." [Words and Phrases, Permanent Ed., vol. 37, pp. 394, 412, 403].
Inasmuch as SHARP was admittedly doing business in Japan through its four duly
registered branches at the time the collection suit against it was led, 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.

DECISION

DAVIDE , J : p

This petition on certiorari seeks to set aside the decision of the court of Appeals
a rming the dismissal of the petitioner's complaint to enforce the judgment of a
Japanese court. The principal issue here is whether a Japanese court can acquire
jurisdiction over a Philippine corporation doing business in Japan by serving summons
through diplomatic channels on the Philippine corporation at its principal o ce in
Manila after prior attempts to serve summons in Japan had failed. Cdpr

Petitioner Northwest Orient Airlines, Inc. (hereinafter NO RTHWE ST ), a

corporation organized under the laws of the State of Minnesota, U.S.A., sought to
enforce in Civil Case No. 83-17637 of the Regional Trial Court (RTC), Branch 54, Manila,
a judgment rendered in its favor by a Japanese court against private respondent C.F.
Sharp & Company, Inc., (hereinafter SHARP), a corporation incorporated under
Philippine laws. LLpr

As found by the Court of Appeals in the challenged decision of 10 November

1993,1 the following are the factual and procedural antecedents of this controversy:
On May 9, 1974, plaintiff Northwest Airlines and defendant C.F. Sharp &
Company, through its Japan branch, entered into an International Passenger
Sales Agency Agreement, whereby the former authorized the latter to sell its air
transportation tickets. Unable to remit the proceeds of the ticket sales made by
defendant on behalf of the plaintiff under the said agreement, plaintiff on
March 25, 1980 sued defendant in Tokyo, Japan, for collection of the
unremitted proceeds of the ticket sales, with claim for damages.
On April 11, 1980, a writ of summons was issued by the 36th Civil
Department, Tokyo District Court of Japan against defendant at its o ce at the
Taiheiyo Building, 3rd oor, 132, Yamashita-cho, Naka-ku, Yokohoma,
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 Kanagawa Prefecture. The attempt to serve the summons was unsuccessful
because the bailiff was advised by a person in the o ce that Mr. Dinozo, the
person believed to be authorized to receive court processes was in Manila and
would be back on April 24, 1980.
On April 24, 1980, bailiff returned to the defendant's o ce to serve the
summons. Dr. Dinozo refused to accept the same claiming that he was no
longer an employee of the defendant.
After the two attempts of service were unsuccessful, the judge of the
Tokyo District Court decided to have the complaint and the writs of summons
served at the head o ce of the defendant in Manila. On July 11, 1980, the
Director of the Tokyo District Court requested the Supreme Court of Japan to
serve the summons through diplomatic channels upon the defendant's head
office in Manila.
On August 28, 1980, defendant received from Deputy Sheriff Rolando
Balingit the writ of summons (p. 276, Records). Despite receipt of the same,
defendant failed to appear at the scheduled hearing. Thus, the Tokyo Court
proceeded to hear the plaintiff's complaint and on [January 29, 1981], rendered
judgment ordering the defendant to pay the plaintiff the sum of 83,158,195 Yen
and damages for delay at the rate of 6% per annum from August 28, 1980 up to
and until payment is completed (pp. 12-14, Records).
On March 24, 1981, defendant received from Deputy Sheriff Balingit copy
of the judgment. Defendant not having appealed the judgment, the same
became final and executory.
Plaintiff was unable to execute the decision in Japan, hence, on May 20,
1983, a suit for enforcement of the judgment was led by plaintiff before the
Regional Trial Court of Manila, Branch 54. 2
On July 16, 1983, defendant led its answer averring that the judgment
of the Japanese Court sought to be enforced is null and void and unenforceable
in this jurisdiction having been rendered without due and proper notice to the
defendant and/or with collusion or fraud and/or upon a clear mistake of law
and fact (pp. 41-45, Rec.). LibLex

Unable to settle the case amicably, the case was tried on the merits. After
the plaintiff rested its case, defendant on April 21, 1989, led a Motion for
Judgment on a Demurrer to Evidence based on two grounds: (1) the foreign
judgment sought to be enforced is null and void for want of jurisdiction and (2)
the said judgment is contrary to Philippine law and public policy and rendered
without due process of law. Plaintiff led its opposition after which the court a
quo rendered the now assailed decision dated June 21, 1989 granting the
demurrer motion and dismissing the complaint (Decision, pp. 376-378,
Records). In granting the demurrer motion, the trial court held that:
"The foreign judgment in the Japanese Court sought in this action is
null and void for want of jurisdiction over the person of the defendant
considering that this is an action in personam; the Japanese Court did not
acquire jurisdiction over the person of the defendant because
jurisprudence requires that the defendant be served with summons in
Japan in order for the Japanese Court to acquire jurisdiction over it, the
process of the Court in Japan sent to the Philippines which is outside
Japanese jurisdiction cannot confer jurisdiction over the defendant in the
case before the Japanese court of the case at bar. Boudard versus Tait 67
Phil. 170. The plaintiff contends that the Japanese Court acquired
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 jurisdiction because the defendant is a resident of Japan, having four (4)
branches doing business therein and in fact had a permit from the
Japanese government to conduct business in Japan (citing the exhibits
presented by the plaintiff); if this is so then service of summons should
have been made upon the defendant in Japan in any of these alleged four
branches; as admitted by the plaintiff the service of the summons issued
by the Japanese Court was made in the Philippines thru a Philippine
sheriff. This Court agrees that if the defendant in a foreign court is a
resident in the court of that foreign court such court could acquire
jurisdiction over the person of the defendant but it must be served upon the
defendant in the territorial jurisdiction of the foreign court. Such is not the
case here because the defendant was served with summons in the
Philippines and not in Japan."
Unable to accept the said decision, plaintiff on July 11, 1989 moved for
reconsideration of the decision, ling at the same time a conditional Notice of
Appeal, asking the court to treat the said notice of appeal "as in effect after and
upon issuance of the court's denial of the motion for reconsideration." cdasia

Defendant opposed the motion for reconsideration to which a Reply

dated August 28, 1989 was filed by the plaintiff.
On October 16, 1989, the lower court disregarded the Motion for
Reconsideration and gave due course to the plaintiff's Notice of Appeal. 3
In its decision, the Court of Appeals sustained the trial court. It agreed with the
latter in its reliance upon Boudard vs. Tait 4 wherein it was held that "the process of the
court has no extraterritorial effect and no jurisdiction is acquired over the person of the
defendant by serving him beyond the boundaries of the state." To support its position,
the Court of Appeals further stated:
In an action strictly in personam, such as the instant case, personal
service of summons within the forum is required for the court to acquire
jurisdiction over the defendant (Magdalena Estate Inc. vs. Nieto, 125 SCRA 230).
To confer jurisdiction on the court, personal or substituted service of summons
on the defendant not extraterritorial service is necessary (Dial Corp. vs. Soriano,
161 SCRA 739). LLjur

But while plaintiff-appellant concedes that the collection suit led is an

action in personam, it is its theory that a distinction must be made between an
action in personam against a resident defendant and an action in personam
against a non-resident defendant. Jurisdiction is acquired over a non-resident
defendant only if he is served personally within the jurisdiction of the court, and
over a resident defendant if by personal, substituted or constructive service
conformably to statutory authorization. Plaintiff-appellant argues that since the
defendant-appellee maintains branches in Japan, it is considered a resident
defendant. Corollarily, personal substituted or constructive service of summons
when made in compliance with the procedural rules is su cient to give the
court jurisdiction to render judgment in personam.
Such an argument does not persuade.
It is general rule that processes of the court cannot lawfully be served
outside the territorial limits of the jurisdiction of the court from which it issues
(Carter vs. Carter, 41 S.E. 2d 532, 201) and this is regardless of the residence or
citizenship of the party thus served (Iowa-Rahr, 129 NW 494, 150 Iowa 511, 35
LRC, NS 292, Am. Case 1912 D680). There must be actual service within the
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 proper territorial limits on defendant or someone authorized to accept service
for him. Thus, a defendant, whether a resident or not in the forum where the
action is filed, must be served with summons within that forum. cdasia

But even assuming a distinction between a resident defendant and non-

resident defendant were to be adopted, such distinction applies only to natural
persons and not to corporations. This nds support in the concept that "a
corporation has no home or residence in the sense in which those terms are
applied to natural persons" (Claude Neon Lights vs. Phil. Advertising Corp., 57
Phil. 607). Thus, as cited by the defendant-appellee in its brief:

"Residence is said to be an attribute of a natural person, and can be

predicated on an arti cial being only by more or less imperfect analogy.
Strictly speaking, therefore, a corporation can have no local residence or
habitation. It has been said that a corporation is a mere ideal existence,
subsisting only in contemplation of law — an invisible being which can
have, in fact, no locality and can occupy no space, and therefore cannot
have a dwelling place. (18 Am. Jur. 2d, p. 693 citing Kimmerle vs. Topeka ,
88 370, 128 p. 367; wood v. Hartfold F. Ins. Co., 13 Conn 202)"
Jurisprudence so holds that the foreign or domestic character of a
corporation is to be determined by the place of its origin, where its charter was
granted and not by the location of its business activities (Jennings v. Idaho Rail
Light & P. Co. , 26 Idaho 703, 146 p. 101). A corporation is a "resident" and an
inhabitant of the state in which it is incorporated and no other (36 Am. Jur. 2d,
p. 49).
Defendant-appellee is a Philippine Corporation duly organized under the
Philippine laws. Clearly, its residence is the Philippines, the place of its
incorporation, and not Japan. While defendant-appellee maintains branches in
Japan, this will not make it a resident of Japan. A corporation does not become
a resident of another by engaging in business there even though licensed by
that state and in terms given all the rights and privileges of a domestic
corporation (Galveston H. & S.A.R. Co. vs. Gonzales, 151 US 496, 38 L ed. 248, 4
S Ct. 401). cdasia

On this premise, defendant appellee is a non-resident corporation. As

such, court processes must be served upon it at a place within the state in which
the action is brought and not elsewhere (St. Clair vs. Cox, 106 US 350, 27 L ed.
222, 1 S. Ct. 354). 5
It then concluded that the service of summons effected in Manila or beyond the
territorial boundaries of Japan was null and did not confer jurisdiction upon the Tokyo
District Court over the person of SHARP; hence, its decision was void.
Unable to obtain a reconsideration of the decision, NORTHWEST elevated the
case to this Court contending that the respondent court erred in holding that SHARP
was not a resident of Japan and that summons on SHARP could only be validly served
within the country.
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. 6
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
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 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.cdasia

Consequently, the party attacking a foreign judgment has the burden of

overcoming the presumption of its validity. 7 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 but also was 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. 8 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 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. 9 Sections 24 and 25, rule
132 of the Rules of Court provide that it may be evidenced by an o cial 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 that 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 presumption 1 0 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
in the Philippines. Section 14, Rule 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 o cial designated by law to
that effect, or (3) on any of its officers or agents within the Philippines.
cdasia

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. 1 1
Where the corporation has no such agent, service shall be made on the
government o cial 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 o ce or o cial served shall
transmit by mail a copy of the summons or other legal process to the corporation at its
home or principal o ce. The sending of such copy is a necessary part of the service. 1 2
SHARP contends that the laws authorizing service of process upon the Securities
and Exchange commission, the Superintendent of Banks, and the Insurance
Commissioner, as the case may be, presuppose a situation wherein the foreign
corporation doing business in the country no longer has any branches or o ces within
the Philippines. Such contention is belied by the pertinent provisions of the said laws.
Thus, Section 128 of the Corporation Code 13 and Section 190 of the Insurance Code
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 14 clearly contemplate two situations: (1) if the corporation had left the Philippines or
had ceased to transact business therein, and (2) if the corporation has no designated
agent. Section 17 of the General Banking Act 15 does not speak of a corporation which
had ceased to transact business in the Philippines.
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
o cial or on any of SHARP's o cers or agents in Japan could be availed of. The
respondent, however, insists that only service on any of its o cers or employees in its
branches in Japan could be resorted to. We do not agree. As found by the respondent
court, two attempts at service were made at SHARP's Yokohoma branch. Both were
unsuccessful. On the rst attempt, Mr. Dinozo, who was believed to be the person
authorized to accept court process, was in Manila. On the second, Mr. Dinozo was
present, but he refused to accept the summons because, according to him, he was no
longer an employee of SHARP. While it may be true that service could have been made
upon any of the o cers or agents of SHARP at its three other branches in Japan, the
availability of such a recourse would not preclude service upon the proper government
official, as stated above. cdasia

As found by the Court of Appeals, it was the Tokyo District Court which ordered
that summons for SHARP be served at its head o ce in the Philippines after the two
attempts of service had failed. 1 6 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 o ce in Manila. This service is equivalent to service
on the proper government o cial 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 laws holds no water. 1 7
In deciding against the petitioner, the respondent court sustained the trial court's
reliance on Boudard vs. Tait1 8 where this Court held:
"The fundamental rule is that jurisdiction in personam over non-residents,
so as to sustain a money judgment, must be based upon personal service within
the state which renders the judgment."
xxx xxx xxx
"The process of a court has no extraterritorial effect, and no jurisdiction is
acquired over the person of the defendant by serving him beyond the
boundaries of the state. Nor has a judgment of a court of a foreign country
against a resident of this country having no property in such foreign country
based on process served here, any effect here against either the defendant
personally or his property situated here."
"Process issuing from the courts of one state or country cannot run into
another, and although a non-resident defendant may have been personally
served with such process in the state or country of his domicile, it will not give
such jurisdiction as to authorize a personal judgment against him." cdasia

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 It further availed of the ruling in Magdalena Estate, Inc. vs. Nieto 1 9 and Dial Corp. vs.
Soriano, 2 0 as well as the principle laid down by the Iowa Supreme Court in the 1911
case of Raher vs. Raher.2 1
The rst three cases are, however, inapplicable. B o ud ar d involved the
enforcement of a judgment of the civil division of the Court of First Instance of Hanoi,
French Indo-China. The trial court dismissed the case because the Hanoi court never
acquired jurisdiction over the person of the defendant considering that "[t]he evidence
adduced at the trial conclusively proves that neither the appellee [the defendant] nor his
agent or employees were ever in Hanoi, French Indo-China; and that the deceased Marie
Theodore Jerome Boudard had never, at any time, been his employee." In Magdalena
Estate, what was declared invalid resulting in the failure of the court to acquire
jurisdiction over the person of the defendants in an action in personam was the service
of summons through publication against non-appearing resident defendants. It was
claimed that the latter concealed themselves to avoid personal service of summons
upon them. In Dial, the defendants were foreign corporations which were not domiciled
and licensed to engage in business in the Philippines and which did not have o cers or
agents, places of business, or properties here. On the other hand, in the instant case,
SHARP was doing business in Japan and was maintaining four branches therein.
Insofar as the Philippines is concerned, Raher is a thing of the past. In that case, a
divided Supreme Court of Iowa declared that the principle that there can be no
jurisdiction in a court of a territory to render a personal judgment against anyone upon
service made outside its limits was applicable alike to cases of residents and non-
residents. The principle was put at rest by the United States Supreme Court when it
ruled in the 1940 case of Milliken vs. Meyer 2 2 that domicile in the state is alone
su cient to bring an absent defendant within the reach of the state's jurisdiction for
purposes of a personal judgment by means of appropriate substituted service or
personal service without the state. This principle is embodied in Section 18, Rule 14 of
the Rules of Court which allows service of summons on residents temporarily out of the
Philippines to be made out of the country. The rationale for this rule was explained in
Milliken as follows: cdasia

[T]he authority of a state over one of its citizens is not terminated by the
mere fact of his absence from the state. The state which accords him privileges
and affords protection to him and his property by virtue of his domicile may
also exact reciprocal duties. "Enjoyment of the privileges of residence within the
state, and the attendant right to invoke the protection of its laws, are
inseparable" from the various incidences of state citizenship. The
responsibilities of that citizenship arise out of the relationship to the state which
domicile creates. That relationship is not dissolved by mere absence from the
state. The attendant duties, like the rights and privileges incident to domicile, are
not dependent on continuous presence in the state. One such incident of
domicile is amenability to suit within the state even during sojourns without the
state, where the state has provided and employed a reasonable method for
apprising such an absent party of the proceedings against him. 2 3
The domicile of a corporation belongs to the state where it was incorporated. 2 4
In a strict technical sense, such domicile as a corporation may have is single in its
essence and a corporation can have only one domicile which is the state of its
creation.2 5
Nonetheless, a corporation formed in one state may, for certain purposes, be
regarded a resident in another state in which it has o ces and transacts business. This
is the rule in our jurisdiction and apropos thereto, it may be necessary to quote what we
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 stated in State Investment House, Inc. vs. Citibank, N.A., 2 6 to wit:
The issue whether these Philippine branches or units may be considered
"residents of the Philippine Islands" as that term is used in Section 20 of the
Insolvency Law . . . or residents of the state under the laws of which they were
respectively incorporated. The answer cannot be found in the Insolvency Law
itself, which contains no de nition of the term, resident, or any clear indication
of its meaning. There are however other statutes, albeit of subsequent
enactment and effectivity, from which enlightening notions of the term may be
derived. cdasia

The National Internal Revenue Code declares that the term "'resident
foreign corporation' applies to a foreign corporation engaged in trade or
business within the Philippines," as distinguished from a "'non-resident foreign
corporation' . . . (which is one) not engaged in trade or business within the
Philippines." [Sec. 20, pars. (h) and (i)].
The Offshore Banking Law, Presidential Decree No. 1034, states "that
branches, subsidiaries, a liation, extension o ces or any other units of
corporation or juridical person organized under the laws of any foreign country
operating in the Philippines shall be considered residents of the Philippines."
[Sec. 1 (e)].
The General Banking Act, Republic Act No. 337, places "branches and
agencies in the Philippines of foreign banks . . . (which are) called Philippine
branches, in the same category as "commercial banks, savings associations,
mortgage banks, development banks, rural banks, stock savings and loan
associations" (which have been formed and organized under Philippine laws),
making no distinction between the former and the latter in so far as the terms
"banking institutions" and "bank" are used in the Act [Sec. 2], declaring on the
contrary that in "all matters not speci cally covered by special provisions
applicable only to foreign banks, or their branches and agencies in the
Philippines, said foreign banks or their branches and agencies in the Philippines,
said foreign banks or their branches and agencies lawfully doing business in
the Philippines "shall be bound by all laws, rules, and regulations applicable to
domestic banking corporations of the same class, except such laws, rules and
regulations as provided for the creation, formation, organization, or dissolution
of corporations or as x the relation, liabilities, responsibilities, or duties of
members, stockholders or offices of corporation." [Sec. 18]. cdasia

This Court itself has already had occasion to hold [Claude Neon Lights,
Fed. Inc. vs. Philippine Advertising Corp., 57 Phil. 607] that a foreign corporation
licitly doing business in the Philippines, which is a defendant in a civil suit, may
not be considered a non-resident within the scope of the legal provision
authorizing attachment against a defendant not residing in the Philippine
Islands; [Sec. 424, in relation to Sec. 412 of Act No. 190, the Code of Civil
Procedure; Sec. 1 (f), Rule 59 of the Rules of 1940; Sec. 1(f), Rule 57, rules of
1964] in other words, a preliminary attachment may not be applied for and
granted solely on the asserted fact that the defendant is a foreign corporation
authorized to do business in the Philippines — and is consequently and
necessarily, "a party who resides out of the Philippines." Parenthetically, if it
may not be considered as a party who resides out of the country, then, logically,
it must be considered a party who does reside in the Philippines, who is a
resident of the country. Be this as it may, this Court pointed out that:

". . . Our laws and jurisprudence indicate a purpose to assimilate

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 foreign corporations, duly licensed to do business here, to the status of
domestic corporations. (Cf. Section 73, Act No. 1459, and Marshall Wells
Co. vs. henry W. Elser & Co. , 46 Phil. 70, 76; Yu Cong Eng vs. Trinidad , 47
Phil. 385, 411) We think it would be entirely out of line with this policy
should we make a discrimination against a foreign corporation, like the
petitioner, and subject its property to the harsh writ of seizure by
attachment when it has complied not only with every requirement of law
made specially of foreign corporations, but in addition with every
requirement of law made of domestic corporations. . . ."

Obviously, the assimilation of foreign corporations authorized to do

business in the Philippines "to the status of domestic corporations," subsumes
their being found and operating as corporations, hence, residing, in the country.
cdasia

The same principle is recognized in American law: that the "residence of

a corporation, if it can be said to have a residence, is necessarily where it
exercises corporate functions . . .;" that it is considered as dwelling "in the place
where its business is done . . ." as being "located where its franchises are
exercised . . .," and as being "present where it is engaged in the prosecution of
the corporate enterprise;" that a "foreign corporation licensed to do business in a
state is a resident of any country where it maintains an o ce or agent for
transaction of its usual and customary business for venue purposes;" and that
the "necessary element in its signi cation is locality of existence." [Words and
Phrases, Permanent Ed., vol. 37, pp. 394, 412, 403].
Inasmuch as SHARP was admittedly doing business in Japan through its four
duly registered branches at the time the collection suit against it was led, 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. 2 7
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.
We nd NORTHWEST's claim for attorney's fees, litigation expenses, and
exemplary damages to be without merit. We nd no evidence that would justify an
award for attorney's fees and litigation expenses under Article 2208 of the Civil Code of
the Philippines. Nor is an award for exemplary damages warranted. Under Article 2234
of the Civil Code, before the court may consider the question of whether or not
exemplary damages should be awarded, the plaintiff must show that he is entitled to
moral, temperate, or compensatory damages. There being no such proof presented by
NORTHWEST, no exemplary damages may be adjudged in its favor. cdasia

WHEREFORE, the instant petition is partly GRANTED, and the challenged decision
is AFFIRMED insofar as it denied NORTHWEST's claims for attorney's fees, litigation
expenses, and exemplary damages but REVERSED insofar as it sustained the trial
court's dismissal of NORTHWEST's complaint in Civil Case No. 83-17637 of Branch 54
of the Regional Trial Court of Manila, and another in its stead is hereby rendered
ORDERING private respondent C.F. SHARP & COMPANY, INC. to pay to NORTHWEST
the amounts adjudged in the foreign judgment subject of said case, with interest
thereon at the legal rate from the ling of the complaint therein until the said foreign
judgment is fully satisfied.
Costs against the private respondent.

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 SO ORDERED.
Padilla, Bellosillo, Quiason and Kapunan, JJ ., concur.

Footnotes
1. Annex "A" of Petition. per Associate Justice Antonio M. Martinez; concurred in by
associate Justices Cancio C. Garcia and Ramon Mabutas, Jr.

2. This is Civil Case No. 83-17637.

3. Rollo, 28-31.
4. 67 Phil. 170 [1939].

5. Rollo, 32-34.
6. 47 am Jur 2d Judgments § 1237 (1969).

7. 47 Am Jur Judgments § 1237 (1969).

8. JOVITO R. SALONGA, Private International Law, 100, 1967 3rd ed.; 16 Am Jur 2d Con ict
of Laws § 125 (1979).

9. FLORENZ D. REGALADO, Remedial Law Compendium, vol. 2, 1989 ed., 526, citing In re
Estate of Johnson, 39 Phil. 156 [1918] and Fluemer vs. Hix, 54 Phil. 610 [1930];
EDGARDO L. PARAS, Philippine Con ict of Laws, 1984 ed., 45, citing Adong vs. Cheong
Seng Gee, 43 Phil. 43 [1922] and Sy Joc Lieng vs. Syquia, 16 Phil. 137 [1910].
10. Lim vs. Collector of Customs, 36 Phil. 472 [1917]; International Harvester Co. vs.
Hamburg-American Line, 42 Phil. 845 [1918]; Suntay vs, Suntay, 95 Phil. 500 [1954];
Beam vs. Yatco , 82 Phil. 30 [1948]; collector of Internal Revenue vs. Fisher, 1 SCRA 93
[1961].
11. Poizant vs. Morgan, 28 Phil. 597 [1914]; H.B. Zachry Co. vs. Court of Appeals, G.R. No.
106989, 10 May 1994.

12. Section 190, Insurance Code; Section 17, General Banking Act; Section 128, Corporation
Code.
13. It reads:

SEC. 128. Resident Agent; service of process. — . . . Any such foreign corporation shall
likewise execute and le with the Securities and Exchange Commission an agreement or
stipulation, executed by the proper authorities of said corporation, in form and substance
as follows:

. . . if at any time said corporation shall cease to transact business in the Philippines, or
shall be without any resident agent in the Philippines on whom any summons or other
legal processes may be served, then in any action or proceeding arising out of any
business or transaction which occurred in the Philippines, service of any summons or
other legal process may be made upon the Securities and Exchange Commission and
that such service shall have the same force and effect as if made upon the duly-
authorized officers of the corporation at its home office. (Emphasis supplied).

14. It reads:
SEC. 190. . . . Any such foreign corporation shall, as further condition precedent to the
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 transaction of insurance business in the Philippines, make and le with the
Commissioner and agreement or stipulation, executed by the proper authorities of said
company in form and substance as follows :
. . . if at any time said company shall leave the Philippines, or cease to transact business
therein, or shall be without any agent in the Philippines on whom any notice, proof of
loss, summons, or legal process may be served, then in any action or proceeding out of
any business or transaction which occurred in the Philippines, service of any notice
provided by law, or insurance policy, proof of loss, summons or other legal process may
be made upon the Insurance Commissioner, and that such service upon the Insurance
Commissioner shall have the same force and effect as if made upon the company.
(Emphasis supplied).

15. It provides:

SEC. 17. . . .
xxx xxx xxx

Should there be no person authorized by the corporation upon whom service of

summons, processes, and all legal notices may be made, service of summons,
processes, and legal notices may be made upon the Superintendent of Banks and such
service shall be as effective as if made upon the corporation or upon its duly authorized
agent. (Emphasis supplied).

16. Decision of the Court of Appeals, 2; Rollo, 29.

17. Appellee's Brief, 18.

18. Supra note 4 at 174-175 (citations omitted).

19. 125 SCRA 758 [1983].
20. 161 SCRA 737 [1988].

21. 150 Iowa 511, 129 NW 494.

22. 311 U.S. 457.

23. Id. at 463-464 (citations omitted).

24. 18 Am Jur 2d Corporations § 159 (1965).
25. 36 Am 2d Foreign Corporations § 32 (1968).

26. 203 SCRA 9, 18-20 [1991].

27. 36 Am Jur 2d foreign Corporations § 516 (1968).

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