NORTHWEST ORIENT AIRLINES, INC. vs. CA and C.F. SHARP & COMPANY INC. (Conflict of Laws)

G.R. No. 112573 February 9, 1995

NORTHWEST ORIENT AIRLINES, INC. petitioner,

vs.

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

FACTS:

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 sued defendant in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim for damages.

A writ of summons was issued by the Civil Department, Tokyo District Court of Japan against defendant at its office at the Yokohoma, Kanagawa Prefecture. The attempt to serve the summons was unsuccessful. 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 office of the defendant in Manila. 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.

The defendant received from Deputy Sheriff Rolando Balingit the writ of summons. 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 rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195 Yen and damages for delay. 

Then, the defendant received from Deputy Sheriff Balingit copy of the judgment. Defendant not having appealed the judgment, the same became final and executory.

The defendant assailed the validity of service of summon.

ISSUE:

Whether service of summon to a resident corporation conferring to philippine jurisdiction may be made through diplomatic channels.

RULING:

YES, SC held that summon may be done by preference through personal service but substituted service of summon must be recognized as well. Resident corporation must have authorized representative here, duly authorized by that foreign corporation license to do business in the philippines to receive or accept summon on behalf of foreign entity. SC said that the service of summon being done properly by diplomatic channel then the service is valid therefore any judgment rendered pursuant to that valid service of summon is a valid judgment hence can enforce in its jurisdiction.