Note: All names appearing herein are fictional.

REPUBLIC OF THE PHILIPPINES NATIONAL CAPITAL JUDICIAL REGION REGIONAL TRIAL COURT MAKATI CITY TALAMPAKAN GOLD MINING PROJECT INC., Plaintiff, CIVIL CASE NO. 2013 - versus MEGATRON SERVICES, INC., and WILLIAM SMITH, in his Defendant. x------------------------------------------x For: RESCISSION AND DAMAGES

personal capacity and as representative of MEGATRON

COMMENT TO MOTION TO DISMISS Plaintiff, through counsel, respectfully files this comment on the motion to dismiss filed by the defendants on 29th day of November 2011 and was served to us on the same date. JURISDICTION OVER THE PERSON OF THE DEFENDANTS HAS BEEN LAWFULLY ACQUIRED It is worthwhile to note as against to the contention of the defendant that WILLIAM SMITH (SMITH for Brevity) has been appointed by the Bankruptcy Court as the receiver and the representative of MEGATRON SERVICES, INC., (MEGATRON for brevity) and MEGAHOUSE, the mother company. Thus, Section 3 of Rule 3 provides; Representatives as parties. Where the action is allowed to be prosecuted and defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real property in interest. A representative may be a trustee of an expert trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal.
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It is therefore clear from the provisions of the aforecited rule, that representative may also be included in an action pertaining to the principal and both are considered real party-in-interest, of or the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit,1 and considering that it is SMITH who signed in behalf of MEGATRON in addition of him as the representative appointed by the court, making him a necessary party or one who is not indispensable but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action.2 Assuming arguendo that MEGATRON did not secure license to operate in the Philippines, thus not required to comply with the rules of appointing a resident agent or representative to accept service of summons, in addition to SMITH being sued in his personal capacity is the Purpose Rule, under such rule if a foreign corporation operates in the Philippines without submitting to our laws, it is only just that it not be allowed to invoke them in our courts when it should need them later for its own protection. While foreign investors are always welcome in this land to collaborate with us for our mutual benefit, they must be prepared as an indispensable condition to respect and be bound by Philippine law in proper cases.3 It was never the purpose of the legislature to exclude a foreign corporation which happens to obtain an isolated order for business from the Philippines and thus, in permit persons to avoid their contracts made with such foreign corporations.4 Thus, Section 12, Rule 14, as amended is not applicable since SMITH is being sued in his personal capacity and representative of MEGATRON as the duly appointed receiver and representative of the Bankruptcy Court, it is personal service that applies and if not possible within a reasonable time and for justifiable causes, substituted service may be resorted to: Service in person on defendant.5 Whenever practicable, the summons shall be served by handling a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him. Substituted service. 6 If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant's residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or
1 2

Section 2, Rule 3, Rules of Court. Section 8, Rule 3, Ibid. 3 Granger Associates vs. Microwave System, Inc., 189 SCRA 632. 4 Communications Materials and Design, Inc., vs. CA, 189 SCRA 632. 5 Section 6, Rule 14, Rules of Court. 6 Section 7, Rule 14, Ibid. Page 2 of 7

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regular place of business with some competent person in charge thereof. In accordance to with the said rules, personal service of summons shall be resorted to but if for justifiable causes, the defendant cannot be served within a reasonable time, which in the case at bar, it is admitted by Jessica Mills that SMITH will be back only after several months from Johannesburg, South Africa, hence it is but reasonable for the Sherriff to resort to substituted service to due to impossibility of personal service within a reasonable time,7 provided that service was made at the defendants residence to some person of suitable age and discretion residing therein and the same was stated in the proof of service.8 Residence refers to where the person named in the summons is living even though he may be temporarily out of the country at that time.9 Under the rules, a plaintiff, in the initial stage of suit, is merely required to know the defendants residence and no more. He is not asked to investigate where a resident defendant actually is, at the precise moment of filing the suit. Once the defendants residence is known, he can expect valid service of summons to be made on some persons of suitable age and discretion residing therein. By the terms of the law, plaintiff is not even duty-bound to see to it that the person upon whom the service was actually made delivers the summons to the defendant or informs him about it, the law presumes that for him.10 Furthermore, ownership of house is not synonymous with the dwelling or residence as required by law, it is not controlling.11 The only requirement in the substituted service to make the same valid is that, summons was served at the defendants residence at the time of such service12, which in the instant case is at North Forbes Park Makati City. Anent to the foregoing, service of summons was done in compliance with the rules making it valid, thus jurisdiction over the person of the defending parties has been properly acquired by this Honorable Court. THIS HONORABLE COURT HAS JURISDICTION OVER THE SUBJECT MATTER AND VENUE WAS PROPER

Remedial Law, Oscar M. Herrera, Vol. 1, 2007 Ed., Rex Printing Co., Inc., Quezon City, p. 924; citing Venturanza vs. CA, December 11, 1987. 8 Syjuco vs. Castro, 1989. 9 Venturanza vs. CA, supra. 10 Remedial Law, Oscar M. Herrera, Vol. 1, 2007 Ed., supra, p. 928-929. 11 Arevalo vs. Quilatan, 1982. 12 Ibid. Page 3 of 7

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Defendants posit that Section 10 of the Service Contract entered into by the Plaintiff and MEGATRON which states; This contract shall be governed by the laws of New York and all disputes arising, related or in connection with this contract shall be settled with finality in the courts of New York. That the same stipulations divest the Philippine courts of its jurisdiction over the subject matter is devoid of merit, such contention constitutes a violation of public policy. Jurisdiction can never be the subject of the contract and such stipulation is void, jurisdiction of courts is conferred by law and not by the party.13 Rescission of contract and damages is rightfully within the power of Philippine courts to settle and decide. Such stipulations may only pertain to venue, since jurisdiction is conferred by law.14 Agreements as to venue must be accompanied by qualifying words that will exclude any other courts from taking cognizance of the case; absence of such qualifying words does not preclude the filing of suits in the residence of plaintiff or defendant. The plain meaning is that the parties merely consented to be sued in New York. Qualifying or restrictive words which would indicate that New York and New York alone is the venue are totally absent therefrom. There is no intention between the parties in the said clause that plaintiff and defendant bound themselves to file suits and settle disputes only or exclusively in New York, evident is the last wordings of Section 10 of the Service agreement which provides a proviso that;

Provided, however, that all disputes arising from Acts of God shall be construed in light of Philippines Law.
For that agreement did not change or transfer venue. It simply is permissive. The parties solely agreed to ADD the courts of New York as tribunals to which they may resort. They did not waive their right to pursue remedy in the courts specifically mentioned in Section 4(b) of Rule 4.15 Renuntiatio non praesumitur.16 The parties did not thereby stipulate that only the courts of New York, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In
13 14

Moles vs. Carandang, 1968. Atlas Development vs. Sarmiento Enterprise, 1990. 15 When Rule not applicable. This Rule shall not apply. (a) In those cases where a specific rule or law provides otherwise; or (b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof. 16 Citing Hong Kong and Shanghai Banking Corp., vs. Sherman, August 11, 1989. Page 4 of 7

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International Law, jurisdiction is often defined as the light of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed in or marching through State territory with the permission of the latter's authorities. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the State. A State is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them.17 The principle of lex loci contractus which provides a general rule that, the law of the place where a contract is made or entered into governs with respect to its nature, validity, obligation, and interpretation has no application in this case, since stipulations in a contract, which specify a definite place for the institution of an action arising in connection therewith, do not as a rule, supersede the general rules on the matter set out in Rule 4 of the Rules of Court, but should be construed merely as an agreement on additional forum, not as limited venue to the specified place,18 thus, making it merely permissive, in which parties may be allowed to resort to the aid of other courts. It is evident from the cited provision of section 10 of the service agreement that Philippine laws will apply in cases of Acts of God, thus making it submissive to Philippine courts. Restrictive stipulations are in derogation of the general policy of making it more convenient for the parties to institute actions arising from or in relation to their agreements. Thus, the restriction should be strictly construed as relating solely to the agreement for which the exclusive venue stipulation is embodied. Expanding the scope of such limitation on a contracting party will create unwarranted restrictions which the parties might find unintended or worse, arbitrary and oppressive. Moreover, since convenience is the raison detre of the rules on venue, venue stipulation should be deemed merely permissive, and that interpretation should be adopted which most serves the parties convenience. Contrariwise, the rules mandated by the Rules of Court should govern.19 PRAYER WHEREFORE, after due hearing, it is respectfully prayed that the Motion to Dismiss filed by the Defendants be denied. Makati City, December 9 2011.
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Hong Kong and Shanghai Banking Corp., vs. Sherman, August 11, 1989, citing J. Salonga, Private International Law, 1981, pp. 37-38 18 Western Minolco Corp., vs. CA, 167 SCRA 598. 19 San Miguel Corp., Monastderio, 2005. Page 5 of 7

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QUINTANA and QUINTANA LAW OFFICES Counsel for Defendant th 11 Floor Cityland Dela Rosa 7648 Dela Rosa Street Makati City ATTY. ALDRIN MARK M. QUINTANA PTR#, 9-23-12, Makati City IBP No. 092387, 09-23-11, Makati City ROLL No. 092387 MCLE Exempt (Admitted to the Bar 2011) COPY FURNISHED Through personal service, notice received by: ATTY. JOSE P. RIZAL ENRILE &DEFENSOR-SANTIAGO LAW OFFICES Counsel for Defendant Petra and Pilar Building 13 Pasong Tamo Street Makati City

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NOTICE THE CLERK OF COURT Regional Trial Court Makati City GREETINGS: Please submit the your Comment on the Motion to Dismiss filed on 29 November, 2011 by the Counsel for the defendants herein. NOTICE ATTY. JOSE P. RIZAL NOLI & EL FILI LAW OFFICES Counsel for Defendant Kalamba Building 1861 Pasong Tamo Street Makati City GREETINGS: Please take notice that the undersigned counsel will submit the foregoing Comment on your Motion to Dismiss filed, dated 29 November 2011, on 9 December 2011 at 2:00 pm. ATTY. ALDRIN MARK M. QUINTANA

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