Hahn v.

Court of Appeals [266 SCRA 537 (January 22, 1997)]Jurisdiction Over Foreign
CorporationDoing Business in the Philippines Without a License
Facts: Petitioner is a Filipino citizen doing business under the name of Hahn-Manila. Private
respondent BMW is a non-resident corporation incorporated in Germany. Petitioner executed in favor of
private respondent a Deed of Assignment with a Special Power of Attorney which constituted
petitioner as the exclusive dealer of private respondent as long as the assignment of its trademark and
device subsisted. However, no formal contract was drawn between the two parties. Thereafter,
petitioner was informed that BMW was arranging to grant the exclusive dealership of BMW cars and
products to Columbia Motors Corp. (CMC). BMW expressed dissatisfaction with various aspect of
petitioners business but nonetheless also expressed willingness to continue business relations with
petitioner on the basis of a standard BMW contract otherwise, if said offer was unacceptable to
petitioner then BMW would terminate petitioners exclusive dealership. Petitioner refused BMWs offer
in which case BMW withdrew its alternative offer and terminated petitioners exclusive dealership.
Petitioner therefore filed an action for specific performance and damages against BMW to compel it to
continue the exclusive dealership.BMW moved to dismiss the case contending that the trial court did
not acquire jurisdiction over it through the service of summons on DTI because BMW is a foreign
corporation and is not doing business in the Philippines. The trial court deferred the resolution of the
motion for dismissal until after trial on the merits for the reason that the grounds advanced by BMW
did not seem indubitable. BMW appealed said order to the CA. The CA resolved that BMW was not
doing business in the country and therefore jurisdiction over it could not have been acquired through
the service of summons on DTI and it dismissed the petition.
Issue: W/N BMW is doing business in the Philippines so as to enable the court to acquire jurisdiction
over it through the service of summons on the DTI.
HeId: RA 7042 enumerates what acts are considered as doing business. Section 3(d) enumerating
such acts includes the phrase appointing representatives or distributors in the Philippines but not
when the representative or distributor transacts business in his own name for his own account. In the
case at bar, petitioner is private respondent BMWs agent and not merely a broker. The record reveals
that private respondent exercised control over petitioners activities as a dealer and made regular
inspections of petitioners premises to enforce its standards. Since BMW is considered as doing
business in the Philippines, the trial court validly acquired jurisdiction over it by virtue of the service of
summons on the DTI. Furthermore, it is now settled that, for purposes of having summons served on a
foreign corporation in accordance with the Rules of Court, it is sufficient that it be alleged in the
complaint that the foreign corporation is doing business in the Philippines. The court need not go
beyond the allegations in the complaint in order to determine whether or not it acquired jurisdiction.
Such determination that the foreign corporation is doing business in the Philippines is only tentative
and only for the purpose of enabling the court to acquire jurisdiction. A contrary determination may be
made based on the courts findings or evidence presented