SECONDDIVISION

[G.R.No.113074.January22,1997]
ALFREDHAHN,petitioner,vs.COURTOFAPPEALSand
BAYERISCHEMOTORENWERKE
AKTIENGESELLSCHAFT(BMW),respondents.
DECISION
MENDOZA,J.:
Thisisapetitionforreviewofthedecisioni[1]oftheCourtof
Appealsdismissingacomplaintforspecificperformance
whichpetitionerhadfiledagainstprivaterespondentonthe
groundthattheRegionalTrialCourtofQuezonCitydidnot
acquirejurisdictionoverprivaterespondent,anonresident
foreigncorporation,andoftheappellatecourt'sorderdenying
petitioner'smotionforreconsideration.
Thefollowingarethefacts:
PetitionerAlfredHahnisaFilipinocitizendoingbusiness
underthenameandstyle"HahnManila."Ontheotherhand,
privaterespondentBayerischeMotorenWerke
Aktiengesellschaft(BMW)isanonresidentforeigncorporation
existingunderthelawsoftheformerFederalRepublicof
Germany,withprincipalofficeatMunich,Germany.
OnMarch7,1967,petitionerexecutedinfavorofprivate
respondenta"DeedofAssignmentwithSpecialPowerof
Attorney,"whichreadsinfullasfollows:

WHEREAS,theASSIGNORisthepresentownerandholder
oftheBMWtrademarkanddeviceinthePhilippineswhich
ASSIGNORusesandhasbeenusingontheproducts
manufacturedbyASSIGNEE,andforwhichASSIGNORis
theauthorizedexclusiveDealeroftheASSIGNEEinthe
Philippines,thesamebeingevidencedbycertificateof
registrationissuedbytheDirectorofPatentson12December
1963andisreferredtoasTrademarkNo.10625;
WHEREAS,theASSIGNORhasagreedtotransferand
consequentlyrecordsaidtransferofthesaidBMWtrademark
anddeviceinfavoroftheASSIGNEEhereinwiththe
PhilippinesPatentOffice;
NOWTHEREFORE,inviewoftheforegoingandin
considerationofthestipulationshereunderstated,the
ASSIGNORherebyaffirmsthesaidassignmentandtransferin
favoroftheASSIGNEEunderthefollowingtermsand
conditions:
1.TheASSIGNEEshalltakeappropriatestepsagainstany
userotherthanASSIGNORorinfringeroftheBMW
trademarkinthePhilippines,forsuchpurpose,the
ASSIGNORshallinformtheASSIGNEEimmediatelyofany
suchuseorinfringementofthesaidtrademarkwhichcomesto
hisknowledgeanduponsuchinformationtheASSIGNOR
shallautomaticallyactasAttorneyInFactoftheASSIGNEE
forsuchcase,withfullpower,authorityandresponsibilityto
prosecuteunilaterallyorinconcertwithASSIGNEE,anysuch
infringerofthesubjectmarkandforpurposeshereofthe
ASSIGNORisherebynamedandconstitutedasASSIGNEE's
AttorneyInFact,butanysuchsuitwithoutASSIGNEE's

consentwillexclusivelybetheresponsibilityandforthe
accountoftheASSIGNOR,
2.ThattheASSIGNORandtheASSIGNEEshallcontinue
businessrelationsashasbeenusualinthepastwithouta
formalcontract,andforthatpurpose,thedealershipof
ASSIGNORshallcovertheASSIGNEE'scompleteproduction
programwiththeonlylimitationthat,forthepresent,inview
ofASSIGNEE'slimitedproduction,thelattershallnotbeable
tosupplyautomobilestoASSIGNOR.
Pertheagreement,theparties"continue[d]businessrelations
ashasbeenusualinthepastwithoutaformalcontract."Buton
February16,1993,inameetingwithaBMWrepresentative
andthepresidentofColumbiaMotorsCorporation(CMC),
JoseAlvarez,petitionerwasinformedthatBMWwas
arrangingtogranttheexclusivedealershipofBMWcarsand
productstoCMC,whichhadexpressedinterestinacquiring
thesame.OnFebruary24,1993,petitionerreceived
confirmationoftheinformationfromBMWwhich,inaletter,
expresseddissatisfactionwithvariousaspectsofpetitioner's
business,mentioningamongotherthings,declineinsales,
deterioratingservices,andinadequateshowroomand
warehousefacilities,andpetitioner'sallegedfailuretocomply
withthestandardsforanexclusiveBMWdealer.ii[2]
Nonetheless,BMWexpressedwillingnesstocontinuebusiness
relationswiththepetitioneronthebasisofa"standardBMW
importer"contract,otherwise,itsaid,ifthiswasnotacceptable
topetitioner,BMWwouldhavenoalternativebuttoterminate
petitioner'sexclusivedealershipeffectiveJune30,1993.

Petitionerprotested,claimingthattheterminationofhis
exclusivedealershipwouldbeabreachoftheDeedof
Assignment.iii[3]Hahninsistedthataslongastheassignment
ofitstrademarkanddevicesubsisted,heremainedBMW's
exclusivedealerinthePhilippinesbecausetheassignment
wasmadeinconsiderationoftheexclusivedealership.In
thesameletterpetitionerexplainedthatthedeclineinsales
wasduetolowerpricesofferedforBMWcarsintheUnited
Statesandthefactthatfewcustomersreturnedforrepairsand
servicingbecauseofthedurabilityofBMWpartsandthe
efficiencyofpetitioner'sservice.
BecauseofHahn'sinsistenceontheformerbusinessrelation,
BMWwithdrewonMarch26,1993itsofferofa"standard
importercontract"andterminatedtheexclusivedealer
relationshipeffectiveJune30,1993.iv[4]Ataconferenceof
BMWRegionalImportersheldonApril26,1993in
Singapore,HahnwassurprisedtofindAlvarezamongthose
invitedfromtheAsianregion.OnApril29,1993,BMW
proposedthatHahnandCMCjointlyimportanddistribute
BMWcarsandparts.
Hahnfoundtheproposalunacceptable.OnMay14,1993,he
filedacomplaintforspecificperformanceanddamagesagainst
BMWtocompelittocontinuetheexclusivedealership.Later
hefiledanamendedcomplainttoincludeanapplicationfor
temporaryrestrainingorderandforwritsofpreliminary,
mandatoryandprohibitoryinjunctiontoenjoinBMWfrom
terminatinghisexclusivedealership.Hahn'samended
complaintallegedinpertinentparts:

2.Defendant[BMW]isaforeigncorporationdoingbusinessin
thePhilippineswithprincipalofficesatMunich,Germany.It
maybeservedwithsummonsandothercourtprocesses
throughtheSecretaryoftheDepartmentofTradeandIndustry
ofthePhilippines....
....
5.OnMarch7,1967,Plaintiffexecutedinfavorofdefendant
BMWaDeedofAssignmentwithSpecialPowerofAttorney
coveringthetrademarkandinconsiderationthereof,underits
firstwhereasclause,Plaintiffwasdulyacknowledgedasthe
"exclusiveDealeroftheAssigneeinthePhilippines"....
....
8.Fromthetimethetrademark"BMW&DEVICE"wasfirst
usedbythePlaintiffinthePhilippinesuptothepresent,
Plaintiff,throughitsfirmname"HAHNMANILA"and
withoutanymonetarycontributionfromdefendantBMW,
establishedBMW'sgoodwillandmarketpresenceinthe
Philippines.Pursuantthereto,Plaintiffhasinvestedalotof
moneyandresourcesinordertosinglehandedlycompete
againstothermotorcycleandcarcompanies....Moreover,
Plaintiffhasbuiltbuildingsandotherinfrastructuressuchas
servicecentersandshowroomstomaintainandpromotethe
carandproductsofdefendantBMW.
....
10.InaletterdatedFebruary24,1993,defendantBMW
advisedPlaintiffthatitwaswillingtomaintainwithPlaintiffa
relationshipbutonly"onthebasisofastandardBMW

importercontractasadjustedtoreflecttheparticularsituation
inthePhilippines"subjecttocertainconditions,otherwise,
defendantBMWwouldterminatePlaintiff'sexclusive
dealershipandanyrelationshipforcauseeffectiveJune30,
1993....
....
15.TheactuationsofdefendantBMWareinbreachofthe
assignmentagreementbetweenitselfandplaintiffsincethe
considerationfortheassignmentoftheBMWtrademarkisthe
continuanceoftheexclusivedealershipagreement.Itthus,
followsthattheexclusivedealershipshouldcontinueforso
longasdefendantBMWenjoystheuseandownershipofthe
trademarkassignedtoitbyPlaintiff.
ThecasewasdocketedasCivilCaseNo.Q9315933and
raffledtoBranch104oftheQuezonCityRegionalTrialCourt,
whichonJune14,1993issuedatemporaryrestrainingorder.
Summonsandcopiesofthecomplaintandamendedcomplaint
werethereafterservedontheprivaterespondentthroughthe
DepartmentofTradeandIndustry,pursuanttoRule14,14of
theRulesofCourt.Theorder,summonsandcopiesofthe
complaintandamendedcomplaintwerelatersentbytheDTI
toBMWviaregisteredmailonJune15,1993v[5]andreceived
bythelatteronJune24,1993.
OnJune17,1993,withoutproofofserviceonBMW,the
hearingontheapplicationforthewritofpreliminary
injunctionproceededexparte,withpetitionerHahntestifying.
OnJune30,1993,thetrialcourtissuedanordergrantingthe
writofpreliminaryinjunctionuponthefilingofabondof

P100,000.00.OnJuly13,1993,followingthepostingofthe
requiredbond,awritofpreliminaryinjunctionwasissued.
OnJuly1,1993,BMWmovedtodismissthecase,contending
thatthetrialcourtdidnotacquirejurisdictionoveritthrough
theserviceofsummonsontheDepartmentofTradeand
Industry,becauseit(BMW)wasaforeigncorporationandit
wasnotdoingbusinessinthePhilippines.Itcontendedthatthe
executionoftheDeedofAssignmentwasanisolated
transaction;thatHahnwasnotitsagentbecausethelatter
undertooktoassembleandsellBMWcarsandproducts
withouttheparticipationofBMWandsoldotherproducts;and
thatHahnwasanindentorormiddlemantransactingbusiness
inhisownnameandforhisownaccount.
PetitionerAlfredHahnopposedthemotion.Hearguedthat
BMWwasdoingbusinessinthePhilippinesthroughhimasits
agent,asshownbythefactthatBMWinvoicesandorder
formswereusedtodocumenthistransactions;thathegave
warrantiesasexclusiveBMWdealer;thatBMWofficials
periodicallyinspectedstandardsofservicerenderedbyhim;
andthathewasdescribedinservicebookletsandinternational
publicationsofBMWasa"BMWImporter"or"BMW
TradingCompany"inthePhilippines.
Thetrialcourtvi[6]deferredresolutionoftheMotiontodismiss
untilaftertrialonthemeritsforthereasonthatthegrounds
advancedbyBMWinitsmotiondidnotseemtobe
indubitable.

Withoutseekingreconsiderationoftheaforementionedorder,
BMWfiledapetitionforcertiorariwiththeCourtofAppeals
allegingthat:
I.THERESPONDENTJUDGEACTEDWITHUNDUE
HASTEOROTHERWISEINJUDICIOUSLYIN
PROCEEDINGSLEADINGTOWARDTHE
ISSUANCEOFTHEWRITOFPRELIMINARY
INJUNCTION,ANDINPRESCRIBINGTHETERMS
FORTHEISSUANCETHEREOF.
II.THERESPONDENTJUDGEPATENTLYERREDIN
DEFERRINGRESOLUTIONOFTHEMOTIONTO
DISMISSONTHEGROUNDOFLACKOF
JURISDICTION,ANDTHEREBYFAILINGTO
IMMEDIATELYDISMISSTHECASEAQUO.
BMWaskedfortheimmediateissuanceofatemporary
restrainingorderand,afterhearing,forawritofpreliminary
injunction,toenjointhetrialcourtfromproceedingfurtherin
CivilCaseNo.Q9315933.Privaterespondentpointedout
that,unlessthetrialcourt'sorderwassetaside,itwouldbe
forcedtosubmittothejurisdictionofthecourtbyfilingits
answerortoacceptjudgmentindefault,whenthevery
questionwaswhetherthecourthadjurisdictionoverit.
TheCourtofAppealsenjoinedthetrialcourtfromhearing
petitioner'scomplaint.OnDecember20,1993,itrendered
judgmentfindingthetrialcourtguiltyofgraveabuseof
discretionindeferringresolutionofthemotiontodismiss.It
stated:

Goingbythepleadingsalreadyfiledwiththerespondentcourt
beforeitcameoutwithitsquestionedorderofJuly26,1993,
weruleandsoholdthatpetitioner's(BMW)motiontodismiss
couldberesolvedthenandthere,andthattherespondent
judge'sdefermentofhisactionthereonuntilaftertrialonthe
meritconstitutes,toourmind,graveabuseofdiscretion.
....
...[T]hereisnotmuchappreciabledisagreementasregards
thefactualmattersrelating,tothemotiontodismiss.What
trulydivide(sic)thepartiesandtowhichtheygreatlydifferis
thelegalconclusionstheyrespectivelydrawfromsuchfacts,
(sic)withHahnmaintainingthatonthebasisthereof,BMWis
doingbusinessinthePhilippineswhilethelatterassertsthatit
isnot.
Then,afterstatingthatanyrulingwhichthetrialcourtmight
makeonthemotiontodismisswouldanywaybeelevatedtoit
onappeal,theCourtofAppealsitselfresolvedthemotion.It
ruledthatBMWwasnotdoingbusinessinthecountryand,
therefore,jurisdictionoveritcouldnotbeacquiredthrough
serviceofsummonsontheDTIpursuanttoRule14,Section
14.Thecourtupheldprivaterespondent'scontentionthatHahn
actedinhisownnameandforhisownaccountand
independentlyofBMW,basedonAlfredHahn'sallegations
thathehadinvestedhisownmoneyandresourcesin
establishingBMW'sgoodwillinthePhilippinesandonBMW's
claimthatHahnsoldproductsotherthanthoseofBMW.It
heldthatpetitionerwasamereindentororbrokerandnotan
agentthroughwhomprivaterespondentBMWtransacted

businessinthePhilippines.Consequently,theCourtof
Appealsdismissedpetitioner'scomplaintagainstBMW.
Hence,thisappeal.PetitionercontendsthattheCourtof
Appealserred(1)infindingthatthetrialcourtgravelyabused
itsdiscretionindeferringactiononthemotiontodismissand
(2)infindingthatprivaterespondentBMWisnotdoing
businessinthePhilippinesand,forthisreason,dismissing
petitioner'scase.
Petitioner'sappealiswelltaken.Rule14,14provides:
14.Serviceuponforeigncorporations.Ifthedefendantis
aforeigncorporation,oranonresidentjointstockcompanyor
association,doingbusinessinthePhilippines,servicemaybe
madeonitsresidentagentdesignatedinaccordancewithlaw
forthatpurpose,or,iftherebenosuchagent,onthe
governmentofficialdesignatedbylawtothateffect,oronany
ofitsofficersoragentswithinthePhilippines.(Emphasis
added)
Whatactsareconsidered"doingbusinessinthePhilippines"
areenumeratedin3(d)oftheForeignInvestmentsActof
1991(R.A.No.7042)asfollows:vii[7]
d)thephrase"doingbusiness"shallincludesoliciting
orders,servicecontracts,openingoffices,whethercalled
"liaison"officesorbranches,appointingrepresentativesor
distributorsdomiciledinthePhilippinesorwhoinany
calendaryearstayinthecountryforaperiodorperiods
totallingonehundredeighty(180)daysormore;
participatinginthemanagement,supervisionorcontrolof

anydomesticbusiness,firm,entityorcorporationinthe
Philippines;andanyotheractoractsthatimplya
continuityofcommercialdealingsorarrangementsand
contemplatetothatextenttheperformanceofactsor
works,ortheexerciseofsomeofthefunctionsnormally
incidentto,andinprogressiveprosecutionof,commercial
gainorofthepurposeandobjectofthebusiness
organization:Provided,however,Thatthephrase

"doing
business"shallnotbedeemedtoincludemere
investmentasashareholderbyaforeignentityindomestic
corporationsdulyregisteredtodobusiness,and/orthe
exerciseofrightsassuchinvestor;norhaving,anominee
directororofficertorepresentitsinterestsinsuch
corporation;norappointingarepresentativeor
distributordomiciledinthePhilippineswhichtransacts
businessinitsownnameandforitsownaccount.
(Emphasissupplied)
Thus,thephraseincludes"appointingrepresentativesor
distributorsinthePhilippines"butnotwhenthe
representativeordistributor"transactsbusinessinits
nameandforitsownaccount."Inaddition,Section1(f)(1)
oftheRulesandRegulationsimplementing(IRR)theOmnibus
InvestmentCodeof1987(E.O.No.226)provided:
(f)"Doingbusiness"shallbeanyactorcombinationofacts,
enumeratedinArticle44oftheCode.Inparticular,"doing
business"includes:
(1)....Aforeignfirmwhichdoesbusinessthroughmiddlemen
actingintheirownnames,suchasindentors,commercial

brokersorcommissionmerchants,shallnotbedeemeddoing
businessinthePhilippines.Butsuchindentors,commercial
brokersorcommissionmerchantsshallbetheonesdeemedto
bedoingbusinessinthePhilippines.
ThequestioniswhetherpetitionerAlfredHahnistheagentor
distributorinthePhilippinesofprivaterespondentBMW.Ifhe
is,BMWmaybeconsidereddoingbusinessinthePhilippines
andthetrialcourtacquiredjurisdictionoverit(BMW)by
virtueoftheserviceofsummonsontheDepartmentofTrade
andIndustry.Otherwise,ifHahnisnottheagentofBMWbut
anindependentdealer,albeitofBMWcarsandproducts,
BMW,aforeigncorporation,isnotconsidereddoingbusiness
inthePhilippineswithinthemeaningoftheForeign
InvestmentsActof1991andtheIRR,andthetrialcourtdid
notacquirejurisdictionoverit(BMW).
TheCourtofAppealsheldthatpetitionerAlfredHahnactedin
hisownnameandforhisownaccountandnotasagentor
distributorinthePhilippinesofBMWonthegroundthat"he
alonehadcontactswithindividualsorentitiesinterestedin
acquiringBMWvehicles.IndependencecharacterizesHahn's
undertakings,forwhichreasonheistobeconsidered,under
governingstatutes,asdoingbusiness."(p.13)Insupportof
thisconclusion,theappellatecourtcitedthefollowing
allegationsinHahn'samendedcomplaint:
8.Fromthetimethetrademark"BMW&DEVICE"wasfirst
usedbythePlaintiffinthePhilippinesuptothepresent,
Plaintiff,throughitsfirmname"HAHNMANILA"and
withoutanymonetarycontributionsfromdefendantBMW;
establishedBMW'sgoodwillandmarketpresenceinthe

Philippines.Pursuantthereto,Plaintiffinvestedalotofmoney
andresourcesinordertosinglehandedlycompeteagainst
othermotorcycleandcarcompanies....Moreover,Plaintiffhas
builtbuildingsandotherinfrastructuressuchasservicecenters
andshowroomstomaintainandpromotethecarandproducts
ofdefendantBMW.
Astheabovequotedallegationsoftheamendedcomplaint
show,however,thereisnothingtosupporttheappellatecourt's
findingthatHahnsolicitedordersaloneandforhisown
accountandwithout"interferencefrom,letalonedirectionof,
BMW."(p.13)Tothecontrary,Hahnclaimedhetookorders
forBMWcarsandtransmittedthemtoBMW.Uponreceiptof
theorders,BMWfixedthedownpaymentandpricingcharges,
notifiedHahnofthescheduledproductionmonthforthe
orders,andreconfirmedtheordersbysigningandreturningto
Hahntheacceptancesheets.Paymentwasmadebythebuyer
directlytoBMW.Titletocarspurchasedpasseddirectlytothe
buyerandHahnneverpaidforthepurchasepriceofBMW
carssoldinthePhilippines.Hahnwascreditedwitha
commissionequalto14%ofthepurchasepriceuponthe
invoicingofavehicleorderbyBMW.Uponconfirmationin
writingthatthevehicleshadbeenregisteredinthePhilippines
andservicedbyhim,Hahnreceivedanadditional3%ofthe
fullpurchaseprice.Hahnperformedaftersaleservices,
including,warrantyservices,forwhichhereceived
reimbursementfromBMW.Allorderswereoninvoicesand
formsofBMW.viii[8]
TheseallegationsweresubstantiallyadmittedbyBMWwhich,
initspetitionforcertioraribeforetheCourtofAppeals,
stated:ix[9]

9.4.Assoonasthevehiclesarefullymanufacturedandfull
paymentofthepurchasepricesaremade,thevehiclesare
shippedtothePhilippines.(Thepaymentsmaybemadebythe
purchasersorthirdpersonsorevenbyHahn.)Thebillsof
ladingaremadeupinthenameofthepurchasers,butHahn
Manilaisthereinindicatedasthepersontobenotified.
9.5.ItisHahnwhopicksupthevehiclesfromthePhilippine
ports,forpurposesofconductingpredeliveryinspections.
Thereafter,hedeliversthevehiclestothepurchasers.
9.6.AssoonasBMWinvoicesthevehicleordered,Hahnis
creditedwithacommissionoffourteenpercent(14%)ofthe
fullpurchasepricethereof,andassoonasheconfirmsin
writing,thatthevehicleshavebeenregisteredinthe
Philippinesandhavebeenservicedbyhim,hewillreceivean
additionalthreepercent(3%)ofthefullpurchasepricesas
commission.
Contrarytotheappellatecourt'sconclusion,thisarrangement
showsanagency.Anagentreceivesacommissionuponthe
successfulconclusionofasale.Ontheotherhand,abroker
earnshispaymerelybybringingthebuyerandtheseller
together,evenifnosaleiseventuallymade.
Astotheservicecentersandshowroomswhichhesaidhehad
putupathisownexpense,Hahnsaidthathehadtofollow
BMWspecificationsasexclusivedealerofBMWinthe
Philippines.AccordingtoHahn,BMWperiodicallyinspected
theservicecenterstoseetoitthatBMWstandardswere
maintained.Indeed,itwouldseemfromBMW'slettertoHahn

thatitwasforHahn'sallegedfailuretomaintainBMW
standardsthatBMWwasterminatingHahn'sdealership.
ThefactthatHahninvestedhisownmoneytoputupthese
servicecentersandshowroomsdoesnotnecessarilyprovethat
heisnotanagentofBMW.Forasalreadynoted,thereare
factsintherecordwhichsuggestthatBMWexercisedcontrol
overHahn'sactivitiesasadealerandmaderegularinspections
ofHahn'spremisestoenforcecompliancewithBMW
standardsandspecifications.x[10]Forexample,initsletterto
HahndatedFebruary23,1996,BMWstated:
Inthelastyearswehavepointedouttoyouinseveral
discussionsandlettersthatwehavetotacklethePhilippine
marketmoreprofessionallyandthatwearethroughyour
presentactivitiesnotadequatelypreparedtocopewiththe
forthcomingchallenges.xi[11]
Ineffect,BMWwasholdingHahnaccountabletoitunderthe
1967Agreement.
ThiscasefitsintothemouldofCommunicationsMaterials,
Inc.v.CourtofAppeals,xii[12]inwhichtheforeigncorporation
enteredintoa"RepresentativeAgreement"anda"Licensing
Agreement"withadomesticcorporation,byvirtueofwhich
thelatterwasappointed"exclusiverepresentative"inthe
Philippinesforastipulatedcommission.Pursuanttothese
contracts,thedomesticcorporationsoldproductsexportedby
theforeigncorporationandputupaservicecenterforthe
productssoldlocally.ThisCourtheldthattheseacts
constituteddoingbusinessinthePhilippines.Thearrangement
showedthattheforeigncorporation'spurposewastopenetrate

thePhilippinemarketandestablishitspresenceinthe
Philippines.
Inaddition,BMWheldoutprivaterespondentHahnasits
exclusivedistributorinthePhilippines,evenasitannouncedin
theAsianregionthatHahnwasthe"officialBMWagent"in
thePhilippines.xiii[13]
TheCourtofAppealsalsofoundthatpetitionerAlfredHahn
dealtinotherproducts,andnotexclusivelyinBMWproducts,
and,onthisbasis,ruledthatHahnwasnotanagentofBMW.
(p.14)ThisfindingisbasedentirelyonallegationsofBMWin
itsmotiontodismissfiledinthetrialcourtandinitspetition
forcertioraribeforetheCourtofAppeals.xiv[14]Butthis
allegationwasdeniedbyHahnxv[15]andthereforetheCourtof
Appealsshouldnothaveciteditasifitwerethefact.
Indeedthisisnottheonlyfactualissueraised,whichshould
haveindicatedtotheCourtofAppealsthenecessityof
affirmingthetrialcourt'sorderdeferringresolutionofBMW's
motiontodismiss.Petitionerallegedthatwhetherornotheis
consideredanagentofBMW,thefactisthatBMWdid
businessinthePhilippinesbecauseitsoldcarsdirectlyto
Philippinebuyers.xvi[16]ThiswasdeniedbyBMW,which
claimedthatHahnwasnotitsagentandthat,whileitwastrue
thatithadsoldcarstoPhilippinebuyers,thiswasdonewithout
solicitationonitspart.xvii[17]
ItisnottruethenthatthequestionwhetherBMWisdoing
businesscouldhavebeenresolvedsimplybyconsideringthe
parties'pleadings.Therearegenuineissuesoffactswhichcan
onlybedeterminedonthebasisofevidencedulypresented.

BMWcannotshortcircuittheprocessonthepleathatto
compelittogototrialwouldbetodenyitsrightnottosubmit
tothejurisdictionofthetrialcourtwhichpreciselyitdenies.
Rule16,3authorizescourtstodefertheresolutionofa
motiontodismissuntilafterthetrialifthegroundonwhich
themotionisbaseddoesnotappeartobeindubitable.Herethe
recordofthecasebristleswithfactualissuesanditisnotatall
clearwhethersomeallegationscorrespondtotheproof.
Anyway,privaterespondentneednotapprehendthatby
respondingtothesummonsitwouldbewaivingitsobjection
tothetrialcourt'sjurisdiction.Itisnowsettledthat.for
purposesofhavingsummonsservedonaforeigncorporation
inaccordancewithRule14,14,itissufficientthatitbe
allegedinthecomplaintthattheforeigncorporationisdoing
businessinthePhilippines.Thecourtneednotgobeyondthe
allegationsofthecomplaintinordertodeterminewhetherit
hasjurisdiction.xviii[18]Adeterminationthattheforeign
corporationisdoingbusinessisonlytentativeandismadeonly
forthepurposeofenablingthelocalcourttoacquire
jurisdictionovertheforeigncorporationthroughserviceof
summonspursuanttoRule14,14.Suchdeterminationdoes
notforecloseacontraryfindingshouldevidencelatershow
thatitisnottransactingbusinessinthecountry.AsthisCourt
hasexplained:
Thisisnottosay,however,thatthepetitioner'srightto
questionthejurisdictionofthecourtoveritspersonisnowto
bedeemedaforeclosedmatter.Ifitistrue,asSigneticsclaims,
thatitsonlyinvolvementinthePhilippineswasthrougha
passiveinvestmentinSigfil,whichitevenlaterdisposedof,
andthatTEAMPacificisnotitsagent,thenitcannotreallybe

saidtobedoingbusinessinthePhilippines.Itisadefense,
however,thatrequiresthecontraventionoftheallegationsof
thecomplaint,aswellasafullventilation,ineffect,ofthe
mainmeritsofthecase,whichshouldnotthusbewithinthe
provinceofameremotiontodismiss.So,also,theissueposed
bythepetitionerastowhetheraforeigncorporationwhichhas
donebusinessinthecountry,butwhichhasceasedtodo
businessatthetimeofthefiling,ofacomplaint,canstillbe
madetoanswerforacauseofactionwhichaccruedwhileit
wasdoing,business,isanothermatterthatwouldyethaveto
awaitthereceptionandadmissionofevidence.Sincethese
pointshaveseasonablybeenraisedbythepetitioner,there
shouldbenorealcauseforwhatmayunderstandablybeits
apprehension,i.e.,thatbyitsparticipationduringthetrialon
themerits,itmay,absentaninvocationofseparateor
independentreliefsofitsown,beconsideredtohave
voluntarilysubmitteditselftothecourt'sjurisdiction.xix[19]
Farfromcommittinganabuseofdiscretion,thetrialcourt
properlydeferredresolutionofthemotiontodismissandthus
avoidedprematurelydecidingaquestionwhichrequiresa
factualbasis,withthesameresultifithaddeniedthemotion
andconditionallyassumedjurisdiction.ItistheCourtof
Appealswhich,byrulingthatBMWisnotdoingbusinesson
thebasismerelyofuncertainallegationsinthepleadings,
disposedofthewholecasewithfinalityandtherebydeprived
petitionerofhisrighttobeheardonhiscauseofaction.Nor
wastherejustificationfornullifyingthewritofpreliminary
injunctionissuedbythetrialcourt.Althoughtheinjunction
wasissuedexparte,thefactisthatBMWwassubsequently
heardonitsdefensebyfilingamotiontodismiss.

WHEREFORE,thedecisionoftheCourtofAppealsis
REVERSEDandthecaseisREMANDEDtothetrialcourtfor
furtherproceedings.
SOORDERED.

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