National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 84 S.Ct.

411,
11 L.Ed.2d 354 (1964).

Facts: Szukhent (D), a Michigan resident, leased farm equipment from National
Equipment Rental (P), a New York corporation. The lease designated Weinberg, a
New York resident, as agent for the service of process in New York. Szukhent did not
know Weinberg and the lease did not indicate that Weinberg had to tell Szukhent of
notice. National Equipment Rental sued Szukhent for a failure to make payments
under the lease. Notice was served on Weinberg, who forwarded it to Szukhent with
a letter stating the documents had been served on her as Szukhents agent.
National Equipment Rental also notified Szukhent of the service of process on
Weinberg by certified mail.

The district court quashed service of summons on the grounds that the lease did not
specifically require Weinberg to give notice to Szukhent, and the court did not
therefore have personal jurisdiction over Szukhent. The court reasoned that this was
a failure of the agency agreement. The court of appeals affirmed and certiorari was
granted.

Issue: Is an unknown agent who has not expressly undertaken to transmit notice to
a party and who was merely designated by contract to receive notice, authorized to
accept service of process?

Holding and Rule (Stewart): Yes. A party to a private contract may appoint an agent
to receive service of process, and that service will be valid if that party promptly
accepts and transmits notice of service.

D received timely and complete notice. This satisfies the requirements of Rule 4(d)
(1). The clause under dispute is a forum selection clause. It is settled law that the
parties may freely negotiate such matters and that contracts to agree to submit to
the jurisdiction of a court are valid. Weinbergs prompt acceptance and transmittal
of the summons to D was sufficient to validate the agency. Weinbergs sole role was
to receive process and that interest does not conflict with the interests of D. The
fact that D did not know Weinberg is irrelevant.
Dissent (Black): Todays holding give a green light to every large company to
contrive contracts which declare with force of law that when such a company wants
to sue someone with whom it does business, that individual must go and try to
defend himself in some place no matter how distant or else suffer a default of
judgment. This ruling will allow such clauses to become boiler plate in most
contracts. This service of process raises serious questions in Due Process.

Dissent (Brennan): Federal standards and state law must define who is an agent
authorized by appointment within the meaning of Rule 4(d)(1). It offends common
sense to treat a printed form which closes an installment sale as embodying terms
to all of which the individual knowingly assented. There should be an explicit
condition that the agent transmit actual notice to the principal and the non-drafting
party must be shown to have understood and consented to the appointment.

Notes: Under an adhesion contract, the party who wrote the contract has the
burden of proof that a party understood the contract. Private parties may consent in
advance to the jurisdiction of a court. Not all courts give such prorogation
agreements full effect. The consent to designate a third person to receive process is
a consent to jurisdiction and such commercial contracts are valid.

Summary of International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct.

154, 90 L. Ed. 95 (1945).

Facts

International Shoe Co. (D, appellant) was a Delaware corporation with its principle
place of business in St. Louis, Missouri. It had no offices in the state of Washington
and made no contracts for sale there. International Shoe did not keep merchandise
in Washington and did not make deliveries of goods in intrastate commerce
originating from the state.

International Shoe employed 11-13 salesmen for three years who resided in
Washington. Their commissions each year totaled more than $31,000 and
International Shoe reimbursed them for expenses. Prices, terms, and acceptance or
rejection of footwear orders were established through St. Louis. Salesmen did not
have authority to make contracts or collections.
The state of Washington brought suit against International Shoe in Washington State
court to recover unpaid contributions to the unemployment compensation fund.
Notice was served personally on an agent of the defendant within the state and by
registered mail to corporate headquarters. The Supreme Court of Washington held
that the state had jurisdiction to hear the case and International Shoe appealed.

Issue

Did International Shoes activities in Washington make it subject to personal

jurisdiction in Washington courts?

Holding and Rule (Stone)

Yes. Minimum contacts with the forum state can enable a court in that state to exert
personal jurisdiction over a party consistent with the Due Process clause.

A casual presence of a corporation or its agent in a state in single or isolated

incidents is not enough to establish jurisdiction. Acts of agents of the corporation,
because of the nature, quality, and circumstances of their commission, may be
deemed sufficient. Consent may be implied from the corporations presence and
activities in the state through the acts of authorized agents.

The activities carried on by defendant corporation in Washington were systematic

and continuous rather than irregular or casual. The defendant received the benefits
and protection of the laws of the state and is subject to jurisdiction there.

Relevant factors

International Shoe had conducted systematic and continuous business operations

in Washington. A large volume of interstate business for the defendant was created
through its agents within the state and the corporation received the benefits and
protection of Washingtons laws. International Shoe had established agents in the
state permanently.

Disposition

Affirmed judgment for the plaintiff.

See Pennoyer v. Neff for a law school civil procedure case brief presenting an issue
of personal jurisdiction in connection with personal service of process and quasi in
rem proceedings.

The Supreme Court in Burger King Corp. v. Rudzewicz set forth the balancing factors
for the personal jurisdiction reasonableness test.

Perkins v. Benguet Consolidated Mining Co.,

1. Perkins v. Benguet Consolidated Mining Co., (12); pg. 938, 3396

2. Facts: The mining company had a mine in the P.I. which was occupied by the
Japanese during WWII. During this occupation, the president of the company
returned to his home in Ohio to conduct business on behalf of the company. Perkins
husband was given the stock and dividends of the company when they were
divorced. Perkins is a non-resident of Ohio.

3. Procedural Posture: Perkins brought an in personam action in the Ohio state

courts against the mining company to recover the value of the stock and dividends
the thought were due to her and not her husband. This cause of action did not arise
in Ohio, and does not concern the business being performed in Ohio. Personal
service on the president of the company was made in Ohio. The lower courts
quashed the service of the mining company, not giving a reason. The court of
appeals affirmed, as did the Supreme Court of Ohio. Perkins argues that the federal
due process compels the state to open its courts to her action.

4. Issue: Whether the 14th amendment due process clause compels a state court to
exercise jurisdiction over a foreign corporation which has sufficient nexus with the
state.

5. Holding: No.

6. Reasoning: In accordance with Intl Shoe, the amount and kind of activities which
must be carried on by the foreign corporation in the state of the forum so as to
make it reasonable and just to subject the corporation to the jurisdiction of that
state are to be determined in each case. Here, there is sufficient nexus to permit
Ohio to exercise jurisdiction, where the cause of action arose from activities entirely
distinct from its activities in Ohio. However, it would not violate due process for Ohio
to either take or decline jurisdiction of the corporation.

McGee vs. International Life Ins. Co.

Procedural Basis: Appeal from Texas courts refusal to enforce California judgment
in action to recover proceeds of life insurance policy.

Facts: Franklin, a California resident, had a life insurance policy with the Empire
Mutual Insurance Company of Arizona. In 1948, International Life Insurance
Company (D) of Texas took over Empire Mutuals policies. International Life (D)
refused to pay the proceeds of his policy to his designated beneficiary, McGee (P),
claiming that Franklin had committed suicide. McGee (P) brought suit in California,
then tried to enforce it in Texas.

Procedural History: The Texas Courts refused to enforce the judgment claiming
that Californias exercise of jurisdiction was improper. McGee (P) appealed the
Texas decision to the U.S. Supreme Court.

Issue: Can a state ever exercise jurisdiction over a D whose contacts with that state
are limited to a single act or contract?

Rule: A state may exercise jurisdiction over a D whose contacts with that state
consist of only a single act, provided that that act is what gave rise to the claim for
which jurisdiction is being sought, and was deliberately directed toward the state.

Application: It is much more likely that small policy holders would be denied
justice if forced to file suit in a foreign jurisdiction, than the life insurance companies
would be more than slightly inconvenienced by having to defend a suit in
California. It should not come as a complete surprise to International Life (D) to be
required to defend suit after refusing to pay that policy holders beneficiary.

Conclusion: Judgment reversed.

PHILSEC INVESTMENT et al vs.CA et al

G.R. No. 103493

June 19, 1997

FACTS: Private respondent Ducat obtained separate loans from petitioners Ayala
International Finance Limited (AYALA) and Philsec Investment Corp (PHILSEC),
secured by shares of stock owned by Ducat.

In order to facilitate the payment of the loans, private respondent 1488, Inc.,
through its president, private respondent Daic, assumed Ducats obligation under an
Agreement, whereby 1488, Inc. executed a Warranty Deed with Vendors Lien by
which it sold to petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in Texas,
U.S.A., while PHILSEC and AYALA extended a loan to ATHONA as initial payment of
the purchase price. The balance was to be paid by means of a promissory note
executed by ATHONA in favor of 1488, Inc. Subsequently, upon their receipt of the
money from 1488, Inc., PHILSEC and AYALA released Ducat from his indebtedness
and delivered to 1488, Inc. all the shares of stock in their possession belonging to
Ducat.

As ATHONA failed to pay the interest on the balance, the entire amount covered by
the note became due and demandable. Accordingly, private respondent 1488, Inc.
sued petitioners PHILSEC, AYALA, and ATHONA in the United States for payment of
the balance and for damages for breach of contract and for fraud allegedly
perpetrated by petitioners in misrepresenting the marketability of the shares of
stock delivered to 1488, Inc. under the Agreement.

While the Civil Case was pending in the United States, petitioners filed a complaint
For Sum of Money with Damages and Writ of Preliminary Attachment against
private respondents in the RTC Makati. The complaint reiterated the allegation of
petitioners in their respective counterclaims in the Civil Action in the United States
District Court of Southern Texas that private respondents committed fraud by selling
the property at a price 400 percent more than its true value.

Ducat moved to dismiss the Civil Case in the RTC-Makati on the grounds of (1) litis
pendentia, vis-a-vis the Civil Action in the U.S., (2) forum non conveniens, and (3)
failure of petitioners PHILSEC and BPI-IFL to state a cause of action.

The trial court granted Ducats MTD, stating that the evidentiary requirements of
the controversy may be more suitably tried before the forum of the litis pendentia in
the U.S., under the principle in private international law of forum non conveniens,
even as it noted that Ducat was not a party in the U.S. case.
Petitioners appealed to the CA, arguing that the trial court erred in applying the
principle of litis pendentia and forum non conveniens.

The CA affirmed the dismissal of Civil Case against Ducat, 1488, Inc., and Daic on
the ground of litis pendentia.

ISSUE: is the Civil Case in the RTC-Makati barred by the judgment of the U.S. court?

HELD: CA reversed. Case remanded to RTC-Makati

NO

While this Court has given the effect of res judicata to foreign judgments in several
cases, it was after the parties opposed to the judgment had been given ample
opportunity to repel them on grounds allowed under the law. This is because in this
jurisdiction, with respect to actions in personam, as distinguished from actions in
rem, a foreign judgment merely constitutes prima facie evidence of the justness of
the claim of a party and, as such, is subject to proof to the contrary. Rule 39, 50
provides:

Sec. 50. Effect of foreign judgments. The effect of a judgment of a tribunal of a

foreign country, having jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the
title to the thing;

(b) In case of a judgment against a person, the judgment is presumptive evidence of

a right as between the parties and their successors in interest by a subsequent title;
but the judgment may be repelled by evidence of a want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake of law or fact.

In the case at bar, it cannot be said that petitioners were given the opportunity to
challenge the judgment of the U.S. court as basis for declaring it res judicata or
conclusive of the rights of private respondents. The proceedings in the trial court
were summary. Neither the trial court nor the appellate court was even furnished
copies of the pleadings in the U.S. court or apprised of the evidence presented
thereat, to assure a proper determination of whether the issues then being litigated
in the U.S. court were exactly the issues raised in this case such that the judgment
that might be rendered would constitute res judicata.

Second. Nor is the trial courts refusal to take cognizance of the case justifiable
under the principle of forum non conveniens:
First, a MTD is limited to the grounds under Rule 16, sec.1, which does not include
forum non conveniens. The propriety of dismissing a case based on this principle
requires a factual determination, hence, it is more properly considered a matter of
defense.

Second, while it is within the discretion of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only after vital facts are established, to
determine whether special circumstances require the courts desistance.

Summary of World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100

S. Ct. 559, 62 L. Ed. 2d 490 (1980).

Parties

The plaintiffs in the underlying action were the Robinsons. This part of the case
involves a request for a writ of prohibition brought by the defendants (Word-Wide
Volkswagen and Seaway) against the trial court judge, Woodson.

Facts

The Robinsons (P) purchased an Audi from Seaway Volkswagen, Inc. (D1), a New
York car dealership. One year later while driving through Oklahoma, another car hit
them from behind, causing a fire which caused severe injuries to Mrs. Robinson and
her two children.

The Robinsons brought a products liability suit in state court against four parties
including Seaway and its distributor, World-Wide Volkswagen Corp. (Ds). The
defendants were New York corporations and conducted no business in Oklahoma.
The defendants entered special appearances claiming that Oklahoma could not
exert in personam jurisdiction over them by virtue of the Due Process Clause of the
Fourteenth Amendment. The trial court found that it had jurisdiction and the
Oklahoma Supreme Court denied defendants request for a writ of prohibition to
restrain the trial judge from exercising in personam jurisdiction over them. The U.S.
Supreme Court granted cert.

Issue

In order to exercise personal jurisdiction over a nonresident party, how extensive

must the partys contacts be to satisfy due process?
Holding and Rule (White)

The partys contacts with the state must be such that maintenance of the suit does
not offend traditional notions of fair play and substantial justice. The relationship
between the party and the state must be such that it is reasonable to require the
corporation to defend the particular suit which is brought there.

A state court may exercise personal jurisdiction over a party only if the party has
minimum contacts with the forum state (see International Shoe Co. v. Washington).
The court held that there was a total absence of circumstances that are necessary
to permit an exercise of personal jurisdiction. The defendants did not solicit
business in Oklahoma through salespersons or advertising reasonably calculated to
reach the state.

Although it was foreseeable that one of their cars could be involved in an accident
in Oklahoma, foreseeability alone is not sufficient for personal jurisdiction under the
Due Process Clause. The degree of foreseeability that must exist is not the mere
likelihood that a product will find its way into the state, but that the defendants
conduct and connection with the state are such that he should reasonably
anticipate being haled into court there. Purposeful availment provides clear notice
of jurisdiction.

Disposition

Judgment reversed.

Dissent (Brennan)

States may exercise jurisdiction over a defendant even if that party has not
deliberately or purposefully sought contact with the state. It would be difficult to
believe that the defendants truly believed that none of the cars they sold would
ever leave the New York area. Their contacts with Oklahoma were not extensive but
it was reasonable for them to be subjected to jurisdiction. Fairness dictates that the
sale of a mobile item such as a car should satisfy the minimum contacts necessary
for jurisdiction.

Dissent (Marshall)

Jurisdiction here is based on the deliberate and purposeful acts of the defendants in
choosing to become part of a global network for marketing and servicing cars. They
must have anticipated that a substantial portion of the cars sold would travel to
remote states. The probability that some of the cars would eventually get to all
contiguous states is a virtual certainty. This knowledge would alert a reasonable
businessman to the likelihood that a defect might manifest itself in the forum state.

Dissent (Blackmun)

It is the nature of the instrumentality that is critical. With our network of interstate
highways, the defendants could not have believed that their cars would remain in
the vicinity of their retail sale. It is not unreasonable, unconstitutional, or beyond
International Shoe to uphold jurisdiction in this instance.

See Hanson v. Denckla for a law school civil procedure case brief in which the
Supreme Court held that lack of personal jurisdiction over an indispensable party
required reversal of the judgment against all parties including those for which
exercise of personal jurisdiction was proper.