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Hahn v.

Court of Appeals [266 SCRA 537 (January 22, 1997)]

An agent receives his commission only upon the successful conclusion of a sale.

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.

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