Time, Inc. vs. Reyes

Under Article 360 of the Revised Penal Code, as amended by Republic Act No. 4363, a civil action for damages by a public officer with office in Manila against a foreign publisher for a libelous article not printed or first published in the Philippines may be filed only in the Court of First Instance of Manila; the statutory venue is mandatory and exclusive. A court’s deferment of a motion to dismiss for lack of jurisdiction or improper venue is correctable by certiorari or prohibition even before trial.

Antonio J. Villegas was Mayor of the City of Manila, and Juan Ponce Enrile was Undersecretary of Finance and concurrently Acting Commissioner of Customs; both held offices in Manila. Time, Inc. is an American corporation with principal offices in New York City and publishes the weekly news magazine “Time”; Time-Life International is not a juridical person but a mere division of Time, Inc. Republic Act No. 4363 amended Article 360 of the Revised Penal Code to restrict venue in written defamation cases, and Section 3 made the statute effective only upon the organization and proclamation of a Philippine Press Council.

Time, Inc., an American corporation with principal offices in New York City, publishes “Time,” a weekly news magazine. At the time of the publication at issue, Antonio J. Villegas was Mayor of the City of Manila and Juan Ponce Enrile was Undersecretary of Finance and concurrently Acting Commissioner of Customs, both with offices in the City of Manila. In its 18 August 1967 issue, Time (Asia Edition) published an essay entitled “Corruption in Asia.” The essay stated that the problem of Manila’s mayor, Antonio Villegas, was a case in point; that when it was discovered the previous year that the mayor’s coffers contained far more pesos than seemed reasonable in light of his income, an investigation was launched; that witnesses who had helped him under curious circumstances were asked to explain in court; that one government official admitted lending Villegas P30,000 ($7,700) without interest because he was the mayor’s compadre; that an assistant declared he had given Villegas loans without collateral because he regarded the boss as “my own son”; that a wealthy Manila businessman testified he had lent Villegas’ wife 15,000 pesos because the mayor was “like a brother to me”; that Villegas denounced the investigation as an invasion of his family’s privacy; that the case was dismissed on a technicality; and that Villegas was still mayor.

Villegas and Enrile filed Civil Case No. 10403 in the CFI of Rizal against Time, Inc. and Time-Life International, publisher of “Time” Magazine (Asia Edition), seeking damages for the alleged libel. The complaint alleged that the defendants, conspiring and confederating, published a libelous article publicly, falsely, and maliciously imputing to the plaintiffs the crimes of graft, corruption, and nepotism; that the publication particularly referred to Villegas as a case in point in connection with graft, corruption, and nepotism in Asia; that it referred to Enrile as the high government official who helped under curious circumstances Villegas in lending the latter approximately P30,000 ($7,700) without interest because he was the mayor’s compadre; and that the purpose was to cause the dishonor, discredit, and public contempt of the plaintiffs, particularly Villegas. The complaint did not allege that the libelous article was printed and first published in the province of Rizal, and the offending publication was not printed in the Philippines.

On motion of the plaintiffs, the respondent judge on 25 November 1967 granted leave to take the depositions of Anthony Gonzales of Time-Life International and Cesar B. Enriquez of Muller & Phipps (Manila) Ltd. in connection with the activities and operations in the Philippines of Time, Inc., and on 27 November 1967 issued a writ of attachment on Time, Inc.’s real and personal estate. Time, Inc. received the summons and a copy of the complaint at its offices in New York on 13 December 1967. On 27 December 1967, it filed a motion to dismiss the complaint for lack of jurisdiction and improper venue, relying on Republic Act No. 4363. The private respondents opposed the motion.

In an order dated 26 February 1968, the respondent judge deferred the determination of the motion to dismiss until after trial on the merits, considering that the grounds relied upon did not appear to be indubitable. Time, Inc. moved for reconsideration, which the private respondents again opposed. On 30 March 1968, the respondent judge issued an order re-affirming the previous order of deferment. Failing in its efforts to discontinue the taking of the depositions and to have action taken before trial on its motion to dismiss, Time, Inc. filed the present petition for certiorari and prohibition. The petition sought to annul the orders for the taking of the depositions, for deferring determination of the motion to dismiss, and for reaffirming the deferment, as well as the writ of attachment, and to prohibit the CFI of Rizal from further proceeding with Civil Case No. 10403.

• Jurisdiction and Venue: Time, Inc. argued that the CFI of Rizal lacked jurisdiction and that venue was improper under Republic Act No. 4363, because the civil action for damages was brought by public officers whose offices were in the City of Manila and the libelous article was not printed or first published in the Philippines.
• Annulment of Interlocutory Orders: Time, Inc. maintained that the CFI of Rizal’s orders granting the taking of depositions, issuing the writ of attachment, deferring the motion to dismiss, and reaffirming the deferment should be annulled, and that the CFI of Rizal should be prohibited from further proceeding, because it had no jurisdiction over the case.

• Non-Applicability to Non-Resident Defendants: Villegas and Enrile argued that Republic Act No. 4363 was not applicable to an action against a non-resident defendant like Time, Inc.; Congress did not intend to protect non-resident defendants, as shown by Section 3, which conditioned the statute’s effectivity on the organization of a Philippine Press Council that a non-resident defendant could not comply with.
• No Inconvenience to Foreign Corporation: They argued that a foreign corporation is not inconvenienced by an out-of-town libel suit.
• Absurdity of Alternative Venue: They argued that it would be absurd and incongruous, absent an extradition treaty, for the law to give public officers with office in Manila the second option of filing a criminal case in the place where the libelous article was printed and first published if the defendant is a foreign corporation.
• Single Publication Rule: They invoked the “single publication” rule, which originated in the United States and was imported into the Philippines, to argue that publications in another state are not covered by venue statutes of the forum.
• Lack of Capacity to Sue: They sought dismissal on the ground that Time, Inc., a foreign corporation, failed to allege its capacity to sue in the Philippines, relying on Section 69 of the Corporation Law and the rulings in Marshall-Wells Co. vs. Elser & Co., Inc. and Atlantic Mutual Ins. Co., Inc. vs. Cebu Stevedoring Co., Inc.
• Prematurity: They advanced that the petition was premature because the respondent judge had not definitely ruled on the motion to dismiss or held that it had jurisdiction, but had only deferred the motion.

• Venue Under RA 4363: Whether the CFI of Rizal had jurisdiction over the civil action for damages by public officers with offices in Manila where the libelous article was not printed or first published in the Philippines.
• Applicability to Foreign/Non-Resident Defendant: Whether Republic Act No. 4363 applies to a civil action for damages against a foreign corporation or non-resident defendant.
• Certiorari/Prohibition Against Deferment: Whether a court’s deferment of a motion to dismiss for lack of jurisdiction or improper venue may be challenged by certiorari or prohibition before trial on the merits.
• Capacity to Sue: Whether a foreign corporation may seek a writ of prohibition to challenge the wrongful assumption of jurisdiction without alleging its legal capacity to sue in the Philippines.

• Venue Under RA 4363: No. Under Article 360 of the Revised Penal Code, as amended by RA 4363, public officers with offices in Manila may sue only in the CFI of Manila or where the article was printed and first published; since the article was not printed or first published in the Philippines, only the CFI of Manila had venue.
• Applicability to Foreign/Non-Resident Defendant: Yes. RA 4363 applies to foreign or non-resident defendants; its text does not limit its effectivity to residents, and venue is not dependent on convenience or inconvenience.
• Certiorari/Prohibition Against Deferment: Yes. The refusal or deferment of a ruling on a motion to dismiss for lack of jurisdiction or improper venue is in excess of jurisdiction and correctable by certiorari or prohibition even before trial.
• Capacity to Sue: Yes. A foreign corporation may by writ of prohibition seek relief against the wrongful assumption of jurisdiction; it is merely defending, not maintaining a suit, so failure to allege capacity is not fatal.

• Venue Under RA 4363: The SC read the first proviso of Article 360, as amended by RA 4363, as localizing venue based first on whether the offended party is a public officer or private individual and, if a public officer, on whether his office is in Manila at the time of the offense. For a public officer with office in Manila, the proviso allows only two venues: the CFI of the City of Manila or the city or province where the libelous article was printed and first published. The complaint in Civil Case No. 10403 did not allege that the article was printed and first published in Rizal, and the offending publication was not printed in the Philippines. The alternative venue was therefore not open to Villegas and Enrile, leaving only the CFI of Manila. The SC explained that the limitation was intended to minimize or limit out-of-town libel suits, protect an alleged offender from hardships, inconveniences, and harassments, and protect the interest of the public service where the offended party is a public officer; a libeled public official may sue where he holds office so that the action interferes as little as possible with his duties. The venue provisions are mandatory for the party bringing the action unless waived by the defendant, and no waiver occurred. The inapplicability of one alternative venue does not render the other alternative inapplicable.

• Applicability to Foreign/Non-Resident Defendant: The SC rejected the argument that RA 4363 does not apply to non-resident defendants. Section 3 makes the official proclamation that a Philippine Press Council has been organized a precondition to the effectivity of the entire Act; it contains no terms indicating that the law is effective only as to some, but not all, persons who may be charged with libeling public officers. The SC saw nothing in the text sustaining unequal protection to some of those charged with libel. The claim that a foreign corporation is not inconvenienced by an out-of-town suit is irrelevant and untenable because venue and jurisdiction are not dependent on convenience or inconvenience; venue was fixed under RA 4363 to protect the public service by minimizing interference with a public officer’s duties. The inability to file a criminal libel case against a non-resident defendant does not make the statute incongruous or absurd; the same inability exists for crimes other than libel, and no state can by its laws or courts directly bind persons or property beyond its limits. No criminal action can lie against a corporation, whether resident or non-resident, and the case filed was for damages. The multiple publication and single publication rules are not pertinent because the number of causes of action is not in issue; RA 4363 is a specific venue statute conferring jurisdiction on specified courts, and where a statute creates a right and provides a remedy, the remedy is exclusive, and where it confers jurisdiction on a particular court, that jurisdiction is exclusive unless otherwise provided.

• Certiorari/Prohibition Against Deferment: The motion to dismiss was predicated on the CFI of Rizal’s lack of jurisdiction. The SC held that certiorari or prohibition, or both, may issue in case of a denial or deferment of action on a motion to dismiss for lack of jurisdiction. Although action on a motion to dismiss may be deferred until trial and an order to that effect is interlocutory, prohibition lies where it clearly appears that the trial judge or court is proceeding in excess or outside of its jurisdiction, since it would be useless and a waste of time to go ahead with the proceedings. Jurisdiction over the subject matter is determined by the allegations in the complaint; when a motion to dismiss is filed for lack of jurisdiction, those allegations are deemed admitted for purposes of the motion, so the motion may be resolved without waiting for trial. The SC cited University of Sto. Tomas vs. Villanueva, San Beda College vs. CIR, Edward J. Nell Co. vs. Cubacub, and Ruperto vs. Fernando. Thus the petition was not premature.

• Capacity to Sue: The SC held that Section 69 of the Corporation Law and the Marshall-Wells and Atlantic Mutual rulings were not apropos. Time, Inc. was not “maintaining any suit” but was merely defending one against itself; it did not file a complaint but only a corollary defensive petition to prohibit the CFI of Rizal from further proceeding with a suit that the CFI had no jurisdiction to entertain. Its failure to aver legal capacity to institute the present petition was not fatal. A foreign corporation may, by writ of prohibition, seek relief against the wrongful assumption of jurisdiction.

• Venue in written defamation under RA 4363 — For a public officer with office in Manila at the time of the offense, a civil action for damages for written defamation may be filed only in the CFI of Manila or the city or province where the libelous article was printed and first published; if the article was not printed or first published in the Philippines, only the CFI of Manila. The SC applied this to hold that the CFI of Rizal had no jurisdiction over the suit by Villegas and Enrile.
• Mandatory and exclusive statutory venue — Where a statute creates a right and provides a remedy for its enforcement, the remedy is exclusive; where it confers jurisdiction on a particular court, that jurisdiction is exclusive unless otherwise provided. The venue provisions of RA 4363 are mandatory for the party bringing the action unless waived by the defendant. The SC applied this because Time, Inc. did not waive venue.
• RA 4363 applies to foreign and non-resident defendants — The statute’s text does not limit its effectivity to residents; Section 3’s Press Council precondition applies to the entire Act. Venue and jurisdiction are not dependent on convenience or inconvenience. The SC applied this to Time, Inc.
• Certiorari/prohibition against deferment of a motion to dismiss for lack of jurisdiction — A court’s refusal or deferment of a ruling on a motion to dismiss for lack of jurisdiction or improper venue is in excess of jurisdiction and correctable by certiorari or prohibition even before trial, because it is useless and a waste of time to proceed if the court has no jurisdiction. The SC applied this to the CFI of Rizal’s deferment.
• Foreign corporation defending, not maintaining suit — The license requirement for a foreign corporation to maintain suit does not apply when the foreign corporation is merely defending a suit or filing a defensive petition for prohibition against the wrongful assumption of jurisdiction. Failure to allege legal capacity to sue is not fatal in that situation. The SC applied this to Time, Inc.
• Single publication rule is irrelevant to venue — The multiple publication and single publication rules concern the number of causes of action arising from a publication, not the venue of a libel action under a specific venue statute. The SC applied this to reject the respondents’ invocation of the single publication rule.
• No criminal action against corporations — No criminal action can lie against a corporation, whether resident or non-resident. The SC used this to reject the argument that RA 4363 is absurd because a criminal libel case could not be filed against a foreign corporate defendant.
• Territorial limits of jurisdiction — No state can by its laws, and no court which is only a creature of the state, directly bind or affect property or persons beyond the limits of the state. The SC used this to explain why the inability to file a criminal libel case against a non-resident defendant is not absurd.

• “The limitation of the choices of venue, as introduced into the Penal Code through its amendments by Republic Act 4363, was intended "to minimize or limit the filing of out-of-town libel suits" to protect an alleged offender from "hardships, inconveniences and harassments" and, furthermore, to protect "the interest of the public service" where one of the offended parties is a public officer.” — This passage explains the policy behind RA 4363’s venue limitation and supports the SC’s reading that the limitation is mandatory.
• “We see nothing in the text of the law that would sustain such unequal protection to some of those who may be charged with libel.” — This rejects the argument that RA 4363 should not apply to non-resident defendants.
• “The rule is that where a statute creates a right and provides a remedy for its enforcement, the remedy is exclusive; and where it confers jurisdiction upon a particular court, that jurisdiction is likewise exclusive, unless otherwise provided.” — This states the rule making RA 4363’s venue provisions mandatory and exclusive.
• “A foreign corporation may, by writ of prohibition, seek relief against the wrongful assumption of jurisdiction.” — This rejects the capacity-to-sue objection against Time, Inc.

• Marshall-Wells Co. vs. Elser & Co., Inc., 46 Phil. 70 — Distinguished; the license requirement for a foreign corporation maintaining suit did not apply to Time, Inc., which was merely defending and seeking prohibition.
• Atlantic Mutual Ins. Co., Inc. vs. Cebu Stevedoring Co., Inc., L-18961, Aug. 31, 1966, 17 SCRA 1037 — Distinguished; same reason.
• Edward J. Nell Co. vs. Cubacub, L-20843, June 23, 1965, 14 SCRA 419 — Followed; jurisdiction over the subject matter is determined by the allegations in the complaint, and a motion to dismiss for lack of jurisdiction may be resolved without trial.
• University of Sto. Tomas vs. Villanueva, L-13748, Oct. 30, 1959 — Followed; prohibition lies where the trial court is proceeding outside its jurisdiction even if the motion to dismiss was deferred.
• San Beda College vs. CIR, 51 O.G. 5636 — Followed; certiorari or prohibition may issue where it would be useless and futile to proceed if the lower court had no jurisdiction.
• Ruperto vs. Fernando, 83 Phil. 943 — Followed; cited as to the same effect on the availability of certiorari or prohibition against a court acting without jurisdiction.
• Perkins vs. Dizon, 72 Phil. 579 — Cited for the fundamental rule of international jurisdiction that no state can by its laws, and no court which is only a creature of the state, directly bind or affect property or persons beyond the limits of the state.
• West Coast Life Ins. Co. vs. Hurd, 27 Phil. 401 — Cited for the rule that no criminal action can lie against a corporation, whether resident or non-resident.

• Revised Penal Code, Art. 360, as amended by Republic Act No. 4363, Sec. 1 — Fixes venue for criminal and civil actions for written defamation; for a public officer with office in Manila at the time of the offense, the action must be filed in the CFI of Manila or the city or province where the libelous article was printed and first published; the civil action must be filed in the same court as the criminal action, and the court first filing acquires jurisdiction to the exclusion of other courts. The SC applied this to hold that the CFI of Rizal had no jurisdiction because the article was not printed or first published in the Philippines.
• Republic Act No. 4363, Sec. 3 — Makes the Act effective only upon the organization and election of members of a Philippine Press Council and the President’s proclamation of that fact. The SC held this precondition applies to the entire Act and does not make the Act inapplicable to non-resident defendants.
• Corporation Law, Sec. 69 — Prohibits a foreign corporation from maintaining suit for the recovery of any debt, claim, or demand unless it has the required license. The SC held it did not apply to Time, Inc., which was merely defending a suit and seeking prohibition against the wrongful assumption of jurisdiction.