International Law

Corporation Law 2C/2D CLV 1314
De Torres, Li, Pasamba, Vega Page 1

FOREIGN CORPORATIONS CASE DIGESTS

1.) MARSHALL-WELLS COMPANY v HENRY W. ELSER & CO.,
INC.
GR No. 22015, September 1, 1924

(outline: Section 69 of the old Corporation Law was intended
to subject the foreign corporation doing business in the
Philippines to the jurisdiction of our courts and not to prevent
the foreign corporation from performing single acts, but to
prevent it from acquiring domicile for the purpose of business
without taking the necessary steps to render it amenable to
suit in the local courts.)

FACTS:
Marshall-Wells Company, an Oregon corporation, sued Henry
W. Elser & Co., Inc., a domestic corporation for the unpaid
balance of a bill of goods sold by Marshall-Wells to Elser. Elser
demurred to the complaint, contending that Marshall-Wells
had no capacity to sue, the latter not having complied with
the laws of the Philippines required of foreign corporations
desiring and/or authorized to do business in the Philippines.
The trial court sustained the demurrer.

ISSUE:
Is the obtaining of the license prescribed by law a condition
precedent to the maintaining of any kind of action in the
courts of the Philippine Islands by a foreign corporation?

HELD:
NO. Section 68 of the Corporation Law provides that no
foreign corporation shall be permitted to transact business in
the Philippines Islands until after it shall have obtained a
license for that purpose from the Chief of the Mercantile
Register of the Bureau of Commerce and Industry, upon
order either of the Secretary of Finance or the Secretary of
Commerce and Communications. No order for a license shall
be issued except upon a statement under oath of the
managing agent of the corporation, showing to the
satisfaction of the proper Secretary that the corporation is
solvent and in sound financial condition, and setting forth the
resources and liabilities of the corporation. Section 69 states
that No foreign corporation or corporation formed,
organized, or existing under any laws other than those of the
Philippine Islands shall be permitted to transact business in
the Philippine Islands or maintain by itself or assignee any suit
for the recovery of any debt, claim, or demand whatever,
unless it shall have the license prescribed by law.

It all simmers down to an issue of statutory construction. Elser
isolates a portion of one sentence of the law and asks the
court to give it a literal meaning and would have the law read
thus: No foreign corporation shall be permitted to maintain
by itself or assignee any suit for the recovery of any debt,
claim, or demand whatever, unless it shall have the license
prescribed in Section 68 of the law. Marshall-Wells, on the
other hand, desires for the court to consider the particular
point under discussion with reference to all the law, and
thereafter to give the law a common sense interpretation.
Court held that the law simply means that no foreign

corporation shall be permitted to transact business in the
Philippine Islands unless it shall have the license required by
law, and, until it complies with the law, shall not be permitted
to maintain any suit in the local courts.

Section 69 of the old Corporation Law was intended to subject
the foreign corporation doing business in the Philippines to
the jurisdiction of our courts and not to prevent the foreign
corporation from performing single acts, but to prevent it
from acquiring domicile for the purpose of business without
taking the necessary steps to render it amenable to suit in the
local courts. The implication of the law is that it was never the
purpose of the Legislature to exclude foreign corporation
which happens to obtain an isolated order for business from
the Philippines, from securing redress in the Philippine courts,
and thus, in effect, to permit persons to avoid their contracts
made with such foreign corporations.

The noncompliance of a foreign corporation with the statute
may be pleaded as an affirmative defense. Thereafter, it must
appear from the evidence that (1) the plaintiff is a foreign
corporation, (2) that it is doing business in the Philippines, and
(3) that it has not obtained the proper license as provided by
the statute.

Case remanded to the court of origin for further proceedings.

2. HOME INSURANCE COMPANY v EASTERN SHIPPIN LINES
and/or ANGEL JOSE TRANSPORTATION, INC. and HON. A
MELENCIO-HERRERA
HOME INSURANCE COMPANY v N.V. NEDLLOYD LIGNEN;
COLUMBIAN PHILIPPINES, INC., and/or GUACODS, INC., AND
HON. MELENCIO-HERRERA
GR No. L-34382, L-34383 July 20, 1983

(outline: Effect on failure to obtain license on the contract
entered into and criminal liability)

FACTS: (2 Consolidated Cases)

Case 1:
In 1967, S. Kajita & Co., on behalf of Atlas Consolidated Mining
& Development Corporation, shipped on board the SS
"Eastern Jupiter' from Osaka, Japan, 2,361 coils of "Black Hot
Rolled Copper Wire Rods." The said VESSEL is owned and
operated by defendant Eastern Shipping Lines. The shipment
was covered by a bill of lading with arrival notice to Phelps
Dodge Copper Products Corporation of the Philippines
(consignee) at Manila. The shipment was insured with plaintiff
against all risks in the amount. Some of the coils discharged
from the vessel were in bad order and had to be considered as
scrap. Upon weighing there was a net loss/shortage of 593.15
kilos for which Home Insurance paid consignee pursuant to
the insurance policy and became subrogated to the rights and
actions of the consignee. Home insurance made demands for
reimbursement. Unheeded.


Case 2:
In 1966, the Hansa Transport Kontor shipped from Bremen,
Germany, 30 packages of Service Parts of Farm Equipment and
Implements on board the VESSEL, SS "NEDER RIJN" owned by
the defendant, N. V. Nedlloyd Lijnen, and represented in the
Philippines by its local agent, Columbian Philippines, Inc. The
shipment was covered by a bill of lading for transportation to,
and delivery at, Manila, in favor of the consignee,
international Harvester Macleod, Inc. The shipment was
insured with plaintiff company. For the short delivery of 1
package and the missing items in 5 other packages, Home
Insurance paid consignee pursuant to the insurance policy
(subrogated, demand, unheeded.)

Home Insurance Company is a foreign insurance company duly
authorized to do business in the Philippines through its agent,
Victor Bello with an office address in Makati.

Trial court dismissed the two cases due to plaintiffs lack of
capacity to sue. (The lower court, therefore, declared that
pursuant to the basic public policy reflected in the Corporation
Law, the insurance contracts executed before a license was
secured must be held null and void. The court ruled that the
contracts could not be validated by the subsequent
procurement of the license.)

ISSUE:
Whether Home Insurance had the capacity to sue
Whether respondents are liable to pay

HELD:
YES and YES. On the basis of factual and equitable
considerations, the private respondents' obligation to pay
under the terms of the contracts has been proved. When the
complaints in these two cases were filed, the petitioner had
already secured the necessary license to conduct its insurance
business in the Philippines. It could already file suits.
Petitioner was, therefore, telling the truth when it averred in
its complaints that it was a foreign insurance company duly
authorized to do business in the Philippines through its agent
Mr. Victor H. Bello. However, when the insurance contracts
which formed the basis of these cases were executed, the
petitioner had not yet secured the necessary licenses and
authority. The Court ruled in the leading case of Marshall
Wells Co. v. Henry W. Elser & Co. that the object of Sections
68 and 69 of the Corporation Law was to subject the foreign
corporation doing business in the Philippines to the
jurisdiction of our courts. The Corporation Law must be given
a reasonable, not an unduly harsh, interpretation which does
not hamper the development of trade relations and which
fosters friendly commercial intercourse among countries.

The SC distinguished between the denial of a right to take
remedial action and the penal sanction for non-registration.
Insofar as transacting business without a license is concerned,
Section 69 of the Corporation Law imposed a penal sanction-
imprisonment and/or fine. And insofar as litigation is
concerned, the foreign corporation or its assignee may not
maintain any suit for the recovery of any debt, claim, or
demand whatever. The Corporation Law is silent on whether

or not the contract executed by a foreign corporation with no
capacity to sue is null and void ab initio.

There are conflicting schools of thought both here and abroad
which are divided on whether such contracts are void or
merely voidable. Professor Sulpicio Guevarra cited an Illinois
decision which holds the contracts void and a Michigan
statute and decision declaring them merely voidable: Where a
contract which is entered into by a foreign corporation
without complying with the local requirements of doing
business is rendered void either by the express terms of a
statute or by statutory construction, a subsequent compliance
with the statute by the corporation will not enable it to
maintain an action on the contract. But where the statute
merely prohibits the maintenance of a suit on such contract
(without expressly declaring the contract "void"), it was held
that a failure to comply with the statute rendered the
contract voidable and not void, and compliance at any time
before suit was sufficient. Notwithstanding the above
decision, the Illinois statute provides, among other things that
a foreign corporation that fails to comply with the conditions
of doing business in that state cannot maintain a suit or
action, etc. The court said: 'The contract upon which this suit
was brought, having been entered into in this state when
appellant was not permitted to transact business in this state,
is in violation of the plain provisions of the statute, and is
therefore null and void, and no action can be maintained
thereon at any time, even if the corporation shall, at some
time after the making of the contract, qualify itself to transact
business in this state by a compliance with our laws in
reference to foreign corporations that desire to engage in
business here.

A Michigan statute provides: "No foreign corporation subject
to the provisions of this Act, shall maintain any action in this
state upon any contract made by it in this state after the
taking effect of this Act, until it shall have fully complied with
the requirement of this Act, and procured a certificate to that
effect from the Secretary of State," It was held that the above
statute does not render contracts of a foreign corporation that
fails to comply with the statute void, but they may be
enforced only after compliance therewith.

Our jurisprudence leans towards the later view. It has long
been the rule that a foreign corporation actually doing
business in the Philippines without license to do so may be
sued in our courts. There is no question that the contracts are
enforceable. The requirement of registration affects only the
remedy.

Significantly, Batas Pambansa Blg. 68, the Corporation Code of
the Philippines has corrected the ambiguity caused by the
wording of Section 69 of the old Corporation Law.
Section 133 of the present Corporation Code provides:

SEC. 133. Doing business without a license.-No
foreign corporation transacting business in the
Philippines without a license, or its successors
or assigns, shall be permitted to maintain or
intervene in any action, suit or proceeding in
any court or administrative agency in the

Philippines; but such corporation may be sued
or proceeded against before Philippine courts
or administrative tribunals on any valid cause of
action recognized under Philippine laws.

It is, therefore, not necessary to declare the contract null and
void even as against the erring foreign corporation. The penal
sanction for the violation and the denial of access to our
courts and administrative bodies are sufficient from the
viewpoint of legislative policy. The Courts ruling that the lack
of capacity at the time of the execution of the contracts was
cured by the subsequent registration is also strengthened by
the procedural aspects of these cases. The petitioner averred
in its complaints that it is a foreign insurance company, that it
is authorized to do business in the Philippines, that its agent is
Mr. Victor H. Bello, and that its office address is the Oledan
Building at Ayala Avenue, Makati. The petitioner sufficiently
alleged its capacity to sue.

3. THE MENTHOLATUM CO., INC., ET.AL v ANACLETO
MANGALIMAN, ET. AL
GR No. L-47701, June 27, 1941
(outline: Doing business : It implies a continuity of
commercial dealings and arrangements and the performance
of acts or works or the exercise of some of the functions
normally incident to the purpose or object of a foreign
corporations organization)

FACTS:
In 1935, Mentholatum Co and the Philippine-American Drug
Co., Inc. instituted an action against Anacleto Mangaliman,
Florencio Mangaliman, and the Director of the Bureau of
Commerce for infringement of trade mark and unfair
competition. Mentholatum prayed that respondents be
restrained from selling their product Mentholiman.

Mentholatum Co., Inc. is a Kansas corporation which
manufactures Mentholatum, a medicament and salve
adapted for the treatment of colds, nasal irritations, chapped
skin, insect bites, rectal irritation, etc. Philippine-American
Drug Co is its exclusive distributing agent in the Philippines
authorized to look after its interests. Mentholatum then
registered with the Bureau of Commerce and Industry the
word Mentolatum as trade mark for its products. The
Mangaliman brothers prepared a medicament and salve
named Mentholiman which they sold to the public packed in
a container of the same size, color and shape as
Mentholatum. As a consequence, Mentholatum suffered
damages from the diminution of their sales and the loss of the
goodwill and reputation of their product in the market.

ISSUE:
Whether the petitioners could prosecute the instant action
without having secured the license required in Section 69 of
the Corporation Law
Whether the Philippine-American Drug Co, Inc., could by itself
maintain this proceeding

HELD:
NO and NO. No general rule or governing principle can be laid
down as to what constitutes doing or engaging in or
transacting business. Indeed, each case must be judged in

the light of its peculiar environmental circumstances. The true
test, however, seems to be whether the foreign corporation is
continuing the body or substance of the business or enterprise
for which it was organized or whether it has substantially
retired from it and turned it over to another. The term implies
a continuity of commercial dealings and arrangements, and
contemplates, to the extent, the performance of acts or works
or the exercise of some of the functions normally incident to,
and in progressive prosecution of, the purpose and object of
its organization.

The facts show that the Philippine-American Drug Co is the
exclusive distributing agent in the Philippine Islands of the
Mentholatum Co., Inc. in the sale and distribution of
Mentholatum. It follows that whatever transactions the
Philippine-American Drug Co., Inc. had executed in view of the
law, the Mentholatum Co., Inc. did it itself. And, the
Mentholatum Co., Inc. being a foreign corporation doing
business in the Philippines without the license required by
Section 68 of the Corporation Law, it may not prosecute this
action for the reason that the distinguishing features of the
agent being his representative character and derivative
authority, it cannot now, to the advantage of his principal,
claim an independent standing in court.

4. PACIFIC VEGETABLE OIL CORPORATION v ANGEL O.
SINGZON
GR No. L-7919, April 29, 1955
(outline: to be doing business in the Philippines requires
that the contract must be perfected or consummated in
Philippine soil.)

FACTS:
In 1947, Singzon, acting through RJ Roesling Co of 244
California Street, San Francisco, as his own broker, sold to
Pacific Vegetable Oil Corp, a foreign corporation, 500 long
tons of copra at $142 per short ton. c.i.f. Pacific Coast, the
agreed price to be covered by an irrevocable letter of credit
for 100% of the contract price. Pursuant to the contract, the
Bank of California, on behalf of Pacific Vegetable, opened an
irrevocable letter of credit with China Bank covering the said
order of copra. Singzon failed to ship the 500 long tons of
copra due to the typhoon and a subsequent fire. Upon
negotiation, a conditional amicable settlement was arrived at,
under which Singzon promised to ship under similar terms but
on a later date with the understanding that should he fail to
ship the same on or before the agreed date, he shall pay
damages. In consonance of this agreement, appellee executed
a promissory note and a guarantee. (Naturally) Singzon
defaulted again.

Pacific Vegetable sued Singzon for sum of money as damages
for failure of the latter to deliver the 300 long tons of copra.
Singzon filed a motion to dismiss contending Pacifics lack of
capacity to sue. Pacific consequently filed a written
manifestation stating that it had acquired its license and that

the court should deny the motion. The court dismissed the
case even if it afterwards obtained a license to transact
business upon the theory that this belated act did not have
the effect of curing the defect that existed when the case was
instituted. (IMO, not an important detail, but CLV may ask.
The court didnt rule on the curative effect of the belated
compliance of the license in this case. But NB, in another case,
the late acquisition of the license cured the defect.)

ISSUE:
Whether Pacific Vegetable has unlawfully transacted business
in the Philippines due to the lack of a license required of
foreign corporations
Whether the foreign corporation had personality to sue

HELD:
NO and YES. It clearly appears from the facts that the copra in
question was actually sold by Singzon to Pacific Vegetable in
the United States. It also appears that the contract was
entered into in the United States by appellees broker and
appellants representatives. Also, the payment of the price
was to be made at San Francisco, through a letter of credit to
be opened at the Bank of California. And with respect to the
delivery of copra, it likewise appears that the price agreed
upon was $142 per 2,000lbs, c.i.f. (cost, insurance, freight),
Pacific Coast. This means that the vendor was to pay not only
the cost of the goods, but also the freight and insurance
expenses, and this is taken to indicate that the delivery is to
be made at the port of destination.

A specification in a contract relative to the payment of freight
can be taken to indicate the intention of the parties in regard
to the place of delivery. If the buyer is to pay the freight, he
does so because the goods become his at the point of
shipment. If the seller is to pay the freight, the inference is
equally strong that the duty of the seller is to have the goods
transported to their ultimate destination and that title to
property does not pass until the goods have reached their
destination.

The contract covering the copra in question has been not only
entered in the United States but it was agreed to be
consummated there. It follows that Pacific Vegetable has not
transacted business in the Philippines in contemplation of
Section 68 and 69 of the Corporation Law which require any
foreign corporation to obtain a license before it could transact
business, or before it could have personality to file suit in the
Philippines. This view is not affected by the fact that the
appellant has also bought copra from other exporters in the
Philippines it appearing that these transactions were
undertaken under similar circumstances and as such cannot
place the corporation within the purview of the law. Since
Pacific Vegetable has not transacted business in the
Philippines, it is not required to obtain a license before it could
have personality to bring a court action. It was never the
purpose of the Legislature to exclude a foreign corporation
the Philippines, from securing redress in the Philippine courts
and to permit persons to avoid their contracts made with such
foreign corporation.


USELESS ISSUE: Whether Singzon was liable to pay the
damages claimed. YES. The conditional amicable settlement
was perfected 14 days after the fire and typhoon which he
claims caused the loss of the goods, which means that he
assumed liability even after the force majeure.

5. Aetna Casualty and Surety Co v Pacific Star Line

Territoriality Rule : To be doing business in the Philippines
requires that the contract must be perfected or consummated
in Philippine soil.

Facts
This is an appeal from the decision of the Court of First
Instance of Manila, Branch XVI, in Civil Case No. 53074 entitled
Aetna Casualty & Surety Company vs. Pacific Star Line, The
Bradman Co. Inc., Manila Port Service and/or Manila Railroad
Company, Inc." dismissing the complaint on the ground that
the plaintiff has no legal capacity to bring this suit and making
no finding as to the liability of the defendants.

The complaint stated that during the time material to the
action, the defendant Pacific Star Line, as a common carrier,
was operating the vessel SS Ampal on a commercial run
between United States and Philippine Ports including Manila;
that the defendant, The Bradman Co. Inc., was the ship agent
in the Philippines for the SS Ampal and/or Pacific Star Line;
that the Manila Railroad Co. Inc. and Manila Port Service were
the arrastre operators in the port of Manila and were
authorized to delivery cargoes discharged into their custody
on presentation of release papers from the Bureau of Customs
and the steamship carrier and/or its agents.

On December 2, 1961, the SS Ampal took on board at New
York, N.Y., U.S.A., a consignment or cargo including 33
packages of Linen & Cotton Piece Goods for shipment to
Manila for which defendant Pacific Star Line issued Bill of
Lading No. 18 in the name of I. Shalom & Co., Inc., as shipper,
consigned to the order of Judy Philippines, Inc., Manila; that
the SS Ampal arrived in Manila on February 10, 1962 and in
due course, discharged her cargo into the custody of Manila
Port Service.

Due to the negligence of the defendants, the shipment
sustained damages valued at US $2,300.00 representing
pilferage and seawater damage; that I. Shalom & Co., Inc.
immediately filed claim for the undelivered land damaged
cargo with defendant Pacific Star Line in New York, N.Y., but
said defendant refused and still refuses to pay the said claim;
that the cargo was insured by I. Shalom & Co., Inc. with
plaintiff Aetna Casualty & Surety Company for loss and/or
damage; that upon demand, plaintiff Aetna Casualty &
Surety Company indemnified I. Shalom & Co., Inc. the
amount of US $2,300.00; that in addition to this, the plaintiffs
had obligated themselves to pay attorney's fees and they
further anticipated incurring litigation expenses which may be
assessed at P1,000.00; that plaintiffs and/or their
predecessor-in-interest sustained losses due to the negligence
of Pacific Star Line prior to delivery of the cargo to Manila or,
in the alternative, due to the negligence of Manila Port Service
after delivery of the cargo to it by the SS Ampal; that despite

repeated demands, none of the defendants has been willing
to accept liability for the claim of the plaintiffs and/or I.
Shalom & Co., Inc.; and that by reason of defendants' evident
bad faith, they should consequently be liable to pay exemplary
damages in the amount of P2,000.00.

On motion of the defendants Pacific Star Line and The
Bradman Co. Inc. and with the conformity of the plaintiff
Aetna Casualty & Surety Company, the plaintiff Smith Bell &
Co. (Philippines), Inc. was dropped and the complaint was
dismiss as to said plaintiff.

In their answer filed on February 28, 1963, the defendants
Manila Port Service and Manila Railroad Company, Inc.
alleged that they have exercised due care and diligence in
handling and delivering the cargoes consigned to Judy
Philippines, Inc.; that, in fact, they had delivered the
merchandise to the consignee thereof in the same quantity,
order and condition as when the same was actually received
from the carrying vessel; that a portion of the shipment in
question was discharged from the carrying vessel in bad order
and condition and consequently, any loss or shortage incurred
thereto, is the sole responsibility of the said carrying vessel
and not that of the arrastre operator; that they have delivered
to the consignee thereof the same quantity of merchandise
and in the same order or condition as when received from the
carrying vessel; that since no claim of the value of the goods in
question was filed by the plaintiff or any of its representative
within 15 days from the discharge of the last package from the
carrying vessel, the claim has become time-barred and/or
prescribed pursuant to the management contract under which
said defendants were appointed as arrastre operator at the
Port of Manila; that consequently, they are completely
relieved or released from any or all liability therefor and that
they do not in any manner act as agent of the carrying vessel
in the discharge of the goods at the piers.

The trial court dismissed the complaint because:
There has been a ruling that foreign
corporation may file a suit in the Philippines in
isolated cases. But the case of the plaintiff here
is not that. The evidence shows that the
plaintiff has been filing actions in the
Philippines not just in isolated instances, but in
numerous cases and therefore, has been doing
business in this country, contrary to Philippine
laws.

Issue :
whether or not the appellant, Aetna Casualty & Surety
Company, has been doing business in the Philippines. It is a
fact that said appellant has no license to transact business in
the Philippines as a foreign corporation.

Held :
Section 68 of the Corporation Law provides that "No foreign
corporation or corporation formed, organized, or existing
under any laws other than those of the Philippines shall be
permitted to transact business in the Philippines until after it
shall have obtained a license for that purpose from the
Securities and Exchange Commissioners . . . ." And according
to Section 69 of said Corporation Law "No foreign corporation

or corporation formed, organized, or existing under any laws
other than those of the Philippines shall be permitted to
transact business in the Philippines or maintain by itself or
assignee any suit for the recovery of any debt, claim, or
demand whatever, unless it shall have the license prescribed
in the section immediately preceding ..."

It is settled that if a foreign corporation is not engaged in
business in the Philippines, it may not be denied the right to
file an action in Philippine courts for isolated transactions.

The object of Sections 68 and 69 of the Corporation Law was
not to prevent the foreign corporation from performing
single acts, but to prevent it from acquiring a domicile for the
purpose of business without taking the steps necessary to
render it amenable to suit in the local courts. It was never the
purpose of the Legislature to exclude a foreign corporation
the Philippines, from securing redress in the Philippine courts.

It cannot be said that the Aetna Casualty & Surety Company is
transacting business of insurance in the Philippines for which
it must have a license. The contract of insurance was entered
into in New York, U.S.A., and payment was made to the
consignee in its New York branch. It appears from the list of
cases issued by the Clerk of Court of the Court of First Instance
of Manila that all the actions, except two (2) cases filed by
Smith, Bell & Co., Inc. against the Aetna Casualty & Surety
Company, are claims against the shipper and the arrastre
operators just like the case at bar.

Consequently, since the appellant Aetna Casualty & Surety
Company is not engaged in the business of insurance in the
Philippines but is merely collecting a claim assigned to it by
the consignee, it is not barred from filing the instant case
although it has not secured a license to transact insurance
business in the Philippines.

WHEREFORE, the decision appealed from is hereby set aside
and the case is remanded to the trial court for further
proceedings to determine the liability of the defendants-
appellees, without pronouncements as to costs.

6. Agilent Technologies v Integrated Silicon Technology

Transactions seeking profit Although each case must be
judged in light of its attendant circumstances, jurisprudence
has evolved several guiding principles for the application of
these tests. By and large, to constitute doing business , the
activity to be undertaken in the Philippines is one that is for
profit-making.

Facts :
Petitioner Agilent Technologies Singapore (Pte.), Ltd.
(Agilent) is a foreign corporation, which, by its own
admission, is not licensed to do business in the Philippines.
Respondent Integrated Silicon Technology Philippines
Corporation (Integrated Silicon) is a private domestic
corporation, 100% foreign owned, which is engaged in the
business of manufacturing and assembling electronics
components. Respondents Teoh Kiang
Hong, Teoh Kiang Seng and Anthony Choo, Malaysian

nationals, are current members of Integrated Silicons board
of directors, while Joanne Kate M. dela Cruz, Jean Kay
M. dela Cruz, and Rolando T. Nacilla are its former members.

The juridical relation among the various parties in this
case can be traced to a 5-year Value Added Assembly Services
Agreement (VAASA), entered into on April 2, 1996 between
Integrated Silicon and the Hewlett-Packard Singapore (Pte.)
Ltd., Singapore Components Operation (HP-Singapore).
Under the terms of the VAASA, Integrated Silicon was to
locally manufacture and assemble fiber optics for export to
HP-Singapore. HP-Singapore, for its part, was to consign raw
materials to Integrated Silicon; transport machinery to the
plant of Integrated Silicon; and pay Integrated Silicon the
purchase price of the finished products. The VAASA had a five-
year term, beginning on April 2, 1996, with a provision for
annual renewal by mutual written consent. On September 19,
1999, with the consent of Integrated Silicon, HP-Singapore
assigned all its rights and obligations in the
VAASA to Agilent.

On May 25, 2001, Integrated Silicon filed a complaint for
Specific Performance and Damages against Agilent and its
officers Tan Bian Ee, Lim Chin Hong, Tey Boon Teck and
Francis Khor. It alleged that Agilent breached the parties oral
agreement to extend the VAASA. Integrated Silicon thus
prayed that defendant be ordered to execute a written
extension of the VAASA for a period of five years as earlier
assured and promised; to comply with the extended VAASA;
and to pay actual, moral, exemplary damages and attorneys
fees.

On June 1, 2001, summons and a copy of the complaint
were served on Atty. Ramon Quisumbing, who returned
these processes on the claim that he was not the registered
agent of Agilent. Later, he entered a special appearance to
assail the courts jurisdiction over the person of Agilent.

Agilent filed a separate complaint against Integrated
Silicon for Specific Performance, Recovery of Possession, and
Sum of Money with Replevin, Preliminary Mandatory
Injunction, and Damages. Agilent prayed that a writ
of replevin or, in the alternative, a writ of preliminary
mandatory injunction, be issued ordering defendants to
immediately return and deliver to plaintiff its equipment,
machineries and the materials to be used for fiber-optic
components which were left in the plant of Integrated
Silicon. It further prayed that defendants be ordered to pay
actual and exemplary damages and attorneys fees.

Trial court denied the Motion to Dismiss and granted
petitioner Agilents application for a writ of replevin

Issue
Whether a foreign corporation without a license is
incapacitated from bringing an action in Philippine courts
Whether Agilent was doing business in the Philippines.

Held
We are not unmindful of the afflictive consequences that may
be suffered by both petitioner and respondents if replevin is
granted by the trial court in Civil Case No. 3123-2001-C. If

respondent Integrated Silicon eventually wins Civil Case No.
3110-2001-C, and the VAASAs terms are extended, petitioner
corporation will have to comply with its obligations
thereunder, which would include the consignment of
properties similar to those it may recover by way of replevin in
Civil Case No. 3123-2001-C. However, petitioner will also
suffer an injustice if denied the remedy of replevin, resort to
which is not only allowed but encouraged by law.

Respondents argue that since Agilent is an unlicensed
foreign corporation doing business in the Philippines, it lacks
the legal capacity to file suit. A foreign corporation without a
license is not ipso facto incapacitated from bringing an action
in Philippine courts. A license is necessary only if a foreign
corporation is transacting or doing business in the
country. The Corporation Code provides:
Sec. 133. Doing business without a license. No foreign
corporation transacting business in the Philippines without a
license, or its successors or assigns, shall be permitted to
maintain or intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines; but such
corporation may be sued or proceeded against before
Philippine courts or administrative tribunals on any valid cause
of action recognized under Philippine laws.

The aforementioned provision prevents an unlicensed
foreign corporation doing business in the Philippines from
accessing our courts.

In a number of cases, however, we have held that an
unlicensed foreign corporation doing business in
the Philippines may bring suit in Philippine courts against a
Philippine citizen or entity who had contracted with and
benefited from said corporation. Such a suit is premised on
the doctrine of estoppel. A party is estopped from
challenging the personality of a corporation after having
acknowledged the same by entering into a contract with
it. This doctrine of estoppel to deny corporate existence and
capacity applies to foreign as well as domestic
corporations. The application of this principle prevents a
person contracting with a foreign corporation from later
taking advantage of its noncompliance with the statutes
chiefly in cases where such person has received the benefits of
the contract.

The principles regarding the right of a foreign
corporation to bring suit in Philippine courts may thus be
condensed in four statements: (1) if a foreign corporation
does business in the Philippines without a license, it cannot
sue before the Philippine courts; (2) if a foreign corporation
is not doing business in the Philippines, it needs no license to
sue before Philippine courts on an isolated transaction or on a
cause of action entirely independent of any business
transaction; (3) if a foreign corporation does business in the
Philippines without a license, a Philippine citizen or entity
which has contracted with said corporation may
be estopped from challenging the foreign corporations
corporate personality in a suit brought before Philippine
courts; and (4) if a foreign corporation does business in the
Philippines with the required license, it can sue before
Philippine courts on any transaction.


The challenge to Agilents legal capacity to file suit hinges
on whether or not it is doing business in
the Philippines. However, there is no definitive rule on what
constitutes doing, engaging in, or transacting business in
the Philippines, as this Court observed in the case
of Mentholatum v. Mangaliman, The Corporation Code itself
is silent as to what acts constitute doing or transacting
business in the Philippines.

Jurisprudence has it, however, that the term implies a
continuity of commercial dealings and arrangements, and
contemplates, to that extent, the performance of acts or
works or the exercise of some of the functions normally
incident to or in progressive prosecution of the purpose and
subject of its organization.

In Mentholatum, this Court discoursed on the two general
tests to determine whether or not a foreign corporation can
be considered as doing business in the Philippines. The first
of these is the substance test, thus :
The true test [for doing business], however, seems to be
whether the foreign corporation is continuing the body of the
business or enterprise for which it was organized or whether it
has substantially retired from it and turned it over to another.

The second test is the continuity test, expressed thus:
The term [doing business] implies a continuity of commercial
dealings and arrangements, and contemplates, to that extent,
the performance of acts or works or the exercise of some of
the functions normally incident to, and in the progressive
prosecution of, the purpose and object of its organization.

An analysis of the relevant case law, in conjunction with
Section 1 of the Implementing Rules and Regulations of the
FIA (as amended by Republic Act No. 8179), would
demonstrate that the acts enumerated in the VAASA
do not constitute doing business in the Philippines.

By and large, to constitute doing business, the activity
to be undertaken in the Philippines is one that is for profit-
making. (this is the one in the outline)

By the clear terms of the VAASA, Agilents activities in
the Philippines were confined to (1) maintaining a stock of
goods in the Philippines solely for the purpose of having the
same processed by Integrated Silicon; and (2) consignment of
equipment with Integrated Silicon to be used in the
processing of products for export. As such, we hold that,
based on the evidence presented thus far, Agilent cannot be
deemed to be doing business in
the Philippines. Respondents contention that Agilent lacks
the legal capacity to file suit is therefore devoid of merit. As a
foreign corporation not doing business in the Philippines, it
needed no license before it can sue before our courts.
Finally, as to Agilents purported failure to state a cause of
action against the individual respondents, we likewise rule in
favor of petitioner. A Motion to Dismiss hypothetically admits
all the allegations in the Complaint, which plainly alleges that
these individual respondents had committed or permitted the
commission of acts prejudicial to Agilent. Whether or not
these individuals had divested themselves of their interests in
Integrated Silicon, or are no longer members of Integrated

Silicons Board of Directors, is a matter of defense best
threshed out during trial.

WHEREFORE, PREMISES CONSIDERED, the petition is
GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 66574 dated August 12, 2002, which dismissed Civil Case
No. 3123-2001-C, is REVERSED and SET ASIDE. The Order
dated September 4, 2001 issued by the Regional Trial Court
of Calamba, Laguna, Branch 92, in Civil Case No. 3123-2001-C,
is REINSTATED. Agilents application for a Writ of Replevin is
GRANTED.

7. GRANGER ASSOCIATES v. MICROWAVE SYSTEMS, INC.
(1990)

TRANSACTIONS WITH AGENTS AND BROKERS

Doctrine: The purpose of the rule requiring foreign
corporations to secure a license to do business in the
Philippines is to enable us to exercise jurisdiction over them
for the regulation of their activities in this country, If a foreign
corporation operates in the Philippines without submitting to
our laws, it is only just that it not be allowed to invoke them in
our courts when it should need them later for its own
protection. While foreign investors are always welcome in this
land to collaborate with us for our mutual benefit, they must
be prepared as an indispensable condition to respect and be
bound by Philippine law in proper cases, as in the one at bar.

FACTS:
The foreign corporation is Granger Associates, the herein
petitioner, which was organized in the United States and has
no license to do business in this country. The domestic
corporation is Microwave Systems, Inc., one of the herein
private respondents, which has been sued for recovery of a
sum equivalent to US$900,633.30 allegedly due from it to the
petitioner. The claim arose from a series of agreements
concluded between the two parties, principally the contract
dated March 28, 1977, under which Granger licensed MSI to
manufacture and sell its products in the Philippines and
extended to the latter certain loans, equipment and parts; the
contract dated May 17, 1979, for the sale by Granger of
Equipment to MSI and the Supplemental and Amendatory
Agreement concluded in December 1979.

Granger filed a complaint against MSI and the other private
respondents in the Regional Trial Court of Pasay City. In its
answer, MSI alleged the affirmative defense that the plaintiff
had no capacity to sue, being an unlicensed foreign
corporation, and moved to dismiss. The law invoked by the
defendants was Section 133 of the Corporation Code reading
as follows:

No foreign corporation transacting business in the Philippines
without a license, or its successors or assigns, shall be
permitted to maintain or intervene in any action, suit or
proceeding in any court or administrative agency of the
Philippines.


The trial court granted the motion to dismiss which was
affirmed by the CA.

Granger seeks the reversal of the respondent court on the
ground that MSI has failed to prove its affirmative allegation
that Granger was transacting business in the Philippines. It
insists that it has dealt only with MSI and not the general
public and contends that dealing with the public itself is an
indispensable ingredient of transacting business. It also argues
that its agreements with MSI covered only one isolated
transaction for which it did not have to secure a license to be
able to file its complaint.

ISSUE:
WON the foreign corporation (Granger Associates) is doing
business in the Philippines" as applied to an unlicensed foreign
corporation that has filed a complaint against a domestic
corporation.

HELD:
Yes. According to Section 1 of Rep. Act No. 5455
...the phrase "doing business" shall include soliciting orders,
purchases, service contracts, opening offices whether called
"liaison" offices or branches; appointing representatives or
distributors domiciled in the Philippines or who in any
calendar year stay in the Philippines for a period or periods
totalling one hundred eighty days or more; participating in the
management, supervision or control of any domestic business
firm, entity or corporation in the Philippines; any other act or
acts that imply a continuity of commercial dealings or
arrangements and contemplates to that extent the
performance of acts or works, or the exercise of some of these
functions normally incident to, and in progressive prosecution
of, commercial gain or of the purpose and object of the
business organization.

Moreover, the Court in Top-Weld Manufacturing, Inc. v. ECED,
S.A., said that:
There is no general rule or governing principle laid down as
to what constitutes "doing" or "engaging in" or ""transacting"
business in the Philippines. Each case must be judged in the
light of its peculiar circumstance The acts of these
corporations should be distinguished from a single or isolated
business transaction or occasional, incidental and casual
transactions which do not come within the meaning of the
law. Where a single act or transaction, however, is not merely
incidental or casual but indicates the foreign corporation's
intention to do other business in the Philippines, said single
act or transaction constitutes "doing" or "engaging in" or
"transacting" business in the Philippines.
The petitioner contends that its various transactions with the
private respondent were mere facets of the basic agreement
licensing MSI to manufacture and sell Granger's products in
the Philippines. All subsequent agreements were merely
auxiliary to that first contract and should not be considered
separate transactions coming 'within the concept of "doing
business in the Philippines."

However, this is not true of the Multiplex agreement dated
May 17, 1979, which dealt with a different subject matter and
had a different consideration to be paid under a different
method from that specified in the first agreement of the

parties in 1977. It is also noted that in the supplemental and
Amendatory Agreement, Granger sold to MSI certain
materials/parts radios and granted it the right to exploit its
designs. The subject matter of this transaction is also different
from those covered by the previous agreements.
Even if it be assumed for the sake of argument that the
subject matter of the first contract is of the same kind as that
of the subsequent agreements, that fact alone would not
necessarily signify that all such agreements are merely
auxiliary to the first. As long as it can be shown that the
parties entered into a series of agreements, as in successive
sales of the foreign company's regular products, that company
shall be deemed as doing business in the Philippines.
Moreover, Granger had extended its personality in the
Philippines and would receive orders for its products and
discharge its warranty obligations through the agency of MSI It
would even appear that Granger intended to transact business
in the Philippines through the instrumentality of MSI not only
for the sale and warranty of its products in this country. The
'agent, was expected to extend also in mainland China and
other ASEAN countries, where MSI was to act as its
representative in the development of possible markets for
Granger products.

In the Supplemented and Amendatory Agreement of
December 1979, Granger saw to it that it was assured of at
least one seat in the board of directors of MSI; without
prejudice to the right of Granger to request additional seats as
its interest may require". Granger actually purchased 9,000
shares of MSI, representing 30% of the latter's issued and
outstanding shares of stock. The fact that it was directly
involved in the business of MSI was also manifestation
stipulation where Granger "acknowledged and confirmed" the
transfer of a block of stocks from one shareholder to another
group of investors. Such approval is not normally given except
by a stockholder enjoying substantial participation in the
management of the business of the company. The petitioner
cites the regulations of the Board of Investments stating that
mere investment in a local company by a foreign corporation
should not be construed as doing business in the Philippines. It
cannot be denied, however, that the investment of Granger in
MSI is quite substantial, enabling it to participate in the actual
management and control of MSI In fact, it appointed a
representative in the board of directors to protect its
interests, and this director was so influential that, at his
request, the regular board meeting was converted into an
annual stockholder's meeting to take advantage of his
presence.

On the question of whether the foreign corporation must be
shown to have dealt with the public in general to be
considered as transacting business in the Philippines, it is
important to note that when a corporation performs acts for
which it was created or exercises some of the functions for
which it was organized, the amount or volume of the business
is immaterial and a single act of that character may constitute
doing business. It is the performance by a foreign corporation
of the acts for which it was created, regardless of volume of
business, that determines whether a foreign corporation
needs a license or not.


We are convinced from an examination of the terms and
conditions of the contracts and agreements entered into
between petitioner and private respondents indicate that they
established within our country a continuous business, and not
merely one of a temporary character. Such agreements did
not constitute only one isolated transaction, as the petitioner
contends, but a succession of acts signifying the intent of
Granger to extend its operations in the Philippines. In any
event, it is now settled that even one single transaction may
be construed as transacting business in the Philippines under
certain circumstances. A single act may bring the corporation
within the purview of the statute where it is an act of the
ordinary business of the corporation. In such a case, the single
act or transaction is not merely incidental or casual, but is of
such character as distinctly to indicate a purpose on the part
of the foreign corporation to do other business in the state,
and to make the state a base of operations for the conduct of
a part of the corporations' ordinary business.

The purpose of the rule requiring foreign corporations to
secure a license to do business in the Philippines is to enable
us to exercise jurisdiction over them for the regulation of their
activities in this country, If a foreign corporation operates in
the Philippines without submitting to our laws, it is only just
that it not be allowed to invoke them in our courts when it
should need them later for its own protection. While foreign
investors are always welcome in this land to collaborate with
us for our mutual benefit, they must be prepared as an
indispensable condition to respect and be bound by Philippine
law in proper cases, as in the one at bar.

8. WESTERN EQUIPMENT & SUPPLY CO. V. REYES (1927)

THE SPECIAL CASES ON THE INFRINGEMENT OF BUSINESS
NAMES AND TRADEMARKS

Doctrine: Rights to the use of its corporate name or trade
name is a property right, a right in rem, which it may assert
and protect against the whole world, in any of the courts in
the world even in jurisdictions where it does not transact
business just the same as it may protect its tangible
property, real or personal, against trespass or conversion.

FACTS:
In 1925, Western Equipment and Supply Co. applied for the
issuance of a license to engage in business in the Philippines.
On the other hand, Western Electric Co. has never been
licensed to engage in business, nor has it ever engaged in
business in the Philippines. Western Equipment, since the
issuance of its license, engaged in the importation and sale of
electrical and telephone apparatus and supplies manufactured
by Western Electric. The electric and telephone apparatus and
supplies manufactured by the plaintiff Western Electric
Company, Inc., have been sold in foreign and interstate
commerce and have become well and thoroughly known to
the trade in all countries of the world for the past fifty years;
that at present time the greater part of all telephone
equipment used in Manila and elsewhere in the Philippine
Islands was manufactured by the said Western Electric
Company, Inc., and sold by it in commerce between the
United States and the Philippine Islands. The name `Western

Electric Company, Inc., has been registered as a trade-mark
under the provisions of the Act of Congress of February 20,
1905, in the office of the Commissioner of Patents, at
Washington, District of Columbia, and said trade-mark
remains in force to this date.

A local corporation, Electric Supply Co. Inc. has been importing
the same products in the Philippines. In 1926, Electric Supplys
president, Henry Herman, along with other persons filed
articles of incorporation with the defendant Director of the
Bureau of Commerce and Industry with the intention of
organizing a domestic corporation to be known as the
"Western Electric Company, Inc.," for the purpose principally
of manufacturing, buying, selling and generally dealing in
electrical and telephone apparatus and supplies. Western
Equipment, et al. filed against Herman to prevent them from
organizing said corporation upon the ground among others,
that the corporate name by which said defendants desire to
be known, being identical with that of the plaintiff Western
Equipment and Supply Company, will deceive and mislead the
public purchasing electrical and telephone apparatus and
supplies.

Western Equipment et, al. prayed for a temporary injunction,
pending the final decision of the court when it should be made
permanent, restraining the issuance of the certificate of
incorporation in favor of the defendants under the name of
Western Electric Company, Inc., or the use of that name for
any purpose in the exploitation and sale of electric apparatus
and supplies. The preliminary writ was issued.

The trial court ruled in favor of Western Equipment, holding
that the purpose of the incorporation of the proposed
corporation is illegal or void.

ISSUE:
Whether the foreign corporation Western Electric Co. Inc. has
right of action to prevent an officer of the government from
issuing a certificate of incorporation to Philippine residents
who attempt to pirate the corporate name of the foreign
corporation and engage in the same business.

HELD:
Yes. It is stipulated that the Western Electric Company, Inc.,
has never engaged in business in the Philippine Islands. In
the case of Marshall-Wells Co. vs. Henry W. Elser & Co. (46
Phil., 70, 76), this court held:
The noncompliance of a foreign corporation with the
statute may be pleaded as an affirmative defense.
Thereafter, it must appear from the evidence, first,
that the plaintiff is a foreign corporation, second, that
it is doing business in the Philippines, and third, that it
has not obtained the proper license as provided by the
statute.

If it had been stipulated that the plaintiff, Western Electric
Company, Inc., had been doing business in the Philippine
Islands without first obtaining a license, another and a very
different question would be presented. That company is not
here seeking to enforce any legal or contract rights arising
from, or growing out of, any business which it has transacted
in the Philippine Islands. The sole purpose of the action is to

protect its reputation, its corporate name, its goodwill,
whenever that reputation, corporate name or goodwill have,
through the natural development of its trade, established
themselves. And it contends that it the right to the use of its
corporate and trade name.

A trademark acknowledges no territorial boundaries of
municipalities, states or nations, but extends to every market
where the traders goods have become known and identified
by the use of the mark.

Rights to the use of its corporate name or trade name is a
property right, a right in rem, which it may assert and protect
against the whole world, in any of the courts in the world
even in jurisdictions where it does not transact business just
the same as it may protect its tangible property, real or
personal, against trespass or conversion. The trial court was
correct in holding that the purpose of the proposed
corporation by Herman, et. al. as fraudulent and contrary to
law, as it attempts to unjustly compete with the real Western
Electric Co. Inc. and deceive Filipinos into thinking that the
goods they propose to sell are goods of manufacture of the
real Western Electric Co.

The plaintiff, Western Electric Company, Inc., has been in
existence as a corporation for over fifty years, during which
time it has established a reputation all over the world
including the Philippine Islands, for the kind and quality of its
manufactured articles, and it is very apparent that the whole
purpose and intent of Herman and his associates in seeking to
incorporate another corporation under the identical name of
Western Electric Company, Inc., and for the same identical
purpose as that of the plaintiff, is to trespass upon and profit
by its good name and business reputation. The very fact that
Herman and his associates have sought the use of that
particular name for that identical purpose is conclusive
evidence of the fraudulent intent with which it is done.

9. ANTAM CONSOLIDATED VS. CA (1986)

DOCTRINE ON UNRELATED OR ISOLATED TRANSACTIONS

Doctrine: There is no general rule or governing principle laid
down as to what constitutes 'doing' or 'engaging in' or
'transacting business in the Philippines. Each case must be
judged in the Light of its peculiar circumstance. The acts of
these corporations should be distinguished from a single or
isolated business transaction or occasional, incidental and
casual transactions which do not come within the meaning of
the law. Where a single act or transaction, however, is not
merely incidental or casual but indicates the foreign
corporation's intention to do other business in the Philippines,
said single act or transaction constitutes 'doing' or 'engaging
in' or 'transacting' business in the Philippines.

FACTS:
Respondent Stokely Van Camp. Inc. (Stokely) filed a complaint
against Banahaw Milling Corporation (Banahaw), Antam
Consolidated, Inc., Tambunting Trading Corporation
(Tambunting), Aurora Consolidated Securities and Investment
Corporation, and United Coconut Oil Mills, Inc. (Unicom) for

collection of sum of money. In its complaint, Stokely alleged:
(1) that it is a corporation organized and existing under the
laws of the state of Indiana, U.S.A. and has its principal office
is in Indianapolis, Indiana, U.S.A., and one of its subdivisions
"Capital City Product Company" (Capital City) has its office in
Columbus, Ohio, U.S.A.; (2) that Stokely and Capital City were
not engaged in business in the Philippines prior to the
commencement of the suit so that Stokely is not licensed to
do business in this country and is not required to secure such
license; (3) that Capital City and Coconut Oil Manufacturing
(Phil.) Inc. (Comphil) with the latter acting through its broker
Rothschild Brokerage Company, entered into a contract (RBS
3655) wherein Comphil undertook to sell and deliver and
Capital City agreed to buy crude coconut oil. However,
Comphil failed to deliver the coconut oil so that Capital City
covered its coconut oil needs in the open market at a price
substantially in excess of the contract and consequently
sustained losses. To settle Capital City's loss under the
contract, the parties entered into a second contract (RBS
3738) wherein Comphil undertook to buy and Capital City
agreed to sell coconut crude oil under the same terms and
conditions but at an increased c.i.f. price. (4) that the second
contract states that "it is a wash out against RBS 3655" so that
Comphil was supposed to repurchase the undelivered coconut
oil from Capital City by paying the latter the sum equivalent to
the losses that Capital City sustained under the first contract;
that Comphil again failed to pay said amount, so to settle
Capital City's loss, it entered into a third contract with Comphil
wherein the latter undertook to sell and deliver and Capital
City agreed to buy the same quantity of crude coconut oil (5)
that the latter price was below the then current market price
and by delivering said quantity of coconut oil to Capital City at
the discounted price, Comphil was to have settled its liability
to Capital City; (6) that Comphil failed to deliver the coconut
oil so Capital City notified the former that it was in default; (7)
that Capital City sustained damages and (8) that after
repeated demands from Comphil to pay the said amount, the
latter still refuses to pay the same.

Stokely further prayed that a writ of attachment be issued
against any and all the properties of Antam, et al. in an
amount sufficient to satisfy any lien of judgment that Stokely
may obtain in its action. The trial court ordered the issuance
of a writ of attachment in favor of Stokely upon the latter's
deposit of a bond in the amount of P1,285,000.00.

Antam, et al. filed a motion to dismiss the complaint on the
ground that Stokely, being a foreign corporation not licensed
to do business in the Philippines, has no personality to
maintain the suit.

ISSUE:
Whether Stokely Van Camp, Inc. has the capacity to sue, in
light of three transactions it entered into with Comphil,
Antam, etc. without license.

HELD:
Yes. The transactions entered into by Stokely with Comphil,
Antam, et al. are not a series of commercial dealings which
signify an intent on the part of Stokely to do business in the
Philippines but constitute an isolated one which does not fall
under the category of "doing business." The only reason why

Stokely entered into the second and third transactions with
Comphil, Antam, et al. was because it wanted to recover the
loss it sustained from the failure of Comphil, Antam, et al. to
deliver the crude coconut oil under the first transaction and in
order to give the latter a chance to make good on their
obligation. Instead of making an outright demand on Comphil,
Antam, et al., Stokely opted to try to push through with the
transaction to recover the amount of US$103,600.00 it lost.
This explains why in the second transaction, Comphil, Antam,
et al. were supposed to buy back the crude coconut oil they
should have delivered to the respondent in an amount which
will earn the latter a profit of US$103,600.00. When this failed
the third transaction was entered into by the parties whereby
Comphil, Antam, et al. were supposed to sell crude coconut oil
to the respondent at a discounted rate, the total amount of
such discount being US$103,600.00. Unfortunately, Comphil,
Antam, et al. failed to deliver again, prompting Stokely to file
the suit below. From these facts alone, it can be deduced that
in reality, there was only one agreement between Comphil,
Antam, et al. and Stokely and that was the delivery by the
former of 500 long tons of crude coconut oil to the latter, who
in turn, must pay the corresponding price for the same. The
three seemingly different transactions were entered into by
the parties only in an effort to fulfill the basic agreement and
in no way indicate an intent on the part of Stokely to engage
in a continuity of transactions with Comphil, Antam, et al.
which will categorize it as a foreign corporation doing business
in the Philippines. Stokely, being a foreign corporation not
doing business in the Philippines, does not need to obtain a
license to do business in order to have the capacity to sue.

In the case of Top-Weld Manufacturing, Inc. v. ECED, S.A. (138
SCRA 118,127-128), the court stated: There is no general rule
or governing principle laid down as to what constitutes 'doing'
or 'engaging in' or 'transacting business in the Philippines.
Each case must be judged in the Light of its peculiar
circumstance. The acts of these corporations should be
distinguished from a single or isolated business transaction or
occasional, incidental and casual transactions which do not
come within the meaning of the law. Where a single act or
transaction, however, is not merely incidental or casual but
indicates the foreign corporation's intention to do other
business in the Philippines, said single act or transaction
constitutes 'doing' or 'engaging in' or 'transacting' business in
the Philippines.

In the Mentholatum Co. v. Mangaliman case earlier cited, the
Court held:
The true test, however, seems to be whether the foreign
corporation is continuing the body or substance of the
business or enterprise for which it warning-organized or
whether it has substantially was retired from it and turned it
over to another. The term implies a continuity of commercial
dealings and arrangements, and contemplates, to that extent,
the performance of acts or workers or the exercise of some of
the functions normally incident to, and in progressive
prosecution of, the purpose and object of its organization.

In the case at bar, the transactions entered into by the
respondent with the petitioners are not a series of commercial
dealings which signify an intent on the part of the respondent
to do business in the Philippines but constitute an isolated one

which does not fall under the category of "doing business."
The records show that the only reason why the respondent
entered into the second and third transactions with the
petitioners was because it wanted to recover the loss it
sustained from the failure of the petitioners to deliver the
crude coconut oil under the first transaction and in order to
give the latter a chance to make good on their obligation.
Instead of making an outright demand on the petitioners, the
respondent opted to try to push through with the transaction
to recover the amount of US$103,600.00 it lost. This explains
why in the second transaction, the petitioners were supposed
to buy back the crude coconut oil they should have delivered
to the respondent in an amount which will earn the latter a
profit of US$103,600.00. When this failed the third transaction
was entered into by the parties whereby the petitioners were
supposed to sell crude coconut oil to the respondent at a
discounted rate, the total amount of such discount being
US$103,600.00. Unfortunately, the petitioners failed to deliver
again, prompting the respondent to file the suit below.

From these facts alone, it can be deduced that in reality, there
was only one agreement between the petitioners and the
respondent and that was the delivery by the former of 500
long tons of crude coconut oil to the latter, who in turn, must
pay the corresponding price for the same. The three
seemingly different transactions were entered into by the
parties only in an effort to fulfill the basic agreement and in no
way indicate an intent on the part of the respondent to
engage in a continuity of transactions with petitioners which
will categorize it as a foreign corporation doing business in the
Philippines. Thus, the trial court, and the appellate court did
not err in denying the petitioners' motion to dismiss because
the respondent, being a foreign corporation not doing
business in the Philippines, does not need to obtain a license
to do business in order to have the capacity to sue.

The Court agreed with the respondent that it is a common
ploy of defaulting local companies which are sued by
unlicensed foreign companies not engaged in business in the
Philippines to invoke lack of capacity to sue. The doctrine of
lack of capacity to sue based on failure to first acquire a local
license is based on considerations of sound public policy. It
intended to favor domestic corporations who enter was never
into solitary transactions with unwary foreign firms and then
repudiate their obligations simply because the latter are not
licensed to do business in this country. The petitioners in this
case are engaged in the exportation of coconut oil, an export
item so vital in our country's economy. They filed this petition
on the ground that Stokely is an unlicensed foreign
corporation without a bare allegation or showing that their
defenses in the collection case are valid and meritorious. We
cannot fault the two courts below for acting as they did.

10. ATLANTIC MUTUAL INC. v. CEBU STEVEDORING CO (1966)

NEED TO ALLEGE CAPACITY TO SUE

Doctrine: The fact that a foreign corporation is not doing
business in the Philippines must be alleged if a foreign
corporation desires to sue in the Philippine courts under the
isolated transaction rule.


FACTS:
Atlantic Mutual Insurance Company and Continental Insurance
Company are both foreign corporations existing under the
laws of the United States. They sued the Cebu Stevedoring
Co., Inc., a domestic corporation, for recovery of a sum of
money. Cebu Stevedoring, as a common carrier, undertook to
carry a shipment of copra for deliver to Procter & Gamble
Company, at Cebu City; that upon discharge, a portion of the
copra was found damaged; that since the copra had been
previously insured with plaintiffs they paid the shipper and/or
consignee, upon proper claim and assessment of the damage,
the sum of P15,980.30; and that as subrogee to the shipper's
and/or consignee's rights, plaintiffs demanded, without
success, settlement from defendant by reason of its failure to
comply with its obligation, as carrier, to deliver the copra in
good order.
Defendant moved to dismiss on two grounds: (a) that plaintiffs
had "no legal personality to appear before Philippine courts
and with no capacity to sue;" and (b) that the complaint did
not state a cause of action. Both grounds were based upon
failure of the complaint to allege compliance with section 69
of the Corporation Law, which states:
SEC. 69. No foreign corporation or corporation formed,
organized, or existing under any laws other than those
of the Philippines shall be permitted to transact
business in the Philippines or maintain by itself or
assigned any suit for the recovery of any debt, claim,
or demand whatever, unless it shall have the license
prescribed in the section immediately preceeding. Any
officer, director or agent of the corporation or any
person transacting business for any foreign
corporation not having the license prescribed shall be
punished by imprisonment for not less than six months
nor more than two years or by a fine of not less than
two hundred pesos nor more than one thousand
pesos, or by both such imprisonment and fine, in the
discretion of the Court.

ISSUE:
WON a foreign corporation, without such license, may sue in
our courts in view of section 69 of the Corporation Law

HELD:
YES.

CORP DOCTRINE:
In Marshall-Wells Co. vs. Elser & Co., 46 Phil. 71 (September 8,
1924), the Court said after analyzing Section 69 of the
Corporation Law: "The Law simply means that no foreign
corporation shall be permitted to transact business in the
Philippines, ... unless it shall have the license required by law,
and, until it complies with this law, shall not be permitted to
maintain any suit in the local courts."

The Court explained in that case that "the object of the
statute was to object of the statute was not to prevent the
foreign corporation from performing single acts, but to
prevent it from acquiring a domicile for the purpose of
business without taking the steps necessary to render it
amenable to suit in the local courts. The implication of the law
is that it was never the purpose of the Legislature to exclude a
foreign corporation which happens to obtain an isolated order

for business from the Philippines, from securing redress in the
Philippine Courts, and thus, in effect, to permit persons to
avoid their contracts made with such foreign corporations. The
effect of the statute preventing foreign corporations from
doing business and from bringing actions in the local courts,
except in compliance with elaborate requirements, must not
be unduly extended or improperly applied. It should not be
construed to extend beyond the plain meaning of its terms,
considered in connection with its object, and in connection
with the spirit of the entire law."

PROCEDURE:
But merely to say that a foreign corporation not doing
business in the Philippines does not need a license in order to
sue in our courts does not completely resolve the issue in the
present case. The proposition, as stated, refers to the right to
sue; the question here refers to pleading and procedure. It
should be noted that insofar as the allegations in the
complaint have a bearing on appellants' capacity to sue, all
that is averred is that they are both foreign corporations
existing under the laws of the United States. This averment
conjures two alternative possibilities: either they are engaged
in business in the Philippines or they are not so engaged. If the
first, they must have been duly licensed in order to maintain
this suit; if the second, if the transaction sued upon is singular
and isolated, no such license is required. In either case, the
qualifying circumstance is an essential part of the element of
plaintiffs' capacity to sue and must be affirmatively pleaded.

In the present case, the law denies to a foreign corporation
the right to maintain suit unless it has previously complied
with a certain requirement, then such compliance, or the fact
that the suing corporation is exempt therefrom, becomes a
necessary averment in the complaint. These are matters
peculiarly within the knowledge of appellants alone, and it
would be unfair to impose upon appellee the burden of
asserting and proving the contrary. It is enough that foreign
corporations are allowed by law to seek redress in our courts
under certain conditions: the interpretation of the law should
not go so far as to include, in effect, an inference that those
conditions have been met from the mere fact that the party
suing is a foreign corporation. Facts showing the capacity of a
party to sue or be sued or the authority of a party to sue or be
sued in a representative capacity or the legal existence of an
organized association of persons that is made a party, must be
averred.

Note: In this case, the CFI found the complaint to be
deficient (by not including therein an allegation that as
foreign corporations they were duly licensed to engage
in business in the Philippines). Appellants told the CFI
that they wont amend the complaint contending that it
is erroneous for the CFI to interpret the statute by
implying that without such license, a foreign
corporation may not sue in Philippines courts. Thus the
appellants waited for the dismissal of the complaint to
enable them to appeal the case to the SC. However, SC
still affirmed the CFIs dismissal even though it held
that a foreign corporation can sue in the Philippines.
The court held that facts showing the capacity of a
party to sue or be sued or the authority of a party to
sue or be sued in a representative capacity or the legal

existence of an organized association of persons that is
made a party, MUST BE AVERRED in the complaint.

11. MERRILL LYNCH FUTURES, INC. v. COURT OF APPEALS
(1992)

ESTOPPEL DOCTRINE

Doctrine: Under the principle of estoppel, a foreign
corporation doing business in the Philippines may sue in the
Philippine courts even without a license to do business against
a Philippine citizen who had contracted with and been
benefited by said corporation and knew it to be without the
necessary license to do business.

FACTS:
Merrill Lynch Futures, Inc. (ML FUTURES) filed a complaint
with the Regional Trial Court against the Spouses Pedro M.
Lara and Elisa G. Lara for the recovery of a debt and interest
thereon, damages, and attorney's fees.
ML FUTURES described itself as
a) a non-resident foreign corporation, not doing business in
the Philippines, duly organized and existing under and by
virtue of the laws of the state of Delaware, U.S.A.;" as well as
b) a "futures commission merchant" duly licensed to act as
such in the futures markets and exchanges in the United
States, . . essentially functioning as a broker . . (executing)
orders to buy and sell futures contracts
1
received from its
customers on U.S. futures exchanges.
ML FUTURES entered into a Futures Customer Agreement
with the defendant spouses (Account No. 138-12161), in
virtue of which it agreed to act as the latter's broker for the
purchase and sale of futures contracts in the U.S. Pursuant to
the contract, orders to buy and sell futures contracts were
transmitted to ML FUTURES by the Lara Spouses "through the
facilities of Merrill Lynch Philippines, Inc., a Philippine
corporation and a company servicing plaintiffs customers.
From the outset, the Lara Spouses "knew and were duly
advised that Merrill Lynch Philippines, Inc. was not a broker in
futures contracts," and that it "did not have a license from the
Securities and Exchange Commission to operate as a
commodity trading advisor (i.e., 'an entity which, not being a
broker, furnishes advice on commodity futures to persons
who trade in futures contracts'). The Lara Spouses actively
traded in futures contracts for four years or so, there being
more or less regular accounting and corresponding
remittances of money (or crediting or debiting) made between
the spouses and ML FUTURES. Subsequently, a loss was
incurred in respect of three (3) transactions involving "index
futures." Thus, the said spouses became indebted to ML
FUTURES for the ensuing balance of US$84,836.27, which the
latter asked them to pay. The Lara Spouses however refused
to pay this balance, "alleging that the transactions were null

1
A futures contract is contractual commitment to buy and sell a standardized quantity of a particular item
at a specified future settlement date and at a price agreed upon, with the purchase or sale being
executed on a regulated futures exchange.


and void because Merrill Lynch Philippines, Inc., the Philippine
company servicing accounts of plaintiff, . . had no license to
operate as a 'commodity and/or financial futures broker.'"

On the foregoing essential facts, ML FUTURES prayed (1) for a
preliminary attachment against defendant spouses'
properties. Preliminary attachment issued ex parte on
December 2, 1987, and the defendant spouses were duly
served with summons.

They then filed a motion to dismiss dated December 18, 1987
on the grounds that (1) plaintiff ML FUTURES had "no legal
capacity to sue" and (2) its "complaint states no cause of
action since . . (it) is not the real party in interest."

Trial Court promulgated an Order sustaining the motion to
dismiss. The Court of Appeals affirmed the Trial Court's
judgment.

ISSUES:
(a) WON ML FUTURES is prohibited from suing in Philippine
Courts because it is doing business in the country without a
license - NO

(b) WON ML FUTURES is a real party in interest (since it is
contended that the Lara Spouses had not been doing business
with it, but with another corporation, Merrill Lynch, Pierce,
Fenner & Smith, Inc.) - YES

HELD:
The Court is satisfied that the facts on record adequately
establish that ML FUTURES, operating in the United States,
had indeed done business with the Lara Spouses in the
Philippines over several years, had done so at all times
through Merrill Lynch Philippines, Inc. (MLPI), a corporation
organized in this country, and had executed all these
transactions without ML FUTURES being licensed to so
transact business here, and without MLPI being authorized to
operate as a commodity futures trading advisor. These are the
factual findings of both the Trial Court and the Court of
Appeals. These, too, are the conclusions of the Securities &
Exchange Commission which denied MLPI's application to
operate as a commodity futures trading advisor, a denial
subsequently affirmed by the Court of Appeals.

The Court is satisfied, too, that the Laras did transact business
with ML FUTURES through its agent corporation organized in
the Philippines, it being unnecessary to determine whether
this domestic firm was MLPI (Merrill Lynch Philippines, Inc.) or
Merrill Lynch Pierce Fenner & Smith (MLPI's alleged
predecessor). The fact is that ML FUTURES did deal with
futures contracts in exchanges in the United States in behalf
and for the account of the Lara Spouses, and that on several
occasions the latter received account documents and money
in connection with those transactions.

The crucial question is whether or not ML FUTURES may sue in
Philippine Courts to establish and enforce its rights against
said spouses, in light of the undeniable fact that it had
transacted business in this country without being licensed to

do so. In other words, if it be true that during all the time that
they were transacting with ML FUTURES, the Laras were fully
aware of its lack of license to do business in the Philippines,
and in relation to those transactions had made payments to,
and received money from it for several years, the question is
whether or not the Lara Spouses are now estopped to impugn
ML FUTURES' capacity to sue them in the courts of the forum.

The general rule that in the absence of fraud of person who
has contracted or otherwise dealt with an association in such
a way as to recognize and in effect admit its legal existence as
a corporate body is thereby estopped to deny its corporate
existence in any action leading out of or involving such
contract or dealing, unless its existence is attacked for causes
which have arisen since making the contract or other dealing
relied on as an estoppel and this applies to foreign as well as
domestic corporations.

There would seem to be no question that the Laras received
benefits generated by their business relations with ML
FUTURES. Those business relations, according to the Laras
themselves, spanned a period of seven (7) years; and they
evidently found those relations to be of such profitability as
warranted their maintaining them for that not insignificant
period of time; otherwise, it is reasonably certain that they
would have terminated their dealings with ML FUTURES much,
much earlier.

In fact, even as regards their last transaction, in which the
Laras allegedly suffered a loss, the Laras nonetheless still
received some monetary advantage, for ML FUTURES credited
them with the amount of US$75,913.42 then due to them,
thus reducing their debt to US$84,836.27. Given these facts,
and assuming that the Lara Spouses were aware from the
outset that ML FUTURES had no license to do business in this
country and MLPI, no authority to act as broker for it, it would
appear quite inequitable for the Laras to evade payment of an
otherwise legitimate indebtedness due and owing to ML
FUTURES upon the plea that it should not have done business
in this country in the first place, or that its agent in this
country, MLPI, had no license either to operate as a
"commodity and/or financial futures broker."

12. Eriks Ltd v CA
Estoppel doctrine , p 68 : proper doctrine as compared to
Merrill

Facts
Petitioner Eriks Pte. Ltd. is a non-resident foreign
corporation engaged in the manufacture and sale of elements
used in sealing pumps, valves and pipes for industrial
purposes, valves and control equipment used for industrial
fluid control and PVC pipes and fittings for industrial uses. In
its complaint, it alleged that

(I)t is a corporation duly organized and existing under the
laws of the Republic of Singapore with address at 18 Pasir
Panjang Road #09-01, PSA Multi-Storey Complex, Singapore
0511. It is not licensed to do business in the Philippines and
i(s) not so engaged and is suing on an isolated transaction for
which it has capacity to sue x x x.

On various dates covering the period January 17 -- August
16, 1989, private respondent Delfin Enriquez, Jr., doing
business under the name and style of Delrene EB Controls
Center and/or EB Karmine Commercial, ordered and received
from petitioner various elements used in sealing pumps,
valves, pipes and control equipment, PVC pipes and
fittings. The ordered materials were delivered via airfreight.

The transfers of goods were perfected in Singapore, for
private respondents account, F.O.B. Singapore, with a 90-day
credit term. Subsequently, demands were made by petitioner
upon private respondent to settle his account, but the latter
failed/refused to do so.

On August 28, 1991, petitioner corporation filed with the
Regional Trial Court of Makati, Branch for the recovery of
S$41,939.63 or its equivalent in Philippine currency, plus
interest thereon and damages. Private respondent responded
with a Motion to Dismiss, contending that petitioner
corporation had no legal capacity to sue. In an Order dated
March 8, 1993, the trial court dismissed the action on the
ground that petitioner is a foreign corporation doing business
in the Philippines without a license.

Issue
whether petitioner-corporation may maintain an action in
Philippine courts considering that it has no license to do
business in the country. The resolution of this issue depends
on whether petitioners business with private respondent may
be treated as isolated transactions.

Petitioner insists that the series of sales made to private
respondent would still constitute isolated transactions despite
the number of invoices covering several separate and distinct
items sold and shipped over a span of four to five months, and
that an affirmation of respondent Courts ruling would result
in injustice and unjust enrichment.

Private respondent counters that to declare petitioner as
possessing capacity to sue will render nugatory the provisions
of the Corporation Code and constitute a gross violation of our
laws. Thus, he argues, petitioner is undeserving of legal
protection.

Held
The petition has no merit.

The Concept of Doing Business
Sec. 133. Doing business without a license. - No foreign
corporation transacting business in the Philippines without a
license, or its successors or assigns, shall be permitted to
maintain or intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines; but such
corporation may be sued or proceeded against before
Philippine courts or administrative tribunals on any valid cause
of action recognized under Philippine laws.

The aforementioned provision prohibits, not merely
absence of the prescribed license, but it also bars a foreign
corporation doing business in the Philippines without such
license access to our courts. A foreign corporation without

such license is not ipso facto incapacitated from bringing an
action. A license is necessary only if it is transacting or doing
business in the country.

However, there is no definitive rule on what constitutes
doing, engaging in, or transacting business. The
Corporation Code itself does not define such terms. To fill the
gap, the evolution of its statutory definition has produced a
rather all-encompassing concept.

The trial court held that petitioner-corporation was doing
business without a license, finding that
The invoices and delivery receipts covering the period of (sic)
from January 17, 1989 to August 16, 1989 cannot be treated
to mean a singular and isolated business transaction that is
temporary in character. Granting that there is no
distributorship agreement between herein parties, yet by the
mere fact that plaintiff, each time that the defendant posts
an order delivers the items as evidenced by the several
invoices and receipts of various dates only indicates that
plaintiff has the intention and desire to repeat the (sic) said
transaction in the future in pursuit of its ordinary
business. Furthermore, and if the corporation is doing that
for which it was created, the amount or volume of the
business done is immaterial and a single act of that character
may constitute doing business

Even if We were to view, as contended by the appellant,
that the transactions which occurred between January to
August 1989, constitute a single act or isolated business
transaction, this being the ordinary business of appellant
corporation, it can be said to be illegally doing or transacting
business without a license. x x x Here it can be clearly
gleaned from the four-month period of transactions between
appellant and appellee that it was a continuing business
relationship, which would, without doubt, constitute doing
business without a license. For all intents and purposes,
appellant corporation is doing or transacting business in the
Philippines without a license and that, therefore, in
accordance with the specific mandate of Section 144 of the
Corporation Code, it has no capacity to sue.

We find no reason to disagree with both lower
courts. More than the sheer number of transactions entered
into, a clear and unmistakable intention on the part of
petitioner to continue the body of its business in the
Philippines is more than apparent. As alleged in its complaint,
it is engaged in the manufacture and sale of elements used in
sealing pumps, valves, and pipes for industrial purposes,
valves and control equipment used for industrial fluid control
and PVC pipes and fittings for industrial use. Thus, the sale by
petitioner of the items covered by the receipts, which are part
and parcel of its main product line, was actually carried out in
the progressive prosecution of commercial gain and the
pursuit of the purpose and object of its business, pure and
simple. Further, its grant and extension of 90-day credit terms
to private respondent for every purchase made, unarguably
shows an intention to continue transacting with private
respondent, since in the usual course of commercial
transactions, credit is extended only to customers in good
standing or to those on whom there is an intention to
maintain long-term relationship. This being so, the existence

of a distributorship agreement between the parties, as alleged
but not proven by private respondent, would, if duly
established by competent evidence, be merely corroborative,
and failure to sufficiently prove said allegation will not
significantly affect the finding of the courts below. Nor our
own ruling. It is precisely upon the set of facts above-detailed
that we concur with respondent Court that petitioner
corporation was doing business in the country.

Given the facts of this case, we cannot see how
petitioners business dealings will fit the category of
isolated transactions considering that its intention to
continue and pursue the corpus of its business in the country
had been clearly established. It has not presented any
convincing argument with equally convincing evidence for us
to rule otherwise.

WHEREFORE, premises considered, the instant petition is
hereby DENIED and the assailed Decision is AFFIRMED.

13. General Corp v Union Insurance Society, G.R. No. L-2684,
September 14, 1950

Doctrine:
A foreign corp actually doing business in the Phil, with
or without license or authority to do so, is amenable to
process and the jurisdiction of local courts. If such foreign corp
has a license to do business, then summons to it will be served
on the agent designated by it for the purpose, or otherwise in
accordance with the provisions of the Corporation Law. Where
such foreign corp actually doing business here has not applied
for license to do so and has not designated an agent to receive
summons, then service of summons on it will be made
pursuant to the provisions of the Rules of Court, particularly
Rule 7, sec 14 thereof. We further hold that where a foreign
insurance corp engages in regular marine insurance business
here by issuing marine insurance policies abroad to cover
foreign shipments to the Philippines, said policies being made
payable here, and said insurance company appoints and keeps
an agent here to receive and settle claims flowing from said
policies, then said foreign corporation will be regarded as
doing business here in contemplation of law

Facts:
The Union Insurance Society of Canton, Chinese
insurance corp, duly authorized to do business in the Phil, has
been acting as settling agent of and settling insurance claims
against the Firemans Fund Insurance Co., American insurance
corporation not authorized to do business in the Phil, even
before the last world war and continued as such at least up to
1946.

General Corp, and the Mayon Investment Co.,
domestic corps, sued the Union Insurance and the Firemans
Fund for the payment of 12 marine insurance policies. Said
policies were issued by the Firemans Fund for merchandise
shipped from the US to the Phil in 1945. Upon arrival of the
merchandise in Manila, the consignee or purchaser failed to
meet the terms of the sale and following a certain agreement
between the shippers and General Corp, the shipping papers,
including the 12 marine insurance policies were surrendered
to General Corp and the merchandise released to them. It was

later found that some of the merchandise were lost and
others damaged, General Corp filed the corresponding claims
with the defendant Union Insurance acting as settling agent of
its co-defendant Firemans Fund. The 11 insurance policy
claims were adjudicated by the Superior Court of the State of
Washington against the General Corp except as regards the
claim based on one insurance policy, No. 70448/6. The court
absolved the Union Insurance from the complaint but
condemned Firemans Fund to pay the General Corp on the
claim based on the said insurance policy.

The General Corp appealed from that part of the
decision referring to the 11 marine insurance policies to the
Phil SC. Summons was served to Firemans Fund on
September 12, 1946, through Union Insurance, then acting as
Firemans Funds settling agent in the Phil. At that time,
Firemans Fund had not yet been registered and authorized to
do business in the Philippines. Registration came only 2
months later.

Issue:
W/N the court acquired jurisdiction over Firemans
Fund.

Held:
Yes. Sec 14, Rule 7 of the Rules of Court reads as
follows:

"SEC. 14. Service upon private foreign corporations.
If the defendant is a foreign corporation, or a non-resident
joint stock company or association, doing business in the
Philippines, service may be made on its resident agent
designated in accordance with law for that purpose, or, if
there be no such agent, on the government official designated
by law to that effect, or on any of its officers or agents within
the Philippines." library

Service of summons for appellant Firemans Fund on
its settling agent Union Insurance Society of Canton, Ltd., was
legal and gave the court jurisdiction over said appellant, the
court ruling that the phrase "or agents within the Philippines"
clearly embraced settling agents like the Union Insurance.

Further, in employing the phrase "doing business in
the Philippines" makes no distinction as to whether said
business was being done or engaged in legally with the
corresponding authority and license of the Govt or, perhaps
illegally, without the benefit of any such authority or license.
As long as a foreign private corp does or engages in business
in this jurisdiction, it should and will be amenable to process
and the jurisdiction of the local courts, this for the protection
of the citizens, and service upon any agent of said foreign corp
constitutes personal service upon the corporation and
accordingly judgment may be rendered against said foreign
corporation.

It is a rule generally accepted that one single or
isolated business transaction does not constitute "doing
business" within the meaning of the law, and that transactions
which are occasional, incidental and casual, not of a character
to indicate a purpose to engage in business do not constitute
the doing or engaging in business contemplated by law. In

order that a foreign corporation may be regarded as doing
business within a State, there must be continuity of conduct
and intention to establish a continuous business, such as the
appointment of a local agent, and not one of a temporary
character. 12 marine insurance policies were not casual or
isolated business transactions. And, to conclusively prove
continuity of the business and the intention to continue such
regular business, Firemans fund applied for, obtained a
license and was authorized to regularly do business in the
Philippines.

It would indeed be anomalous and quite prejudicial,
even disastrous, to the citizens in this jurisdiction who in all
good faith and in the regular course of business accept and
pay for shipments of goods from America, relying for their
protection on duly executed foreign marine insurance policies
that when they go to court to enforce said policies, the insurer
who all along has been engaging in this business of issuing
similar marine policies, serenely pleads immunity to local
jurisdiction because of its refusal or neglect to obtain the
corresponding license to do business here thereby compelling
the consignees or purchasers of the goods insured to go to
America and sue in its courts for redress.

14. Top-Weld Mfg. v ECED, G.R. No. L-44944, August 9, 1985

Doctrine:
The local party to a contract with a foreign corporation
that does business in the Philippines without license cannot
maintain suit against the foreign corporation just as the
foreign corporation cannot maintain suit, under the principle
of pari delicto. It is incumbent upon the local corporation to
know whether or not the foreign corporation was properly
authorized to engage in business in the Philippines when it
entered into agreements with it

Facts:
Top-weld is a Philippine corp engaged in the business
of manufacturing and selling welding supplies and equipment.
It entered into a License and Technical Assistance
Agreement with IRTI a corp organized and existing under the
laws of Switzerland, constituting Top-weld a licensee of IRTI to
manufacture welding products under certain specifications. It
also entered into a Distributor Agreement with ECED, a
company organized and existing under the laws of Panama,
constituting Top-weld as distributor in the Phil of certain
welding products and equipment.
Upon learning that the two foreign entities were
negotiating with another group to replace Top-weld as their
licensee and distributor, the latter instituted against IRTI,
ECED seeking the issuance of a writ of preliminary injunction
to restrain the corps from negotiating with third persons or
from actually carrying out the transfer of its distributorship
and franchising rights, and from terminating their contracts
with the petitioner until after good faith negotiations on
existing contracts between them had been carried out and
completed.

Issue:
W/N IRTI and ECED can be considered as "doing
business" in the Philippines and, therefore, subject to the

provisions of R.A. No. 5455.

Held:
Yes. There is no general rule or governing principle laid
down as to what constitutes "doing" or engaging in" or
"transacting" business in the Philippines. Each case must be
judged in the light of its peculiar circumstances. The true test,
however, seems to be whether the foreign corporation is
continuing the body or substance of the business or enterprise
for which it was organized or whether it has substantially
retired from it and turned it over to another.

When IRTI and ECED entered into the disputed
contracts with the petitioner, they were carrying out the
purposes for which they were created. IRTI and ECEDs
conduct indicate that they established within our country a
continuous business, and not merely one of a temporary
character. This fact is even more strengthened by the
admission of the IRTI and ECED that they are negotiating with
another group for the transfer of the distributorship and
franchising rights from the petitioner. Their acts enabled them
to enter into the mainstream of our economic life in
competition with our local business interests. This should
bring them under the provisions of R.A. No. 5455, Sec. 4 which
reads:

Sec 4. Licenses to do business.- No alien, and no firm,
association, partnership, corporation, or any other form of
business organization formed, organized, chartered or existing
under any laws other than those of the Philippines, or which is
not a Philippine National, or more than thirty per cent of the
outstanding capital of which is owned or controlled by aliens
shall do business or engage in any economic activity in alien
the Philippines, or be registered, licensed, or permitted by
the Securities and Exchange Commission, or by any other
bureau, office, agency, political subdivision, or
instrumentality of the government, to do business, or engage
in an economic activity in the Philippines without first
securing a written certificate from the Board of Investments
to the effect ...

Upon granting said certificate, the Board shall impose
the following requirements on the alien or the firm,
association, partnership, corporation, or other form of
business organization that is not organized or existing under
the laws of the Philippines...

(9) Not to terminate any franchise, licensing or other
agreement that applicant may have with a resident of the
Philippines, authorizing the latter to assemble, manufacture
or sell within the Philippines the products of the applicant,
except for violation thereof or other just cause and upon
payment of compensation and reimbursement and other
expenses incurred by the licensee in developing a market for
the said products; Provided. however, That in case of
disagreement, the amount of compensation or
reimbursement shall be determined by the court where the
licensee is domiciled or has its principal office who shall
require the applicant to file a bond in such amount as, in its
opinion, is sufficient for this purpose.

However, they are not bound by the requirement on

termination, and Top-weld cannot invoke the same against
the former because as between the parties themselves, R.A.
No. 5455 does not declare as void or invalid the contracts
entered into without first securing a license or certificate to do
business in the Philippines. Neither does it appear to intend to
prevent the courts from enforcing contracts made in
contravention of its licensing provisions. There is no denying,
though, that an "illegal situation" was created when the
parties voluntarily contracted without such license.

It was incumbent upon Top-weld to know whether or
not IRTI and ECED were properly authorized to engage in
business in the Philippines when they entered into the
licensing and distributorship agreements." The very purpose
of the law was circumvented and evaded when the petitioner
entered into said agreements despite the prohibition of R.A.
No. 5455. The parties in this case being equally guilty of
violating R.A, No. 5455, they are in pari delicto, in which case
it follows as a consequence that petitioner is not entitled to
the relief prayed for in this case.

15. Communication Materials v CA, G.R. No. 102223, August
22, 1996

Doctrine:
In a long line of decisions, this Court has not altogether
prohibited a foreign corporation not licensed to do business in
the Philippines from suing or maintaining an action in
Philippine Courts. The object is not to prevent the foreign
corporation from performing single acts, but to prevent it
from acquiring a domicile for the purpose of business without
taking steps necessary to render it amenable to suit in the
local courts.

Facts:
ITEC, an American corp not licensed to do business in
the Philippines, entered into a Representative Agreement
with ASPAC, a domestic corp, constituting ASPAC as its
exclusive representative in the Philippines for the sale of
ITECs products, in consideration of which, ASPAC was paid a
stipulated commission. The agreement was signed by Clark
and Aguirre, presidents of ITEC and ASPAC respectively, for
and in behalf of their companies. Through a License
Agreement, ASPAC was able to incorporate legally and
publicly as ASPAC-ITEC (Philippines).

Subsequently, ITEC decided to terminate the contracts,
because petitioner ASPAC allegedly violated its contractual
commitment. ITEC charges the ASPAC and another Philippine
Corporation named Digital, the pres of which is likewise
Aguirre, of using knowledge and information of ITECs
products specifications to develop their own line of
equipment and product support, which are similar, if not
identical to ITECs own, and offering them to ITECs former
customer. ASPAC filed a motion to dismiss on the grounds
that: (1) plaintiff has no legal capacity to sue as it is a foreign
corporation doing business in the Philippines without the
required BOI authority and SEC license, and (2) plaintiff is
simply engaged in forum shopping which justifies the
application against it of the principle of forum non

conveniens.

Issue:
1. W/N ITEC is actually doing business in the Philippines
without the requisite authority and license from the BOI and
the SEC.

2. W/N ITEC is disqualified from instituting the present action
in the Phil courts.

Held:
1. Yes.
Secs 1 (f) (1) and 1 (f) (2) of the Rules and Regulations
Implementing the Omnibus Investments Code of 1987, reads:
(1) A foreign firm is deemed not engaged in business in the
Philippines if it transacts business through middlemen, acting
in their own names, such as indebtors, commercial bookers
or commercial merchants.
(2) A foreign corporation is deemed not doing business if its
representative domiciled in the Philippines has an
independent status in that it transacts business in its name
and for its account.

On the other hand, Section 133 of the Corporation
Code, provides that No foreign corporation, transacting
business in the Philippines without a license, or its successors
or assigns, shall be permitted to maintain or intervene in any
action, suit or proceeding in any court or administrative
agency of the Philippines; but such corporation may be sued
or proceeded against before Philippine Courts or
administrative tribunals on any valid cause of action
recognized under Philippine laws.

However, in a long line of decisions, this Court has not
altogether prohibited a foreign corporation not licensed to do
business in the Philippines from suing or maintaining an action
in Philippine Courts. What it seeks to prevent is a foreign
corporation doing business in the Philippines without a license
from gaining access to Philippine Courts. The purpose of the
law in requiring that foreign corporations doing business in
the Philippines be licensed to do so and that they appoint an
agent for service of process is to subject the foreign
corporation doing business in the Philippines to the
jurisdiction of its courts. The object is not to prevent the
foreign corporation from performing single acts, but to
prevent it from acquiring a domicile for the purpose of
business without taking steps necessary to render it amenable
to suit in the local courts.

ITEC had been engaged in or doing business in the
Philippines for some time now. This is the inevitable result
after a scrutiny of the different contracts and agreements
entered into by ITEC with its various business contacts in the
country, particularly ASPAC and TESSI. The latter is a local
electronics firm engaged by ITEC to be its local technical
representative, and to create a service center for ITEC
products sold locally. Its arrangements, with these entities
indicate convincingly ITECs purpose to bring about the
situation among its customers and the general public that they
are dealing directly with ITEC, and that ITEC is actively
engaging in business in the country.


A foreign corporation doing business in the Philippines
may sue in Philippine Courts although not authorized to do
business here against a Philippine citizen or entity who had
contracted with and benefited by said corporation. To put it in
another way, a party is estopped to challenge the personality
of a corporation after having acknowledged the same by
entering into a contract with it. And the doctrine of estoppel
to deny corporate existence applies to a foreign as well as to
domestic corporations. One who has dealt with a corporation
of foreign origin as a corporate entity is estopped to deny its
corporate existence and capacity. The principle will be applied
to prevent a person contracting with a foreign corporation
from later taking advantage of its noncompliance with the
statutes chiefly in cases where such person has received the
benefits of the contract.

The rule is deeply rooted in the time-honored axiom of
Commodum ex injuria sua non habere debet - no person ought
to derive any advantage of his own wrong. This is as it should
be for as mandated by law, every person must in the exercise
of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good
faith. ASPAC is not at liberty to question plaintiffs standing to
sue, having already acceded to the same by virtue of its entry
into the Representative Agreement referred to earlier.

16. Facilities Management Corp v Dela Osa, G.R. No. L-38649,
March 26, 1979

Doctrine:
Indeed, if a foreign corporation, not engaged in
business in the Philippines, is not banned from seeking redress
from courts in the Philippines, a fortiori, that same
corporation cannot claim exemption from being sued in
Philippine courts for acts done against a person or persons in
the Philippines.

Facts:
Dela Osa sought his reinstatement with full backwages,
as well as the recovery of his overtime compensation, swing
shift and graveyard shift differentials. Petitioner alleged that
he was employed by Facilities Mgmt Corp (FMC) as a painter,
houseboy, and cashier.

FMC alleged that it is domiciled in Wake Island which is
beyond the territorial jurisdiction of the Phil govt; that
respondent J. V. Catuira, though its employee, is without
power and authority of legal representation; and that the
employment contract between Dela Osa and FMC carries the
approval of the Dept of Labor. Subsequently, FMC filed a
motion to dismiss the subject petition on the ground that this
Court has no Jurisdiction over the instant case.

Issue:
W/N FMC has been doing business in the Philippines so
that the service of summons upon its agent in the Philippines
vested the CFI of Manila with jurisdiction.

Held:
Yes. FMC may be considered as doing business in the
Phil within the scope of Sec 14, Rule 14 of the Rules of the
Court which provide:
SEC 14. Service upon private foreign corporations. If
the defendant is a foreign corporation or a non-resident joint
stock company or association: doing business in the
Philippines, service may be made on its resident agent
designated in accordance with law for that purpose or, if there
be no such agent, on the government official designated by
law to that effect, or on any of its officers or agents within the
Philippines.

Indeed, the FMC, in compliance with Act 2486 as
implemented by Dept of Labor Order No. IV had to appoint
Catuira, 1322 A. Mabini, Ermita, Manila as agent for FMC with
authority to execute Employment Contracts and receive, in
behalf of that corp, legal services from and be bound by
processes of the Phil Courts of Justice, for as long as he
remains an employee of FMC. It is a fact that when the
summons for the petitioner was served on Catuira he was still
in the employ of the FMC.

Under the rules and regulations promulgated by the
BOI, the phrase 'doing business' means:
1) Soliciting orders, purchases (sales) or service
contracts. Concrete and specific solicitations by a foreign firm,
not acting independently of the foreign firm
(2) Appointing a representative or distributor who is domiciled
in the Phil, unless said representative or distributor has an
independent status
(4) Opening offices, whether called 'liaison' offices, agencies or
branches, unless proved otherwise.
(10) Any other act or acts that imply a continuity of
commercial dealings or arrangements, and contemplate to
that extent the performance of acts or works, or the exercise
of some of the functions normally incident to, or in the
progressive prosecution of, commercial gain or of the purpose
and objective of the business organization.

Citing previous rulings, the court said that while
plaintiff is a foreign corporation without license to transact
business in the Philippines, it does not follow that it has no
capacity to bring the present action. Such license is not
necessary because it is not engaged in business in the
Philippines.

Indeed, if a foreign corporation, not engaged in
business in the Philippines, is not banned from seeking redress
from courts in the Philippines, a fortiori, that same
corporation cannot claim exemption from being sued in
Philippine courts for acts done against a person or persons in
the Philippines.

17. Signetics v CA, G.R. No. 105141, August 31, 1993

Doctrine:
In order that services may be effected, it is required
that the foreign corporation be one which is doing business in
the Philippines. This is a sine qua non requirement.


Facts:
Signetics, an American corp, through Signetics Filipinas
Corp (SigFil), a wholly-owned subsidiary, entered into lease
contract over a piece of land with Fruehauf Electronics Phils.,
Inc. (Freuhauf).

Freuhauf sued Signetics for damages, accounting or
return of certain machinery, equipment and accessories, as
well as the transfer of title and surrender of possession of the
buildings, installations and improvements on the leased land,
before the RTC of Pasig. Claiming that Signetics caused SigFil
to insert in the lease contract the words "machineries,
equipment and accessories," the defendants were able to
withdraw these assets from the cost-free transfer provision of
the contract.
On the basis of the allegation that Signetics is a "subsidiary of
Us Philips Corp, and may be served summons at Philips
Electrical Lamps, Inc., Las Pias and/or c/o Technology
Electronics Assembly & Management (TEAM) Pacific
Corporation, Electronics Avenue, FTI Complex" service of
summons was made on Signetics through TEAM Pacific
Corporation.

Signetics filed a motion to dismiss the complaint on the
ground of lack of jurisdiction over its person.

Issue:
W/N the lower court had correctly assumed
jurisdiction over Signetics, a foreign corporation, on its claim
in a motion to dismiss, that it had since ceased to do business
in the Philippines.

Held:
Yes. Signetics contention that there should be "proof"
of the foreign corporation's doing business in this country
before it may be summoned is based on the following portions
of the decision in Pacific Micronisian:

The pertinent rule to be considered is section 14, Rule
7 of the Rules of Court, which refers to the three modes of
effecting service upon private foreign corporations, namely:
(1) by serving upon the agent designated in accordance with
law to accept service by summons; (2) if there be no special
agent, by serving on the government official designated by law
to that effect; and (3) by serving on any officer or agent within
the Philippines. But, it should be noted, in order that services
may be effected in the manner above stated, said section also
requires that the foreign corporation be one which is doing
business in the Philippines. This is a sine qua non requirement.

It should be recalled that jurisdiction and venue of
actions are, as they should be, initially determined by the
allegations of the complaint. The fact of doing business must
then, in the first place, be established by appropriate
allegations in the complaint. This is what the Court should be
seen to have meant in the Pacific Micronisian case. The
complaint, it is true, may have been vaguely structured but,
taken correlatively, not disjunctively as the petitioner would
rather suggest, it is not really so weak as to be fatally deficient
in the above requirement. The following were alleged in the
complaint: 1) that Signetics was engaging in business in the
Phil; 2) SigFil was a business conduit, which was supposed to

be Signetics actual operating entity in the Phil; 3) SigFil
transferred all shares to TEAM.

In any event, it may well be that the Court should
restate the rule, and it is that a foreign corporation, although
not engaged in business in the Philippines, may still look up to
our courts for relief; reciprocally, such corporation may
likewise be "sued in Philippine courts for acts done against a
person or persons in the Philippines" (FMC v. De la Osa),
provided that, in the latter case, it would not be impossible for
court processes to reach the foreign corporation, a matter
that can later be consequential in the proper execution of
judgment. Verily, a State may not exercise jurisdiction in the
absence of some good basis (and not offensive to traditional
notions of fair play and substantial justice) for effectively
exercising it, whether the proceedings are in rem, quasi in rem
or in personam.

This is not to say, however, that the petitioner's right
to question the jurisdiction of the court over its person is now
to be deemed a foreclosed matter. If it is true, as Signetics
claims, that its only involvement in the Philippines was
through a passive investment in Sigfil, which it even later
disposed of, and that TEAM Pacific is not its agent, then it
cannot really be said to be doing business in the Philippines. It
is a defense, however, that requires the contravention of the
allegations of the complaint, as well as a full ventillation, in
effect, of the main merits of the case, which should not thus
be within the province of a mere motion to dismiss. So, also,
the issue posed by the petitioner as to whether a foreign
corporation which has done business in the country, but which
has ceased to do business at the time of the filing of a
complaint, can still be made to answer for a cause of action
which accrued while it was doing business, is another matter
that would yet have to await the reception and admission of
evidence. Since these points have seasonably been raised by
the petitioner, there should be no real cause for what may
understandably be its apprehension, i.e., that by its
participation during the trial on the merits, it may, absent an
invocation of separate or independent reliefs of its own, be
considered to have voluntarily submitted itself to the court's
jurisdiction.

18. Avon Insurance PLC v CA

Facts
Respondent Yupangco Cotton Mills filed a complaint against
several foreign reinsurance companies (among which are
petitioners) to collect their alleged percentage liability under
contract treaties between the foreign insurance companies
and the international insurance broker C.J. Boatright, acting as
agent for respondent Worldwide Surety and Insurance
Company. Inasmuch as petitioners are not engaged in
business in the Philippines with no offices, places of business
or agents in the Philippines, the reinsurance treaties having
been rendered abroad, service of summons upon motion of
respondent Yupangco, was made upon petitioners through
the office of the Insurance Commissioner.

Yupangco Cotton Mills engaged to secure with
Worldwide Security and Insurance Co. Inc., several of its
properties for the periods July 6, 1979 to July 6, 1980 as under

Policy No. 20719 for a coverage of P100,000,000.00 and from
October 1, 1980 to October 1, 1981, under Policy No. 25896,
also for P100,000,000.00. Both contracts were covered by
reinsurance treaties between Worldwide Surety and
Insurance and several foreign reinsurance companies,
including the petitioners. The reinsurance arrangements had
been made through international broker C.J. Boatright and Co.
Ltd., acting as agent of Worldwide Surety and Insurance.

The properties therein insured were razed by fire,
thereby giving rise to the obligation of the insurer to
indemnify the Yupangco Cotton Mills. Partial payments were
made by Worldwide Surety and Insurance and some of the
reinsurance companies.

On May 2, 1983, Worldwide Surety and Insurance, in a
deed of Assignment, acknowledge a remaining balance
of P19,444,447.75 still due Yupangco Cotton Mills, and
assigned to the latter all reinsurance proceeds still collectible
from all the foreign reinsurance companies. Thus, in its
interest as assignee and original insured, Yupangco Cotton
Mills instituted this collection suit against the petitioners.

Issue :
whether or not the respondent court has no jurisdiction over
the petitioners being a foreign corporations not doing
business in the Philippines with no office, place of business
or agents in the Philippines.

Held :
There is no sufficient basis in the records which would
merit the institution of this collection suit in the
Philippines. More specifically, there is nothing to substantiate
the private respondents submission that the petitioners had
engaged in business activities in this country. This is not an
instance where the erroneous service of summons upon the
defendant can be cured by the issuance and service of alias
summons, as in the absence of showing that petitioners had
been doing business in the country, they cannot be
summoned to answer for the charges leveled against them.

The Court is cognizant of the doctrine is Signetics Corp. vs.
Court of Appeals that for the purpose of acquiring jurisdiction
by way of summons on a defendant foreign corporation, there
is no need to prove first the fact that defendant is doing
business in the Philippines. The plaintiff only has to allege in
the complaint that the defendant has an agent in the
Philippines for summons to be validly served thereto, even
without prior evidence advancing such factual allegation.

As it is, private respondent has made no allegation or
demonstration of the existence of petitioners domestic agent,
but avers simply that they are doing business not only abroad
but in the Philippines as well. It does not appear at all that the
petitioners had performed any act which would give the
general public the impression that it had been engaging, or
intends to engage in its ordinary and usual business
undertakings in the country. The reinsurance treaties
between the petitioners and Worldwide Surety and
Insurance were made through an international insurance
brokers, and not through any entity of means remotely

connected with the Philippines. Moreover there is authority
to the effect that a reinsurance company is not doing business
in a certain state merely because the property of lives which
are insured by the original insurer company are located in that
state.

A foreign corporation, is one which owes its existence to
the laws of another state, and generally has no legal existence
within the state in which it is foreign. In Marshall Wells Co. vs.
Elser, it was held that corporations have no legal status
beyond the bounds of sovereignty by which they are
created. Nevertheless, it is widely accepted that foreign
corporations are, by reason of state comity, allowed to
transact business in other states and to sue in the courts of
such fora. In the Philippines foreign corporations are allowed
such privileges, subject to certain restrictions, arising from the
states sovereign right of regulation.

Even after having filed a motion to dismiss in the
proceedings before the trial court, petitioners have thus
acquiesced to the courts jurisdiction, and they cannot
maintain the contrary at this juncture.This argument is at the
most, flimsy.

When a defendant voluntarily appears, he is deemed to
have submitted himself to the jurisdiction of the court. This
is not, however, always the case. In this instance, however,
the petitioners from the time they filed their motions to
dismiss, their submission have been consistently and
unfailingly to object to the trial courts assumption of
jurisdiction, anchored on the fact that they are all foreign
corporations not doing business in the Philippines.

As we have consistently held, if the appearance of a party
in a suit is precisely to question the jurisdiction of the said
tribunal over the person of the defendant, then this
appearance is not equivalent to service of summons, nor does
is constitute an acquiescence to the courts jurisdiction. Thus
it cannot be argued that the petitioners had abandoned their
objections to the jurisdiction of the court, as their motions to
dismiss in the trial court, and all their subsequent posturings,
were all in protest of the private respondent's insistence on
holding them so answer a charge in a forum where they
believe they are not subject to. Clearly, to continue the
proceedings in a case such as those before Us would just be
useless and a waste of time.

ACCORDINGLY, the decision appealed from dated
October 11, 1990, is SET ASIDE and the instant petition is
hereby GRANTED. The respondent Regional Trial Court of
Manila, Branch 51 is declared without jurisdiction to take
cognizance of Civil Case No. 86-37932, and all its orders and
issuances in connection therewith are hereby ANNULLED and
SET ASIDE. The respondent court is hereby ORDERED to
DESIST from maintaining further proceeding in the case
aforestated.

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Corporation Law 2C/2D CLV 1314

De Torres, Li, Pasamba, Vega Page 1

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