Home Insurance Co. vs.

Eastern Shipping
Lines
(1983)
FACTS: Home Insurance was subrogated to the
rights of shippers against eastern Shipping for
damages on cargo. Eastern refused to pay. HI
filed action to recover sum of money. TC
dismissed because HI failed to prove capacity to
sue.
HELD: HI has capacity to sue because at the time
the complaints were filed, it already had a license
to conduct insurance business in the Phils.
Insurance contracts are not null and void for lack
of license at the time it was entered into. The
Corp. Code is silent on the status of the said
contracts. Also, the object of the law in requiring
registration is to subject the foreign corp. to the
JD of our courts.
THE HOME INSURANCE COMPANY,
Petitioner
, vs.
EASTERN SHIPPING LINES and/or
ANGELJOSE TRANSPORTATION, INC.
Respondent
.
G. R. L-34382, July 20, 1983
FACTS: On or about January 13, 1967, S. Kajikita
& Co. on board the SS Eastern Jupiter, which is
owned by the respondent, from Osaka, Japan coils
of Black Hot Rolled Copper Wires Rods. The
shipment was covered by Bill of Lading with
arrival notice to the Phelps Dodge Copper
ProductsCorporation, the consignee. It was also
insured with the plaintiff against all risks in the
amount of P1,580,105.06.
The coils discharged from the vessel were in bad
order, consisting of loose and partly cut coils
which had to be considered scrap. The plaintiff
paid the consignee under insurance the amount
of P3,260.44 for the loss/damage suffered by the
cargo. Plaintiff, a foreign insurance company
dulyauthorized to do business in the Philippines,
made demands for payment of the aforesaid
amount againstthe carrier and transportation
company for reimbursement of the aforesaid
amount, but each refused topay the same. The
Eastern Shipping Lines filed its answer and
denied the allegations of Paragraph I which refer
to the plaintiffs capacity to sue for lack of
knowledge or information sufficient to form a
belief as to the truth thereof. Angel Jose
Transportation, on the other hand, admitted the
jurisdictionalaverments in paragraphs 1, 2 and 3
of the heading parties.
The Court of First Instance dismissed the
complaint on the ground that the appellant had
failed toprove its capacity to sue. The petitioner
then filed a petition for review on certiorari.

ISSUE: Whether or not that the trial court erred in

dismissing the finding that plaintiff-appellant has
nocapacity to sue.
RULING: The court held that the objective of the
law is to subject the foreign corporation to the
jurisdictionof our court. The Corporation Law must
be given reasonable, not an unduly harsh
interpretation whichdoes not hamper the
development of trade relations and which fosters
friendly commercial intercourseamong countries.
Counsel for appellant contends that at the time of
the service of summons, the appellant had notyet
been authorized to do business. But, the lack of
capacity at the time of the execution of the
contractswas
cured
by
the
subsequent
registration is also strengthened by the
procedural aspects of the case.
The court find the general denials inadequate to
attack the foreign corporations lack of capacity
tosue in the light of its positive averment that it is
authorized to do so. Section 4, Rule 8 requires
that "aparty desiring to raise an issue as to the
legal existence of any party or the capacity of any
party to sue or be sued in a representative
capacity shall do so by specific denial, which shall
include such supportingparticulars as are
particularly within the pleader's knowledge. At
the very least, the private respondentsshould
have stated particulars in their answers upon
which a specific denial of the petitioner's capacity
tosue could have been based or which could have
supported its denial for lack of knowledge. And
yet, evenif the plaintiff's lack of capacity to sue
was not properly raised as an issue by the
answers, the petitioner introduced documentary
evidence that it had the authority to engage in
the insurance business at the timeit filed the
complaints.
The Supreme Court granted the petition,
reversing the decision of the lower court.
First Philippine International Bank vs CA
(1996)

252 SCRA 259 Conflict of Laws Private

International Law Origin of Forum Non
Conveniens
Producers Bank (now called First Philippine
International Bank), which has been under
conservatorship since 1984, is the owner of 6
parcels of land. The Bank had an agreement with
Demetrio Demetria and Jose Janolo for the two to
purchase the parcels of land for a purchase price
of P5.5 million pesos. The said agreement was
made by Demetria and Janolo with the Banks
manager, Mercurio Rivera. Later however, the
Bank,
through
its
conservator,
Leonida

Encarnacion, sought the repudiation of the

agreement as it alleged that Rivera was not
authorized to enter into such an agreement,
hence there was no valid contract of sale.
Subsequently,
Demetria
and
Janolo
sued
Producers Bank. The regional trial court ruled in
favor of Demetria et al. The Bank filed an appeal
with the Court of Appeals.
Meanwhile, Henry Co, who holds 80% shares of
stocks with the said Bank, filed a motion for
intervention with the trial court. The trial court
denied the motion since the trial has been
concluded already and the case is now pending
appeal. Subsequently, Co, assisted by ACCRA law
office, filed a separate civil case against Carlos
Ejercito as successor-in-interest (assignee) of
Demetria and Janolo seeking to have the
purported
contract
of
sale
be
declared
unenforceable against the Bank. Ejercito et al
argued that the second case constitutes forum
shopping.
ISSUE: Whether or not there is forum shopping.
HELD: Yes. There is forum shopping because
there is identity of interest and parties between
the first case and the second case. There is
identity of interest because both cases sought to
have the agreement, which involves the same
property, be declared unenforceable as against
the Bank. There is identity of parties even though
the first case is in the name of the bank as
defendant, and the second case is in the name of
Henry Co as plaintiff. There is still forum shopping
here because Henry Co essentially represents the
bank. Both cases aim to have the bank escape
liability from the agreement it entered into with
Demetria et al.

FACTS: Neff, a California resident, owned land in

Oregon which was sold under a Sheriffs deed to
satisfy a money judgment against him. The
service of summons was made by publication. He
is suing for recovery of said land, alleging that the
sale was invalid for lack of JD of the Oregon court
over him.
HELD: Substituted services by publication, or in
any other authorized form, may be sufficient to
inform parties of the object of the proceedings
taken where property is once brought under the
control of the court by seizure or some equivalent
act to any proceedings authorized by law upon
such seizure for its condemnation and sale.
But where the entire object of the action is to
determine the personal rights and obligations of
defendants, that is, where the suit is merely in
personam, constructive service in this form upon
a non-resident is ineffectual for any purpose.
The important thing to prove is what kind of
action is involved (to determine sufficiency of
form of service to be used)
International Shoe Co. vs. Washington
(1945)
FACTS:
The
state
of
Washington
sued
International Shoe Co. (a Delaware corporation
with principal place of business in Missouri) to
collect the tax laid upon the exercise of the
privilege of employing salesmen within the state.
International Shoes defense is that its activities
within the state, consisting merely of exhibiting
samples and soliciting orders and nothing more,
were not sufficient to manifest its presence
there; hence the state courts had no JD over it.

The Supreme Court also discussed that to combat

forum shopping, which originated as a concept in
international law, the principle of forum non
conveniens was developed. The doctrine of forum
non conveniens provides that a court, in conflicts
of law cases, may refuse impositions on its
jurisdiction where it is not the most convenient
or available forum and the parties are not
precluded from seeking remedies elsewhere.

HELD: The SC of Washington has JD over

International Shoe. Due process requires only that
in order to subject a defendant to a judgment in
personam, if he be not present within the territory
of the forum, he should have certain minimum
contacts with it, such that the maintenance of the
suit does not offend traditional notions of fair
play
and
substantial
justice.
(Minimum
contacts so that the suit will not ofend
traditional
notions
of
fair
play
and
substantial justice.)

**Forum Shopping: occurs when a party

attempts to have his action tried in a particular
court or jurisdiction where he feels he will receive
the most favorable judgment or verdict.

The demands of due process regarding the

corporations presence may be met by such
contacts of the corporation with the state of the
forum as to make it reasonable xxx to require the
corporation with defend the particular suit which
is brought there.

Pennoyer vs. Nef

(1878)

Its presence can be manifested only by such

activities carried on in its behalf by those who are
authorized to act for it.

Mcgee v International Life Insurance

(1957)
Brief Fact Summary. A California resident and
the beneficiary of a life insurance policy, sued an
insurance company when the company failed to
pay following the death of the insured.
Synopsis of Rule of Law. A state courts
jurisdiction satisfies due process when it is based
on a contract with substantial connection with
that state.
Facts. In 1944, Lowell Franklin, a resident of
California, purchased a life insurance policy form
an insurer subsequently bought by Defendant
International Life Insurance Co., who then mailed
a reinsurance certificate to Franklin in California
offering to insure him. Franklin accepted the offer
and paid premiums by mail from his California
home to Defendants office in Texas until his
death in 1950. When the beneficiary, Plaintiff
McGee, notified Defendant of Franklins death,
they refused to pay. Neither the original insurer
nor respondent ever had any office or agent in
California.
Issue. Whether a non-resident corporation is
subject to jurisdiction in a state in which it never
had any agent or office, merely because it was a
party to a contract with a resident of the state.

Held. No. The Supreme Court of the United

States ruled that the Due Process clause did not
preclude the California court from entering a
judgment binding on Defendant. The Supreme
Court found that it is sufficient for purposes of
due process that the suit was based on a contract
that had substantial connection with California. A
state has a manifest interest in providing
effective means of redress for its residents when
their insurers refuse to pay claims.
Discussion. The Supreme Court, in considering
fact the contract was delivered in California, the
premiums were mailed from there and the
insured was a resident of California when he died,
combined with the recognition that modern
transportation and communication have made it
much less burdensome for a party sued to defend
themselves in a state where they conduct
business, found that it did not violate just and fair
play for the California court to enter a binding
agreement on International Life. Moreover, the
Court reasoned that California residents would be
at a severe disadvantage if they had to leave
their own state to obtain payment from their
insurance company.
Worldwide Volkswagen Corp. vs. Woodson
(1980)
FACTS: The spouses Robinson purchased a car
from Seaway Volkswagen in New York. They met
an accident in Oklahoma and pinned the blame
on the defective design of the car. They brought a
suit against the retailer and distributor in
Oklahoma.

HELD: Oklahoma court has no JD. A state court

may exercise personal JD over a nonresident
defendant only so long as there exist minimum
contacts between the defendant and the forum
state. The 2 functions of the concept of minimum
contacts is to protect the defendant against the
burdens of litigating in a distant or inconvenient
forum, and to ensure that the states, through
their courts, do not reach out beyond the limits
imposed on them by their status as coequal
sovereigns in a federal system.
In CAB, there us a total absence of those
affiliating circumstances that are a necessary
predicate to any exercise of state-court JD (no
activity whatsoever on Oklahoma; no sales closed
nor services performed there; no availment of the
privileges and benefits of Oklahoma law; no
solicitation of business there).

In Asahi, even if there were minimum contacts, it

failed the reasonableness test.
Criticism of Asahi: additional acts requirement
is a reinvention of the stream of commerce law.
The fear is that the court might go back to preInternational Shoe standards n JD (requirement of
actual presence).
In Worldwide Volkswagen, the only requirements
for the exercise of JD were minimum contacts and
the reasonableness test; Asahi did not follow this,
and include an additional requirement (purposeful
availment).