CHAPTER XIII

FOREIGN CORPORATIONS

1. The Swedish East Asia Co., LTD., vs. Manila

Port Service, GR. No. L-26332

Facts:

The petitioner, The Swedish East Asia Co., Ltd.,

a corporation duly organized and existing under the
laws of Sweden with principal offices at Gothenburg,
Sweden, is admittedly not licensed to do business in
the Philippines.

On December 3, 1967 the MS "SUDAN", owned

and operated by the petitioner, arrived at the port of
Manila and discharged cargo destined thereto unto
the custody of the respondent Manila Port Service. By
mistake, cargo destined for Hong Kong consisting of
sixteen bundles of "lifts of mild steel tees window
sections were landed at Manila. The erroneous
discharge was obviously engendered by the fact that
the same ship on the same day discharged forty
similar bundles destined for consignees in the
Philippines.

Vicente Pacheco, the petitioner's agent in

Manila, instructed their customs men to arrange for
the reshipment of the sixteen bundles to Hong Kong
and accomplish all necessary papers for payment of
customs, arrastre and storage charges due on the
goods, which charges were as a matter of fact paid
by the petitioner. However, the reshipment of all the
sixteen bundles was not effected, because only eight
of these were available at the time, as the remaining
eight could not be found. After an exchange of letters
between Pacheco and the Manila Port Service, in the
last of which the latter advised the International
Harvester of its inability to locate the eight missing
bundles, the petitioner, presented a formal claim for
the value of the missing cargo to the Manila Port
Service in the sum of P2,349.62. On March 8, 1960
the petitioner received a letter from the respondents
rejecting the claim.

On March 13, 1961 the petitioner filed a

complaint in the Court of First Instance of Manila, for
recovery of the amount of P2,349.62, the value of the
missing goods.

Issue: Whether or not the petitioner has the capacity

to sue, it being a foreign corporation without license
to engage in business in the Philippines, citing Sec.
69 of the Corporation Code.

Ruling: It must be stated however that this section is

not applicable to a foreign corporation performing
single acts or "isolated transactions." 3 There is
nothing in the record to show that the petitioner has
been in the Philippines engaged in continuing
business or enterprise for which it was organized,
when the sixteen bundles were erroneously
discharged in Manila, for it to be considered as
transacting business in the Philippines. The fact is
that the bundles, the value of which is sought to be
recovered, were landed not as a result of a business
transaction, "isolated" or otherwise, but due to a
mistaken belief that they were part of the shipment
of forty similar bundles consigned to persons or
entities in the Philippines. There is no justification,
therefore, for invoking the provisions of section 69 of
the Corporation Law.

2. Antam Consolidated vs. Court of Appeals

143 SCRA 288

Facts:

Stokely Van Camp. Inc. is a corporation

organized and existing under the laws of the state of
Indiana, U.S.A. with Capital City product Company
(Capital City) as one of its subdivisions. Stokely and
Capital City were not engaged in business in the
Philippines.

Stokely and Capital filed a complaint against

Banahaw Milling Corporation, Antam Consolidated,
Inc., Tambunting Trading Corporation, Aurora
Consolidated Securities and Investment Corporation,
and United Coconut Oil Mills, Inc. Unicom" for
collection of sum of money after failure to deliver the
crude coconut oil under the first transaction and their
failure to comply with their obligations.

The trial court ordered the issuance of a writ of

attachment in favor of Stokely upon the latters
deposit of a bond in the amount of Php 1,285,000.00.
On 1 June 3, 1981, Stokely filed a motion for
reconsideration to reduce the attachment bond. On
June 11, 1981, 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.
Thereafter, the trial court issued an order, reducing
the attachment bond to Php 500,000.00 and denying
the motion to dismiss by Antam, et al. on the ground
that the reason cited therein does not appear to be
indubitable. Antam, et al. filed a petition for certiorari
before the Intermediate Appellate Court. The
appellate court dismissed the petition. Antam, et al.
filed a motion for reconsideration but the same was
denied. Hence, they filed the petition for certiorari
and prohibition with prayer for temporary restraining
order.

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.

Ruling: 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. Then 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.

3. Columbia Pictures, Inc. v. CA, 73 SCAD

674, 261 SCRA 144
Facts:

In 1986, the Videogram Regulatory Board (VRB)

applied for a warrant against Jose Jinco (Jingco),
owner of Showtime Enterprises for allegedly pirating
movies produced and owned by Columbia Pictures
and other motion picture companies. Jingco filed a
motion to quash the search warrant but the same
was denied in 1987. Subsequently, Jinco filed an
Urgent Motion to Lift the Search Warrant and Return
the Articles Seized. In 1989, the RTC judge granted
the motion. The judge ruled that based on the ruling
in the 1988 case of 20th Century Fox Film
Corporation vs CA, before a search warrant could be
issued in copyright cases, the master copy of the
films alleged to be pirated must be attached in the
application for warrant.

Issue: Whether or not the 20th Century Fox ruling

may be applied retroactively in this case.

Ruling: No. In 1986, obviously the 1988 case of 20th

Century Fox was not yet promulgated. The lower
court could not possibly have expected more
evidence from the VRB and Columbia Pictures in their
application for a search warrant other than what the
law and jurisprudence, then existing and judicially
accepted, required with respect to the finding of
probable cause.

The Supreme Court also revisited and clarified the

ruling in the 20th Century Fox Case. It is evidently
incorrect to suggest, as the ruling in 20th Century
Fox may appear to do, that in copyright infringement
cases, the presentation of master tapes of the
copyright films is always necessary to meet the
requirement of probable cause for the issuance of a
search warrant. It is true that such master tapes are
object evidence, with the merit that in this class of
evidence the ascertainment of the controverted fact
is made through demonstration involving the direct
use of the senses of the presiding magistrate. Such
auxiliary procedure, however, does not rule out the
use of testimonial or documentary evidence,
depositions, admissions or other classes of evidence
tending to prove the factum probandum, especially
where the production in court of object evidence
would result in delay, inconvenience or expenses out
of proportion to is evidentiary value.

In fine, the supposed pronouncement in said case

regarding the necessity for the presentation of the
master tapes of the copy-righted films for the validity
of search warrants should at most be understood to
merely serve as a guidepost in determining the
existence of probable cause in copy-right
infringement cases where there is doubt as to the
true nexus between the master tape and the pirated
copies. An objective and careful reading of the
decision in said case could lead to no other
conclusion than that said directive was hardly
intended to be a sweeping and inflexible requirement
in all or similar copyright infringement cases.

4. COMMISSIONER OF CUSTOMS VS. KMK

GANI 182 SCRA 591

Facts:

Two containers loaded with 103 cartons of

merchandise covered by eleven airway bills of
several supposedly Singapore based consignees
arrived at the Manila International Airport. The
cargoes were consigned to different entities, among
others, KMK Gani and Indrapal and Company, private
respondents. While the cargoes were at the MIA, a
reliable source tipped the Bureau of Customs that
the said cargoes were going to be unloaded to
Manila. The Suspected Cargo and Anti-Narcotics
(SCAN) dispatched an agent to verify the information.
The cargoes were seized and thereafter subject to
Seizure and Forfeiture proceedings for technical
smuggling. Atty. Armando Padilla entered his
appearance for the consignees KMK and Indrapal.
Records of the case do not show any appearance of
the consignees in person. The Collector of Customs
rules for the forfeiture of all the cargoes. Appeal was
made to the Commissioner of Customs. The
Commissioner of Customs affirmed the finding of the
Collector of Customs of the presence of the intention
to import the said goods in violation of the dangerous
drugs Act and a Central Bank Circular in relation to
the Tariff and Customs Code. Appeal was then made
to the Court of Tax Appeals, which reversed the
decision of the Commissioner of Customs. Hence this
petition to review.

Issue: Did private respondents fail to establish

their personality to sue? Can private respondents sue
within Philippine jurisdiction under the Isolated
Transaction Rule?

Ruling: No. Foreign corporation transacting 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. (Section 133, Corporation Code of the
Philippines)

However, a foreign corporation not engaged in

the in business in the Philippines may not be denied
the right to file an action in the Philippine courts for
an isolated transaction.

The fact that a foreign corporation is not doing

business in the Philippines must be disclosed if it
desires to sue in the Philippine courts under the
isolated transaction rule. Without this disclosure,
the court may choose to deny it the right to sue.
 In the case at bar, the private respondents KMK
Gani and Indrapal aver that they are suing upon a
singular and isolated transaction. But they failed to
prove their legal existence or juridical personality as
foreign corporations.

*** The isolated transaction rule refers only to

foreign corporations. Here the petitioners are not
foreign corporations. They do not even pretend to be
so. The first paragraph of their petition, containing
the allegation of their identities, does not even aver
their corporate character. On the contrary, KMK
alleges that it is a single proprietorship while
Indrapal hides under the vague identification as a
firm, although both describe themselves. With the
phrase Doing business in accordance with the laws
of Singapore.

5. Commissioner of Internal Revenue v.

British Overseas Airways Corp., 149 SCRA
395 [1987]

Facts:

British Overseas Airways Corp (BOAC) is a 100%

British Government-owned corporation engaged in
international airline business and is a member of the
Interline Air Transport Association, and thus, it
operates air transportation services and sells
transportation tickets over the routes of the other
airline members.

From 1959 to 1972, BOAC had no landing rights

for traffic purposes in the Philippines and thus, did
not carry passengers and/or cargo to or from the
Philippines but maintained a general sales agent in
the Philippines - Warner Barnes & Co. Ltd. and later,
Qantas Airways - which was responsible for selling
BOAC tickets covering passengers and cargoes. The
Commissioner of Internal Revenue assessed
deficiency income taxes against BOAC.
Issue: Whether the revenue derived by BOAC from
ticket sales in the Philippines, constitute income of
BOAC from Philippine sources, and accordingly
taxable.

Ruling: The source of an income is the property,

activity, or service that produced the income. For the
source of income to be considered as coming from
the Philippines, it is sufficient that the income is
derived from activity within the Philippines. Herein,
the sale of tickets in the Philippines is the activity
that produced the income. The tickets exchanged
hands here and payments for fares were also made
here in the Philippine currency.

The situs of the source of payments is the

Philippines. The flow of wealth proceeded from, and
occurred within Philippine territory, enjoying the
protection accorded by the Philippine government. In
consideration of such protection, the flow of wealth
should share the burden of supporting the
government. PD 68, in relation to PD 1355, ensures
that international airlines are taxed on their income
from Philippine sources. The 2 1/2% tax on gross
billings is an income tax. If it had been intended as
an excise tax or percentage tax, it would have been
placed under Title V of the Tax Code covering taxes
on business.

6. Davis V. Winship v. Phil. Trust Co., 90 Phil.

744 [1952]

Facts:

Prior to December, 1941, the Eastern Isles

Import corporation organized under an existing by
virtue of the laws of the Philippines, all of the capital
stock of which was and has been owned by American
citizens, had a current account deposit with the
Philippine Trust Company, and as of December 29,
1941, the balance in favor of said depositor was
P51,410.91. Prior to December, 1941, the Eastern
Isles, Inc., a corporation organized under and existing
by virtue of the laws of the Philippines, all of the
capital stock of which was and has been owned by
American citizens, had a current account deposit with
the Philippine Trust Company, and as of December
29, 1941, the balance in favor of said depositor was
P34,827.74.

On October 4, 1943, the Japanese Military

Administration in the Philippines issued an order
requiring all deposit accounts of the hostile people
(including corporations) to be transferred to the Bank
of Taiwan, as the depository of the Japanese Military
Administration, which order the Philippine Trust
Company was specifically directed to comply with. In
compliance with said order, the Philippine Trust
Company transferred and paid the credit balances of
the current account deposits of the Eastern Isles
Import Corporation and of the Eastern Isles, Inc. to
the Bank of Taiwan.

The pre-war current deposit accounts of the

Eastern Isles Import Corporation and of the Eastern
Isles, Inc. were subsequently transferred to S. Davis
Winship who, on August 12, 1947, presented to the
Philippine Trust Company checks Nos. A-79212 and
H-579401 covering the aforesaid deposits. The
Philippine Trust Company, however, refused to pay
said checks, whereupon, on September 6, 1947, S.
Davis Winship instituted the present action against
the Philippine Trust Company in the Court of First
Instance of Manila, to recover upon the first cause of
action the sum of P51,410.91 and under the second
cause of action the sum of P34,827.74.

In its answer, the defendant Philippine trust

Company invoked the order of the Japanese Military
Administration by virtue of which it transferred the
current deposit accounts in question to the Bank of
Taiwan as the depository of the Bureau of Enemy
Property Custody of the Japanese Military
Administration.

Issue: Whether or not Philippine Trust Company is

liable to the pre-war deposits from petitioner.

Ruling: In view of this pronouncement, we have to

affirm the appealed judgment. As it has been
stipulated by the parties that the defendant
transferred the deposits in question to the Bank of
Taiwan in compliance with the order of the Japanese
Military Administration, the defendant was released
from any obligation to the depositors or their
transferee. Appellant's contention that there is no
positive showing that the transfer was made by the
Philippine Trust Company in compliance with the
order of the Japanese Military Administration, and its
logical effect is to make such act binding on said
company. At any rate, the defendant corporation has
not impugned its validity.

In the case of Filipinas Compaia de Seguros vs.

Christern Henefeld and Co., Inc., Phil., 54, we Ruling
that the nationality of a private corporation is
determined by the character or citizenship of its
controlling stockholders; and this pronouncement is
of course decisive as to the hostile character of the
Eastern Isles, Inc., as far as the Japanese Military
Administration was concerned, it being conceded that
the controlling stockholders of said corporations were
American citizens.

7. Dee v. SEC, 199 SCRA 278 [1991]

Facts:

Naga Telephone Company, Inc. (Natelco) was

organized in 1954, the authorized capital was
P100,000.00. In 1974 Natelco decided to increase its
authorized capital to P3,000,000.00. As required by
the Public Service Act, Natelco filed an application for
the approval of the increased authorized capital with
the then Board of Communications under BOC Case
74-84. On 8 January 1975, a decision was rendered in
said case, approving the said application subject to
certain conditions, among which was "That the
issuance of the shares of stocks will be for a period of
one year from the date hereof, 'after which no further
issues will be made without previous authority from
this Board." Pursuant to the approval given by the
then Board of Communications, Natelco filed its
Amended Articles of Incorporation with the Securities
and Exchange Commission (SEC). When the amended
articles were filed with the SEC, the original
authorized capital of P100,000.00 was already paid.
Of the increased capital of P2,900,000.00 the
subscribers subscribed to P580,000.00 of which
P145,000 was fully paid.

The capital stock of Natelco was divided into

213,000 common shares and 87,000 preferred
shares, both at a par value of P10.00 per shares. On
12 April 1977, Natelco entered into a contract with
Communication Services, Inc. (CSI) for the
"manufacture, supply, delivery and installation" of
telephone equipment. In accordance with this
contract, Natelco issued 24,000 shares of common
stocks to CSI on the same date as part of the
downpayment. On 5 May 1979, another 12,000
shares of common stocks were issued to CSI. In both
instances, no prior authorization from the Board of
Communications, now the National
Telecommunications Commission, was secured
pursuant to the conditions imposed by the decision in
BOC Case 74-84. On 19 May 1979, the stockholders
of the Natelco held their annual stockholders'
meeting to elect their seven directors to their Board
of Directors, for the year 1979-1980. In this election
Pedro Lopez Dee was unseated as Chairman of the
Board and President of the Corporation, but was
elected as one of the directors, together with his
wife, Amelia Lopez Dee. In the election CSI was able
to gain control of Natelco when the latter's legal
counsel, Atty. Luciano Maggay won a seat in the
Board with the help of CSI. In the reorganization Atty.
Maggay became president. Dee having been
unseated in the election, filed a petition in the SEC
(SEC Case 1748), questioning the validity of the
elections of 19 May 1979 upon the main ground that
there was no valid list of stockholders through which
the right to vote could be determined.

As prayed for in the petition, a restraining order

was issued by the SEC placing Dee and the other
officers of the 1978-1979 Natelco Board in hold-over
capacity. The SEC restraining order was elevated to
the Supreme Court in GR 50885 where the
enforcement of the SEC restraining order was
restrained. Maggay, et. al. replaced the hold-over
officers. During the tenure of the Maggay Board, from
22 June 1979 to 10 March 1980, it did not reform the
contract of 12 April 1977, and entered into another
contract with CSI for the supply and installation of
additional equipment but also issued to CSI 113,800
shares of common stock. Subsequently, the Supreme
Court dismissed the petition in GR 50885 upon the
ground that the same was premature and the
Commission should be allowed to conduct its hearing
on the controversy. The dismissal of the petition
resulted in the unseating of the Maggay group from
the board of directors of Natelco in a "hold-over"
capacity. In the course of the proceedings in SEC
Case 1748, SEC Hearing officer Emmanuel Sison
issued an order on 23 June 1981, declaring: (1) that
CSI is a stockholder of Natelco and, therefore,
entitled to vote; (2) that unexplained 16,858 shares
of Natelco appear to have been issued in excess to
CSI which should not be allowed to vote; (3) that 82
shareholders with their corresponding number of
shares shall be allowed to vote; and (4)
consequently, ordering the holding of special
stockholder' meeting to elect the new members of
the Board of Directors for Natelco based on the
findings made in the order as to who are entitled to
vote. From the foregoing order dated 23 June 1981,
Dee filed a petition for certiorari/appeal with the SEC
en banc (SEC-AC 036). Thereafter, the Commission
en banc rendered a decision on 5 April 1982,
sustaining the order of the Hearing Officer;
dismissing the petition/appeal for lack of merit; and
ordering new elections as the Hearing Officer shall
set after consultations with Natelco officers, among
others. On 21 April 1982, Dee and Natelco filed their
respective motions for reconsideration. Pending
resolution of the motions for reconsideration, on 4
May 1982, the hearing officer without waiting for the
decision of the commission en banc, to become final
and executory rendered an order stating that the
election for directors would be held on 22 May 1982.
On 20 May 1982, the SEC en banc denied the
motions for reconsideration.

Meanwhile on 20 May 1982 (GR 63922), Antonio

Villasenor filed Civil Case 1507 with the Court of First
Instance of Camarines Sur, Naga City, against
Luciano Maggay, Nildo I. Ramos, Desirerio Saavedra,
Augusto Federis, Ernesto Miguel, Justino de Jesus St.,
Vicente Tordilla, Pedro Lopez Dee and Julio Lopez
Dee, which was raffled to Branch I, presided over by
Judge Delfin Vir. Sunga. Villasenor claimed that he
was an assignee of an option to repurchase 36,000
shares of common stocks of Natelco under a Deed of
Assignment executed in his favor. The Maggay group
allegedly refused to allow the repurchase of said
stocks when Villasenor offered to CSI the repurchase
of said stocks by tendering payment of its price. The
complaint therefore, prayed for the allowance to
repurchase the aforesaid stocks and that the holding
of the 22 May 1982 election of directors and officers
of Natelco be enjoined. A restraining order dated 21
May 1982 was issued by the lower court commanding
desistance from the scheduled election until further
orders. Nevertheless, on 22 May 1982, as scheduled,
the controlling majority of the stockholders of the
Natelco defied the restraining order, and proceeded
with the elections, under the supervision of the SEC
representatives. On 25 May 1982, the SEC recognized
the fact that elections were duly held, and
proclaimed that the following are the "duly elected
directors" of the Natelco for the term 1982-1983:
Felipa T. Javalera, Nilda I. Ramos, Luciano Maggay,
Augusto Federis, Daniel J. Ilano, Nelin J. Ilano, Sr., and
Ernesto A. Miguel. The following are the recognized
officers to wit: Luciano Maggay (President), Nilda I.
Ramos (Vice-President), Desiderio Saavedra
(Secretary), Felipa Javalera (Treasurer), and Daniel
Ilano (Auditor). Despite service of the order of 25 May
1982, the Lopez Dee group headed by Messrs. Justino
De Jesus and Julio Lopez Dee kept insisting no
elections were held and refused to vacate their
position. On 28 May 1982, the SEC issued another
order directing the hold-over directors and officers to
turn over their respective posts to the newly elected
directors and officers and directing the Sheriff of
Naga City, with the assistance of PC and INP of Naga
City, and other law enforcement agencies of the City
or of the Province of Camarines Sur, to enforce the
aforesaid order. On 29 May 1982, the Sheriff of Naga
City, assisted by law enforcement agencies, installed
the newly elected directors and officers of the
Natelco, and the hold-over officers peacefully
vacated their respective offices and turned-over their
functions to the new officers. On 2 June 1982, a
charge for contempt was filed by Villasenor alleging
that Maggay, et. al. have been claiming in press
conferences and over the radio airlanes that they
actually held and conducted elections on 22 May
1982 in the City of Naga and that they have a new
set of officers, and that such acts of Maggay, et. al.
constitute contempt of court. On 7 September 1982,
the lower court rendered judgment on the contempt
charge, declaring CSI, Nilda Ramos, Luciano Maggay,
Desiderio Saavedra, Augusto Federis and Ernesto
Miguel, guilty of contempt of court, and accordingly
punished with imprisonment of 6 months and to pay
fine of P1,000.00 each: and ordering Nilda Ramos,
Luciano Maggay, Desiderio Saavedra, Augusto
Federis and Ernesto Miguel, and those now occupying
the positions of directors and officers of NATELCO to
vacate their respective positions therein, and
ordering them to reinstate the hold-over directors
and officers of NATELCO, such as Pedro Lopez Dee as
President, Justino de Jesus, Sr., as Vice President, Julio
Lopez Dee as Treasurer and Vicente Tordilla, Jr. as
Secretary, and others referred to as hold-over
directors and officers of NATELCO in the order dated
28 May 1982 of SEC Hearing Officer Emmanuel Sison,
in SEC Case 1748, by way of RESTITUTION, and
consequently, ordering said respondents to turn over
all records, property and assets of NATELCO to said
hold-over directors and officers.

The trial judge issued an order dated 10

September 1982 directing the respondents in the
contempt charge to "comply strictly, under pain of
being subjected to imprisonment until they do so."
Maggay, et. al. filed on 17 September 1982, a
petition for certiorari and prohibition with preliminary
injunction or restraining order against the CFI Judge
of Camarines Sur, Naga City and de Jesus, Sr., et.a
al., with the then Intermediate Appellate Court which
issued a resolution ordering de Jesus, Sr., et. al. to
comment on the petition, which was complied with,
and at the same time temporarily refrained from
implementing and or enforcing the questioned
judgment and order of the lower court. On 14 April
1983, the then Intermediate Appellate Court,
rendered a decision, annulling the judgment dated 7
September 1982 rendered by the trial judge on the
contempt charge, and his order dated 10 September
1982, implementing said judgment; ordering the
'hold-over' directors and officers of NATELCO to
vacate their respective offices; directing respondents
to restore or re-establish Maggay, et. al. who were
ejected on 22 May 1982 to their respective offices in
the NATELCO; and prohibiting whoever may be the
successor of the Judge from interfering with the
proceedings of the Securities and Exchange
Commission in SEC-AC 036. The order of re-
implementation was issued, and, finally, the Maggay
group has been restored as the officers of the
Natelco.

Lopez Dee, et. al. filed the petitions for certiorari

with preliminary injunction and/or restraining order.
In the resolution of the Court En Banc dated 23
August 1983, GR 63922 was consolidated with GR
60502.

Issues:
1 Whether the issuance of 113,800 shares of
Natelco to CSI, made during the pendency of
SEC Case 1748 in the Securities and Exchange
Commission was valid.
2 Whether Natelco stockholders have a right of
preemption to the 113,800 shares in question;
else, whether the Maggay Board, in issuing said
shares without notifying Natelco stockholders,
violated their right of pre-emption to the
unissued shares .

Ruling: The issuance of 113,800 shares of Natelco

stock to CSI made during the pendency of SEC Case
1748 in the Securities and Exchange Commission was
valid. The findings of the SEC En Banc as to the
issuance of the 113,800 shares of stock was stated
as follows: "But the issuance of 113,800 shares was
pursuant to a Board Resolution and stockholders'
approval prior to 19 May 1979 when CSI was not yet
in control of the Board or of the voting shares. There
is distinction between an order to issue shares on or
before 19 May 1979 and actual issuance of the
shares after 19 May 1979. The actual issuance, it is
true, came during the period when CSI was in control
of voting shares and the Board (if they were in fact in
control) - but only pursuant to the original Board and
stockholders' orders, not on the initiative to the new
Board, elected 19 May 1979, which petitioners are
questioning. The Commission en banc finds it difficult
to see how the one who gave the orders can turn
around and impugn the implementation of the orders
he had previously given. The reformation of the
contract is understandable for Natelco lacked the
corporate funds to purchase the CSI equipment....
Appellant had raise the issue whether the issuance of
113,800 shares of stock during the incumbency of
the Maggay Board which was allegedly CSI
controlled, and while the case was sub judice,
amounted to unfair and undue advantage. This does
not merit consideration in the absence of additional
evidence to support the proposition." In effect,
therefore, the stockholders of Natelco approved the
issuance of stock to CSI.

The issuance of the 113,800 stocks is not invalid

even assuming that it was made without notice to
the stockholders as claimed by Dee, et. al. The power
to issue shares of stocks in a corporation is lodged in
the board of directors and no stockholders meeting is
required to consider it because additional issuance of
shares of stocks does not need approval of the
stockholders. Consequently, no pre-emptive right of
Natelco stockholders was violated by the issuance of
the 113,800 shares to CSI.
 8. Eriks Pte., Ltd. v. CA, 79 SCAD 70, 267
SCRA 567 [1997]

Facts:

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. On various dates covering
the period January 17 August 16, 1989, Delfin
Enriquez, Jr., doing business under the name and
style of Delrene EB Controls Center and/or EB
Karmine Commercial, ordered and received from
Eriks Pte. Ltd. various elements used in sealing
pumps, valves, pipes and control equipment, PVC
pipes and fittings. The transfers of goods were
perfected in Singapore, for Enriquez's account, F.O.B.
Singapore, with a 90-day credit term. Subsequently,
demands were made by Eriks upon Enriquez to settle
his account, but the latter failed/refused to do so. On
28 August 1991, Eriks filed with the Regional Trial
Court of Makati, Branch 138, Civil Case 91-2373 for
the recovery of S$41,939.63 or its equivalent in
Philippine currency, plus interest thereon and
damages. Enriquez responded with a Motion to
Dismiss, contending that Eriks had no legal capacity
to sue. In an Order dated 8 March 1993, the trial
court dismissed the action on the ground that Eriks is
a foreign corporation doing business in the
Philippines without a license.

On appeal and on 25 January 1995, the

appellate court (CA GR CV 41275) affirmed said order
as it deemed the series of transactions between Eriks
and Enriquez not to be an "isolated or casual
transaction." Thus, the appellate court likewise found
Eriks to be without legal capacity to sue. Eriks filed
the petition for review.
Issue: Whether a foreign corporation which sold its
products 16 times over a five-month period to the
same Filipino buyer without first obtaining a license
to do business in the Philippines, is prohibited from
maintaining an action to collect payment therefore in
Philippine courts.

Ruling: 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." The 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 Philippine 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 in Republic Act 7042
in this wise: "The phrase 'doing business' shall
include soliciting orders, 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 country for a period or periods totaling one
hundred eight(y) (180) days or more; participating in
the management, supervision or control of any
domestic business, firm, entity or corporation in the
Philippines; and 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, and in progressive
prosecution of, commercial gain or of the purpose
and object of the business organization: Provided,
however, That the phrase 'doing business' shall not
be deemed to include mere investment as a
shareholder by a foreign entity in domestic
corporations duly registered to do business, and/or
the exercise of rights as such investor; nor having a
nominee director or officer to represent its interests
in such corporation; nor appointing a representative
or distributor domiciled in the Philippines which
transacts business in its own name and for its own
account." The accepted rule in jurisprudence is that
each case must be judged in the light of its own
environmental circumstances. It should be kept in
mind that the purpose of the law is to subject the
foreign corporation doing business in the Philippines
to the jurisdiction of Philippine courts. It is not to
prevent the foreign corporation from performing
single or isolated acts, but to bar it from acquiring a
domicile for the purpose of business without first
taking the steps necessary to render it amenable to
suits in the local courts. Herein, more than the sheer
number of transactions entered into, a clear and
unmistakable intention on the part of Eriks 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 Eriks 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 Enriquez for every purchase
made, unarguably shows an intention to continue
transacting with Enriquez, 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. The series of transactions in question
could not have been isolated or casual transactions.
What is determinative of "doing business" is not
really the number or the quantity of the transactions,
but more importantly, the intention of an entity to
continue the body of its business in the country. The
number and quantity are merely evidence of such
intention. The phrase "isolated transaction" has a
definite and fixed meaning, i.e. a transaction or
series of transactions set apart from the common
business of a foreign enterprise in the sense that
there is no intention to engage in a progressive
pursuit of the purpose and object of the business
organization. Whether a foreign corporation is "doing
business" does not necessarily depend upon the
frequency of its transactions, but more upon the
nature and character of the transactions. Given the
facts of the case, the Court cannot see how Eriks'
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 the Court to rule otherwise.
Accordingly and ineluctably, Eriks must be held to be
incapacitated to maintain the action a quo against
Enriquez.

9. F B A Aircraft, S.A. v. Zosa, 110 SCRA 1

[1981]

Facts:

After consideration of the allegations, issues and

arguments of the petition for mandamus with
preliminary mandatory injunction and the urgent
motion for release of the attached three aircraft and
engines, respondents' comments thereon, and
respondent court's subject Order of September 23,
1980 dismissing private respondent Summit
Philippines Airways, Inc.'s complaint below "for lack
of jurisdiction over the persons of the defendant and
the writ of attachment (is) dissolved" (Annex B,
petition) and Order of November 10, 1980 (Annex C,
petition) maintaining the attachment until its
dismissal order is final, the Court Resolved to
DISMISS the petition for lack of clear showing by
petitioners that they are entitled to the release of the
attached aircraft.

Respondent court ruled in its aforesaid

November 10, 1980 Order denying respondent-
plaintiff's motion for reconsideration of the dismissal
order of September 23, 1980 but maintaining the
attachment until the dismissal of the complaint shall
have become final (since petitioners-defendants are
foreign corporations adjudged for the nonce to be
"not doing business in the Philippines [and] plaintiff
[respondent] would be completely helpless if these
planes are pirated out of the Philippines") that
respondent-plaintiff, as a result of its dismissal order,
"has two options to pursue: (1) go to the proper
appellate court for a ruling that is definite and
definitive that a foreign corporation can be sued in
the Philippines on the basis of an isolated
transaction; or (2) the plaintiff may file anew a
complaint asking for extra-territorial services of
summons under Section 17, Rule 14 of the Rules of
Court."

Issue: Whether or not a foreign corporation can

be sued in the Philippines on the basis of an isolated
transaction.
Ruling: In the interest of an expeditious disposition
of cases and to avoid needless delays in their
determination on the merits, the Court holds that it is
unnecessary with reference to the first option to
secure and await a definite ruling from the appellate
court on the suability of petitioners-foreign
corporations, presiding from the ruling in Facilities
Management Corporation vs. Osa (89 SCRA 131) that
" (I)ndeed, if a foreign corporation, not engaged in
business in the Philippines, is not barred 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," as underscored
by petitioners' filing of the petition at bar and seeking
redress from this Court. The question of respondent's
appeal from the dismissal order is thus rendered
moot.

As to respondent court's second option, the

Court rules that it is equally unnecessary for
respondent-plaintiff to file anew a complaint asking
for extraterritorial service of summons upon
petitioners-defendants. Petitioners-defendants'
properties having been attached within the
Philippines, extraterritorial of summons clearly may
be effected under Rule 14, section 17 and respondent
court is DIRECTED to grant such leave for
extraterritorial service of summons in the case below
(without going through the ritual of "filing a new
complaint"), as prayed for by respondent-plaintiff in
the proceedings below and thereafter to proceed with
due dispatch in the hearing and determination of the
case on the merits.

10. Facilities Management Corp. v. De la Osa,

89 SCRA 131 [1979]

Facts:

Facilities Management Corporation and J. S.

Dreyer are domiciled in Wake Island while J. V. Catuira
is an employee of FMC stationed in Manila. Leonardo
dela Osa was employed by FMC in Manila, but
rendered work in Wake Island, with the approval of
the Department of Labor of the Philippines. De la Osa
was employed as (1) painter with an hourly rate of
$1.25 from March 1964 to November 1964, inclusive;
(2) houseboy with an hourly rate of $1.26 from
December 1964 to November 1965, inclusive; (3)
houseboy with an hourly rate of $1.33 from
December 1965 to August 1966, inclusive; and (4)
cashier with an hourly rate of $1.40 from August
1966 to March 27 1967, inclusive. He further averred
that from December, 1965 to August, 1966, inclusive,
he rendered overtime services daily, and that this
entire period was divided into swing and graveyard
shifts to which he was assigned, but he was not paid
both overtime and night shift premiums despite his
repeated demands from FMC, et al. In a petition filed
on 1 July 1967, dela Osa sought his reinstatement
with full backwages, as well as the recovery of his
overtime compensation, swing shift and graveyard
shift differentials.

Subsequently on 3 May 1968, FMC, et al. filed a

motion to dismiss the subject petition on the ground
that the Court has no jurisdiction over the case, and
on 24 May 1968, de la Osa interposed an opposition
thereto. Said motion was denied by the Court in its
Order issued on 12 July 1968. Subsequently, after
trial, the Court of Industrial Relations, in a decision
dated 14 February 1972, ordered FMC, et al. to pay
de la Osa his overtime compensation, as well as his
swing shift and graveyard shift premiums at the rate
of 50% per cent of his basic salary. FMC, et al. filed
the petition for review on certiorari.

Issues:

1 Whether the mere act by a non-resident foreign

corporation of recruiting Filipino workers for its
own use abroad, in law doing business in the
Philippines.
2 Whether FMC has been "doing business in the
Philippines" so that the service of summons
upon its agent in the Philippines vested the
Court of First Instance of Manila with
jurisdiction.
Ruling: In its motion to dismiss, FMC admits that Mr.
Catuira represented it in the Philippines "for the
purpose of making arrangements for the approval by
the Department of Labor of the employment of
Filipinos who are recruited by the Company as its own
employees for assignment abroad." In effect, Mr.
Catuira was alleged to be a liaison officer
representing FMC in the Philippines. Under the rules
and regulations promulgated by the Board of
Investments which took effect 3 February 1969,
implementing RA 5455, which took effect 30
September 1968, the phrase "doing business" has
been exemplified with illustrations, among them
being as follows: ""(1) Soliciting orders, purchases
(sales) or service contracts. Concrete and specific
solicitations by a foreign firm, not acting
independently of the foreign firm, amounting to
negotiation or fixing of the terms and conditions of
sales or service contracts, regardless of whether the
contracts are actually reduced to writing, shall
constitute doing business even if the enterprise has
no office or fixed place of business in the Philippines;
(2) appointing a representative or distributor who is
domiciled in the Philippines, unless said
representative or distributor has an independent
status, i.e., it transacts business in its name and for
its own account, and not in the name or for the
account of the principal; xxx (4) Opening offices,
whether called 'liaison' offices, agencies or branches,
unless proved otherwise. xxx (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."

FMC may be considered as "doing business in

the Philippines" within the scope of Section 14
(Service upon private foreign corporations), Rule 14
of the Rules of Court which provides that "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, FMC, in compliance with Act
2486 as implemented by Department of Labor Order
IV dated 20 May 1968 had to appoint Jaime V.
Catuira, 1322 A. Mabini, Ermita, Manila "as agent for
FMC with authority to execute Employment Contracts
and receive, in behalf of that corporation, legal
services from and be bound by processes of the
Philippine Courts of Justice, for as long as he remains
an employee of FMC." It is a fact that when the
summons for FMC was served on Catuira he was still
in the employ of the FMC. Hence, if a foreign
corporation, not engaged in business in the
Philippines, is not barred from seeking redress from
courts in the Philippines (such as in earlier cases of
Aetna Casualty & Surety Company, vs. Pacific Star
Line, etc. [GR L-26809], In Mentholatum vs.
Mangaliman, and Eastboard Navigation vs. Juan
Ysmael & Co.), 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.

11. General Garments Corp. v. Director of

Patents 41 SCRA 50 [1971]

Facts:

The General Garments Corporation, organized

and existing under the laws of the Philippines, is the
owner of the trademark "Puritan," issued on
November 15, 1962 by the Philippine Patent Office,
for assorted men's wear, such as sweaters, shirts,
jackets, undershirts and briefs.
 On March 9, 1964 the Puritan Sportswear
Corporation, organized and existing in and under the
laws of the state of Pennsylvania, U.S.A., filed a
petition with the Philippine Patent Office for the
cancellation of the trademark "Puritan" registered in
the name of General Garments Corporation, alleging
ownership and prior use in the Philippines of the said
trademark on the same kinds of goods, and alleging
further that the registration thereof by General
Garments Corporation had been obtained
fraudulently.

On March 30, 1964 General Garments

Corporation moved to dismiss the petition

Issue: Whether or not Puritan Sportswear

Corporation, which is a foreign corporation not
licensed to do business and not doing business in the
Philippines, has legal capacity to maintain a suit in
the Philippine Patent Office for cancellation of a
trademark registered therein.

Ruling: Petitioner contends that Puritan Sportswear

Corporation, being a foreign corporation which is not
licensed to do and is not doing business in the
Philippines, is not considered as a person under
Philippine laws and consequently is not
comprehended within the term "any person" who
may apply for cancellation of a mark or trade-name
under Section 17(c) of the Trademark Law
aforequoted. That respondent is a juridical person
should be beyond serious dispute. The fact that it
may not transact business in the Philippines unless it
has obtained a license for that purpose, nor maintain
a suit in Philippine courts for the recovery of any
debt, claim or demand without such license (Secs. 68
and 69, Corporation Law) does not make respondent
any less a juridical person. Indeed an exception to
the license requirement has been recognized in this
jurisdiction, namely, where a foreign corporation sues
on an isolated transaction.
 To recognize respondent as a juridical person,
however, does not resolve the issue in this case. It
should be postulated at this point that respondent is
not suing in our courts "for the recovery of any debt,
claim or demand," for which a license to transact
business in the Philippines is required by Section 69
of the Corporation Law, subject only to the exception
already noted. Respondent went to the Philippine
Patent Office on a petition for cancellation of a
trademark registered by petitioner, invoking Section
17(c) in relations to Section 4(d) of the Trademark
Law.

The purpose of such a suit is to protect its

reputation, corporate name and goodwill which has
been established, through the natural development
of its trade for a long period of years, in the doing of
which it does not seek to enforce any legal or
contract rights arising from, or growing out of any
business which it has transacted in the Philippine
Islands.

The right to the use of the corporate or trade

name is a property right, a right in rem, which it may
assert and protect in any of the courts of 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.

It may be added here that the law against such

depredations is not only for the protection of the
owner of the trademark who has acquired prior use
thereof but also, and more importantly, for the
protection of purchasers from confusion, mistake or
deception as to the goods they are buying. This is
clear from a reading of Section 4(d) of the Trademark
Law.

Petitioner argues that Section 21-A militates

against respondent's capacity to maintain a suit for
cancellation, since it requires, before a foreign
corporation may bring an action, that its trademark
or trade name has been registered under the
Trademark Law. The argument misses the essential
point in the said provision, which is that the foreign
corporation is allowed there under to sue "whether or
not it has been licensed to do business in the
Philippines" pursuant to the Corporation Law.

In any event, respondent in the present case is

not suing for infringement or unfair competition
under Section 21-A, but for cancellation under
Section 17, on one of the grounds enumerated in
Section 4. The first kind of action, it maybe stated, is
cognizable by the Courts of First Instance (Sec. 27).

12. Georg Grotjahn GMBH and Co. v. Isnani, 54

SCAD 289, 235 SCRA 216 [1994]

Facts:

The records show that petitioner is a

multinational company organized and existing under
the laws of the Federal Republic of Germany. On July
6, 1983, petitioner filed an application SEC for the
establishment of a regional or area headquarters in
the Philippines, pursuant to Presidential Decree No.
218. The application was approved by the Board of
Investments. Consequently, the SEC issued a
Certificate of Registration and License to petitioner.

Private respondent Romana R. Lanchinebre was

a sales representative of petitioner from 1983 to mid-
1992. On March 12, 1992, she secured a loan of
twenty-five thousand pesos (P25,000.00) from
petitioner. On March 26 and June 10, 1992, she made
additional cash advances in the sum of ten thousand
pesos (P10,000.00). Of the total amount, twelve
thousand one hundred seventy pesos and thirty-
seven centavos (P12,170.37) remained unpaid.
Despite demand, private respondent Romana failed
to settle her obligation with petitioner.
 Private respondent Romana Lanchinebre filed
with the Arbitration Branch of NLRC in Manila, a
Complaint for illegal suspension, dismissal and non-
payment of commissions against petitioner. Petitioner
in turn filed against private respondent a Complaint
for damages.

On September 2, 1992, Petitioner filed another

Complaint for collection of sum of money against
private respondents spouses Lanchinebre.

Issue: Whether or not Petitioner has the capacity to

sue.

Ruling: In its complaint, the petitioner seeks to

recover alleged cash advances made by respondent
Romana Lanchinebre while the latter was in the
employ of the former. Again, it is not disputed that
the Certificate of Registration and License issued to
the petitioner by the Securities and Exchange
Commission was merely "for the establishment of a
regional or area headquarters in the Philippines. It
does not include a license to do business in the
Philippines. There is no allegation in the complaint
moreover that (petitioner) is suing under an isolated
transaction. It must be considered that under Section
4, Rule 8 of the Revised Rules of Court, 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. There is no averment in the
complaint regarding (petitioner's) capacity to sue or
be sued.

13. Granger Associates v. Microwave Systems,

Inc., 189 SCRA 631 [1990]

Facts:
 Granger Associates is a foreign corporation
which was organized in the United States and has no
license to do business in this country. Microwave
Systems, Inc., is a domestic corporation 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, giving MSI the
license to manufacture and sell its products in the
Philippines and extended to the latter certain loans,
equipment and parts. Payment of these contracts
not having been made as agreed upon, Granger filed
a complaint against MSI and the other private
respondents in the Regional Trial Court.

MSI alleged the affirmative defense that the

plaintiff had no capacity to sue, being an unlicensed
foreign corporation, and moved to dismiss.

Motion to dismiss was granted by RTC which was

affirmed by the CA.

In this petition, 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: Whether or not Granger Associates was

doing business in the Philippines?

Ruling: YES. 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.
The quoted stipulations show that 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.

There is also a showing 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.

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.

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.

---------------------------------------------------------------------------
-------------
14. Grey v. Insular Lumber Co., 67 Phil. 139
[1939]

Facts:

The defendant was and is a corporation

organized and existing under the laws of the State of
New York, licensed to engage in business in the
Philippines, with offices in the City of Manila, in
Fabrica, Occidental Negros, in New York and in
Philadelphia. The plaintiff was and is the owner and
possessor of 6 shares of the capital stock of the
defendant corporation. The shares were registered in
his name in the books thereof, and known to him was
that he does not own three per cent of the total
capital stock of the corporation, nor does he
represent stockholders who own three per cent of its
capital.

During the years 1932 and 1933, the plaintiff

asked the offices of the defendant in Manila and in
Fabrica to permit him to examine the books and
records of the business of said defendant, but he was
not allowed to do so because under the law of New
York, the rights of a stockholder to examine the
books and records of a corporation organized under
the laws of that State that Stockholders owning three
per centum of the shares of any corporation other
than a moneyed corporation may make a written
request to the treasurer or other fiscal officer thereof
for statement of its affairs. But neither the plaintiff
nor any other stockholder of the defendant
corporation has asked its treasurer or any of its
officers for a statement of its affairs, as provided in
the statutes of New York; neither did the plaintiff ask
to be allowed to examine any of the statements
prepared by the defendant corporation and existing
in its files, as provided by the statutes of New York.

Plaintiff-appellant contends, however, that, in

accordance with our Corporation Law, under which
the defendant company was registered to do
business in the Philippines, the plaintiff, as
stockholder, is entitled to inspect the record of the
transactions of the defendant corporation, and this
right, which is recognized in the common law, has not
been altered by section 77 of the Stock Corporation
Law of New York quoted in the stipulation of facts and
can be enforced by mandamus.

Issue: Whether or not a stockholder has the right to

inspect and examine the books and records of the
transactions of the defendant Corporation.

Ruling: No. The plaintiff not being a stockholder

owning at least three per cent of the capital stock of
the defendant corporation, has no right to examine
the books and records of the corporation nor to
require a statement of its affairs embracing a
particular account of all its assets and liabilities.

A stockholder of a corporation in New York has

the right to inspect its books and records if it can be
shown that he seeks information for an honest
purpose, or to protect his interests as stockholder.
That said right to examine and inspect the books of
the corporation must be exercised in good faith, for a
specific and honest purpose, and not to gratify
curiosity, or for speculative or vexatious purposes.
Apparently, the appellant has made no effort to prove
or even allege that the information he desired to
obtain through the examination and inspection of
defendants books was necessary to protect his
interests as stockholder of the corporation, or that it
was for a specific and honest purpose, and not to
gratify curiosity, nor for speculative or vexatious
purposes.

15. Home Insurance Co. v. Eastern Shipping

Lines, 123 SCRA 424 [1983]

Facts:

Some time in January of 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 Eastern Shipping Lines.
The shipment was covered by a Bill of Lading, with
arrival notice to Phelps Dodge Copper Products
Corporation of the Philippines at Manila. The
shipment was insured with the Home Insurance
Company against all risks under its Insurance Policy.
The coils discharged from the VESSEL numbered
2,361, of which 53 were in bad order. What the
Phelps Dodge ultimately received at its warehouse
was the same number of coils. Upon weighing at
Phelps Dodge's warehouse, the coils were found to
weigh less as against its invoiced weight. For the
loss/damage suffered by the cargo, Home Insurance
paid the Phelps Dodge under its insurance policy, by
virtue of which Home Insurance became subrogated
to the rights and actions of the Phelps Dodge. Home
Insurance made demands for payment against the
Eastern Shipping and the Angel Jose Transportation
for reimbursement of the aforesaid amount but each
refused to pay the same."

On or about 22 December 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 N. V. Nedlloyd Lijnen, and represented in
the Philippines by its local agent, the Columbian
Philippines, Inc. The shipment was insured with Home
Insurance company under its Cargo Policy. Upon
inspection at International Harvester's warehouse,
the contents of 3 out of the 8 cases were also found
to be complete and intact, leaving 5 cases in bad
order. For the short-delivery and the missing items,
Home Insurance paid International Harvester under
its Insurance Cargo Policy, by virtue of which Home
Insurance became subrogated to the rights and
actions of International Harvester. Demands were
made on N.V. Nedlloyd Lijnen and International
Harvester for reimbursement thereof but they failed
and refused to pay the same."

When the insurance contracts which formed the

basis of these cases were executed, Home Insurance
had not yet secured the necessary licenses and
authority; but when the complaints in these two
cases were filed, Home Insurance had already
secured the necessary license to conduct its
insurance business in the Philippines. In both cases,
Home Insurance made the averment regarding its
capacity to sue, as that it "is a foreign insurance
company duly authorized to do business in the
Philippines through its agent, Mr. Victor H. Bello, of
legal age and with office address at Oledan Building,
Ayala Avenue, Makati, Rizal." The Court of First
Instance of Manila, Branch XVII, however, dismissed
the complaints in both cases, on the ground that
Home Insurance had failed to prove its capacity to
sue. Home Insurance filed the petitions for review on
certiorari, which were consolidated.

Issue: Whether Home Insurance, a foreign

corporation licensed to do business at the time of the
filing of the case, has the capacity to sue for claims
on contracts made when it has no license yet to do
business in the Philippines.

Held: As early as 1924, the Supreme Court ruled in

the leading case of Marshall Wells Co. v. Henry W.
Elser & Co. (46 Phil. 70) 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 Philippine 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 objectives enunciated in the 1924 decision are
even more relevant today when we commercial
relations are viewed in terms of a world economy,
when the tendency is to re-examine the political
boundaries separating one nation from another
insofar as they define business requirements or
restrict marketing conditions. The court 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 for not less than 6 months
nor more than 2 years or payment of a fine not less
than P200.00 nor more than P1,000.00 or both in the
discretion of the court. There is a penalty for
transacting business without registration. 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. Still, there is
no question that the contracts are enforceable. The
requirement of registration affects only the remedy.
Significantly, Batas Pambansa 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 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 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." The old
Section 69 has been reworded in terms of non-access
to courts and administrative agencies in order to
maintain or intervene in any action or proceeding.
The prohibition against doing business without first
securing a license is now given penal sanction which
is also applicable to other violations of the
Corporation Code under the general provisions of
Section 144 of the Code. 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
Philippine courts and administrative bodies are
sufficient from the viewpoint of legislative policy.
Herein, 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. Home Insurance
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. These are all the averments required
by Section 4, Rule 8 of the Rules of Court. Home
Insurance sufficiently alleged its capacity to sue.

16. Lyceum of the Philippines, Inc. v. Court of

Appeals, 219 SCRA 610 [1993]

Facts:

The Lyceum of the Philippines, Inc. is

an educational institution duly registered with the
Securities and Exchange Commission, using said
corporate name since its first registration with the
latter.LPI commenced in the SEC a proceeding
against Lyceum of Baguio, Inc. to require it to change
its corporate name and to adopt another name not
similar to or identical with that of LPI. Associate
Commissioner Julio Sulit held that the corporate
name of LPI and LBI were substantially identical
because of the presence of a "dominant" word
(Lyceum), the name of the geographical location of
the campus being the only word which distinguished
one from the other. The SEC also noted that LPI had
registered as a corporation ahead of LBI and ordered
the latter to change its name to another name "not
similar or identical with" the names of previously
registered entities.LBI assailed the SECs order before
the Supreme Court, which denied the same. Armed
with said SC resolution, LPI wrote to all the
educational institutions it could find using the word
"Lyceum" as part of their corporate name, advising
them to discontinue such use of "Lyceum". LPI
claimed proprietary right over the word Lyceum
and instituted proceedings before the SEC to compel
Lyceum of Aparri, Lyceum of Cabagan, Lyceum of
Camalanuigan, Inc., Lyceum of Lallo, Inc., Lyceum of
Tuao, Inc., Buhi Lyceum, Central Lyceum
of Catanduanes, Lyceum of Southern Philippines,
Lyceum of Eastern Mindanao, Inc., and
Western Pangasinan Lyceum, Inc., also educational
institutions, to delete the word "Lyceum" from their
corporate names and to permanently enjoin them
from using "Lyceum" as part of their respective
names. The SEC hearing officer ruled in favor of LPI,
relying upon the SECs ruling in the LBI case and
holding that the word "Lyceum" was capable of
appropriation, LPI having acquired an enforceable
exclusive right to the use of that word. On appeal,
the SEC En Banc reversed and set aside the hearing
officers decision, not considering the word "Lyceum"
to have become so identified with LPI as to render
use thereof by other institutions as productive of
confusion about the identity of the schools concerned
in the mind of the general public and holding that the
attaching of geographical names to the word
"Lyceum" served sufficiently to distinguish the
schools from one another. Petitioner went to appeal
with the CA but the latter just affirmed the decision of
the SEC En Banc.
Issues: Whether or not the word Lyceum can be
appropriated by LPI to the exclusion of others and
acquired a secondary meaning in relation to LPI.

Ruling: No. The Articles of Incorporation of a

corporation must set out the name of the
corporation. Section 18 of the Corporation Code
establishes a restrictive rule insofar as corporate
names are concerned:"SECTION 18. Corporate name.
No corporate name may be allowed by the
Securities and Exchange Commission if the proposed
name is identical or deceptively or confusingly similar
to that of any existing corporation or to any other
name already protected by law or is patently
deceptive, confusing or contrary to existing laws.
When a change in the corporate name is approved,
the Commission shall issue an amended certificate of
incorporation under the amended name." The policy
underlying the prohibition in Section 18 against the
registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any
existing corporation or which is "patently deceptive"
or "patently confusing" or "contrary to existing laws,"
is the avoidance of fraud upon the public which
would have occasion to deal with the entity
concerned, the evasion of legal obligations and
duties, and the reduction of difficulties
of administration and supervision over
corporations. The corporate names of LA, et. al. not
are "identical with, or deceptively or confusingly
similar" to that of LPI. The corporate names of LA, et.
al. all carry the word "Lyceum", but confusion and
deception are effectively precluded by the appending
of geographic names to the word "Lyceum".
Etymologically, the word "Lyceum" is the Latin word
for the Greek lykei on, which refers to a locality on
the river Ilissius in ancient Athens "comprising an
enclosure dedicated to Apollo and adorned with
fountains and buildings erected by
Pisistratus, Pericles and Lycurgus frequented by the
youth for exercise and by the philosopher Aristotle
and his followers for teaching." In time, the word
"Lyceum" became associated with schools and other
institutions providing public lectures and concerts
and public discussions. Today, the word "Lyceum"
generally refers to a school or an institution of
learning. "Lyceum" is in fact as generic in character
as the word "university." In the name of LPI, "Lyceum"
appears to be a substitute for "university". In other
places," Lyceum", or "Liceo", or "Lycee", denotes a
secondary school or a college. It may be that the use
of the word "Lyceum" may not yet be as widespread
as the use of "university," but it is clear that a not
inconsiderable number of educational institutions
have adopted "Lyceum" or "Liceo" as part of their
corporate names. Since "Lyceum" or "Liceo" denotes
a school or institution of learning, it is not unnatural
to use this word to designate an entity which is
organized and operating as an educational
institution.

NO. LPI claimed that the word "Lyceum" has

acquired a secondary meaning in relation to it,
hence, appropriable by it to the exclusion of other
institutions. The doctrine of secondary meaning
originated in the field of trademark law. Its
application has been extended to corporate names,
since the right to use a corporate name to the
exclusion of others is based upon the same principle
which underlies the right to use a particular
trademark or trade name. In Philippine Nut Industry,
Inc. v. Standard Brands, Inc., the doctrine of
secondary meaning was elaborated thus:" . . . a word
or phrase originally incapable of exclusive
appropriation with reference to an article on the
market, because geographically or otherwise
descriptive, might nevertheless have been used so
long and so exclusively by one producer with
reference to his article that, in that trade and to that
branch of the purchasing public, the word or phrase
has come to mean that the article was his
product."No evidence was ever presented in the
hearing before the Commission which sufficiently
proved that the word 'Lyceum' has indeed acquired
secondary meaning in favor of LPI. If there was any of
this kind, the same tend to prove only that LPI had
been using the disputed word for a long period of
time. Nevertheless, LPIs exclusive use of the word
Lyceum was never established or proven, as in fact
the WPLI was already using the word Lyceum
seventeen (17)years prior to the date LPI started
using the same word in its corporate name.
Furthermore, educational institutions of the Roman
Catholic Church had been using the same or similar
word ('Liceo de Manila,' 'Liceo de Baleno', 'Liceo de
Masbate,' 'Liceo de Albay') long before LPI started
using the word 'Lyceum'. LPI also failed to prove that
the word Lyceum has become so identified with its
educational institution that confusion will surely arise
in the minds of the public if the same word were to
be used by other educational institutions. While LPI
may have proved that it had been using the word
Lyceum for a long period of time, this fact alone did
not amount to mean that the said word had acquired
secondary meaning in its favor because LPI failed to
prove that it had been using the same word all by
itself to the exclusion of others. More so, there was
no evidence presented to prove that confusion will
surely arise if the same word were to be used by
other educational institutions.

LPI is not entitled to a legally enforceable

exclusive right to use the word "Lyceum" in its
corporate name and other institutions may use
"Lyceum" as part of their corporate names. To
determine whether a given corporate name is
"identical" or "confusingly or deceptively similar" with
another entity's corporate name, it is not enough to
ascertain the presence of "Lyceum" or "Liceo" in both
names. One must evaluate corporate names in their
entirety and when the name of petitioner is
juxtaposed with the names of LA, et.al., they are not
reasonably regarded as "identical" or "confusingly or
deceptively similar" with each other.
 17. Marshall-Wells Co. v. Henry W. Wiser and
Co., 46 Phil. 70 [1924]

Facts:

Marshall-Wells Company, an Oregon corporation,

sued Henry W. Elser & Co., Inc., a domestic
corporation, in the Court of First Instance of Manila,
for the unpaid balance of a bill of goods sold by
plaintiff to defendant and for which plaintiff holds
accepted drafts. Defendant demurred to the
complaint on the statutory ground that the plaintiff
has not legal capacity to sue. In the demurrer,
counsel stated that "The said complaint does not
show that the plaintiff has complied with the laws of
the Philippine Islands in that which is required of
foreign corporations desiring to do business in the
Philippine Islands, neither does it show that it was
authorized to do business in the Philippine Islands."
The demurrer was sustained by the trial judge.
Inasmuch as the plaintiff could not allege compliance
with the statute, the order was allowed to become
final and an appeal was perfected.

Issue: Whether or not obtaining of the license

prescribed in section 68, as amended, of the
Corporation Law a condition precedent to the
maintaining of any kind of action in the courts of the
Philippine Islands by a foreign corporation?

Ruling: Corporations have no legal status beyond

the bounds of the sovereignty by which they are
created. A state may restrict the right of a foreign
corporation to engage in business within its limits,
and to sue in its courts. But by virtue of state comity,
a corporation created by the laws of one state is
usually allowed to transact business in other states
and to sue in the courts of the forum.

Defendant isolates a portion of one sentence of

section 69 of the Corporation Law and asks the court
to give it a literal meaning. Counsel 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." Plaintiff, on the contrary,
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.

The object of the statute was to subject the

foreign corporation doing business in the Philippines
to the jurisdiction of its courts. The 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
on 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.

18. Mentholatum Co., Inc. v. Mangaliman, 72

Phil. 524 [1941]

Facts:

On October 1, 1935, the Mentholatum Co., Inc.,

and the Philippine-American Drug Co., Inc. instituted
an action in the Court of First Instance of Manila, civil
case No. 48855, against Anacleto Mangaliman,
Florencio Mangaliman and the Director of the Bureau
of Commerce for infringement of trade mark and
unfair competition. Plaintiffs prayed for the issuance
of an order restraining Anacleto and Florencio
Mangaliman from selling their product
"Mentholiman," and directing them to render an
accounting of their sales and profits and to pay
damages. The complaint stated, that the
Mentholatum Co., Inc., is a Kansas corporation which
manufactures Mentholatum; that the Philippine-
American Drug co., Inc., is its exclusive distributing
agent in the Philippines authorized by it to look after
and protect its interests; that the Mentholatum Co.,
Inc., registered with the Bureau of Commerce and
Industry the word, "Mentholatum," as trade mark for
its products; that 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";
and that, as a consequence of these acts of the
defendants, plaintiffs suffered damages from the
dimunition of their sales and the loss of goodwill and
reputation of their product in the market.

In the Court of Appeals, the decision of the trial

court was reversed, said tribunal holding that the
activities of the Mentholatum Co., Inc., were business
transactions in the Philippines, and that, by section
69 of the Corporation Law, it may not maintain the
present suit. Hence, this petition for certiorari.

Issues:
(1) Whether or not the petitioners could prosecute
the instant action without having secured the license
required in section 69 of the Corporation Law; and

(2) Whether or not the Philippine-American Drug Co.,

Inc., could by itself maintain this proceeding.

Ruling: Section 69 of Act No. 1459 reads: 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 in the section immediately
preceding. Any officer, 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.

In the present case, no dispute exists as to

facts: (1) that the plaintiff, the Mentholatum Co., Inc.,
is a foreign corporation; (2) that it is not licensed to
do business in the Philippines. The controversy, in
reality, hinges on the question of whether the said
corporation is or is not transacting business in the
Philippines.

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 that 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 complaint filed clearly stated that the

Philippine-American Drug Co., Inc., is the exclusive
distributing agent in the Philippine Islands of the
Mentholatum Co., Inc., in the sale and distribution of
its product known as the Mentholatum." The object of
the pleadings being to draw the lines of battle
between litigants and to indicate fairly the nature of
the claims or defenses of both parties, a party cannot
subsequently take a position contradictory to, or
inconsistent with, his pleadings, as the facts therein
admitted are to be taken as true for the purpose of
the action. 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 violation of
trade mark and unfair competition. Neither may the
Philippine-American Drug Co., Inc., maintain the
action here for the reason that the distinguishing
features of the agent being his representative
character and derivative authority, it cannot now, to
the advantage of its principal, claim an independent
standing in court.
19. Merrill Lynch Futures, Inc. v. Cam, 211
SCRA 824 [1992]

Facts:

Merrill Lynch Futures Inc (MLFI) is a non-resident

corporation not doing business in the Philippines and
duly organized and existing under the laws of
Delaware. It entered into a Futures Customer
Agreement with Lara spouses. Orders were
transmitted to MLFI by Lara spouses through Merrill
Lynch Philippines Inc., a Philippine corporation
servicing MLFI's customers. Lara spouses became
indebted to MLFI, which the latter claimed from the
Laras. The Laras refused on the ground that the
transactions were null and void, because Merrill
Lynch Philippines had no license to operate as a
commodity or financial futures broker. MLFI filed a
complaint with the QC RTC for recovery of said debt.
The Laras moved to dismiss on the ground that MLFI
had been doing business in the Philippines; hence
MLFI is prohibited by law to maintain or intervene in
any action. The Laras alleged they were not aware
Merrill Lynch Philippines had no license to do
business in this country. All their transactions had
actually been with MERRILL LYNCH PIERCE FENNER &
SMITH, INC., and not with MLFI
MLFI had indeed done business with the Lara spouses
in the Philippines. MLFI did deal with futures
contracts in exchanges in the US in behalf and for the
account of the Laras, and that on several occasions
the latter received account documents and money in
connection with those transactions. The Lara Spouses
actively traded in futures contracts, including "stock
index futures" for four years. Because of a loss
incurred in respect of transactions involving "index
futures," and after setting this off against an amount
owed by MLFI to the Lara Spouses, said spouses
became indebted to ML FUTURES for the ensuing
balance which the latter asked them to pay. However,
the Laras refused to pay alleging that the
transactions were null and void because Merrill Lynch
Philippines, Inc., the Philippine company servicing
accounts of MLFI had no license to operate as a
commodity and/or financial futures broker. Hence,
MLFI filed a complaint with RTC against Spouses Lara
for the recovery of a debt and interest thereon,
damages, and attorney's fees. The Lara spouses filed
a motion to dismiss on the grounds that MLFI had "no
legal capacity to sue" and although not licensed to do
so, MLFI had been doing business in the Philippines.
Hence, MLFI is prohibited by law to maintain or
intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines.

Issues:
1. Whether or not MLFI was doing business in the
Philippines without a license.
2. Whether or not MLFI may sue in the Philippine
Courts to establish and enforce its rights against
Spouses Lara, in light of the undeniable fact that
it had transacted business in this country
without being licensed to do so
Rulings:
1. Yes. There being otherwise no question respecting
the genuineness of the documents (since it was
not controverted by MLFI, nor of their relevance to
at least one of the grounds for dismissal (ie. the
prohibition on suits in Philippine Courts by foreign
corporations doing business in the country without
license), it would have been a superfluity for SC to
require prior proof of their authenticity.

MLFI was doing business in the Philippines without

a license. MLFI, operating in the US, had indeed
done business with the Lara Spouses in the
Philippines over several years (4 yrs), 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 MLFI
being licensed to so transact business here, and
without MLPI being authorized to operate as a
commodity futures trading advisor, an entity
which, not being a broker, furnishes advice on
commodity futures to persons who trade in futures
contracts. The Laras did transact business with
MLFI 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 MLFI did deal with futures contracts in
exchanges in the US 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.

2. Yes. 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.

A party is estopped to challenge the personality

of a corporation after having acknowledged the
same by entering into a contract with it.
"Doctrine of estoppel to deny corporate
existence applies to 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. 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, where
such person has acted as agent for the
corporation and has violated his fiduciary
obligations as such, and where the statute does
not provide that the contract shall be void, but
merely fixes a special penalty for violation of the
statute. Lara received benefits generated by
their business relations with MLFI which
spanned a period of 7 years. It would appear
quite inequitable for the Lara to evade payment
of an otherwise legitimate indebtedness due
and owing to MLFI upon the plea that it should
not have done business in this country in the
first place.

20. New York Marine Managers, Inc. v. CA, 65

SCAD 163, 249 SCRA 416 [1995]

Facts:

On 25 July 1990 American Natural Soda Ash

Corporation (ANSAC) loaded in Portland, U.S.A., a
shipment of soda ash on board the vessel "MS Abu
Hanna" for delivery to Manila. The supplier/shipper
insured the shipment with petitioner. Upon arrival in
Manila the shipment was unloaded and transferred to
the vessel "MV Biyayang Ginto" owned by private
respondent. Since the shipment allegedly sustained
wettage, hardening and contamination, it was
rejected as total loss by the consignees. When the
supplier sought to recover the value of the cargo loss
from petitioner the latter paid the claim in the
amount of US$58,323.96.

On 20 November 1991 petitioner as subrogee

filed with the Regional Trial Court of Manila a
complaint for damages against private respondent
alleging that Plaintiff is a non-life foreign insurance
corporation organized under the laws of the State of
New York and engaged in an isolated transaction in
this case; defendant is a local domestic corporation
organized under Philippine law.

Issue: Whether or not Plaintiff had no legal capacity

to sue.

Ruling: A foreign corporation not engaged in

business in the Philippines may exercise the right to
file an action in Philippine courts for an isolated
transaction. However, to say merely 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. When the
allegations in the complaint have a bearing on the
plaintiff's capacity to sue and merely state that the
plaintiff is a foreign corporation existing under the
laws of the United States, such averment conjures
two alternative possibilities: either the corporation is
engaged in business in the Philippines, or it is not so
engaged. In the first, the corporation must have been
duly licensed in order to maintain the suit; in the
second, and the transaction sued upon is singular
and isolated, no such license is required. In either
case, compliance with the requirement of license, or
the fact that the suing corporation is exempt
therefrom, as the case may be, cannot be inferred
from the mere fact that the party suing is a foreign
corporation. The qualifying circumstance being an
essential part of the plaintiff's capacity to sue must
be affirmatively pleaded. Hence, the ultimate fact
that a foreign corporation is not doing business in the
Philippines must first be disclosed for it to be allowed
to sue in Philippine courts under the isolated
transaction rule. 8 Failing in this requirement, the
complaint filed by petitioner with the trial court, it
must be said, fails to show its legal capacity to sue.

21. Phil. Columbia Enterprises Co. v. Lantin, 39

SCRA 376 [1971]

Facts:
Private respondent Katoh & Co., Ltd., alleged in
its complaint that it is a corporation duly organized
and under the laws of Japan, with head office in
Tokyo, Japan. The complaint alleged ten (10) causes
of action against the defendants, the petitioners
herein, Philippine Columbia Enterprises, Co., with
principal place of business in Manila, and the general
partners, thereof, Rufino Dy Chin and Fermin Sy, who
reside in Manila. These ten (10) causes of action are
for the collection of payment of ten (10) different
shipments of angle bars, mild steels bars and cold
rolled steel sheets allegedly ordered in May, July,
October and November, 1966 by the defendants from
the plaintiff which plaintiff had duly shipped and
defendants duly received but which defendants
refused to pay. The complaint does not allege that
plaintiff has secured a license to transact business in
the Philippines but it alleges that it "has not been and
is not engaged in business in the Philippines and that
the transactions averred in this complaint were
exports made and consummated in Tokyo, Japan in
pursuance of international trade."

Petitioners-defendants moved to dismiss the

complaint on the grounds: that the plaintiff has no
legal capacity to sue. Petitioners averred that the
very causes of action alleged in the complaint
constitute by themselves transacting business in the
Philippines by the plaintiff, for by their contracts the
goods were to be delivered to, and be paid for in, the
Philippines; the transactions were characterized by
their frequency and continuity; and the amounts
involved were substantial. Petitioners again
manifested their readiness to prove also that
respondent company had been engaged in selling
and buying steel and other products for more than
seven years in the Philippines, that it maintains a
regular office in the Philippines, and that the
contracts it had entered into were perfected and
consummated in the Philippines pursuant to orders
solicited and negotiated by respondent company's
representatives, in the Philippines.

Issue: Whether or not respondent-plaintiff's

allegations in its complaint, particularly in its (10)
causes of action, constitute by themselves an
admission that it is transacting business in the
Philippines.

Ruling: It is petitioners' position that respondent

company is transacting business in the Philippines
and that petitioners have evidence to show that the
transactions involved in the ten (10) causes of action
were transactions in that Philippines, apart from
other activities of respondent company in the
Philippines, contrary to the allegations in the
complaint; that it was error and, in fact, abuse of
discretion by the trial court in not allowing them to
present their evidence before proceeding to trial on
the merits.

Actions by foreign corporations are governed by

rules different from those in action against them. A
counterclaim partakes of the nature of a complaint
and/or cause of action against the plaintiff, 6 so that
if the petitioners-defendants should file a
counterclaim, the private respondent-plaintiff Katoh
& Co., Ltd., would be a defendant thereto, in which
case the said foreign corporation would not be
maintaining a suit and, consequently, Section 69 of
the Corporation Law would not apply.

22. Signetics Corp. v. CA, 44 SCAD 357, 225

SCRA 737 [1993]

Facts:
The petitioner, Signetics Corporation (Signetics),
was organized under the laws of the United States of
America. Through Signetics Filipinas Corporation
(SigFil), a wholly-owned subsidiary, Signetics 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 CORPORATION, and may be
served summons at Philips Electrical Lamps, Inc., Las
Pias, Metro Manila and/or c/o Technology Electronics
Assembly & Management (TEAM) Pacific Corporation,
Electronics Avenue, FTI Complex, Taguig, Metro
Manila," service of summons was made on Signetics
through TEAM Pacific Corporation.

Petitioner filed a motion to dismiss the

complaint on the ground of lack of jurisdiction over
its person. Invoking Section 14, Rule 14, of the Rules
of Court and the rule laid down in Pacific Micronisian
Line, Inc., v. Del Rosario and Pelington to the effect
that the fact of doing business in the Philippines
should first be established in order that summons
could be validly made and jurisdiction acquired by
the court over a foreign corporation.

The RTC denied the Motion to dismiss. While the

CA affirmed RTC. Hence this petition. The petitioner
argues that what was effectively alleged in the
complaint as an activity of doing business was "the
mere equity investment" of petitioner in SigFil, which
the petitioner insists, had theretofore been
transferred to TEAM holdings, Ltd.

Issue: Whether or not the lower court, had correctly

assumed jurisdiction over the petitioner, a foreign
corporation, on its claim in a motion to dismiss, that
it had since ceased to do business in the Philippines.

Ruling: Signetics cannot, at least in this early stage,

assail, on the one hand, the veracity and correctness
of the allegations in the complaint and proceed, on
the other hand, to prove its own, in order to hasten a
peremptory escape. As explained by the Court
in Pacific Micronisian, summons may be served upon
an agent of the defendant who may not necessarily
be its "resident agent designated in accordance with
law." The term "agent", in the context it is used in
Section 14, refers to its general meaning, i.e., one
who acts on behalf of a principal.

The allegations in the complaint have thus been

able to amply convey that not only is TEAM Pacific
the business conduit of the petitioner in the
Philippines but that, also, by the charge of fraud, is
none other than the petitioner itself.

The rule 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" (Facilities Management Corporation 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.
Hence, 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.

23. Sta. Ana v. Malawi, 24 SCRA 1018, 1025

[1968]

Facts:

Florentino Maliwat filed with the Patent Office an

application for registration of the trademark
FLORMANN, which is used on shirts, pants, jackets
and shoes for ladies, men, and children, claiming first
use in commerce of the said mark on 15 January
1962. The claim of first use was subsequently
amended to 6 July 1955.

Jose P. Sta. Ana filed an application for the

registration of the tradename FLORMEN SHOE
MANUFACTURERS (SHOE MANUFACTURERS
disclaimed),3 which is used in the business of
manufacturing ladies' and children's shoes. His claim
of first use in commerce of the said tradename is 8
April 1959.

In view of the admittedly confusing similarity

between the trademark FLORMANN and the
tradename FLORMEN, the Director of Patents
declared an interference. After trial, the respondent
Director gave due course to Maliwat's application and
denied that of Sta. Ana.

Issue: Whether or not there was trademark

infringement.

Ruling: Modern law recognizes that the protection to

which the owner of a trademark mark is entitled is
not limited to guarding his goods or business from
actual market competition with identical or similar
products of the parties, but extends to all cases in
which the use by a junior appropriator of a trademark
or tradename is likely to lead to a confusion of
source, as where prospective purchasers would be
misled into thinking that the complaining party has
extended his business into the or is in any way
connected with the activities of the infringer; or when
it forestalls the normal potential expansion of his
business.

Republic Act No. 166, as amended, provides: the

owner of a trademark, tradename or service-mark
used to distinguish his goods, business or services
from the goods, business or services of others shall
have the right to register the same on the principal
register, unless it consists of or comprises a mark or
tradename which resembles a mark or tradename
registered in the Philippines or a mark or tradename
previously used in the Philippines by another and not
abandoned, as to be likely, when applied to or used
in connection with the goods, business or services of
the applicant, to cause confusion or mistake or to
deceive purchasers; Note that the provision does not
require that the articles of manufacture of the
previous user and the late user of the mark should
possess the same descriptive properties or should fall
into the same categories as to bar the latter from
registering his mark in the principal register.
Therefore, whether or not shirts and shoes have the
same descriptive properties, or whether or not it is
the prevailing practice or the tendency of tailors and
haberdashers to expand their business into shoes
making, are not controlling. The meat of the matter is
the likelihood of confusion, mistake or deception
upon purchasers of the goods of the junior user of the
mark and the goods manufactured by the previous
user. Here, the resemblance or similarity of the mark
FLORMANN and the name FLORMEN and the
likelihood of confusion, one to the other, is admitted;
therefore, the prior adopter, respondent Maliwat, has
the better right to the use of the mark.

24. Universal Mills Corporation v. Universal

Textile Mills, Inc., 78 SCRA 62 [1977].

Facts:

In 1953, Universal Textile Mills, Inc. (UTMI) was

organized. In 1954, Universal Hosiery Mills
Corporation (UHMC) was also organized. Both are
actually distinct corporations but they engage in the
same business (fabrics). In 1963, UHMC petitioned to
change its name to Universal Mills Corporation
(UMC). The Securities and Exchange Commission
(SEC) granted the petition.

Subsequently, a warehouse owned by UMC was

gutted by fire. News about the fire spread and
investors of UTMI thought that it was UTMIs
warehouse that was destroyed. UTMI had to make
clarifications that it was UMCs warehouse that got
burned. Eventually, UTMI petitioned that UMC should
be enjoined from using its name because of the
confusion it brought. The SEC granted UTMIs
petition. UMC however assailed the order of the SEC
as it averred that their tradename is not deceptive;
that UTMIs tradename is qualified by the word
Textile, hence, there can be no confusion.

Issue: Whether or not appellant's corporate name is

confusingly and deceptively similar to that of
appellee's.

Ruling: Yes. There is definitely confusion as it was

evident from the facts where the investors of UTMI
mistakenly believed that it was UTMIs warehouse
that was destroyed. The corporate names in question
are not Identical, but they are indisputably so similar
that even under the test of reasonable care and
observation as the public generally are capable of
using and may be expected to exercise invoked by
appellant, confusion will usually arise, considering
that under the second amendment of its articles of
incorporation on August 14, 1964, appellant included
among its primary purposes the manufacturing,
dyeing, finishing and selling of fabrics of all kinds in
which respondent had been engaged for more than a
decade ahead of petitioner. Factually, the
Commission found existence of such confusion, and
there is evidence to support its conclusion. Since
respondent is not claiming damages in this
proceeding, it is, of course, immaterial whether or not
appellant has acted in good faith.

The SEC did not act in abuse of its discretion

when it order UMC to drop its name because there
was a factual evidence presented as to the confusion.
Further, when UMC filed its petition for change of
corporate name, it made an undertaking that it shall
change its name in the event that there is another
person, firm or entity who has obtained a prior right
to the use of such name or one similar to it. That
promise is still binding upon the corporation and its
responsible officers.

25. Universal Shipping Lines, Inc. v.

Intermediate Appellate Court, 188 SCRA
170 [1990]

Facts:

SEVALCO Limited, owned and operated by the

petitioner, shipped from Rotterdam Netherlands, to
Bangkok, Thailand, aboard its M/V "TAIWAN", two (2)
cargoes of 50 palletized cartons. They were
respectively consigned to S. Lersen Company, Ltd.
and Muang Ngarm Retreads, Ltd. Both shipments
were insured with the private respondent, Alliance
Assurance Company, Ltd., a foreign insurance
company domiciled in London, England, which had
withdrawn from the Philippine market on June 30,
1951 yet.

Despite the arrival of the vessel at Bangkok, the

cargo was not unloaded nor delivered to the
consignee, S. Lersen Company, Ltd. The shipment
was delivered to Muang Ngarm Retreads, Ltd.
because the cargoes had been either totally or
partially dissolved in saltwater which flooded Hatch
No. 2 of the vessel where they had been stored.

Upon arrival in Manila, Arturo C. Saavedra,

master of M/V "TAIWAN" filed a marine protest. The
consignees, S. Lersen Co., Ltd. and Muang Ngarm
Retreads, Inc., filed their respective formal claims for
loss and damage to their cargoes. The insurer paid
both claims in the amounts of I2,180 and 2,547.18
for the loss and damage to their cargoes.

Private respondent, as insurer-subrogee, filed an

action in the Court of First Instance of Manila to
recover from the petitioner and its Manila agent,
Carlos Go Thong & Company, what it paid the
consignees of the cargo.

After trial, the court a quo rendered judgment

ordering defendants Universal Shipping Lines, Inc.
and Carlos Go Thong & Co., jointly and severally, to
pay plaintiff Alliance Asurance Co., Ltd.

On appeal to the Court of Appeals, the decision

was affirmed after exculpating petitioner's ship-
agents in Manila (Go Thong) from any liability on the
ground that it had no participation in the shipment of
the cargo which had been loaded and discharged in
places other than Manila.

Issue: Whether or not a foreign corporation which

sues a local entity for claims arising from their
contractual relations is doing business or not.
Ruling: We uphold the appellate court's ruling that
the private respondent may sue in Philippine courts
upon the marine insurance policies issued by it
abroad to cover international-bound cargoes shipped
by a Philippine carrier, even if it has no license to do
business in this country, for it is not the lack of the
prescribed license (to do business in the Philippines)
but doing business without such license, which bars a
foreign corporation from access to our courts.
 26. Wang Laboratories, Inc. v. Mendoza, 156
SCRA 44 [1987].

Facts:

Petitioner is a corporation duly organized under

the laws of the United States with principal address
at One Industrial Avenue, Lowell, Massachusetts,
U.S.A., engaged in the business of manufacturing and
selling computers worldwide. In the Philippines,
petitioner sells its products to EXXBYTE
TECHNOLOGIES CORPORATION, hereinafter referred
to as EXXBYTE, its exclusive distributor. EXXBYTE is a
domestic corporation engaged in the business of
selling computer products to the public in its own
name for its own account.

Angara, Concepcion, Regala & Cruz Law Offices

(ACCRALAW) is a duly registered professional
partnership. On September 10, 1980, respondent
ACCRALAW entered into a contract with EXXBYTE for
acquisition and installation of a Wang 2200 US
Integrated Information System at the former's office.
As stipulated in the above-said contract, a letter of
credit for US$ 86,142.55 was thereafter opened by
ACCRALAW in favor of petitioner herein to pay for the
Wang 2200 US System. Sometime in May 1981, the
hardware was delivered and installed by EXXBYTE in
ACCRALAW's office.

On June 10, 1981, ACCRALAW and EXXBYTE

entered into another contract for the development of
a data processing software program needed to
computerize the ACCRALAW office. Subsequent
thereto and for one reason or the other, the contract
for the development of a data processing software
program or ISLA was not implemented. ACCRALAW
filed a complaint for breach of contract with
damages, replevin and attachment against herein
petitioner.
 On March 29, 1985, ACCRALAW filed an Ex-
Abundante Cautela Motion for leave to Effect
Extraterritorial Service of Summons on petitioner. In
an order respondent Judge Mendoza, granted the Ex-
Abundante Cautela Motion to Effect Extraterritorial
Service of Summons, denied the petitioner's motion
to dismiss on the ground that it had voluntarily
submitted itself to the jurisdiction of the court, and
thus declined to consider the legal and factual issues
raised in the Motion to Dismiss. Hence, this petition.

Issue: Whether or not respondent Court has

acquired jurisdiction over the person of the
petitioner, a foreign corporation.

Ruling: In its Motion to Dismiss, petitioner

interposed that the court has no jurisdiction over its
person primarily because it is a United States
corporation with principal address at One Industrial
Avenue, Lowell, Massachusetts, U.S.A., is not
domiciled in the Philippines, does not have any office
or place of business in the Philippines, is not licensed
to engage and is not engaging in business here.
EXXBYTE upon whom summons was served on behalf
of this defendant is a local company entirely separate
and distinct from and is not the representative of the
defendant.

Petitioner's contention is untenable. The issue is

not novel in our jurisdiction.

There are three (3) modes of effecting service of

summons upon private foreign corporations as
provided for in Section 14, Rule 7 of the Rules of
Court, to wit: (1) by serving upon the agent
designated in accordance with law to accept service
of summons; (2) if there is no resident agent, by
service on the government official designated by law
to that office; and (3) by serving on any officer or
agent of said corporation within the Philippines.
 Summons intended for the petitioner was
served on EXXBYTE at the 3rd. Floor, Zeta Building,
191 Salcedo Street, Legaspi Village, Makati, Metro
Manila as its duly authorized and exclusive
representative and distributor in the Philippines.
Petitioner opposed such service and filed a Motion to
Dismiss on the ground of lack of jurisdiction on its
person, being a foreign corporation not engaged in
business in the Philippines. Evidence presented by
private respondent however, shows that contrary to
petitioner's allegations, the various public
advertisements of WANG and EXXBYTE clearly show
that Wang has appointed EXXBYTE, which is
domiciled in the Philippines, as its authorized
exclusive representative in this country. In fact,
WANG represents that its office in the Philippines is
EXXBYTE, while the letterhead of EXXBYTE and its
invoices show that it is WANG's representative.
Moreover, in its Reply to Opposition to Motion to
Dismiss, WANG itself admitted that it deals
exclusively with EXXBYTE in the sale of its products in
the Philippines.

In the cases of Mentholatum Co., Inc. v.

Mangaliman, it was held that no general rule or
governing principle can be laid down as to what
constitutes doing or "engaging" or "trading" in
business. Indeed each case must be judged in the
light of its peculiar environmental circumstances;
upon peculiar facts and upon the language of the
Statute applicable.

Under the circumstances; petitioner cannot

unilaterally declare that it is not doing business in the
Philippines. In fact, it has installed, at least 26
different products in several corporations in the
Philippines since 1976. It has registered its trade
name with the Philippine Patents Office and Mr. Yeoh
who is petitioner's controller in Asia has visited the
office of its distributor for at least four times where
he conducted training programs in the Philippines.
Wang has allowed its registered logo and trademark
to be used by EXXBYTE and made it known that there
exists a designated distributor in the Philippines as
published in its advertisements.

It has been held that "where a single act or

transaction of a foreign corporation is not merely
incidental or casual but is of such character as
distinctly to indicate a purpose to do other business
in the State, such act constitutes doing business
within the meaning of statutes prescribing the
conditions under which a foreign corporation may be
served with summons.

Although a foreign corporation is not doing

business in the Philippines, it may be sued for acts
done against persons in the Philippines. The Court
has ruled as follows: Indeed if a foreign corporation,
not engaged in business in the Philippines, is not
barred 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.

Furthermore, even though petitioner objects to

the jurisdiction of the Court over its person, the fact
that it alleged non-jurisdictional grounds in its
pleadings indicates that it has waived lack of
jurisdiction of the court.

As noted by the trial court, defendant Wang

(petitioner herein) in its Motion to Dismiss sought
affirmative reliefs requiring the exercise of
jurisdiction, by praying: (1) for authority to take
testimony by way of deposition upon oral
examination; (2) for extension of time to file
opposition to plaintiffs' motion to effect
Extraterritorial Service of Summons; (3) to hold in
abeyance any and all proceedings relative to
plaintiffs' foregoing motion and (4) to consider as a
mere scrap of paper plaintiff's motion to strike out
Deposition.
 In addition, the records show that petitioner also
prayed for: (1) authority to reset date of taking of
deposition; (2) admission of the formal stenographic
notes and (3) suspension of time to file responsive
pleadings, not to mention its various participation in
the proceedings in the court other than for the
purpose of objecting to lack of jurisdiction.

In fact, it is well settled that "A voluntary

appearance is a waiver of the necessity of formal
notice." Thus, it has been held that when the
appearance is by motion for the purpose of objecting
to the jurisdiction of the court over the person it must
be for the sole and separate purpose of objecting to
the jurisdiction of the Court. If the appearance is for
any other purpose, the defendant is deemed to have
submitted himself to the jurisdiction of the court.
Such an appearance gives the court jurisdiction over
the person. Clarifying further, the Court has likewise
ruled that even though the defendant objects to the
jurisdiction of the Court, if at the same time he
alleges any non-jurisdictional ground for dismissing
the action, the Court acquires jurisdiction over him.