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#1
THE HOME INSURANCE COMPANY VS. EASTERN SHIPPING LINES
G.R. No. L-34382, July 20, 1983,GUTIERREZ, JR., J.
In two separate instances, herein petitioner Home Insurance paid the consignees
(Phelps Dodge, International Harvester) under its insurance policy, by virtue of which the former
became subrogated to the rights and actions of the consignees against herein respondents
Eastern Shipping Lines and Columbian Philippines. But said respondents failed and refused to pay
the same, prompting the petitioner to file complaints against them.
In both cases, the petitioner averred that it is duly authorized to do business in the
Philippines. The respondents denied the allegations which refer to petitioners capacity to sue for
lack of knowledge or information sufficient to form a belief as to the truth thereof. The trial court
dismissed the complaints in the two cases on the same ground that the plaintiff failed to prove its
capacity to sue but admitting that if it had such capacity, respondents are liable and should pay the
petitioner with interest. When the insurance contracts which formed the basis of these cases were
executed, the petitioner had not yet secured the necessary licenses and authority. The lower court,
therefore, declared that pursuant to the basic public policy reflected in the Corporation Law, the
insurance contracts executed before a license was secured must be held null and void. The court
ruled that the contracts could not be validated by the subsequent procurement of the license.
ISSUE
Whether the petitioner has a capacity to sue by virtue of its subsequent registration.
RULING YES.
The applicable provision of the old Corporation Law, Act 1459, as amended is:
"Sec. 68. No foreign corporation or corporations formed, organized, or existing under any laws
other than those of the Philippine Islands shall bepermitted to transact business in the Philippine
Islands until after it shallhave obtained a license for that purpose. . ."
In Marshall Wells Co. v.Henry W. Elser & Co. (46 Phil. 70), the object of Sections 68 and
69 of the Corporation Law was to subject the foreign corporation doing business inthe Philippines
to the jurisdiction of our courts. The lawsimply means that no foreign corporation shall be permitted
'to transactbusiness in the Philippine Islands,' unless it shall have the license required by law, and,
until it complies with thelaw, shall not be permitted to maintain any suit in the local courts.
Insofar as transacting business without a license is concerned, Section 69 ofthe
Corporation Law imposed a penal sanction imprisonment, fine, or both.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 demandwhatever. The Corporation Law is silent on whether or not the
contractexecuted by a foreign corporation with no capacity to sue is null and void abinitio.
We are not unaware of the conflicting schools of thought both here and abroad which
are divided on whether such contracts are void or merelyvoidable. Professor Sulpicio Guevarra in
his book Corporation Law cites an Illinois decisionwhich holds the contracts void and a Michigan
statute and decision declaringthem merely voidable:
"Where a contract which is entered into by a foreign corporation without complying with the local
requirements of doing business is rendered voideither by the express terms of a statute or by
statutory construction, asubsequent compliance with the statute by the corporation will not enable
itto maintain an action on the contract. (Illinois statute) . . . But where the statute merely prohibits
the maintenance of a suit onsuch contract (without expressly declaring the contract 'void'), it was
heldthat a failure to comply with the statute rendered the contract voidable andnot void, and
compliance at any time before suit was sufficient. (Michigan statute)
Our jurisprudence leans towards the view that the very fact that the prohibition
againstmaintaining an action in the courts of the state was inserted in the statuteought to be
conclusive proof that the legislature did not intend or understandthat contracts made without
compliance with the law were void. The statutedoes not fix any time within which foreign
corporations shall comply with theAct. If such contracts were void, no suits could be prosecuted on
them in any court. . . . The primary purpose of our statute is to compel a foreigncorporation
desiring to do business within the state to submit itself to thejurisdiction of the courts of this state.
The statute was not intended toexclude foreign corporations from the state. It does not, in terms,
renderinvalid contracts made in this state by non-complying corporations. Thebetter reason, the
wiser and fairer policy, and the greater weight lie withthose decisions which hold that where, as
here, there is a prohibition with apenalty, with no express or implied declarations respecting the
validity ofenforceability of contracts made by qualified foreign corporations, the contracts . . .
enforceable . . . upon compliance with the law. (Peter & Burghard Stone Co. v. Carper, 172 N.E.
319 [1930]).
Apart from the objectivesearlier cited from Marshall Wells Co. v. Henry W. Elser & Co.
(supra), it haslong been the rule that a foreign corporation actually doing business in the
Philippines without license to do so may be sued in our courts.There is no question that the
contracts are enforceable. The requirement ofregistration affects only the remedy.
#2
FIRST PHILIPPINE INTERNATIONAL BANK v. CA
FACTS: Producer Bank of the Philippines acquired six parcels of land with a total area of 101
hectares located at Don Jose, Sta. Rosa, Laguna. The property used to be owned by BYME
Investment and Development Corporation which had them mortgaged with the bank as collateral
fora loan. The original plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to purchase the
property and thus initiated negotiations with Mercurio Rivera, the manager of Producers Bank, for
that purpose.
Defendant bank, through defendant Rivera, acknowledged receipt of the negotiation letter and
stated, in its communication of December 2, 1987 that said letter has been referred x xx to the
office of our Conservator for proper disposition. However, no response came from the Acting
Conservator.endants through Acting Conservator Encarnacion repudiated the authority of
defendant Rivera and claimed that his dealings with the plaintiffs, particularly his counter-offer of
P5.5 Million are unauthorized or illegal.
Plaintiffs filed a suit for specific performance with damages against the bank, its Manager Rivera
and Acting Conservator Encarnacion. The basis of the suit was that the transaction had with the
bank resulted in a perfected contract of sale. The defendants took the position that there was no
such perfected sale because the defendant Rivera is not authorized to sell the property, and that
there was no meeting of the minds as to the price.
On July 11, 1992, during the pendency of the proceedings in the Court of Appeals, Henry Co and
several other stockholders of the Bank, through counsel Angara Abello Concepcion Regala and
Cruz, filed an action (hereafter, the Second Case) -purportedly a derivative suit - with the
Regional Trial Court of Makati, Branch 134, docketed as Civil Case No. 92-1606, against
Encarnacion, Demetria and Janolo to declare any perfected sale of the property as
unenforceable and to stop Ejercito from enforcing or implementing the sale.
ISSUE:
Whether there was forum shopping on the part of Petitioner Bank
RULING: We rule for private respondent
To begin with, forum-shopping originated as a concept in private international law, where non-
resident litigants are given the option to choose the forum or place wherein to bring their suit for
various reasons or excuses, including to secure procedural advantages, to annoy and harass the
defendant, to avoid overcrowded dockets, or to select a more friendly venue. To combat these less
than honorable excuses, the principle of forum non conveniens was developed whereby a court, in
conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most
convenient or available forum and the parties are not precluded from seeking remedies
elsewhere.
In this light, Blacks Law Dictionarysays that forum-shopping occurs when a party attempts to
have his action tried in a particular court or jurisdiction where he feels he will receive the most
favorable judgment or verdict. Hence, according to Words and Phrases a litigant is open to the
charge of f orum shopping whenever he chooses a forum with slight connection to factual
circumstances surrounding his suit, and litigants should be encouraged to attempt to settle their
differences without imposing undue expense and vexatious situations on the courts.
In the Philippines, forum-shopping has acquired a connotation encompassing not only a choice of
venues, as it was originally understood in conflicts of laws, but also to a choice of remedies. As to
the first (choice of venues), the Rules of Court, for example, allow a plaintiff to commence personal
actions where the defendant or any of the defendants resides or may be found, or where the
plaintiff or any of the plaintiffs resides, at the election of the plaintiff (Rule 4, Sec. 2 [b]). As to
remedies, aggrieved parties, for example, are given a choice of pursuing civil liabilities
independently of the criminal, arising from the same set of facts. A passenger of a public utility
vehicle involved in a vehicular accident may sue on culpa contractual, culpa aquiliana or culpa
criminal - each remedy being available independently of the others - although he cannot recover
more than once.
Applying the foregoing principles in the case before us and comparing it with the Second Case, it
is obvious that there exist identity of parties or interests represented, identity of rights or causes
and identity of reliefs sought.
Very simply stated, the original complaint in the court a quo which gave rise to the instant petition
was filed by the buyer (herein private respondent and his predecessors-in-interest) against the
seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand,
the complaintin the Second Case seeks to declare such purported sale involving the same real
property as unenforceable as against the Bank, which is the petitioner herein. In other words, in
the Second Case, the majority stockholders, in representation of the Bank, are seeking to
accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the
objective or the relief being sought, though worded differently, is the same, namely, to enable the
petitioner Bank to escape from the obligation to sell the property to respondent.
#3
MCGEE v. INTERNATIONAL INSURANCE CO.
FACTS: In 1944, Lowell Franklin, a resident of California, bought a life insurance policy from an
Arizona corporation,naming petitioner as beneficiary. Later, respondent, a Texas corporation,
agreed to assume the insurance obligations of the Arizona corporation, and mailed a reinsurance
certificate to petitioner's son in California, offering to insure him in accordance with his policy.
In 1950, Franklin died. His mother, the beneficiary, notified the insurance company of his death.
Respondent refused to pay, claiming that Franklin committed suicide. McGee obtained judgment
against the insurance company in California state court and attempted to enforce it in Texas.
th
Texas state court refused to enforce the California judgment holding it was void under the 14
amendment (lack of jurisdiction).
ISSUE:
Whether the insurance company , a non-resident corporation, is subject to jurisdiction in a state
where it never had any office or agent, merely because it was a party to contract with a resident of
the state
Ruling:
Turning to this case we think it apparent that the Due Process Clause did not preclude the
California court from entering a judgment binding on respondent. It is sufficient for purposes of due
process that the suit was based on a contract which had substantial connection with that State. Cf.
Hess v. Pawloski,274 U.S. 352 ; Henry L. Doherty & Co. v. Goodman, 294 U.S. 623 ; Pennoyer v.
Neff, 95 U.S. 714, 735 .2 The contract was delivered in California, the premiums were mailed from
there and the insured was a resident of that State when he died. It cannot be denied that California
has a manifest interest in providing effective means of redress for its residents when their insurers
refuse to pay claims. These residents would be at a severe disadvantage if they were forced to
follow the insurance company to a distant State in order to hold it legally accountable. When
claims were small or moderate individual claimants frequently could not afford the cost of bringing
an action in a foreign forum - thus in effect making the company judgment proof. Often the crucial
witnesses - as here on the company's defense of suicide will be found in the insured's locality Of
course there may be inconvenience to the insurer if it is held amenable to suit in California where it
had this contract but certainly nothing which amounts to a denial of due process.. There is no
contention that respondent did not have adequate notice of the suit or sufficient time to prepare its
defenses and appear.
The California statute became law in 1949, after respondent had entered into the agreement with
Franklin to assume Empire Mutual's obligation to him. Respondent contends that application of the
statute to this existing contract improperly impairs the obligation of the contract. We believe that
contention is devoid of merit. The statute was remedial, in the purest sense of that term, and
neither enlarged nor impaired respondent's substantive rights or obligations under the contract. It
did nothing more than to provide petitioner with a California forum to enforce whatever substantive
rights she might have against respondent. At the same time respondent was given a reasonable
time to appear and defend on the merits after being notified of the suit. Under such circumstances
it had no vested right not to be sued in California.
#4
VALMONTE v. ALCALA
FACTS:The petitioners alleged that they are the unregistered owners of Apartment No. 1411
located at Echabelita Street, Paco, Manila, as the petitioner Maria Lourdes is one of the heirs and
successors-in-interests of Cornelio Arreola and Antonina Pascua, the registered owners of the
property. Since the petitioners were migrating to the United States, they offered Apartment No.
1411 for lease to the respondent at the rate ofP1,500.00 per month beginning January 1980; the
latter accepted the offer. The lease contract, initially verbal, was consummated by the respondents
payment of two (2) months rental fees and the petitioners delivery to the respondent of the keys.
Due to the respondents subsequent failure to pay the agreed rentals despite written demand, the
petitioners filed a complaint for unlawful detainer against her on April 26, 2002 before the MTC.As
the petitioners were already US residents at that time, they signed the required
Verification/Certification of Non-Forum Shopping of their complaint before a notary public in the
state ofWashington on March 18, 2002, and had this Verification/Certification authenticated by the
Philippine Consulate General in San Francisco on March 27, 2002. The respondent contended in
her defense that the petitioners had no cause of action against her; she was already the rightful
owner of Apartment No. 1411 by virtue of a sale between her and petitioners,as evidenced by the
Memorandum of Agreement datedAugust 8, 1987. On April 25, 2003, the MTC ruled in the
petitioners favor.The respondent appealed the MTC decision to the Regional Trial Court (RTC),
Branch 50, Manila, which reversed the MTC ruling in its decision dated November 3, 2004.
The petitioners responded to the reversal by filing a Petition for Review(CA Petition) with the CA
on March 31, 2005. On the same date, they also formally manifestedwith the CA that to comply
with the verification and certification requirements under Sections 1 and 2 of Rule 42 of the Rules
of Court they were in the meantime submitting a photostatic copy of theVerification/Certification as
the original was still in the Philippine Consulate in San Francisco for authentication. They promised
to submit the original document as soon as the consulate completed the authentication
process. Indeed, on April 8, 2005, petitioners submitted to the CA the original authenticated
Verification/Certification and moved that the appellate court consider the submission as full
compliance with the verification requirements of the Rules.
Meanwhile, the CA issued April 8 Resolutiondismissing the petition due to the petitioners failure to
attach the complaint, the answer, the position papers filed with the MTC, the memorandum filed
with the RTC, and other material portions of the record supporting the allegations of the
petition. The petitioners received a copy of this April 8 Resolution on April 15, 2005.
On April 28, 2005, the petitioners moved for the reconsiderationof the April 8 Resolution, attaching
thereto the missing pleadings. The CA denied the motion.
ISSUE: WON variance between the dates of the verification/certification executed abroad and the
CA petition is fatal considering the parties are residing overseas.
RULING: No.
First, the variance in dates does not necessarily contradict the categorical declaration made by
petitioners in their affidavit that they read and understood the contents of the pleading. The
petitioners claim in this regard is that they read a copy of the CA Petition through an electronic
mail sent to them by their lawyers. In short, the pleading and the verification are prepared
separately and a variance in their dates is a matter that may satisfactorily be explained. To
demand the litigants to read the very same document that is to be filed before the courts is too
rigorous a requirement; what the Rules require is for a party to read the contents of a pleading
without any specific requirement on the form or manner in which the reading is to be done. That a
client may read the contents of a pleading without seeing the same pleading to be actually filed
with the court is, in these days of e-mails and other technological advances in communication, not
an explanation that is hard to believe. Apparently in this case, counsel sent a copy of the draft
petition by e-mail and finalized it as soon as it was approved by the petitioners. The latter, on the
other hand, complied with their end not only by approving the terms of the petition, but also by
sending a copy of their sworn statement in order to file the petition soonest, thereby complying with
the required timeliness for the filing of the petition. To our mind, beyond the manner of these
exchanges, what is important is that efforts were made to satisfy the objective of the Rule to
ensure good faith and veracity in the allegations of a pleading thereby allowing the courts to act
on the case with reasonable certainty that the petitioners real positions have been pleaded.

Second, the "circumstances" we mentioned above refer to the petitioners unique situation as
parties residing overseas who are litigating locally through their local counsel. While these
overseas litigants are not excused from complying with our Rules such as the strict observance of
the periods for appeal and the verification requirement, we must take into account the attendant
realities brought into play because they are suing from overseas or via long distance
communications with their counsel. In the verification requirement, there are added formalities
required for the acceptance in the Philippines of statements sworn overseas before foreign
notaries; we require their authentication by our consulates. This is a process whose completion
time may vary depending, among others, on various factors such as the location of the requesting
party from the consulate; the peculiarities of foreign laws on notaries; the volume of transactions in
a consulate, noting particularly the time of year when the authentication is requested; and the
mode of sending the authenticated documents to the Philippines. Apparently compelled by one or
a combination of these reasons, the petitioners in fact manifested when they filed their petition that
they were submitting a photostatic copy of the Verification/Certification executed in Washington on
March 17, 2005 since the original was still with the Philippine Consulate in San Francisco for
authentication. We take judicial notice that the petitioners request for authentication coincided with
the observance of the Holy Week. We find it significant that, conformably with their Manifestation,
the petitioners counsel filed on April 8, 2005 the duly sworn and authenticated Verification as soon
as counsel received it. Under these circumstances, there is every reason for an equitable and
relaxed application of the rules to the petitioners situation.

Third, we discern utmost good faith on the part of the petitioners when they filed their Manifestation
about their problem, intent, and plan of compliance with the verification requirement. They in fact
stated early on through this Manifestation that their verification had been executed on March 17,
2005 in Washington, that is, at a date much earlier than the filing of their petition and
manifestation. Unfortunately, the CA failed to note the variance in dates at the earliest opportunity;
thus, the CA dismissed the petition on some other ground, only to hark back later on to the
variance in dates in their reconsideration of the earlier dismissal. Given this good faith and the
early disclosure, it was basically unfair for the CA who had earlier overlooked the variance in
dates to subsequently make this ground the basis of yet another dismissal of the petition. The
CA after overlooking the variance in dates at the first opportunity should have at least asked for
the petitioners explanation on why the variance should not be an additional ground for the
dismissal of the petition, instead of reflecting in their order on reconsideration that it could have
granted the motion for reconsideration based on attachments already made, but there existed
another reason the variance in dates for maintaining the dismissal of the petition.

Fourth, we note that most of the material allegations set forth by petitioners in their CA Petition are
already in their complaint for unlawful detainer filed before the MTC on April 26, 2002. Attached to
the complaint was a Verification/Certification dated March 18, 2002 in which petitioners declared
under oath that they had caused the preparation of the complaint through their lawyers and had
read and understood the allegations of the complaint. The material facts alleged in the CA Petition
are likewise stated in the records of the case, as part of the findings of facts made by the MTC and
the RTC. Verification as to the truth of these facts in the petition for review before the CA was,
therefore, strictly a redundancy; its filing remained a necessity only because the Rules on the filing
of a petition for review before the CA require it. This consideration could have led to a more
equitable treatment of the petitioners failure to strictly comply with the Rules, additionally justified
by the fact that the failure to comply with the rules on verification is a formal rather than a
jurisdictional defect.