Global Business Holdings, Inc.

v.
Surecomp Software, B.V.
G.R. No. 173463
October 13, 2010
Facts:

Global Business Holdings merged with Asian Banking Corporation (ABC), with the former
as the surviving corporation. Prior to the merger, ABC had an existing software license agreement
with Surecomp Software, a foreign corporation in the Netherlands for the ABC’s bank operation
system for a period of twenty years. After the merger, Global Business holdings found the
software unusable, and therefore terminated the contract with Surecomp Software. As a result
of the early termination, Surecomp filed an action for breach of contract with damages before
the Philippine RTC. Global Business moved to dismiss the case on the ground that Surecomp had
no capacity to sue because it was doing business in the Philippines without a license. RTC ruled
in favor of Surecomp hodling that Global Business, being the successor in interest of ABC is
estopped from denying Surecomps capacity to sue, to which the CA agreed, hence this petition.

Issue: Whether or not Global Business Holdings is estopped from denying Surecomp’s capacity
to sue.

Ruling: Yes.

As a general rule, a corporation has a legal status only within the state or territory in which
it was organized. In order to subject a foreign corporation doing business in the country to the
jurisdiction of our courts, it must acquire a license from the Securities and Exchange Commission
and appoint an agent for service of process, without which it cannot institute a suit in the
Philippines. The exception to this rule is the doctrine of estoppel. A foreign corporation doing
business in the Philippines without license may sue in Philippine courts a Filipino citizen or a
Philippine entity that had contracted with and benefited from it. A party is estopped from
challenging the personality of a corporation after having acknowledged the same by entering into
a contract with it. The principle is applied to prevent a person contracting with a foreign
corporation from later taking advantage of its noncompliance with the statutes, chiefly in cases
where such person has received the benefits of the contract.