TUNG HO V.
TING GUAN Taiwan is not a signatory to the New York
FACTS:
Ting Guan Trading Corporation (TGTC), a
domestic corporation organized under the laws
of the Philippines, obligated itself under a
contract of sale to deliver heavy metal scrap iron
and steel to Tung Ho Steel Enterprises (THSE), a
foreign corporation organized under the laws of
Taiwan, Republic of China.
THSE filed a request for arbitration before the
ICC International Court of Arbitration (ICC) in
Singapore after TGTC failed to deliver the full
quantity of the promised heavy metal scrap iron
and steel.
The ICC ruled in favor of THSE and ordered TGTC
to pay THSE.
THSE filed an action against TGTC for the
recognition and enforcement of the arbitral
award before the Regional Trial Court (RTC) of
Makati. TGTC moved to dismiss the case based
on THSE lack of capacity to sue and for
prematurity.
TGTC subsequently filed a supplemental motion
to dismiss based on improper venue. TGTC
argued that the complaint should have been
filed in Cebu where its principal place of business
was located.
The RTC denied TGTC motion to dismiss.
TGTC moved to reconsider the order and raised
the RTC’s alleged lack of jurisdiction over its
person as additional ground for the dismissal of
the complaint.
TGTC insisted that Ms. Fe Tejero, on whom
personal service was served, was not its
corporate secretary and was not a person
allowed under Section 11, Rule 14 of the Rules of
Court to receive a summons. It also asserted that
Tung Ho cannot enforce the award in the
Philippines without violating public policy as
Convention.
The RTC denied the motion and ruled that TGTC
had voluntarily submitted to the court’s
jurisdiction when it raised other arguments apart
from lack of jurisdiction in its motion to dismiss.
ISSUE:
WON RTC acquire jurisdiction over Ting Guan?
HELD:
Tejero was not the proper person to receive the
summons. Nonetheless there is no reason to
disturb the lower courts’ finding that Tejero was
not a corporate secretary and, therefore, was
not the proper person to receive the summons
under Section 11, Rule 14 of the Rules of Court.
This Court is not a trier of facts; cannot re-
examine, review or re-evaluate the evidence and
the factual review made by the lower courts. In
the absence of compelling reasons, it will not
deviate from the rule that factual findings of the
lower courts are final and binding on this Court.
Moreover, TinTGTC voluntarily appeared before
the trial court. However, the Court cannot agree
with the legal conclusion that the appellate court
reached, given the established facts. To the
Court mind, TGTC voluntarily appeared before
the trial court in view of the procedural recourse
that it took before that court. Its voluntary
appearance is equivalent to service of summons.
HANG LUNG BANK, LTD. V. JUDGE SAULOG
FACTS:
This is a petition for certiorari seeking to nullify
the two orders of the RTC which dismissed the
complaint of Hang Lung Bank for collection of
sum of money on the ground that Hang Lung
Bank is a Hong Kong based bank and is barred by
the General Banking Act from maintaining a suit
in this jurisdiction. The issue stemmed from the
foregoing:
Hang Lung Bank which is not doing any business
in the Philippine entered into a loan with
Worlder Enterprises with Cordova Chin San as
the guarantor under a continuing guaranty to
the extent of 250,000 HK dollars. Worlder Ent
failed to pay, and so Hang Lung Bank filed in
Hong Kong’s SC a collection suit against both
Chin San and Worlder Ent. Summons were
served in their address at HK but failed to
respond thereto. As a result, SC of Hong Kong
rendered judgment in favor of Hang Lung Bank.
Thereafter, petitioner through counsel sent a
demand letter to Chin San at his Philippine
address but again, no response was made
thereto. Hence, on October 18, 1984, petitioner
instituted in the court below an action seeking
"the enforcement of its just and valid claims
against private respondent, who is a local
resident, for a sum of money based on a
transaction which was perfected, executed and
consummated abroad.
In his answer to the complaint, Chin San raised
as affirmative defenses: lack of cause of action,
incapacity to sue and improper venue. Before
the trial Chin San filed a motion to dismiss based
on the grounds above which was granted by RTC.
Its dismissal was anchored on the following:
Section 14, General Banking Act provides:
"No foreign bank or banking corporation
formed, organized or existing under any
laws other than those of the Republic of the
Philippines, shall be permitted to transact
business in the Philippines, or maintain by
itself any suit for the recovery of any debt,
claims or demands whatsoever until after it
shall have obtained, upon order of the
Monetary Board, a license for that
purpose." Any officer, director or agent of
any such corporation who transacts
business in the Philippines without the said
license shall be punished by imprisonment
for not less than one year nor more than
ten years and by a fine of not less than one
thousand pesos nor more than ten
thousand pesos.
Hang Lung Bank filed a motion for the
reconsideration of said order but it was denied
for lack of merit. Hence, the instant petition for
certiorari seeking the reversal of said orders "so
as to allow petitioner to enforce through the
court below its claims against private
respondent as recognized by the Supreme Court
of Hong Kong.
ISSUE:
WON petitioner foreign banking corporation has
the capacity to file the action below.
HELD:
SC ruled that the issue of the improper venue
need not be tackled because the same was
waived by Chin San when he filed his answer to
the complaint thereby necessarily implying
submission to the jurisdiction of the court.
With regards to the main issue, Chin San was
correct in contending that that since petitioner is
a bank, its capacity to file an action in this
jurisdiction is governed by the General Banking
Act (Republic Act No. 337), particularly Section
14 as found above. The court adhered to its
previous construction of the said provision which
is almost identical to the Old Corporation Law
(Sec. 69, Act No. 1459). In a long line of cases, it
has ruled that a foreign corporation is not
prohibited from suing or maintaining a cause of
action in the Philippine courts. What it seeks to
prevent is a foreign corporation doing business
in the Philippines without a license from gaining
access to Philippine courts. The 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 it from performing single acts
but to prevent it from acquiring a domicile for copied the Hongkong judgment with respect to
the purpose of business without taking the steps private respondent's liability.
necessary to render it amenable to suit in the
However, a foreign judgment may not be
local courts. What was prohibited by the suit was
enforced if it is not recognized in the jurisdiction
the act of doing business in the Philippine with
where affirmative relief is being sought. Hence,
the lack of license, license is a requirement
in the interest of justice, the complaint should be
before a Corporation is subject to the jurisdiction
considered as a petition for the recognition of
of the Court. However, in order for a foreign
the Hong Kong judgment under Section 50 (b),
corporation to maintain a suit in the Philippines,
Rule 39 of the Rules of Court in order that
it has to have a license.
Cordova Shin San may present evidence of lack
The fairly recent case of Universal Shipping Lines of jurisdiction, notice, collusion, fraud or clear
vs. Intermediate Appellate Court, although mistake of fact and law, if applicable.
dealing with the amended version of Section 69
of the old Corporation Law, Section 133 of the
Corporation Code (Batas Pambansa Blg. 68), but
which is nonetheless apropos, states the rule
succinctly: "it is not the lack of the prescribed
license (to do business in the Philippines) but
doing business without license, which bars a
foreign corporation from access to our courts."
In this case, the court ruled that a foreign
corporation not licensed to do business in the
Philippines may file a suit in this country.

Since petitioner foreign Banking Corporation

was not doing business in the Philippines, it may
not be denied the privilege of pursuing its claims
against private respondent for a contract which
was entered into and consummated outside the
Philippines. Otherwise we will be hampering the
growth and development of business relations
between Filipino citizens and foreign nationals.
Worse, we will be allowing the law to serve as a
protective shield for unscrupulous Filipino
citizens who have business relationships abroad.

The complaint therefore appears to be one of

the enforcement of the Hongkong judgment
because it prays for the grant of the affirmative
relief given by said foreign judgment. Although
petitioner asserts that it is merely seeking the
recognition of its claims based on the contract
sued upon and not the enforcement of the
Hongkong judgment it should be noted that in
the prayer of the complaint, petitioner simply