Professional Documents
Culture Documents
FOREIGN CORPORATIONS
I.
Definition;
Nature
of
a
Foreign
Corporation
A.
Definition
(Section
123)
Section
123.
Definition
and
rights
of
foreign
corporations.
For
the
purposes
of
this
Code,
a
foreign
corporation
is
one
formed,
organized
or
existing
under
any
laws
other
than
those
of
the
Philippines
and
whose
laws
allow
Filipino
citizens
and
corporations
to
do
business
in
its
own
country
or
state.
It
shall
have
the
right
to
transact
business
in
the
Philippines
after
it
shall
have
obtained
a
license
to
transact
business
in
this
country
in
accordance
with
this
Code
and
a
certificate
of
authority
from
the
appropriate
government
agency.
(n)
foreign
corporation.)
B.
Two
requirements
to
be
considered
a
foreign
corporation:
1. Organized
in
another
country.
o Regardless
of
the
ownership
(e.g.
a
corporation
organized
under
foreign
laws
even
if
wholly
owned
by
Filipinos)
2. The
laws
of
the
corporations
home
state
allows
for
Filipino
citizens
and
corporations
to
do
business
thereat
(policy
of
reciprocity).
o The
presence
of
absence
of
reciprocity
affects
its
capacity
to
do
business
in
the
Philippines.
C.
Nature
of
the
Corporate
Creature
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Avon
Insurance
PLC
v.
Court
of
Appeals,
278
SCRA
312,
86
SCAD
401
(1997).
Times,
Inc.
v.
Reyes,
39
SCRA
303
(1971),
citing
Perkins
v.
Dizon,
69
Phil.
186
(1939).
3
Times,
Inc.
v.
Reyes,
39
SCRA
303
(1971),
citing
Paul
v.
Virginia,
8
Wall.
168
(1869);
Sioux
Remedy
Co.
v.
Cape
and
Cope,
235
U.S.
197
(1914);
Cyclone
Mining
Co.
v.
Baker
Light
&
Power
Co.,
165
Fed.
996
(1908).
4
SALONGA,
PRIVATE
INTERNATIONAL
LAW,
1979
ed.,
p.
344.
5
The
chapter
does
not
cover
nor
discuss
the
concept
of
"doing
business"
in
the
field
of
taxation,
as
the
subject
is
itself
a
technical
matter
that
deserves
a
separate
discussion.
6
Villanueva,
C.
L.,
&
Villanueva-Tiansay,
T.
S.
(2013).
Philippine
Corporate
Law.
(2013
ed.).
Manila,
Philippines:
Rex
Book
Store.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
II.
License
to
Do
Business
in
the
Philippines
A.
Application
for
License
(Sections
124
and
125;
Art.
48,
Omnibus
Investment
Code)
Section
124.
Application
to
existing
foreign
corporations.
Every
foreign
corporation
which
on
the
date
of
the
effectivity
of
this
Code
is
authorized
to
do
business
in
the
Philippines
under
a
license
therefore
issued
to
it,
shall
continue
to
have
such
authority
under
the
terms
and
condition
of
its
license,
subject
to
the
provisions
of
this
Code
and
other
special
laws.
(n)
Section
125.
Application
for
a
license.
A
foreign
corporation
applying
for
a
license
to
transact
business
in
the
Philippines
shall
submit
to
the
Securities
and
Exchange
Commission
a
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
series,
if
any;
8.
A
statement
of
its
outstanding
capital
stock
and
the
aggregate
number
of
shares
which
the
corporation
has
issued,
itemized
by
classes,
par
value
of
shares,
shares
without
par
value,
and
series,
if
and
liabilities
of
the
corporation
as
of
the
date
not
exceeding
one
(1)
year
immediately
prior
to
the
filing
of
the
application.
Foreign
banking,
financial
and
insurance
corporations
shall,
in
addition
to
the
above
requirements,
comply
with
the
provisions
of
existing
laws
any;
9.
A
statement
of
the
amount
actually
paid
in;
and
10.
Such
additional
information
as
may
be
necessary
or
appropriate
in
order
to
enable
the
Securities
and
Exchange
Commission
to
determine
whether
such
corporation
is
entitled
to
a
license
to
transact
business
Facts:
Marshall-Wells
Company
(an
Oregon,
U.S.
corporation)
sued
Henry
W.
Elser
&
Co.,
Inc.
(a
domestic
corporation)
in
CFI
Manila
for
the
unpaid
balance
on
goods
it
sold
to
the
latter.
Henry
W.
Elser
&
Co.,
Inc.
averred
that
Marshall-Wells
Company
has
no
legal
capacity
to
sue
since
there
is
no
showing
that
it
has
complied
with
the
laws
of
Philippines,
particularly
Section
69
of
the
Corporation
Law
where
it
states:
No
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
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.
Issue:
Whether
or
not
the
obtaining
of
the
license
prescribed
in
section
68,
as
amended,
of
the
Corporation
Law
is
a
condition
precedent
to
the
maintaining
of
any
kind
of
action
in
the
courts
of
the
Philippine
Islands
by
a
foreign
corporation.
Held:
NO.
The
SC
decided
in
favor
of
Marshall
Wells
Co.
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.
Doctrine:
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.
C.
Appointment
of
a
Resident
Agent
(Section
127
and
128)
Section
127.
Who
may
be
a
resident
agent.
A
resident
agent
may
be
either
an
individual
residing
in
the
Philippines
or
a
domestic
corporation
lawfully
transacting
business
in
the
Philippines:
Provided,
That
in
the
case
of
an
individual,
he
must
be
of
good
moral
character
and
of
sound
financial
standing.
(n)
Section
128.
Resident
agent;
service
of
process.
The
Securities
and
Exchange
Commission
shall
require
as
a
condition
precedent
to
the
issuance
of
the
license
to
transact
business
in
the
Philippines
by
any
foreign
corporation
that
such
corporation
file
with
the
Securities
and
Exchange
Commission
a
written
power
of
attorney
designating
some
person
who
must
be
a
resident
of
the
Philippines,
on
whom
any
summons
and
other
legal
processes
may
be
served
in
all
actions
or
other
legal
proceedings
against
such
corporation,
and
consenting
that
service
upon
such
resident
agent
shall
be
admitted
and
held
as
valid
as
if
served
upon
the
duly
authorized
officers
of
the
foreign
corporation
at
its
home
office.
Any
such
foreign
corporation
shall
likewise
execute
and
file
with
the
Securities
and
Exchange
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Commission
an
agreement
or
stipulation,
executed
by
the
proper
authorities
of
said
corporation,
in
form
and
substance
as
follows:
"The
(name
of
foreign
corporation)
does
hereby
stipulate
and
agree,
in
consideration
of
its
being
granted
by
the
Securities
and
Exchange
D.
Issuance
of
License
(Section
126;
Art.
49,
Omnibus
Investment
Code)
Section
126.
Issuance
of
a
license.
If
the
Securities
and
Exchange
Commission
is
satisfied
that
the
applicant
has
complied
with
all
the
requirements
of
this
Code
and
other
special
laws,
rules
and
regulations,
the
Commission
shall
issue
a
license
to
the
applicant
to
transact
business
in
the
Philippines
for
the
purpose
or
purposes
specified
in
such
license.
Upon
issuance
of
the
license,
such
foreign
corporation
may
commence
to
transact
business
in
the
Philippines
and
continue
to
do
so
for
as
long
as
it
retains
its
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
authority
to
act
as
a
corporation
under
the
laws
of
the
country
or
state
of
its
incorporation,
unless
such
license
is
sooner
surrendered,
revoked,
suspended
or
annulled
in
accordance
with
this
Code
or
other
special
laws.
Within
sixty
(60)
days
after
the
issuance
of
the
license
to
transact
business
in
the
Philippines,
the
license,
except
foreign
banking
or
insurance
corporation,
shall
deposit
with
the
Securities
and
Exchange
Commission
for
the
benefit
of
present
and
future
creditors
of
the
licensee
in
the
Philippines,
securities
satisfactory
to
the
Securities
and
Exchange
Commission,
consisting
of
bonds
or
other
evidence
of
indebtedness
of
the
Government
of
the
Philippines,
its
political
time,
allow
the
licensee
to
substitute
other
securities
for
those
already
on
deposit
as
long
as
the
licensee
is
solvent.
Such
licensee
shall
be
entitled
to
collect
the
interest
or
dividends
on
the
securities
deposited.
In
the
event
the
licensee
ceases
to
do
business
in
the
Philippines,
the
securities
deposited
as
aforesaid
shall
be
returned,
upon
the
licensee's
application
therefor
and
upon
proof
to
the
satisfaction
of
the
Securities
and
Exchange
Commission
that
the
licensee
has
no
liability
however,
That
within
six
(6)
months
after
each
fiscal
year
of
the
licensee,
the
Securities
and
Exchange
Commission
shall
require
the
licensee
to
deposit
additional
securities
equivalent
in
actual
market
value
to
two
(2%)
percent
of
the
amount
by
which
the
licensee's
gross
income
for
that
fiscal
year
exceeds
five
million
(P5,000,000.00)
pesos.
The
Securities
and
Exchange
Commission
shall
also
require
deposit
of
additional
securities
if
the
actual
market
value
of
the
securities
on
deposit
has
decreased
by
at
least
ten
(10%)
percent
of
their
actual
E.
Effects
of
Being
Issued
License
market
value
at
the
time
they
were
deposited.
The
Securities
and
Exchange
Commission
may
at
its
discretion
release
part
of
the
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Supreme
Court
has
held:
"The
purpose
of
the
law
is
to
subject
the
foreign
corporation
doing
business
in
the
Philippines
to
the
jurisdiction
of
our
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
steps
necessary
to
render
it
amenable
to
suits
in
the
1
local
courts."
1. Licensed
Foreign
Corporation
Deemed
Domesticated
F.
Amendment
of
License
(Section
131)
Section
131.
Amended
license.
A
foreign
corporation
authorized
to
transact
business
in
the
Eriks
Pte.
Ltd.
v.
Court
of
Appeals,
267
SCRA
567,
76
SCAD
70
(1997).
The
Court
also
held
in
that
case:
"It
was
never
the
intent
of
the
legislature
to
bar
court
access
to
a
foreign
corporation
or
entity
which
happens
to
obtain
an
isolated
order
for
business
in
the
Philippines.
Neither,
did
it
intend
to
shield
debtors
from
their
legitimate
liabilities
or
obligations.
But
it
cannot
allow
foreign
corporations
or
entities
which
conduct
regular
business
any
access
to
courts
without
the
fulfillment
by
such
corporation
of
the
necessary
requisites
to
be
subjected
to
our
government's
regulation
and
authority.
By
securing
a
license,
the
foreign
entity
would
be
giving
assurance
that
it
will
abide
by
the
decisions
of
our
courts,
even
if
adverse
to
it."
2
Villanueva,
C.
L.,
&
Villanueva-Tiansay,
T.
S.
(2013).
Philippine
Corporate
Law.
(2013
ed.).
Manila,
Philippines:
Rex
Book
Store.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
"[t]he
requirement
of
registration
affects
only
the
remedy,"
and
that
"the
lack
of
capacity
at
the
time
of
the
execution
of
the
contracts
was
cured
by
the
subsequent
registration."
1
2. Standing
to
Sue
(Section
133)
Held:
YES.
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.
Doctrine:
The
Corporation
Law
is
silent
on
whether
or
not
the
contract
executed
by
a
foreign
corporation
with
no
capacity
to
sue
is
null
and
laws. (69a)
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Section
144.
Violations
of
the
Code.
Violations
of
any
of
the
provisions
of
this
Code
or
its
amendments
not
otherwise
specifically
penalized
therein
shall
be
punished
by
a
fine
of
not
less
than
one
thousand
(P1,000.00)
pesos
but
not
more
than
ten
thousand
(P10,000.00)
pesos
or
by
imprisonment
for
not
less
than
thirty
(30)
days
but
not
more
than
five
(5)
years,
or
both,
in
the
discretion
of
the
court.
If
the
violation
is
committed
by
a
corporation,
the
same
may,
after
notice
and
hearing,
be
dissolved
in
appropriate
proceedings
before
the
Securities
and
Exchange
Commission:
Provided,
That
such
dissolution
shall
not
preclude
the
institution
of
appropriate
action
against
the
director,
trustee
or
officer
of
the
corporation
responsible
for
said
violation:
Provided,
further,
That
nothing
in
this
section
shall
be
construed
to
repeal
the
other
causes
for
dissolution
of
a
corporation
provided
in
this
Code.
(190
1/2
a)
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
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;
x x x
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
B.
Jurisprudential
Concepts
of
Doing
Business:
It
implies
a
continuity
of
commercial
dealings
and
arrangements
and
the
performance
of
acts
or
works
or
the
exercise
of
some
of
the
functions
normally
incident
to
the
purpose
or
object
of
a
foreign
corporations
organization.
Mentholatum
v.
Mangaliman,
72
Phil.
525
(1941).
1. Twin
Characterization
Test.2
a. Nature
of
the
act
or
transaction:
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
and
considered
as
the
true
test
of
doing
business
in
the
Philippines
is
whether
a
foreign
corporation
is
maintaining
or
continuing
in
the
Philippines
"the
body
or
substance
of
the
business
or
enterprise
for
which
it
was
organized
or
whether
is
has
substantially
retired
from
it
and
turned
it
over
to
another.
b. Existence
of
Continuing
Intent:
In
doing
the
act
or
transaction
there
was
an
intent
on
the
part
of
the
foreign
corporation
to
undertake
a
continuity
of
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
activity
undertaken
in
the
Philippines
amounts
to
doing
business
as
to
require
the
foreign
corporation
to
obtain
such
license.1
o Isolated
transactions,
even
when
perfected
and/or
consummated
within
Philippine
territory,
do
not
constitute
doing
business
in
the
Philippines,
and
do
not
constitute
the
essential
element
of
presence
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Litton
Mills,
Inc.
v.
Court
of
Appeals,
256
SCRA
696
(1996).
Pacific
Vegetable
Oil
Corp.
v.
Singson
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
business
from
the
Philippines,
from
securing
redress
in
the
Philippine
courts,
and
this,
in
effect,
to
permit
persons
to
avoid
their
contracts
made
with
such
foreign
corporation.
Doctrine:
CLV
OPINION:
The
Pacific
Vegetable
Oil
doctrine
does
consider
Defendants
refused
to
pay
for
the
damage,
so
the
surety
company
paid.
Defendants
Manila
Port
Service
and
Manila
Railroad
Company,
Inc.
alleged
that
the
plaintiff,
Aetna
casualty
&
Surety
Company,
is
a
foreign
corporation
not
duly
licensed
to
do
business
in
the
Philippines
and,
Issue:
Whether
or
not
the
appellant,
Aetna
Casualty
&
Surety
Company,
has
been
doing
business
in
the
Philippines.
Held:
NO.
It
is
merely
collecting
a
claim
assigned
to
it
by
the
consignee,
it
is
not
barred
from
filing
the
instant
case
although
it
has
not
secured
a
license
to
transact
insurance
business
in
the
Philippines.
While
plaintiff
Aetna
Casualty
&
Surety
Co.
v.
Pacific
Star
Line
Facts:
I.
Shalom
&
Co.
Inc.
were
supposed
to
receive
a
shipment
of
goods
carried
on
board
SS
Ampal
whose
operator
was
Pacific
Star
Line.
The
Bradman
Co.
Inc.,
was
the
ship
agent
in
the
Philippines
for
the
SS
Ampal,
while
the
Manila
Railroad
Co.
Inc.
and
Manila
Port
Service
were
the
arrastre
operators
in
the
port
of
Manila
and
were
authorized
to
delivery
cargoes
discharged
into
their
custody.
Aetna
Surety
Casualty
&
Surety
Co.
Inc.
insured
the
cargo
in
for
I.
Shalom.
The
SS
Ampal
arrived
in
Manila
but
due
to
the
negligence
of
the
defendants,
the
shipment
sustained
damages
representing
pilferage
and
seawater
damage.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
business.
standard
in
the
FIA
requires
physical
presence
Issue:
What
about
in
the
time
of
internet
and
telephone
solicitations
where
there
is
no
physical
presence
in
the
state?
4. Transactions
Seeking
Profit
Although
each
case
must
be
(2001).
ed.);
Cargill,
Inc.
v.
Intra
Strata
Assurance
Corp.,
615
SCRA
304
(2010),
citing
VILLANUEVA,
PHILIPPINE
CORPORATE
LAW
801-
802
(2001).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
In
2001,
Integrated
Silicon
filed
a
complaint
for
"Specific
Performance
and
Damages"
against
Agilent,
alleging
that
Agilent
breached
the
parties
oral
agreement
to
extend
the
VAASA.
Agilent
filed
a
separate
replevin
case
against
Integrated
Silicon,
praying
that
the
defendants
be
Held:
YES.
By
the
clear
terms
of
the
VAASA,
Agilents
activities
in
the
Philippines
were
confined
to
(1)
maintaining
a
stock
of
goods
in
the
Philippines
solely
for
the
purpose
of
having
the
same
processed
by
Integrated
Silicon;
and
(2)
consignment
of
equipment
with
Integrated
Silicon
to
be
used
in
the
processing
of
products
for
export.
As
such,
we
hold
that,
based
on
the
evidence
presented
thus
far,
Agilent
cannot
be
deemed
to
be
"doing
business"
in
the
Philippines.
As
a
foreign
corporation
not
doing
business
in
the
Philippines,
it
needed
no
license
before
it
can
sue
before
our
courts.
Doctrine:
The
principles
regarding
the
right
of
a
foreign
corporation
to
bring
suit
in
Philippine
courts
may
be
condensed
in
four
statements:
1. If
a
foreign
corporation
does
business
in
the
Philippines
without
a
license,
it
cannot
sue
before
the
Philippine
courts;
2. If
a
foreign
corporation
is
not
doing
business
in
the
Philippines,
it
needs
no
license
to
sue
before
Philippine
courts
on
an
isolated
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Examples:
o
Granger
Associates
v.
Microwave
Systems,
Inc.
Facts:
Granger
Associates
(foreign
corporation)
sued
Microwave
Systems,
Inc.
(domestic
corporation)
for
recovery
of
a
sum
of
money
arising
from
a
series
of
agreements
concluded
between
the
two.
In
the
principal
contract,
Granger
licensed
MSI
to
manufacture
and
sell
its
products
in
the
Philippines
and
extended
to
the
latter
certain
loans,
equipment
and
parts,
a
contract
for
the
sale
of
equipment.
Payment
of
these
contracts
not
having
been
made
as
agreed
upon,
Granger
filed
a
complaint
against
MSI
and
the
other
private
respondents.
In
its
answer,
MSI
alleged
the
affirmative
defense
that
the
plaintiff
had
no
capacity
to
sue
in
accordance
with
Section
133
of
the
Corporation
Code.
Granger
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
contends
that
its
various
transactions
with
MSI
were
mere
facets
of
the
basic
agreement
licensing
MSI
to
manufacture
and
sell
Granger's
products
in
the
Philippines.
All
subsequent
agreements
were
merely
auxiliary
to
that
first.
Issue:
Whether
Grangers
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.
La
Chemise
Lacoste,
S.A.
v.
Fernandez,
129
SCRA
373
(1984);
Schmid
&
Oberly
v.
RJL,
166
SCRA
493
(1988);
Wang
Laboratories,
Inc.
v.
Mendoza,
156
SCRA
44
(1974).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
manufactured
by
Western
Electric.
Herman,
OBrien,
Diaz,
Mapoy
and
Zamora
(defendants)
were
residents
of
the
Philippines.
They
filed
articles
of
incorporation
of
a
domestic
corporation
to
be
known
as
Western
Electric
Company,
Inc.
for
the
The
very
fact
that
the
defendants
have
sought
the
use
of
that
particular
name
for
that
identical
purpose
is
conclusive
evidence
of
the
fraudulent
intent
with
which
it
is
done.
Doctrine:
It
is
well
accepted
that
the
right
to
the
use
of
corporate
name
and
trade
name
is
a
property
right
a
right
in
rem,
which
may
assert
and
protect
against
all
the
world,
in
any
of
the
courts
of
the
world
even
in
Held:
YES.
It
is
true
that
Western
Electric
had
never
done
business
in
the
Philippines
and
had
not
obtained
license
to
do
business
in
the
Philippines.
However,
it
is
not
here
seeking
to
enforce
any
legal
or
contract
rights
arising
from,
or
growing
out
of,
any
business
which
it
has
transacted
in
the
Philippines.
The
sole
purpose
of
the
action
is
to
protect
its
reputation,
its
corporate
name
and
goodwill.
Western
Electric
has
been
in
existence
as
a
corporation
for
over
fifty
years,
during
which
time
it
has
established
a
reputation
all
over
the
world
including
the
Philippine
Islands,
for
the
kind
and
quality
of
its
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
corporation,
whether
licensed
to
do
business
or
not
in
the
Philippines,
with
a
mark
or
tradename
registered
in
the
Philippines,
may
bring
an
action
before
Philippine
courts
for
infringement,
unfair
competition,
false
designation
of
origin
and
false
description,
if
the
country
of
which
the
foreign
corporation
is
a
citizen,
or
in
which
it
is
domiciled,
by
treaty,
convention,
or
D.
Doctrine
on
Unrelated
or
Isolated
Transactions:
Antam
Consolidated
v.
Court
of
Appeals
Facts:
Stokely
Van
Camp
and
Capital
City
Product
Company
are
foreign
3
4
Ericks
Pte.
Ltd.
v.
Court
of
Appeals,
267
SCRA
567,
76
SCAD
70
(1997).
Eastboard
Navigation,
Ltd.
v.
Juan
Ysmael
and
Co.,
Inc.,
102
Phil.
1
(1957).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
corporations
not
engaged
in
business
in
the
Philippines
and
not
licensed.
Capital
City
entered
into
a
contract
with
Coconut
Oil
Manufacturing
(Comphil)
wherein
Comphil
undertook
to
sell
and
deliver
and
Capital
City
agreed
to
buy
500
long
tons
of
crude
coconut
oil
to
be
delivered
at
c.i.f.
price.
but
Comphil
failed
to
deliver
the
coconut
oil
so
petitioners
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.1
Doctrine:
The
doctrine
of
lack
of
capacity
to
sue
based
on
failure
to
first
filed
with
the
trial
court,
the
respondent
should
have
secured
the
requisite
license
to
do
business
in
the
Philippines
because,
in
fact,
it
is
doing
business.
Issue:
Whether
or
not
the
respondent
should
have
secured
the
requisite
license
because
it
was
doing
business
in
the
Philippines.
Held:
NO.
The
Supreme
Court
sustained
the
lower
court
in
not
dismissing
a
complaint
filed
by
a
foreign
corporation
on
the
basis
of
three
contracts
of
purchase
and
sale
of
coconut
oil
from
local
companies.
The
Court
found
that
from
the
facts
alone
it
could
be
deduced
that
there
was
only
one
agreement
between
the
petitioners
and
the
respondent
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
only
reason
why
the
respondent
entered
into
the
second
and
third
transactions
with
the
petitioners
was
because
it
wanted
to
recover
the
loss
it
sustained
from
the
failure
of
the
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
doing
or
engaging
in
business
as
contemplated
by
law.
Lorenzo
Shipping
v.
Chubb
and
Sons,
Inc.,
431
SCRA
266
(2004).
o
o
DOING
BUSINESS
SYNTHESIS:
(Atty.
Hofilea)
(1991).
Appointment
of
local
lawyer
by
foreign
movie
companies
who
have
registered
intellectual
property
rights
over
their
movies
in
the
Philippines,
to
protect
such
rights
for
piracy:
We
fail
to
see
how
exercising
one's
legal
and
property
rights
and
taking
steps
for
the
vigilant
protection
of
said
rights,
particularly
the
appointment
of
an
attorney-in-fact,
can
be
deemed
by
and
of
themselves
to
be
doing
business
here.
Columbia
Pictures
Inc.
v.
Court
of
Appeals,
261
SCRA
144
(1996).
Rationale:
rationale
for
the
allowing
foreign
corporations
not
doing
business
in
the
Philippines
to
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
should
get
a
license.
o Where
a
party
contracts
with
a
foreign
corporation
which
is
without
a
license,
and
such
party
has
derived
benefits,
such
party
will
be
estopped
from
posing
such
lack
of
license
as
a
defense
from
a
suit
initiated
by
the
corporation.
IV.
Suits
Brought
by
Foreign
Corporations
A.
Need
to
Allege
Capacity
to
Sue:
The
fact
that
a
foreign
corporation
is
not
doing
business
in
the
Philippines
must
be
alleged
if
a
foreign
corporation
desires
to
sue
in
Philippines
courts
under
the
isolated
transactions
rule.
In
this
case,
although
the
Supreme
Court
sustained
the
principle
upon
which
the
plaintiffs
appealed
the
dismissal,
it
nevertheless
upheld
the
dismissal
since
the
complaint
filed
with
the
lower
court
only
alleged
that
the
plaintiffs
are
foreign
corporation,
without
further
indicating
that
they
are
exempt
from
the
requisite
of
a
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
license
because
they
are
not
engaged
in
business
in
the
Philippines.
Atlantic
Mutual
Inc.
Co.
v.
Cebu
Stevedoring
Co.,
17
SCRA
1037
(1966).1
Atlantic
Mutual
Inc.
Co.
v.
Cebu
Stevedoring
Co
Facts:
Atlantic
Mutual
Insurance
Company
and
Continental
Insurance
Company
(Atlantic),
both
foreign
corporations
sued
Cebu
Stevedoring
Co.,
Inc.
(Cebu),
a
domestic
corporation,
for
recovery
of
a
sum
of
money
alleging
that
Cebu
undertook
to
carry
a
shipment
of
copra
and
that
upon
discharge,
a
portion
of
the
copra
was
found
damaged;
that
since
the
copra
had
been
insured
with
Atlantic
they
paid
the
shipper
and/or
consignee;
and
that
as
subrogee
to
the
shipper's
and/or
consignee's
rights,
Atlantic
demanded,
but
Cebu
did
not
pay.
Cebu
moved
to
dismiss
based
on:
(a)
that
Atlantic
had
"no
legal
personality
and
with
no
capacity
to
sue;"
and
(b)
that
the
complaint
did
not
state
a
cause
of
action.
Issue:
Whether
or
not
Atlantic
has
the
capacity
to
sue
Held:
NO.
But
where
as
in
the
present
case,
the
law
denies
to
a
foreign
corporation
the
right
to
maintain
suit
unless
it
has
previously
complied
with
a
certain
requirement,
then
such
compliance,
or
the
fact
that
the
suing
corporation
is
exempt
therefrom,
becomes
a
necessary
averment
in
the
complaint.
These
are
matters
peculiarly
within
the
knowledge
of
B.
Estoppel
Doctrine:
Under
the
principle
of
estoppel,
a
foreign
corporation
doing
business
in
the
Philippines
may
sue
in
Philippine
courts
even
without
license
to
do
business
against
a
Philippine
citizen
who
had
contracted
with
and
been
benefited
by
said
corporation
and
knew
it
to
be
without
the
necessary
license
to
do
business.
Merrill
Lynch
Futures,
Inc.
v.
Court
of
Appeals,
211
SCRA
824
(1992).3
Merrill
Lynch
Futures,
Inc.
v.
Court
of
Appeals
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Facts:
Merrill
Lynch
Futures,
Inc.,
through
a
domestic
corporation,
was
found
to
be
engaging
in
business
(commodity
futures)
in
the
Philippines
without
obtaining
the
proper
license.
It
brought
a
suit
in
Philippine
courts
to
enforce
a
claim
against
local
investors.
Issue:
Whether
or
not
Merril
Lynch
engaged
in
business
in
the
Philippines
without
the
requisite
license.
Held:
YES.
Although
the
Court
found
the
foreign
corporation
to
have
engaged
in
business
in
the
Philippines
without
the
requisite
license,
it
overturned
the
dismissal
of
the
suit,
on
the
ground
that
if
the
local
investors
knew
that
the
foreign
corporation
had
no
license
to
do
business
in
the
Philippines,
then
they
are
estopped
from
using
the
lack
of
license
to
avoid
their
obligations.
Doctrine:
The
rule
is
that
a
party
is
estopped
to
challenge
the
personality
of
a
corporation
after
having
acknowledged
the
same
by
entering
into
a
contract
with
it.
And
the
"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
corporate
entity
is
estopped
to
deny
its
corporate
existence
and
capacity."
The
principle
"will
be
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.1
The
"estoppel"
doctrine
was
also
reiterated
in
Georg
Grotjahn
GMBH
&
Co.
v.
Isnani,
235
SCRA
216,
54
SCAD
289
(1994).
Eriks
Ltd.
v.
Court
of
Appeals
Facts:
Eriks
Pte.,
Ltd.
is
a
non
resident
foreign
corporation
engaged
in
the
manufacture
and
sale
of
elements
used
in
sealing
pumps.
Delfin
Enriquez,
Jr.,
doing
business
under
the
name
and
style
of
Delrene
EB
Controls
Center
and/or
EB
Karmine
Commercial,
ordered
and
received
from
petitioner
various
elements
used
in
sealing
pumps,
valves,
pipes
and
control
equipment,
PVC
pipes
and
fittings
within
a
period
of
4
months.
The
transfer
of
goods
were
perfected
in
Singapore
for
private
respondents
account
with
a
90-day
credit
term.
Subsequently,
demands
were
made
by
petitioner
upon
private
respondent
to
settle
his
account,
but
the
latter
failed/refused
to
do
so.
Eriks
Pte.,
Ltd.
filed
with
the
RTC
a
complaint
for
the
recovery
of
US$41,939.63.
Private
respondent
responded
with
a
Motion
to
Dismiss,
contending
that
petitioner
corporation
had
no
legal
capacity
to
sue.
The
trial
court
dismissed
the
action
on
the
ground
that
Eriks
Pte.,
Ltd.
is
a
foreign
corporation
doing
business
in
the
Philippines
without
a
license.
Issue:
Whether
or
not
Eriks
Pte.,
Ltd
is
deemed
to
be
a
foreign
corporation
doing
business
in
the
Philippines
without
a
license
Held:
YES.
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.
Accordingly,
petitioner
must
be
held
to
be
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
to
first
go
to
the
process
of
obtaining
a
license
to
do
business
from
the
SEC,
and
then
file
the
proper
suits
before
the
local
courts;
otherwise,
they
run
the
risk,
as
it
should
be,
that
the
suit
would
be
dismissed,
but
not
on
the
merits,
but
as
a
consequence
of
its
failure
to
obtain
a
license,
without
prejudice
to
obtaining
such
license
and
re-filing
the
suit.1
C.
On
Isolated
Transactions:
A
foreign
corporation
not
licensed
to
do
business
in
the
Philippines
is
not
absolutely
incapacitated
from
filing
a
suit
in
local
court.
Aboitiz
Shipping
Corp.
v.
Insurance
Company
of
North
America,
561
SCRA
262
(2008).
V.
Suits
Against
Foreign
Corporations:
A.
Jurisdiction
Over
Foreign
Corporations
(Section
14,
Rule
14,
Rules
of
Court;
General
Corp.
of
the
Phil.
v.
Union
Insurance
Society
of
Canton,
Ltd.,
87
Phil.
313
(1950).2
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
RULES
OF
COURT
RULE
14
Section
14.
Service
upon
defendant
whose
identity
or
whereabouts
are
unknown.
In
any
action
where
the
defendant
is
designated
as
an
unknown
owner,
or
the
like,
or
whenever
his
whereabouts
are
unknown
and
registered
in
the
PH.
Said
registration
came
two
months
later.
Union
claimed
that
Fireman
was
not
doing
business
in
the
Philippines,
and
that
it
had
no
authority
from
its
co-defendant
to
receive
summons
on
its
behalf.
Issue:
Whether
or
not
summons
was
validly
served
upon
Fireman
as
would
confer
jurisdiction
over
said
corporation.
Held:
YES.
Service
of
summons
for
appellant
Fireman
on
its
settling
agent
Union
was
legal
and
gave
the
court
jurisdiction
over
Fireman.
"Doing
business
in
the
Philippines"
makes
no
distinction
as
to
whether
said
business
was
being
done
legally
or
without
authority
from
the
Government.
As
long
as
a
foreign
private
corporation
does
or
engages
in
business
in
this
jurisdiction,
it
should
and
will
be
amenable
to
process
and
the
jurisdiction
of
the
local
courts.
Hence
service
upon
any
agent
of
said
foreign
corporation
constitutes
personal
service
upon
the
corporation
and
accordingly
judgment
may
be
rendered
against
said.
Even
then,
Fireman
was
adjudged
of
doing
business
in
the
Philippines.
The
subject
transactions
were
not
casual
or
isolated
business
transactions.
According
to
the
evidence,
since
before
the
war,
the
Fireman's
Fund
Insurance
Co.
would
appear
to
have
engaged
in
this
kind
of
business
and
had
employed
its
co-defendant
Union
as
its
settling
agent.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Doctrine:
That
service
of
summons
on
a
foreign
corporation
may
be
made
only
upon
an
agent
of
said
corporation
residing
in
the
Philippines
refers
to
those
doing
business
in
the
Philippines
which
has
complied
with
the
law
and
obtained
the
corresponding
license
and
not
to
those
1. Service
of
Summons
under
the
Rules
of
Court
Hinged
Upon
Doing
Business
in
the
Philippines
B.
Objection
to
Jurisdiction:
Appearance
of
a
foreign
corporation
to
a
suit
precisely
to
question
the
tribunals
jurisdiction
over
its
person
is
not
equivalent
to
service
of
summons,
nor
does
it
constitute
an
acquiescence
to
the
courts
jurisdiction.
Avon
Insurance
PLC
v.
Court
of
Appeals,
278
SCRA
312
(1997).
C.
Discredited
Pari
Delicto
Doctrine:
The
local
party
to
a
contract
with
a
foreign
corporation
that
does
business
in
the
Philippines
without
license
cannot
maintain
suit
against
the
foreign
corporation
just
as
the
foreign
Pacific
Micronisian
Line,
Inc.
v.
Del
Rosario,
96
Phil.
23
(1954).
quoting
also
General
Corporation
of
the
Philippines
v.
Union
Insurance
Society
of
Canton,
Ltd.,49
Off.
Gaz.,
73,
September
14,
1950.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
corporation
cannot
maintain
suit,
under
the
principle
of
pari
delicto.
Top-Weld
Mfg.
v.
ECED,
119
SCRA
118
(1985).
Held:
YES.
From
the
evidence,
it
is
apparent
that
the
2
foreign
corporations
are
doing
business
in
the
Philippines.
They
were
carrying
out
here
the
purposes
for
their
creation
(manufacture
and
marketing
of
welding
products)
and
even
negotiated
with
other
groups
for
the
Top-Weld
now
invokes
R.A.
No.
5455
(Aliens
doing
business
in
the
Philippines)
prohibiting
foreign
corporations
from
transacting
business
and
engaging
in
economic
activity
in
the
Philippines
without
permit
and
from
terminating
any
franchise
or
agreement
with
a
resident
unless
for
just
cause
and
upon
compensation.
Issue:
Whether
or
not
respondent
corporations
can
be
considered
as
"doing
business"
in
the
Philippines
and,
therefore,
subject
to
the
provisions
of
R.A.
No.
5455.
Communication
Materials
v.
Court
of
Appeals
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Facts:
CMDI
and
ASPAC
are
domestic
corporations,
while
Francisco
S.
Aguirre
is
their
President
and
majority
stockholder.
Respondent
ITEC
International
is
a
foreign
corporations
from
Alabama.
There
is
no
dispute
that
ITEC
is
a
foreign
corporation
not
licensed
to
do
business
in
the
Philippines.
raising
this
fact
to
bar
ITEC
from
instituting
this
injunction
case
against
it.
Doctrine:
A
party
is
estopped
to
challenge
the
personality
of
a
corporation
after
having
acknowledged
the
same
by
entering
into
a
ITEC
entered
into
a
Representative
Agreement
with
ASPAC
whereby
it
would
be
the
exclusive
representative
in
the
Philippines
for
the
sale
of
ITECs
products.
Through
a
License
Agreement
entered
into
by
the
same
parties,
ASPAC
became
legally
and
publicly
known
as
ASPAC-ITEC
(Philippines).
By
virtue
of
said
contracts,
ASPAC
sold
electronic
products,
exported
by
ITEC,
to
their
sole
customer,
PLDT.
ITEC
decided
to
D.
Odd
But
Prevailing
Doctrine:
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
FBA
Aircraft
v.
Zosa,
110
SCRA
1
(1981);
Royal
Crown
Intl
v.
NLRC,
178
SCRA
569
(1989);
Wang
Laboratories,
Inc.
v.
Mendoza,
156
SCRA
44
(1987).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Labor
of
the
Philippines.
Dela
Osa
later
filed
for
reinstatement
with
back
wages
and
recovery
of
his
overtime
compensation,
swing
shift
and
graveyard
shift
differentials.
FMC,
et
al.
filed
a
motion
to
dismiss
the
subject
petition
on
the
ground
that
the
Court
has
no
jurisdiction.
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
the
FMC.
Doctrine:
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
Facts:
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
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
of
possession
of
the
buildings,
installations
and
improvements
on
the
leased
land.
Service
of
summons
was
made
on
Signetics
through
Technology
Electronics
Assembly
&
Management
Pacific
Corp.
on
the
basis
of
the
allegation
that
Signetics
is
a
subsidiary
of
US
Philips
Corp.,
and
may
be
served
summons
at
Philips
Electrical
Lamps,
Inc.
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.
Held:
YES.
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.
Doctrine:
The
rule
is
that,
a
foreign
corporation,
although
not
engaged
reinsurers
question
the
jurisdiction
the
trial
court
the
case
has
not
proceeded
to
trial
on
the
merits.
The
reinsurer
is
questioning
also
the
service
of
summons
through
extraterritorial
service
under
Sect
17
Rule
14
of
the
Rules
of
Court
nor
through
the
Insurance
Commissioner
under
Sec
14.
Yupangco
also
contends
that
since
the
reinsurers
question
the
jurisdiction
of
the
court
they
are
deemed
to
have
submitted
to
the
jurisdiction
of
the
court.
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).
Issue:
Whether
or
not
the
international
reinsurers
are
doing
business
in
the
Philippines.
Held:
NO.
International
reinsurers
are
not
doing
business
in
the
Philippines
and
the
Philippine
court
has
not
acquired
jurisdiction
over
them.
The
reinsurance
treaties
between
the
petitioners
and
Worldwide
Surety
and
Insurance
were
made
through
an
international
insurance
Avon
Insurance
PLC
v.
Court
of
Appeals
broker
and
NOT
through
any
entity
or
means
remotely
connected
with
the
Philippines.
Reinsurance
company
is
not
doing
business
in
a
certain
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
state
even
if
the
property
or
lives
which
are
insured
by
the
original
insurer
company
are
located
in
that
state.
Reinsurance
Contract
is
generally
separate
and
distinct
arrangement
from
the
original
contract
of
insurance.
There
was
no
allegation
or
demonstration
of
the
existence
of
petitioners
domestic
agent
but
avers
simply
that
they
are
doing
business
not
only
abroad
but
in
the
Philippines.
Petitioners
had
not
performed
any
act
which
would
give
the
general
public
the
impression
that
it
had
been
engaging
or
intends
to
engage
in
its
ordinary
and
usual
business
undertaking
in
the
country.
Doctrine:
Reinsurance
company
is
not
doing
business
in
a
certain
state
even
if
the
property
or
lives
which
are
insured
by
the
original
insurer
company
are
located
in
that
state.
Reinsurance
Contract
is
generally
separate
and
distinct
arrangement
from
the
original
contract
of
insurance.
of
the
main
merits
of
the
case,
which
should
not
thus
be
within
the
province
of
a
mere
motion
to
dismiss.1
E.
Stipulation
on
Venue:
When
the
contract
sued
upon
has
a
venue
clause
within
the
Philippines,
it
is
deemed
a
confirmation
by
the
foreign
corporation,
even
though
not
doing
business
in
the
Philippines,
to
be
sued
in
local
courts.
Linger
&
Fisher
GMBH
v.
IAC,
125
SCRA
522
(1983).
VI.
Laws
Applicable
to
Foreign
Corps.
(Section
129)
Section
129.
Law
applicable.
Any
foreign
corporation
lawfully
doing
business
in
the
Philippines
shall
be
bound
by
all
laws,
rules
and
regulations
applicable
to
domestic
corporations
of
the
same
class,
except
such
only
as
provide
for
the
creation,
formation,
organization
or
dissolution
of
corporations
or
those
which
fix
the
relations,
liabilities,
responsibilities,
or
duties
of
stockholders,
members,
or
officers
of
corporations
to
each
other
or
to
the
corporation.
(73a)
VII.
Amendment
of
Articles
of
Incorporation
(Section
130)
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
Section
130.
Amendments
to
articles
of
incorporation
or
by-laws
of
foreign
corporations.
Whenever
the
articles
of
incorporation
or
by-laws
of
a
foreign
corporation
authorized
to
transact
business
in
the
Philippines
are
foreign
corporation
shall,
within
sixty
(60)
days
after
such
merger
or
consolidation
becomes
effective,
file
with
the
Securities
and
Exchange
Commission,
and
in
proper
cases
with
the
appropriate
government
agency,
a
copy
of
the
articles
of
merger
or
consolidation
duly
authenticated
by
the
proper
official
or
officials
of
the
country
or
state
amended,
such
foreign
corporation
shall,
within
sixty
(60)
days
after
the
amendment
becomes
effective,
file
with
the
Securities
and
Exchange
Commission,
and
in
the
proper
cases
with
the
appropriate
government
agency,
a
duly
authenticated
copy
of
the
articles
of
incorporation
or
by-laws,
as
amended,
indicating
clearly
in
capital
letters
or
by
underscoring
the
change
or
changes
made,
duly
certified
by
the
authorized
official
or
officials
of
the
country
or
state
of
incorporation.
The
filing
thereof
shall
not
of
itself
enlarge
or
alter
the
purpose
or
purposes
for
which
such
corporation
is
authorized
to
transact
business
in
the
Philippines.
(n)
VIII.
Merger
and
Consolidation
(Section
132;
Art.
51,
Omnibus
Code)
Section
132.
Merger
or
consolidation
involving
a
foreign
corporation
licensed
in
the
Philippines.
One
or
more
foreign
corporations
authorized
to
transact
business
in
the
Philippines
may
merge
or
consolidate
with
any
domestic
corporation
or
corporations
if
such
is
permitted
under
Philippine
laws
and
by
the
law
of
its
incorporation:
Provided,
That
the
requirements
on
merger
or
consolidation
as
provided
in
this
Code
are
followed.
Whenever
a
foreign
corporation
authorized
to
transact
business
in
the
Philippines
shall
be
a
party
to
a
merger
or
consolidation
in
its
home
country
or
state
as
permitted
by
the
law
of
its
incorporation,
such
IX.
Revocation
of
License
(Sections
134
and
135;
Art.
50,
Omnibus
Investment
Code)
Section
134.
Revocation
of
license.
Without
prejudice
to
other
grounds
provided
by
special
laws,
the
license
of
a
foreign
corporation
to
transact
business
in
the
Philippines
may
be
revoked
or
suspended
by
the
Securities
and
Exchange
Commission
upon
any
of
the
following
grounds:
1.
Failure
to
file
its
annual
report
or
pay
any
fees
as
required
by
this
Code;
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
2.
Failure
to
appoint
and
maintain
a
resident
agent
in
the
Philippines
as
required
by
this
Title;
3.
Failure,
after
change
of
its
resident
agent
or
of
his
address,
to
submit
to
the
Securities
and
Exchange
Commission
a
statement
of
Section
135.
Issuance
of
certificate
of
revocation.
Upon
the
revocation
of
any
such
license
to
transact
business
in
the
Philippines,
the
Securities
and
Exchange
Commission
shall
issue
a
corresponding
certificate
of
revocation,
furnishing
a
copy
thereof
to
7.
Transacting
business
in
the
Philippines
outside
of
the
purpose
or
purposes
for
which
such
corporation
is
authorized
under
its
license;
8.
Transacting
business
in
the
Philippines
as
agent
of
or
acting
for
and
in
behalf
of
any
foreign
corporation
or
entity
not
duly
licensed
to
do
business
in
the
Philippines;
or
9.
Any
other
ground
as
would
render
it
unfit
to
transact
business
in
the
Philippines.
(n)
X.
Withdrawal
of
Foreign
Corporation
(Section
136)
Section
136.
Withdrawal
of
foreign
corporations.
Subject
to
existing
laws
and
regulations,
a
foreign
corporation
licensed
to
transact
business
in
the
Philippines
may
be
allowed
to
withdraw
from
the
Philippines
by
filing
a
petition
for
withdrawal
of
license.
No
certificate
of
withdrawal
shall
be
issued
by
the
Securities
and
Exchange
Commission
unless
all
the
following
requirements
are
met;
1.
All
claims
which
have
accrued
in
the
Philippines
have
been
paid,
compromised
or
settled;
2.
All
taxes,
imposts,
assessments,
and
penalties,
if
any,
lawfully
due
to
the
Philippine
Government
or
any
of
its
agencies
or
political
subdivisions
have
been
paid;
and
3.
The
petition
for
withdrawal
of
license
has
been
published
once
a
week
for
three
(3)
consecutive
weeks
in
a
newspaper
of
general
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)