G.R. No. L-61523, 31 July 1986
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 latter’s deposit of a bond in the amount of P1,285,000.00. On 3 June 1981, Stokely filed a motion for reconsideration to reduce the attachment bond. On 11 June 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, dated 10 August 1981, reducing the attachment bond to P500,000.00 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. On 14 June 1982, 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.
Whether Stokely Van Camp, Inc. has the capacity to sue, in light of three transactions it entered into with Comphil, Antam, etc. without license.
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. When 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.
*Case Digest by Benjie L. Sumalpong, JD – 4, Andres Bonifacio College, SY 2019 – 2020