G.R. No. 168266, 15 March 2010
Cargill (foreign) is a corporation organized and existing under the laws of theState of Delaware. Cargill executed a contract with Northern Mindanao Corporation (NMC)(domestic), whereby NMC agreed to sell to petitioner 20,000 to 24,000 metrictons of molasses to be delivered from Jan 1 to 30 1990 for $44 per metric ton. The contract provided that CARGILL was to open a Letter of Credit with theBPI. NMC was permitted to draw up 500,000 representing the minimum priceof the contract. The contract was amended 3 times (in relation to the amount and the price).But the third amendment required NMC to put up a performance bond whichwas intended to guarantee NMC’s performance to deliver the molasses duringthe prescribed shipment periods.
In compliance, INTRA STRATA issued a performance bond to guaranteeNMC’s delivery. NMC was only able to deliver 219551 metric tons out of the agreed 10,500.Thus CARGILL sent demand letters to INTRA claiming payment under theperformance and surety bonds. When INTRA failed to pay, CARGILL filed acomplaint.
CARGILL NMC and INTRA entered into a compromise agreement approvedby the court, such provided that NMC would pay CARGILL 3 million uponsigning and would deliver to CARGILL 6,991 metric tons of molasses. ButNMC still failed to comply.
Whether or not petitioner is doing or transacting business in the Philippines in contemplation of the law and established jurisprudence.
NO.The determination of whether a foreign corporation is doing business in the Philippines must be based on the facts of each case. In the case at bar, the transactions entered into by the respondent with the petitioners are not a series of commercial dealings which signify an intent on the part of the respondent to do business in the Philippines but constitute an isolated one which does not fall under the category of “doing business.” The records show that 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 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.
In the present case, petitioner is a foreign company merely importing molasses from a Philipine exporter. A foreign company that merely imports goods from a Philippine exporter, without opening an office or appointing an agent in the Philippines, is not doing business in the Philippines.
*Case Digest by Benjie L. Sumalpong, JD – 4, Andres Bonifacio College, SY 2019 – 2020