G.R. No. 138104, 11 April 2002
ADB extended a loan to Marcopper under a Principal Loan Agreement and Complementary Loan Agreement. A Support and Standby Credit Agreement was also executed between ADB and Placer Dome (owner of 40% of Marcopper), whereby the latter agreed to provide with a cash flow support for the payment of its obligations to ADB. Marcopper also executed a Deed of Real Estate and Chattel Mortgage in favor of ADB covering all its assets in Marinduque. Marcopper defaulted in its payment. Thus, MR Holding, LTD (placer Dome’s subsidiary corporation) assumed Marcopper’s obligation to ADB. Marcopper likewise executed a Deed of assignment in favor of petitioner.
It appeared that SolidBank Corporation obtained a partial judgment against Marcopper in a case filed with the RTC. A writ of execution was issued and then an auction sale was scheduled. This event prompted petitioner to serve an “Affidavit of Third-Party Claim” upon respondent sheriffs, asserting ownership over all the assets of Marcopper by virtue of the Deed of Assignment. The RTC of Manila denied the affidavit.
Petitioner filed with the RTC of Boac, Marinduque a complaint for reivindication of properties with prayer for preliminary injunction and temporary restraining order against respondents. The application for writ of preliminary injunction was denied.
Whether or not petitioner is doing business in the Philippines.
There are other statutes defining the term “doing business” in the same tenor as those above-quoted, and as may be observed, one common denominator among them all is the concept of “continuity.”
The expression “doing business” should not be given such a strict and literal construction as to make it apply to any corporate dealing whatever. At this early stage and with petitioner’s acts or transactions limited to the assignment contracts, it cannot be said that it had performed acts intended to continue the business for which it was organized. It may not be amiss to point out that the purpose or business for which petitioner was organized is not discernible in the records. No effort was exerted by the Court of Appeals to establish the nexus between petitioner’s business and the acts supposed to constitute “doing business.” Thus, whether the assignment contracts were incidental to petitioner’s business or were continuation thereof is beyond determination.
Significantly, a view subscribed upon by many authorities is that the mere ownership by a foreign corporation of a property in a certain state, unaccompanied by its active use in furtherance of the business for which it was formed, is insufficient in itself to constitute doing business.
In the final analysis, we are convinced that petitioner was engaged only in isolated acts or transactions. Single or isolated acts, contracts, or transactions of foreign corporations are not regarded as a doing or carrying on of business. Typical examples of these are the making of a single contract, sale, sale with the taking of a note and mortgage in the state to secure payment therefor, purchase, or note, or the mere commission of a tort. In these instances, there is no purpose to do any other business within the country.
*Case Digest by Benjie L. Sumalpong, JD – 4, Andres Bonifacio College, SY 2019 – 2020