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Yupangco Cotton Mills engaged to secure with Worldwide several of its
properties.
o These contracts were covered by reinsurance treaties between
Worldwide and several foreign reinsurance companies, including Avon
et al.
While the policies were in effect, the insured properties were razed by fire.
Partial payments were made by Worldwide and some of the reinsurance
companies to YCM.
Worldwide assigned all of its collectibles from Avon et al in favor of YCM.
Thus YCM instituted a collection suit against Avon et al before the RTC of
Manila.
Since Avon et al are not engaged in business in the PH and do not have
offices/agents, the summons was served upon them thru the Office of the
Insurance Commissioner, pursuant to Sec. 14, Rule 14 of the RoC.
Avon et al moved to dismiss the complaint, claiming lack of jurisdiction of the
court and contesting the extra-territorial service of summons.
The lower court denied the MTDs and ordered Avon et al to file their answers.
Avon et al filed a petition for certiorari with the CA:
o Foreign corp not doing business in the PH, no office, place of business
or agents so no jurisdiction
o Extra-territorial service of summons null and void because complaint
for collection is not one affecting Avon et als status, not relating to
property within the PH.
Marshall-Wells Co. (US) sued Henry Elser & Co. (PH) in the CFI of Manila for a
bill of goods sold by MWC to Elser.
Elser demurred to the complaint, alleging that MWC has no legal capacity to
sue since MWC failed to comply with PH laws which is require of foreign
corporation who want to do business in the PH.
The demurrer was granted/sustained.
punished by imprisonment for not less than 6 months nor more than 2
years or by a fine of not less than P200 nor more than P1k or by both.
Corporations have no legal status beyond the bounds of the sovereignty by
which they are created.
A state may restrict the right of a foreign corporation to engage in business
within its limits, and to sue in its courts.
But by virtue of state comity, a corporation created by the laws of one state
is usually allowed to transact business in other states and to sue in the courts
of the forum.
The object of Sec. 69 was to subject the foreign corporation doing business in
the PH to the jurisdiction of its courts.
The object of the statute was not to prevent the foreign corp from performing
single acts, but to prevent it from acquiring a domicile for the purpose of
business without taking the steps necessary to render it amenable to suit in
the local courts.
The implication of the law is that it was never the purpose of the legislature
to exclude a foreign corp which happens to obtain an isolated order for
business from the PH, from securing redress in the PH courts.
The effect of the statute, except on compliance with elaborate requirements,
must not be unduly extended or improperly applied.
The law simply means that no foreign corp shall be permitted to transact
business in the PH unless is shall have the license required by law, and until
it complies with the law, shall not be permitted to maintain any suit in the
local courts.
Non-compliance with the statute may be pleaded as an affirmative defense.
It must thereafter appear from the evidence that the plaintiff is a foreign
corp, that it is doing business in the PH, and that it has not obtained the
proper license as provided by the statute.
S. Kajita & Co., on behalf of Atlas Mining, shipped coils of copper wire rods on
board the SS Eastern Jupiter from Osaka.
The vessel was owned and operated by Eastern Shipping Lines.
The shipment was insured with Home Insurance Corp (HIC).
The shipment was covered by a Bill of Lading, with arrival notice to Phelps
Dodge Copper Products.
Several coils discharged from the vessel were in bad order.
o Hence, HIC paid Phelps Dodge under the insurance policy, by virtue of
which, HIC became subrogated to the rights and actions of Phelps
Dodge.
o HIC made demands for payment against Eastern Shipping for
reimbursement to no avail.
Case 2
4. Mentholatum v. Mangaliman
Philippine American Drug Co. is its exclusive distributing agent in the PH.
In 1919 and 1921, Mentholatum registered with the Bureau of Commerce and
Industry the word Mentholatum as trademark for its products.
The Mangaliman brothers allegedly prepared a medicament and salve named
Mentholiman which was in a container of the same size, color and shapes
as Mentholatum.
CA held that the activities of Mentholatum were business transactions in the
PH, and that by section 69 of the Corp Law, it may not maintain the suit.