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#245 Columbia Pictures v. Court of Appeals AUTHOR: Magsino, Patricia Marie C.

G. R. No. 110318 (Aug. 28, 1996) NOTES: Basically Respondent Sunshine is pirating the
TOPIC: Foreign Corporations Effects of failure to secure movies of Petitioners Columbia Pic., Disney, Warner, 20 th
SEC license Century Fox, et.al., so they went to court to sue Sunshine.
PONENTE: Regalado, J. Respondent Sunshine is questioning the legal standing of
petitioners cause they are foreign corporations without SEC
license to do business in PHL
FACTS:
Petitioners (Columbia Pictures, 20th Century Fox, Walt Disney, Warner Brothers, et. al.) filed a complaint with the
NBI for violation of PD No. 49 and sought its assistance in their anti-film piracy drive
The agents of NBI and private researchers made discreet surveillance on various video establishments in Metro
Manila including Respondent Sunshine Home Video Inc.
NBI Senior Agent Lauro C. Reyes applied for a search warrant with the court against Respondent Sunshine
seeking the seizure of pirated video tapes of copyrighted films, television sets, video cassettes and/or laser disc
recordings equipment and other machines and paraphernalia used or intended to be used in the unlawful
exhibition, showing, reproduction, sale, lease or disposition of videograms tapes
The search warrant was served to Respondent Sunshine, while searching the premises; the NBI Agents found and
seized various video tapes of duly copyrighted motion pictures/films owned or exclusively distributed by
Petitioners Columbia et. al.
The respondents filed a Return of Search Warrant before the Trial Court, and a Motion to lift the order of search
warrant was also filed which was denied for lack of merit
A Motion for Reconsideration (on the denial) was subsequently filed by Respondent Sunshine which was granted,
prompting Petitioners Columbia et. al. to appeal the order of the Trial Court and lifting the search warrant to the
CA
The CA dismissed the appeal and denied the subsequent motion for reconsideration, and so Petitioners Columbia
et. al. elevated the case to the Supreme Court
Respondent Sunshine Home Video Inc. is now challenging the legal standing of the petitioners since they are
foreign corporations without license to do business in the Philippines
ISSUE(S):

Do the petitioners have a capacity to maintain an action in court?

(MORE COMPREHENSIVE: Since petitioners are foreign corporations not licensed by the SEC to do business in
the Philippines, do they have any capacity to maintain a suit/action in court?)

HELD:
YES. They may maintain an action in court.
Even if a foreign corporation has no license to transact business in the Philippines, it does not follow that it
has no capacity to bring an action. A license is not necessary if it is not engaged in business in the
Philippines.

RATIO:

The requirement to obtain a license under Sec. 125 of the Corporation Code is not a condition precedent to the
maintenance of any kind of action in Philippine courts by a foreign corporation.
Any foreign corporation not doing business in the Philippines may maintain an action in our courts upon any cause
of action, provided that the subject matter and the defendant are within the jurisdiction of the court.
It is not the absence of the prescribed license but doing business in the Philippines without such license
which debars the foreign corporation from access to our coaurts. (doing business definition same as tax
cases, so CASE TO CASE BASIS)
In other words, although a foreign corporation is without license to transact business in the Philippines, it does not
follow that it has no capacity to bring an action. This license not necessary if it is not engaged in business in the
Philippines. Based on Article 133 of the Corporation Code; petitioners are not barred from maintaining the present
action.
There is no showing that petitioners are doing, transacting, engaging in or carrying on business in the Philippines
which would require them to obtain a license before they can come to our courts. No evidence was offered to show
that petitioners have performed any acts which would indicate an intention to conduct or transact business in the
Philippines.

SIDE NOTE BY THE COURT (not necessary for recit but solidifies the conclusion of the SC):
The certification issued by the SEC stating that its records do not show the registration of petitioner film
companies either as corporations or partnerships or that they have been licensed to transact business in the
Philippines, has no weight to the petitioners right to bring an action in the Philippines.

CASE LAW/ DOCTRINE:

It is not the absence of the prescribed license but doing business in the Philippines without such license which
debars the foreign corporation from access to our courts.

DISSENTING/CONCURRING OPINION(S):