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AMAT VICTORIA CURAM

INGENOHL V OLSEN Mr. Justice HOLMES delivered the opinion of the Court. This is a suit to recover the costs adjudged to the plaintiff, the petitioner here, in a former suit that was brought by him against the defendant in the British Colony of Hongkong and was determined in his favor by the Supreme Court there. The judgment declared the plaintiff to be the owner of certain trademarks and trade-names and entitled to the exclusive use of them in connection with his business as a cigar manufacturer. It restrained the defendants from selling cigars under these trade-marks and awarded the costs now sued for. The Court of First Instance of Manila gave judgment for the plaintiff. On appeal the Supreme Court of the Philippine Islands reversed this decision on the ground that by section 311(2) of the Code of Civil Procedure a judgment against a person 'may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud or clear mistake of law or fact,' and that the judgment of the Supreme Court of Hongkong showed such a clear mistake. The supposed mistake consisted in denying effect in Hongkong to a sale of business and trade-marks by the Alien Property Custodian to the defendant, the circumstances and nature of which may be stated in few words so far as they concern the present case. The plaintiff Ingenohl had built up a great business as a cigar manufacturer and exporter having his factory at Manila. In 1908 he established a factory at Hongkong and thereafter goods from both factories were sold under the same trade-marks, the outside box or package of the Hongkong goods having a label indicating that they came from there. The trade-marks were registered in Hongkong and the cigars covered by them had acquired a reputation. In 1918 the Alien Property Custodian seized and sold all the property 'wheresoever situate in the Philippine Islands * * * including the business as going concern, and the good will, trade-names and trade-marks thereof, of Syndicat Oriente,' being the above mentioned business of the plaintiff in the Philippines. The Supreme Court of the Philippines held that it was plain error in the Supreme Court of the British Colony to hold that this sale did not carry the exclusive right to use the trade-marks in the latter place.

AMAT VICTORIA CURAM

A trade-mark started elsewhere would depend for its protection in Hongkong upon the law prevailing in Hongkong and would confer no rights except by the consent of that law. Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 36 S. Ct. 357, 60 L. Ed. 713, United Drug Co. v. Theodore Rectanus Co., 248 U. S. 90, 39 S. Ct. 48, 63 L. Ed. 141. When then the judge who, in the absence of an appeal to the Privy Council, is the final exponent of that law, authoritatively declares that the assignment by the Custodian of the assets of the Manila firm cannot and will not be allowed to affect the rights of the party concerned in Hongkong, we do not see how it is possible for a foreign Court to pronounce his decision wrong. It will be acted on and settles the rights of the parties in Hongkong and in view of that fact it seems somewhat paradoxical to say that it is not the law. If the Alien Property Custodian purported to convey rights in English territory valid as against those whom the English law protects he exceeded the powers that were or could be given to him by the United States. It is not necessary to consider whether the section of the Code of Civil Procedure relied upon was within the power of the Philippine Commission to pass. In any event as interpreted it involved delicate considerations of international relations and therefore we should not hold ourselves bound to that deference that we show to the judgment of the local Court upon matters of only local concern. We are of opinion that whatever scope may be given to the section it is far from warranting the refusal to enforce this English judgment for costs, obtained after a fair trial before a court having jurisdiction of the parties, when the judgment is unquestionably valid and in other respects will be enforced. Of course a foreign state might accept the Custodian's transfer as good within its jurisdiction, if there were no opposing local interest or right, and that may be the fact for China outside of Hongkong as seems to have been held in another case not yet finally disposed of, but no principle requires the transfer to be given effect outside of the United States and when as here it has been decided to have been ineffectual it is unnecessary to inquire whether in the other event the Alien Property Custodian was authorized by the statute to use or did use in fact words purporting to have that effect, or what the effect, if any, would be.

AMAT VICTORIA CURAM

Some question was made of the jurisdiction of this Court. The jurisdiction was asserted, at least provisionally, when the writ of certiorari was granted. There are few cases in which it is more important to maintain it, and we confirm it now. The validity of the section of the Code of Civil Procedure is drawn in question, and also the construction of the Trading with the Enemy Act (Comp. St. 3115 1/2 a-3115 1/2 j) which is treated as purporting to authorize what in our opinion it could not authorize if it tried. State Investment House, Inc. vs. Citibank, et al, G.R. No. 79926-27, Oct. 17, 1991

FACTS: Consolidated Mines, Inc. (CMI) obtained loans from Citibank, Bank of America and HSBC, all foreign corporations but with branches in the Philippines. Meanwhile, State Investment House, Inc. (SIHI) and State Financing Center, Inc. (SFCI), also creditors of CMI, filed collection suits against the latter with writs of preliminary attachment. Subsequently, the three banks jointly filed with the court a petition for involuntary insolvency of CMI. SHI and SFCI opposed the petition on the ground that the petitioners are not resident creditors in contemplation of the Insolvency Law. ISSUE: Whether or not a foreign corporation with a branch in the Philippines and doing business therein can be considered a resident HELD: Foreign corporations duly licensed to do business in the Philippines are considered residents of the Philippines, as the word is understood in Sec. 20 of the Insolvency Law, authorizing at least three resident creditors of the Philippines to file a petition to declare a corporation insolvent. The Tax Code declares that the term resident foreign corporation applies to foreign corporation engaged in trade or business within the Philippines as distinguished from a non-resident foreign corporation which is not engaged in trade or business within the Philippines. The Offshore Banking Law sates that: Branches, subsidiaries, affiliates, extension offices or any other units of corporation or juridical person organized under the laws of any foreign country operating in the Philippines shall be considered residents of the Philippines. The General Banking Act places branches and agencies in the Philippines of foreign banks in the category as commercial banks, rural banks, stock savings and loan association

AMAT VICTORIA CURAM

making no distinction between the former ad the latter in so far as the terms banking institutions and banks are used in said Act.

LACE OF INCORPORATION - applicable law in RP X: 1. Times of war - pierced corporate veil to see who controls the corporation (determines the policy of the corporation) 2. Statutory and constitutional limitations -areas of public interest reserved to Filipinos PALTING CASE: application of grandfather rule (but not really much help, principle of reasonableness was actually used to rule ifo of Palting) GRANDFATHER RULE: look at subsequent ownership to determine who controls the corporation HERE: reasonable extent was used *difficulty: reasonableness subjective NEDA: looks at WON a corporation has been used as a vehicle to circumvent restrictions of the constitution JURISDICTION OVER FOREIGN CORPORATIONS Are all foreign corporation allowed to sue in RP? NO Foreign corporation allowed to sue: GR: if licensed to do business X: *purpose of license requirement: establish existence of the corporation in RP -allows the state to regulate the conduct of states in RP and to allow only corporation which had complied with its restrictions to access our courts? -simply for RP courts to acquire jurisdiction over the foreign corporation HOME INSURANCE COMPANY V. EASTERN SHIPPING F: HIC, though no license yet, entered a contract with domestic corporations for insurance of its goods. Because it was not paid, it sued before RTC courts (and now has acquired license in RP). H: Subsequent acquisition of license in RP cured the defect of the contract entered w/o license -registration requirement only affects the capacity to sue, not the capacity to contract *object of acquiring license: for the courts to acquire jurisdiction of foreign corporations Exceptions to the license requirement: 1. Isolated transactions 2. Protection of TM through filing of unfair competition 3. Transactions outside RP 4. Petition merely corollary defense ISOLATED TRANSACTIONS -occassional, incidental, casual

AMAT VICTORIA CURAM

-not of a character to indicate purpose to engage in business EASTBOARD NAVIGATION V. JUAN YSMAEL F: Eastboard, a Toronto based corporation, sues Juan Ysmael. JYC alleged Eastboard no license to do business in RP H: NO license required if only isolated instances *not required that it be only 1 transaction ACTION TO PROTECT TRADEMARK, TRADE NAME, GOODWILL, PATENT FOR UNFAIR COMPETITION -even w/o license to sue LEVITON INDUSTRIES V. SALVADOR F: Leviton Intl sues Leviton Industries for unfair competition (uses Leviton's Int'l's TM for its products). H: If suing for unfair competition, foreign corp should still allege in its complaint the condition precedent in RA 166 (owner/user of TM + comity) *old decision: now IP Code does not require that the foreign corporation is a registered TM holder in RP *why we allow it now: protect its name, property rightgoodwill protected AGREEMENTS FULLY TRANSACTED OUTSIDE RP Ratio: policy of stablizing commercial transactions UNIVERSAL SHIPPING LINES V. IAC: otherwise, our country would be a heaven for unprincipled businessmen HANG LUNG BANK V. SAULOG F: Chinese corporation transacted w/ RP corporation in HK. But since RP Corporation did not comply with agreement, Chinese corporation sued RP Corporation in RP. MTD: no capacity to sue but denied H: GR is that foreign corporation should first obtain license in RP to sue; X: if the transaction based on was transacted "WHOLLY or FULLY" outside RP (don't leave it out!) Ratio: growth and development of business relations between Filipinos and foreign nationals .or else, we would be allowing law to serve as a protective shield for unscrupulous Filipinos PETITION IS MERELY A COROLLARY DEFENSE IN A SUIT AGAINST IT DEFINITION OF TRANSACTING BUSINESS IN RP --see Foreign Business Registration Act and Foreign Investments Act of 1991 soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totalling one hundred eighty (180) days or more;
participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial

AMAT VICTORIA CURAM

dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization: Provided, however, That the phrase "doing business" shall not be deemed to include mere investment as a shareholder by a foreignentity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account. Effect of failure to secure license *penal sanctions

*can be sued but cannot sue


TOP WELD MANUFACTURING V. ECED F: foreign corporation initially wanted to procure business with Top Weld, a domestic corportion. When foreign corporation was about to breach its contract with Top Weld so the latter sued foreign corporation not to transact with other corporations, or else it was dealing or doing business w/o a license. H: In pari delicto. Top Weld knew that foreign corporation had no license. MERRIL LYNCH FUTURES INC (MLFI) V. CA F: Lara spouses contracted with MLFI but owed the corporation so MLFI sued them. MTD based on no capacity to sue. H: Even if no license and doing business in RP, Lara spouses are now estopped from denying corporate existence of the corporation *so what's the difference bet Top Weld and MLFI? TOP WELD In pari delicto But here, none was able to recover MLFI Corporation by estoppel Foreign corporation was allowed to recover

*so SC Inconsistent!!!! CRITICISM about estoppel rule: Foreign corporation allowed to recover even if it should not have been granted relief by the RP Court ---so is there even corporation by estoppel in MLFI? Both parties knew that MLFI did not have license in RP So Lara's can't now alleged that it is not okay with them that MLFI did not have license *trend today though is corporation by estoppel FOR A FOREIGN CORPORATION TO BE DOING BUSINESS IN RP, IS IT REQUIRED TO HAVE ENTERED INTO MORE THAN ONE TRANSACTION? NO. rule is that even if the corporation has merely transacted an isolated transaction, if that transaction is not casual (it is w/n their normal course of business) + intent to establish business in RP = doing business SPECIAL CORPORATIONS 1. RELIGIOUS SOCIETES AND THE CORPORATION SOLE: A corporation composed of a single entity -how to determine nationality Ung Siu Si Temple: nationality of controlling SH; the community who is the beneficiary of the corporation sole ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR of DAVAO: the community who is the beneficiary of the corporation sole - not the nationality of the incumbent *but if control test used, the incumbent who holds the money in trust is a foreigner so the corporation sole would have had a nationality of the foreigner *Ma'am: it should not be automatic - would depend Thanks to batangmataba.blogspot!