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LBP filed a complaint against RBSCI in the RTC for the collection of the sum of
P2,809,280.25, capitalized and accrued interests, penalties and surcharges, and for such other
equitable reliefs. For the latters failure to file its answer to the complaint, the trial court declared
the RBSCI in default. Despite its receipt of the copy of the said order, the RBSCI failed to file a
motion to set aside the order of default. Meanwhile, the Monetary Board approved the placement
of the RBSCIs assets under receivership. The PDIC was designated as receiver of the RBSCI,
and the latter was prohibited from doing business in the Philippines. Unaware of the action of the
CB, the trial court rendered judgment by default against the RBSCI ordering the bank to pay its
obligation to respondent LBP plus interests and damages. The RBSCI, through the PDIC,
appealed the decision to the CA. The RBSCI claim that since it was placed under receivership
and prohibited from doing business in the Philippines it should no longer be held liable for
interests and penalties on its account to the LBP. However, CA rendered judgment affirming the
decision of the RTC.
WON an insolvent bank placed under receivership and prohibited from doing business in
the Philippines may be held liable to pay interests and penalties after being declared in default.
Yes. Such party declared in default is proscribed from seeking a modification or reversal
of the assailed decision on the basis of the evidence submitted by him in the CA, for if it were
otherwise, he would thereby be allowed to regain his right to adduce evidence, a right which he
lost in the trial court when he was declared in default, and which he failed to have vacated. In
this case, the RBSCI sought the modification of the decision of the trial court based on the
evidence submitted by it only in the CA.
RBSCI was served with a copy of summons and the complaint, but failed to file its
answer thereto. It also failed to file a verified motion to set aside the order of default despite its
receipt of a copy thereof. We note that the trial court rendered judgment only on April 7, 1998 or
more than a year after the issuance of the default order; yet, RBSCI failed to file any verified
motion to set aside the said order before the rendition of the judgment of default. The PDIC was
designated by the Central Bank of the Philippines as receiver as early as January 14, 1998, and in
the course of its management of the RBSCI banks affairs, it should have known of the pendency
of the case against the latter in the trial court. Moreover, RBSCI, through the PDIC, received a
copy of the decision of the trial court but did not bother filing a motion for partial
reconsideration appending thereto the orders of the Monetary Board or a motion to set aside the
order of default. Instead, the RBSCI appealed the decision, and even failed to assign as an error
the default order of the trial court. The RBSCI is, thus, barred from relying on the orders of the
Monetary Board of the Central Bank of the Philippines placing its assets and affairs under
receivership and ordering its liquidation.


The National Abaca filed a complaint against Pore for the recovery of P1,213.34,
allegedly advanced to her for the purchase of hemp and which she had allegedly failed to
account. The MC found against Pore, ruling that she had not accounted for cash advances in the
sum of P272.49 and sentenced her to pay to the National Abaca, with legal interest.
National Abaca prayed for a new trial, which was denied, prompting an appeal which
Pore moved to dismiss upon the ground that National Abaca has no legal capacity to sue as it was
abolished by Executive Order No. 372 dated November 24,1950. National Abaca objected, on
the ground that pursuant to said executive order, it "shall nevertheless be continued as a body
corporate for a period of three (3) years from the effective date" of said executive order, which
was November 30, 1950, "for the purpose of prosecuting and defending suits by or against it and
of enabling the Board of Liquidators" thereby created "gradually to settle and close its
affairs", . . . and that this case was begun on November 14, 1953, or before the expiration of the
period aforementioned. The CFI issued an order directing National Abaca to amend the
complaint by including the Board of Liquidators as co-party. However, the original copy of the
amended complalint was lost. Thus, the case was dismissed. The MR was denied by CFI.
WON an action, commenced within three (3) years after the abolition of National Abaca,
as a corporation, may be continued after the expiration of the three year period.
No. The Corporation Law contains no provision authorizing a corporation, after three (3)
years from the expiration of its lifetime, to continue in its corporate name actions instituted by it
within said period of three (3) years. In the absence of statutory provision to the contrary,
pending actions by or against a corporation are abated upon expiration of the period allowed by
law for the liquidation of its affairs. However, trustees to whom the corporate assets have been
conveyed pursuant to the authority of section 78 may be used and be sued as such in all matters
connected with the liquidation.

Petitioner is a foreign corporation organized under the laws of the US while defendant is
a local domestic corporation organized under Philippine law. On 25 July 1990 American Natural
Soda Ash Corporation (ANSAC) loaded in Portland , U.S.A., a shipment of soda ash on board
the vessel "MS Abu Hanna" for delivery to Manila . The supplier/shipper insured the shipment
with petitioner. Upon arrival in Manila the shipment was unloaded and transferred to the vessel
"MV Biyayang Ginto" owned by private respondent. However, the shipment allegedly sustained
wettage, hardening and contamination. Thus, it was rejected as total loss by the consignees.
When the supplier sought to recover the value of the cargo loss from petitioner the latter
paid the claim in the amount of US$58,323.96. On 20 November 1991 petitioner as subrogee
filed with the RTC Manila a complaint for damages against private respondent. Thereafter,
private respondent filed a motion to dismiss the complaint one of its grounds cited being plaintiff
having no legal capacity to sue.
WON a foreign corporation may can seek for relief from our courts.
No. A foreign corporation not engaged in business in the Philippines may exercise the
right to file an action in Philippine courts for an isolated transaction. When the allegations in the
complaint have a bearing on the plaintiff's capacity to sue and merely state that the plaintiff is a
foreign corporation existing under the laws of the United States, such averment conjures two
alternative possibilities: either the corporation is engaged in business in the Philippines, or it is
not so engaged. In the first, the corporation must have been duly licensed in order to maintain the
suit; in the second, and the transaction sued upon is singular and isolated, no such license is
required. In either case, compliance with the requirement of license, or the fact that the suing
corporation is exempt therefrom, as the case may be, cannot be inferred from the mere fact that
the party suing is a foreign corporation.
The qualifying circumstance being an essential part of the plaintiff's capacity to sue must
be affirmatively pleaded. Hence, the ultimate fact that a foreign corporation is not doing business
in the Philippines must first be disclosed for it to be allowed to sue in Philippine courts under the
isolated transaction rule. Failing in this requirement, the complaint filed by petitioner with the
trial court, it must be said, fails to show its legal capacity to sue. In the case at bar, petitioner's
complaint is fatally defective for failing to allege its duly authorized representative or resident
agent in this jurisdiction. The pleadings filed by counsel for petitioner do not suffice. True, a
lawyer is generally presumed to be properly authorized to represent any cause in which he
appears, and no written power of attorney is required to authorize him to appear in court for his
client, but such is disputable. Where said authority has been challenged or attacked by the
adverse party the lawyer is required to show proof of such authority or representation in order to
bind his client. The requirement of the production of authority is essential because the client will
be bound by his acquiescence resulting from his knowledge that he was being represented by
said attorney.