Global Business Holdings, Inc. (formerly Global Business Bank, Inc.) vs.

Surecomp
Software

Facts:

Surecomp Software is a foreign corporation organized under the laws of the

Netherlands. In 1999, it entered into a software license agreement to let Asian Bank Corp (ABC)
use Surecomps IMEX Software System for 20 years.

Pursuant to the agreement, Surecomp installed the system and ABC also undertook to
pay professional services and annual maintenance fees for 5 years, and committed to purchase
some products at discounted prices. ABC also requested Surecomp to purchase a certain
software with a promise to reimburse. However, Global failed to reimburse despite Surecomps
delivery of the product.

Sometime in 2000, ABC merged with Global Business. When Global took over
operations, it found the IMEX system unworkable and informed Surecomp that it was going to
discontinue with the software agreement and that it was going to stop payments.

Surecomp filed a complaint for breach of contract with damages in RTC-Makati for
Globals failure to pay its obligations in the agreement despite demands.

o Surecomp demanded payment of actual damages and an additional amount

for Globals unilateral pretermination of the agreement, and damages.

Instead of filing an answer, Global filed an MTD based on two grounds:

1. That Surecomp had no capacity to sue because it was doing business in the
Philippines without a license; and

2. That the claim on which the action was founded was unenforceable under
the Intellectual Property Code of the Philippines. Being a technology transfer
arrangement, Surecomp failed to comply with Sec 87 & 88 of the Intellectual
Property Code of the Philippines.

RTC ruled that:

o On Ground 1: Global is estopped from denying Surecomps capacity to sue.

Globals argument that it was not the one who actually contracted with
Surecomp is of no moment. It does not relieve Global of its contractual
obligation.

o On Gorund 2: This will require a hearing before the MTD can be resolved.


Surecomp moved for an outright denial of the MTD

o RTC denied MTD RTC says it sees no reason to belabor the issue on
Surecomps capacity to sue since there is a prima facie showing that
Global entered into a contract with Surecomp and having done so,
willingly, it cannot now be made to raise the issue of capacity to sue
(Merrill Lynch Futures, Inc. v. CA).

o As to unenforceability of the contract, it is an executed, rather than an

executor contract. The statute of frauds finds no application here.

Global filed a petition for certiorari with prayer for the issuance of a TRO and/or writ of
preliminary injunction under Rule65 before the CA, saying that the RTC abused its discretion
and acted in excess of its jurisdiction.

o CA denied the petition. MR denied.

Issue/s:

Whether a special civil action for certiorari is the proper remedy for a denial of a motion
to dismiss.

Held:

No.

An order denying an MTD is an interlocutory order. It neither terminates nor finally

disposes of a case (it leaves something to be done by the court before the case is finally decided
on the merits).

The general rule is that the denial of an MTD cannot be questioned in a special civil
action for certiorari.

A special civil action for certiorari is a remedy designed to correct errors of jurisdiction
and NOT errors of judgment.

To justify the grant of the extraordinary remedy of certiorari, the denial of the MTD must
have been tainted with grave abuse of discretion.

"Grave abuse of discretion" is meant such capricious and whimsical exercise of judgment
that is equivalent to lack of jurisdiction.
 o The abuse of discretion must be grave as where the power is exercised in
an arbitrary or despotic manner by reason of passion or personal hostility,
and must be so patent and gross as to amount to an evasion of positive
duty or to a virtual refusal to perform the duty enjoined by or to act all in
contemplation of law.

In this case, Global did not properly substantiate its claim of arbitrariness on the part of
the TC judge denying the MTD. Ina petition for certiorari, absent such showing of
arbitrariness, capriciousness, or ill motive in the disposition of the trial judge in the case,
SC is constrained to uphold the ruling, especially because the decision was upheld by the
CA.

Petition denied, CAs decision affirmed.