You are on page 1of 7

WHEREFORE, premises considered, the petition is Global Business Holding, Inc. vs.

Surecomp
DENIED for utter lack of merit. Sofware, B.V.
SO ORDERED. correct errors of jurisdiction and not errors of judgment.
Corona (C.J., Chairperson), Velasco, Jr., Leonardo- To justify the grant of the extraordinary remedy
De Castro and Del Castillo, JJ., concur. of certiorari, the denial of the motion to dismiss must have
Petition denied. been tainted with grave abuse of discretion. By “grave abuse
Note.—The right to appeal is not a natural right or a of discretion” is meant such capricious and whimsical exercise
part of due process, but merely a statutory privilege that of judgment that is equivalent to lack of jurisdiction. The
may be exercised only in the manner and in the abuse of discretion must be grave as where the power is
exercised in an arbitrary or despotic manner by reason of
accordance with the provisions of the applicable law.
passion or personal hostility, and must be so patent and gross
(Philux, Inc. vs. National Labor Relations Commission, as to amount to an evasion of positive duty or to a virtual
564 SCRA 21 [2008]) refusal to perform the duty enjoined by or to act all in
——o0o—— contemplation of law.
G.R. No. 173463. October 13, 2010.* Mercantile Law; Corporation Law; As a rule, unlicensed
GLOBAL BUSINESS HOLDINGS, INC. (formerly Global foreign non-resident corporations doing business in the
Business Bank, Inc.), petitioner, vs. SURECOMP Philippines cannot file suits in the Philippines; In order to
SOFTWARE, B.V., respondent. subject a foreign corporation doing business in the country to
Remedial Law; Certiorari; Motion to Dismiss; The the jurisdiction of our courts, it must acquire a license from
General rule is that the denial of a motion to dismiss cannot the Securities and Exchange Commission and appoint an agent
be questioned in a special civil action for certiorari which is a for service of process; Exception to this rule is the doctrine of
remedy designed to correct errors of jurisdiction and not estoppel.—The determination of a corporation’s capacity is a
errors of judgment; To justify the grant of the extraordinary factual question that requires the elicitation of a
remedy of certiorari, the denial of the motion to dismiss must preponderant set of facts. As a rule, unlicensed foreign non-
have been tainted with grave abuse of discretion; Meaning of resident corporations doing business in the Philippines cannot
“grave abuse of discretion.”—An order denying a motion to file suits in the Philippines. x x x A corporation has a legal
dismiss is an interlocutory order which neither terminates nor status only within the state or territory in which it was
finally disposes of a case as it leaves something to be done by organized. For this reason, a corporation organized in another
the court before the case is finally decided on the merits. As country has no personality to file suits in the Philippines. In
such, the general rule is that the denial of a motion to dismiss order to subject a foreign corporation doing business in the
cannot be questioned in a special civil action country to the jurisdiction of our courts, it must acquire a
for certiorari which is a remedy designed to license from the Securities and Exchange Commission and
_______________ appoint an agent for service of process. Without such license,
it cannot institute a suit in the Philippines. The exception to
* SECOND DIVISION. this rule is the doctrine of estoppel. Global is estopped from
95
challenging Surecomp’s capacity to sue.
VOL. 633, OCTOBER 13, 2010 95 Same; Same; A foreign corporation doing business in the
Philippines without license may sue in Philippine courts a
Filipino citizen or a Philippine entity that had contracted with

(Surecomp).V.000. vs.** J. Perlas-Bernabe. Consequently. a foreign corporation duly organized also undertook to pay Surecomp professional services. for the use of subsequent anniversaries. for failure of Global to pay its obligations under the agreement despite demands. Sofware. 10-18. 4 Formerly known as Global Business Bank. 75524. 2010 97 PETITION for review on certiorari of the decision and Global Business Holding. Surecomp Sofware. a domestic corporation. In a separate transaction. 2010. Inc.00 as license fee. ABC requested Surecomp to purchase on its behalf a software called MF . 96 SUPREME COURT REPORTS ANNOTATED 2 Id. VOL. 633. the System unworkable for its operations. suing on an isolated transaction.3 prices. Hernandez & Gatmaitan for Surecomp of its decision to discontinue with the petitioner. B. Pursuant to the The facts of the case are as follows: agreement. Salazar. Rollo. 2006 of the Court of Appeals (CA) in CA-G. Global Business Holding. Bautista & Reyes for respondent. 97 with the statutes. and existing under the laws of the Netherlands. Abdulwahid. with 96 Associate Justices Remedios A. 2006 and the Resolution2 dated In its complaint.V. and annual maintenance fees for five (5) Corporation (ABC). assailing docketed as Civil Case No. Inc. When Global took over the with and benefited from it. 1999. SP corporation not doing business in the Philippines and is No. The facts are stated in the opinion of the Court. noncompliance 1 Penned by Associate Justice Estela M. concurring. entered which included on-site support and development of into a software license agreement with Asian Bank interfaces. Surecomp 3 Id. 01-1278.: complaint for breach of contract with damages before Before the Court is a petition for review the Regional Trial Court (RTC) of Makati.R. Carpio per Special Order a foreign corporation from later taking advantage of its No. and informed Sycip. vs. Inc. Poblador. resolution of the Court of Appeals. 898 dated September 28.. OCTOBER 13. A party is estopped from operations of ABC. 11. chiefly in cases where such person has received the benefits of the contract.. Surecomp filed a NACHURA.and benefited from it. it installed the System in ABC’s computers On March 29. pp. Inc. 19. (Global). Salazar-Fernando and Hakim S.V. The principle is applied to prevent a person contracting with ** In lieu of Associate Justice Antonio T. ABC B. and committed to purchase its IMEX Software System (System) in the bank’s computer one (1) or two (2) Remote Access solutions at discounted system for a period of twenty (20) years. at p. ABC merged with petitioner Global in the Philippines without license may sue in Philippine courts Business Holdings.5 the Decision1dated May 5.—A foreign corporation doing business In July 2000. B. for a consideration of US$298. Surecomp alleged that it is a foreign July 10. respondent Surecomp Software. it found challenging the personality of a corporation after having _______________ acknowledged the same by entering into a contract with it. at p. agreement and to stop further payments thereon. The case was on certiorariunder Rule 45 of the Rules of Court.4 with Global as the a Filipino citizen or a Philippine entity that had contracted surviving corporation.

Santamaria. Makati Global stressed that it could not be held accountable for City. the RTC issued an Order. 9 Penned by Pairing Judge Cesar D. 633. demanded payment of actual damages amounting to After an exchange of pleadings on the motions filed by US$319. Branch 146. as it was the merging Asian Bank which did. taken part VOL. is of no moment 6 Id. Furthermore. The right of creditors or liens upon the property Intellectual Property Code of the Philippines. on June 18. merger. Its argument that it was not _______________ the one who actually contracted with the plaintiff [Surecomp] 5 Rollo. id.. obligations of ASIANBANK in the same manner as if the Merged Bank had itself incurred such liabilities or B. Global argued that the contract _______________ entered into was not an isolated transaction since the contract was for a period of 20 years. ASIANBANK may be prosecuted by or against the Merged failed to comply with Sections 87 and 88 of the Bank.610. 2002. Global filed a motion for leave to serve Notwithstanding the delivery of the product and the written interrogatories to Surecomp in preparation for services provided. attaching thereto its obligations under the agreement. Inc. 7 of that contract with damages. any breach as the agreement was entered into between 99 Surecomp and ABC. attorney’s fees and “After a thorough and careful deliberation of the costs of suit.V. Thus. vs.. and since it cannot dismiss based on two grounds: (1) that Surecomp had no be denied that there is indeed a contract entered into between the plaintiff [Surecomp] and the defendant [Global].955. Inc. vs. at p. 2010 99 in the negotiation and execution of the agreement but Global Business Holding. 8 Id. Global averred that the ing claim. obligation under the Agreement on account of its undertaking 98 under it: 98 SUPREME COURT REPORTS ANNOTATED “x x x shall be responsible for all the liabilities and Global Business Holding. In the interim. On the second ground. Surecomp Sofware.Cobol Runtime with a promise to reimburse its cost. 12. action or proceeding brought by or against agreement. and (2) that the claim on Asian Bank. OCTOBER 13. defendant [Global] is estopped from denying which the action was founded was unenforceable under plaintiff’s [Surecomp’s] capacity to sue it for alleged breach the Intellectual Property Code of the Philippines. being a technology transfer arrangement. obligations. provided that the Merged Bank shall have the right to . 11. 105-107. at pp.00 for Global’s unilateral pretermination of pertinent portions of which read: the agreement. Surecomp its written interrogatories. Surecomp Sofware. and any pend- On the first ground. p. as it does not relieve defendant Global Bank of its contractual 7 Id. Global filed a motion to their positions in these two (2) incidents. exemplary damages. capacity to sue because it was doing business in the the latter as a successor in interest of the merging corporation Philippines without a license.8 of ASIANBANK shall not be impaired by the merger. 9 the US$227. Global failed to pay and comply with the hearing on the motion to dismiss. in any manner. It had not.00 and an additional amount of Global.6 respective arguments advanced by the parties in support of Instead of filing an answer.V. merely took over the operations of ABC as a result of the B.

510. _______________ this court finds that resort to such a discovery mechanism while laudable is premature as defendant has yet to file its 10 Id. or with the Merged Bank may October 2001 is denied on the two grounds therein alleged. the resolution of the motion to dismiss is held As to the issue of unenforceability of the subject contract in abeyance until after a hearing on it is property conducted. 13 Id. by the defendant [Global]. In partially modifying the first assailed Order.. 2002. praying contract between the parties is an executed. Necessarily. Defendant’s [Global’s] Motion to Dismiss dated 17 ASIANBANK may have. which is transaction are arguments that are hardly supported by the required to act on it in accordance with the pertinent rule on evidence already presented for the resolution of the Motion to the matter. viz. 211 as the alleged unenforceability of the subject contract is SCRA 824]. justification in modifying the earlier Order allowing the SO ORDERED. 108.”14 12 Id.: litigation.”13 considering the established jurisprudence in this jurisdiction..e. As the case now stands. (Citations omitted. and the disputed facts are not clear.12 the fallo of which reads: As to defendant’s Motion to Serve Written Interrogatories. On November 27. willingly. 106-107.. at p.”10 further presentation of evidence. Dismiss. contract the statute of frauds therefore finds no Global filed a motion for reconsideration. 110. Inc. the latter is directed to serve the capacity to sue or that defendant did not benefit from the written interrogatories upon the plaintiff [Surecomp]. the RTC issued an xxxx Order. i. Inc. rather than an for an outright denial of the motion to dismiss.. . hearing before the motion to dismiss can be resolved and SO ORDERED. invoke under existing laws. It appearing that the subject Surecomp moved for partial reconsideration.11 application here. will require a of the Answer. the Order of this Court dated 18 June 2002 counter-claims of every kind and nature which is modified. the issues are not yet joined 11 Id. CA. That defendant was not aware of plaintiff’s lack of concerned. that the cause of action of the The resolution of defendant’s [Global’s] Motion to Serve plaintiff is anchored on an unenforceable contract under the Written Interrogatories is held in abeyance pending the filing provision of the Intellectual Property Code. 100 _______________ 100 SUPREME COURT REPORTS ANNOTATED Global Business Holding. Accordingly. shall be liberally construed to the end that the truth “This court sees no reason to further belabor the issue on of the controversy on hand. under the Intellectual Property Code..” Defendant [Global] is given five (5) days from receipt of this It appearing however that the second ground relied upon Order within which to file its Answer. privileges. at pp. Surecomp Sofware. while executory. at pp. 108-110. at pp. vs. that defendant entered into a contract with defendant and the motion to serve written interrogatories upon the plaintiff having done so.. at pp. it cannot now be made to raise the [Surecomp] filed by the defendant [Global] is GRANTED insofar issue of capacity to sue [Merrill Lynch Futures. this court finds relative to the second ground aforementioned.V. 13. set-offs and “WHEREFORE. the RTC that availment of mode of discovery by any of the parties to a ratiocinated. shall be ascertained at a less plaintiff’s capacity to sue since there is a prima facie showing expense with the concomitant facility and expeditiousness. rights. Answer. exercise all defenses. 14 Id. 108-110. v.) B.

Inc. capriciousness. the denial of the motion to dismiss must is DENIED. 19 Rollo.16 the of judgment. 17. the CA rendered a Decision. unlicensed foreign _______________ non-resident corporations doing business in the Philippines cannot file suits in the Philippines.V. 15. vs. Global Business Holding. 17 Id. 2010 101 16 Supra note 1. 2006. The abuse of discretion must be grave as A motion for reconsideration was filed by Global. 2002 of the Regional Trial Court of Makati City. 23 This is . The determination of a corporation’s capacity is a As such.19 the motion to dismiss. Global did not properly remedy for a denial of a motion to dismiss. such showing of arbitrariness. whimsical exercise of judgment that is equivalent to lack SO ORDERED. RTC abused its discretion and acted in excess of its a special civil action for certiorari which is a remedy jurisdiction. the Rules of Court before the CA. at p. interlocutory order which neither terminates nor finally especially because its decision was upheld by the CA. the CA issued a Resolution18 denying the manner by reason of passion or personal hostility.20 dispositive portion of which reads: To justify the grant of the extraordinary remedy “WHEREFORE. 2002 and have been tainted with grave abuse of discretion. pp. contending that the B. 511-512. An order denying a motion to dismiss is an we are constrained to uphold the court’s ruling. Inc. premises considered. 101 15 Id. disposes of a case as it leaves something to be done by II the court before the case is finally decided on the merits.V. of positive duty or to a virtual refusal to perform the duty Global presents the following issues for resolution: (1) enjoined by or to act all in contemplation of law. Surecomp Sofware. The assailed Orders dated June 18.”17 of jurisdiction. VOL. OCTOBER 13.15 designed to correct errors of jurisdiction and not errors On May 5. or ill I. Global filed a petition for certiorari with prayer for the issuance of a temporary restraining order 102 SUPREME COURT REPORTS ANNOTATED and/or writ of preliminary injunction under Rule 65 of Global Business Holding.. By November 27. and motion for reconsideration for lack of merit. vs. 102 Undaunted.22 As a rule. the instant petition of certiorari. 01-1278 are hereby AFFIRMED. at p. 18 Supra note 2. In a petition for certiorari. Surecomp Sofware. the general rule is that the denial of a motion to factual question that requires the elicitation of a dismiss cannot be questioned in preponderant set of facts. in Civil Case No. motive in the disposition of the trial judge in the case. “grave abuse of discretion” is meant such capricious and Branch 146. absent The petition is bereft of merit. this petition. and (2) substantiate its claim of arbitrariness on the part of the whether Global is estopped from questioning Surecomp’s trial court judge that issued the assailed orders denying capacity to sue.21 whether a special civil action for certiorari is the proper In the instant case.. must be so patent and gross as to amount to an evasion Hence. 2006. 633. B. On where the power is exercised in an arbitrary or despotic July 10.

28 This is The exception to this rule is the doctrine of estoppel. at p. Isnani. “Sec. 256. 109272. G. 124. Co. 370 (2000). 394 Phil. 340 SCRA 359. 143 SCRA 288 (1986). shall be permitted to 104 maintain or intervene in any action. 235 SCRA 216. supra note corporation transacting business in the Philippines without a 24. 370-371.” from later taking advantage of its noncompliance with A corporation has a legal status only within the state the statutes. Georg Grotjahn GMBH & Group of Taiwan. p. Surecomp Sofware. and and benefited from it. Ingenieuburo 21 Id. while the other is and appoint an agent for service of process. v. rights. No. Inc. 25 European Resources and Technologies. OCTOBER 13. privileges.R. 837. it is as if it was the one which subject a foreign corporation doing business in the entered into contract with Surecomp. v. August 10. Inc. Based on the findings of fact Global is estopped from challenging Surecomp’s capacity of the RTC. In the merger of country to the jurisdiction of our courts. corporation may be sued or proceeded against before B. 661 (2005). merger or consolidation. 133. Philippine courts or administrative tribunals on any valid cause prevent a person contracting with a foreign corporation of action recognized under Philippine laws. Court of Appeals. v. one of the corporations a license from the Securities and Exchange Commission survives and continues the business.R. 22 Id. Inc. Oriental Wood Processing Corporation. p. but such Global Business Holding. 97816. v. chiefly in cases where such person has or territory in which it was organized. Birkhahn + Nolte. Universal International 23 Subic Bay Metropolitan Authority v.. properties. Antam Consolidated. v. Inc. In order to surviving corporation. 704. Global also has the citizen or a Philippine entity that had contracted with right to exercise all defenses. 507 Phil.26 The principle is applied to _______________ 20 Rimbunan Hijau Group of Companies v. 631. Ingenieuburo B. at p.mandated under Section 133 of the Corporation Code.. 1994. Global assumed all the liabilities A foreign corporation doing business in the Philippines and obligations of ABC as if it had incurred such liabilities without license may sue in Philippine courts a Filipino or obligations itself. July 24. as affirmed by the CA. it cannot institute a suit in the Philippines.25 A party is estopped from . Universal International Group of Taiwan. 691. at p. 645. suit or proceeding in any 104 SUPREME COURT REPORTS ANNOTATED court or administrative agency of the Philippines. 1992. 633. 435 SCRA 246. 2010 103 SCRA 824. Global Business Holding. and liabilities are license. 267. Doing business without a license. 125. No. Birkhahn + Nolte. 470 SCRA 650. In the same way. license. Inc. 211 VOL. supra. it must acquire two existing corporations. Inc.V. 255 (2004). citing Subic Bay Metropolitan Authority v. vs. Court of Appeals.—No foreign 26 Id. G. 24 acquired by the surviving corporation. a received the benefits of the contract. Surecomp Sofware. supra. Court of Appeals. under the terms of the to sue. For this reason. Without such dissolved. challenging the personality of a corporation after having which reads: acknowledged the same by entering into a contract with _______________ it. or its successors or assigns.V. and all its rights. Merrill Lynch Futures. 227 Phil. 703. at p. 24 European Resources and Technologies. 114. Merrill 103 Lynch Futures v.27 corporation organized in another country has no Due to Global’s merger with ABC and because it is the personality to file suits in the Philippines. 646. 479 Phil. particularly true in this case. vs.

Velasco. _______________ 27 Merrill Lynch Futures. Costs against petitioner. Inc. 350 SCRA 341. 2006 of the Court of Appeals in CA-G. JJ. 258. supra. 75524 are hereby AFFIRMED. 2006 and the Resolution dated July 10. © Copyright 2017 Central Book Supply. ***** Additional member in lieu of Associate Justice Diosdado M. 351 (2001). Jr. Court of Appeals. concur. **** Additional member in lieu of Associate Justice Roberto A. These findings of fact were never contested by Global in any of its pleadings filed before this Court. Inc..R. 2010.**** Brion***** andMendoza. 897 dated September 28. SP No. Peralta per Special Order No. 905 dated October 5. Abad per Special Order No.counter-claims of every kind and nature which ABC may have or invoke under the law. 244. 904 dated October 5. v. 403 Phil. in view of the foregoing. 2010. WHEREFORE. All rights reserved. Carpio per Special Order No.. 28 Babst v. 2010.*** Leonardo-De Castro. *** Additional member in lieu of Associate Justice Antonio T. SO ORDERED. Court of Appeals. the Decision dated May 5. .