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Rimbunan Hijau V Oriental
Rimbunan Hijau V Oriental
Facts:
1. Rimbunan and Niugini are unlicensed foreign corporations who entered into a contract to sell and export PNG
round logs to Oriental Wood Processing (domestic corporation) for a total purchase price of $543, 699.52.
a. Rimbunan and Niugini are foreign corporation organized and existing under the laws of Papua New
Guinea.
i. Niugini is Rimbunans subsidiary with the same set of directors and officers.
b. Oriental Wood Processing is a private domestic corporation.
c. PNG round logs are mixed group of series of Papua New Guinea round logs.
2. Oriental Wood only managed to pay $199, 958 in installments via telegraphic transfers to Rimbunans bank
account.
3. When Oriental refused to pay the remaining balance of $343, 741. 52, Rimbunan instituted a complaint for sum
of money against Oriental in the RTC Bulacan.
4. Oriental filed a motion to dismiss- alleging the following:
a. Rimbunanan and Niugini have no legal capacity to sue in our jurisdiction.
b. Rimbunan and Niugini had been doing business in the Philippines without a license and had made 14
transactions with Oriental involving round logs with a total amount of $4M.
c. Such transactions as stated above constitute a continuity of commercial dealings in the progressive
prosecution of the purpose and object of Rimbunans organization.
5. Rimbunan and Niugini filed a motion to Expunge Orientals Motion to Dismiss.
a. In this motion, R&N argued that Oriental is ESTOPPED from questioning their capacity to sue when they
entered a contract with them.
6. Rimbunan and Niugini also filed a motion to Declare Defendant (Oriental) in default.
a. This is for the failure of Oriental to pay the balance of the exported logs.
7. RTC Bulacan ruled in favor of Rimbunan. In dismissing Orientals motion to dismiss, RTC decided that:
a. Rimbunan and Niugini were merely suing on an isolated transaction.
b. Also, Oriental is ESTOPPED in questioning the personality of Rimbunan and Niugini since Oriental
acknowledged their personalities by entering into a contract with them.
8. Oriental elevated the matter to the CA via SPECIAL CIVIL ACTION FOR CETIORARI UNDER RULE 65. CA reversed
the decision of the RTC because: (basically affirmed the arguments of Oriental)
a. Based on the facts, petitioners dealings constituted doing business in the Philippines.
b. Rimbunan and Niugini never [having denied] but even admitted [that their acts and transactions]
constitute not merely incidental or casual performance of business, but are of such character as
distinctly to indicate a purpose on [their] part to do business in the Philippines.
9. With this, Rimbunan and Niugini went to the SC via PETITION for review on certiorari.
Issue
1. Whether or not the CA was correct in granting the extraordinary remedy of certiorari. NO.
2. Whether or not Rimbunan and Niugini have legal capacity to sue in our jurisdiction. YES.
Held/Ratio
A. The ascertainment of whether a foreign corporation is merely suing on an isolated transaction or is actually doing
business in the Philippines requires the elicitation of at least a preponderant set of facts (preponderance of
evidence). It simply cannot be answered through conjectures or acceptance of unsubstantiated allegations.
B. Courts could not afford to dismiss a litigants complaint on the basis of a half-baked conclusion that a party is
incapacitated to sue in this jurisdiction with no evidence to show for it. The issue has to be determined in accordance
with the facts presented, not on the basis of unsubstantiated allegations.
C. The rule is that a party is estopped to challenge the personality of a corporation after having acknowledged the same
by entering into a contract with it. And the doctrine of estoppel to deny corporate existence applies to foreign as
well as to domestic corporations; one who has dealt with a corporation of foreign origin as a corporate entity is
estopped to deny its existence and capacity.