RAMON A. GONZALES vs. HON. ANTONIO V.

RAQUIZA, as Secretary of Public

Works and Communications, et al.

G.R. No. 29627 December 19, 1989

FERNAN, C.J.:

FACTS:

In 1967, the Commissioner of Public Highways, Baltazar Aquino, entered into 2

separate contracts for the importation of construction equipment with Continental Ore (Phil.)
Inc., which acted as the representative of Huber Corporation and as agent of Allis-Chalmers
International and General Motors Corporation. Under the first contract, the Philippines was
obligated to pay Huber Corporation $13.39M in the form of irrevocable, confirmed
and divisible letters of credit in favor of Continental Ore Corporation for the purchase of road
construction equipment and spare parts. Under Contract the second contract, the Philippines was
obligated to pay Continental Ore Corp. $21.08M in the form of irrevocable, confirmed,
and divisible letters of credit; Allis-Chalmers International and General Motors Corporation
would sell, transfer and convey to the Philippines road construction equipment and spare parts
under the same terms and conditions stated in the first contract.
Both of these contracts were duly approved by Secretary Raquiza and the Auditor- General.

Gonzales, as taxpayer and stockholder of PNB, questioned the validity of the contracts on
the ground that there was no appropriation for the payments and no certificate of availability of
funds, as required by the Revised Administrative Code (Sec. 606, 607, 608), and for being
violative of the PNB Charter since the accommodation or loan to the Philippines was beyond the
lending capacity of the bank.

ISSUE:

Are the contracts valid inspite of the fact that the three American corporations which
entered into said contracts are not licensed to do business in the Philippines?

RULING:

Yes. One single or isolated business transaction does not constitute "doing business"
within the meaning of the law. Transactions which are occasional, incidental, and casual-not of a
character to indicate a purpose to engage in business, do not constitute the doing or engaging in
business as contemplated by law. Where the three transactions indicate no intent by the foreign
corporation to engage in a continuity of transactions, they do not constitute doing business in the
Philippines.