Case Citation: HOME INSURANCE CO. v. EASTERN SHIPPING LINES G.R. No.

L-34382

Date: July 20, 1983

Petitioners:

Respondents:

Syllabus Topic: Corporate criminal liability under special laws

Doctrine: No foreign corporation transacting business in the Philippines without a license, or its
successors or assigns, shall be permitted to maintain or intervene in any action, suit or
proceeding in any court or administrative agency in the Philippines; but such
corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under Philippine laws.

Quick summary: L-34382

S. Kajita & Co., on behalf of Atlas Consolidated Mining & Development Corporation,
Antecedent shipped on board the “SS Eastern Jupiter” from Osaka, Japan, 2,361 coils of "Black
Facts: Hot Rolled Copper Wire Rods." The said vessel is owned and operated by Eastern
Shipping Lines (Eastern). The shipment was covered by Bill of Lading No. O-MA-9,
with arrival notice to Phelps Dodge Copper Products Corporation of the Philippines
(Phelps Dodge) at Manila. The shipment was insured with Home Insurance Co. against
all risks in the amount of P1.5M in favor of the consignee, Phelps Dodge. Some of the
coils discharged from the vessel were in bad order. Some were loose and partly cut,
and some were entangled, partly cut, and which had to be considered as scrap. So
Home Insurance Co. paid Phelps Dodge under its insurance policy which plaintiff
became subrogated to the rights and actions of Phelps Dodge. Home Insurance Co.
made demands for payment against the Eastern and the transportation company for
reimbursement of the aforesaid amount but each refused to pay the same.

L-34383
Hansa Transport Kontor shipped from Bremen, Germany, 30 packages of Service
Parts of Farm Equipment and Implements on board the vessel, SS "NEDER RIJN"
owned by the defendant, N. V. Nedlloyd Lijnen, and represented in the Philippines by
its local agent, the defendant Columbian Philippines, Inc. (Columbian). The shipment
was covered by Bill of Lading No. 22 for transportation to, and delivery at, Manila, in
favor of the consignee, international Harvester Macleod, Inc. (Harvester). The shipment
was insured with Home Insurance Co. The packages discharged from the vessel were
found to be in bad order and the delivery was short of one package. Home Insurance
then paid the consignee, Harvester under its Insurance Cargo Policy Demands were
made on N. V. Nedlloyd Lijnen and Columbian for reimbursement thereof but they failed
and refused to pay the same.

Lower court/s
Ruling:

Appellate court
Ruling:

Petitioner’s
Contention:

CORPORATION LAW
PLM JD 3-3 (2021-2022)
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Respondent’s
Contention:

Issue: Whether Home Insurance, a foreign corporation licensed to do business at the time of
the filing of the case, has the capacity to sue for claims on contracts made when it had
no license yet to do business in the PH. [YES]

SC Ruling: There is no question that the contracts are enforceable. The requirement of registration
affects only the remedy. Section 133 of the present Corporation Code provides:

SEC. 133. Doing business without a license.

SEC. 133. Doing business without a license.- No foreign corporation transacting

business in the Philippines without a license, or its successors or assigns, shall be
permitted to maintain or intervene in any action, suit or proceeding in any court or
administrative agency in the Philippines; but such corporation may be sued or
proceeded against before Philippine courts or administrative tribunals on any valid
cause of action recognized under Philippine laws.

The prohibition against doing business without first securing a license is now given
penal sanction which is also applicable to other violations of the Corporation Code
under the general provisions of Section 144 of the Code. This implies that failure of a
foreign corporation to do obtain license to do business, when one is required, does not
affect the validity of the transactions, but simply removes the legal standing of such
foreign corporation to sue. (from CLV)

Therefore, it is not necessary to declare the contract null and void because the penal
sanction for the violation and the denial of access to our courts and administrative
bodies are sufficient from the viewpoint of legislative policy.

The lack of capacity at the time of the execution of the contracts was cured by the
subsequent registration is also strengthened by the procedural aspects of these cases.

Home Insurance averred in its complaints that it is a foreign insurance company, that
it is authorized to do business in the Philippines, that its agent is Mr. Victor H. Bello,
and that its office address is the Oledan Building at Ayala Avenue, Makati. These are
all the averments required by Section 4, Rule 8 of the Rules of Court. Home Insurance
sufficiently alleged its capacity to sue

Others/Notes:

CORPORATION LAW
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