FOREIGN CORPORATION

MARSHALL-WELLS CO. v. HENRY W. ELSER & CO. (1924)

1) Marshall-Wells Company (an Oregon corporation) sued Henry W. Elser &
Co., Inc.(a domestic corporation) in CFI Manila for the unpaid balance on a bill of
goods sold by plaintiff to defendant.

2) HENRY W. ELSER & CO. (Defendant) demurred to the complaint on the

statutory ground that:

MARSHALL-WELLS CO has no legal capacity to sue since its

complaint does not show that it has complied with the laws of the
Philippine Islands in that which is required of foreign corporations desiring
to do business in the Philippine Islands, neither does it show that it was
authorized to do business in the Philippine Islands.

3) Section 69 of the CL states:

"No foreign corporation shall be permitted to maintain by itself or

assignee any suit for the recovery of any debt, claim, or demand whatever,
unless it shall have the license prescribed in section 68 of the law."

ISSUE: Is the obtaining of the license prescribed in section 68, as

amended, of the Corporation Law a condition precedent to the maintaining of any
kind of action in the courts of the Philippine Islands by a foreign corporation?

HELD: For Oregon C.

The implication of the law is that it was never the purpose of the
Legislature to exclude a foreign corporation which happens to obtain an isolated
order for business from the Philippines, from securing redress in the Philippine
courts, and thus, in effect, to permit persons to avoid their contracts made with
such foreign corporations. The effect of the statute preventing foreign
corporations from doing business and from bringing actions in the local courts,
except on compliance with elaborate requirements, must not be unduly extended
or improperly applied. It should not be construed to extend beyond the plain
meaning of its terms, considered in connection with its object, and in connection
with the spirit of the entire law.

RATIO: The object of the statute was to subject the foreign corporation
doing business in the Philippines to the jurisdiction of its courts. The object of the
statute was not to prevent the foreign corporation from performing single acts,
but to prevent it from acquiring a domicile for the purpose of business without
taking the steps necessary to render it amenable to suit in the local courts.
COLUMBIA PICTURES et al. v. CA (1996)
1) Complainants (8 foreign Cs) thru counsel lodged a formal complaint with
the NBI for violation of PD No. 49, as amended, and sought its assistance in their
anti-film piracy drive.

2) NBI applied for a search warrant from the LC, which was granted.

3) NBI raided Sunshine Home Video, Inc. (PR together w/ the owner) and
found and seized various video tapes of duly copyrighted motion pictures/films
owned or exclusively distributed by Complainants.

4) LC granted the PRs’ MR on its “Motion To Lift the Order of Search

Warrant".

5) Complainants appealed to Ca (w/c was denied) and the case eventually

reachd SC.

6) PR’s Comment:

a) being foreign corporations, petitioners should have such license to

be able to maintain action in Philippine courts.

b) petitioners are "doing business in the Philippines" under Section

l(f)(1) and (2), Rule 1 of the Rules of the Board of Investments since they
are copyright owners or owners of exclusive rights of distribution in the
Philippines of copyrighted motion pictures, and also due to the
appointment of Atty. Rico V. Domingo as their attorney-in-fact.

c) As foreign corporations doing business in the Philippines, Section

133 of the Code denies them the right to maintain a suit in Philippine
courts in the absence of a license to do business.

d) Consequently, they have no right to ask for the issuance of a

search warrant.

7) Complainants deny that they are doing business in the Philippines,

contending that:

a) PRs have not adduced evidence to prove that petitioners are doing
such business here, as would require them to be licensed by the SEC

b) an exclusive right to distribute a product or the ownership of such

exclusive right does not conclusively prove the act of doing business nor
establish the presumption of doing business
8) The Corporation Code provides:

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 of 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.

ISSUE: WON the Complainants are “doing business in the Philippines” that
would require them to get a license from SEC before filing a case in court?

HELD 1: Petitioners are not barred from maintaining the present action
based on Article 133 of CC and gauged by such statutory standards. There is no
showing that, under our statutory or case law, petitioners are doing, transacting,
engaging in or carrying on business in the Philippines as would require obtention
of a license before they can seek redress from our courts. No evidence has been
offered to show that petitioners have performed any of the enumerated acts or
any other specific act indicative of an intention to conduct or transact business in
the Philippines.

RATIO 1: It is not the absence of the prescribed license but "doing business"
in the Philippines without such license which debars the foreign corporation from
access to our courts. In other words, although a foreign corporation is without
license to transact business in the Philippines, it does not follow that it has no
capacity to bring an action. Such license is not necessary if it is not engaged in
business in the Philippines.

HELD 2: That petitioners are admittedly copyright owners or owners of

exclusive distribution rights in the Philippines of motion pictures or films does not
convert such ownership into an indicium of doing business which would require
them to obtain a license before they can sue upon a cause of action in local
courts.

HELD 3: Neither is the appointment of Atty. Rico V. Domingo as attorney-in-

fact of petitioners, with express authority pursuant to a special power of attorney
tantamount to doing business in the Philippines. We fail to see how exercising
one's legal and property rights and taking steps for the vigilant protection of said
rights, particularly the appointment of an attorney-in-fact, can be deemed by and
of themselves to be doing business here.
HELD 4: In accordance with the rule that "doing business" imports only acts
in furtherance of the purposes for which a foreign corporation was organized, it is
held that the mere institution and prosecution or defense of a suit, particularly if
the transaction which is the basis of the suit took place out of the State, do not
amount to the doing of business in the State.

GENERAL GARMENTS v. DIR OF PATENTS and PURITAN SPORTSWEAR

CORP. (1971)
1) General Garments Corporation (organized and existing under the laws of
the Philippines) is the owner of the trademark "Puritan," registered in the PPO
for assorted men's wear, such as sweaters, shirts jackets, undershirts and briefs.

2) Puritan Sportswear Corporation (organized and existing in and under the

laws of the state of Pennsylvania, U.S.A.) filed a petition with the PPO for the
cancellation of the trademark "Puritan" registered in the name of General
Garments Corporation:

alleging ownership and prior use in the Philippines of the said trademark
on the same kinds of goods, which use it had not abandoned

3) General Garments Corporation moved to dismiss contending that:

that Puritan Sportswear Corporation (being a foreign corporation which is

not licensed to do and is not doing business in the Philippines) is not
considered as a person under Philippine laws and consequently is not
comprehended within the term "any person" who may apply for
cancellation of a mark or trade-name under Section 17(c) of the
Trademark Law aforequoted.

ISSUE: WON Puritan Sportswear Corporation (which is a foreign

corporation not licensed to do business and not doing business in the
Philippines) has legal capacity to maintain a suit in the PPO for cancellation of a
trademark registered thereon?

HELD: That Puritan Sportswear Corporation (respondent) is a juridical

person should be beyond serious dispute. The fact that it may not transact
business in the Philippines unless it has obtained a license for that purpose, nor
maintain a suit in Philippine courts for the recovery of any debt, claim or demand
without such license (Sec. 68 and 69, Corporation Law) does not make
respondent any less a juridical person. Indeed an exception to the license
requirement has been recognized in this jurisdiction, namely, where a foreign
corporation sues on an isolated transaction (as first enunciated in Marshall-Wells
Co. v. Elser & Co.)
 However, to recognize Puritan Sportswear Corporation (respondent)
as a juridicial person does not resolve the issue in this case. It should be
postulated at this point that respondent is not suing in our courts "for the
recovery of any debt, claim or demand," for which a license to transact
business in the Philippines is required by Section 69 of the Corporation
Law, subject only to the exception already noted. Respondent went to the
PPO on a petition for cancellation of a trademark registered by petitioner,
invoking the Trademark Law.

LE CHEMISE LACOSTE v. Fernandez (1984)

1) The petitioner is a foreign corporation, organized and existing under the
laws of France and not doing business in the Philippines. It is the actual owner of
the trademarks "LACOSTE," "CHEMISE LACOSTE," "CROCODILE DEVICE"
and a composite mark consisting of the word "LACOSTE" and a representation
of a crocodile /alligator used on clothings and other goods specifically sporting
apparels sold in many parts of the world and which have been marketed in the
Philippines since 1964.

2) Hemandas & Co., a duly licensed domestic firm applied for and was
issued Reg. No. SR-2225 (SR stands for Supplemental Register) for the
trademark "CHEMISE LACOSTE & CROCODILE DEVICE" by the Philippine
Patent Office for use on T-shirts, sportswear and other garment products of the
company. The main basis of the private respondent's case is its claim of
alleged prior registration.

3) Petitioner filed with the NBI a letter-complaint alleging therein the acts of
unfair competition being committed by Hemandas and requesting their
assistance in his apprehension and prosecution

4) NBI conducted an investigation and subsequently filed with the

respondent court two applications for the issuance of search warrants w/c was
granted.

5) The NBI agents executed the two search warrants and as a result of the
search found and seized various goods and articles described in the warrants.

6) LC: granted Hernandas’ MQ search warrant.

7) LE CHEMISE LACOSTE filed a petition for certiorari with preliminary

injunction before SC asks us to set aside as null and void, the order of Judge
Fernandez granting the motion to quash the search wan-ants previously issued
by him and ordering the return of the seized items.
8) Hemandas COMMENT:

petitioner being a foreign corporation failed to allege essential facts

bearing upon its capacity to sue before Philippine courts.

not only is the petitioner not doing business in the Philippines but it also is
not licensed to do business in the Philippines.

HELD 1: LE CHEMISE LACOSTE is a foreign corporation not doing

business in the Philippines. The marketing of its products in the Philippines is
done through an exclusive distributor, Rustan Commercial Corporation. The latter
is an independent entity which buys and then markets not only products of the
petitioner but also many other products bearing equally well-known and
established trademarks and tradenames. In other words, Rustan is not a mere
agent or conduit of the petitioner.

HELD 2: But even assuming the truth of the PR’s allegation that
LE CHEMISE LACOSTE failed to allege material facts in its petition relative to
capacity to sue, LE CHEMISE LACOSTE may still maintain the present suit
against respondent Hemandas.

RATIO 2: As early as 1927, this Court was, and it still is, of the view that a
foreign corporation not doing business in the Philippines needs no license to sue
before Philippine courts for infringement of trademark and unfair competition.

HELD 3: More important is the nature of the case which led to this petition.
What preceded this petition for certiorari was a letter-complaint filed before the
NBI charging Hemandas with a criminal offense, i.e., violation of Article 189 of
the Revised Penal Code. If prosecution follows after the completion of the
preliminary investigation being conducted by the Special Prosecutor the
information shall be in the name of the People of the Philippines and no longer
the petitioner which is only an aggrieved party since a criminal offense is
essentially an act against the State. It is the latter which is principally the injured
party although there is a private right violated. Petitioner's capacity to sue would
become, therefore, of not much significance in the main case. We cannot allow a
possible violator of our criminal statutes to escape prosecution upon a far-fetched
contention that the aggrieved party or victim of a crime has no standing to sue.

LITTON MILLS, INC. v. CA and GELHAAR UNIFORM COMPANY (1996)

1) Petitioner LITTON MILLS entered into an agreement with EMPIRE SALES
PHIL CORP. (as local agent of PR GELHAAR UNIFORM COMPANY-a
corporation organized under the laws of the United States) where LITTION
agreed to supply GELHAAR 7,770 dozens of soccer jerseys.

2) LITTON sent:
 a) 4 shipments totalling 4,770 dozens of the soccer jerseys between
December 2 and December 30, 1983.

b) 5th shipment, consisting of 2,110 dozens of the jerseys, was inspected

by Empire from January 9 to January 19, 1984, but Empire refused to
issue the required certificate of inspection.

3) LITTON filed a complaint for specific performance against GELHAAR.

4) GELHAAR filed a MTD and to quash the summons on the ground that:

a) It is a foreign corporation not doing business in the Philippines, and

as such, was beyond the reach of the local courts.

b) the contract with Litton was a single, isolated transaction and that it
did not constitute "doing business."

HELD: GELHAAR’s act in purchasing soccer jerseys to be within the

ordinary course of business of the company considering that it was engaged in
the manufacture of uniforms. The acts noted above are of such a character as to
indicate a purpose to do business.

RATIO: It is not really the fact that there is only a single act done that is
material. The other circumstances of the case must be considered. (Wang
Laboratories, Inc. v. Mendoza) held that where a single act or transaction of a
foreign corporation is not merely incidental or casual but is of such character as
distinctly to indicate a purpose on the part of the foreign corporation to do other
business in the state, such act will be considered as constituting doing business.
This Court referred to acts which were in the ordinary course of business of the
foreign corporation.

MENTHOLATUM CO. v. Mangiliman ()

1) MENTHOLATUM CO. (a foreign corporation) and Philippine-American
Drug Co., (the former's exclusive distributing agent in the Philippines) filed a
complaint for infringement of trademark and unfair competition against the
Mangalimans.

2) Philippine-American Drug Co., Inc., was admittedly selling products of its

principal, MENTHOLATUM CO. in the latter's name or for the latter's account.

HELD: Whatever transactions the Philippine-American Drug Co., Inc. had

executed in view of the law, the MENTHOLATUM CO. did it itself. The
MENTHOLATUM CO. being a foreign corporation doing business in the
Philippines w/o the license required by Section 68 of the Corporation Law, it may
not prosecute this action for violation of trademark and unfair competition.

AGILENT TECHNOLOGIES SINGAPORE LTD. v. INTEGRATED SILICON

TECHNOLOGY PHIL CORP. (2004)

MERRYL LYNCH FUTURES v. CA (1992)