4/7/2021
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administrative order, rule or regulation contrary or inconsistent with any provision of
the Revised Corporation Code is modified or repealed accordingly.[38]
While the law (presently the Revised Corporation Code or its predecessor, the
Corporation Code) grants to foreign corporations with Philippine license the right to sue
in the Philippines, the Court, however, in a long line of cases under the regime of the
Corporation Code has held that a foreign corporation not engaged in business in the
Philippines may not be denied the right to file an action in the Philippine courts for an
isolated transaction.[39] The issue on whether a foreign corporation which does not
have license to engage in business in the Philippines can seek redress in Philippine
courts depends on whether it is doing business or it merely entered into an isolated
transaction.[40] A foreign corporation that is not doing business in the Philippines must
disclose such fact if it desires to sue in Philippine courts under the "isolated transaction
rule" because without such disclosure, the court may choose to deny it the right to sue.
[41]
The right and capacity to sue, being, to a great extent, matters of pleading and
procedure, depend upon the sufficiency of the allegations in the complaint. Thus, as to
a foreign corporation, the qualifying circumstance that if it is doing business in the
Philippines, it is duly licensed or if it is not, it is suing upon a singular and isolated
transaction, is an essential part of the element of the plaintiffs capacity to sue and
must be affirmatively pleaded.[42]
These pronouncements equally obtain under the Revised Corporation Code given the
reproduction of the exact wording of Section 133, Corporation Code in Section 150 of
the Revised Corporation Code.
Based on the parameters discussed above, the CA has correctly ruled that SCPL has
personality to sue before Philippine courts under the isolated transaction rule, to wit:
x x x [A] foreign corporation needs no license to sue before Philippine courts
on an isolated transaction.[43] However, to say merely that a foreign
corporation not doing business in the Philippines does not need a license in
order to sue in our courts does not completely resolve the issue. When the
allegations in the complaint have a bearing on the plaintiff’s capacity to sue
and merely state that the plaintiff is a foreign corporation existing under the
laws of a country, such averment conjures two alternative possibilities:
either the corporation is engaged in business in the Philippines, or it is not
so engaged. In the first, the corporation must have been duly licensed in
order to maintain the suit; in the second, and the transaction sued upon is
singular and isolated, no such license is required. In either case, compliance
with the requirement of license, or the fact that the suing corporation is
exempt therefrom, as the case may be, cannot be inferred from the mere
fact that the party suing is a foreign corporation. The qualifying
circumstance being an essential part of the plaintiff’s capacity to sue must
be affirmatively pleaded. Hence, the ultimate fact that a foreign corporation
is not doing business in the Philippines must first be disclosed for it to be
allowed to sue in Philippine courts under the isolated transaction rule. Failing
https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/65911
7/22