GR L 61950; (September, 1990) (Digest)
G.R. No. L-61950 September 28, 1990
MARUBENI NEDERLAND B.V., petitioner, vs. THE HONORABLE JUDGE RICARDO P. TENSUAN, Presiding Judge of the Court of First Instance of Rizal, Branch IV, Quezon City and ARTEMIO GATCHALIAN, respondents.
FACTS
Petitioner Marubeni Nederland B.V., a foreign corporation, entered into a supply contract and two financing contracts in Tokyo, Japan, with D.B. Teodoro Development Corporation (DBT) for the construction of a lime plant in Guimaras, Iloilo. The National Investment and Development Corporation (NIDC) guaranteed DBT’s payment obligations. Disputes arose regarding the plant’s performance, leading to a Settlement Agreement in 1981. Subsequently, DBT rejected the plant and demanded indemnification.
Before any payment under the Settlement Agreement was made, private respondent Artemio Gatchalian, a DBT stockholder, filed a complaint for contractual breach against Marubeni before the Court of First Instance of Rizal. He impleaded DBT as an unwilling plaintiff and NIDC. The complaint sought indemnification and a preliminary injunction to prevent DBT and NIDC from making payments to Marubeni. The respondent judge issued a temporary restraining order.
ISSUE
Whether the Philippine court acquired jurisdiction over the person of petitioner Marubeni Nederland B.V., a foreign corporation allegedly not doing business in the Philippines.
RULING
Yes, the Philippine court validly acquired jurisdiction. The Supreme Court held that petitioner was “doing business” in the Philippines, thereby subjecting itself to the jurisdiction of local courts. The determination of what constitutes “doing business” depends on the peculiar facts of each case. Applying Republic Act No. 5455 and the implementing rules of the Board of Investments, the Court found that the performance within the Philippines of acts such as soliciting orders or service contracts constitutes doing business. Here, petitioner’s transactions were not isolated. The contracts involved a continuous obligation to supply equipment, machinery, materials, and technical know-how for the construction and operation of a lime plant in the Philippines, indicating a sustained business activity.
The Court rejected petitioner’s argument that it was separate from Marubeni Corporation, Japan (which had a Manila branch), noting that such a corporate defense could be raised during trial on the merits. Crucially, a foreign corporation doing business without a license is not barred from being sued in Philippine courts; it cannot invoke its lack of license to defeat jurisdiction. Finally, the Court found no denial of due process in the denial of the motion to dismiss without a formal hearing, as the grounds were not indubitable and the issue of jurisdiction could still be resolved during the trial on the merits. The petition was dismissed.