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Pacific&Vegetable&Oil&Corp&v.

&Angel&Singzon&

RP&TO&THE&RESCUE:&Singzon,(through(a(broker,(entered(into(a(contract(with(Pacific(Vegetable(Oil(
Corp( in( California.( Singzon( bound( herself( to( ship( 500( tons( of( copra( in( September( and( October(
1947(with(the(agreement(CIF,(Pacific(Coast.(Pursuant(to(this,(the(Bank(of(California(opened(an(
irrevocable(letter(of(credit(on(behalf(of(Pacific(with(China(Bank.(Unfortunately,(Singzon(failed(to(
deliver(the(copra.(BUT(upon(further(negotiation(through(the(broker,(Singzon(bound(himself(to(
deliver(300(tons(not(later(than(February(otherwise(the(contract(would(be(cancelled.(In(the(event(
that(he(fails(to(ship(said(300(tons,(Singzon(shall(pay(Pacific($10K(and(shall(be(obliged(to(still(fulfill(
all(his(obligations(under(the(original(contract.(

Sadly,(Singzon(once(again(failed(to(ship(300(tons(of(copra.(He(also(failed(to(pay(the(fine(or(ship(
the( 500( tons( as( originally( agreed.( As( a( result,( Pacific( was( forced( to( purchase( from( the( world(
market( and( incurred( additional( expenses.( Pacific( filed( an( action( to( recover( damages( in( the(
Philippines( but( Singzon( filed( a( motion( to( dismiss( on( the( ground( that( Pacific( failed( to( obtain(
license(to(transact(business(in(the(Philippines(and(thus(no(personality(to(file(action(under(Sec(68(
and(69(of(the(Corp(Law.(

The(Court(held(that(Pacific(does(not(need(a(license(to(have(personality(to(file(an(action(against(
Singzon.(The(contract(was(perfected(and(consummated(in(the(US.(Under(the(arrangement(c.i.f.%
U.S.%Pacific%Coast,(the(vendor(is(to(pay(not(only(the(cost(of(the(goods,(but(also(the(freight(and(
insurance( expenses,( and,( as( it( was( judicially( interpreted,( this( is( taken( to( indicate( that( the(
delivery(is(to(be(made(at(the(port(of(destination.(

FACTS:& In( August( 1947,( Singzon,( acting( through( a( broker( in( San( Francisco,( sold( to( Pacific(
Vegetable( Oil( Corp( (a( foreign( corporation)( 500( tons( of( copra( with( the( agreement( CIF,( Pacific(
Coast.(Pursuant(to(this,(the(Bank(of(California,(on(behalf(of(Pacific,(opened(an(irrevocable(letter(
of(credit(with(China(Bank(in(the(Philippines.(

Singzon(failed(to(deliver(the(500(tons(of(copra.(Upon(negotiation(with(the(broker,(they(entered(
into( a( settlement( whereby( Singzon( would( deliver( 300( tons( not( later( than( February,( otherwise(
the(contract(would(be(cancelled.(In(the(event(that(he(fails(to(ship(said(300(tons,(Singzon(shall(
pay(Pacific(

$10,000(and(shall(be(obliged(to(fulfill(all(his(obligations(under(the(original(contract.(

Singzon(failed(to(ship(the(copra,(and(he(did(not(pay(the(fine(or(ship(the(500(as(originally(agreed.(
Pacific(demanded(the(payment(of($10,000(but(Singzon(failed(and(refused(to(ship(the(500(tons(of(
copra.( As( a( result,( Pacific( was( forced( to( purchase( copra( from( the( world( market( and( incurred(
additional(expenses.(

Pacific(then(filed(an(action(to(recover(damages.(Singzon(filed(a(motion(to(dismiss(on(the(ground(
that( Pacific)failed( to( obtain( license( to( transact( business( in( the( Philippines( and( thus( no(
personality(to(file(the(action.(

RTC(denied(this(motion(and(the(MR.(CA(reversed(and(dismissed(the(case(holding(that(Pacific(had(
no( personality( to( institute( the( case( even( if( it( subsequently( obtained( a( license( to( transact(
business(upon(the(theory(that(this(belated(act(did(not(have(the(effect(of(curing(the(defect.(
ISSUE:&W/N(Pacific(Vegetable(Oil(Corp(transacted(business(in(the(PH(in(contemplation(of(law(

HELD:&NO.(The(contract(was(perfected(in(the(US(by(a(broker(and(representatives(of(the(parties.(
Moreover,( it( appears( that( payment( was( made( to( a( bank( in( California( and( delivery( undertaken(
through( a( letter( of( credit( at( the( Bank( of( California.( With( respect( to( the( delivery( of( copra,( it(
appears( that( the( price( agreed( upon( was( $142( per( 2k( lbs,( c.i.f.% U.S.% Pacific% Coast.( Under( the(
arrangement(c.i.f.%U.S.%Pacific%Coast,(the(vendor(is(to(pay(not(only(the(cost(of(the(goods,(but(
also( the( freight( and( insurance( expenses,( and,( as( it( was( judicially( interpreted,( this( is( taken( to(
indicate( that( the( delivery( is( to( be( made( at( the( port( of( destination.( Since( CIF( includes( both(
insurance(and(freight(expenses(to(be(paid(by(the(seller,(ordinarily,(before(the(vessel(arrives(at(
the(point(of(destination(the(risk(of(loss(be(for(the(seller.(

Sec& 68& and& 69& of& the& Corporation& Law( requires( any( foreign( corporation( to( obtain( a( license(
before(it(could(transact(business(or(before(it(could(have(personality(to(file(suit(in(the(Philippines.(
Pacific( has( not( transacted( business( in( the( Philippines.( It( is( clear( that( the( copra( was( sold( by(
Singzon(in(the(US(as(it(was(entered(into(by(Singzons(broker(in(California.(Moreover,(the(contract(
was( agreed( to( be( consummated( there.( Thus,( Pacific( is( not( required( to( obtain( a( license( before(
acquiring(personality(to(bring(court(action.(

It(was(never(the(purpose(of(the(Legislature(to(exclude(a(foreign(corporation(which(happens(to(
obtain(an(isolated(order(for(business(in(the(Philippines,(from(securing(redress(in(the(Philippine(
courts,( and( thus,( in( effect,( to( permit( persons( to( avoid( their( contracts( made( with( such( foreign(
corporation.(

The&decision&is&reversed,&allowing&Pacific&to&prosecute&its&claim&against&Singzon.&