, petitioner, remittances of money (or crediting or debiting) made between the spouses
vs. and ML FUTURES;
HON. COURT OF APPEALS, and the SPOUSES PEDRO M. LARA and
ELISA G. LARA, respondents. 5) that because of a loss amounting to US$160,749.69 incurred in respect of
three (3) transactions involving "index futures," and after setting this off
FACTS: against an amount of US$75,913.42 then owing by ML FUTURES to the Lara
Spouses, said spouses became indebted to ML FUTURES for the ensuing
1. On November 23, 1987, Merrill Lynch Futures, Inc. (hereafter, simply ML balance of US$84,836.27, which the latter asked them to pay;
FUTURES) filed a complaint with the Regional Trial Court at Quezon City
against the Spouses Pedro M. Lara and Elisa G. Lara for the recovery of a 6) that the Lara Spouses however refused to pay this balance, "alleging that
debt and interest thereon, damages, and attorney's fees. the transactions were null and void because Merrill Lynch Philippines, Inc., the
Philippine company servicing accounts of plaintiff, . . had no license to operate
2. ML FUTURES alleged the following: as a 'commodity and/or financial futures broker.'"
1) that on September 28, 1983 it entered into a Futures Customer Agreement 3. On January 12, 1988, the Trial Court promulgated an Order sustaining the
with the defendant spouses (Account No. 138-12161), in virtue of which it motion to dismiss, directing the dismissal of the case and discharging the writ
agreed to act as the latter's broker for the purchase and sale of futures of preliminary attachment. It later denied ML FUTURES's motion for
contracts in the U.S.; reconsideration, by Order dated February 29, 1988. ML FUTURES appealed
to the Court of Appeals which affirmed the TC’s decision. Hence, this petition.
2) that pursuant to the contract, orders to buy and sell futures contracts were
transmitted to ML FUTURES by the Lara Spouses "through the facilities of ISSUE:WON the petitioner has the legal capacity to sue.
Merrill Lynch Philippines, Inc., a Philippine corporation and a company
servicing plaintiffs customers; 2 HELD:
3) that from the outset, the Lara Spouses "knew and were duly advised that 1. The facts on record adequately establish that ML FUTURES, operating in
Merrill Lynch Philippines, Inc. was not a broker in futures contracts," and that it the United States, had indeed done business with the Lara Spouses in the
"did not have a license from the Securities and Exchange Commission to Philippines over several years, had done so at all times through Merrill Lynch
operate as a commodity trading advisor (i.e., 'an entity which, not being a Philippines, Inc. (MLPI), a corporation organized in this country, and had
broker, furnishes advice on commodity futures to persons who trade in futures executed all these transactions without ML FUTURES being licensed to so
contracts'); transact business here, and without MLPI being authorized to operate as a
commodity futures trading advisor. These are the factual findings to both the
4) that in line with the above mentioned agreement and through said Merrill Trial Court and the Court of Appeals. These, too, are the conclusions of the
Lynch Philippines, Inc., the Lara Spouses actively traded in futures contracts, Securities & Exchange Commission which denied MLPI's application to
including "stock index futures" for four years or so, i.e., from 1983 to October,
operate as a commodity futures trading advisor, a denial subsequently
1987, 3 there being more or less regular accounting and corresponding
affirmed by the Court of Appeals. Prescinding from the proposition that factual
findings of the Court of Appeals are generally conclusive, the Supreme Court
Civpro/rule 2 & 3/mpperez Page 1
has been cited to no circumstance of substance to warrant reversal of said whether they were so far aware of the absence of the requisite licenses on the
Appellate Court's findings or conclusions in this case. Further, the Laras did part of ML FUTURES and its Philippine correspondent, MLPI, as to be
transact business with ML FUTURES through its agent corporation organized estopped from alleging that fact as a defense to such liability, should be
in the Philippines, it being unnecessary to determine whether this domestic ventilated and adjudicated on the merits by the proper trial court.
firm was MLPI (Merrill Lynch Philippines, Inc.) or Merrill Lynch Pierce Fenner&
Smith (MLPI's alleged predecessor). The fact is that ML FUTURES did deal
with futures contracts in exchanges in the United States in behalf and for the
account of the Lara Spouses, and that on several occasions the latter received
account documents and money in connection with those transactions. Given
these facts, if indeed the last transaction executed by ML FUTURES in the
Laras's behalf had resulted in a loss amounting to US $160,749.69; that in
relation to this loss, ML FUTURES had credited the Laras with the amount of
US $ 75,913.42 — which it (ML FUTURES) then admittedly owed the spouses
— and thereafter sought to collect the balance, US $84,836.27, but the Laras
had refused to pay (for the reasons already above stated).
FACTS: 6. ITEC charged the petitioners and another Philippine Corporation, DIGITAL
BASE COMMUNICATIONS, INC. the President of which is likewise petitioner
1. Petitioners COMMUNICATION MATERIALS AND DESIGN, INC. and Aguirre, of using knowledge and information of ITEC's products specifications
ASPAC MULTI-TRADE INC. are both domestic corporations, while petitioner to develop their own line of equipment and product support, which are similar,
Francisco S. Aguirre is their President and majority stockholder. Private if not identical to ITEC's own, and offering them to ITEC's former customer.
Respondents ITEC, INC. and/or ITEC, INTERNATIONAL, INC. are
corporations duly organized and existing under the laws of the State of 7. On January 31, 1991, ITEC, INC. filed a complaint with the Regional Trial
Alabama, United States of America (a foreign corporation not licensed to do Court of Makati and sought to enjoin, first, preliminarily and then, after trial,
business in the Philippines). permanently; (1) DIGITAL, CMDI, and Francisco Aguirre and their agents and
business associates, to cease and desist from selling or attempting to sell to
2. On August 14, 1987, ITEC entered into a contract with ASPAC referred to PLDT and to any other party, products which have been copied or
as "Representative Agreement" initially for a term of 24 months and was manufactured "in like manner, similar or identical to the products, wares and
renewed for another 24 months. Pursuant to the contract, ITEC engaged equipment of plaintiff," and (2) defendant ASPAC, to cease and desist from
ASPAC as its "exclusive representative" in the Philippines for the sale of using in its corporate name, letter heads, envelopes, sign boards and
ITEC's products, in consideration of which, ASPAC was paid a stipulated business dealings, plaintiff's trademark, internationally known as ITEC; and
commission (signed by G.A. Clark and Francisco S. Aguirre, presidents of the recovery from defendants in solidum, damages of at least P500,000.00,
ITEC and ASPAC). attorney's fees and litigation expenses.
3. Through a "License Agreement" they’ve entered into on November 10, 8. Defendants filed a motion to dismiss on the following grounds: (1) That
1988, ASPAC was able to incorporate and use the name "ITEC" in its own plaintiff has no legal capacity to sue as it is a foreign corporation doing
name. ASPAC Multi-Trade, Inc. became legally and publicly known as business in the Philippines without the required BOI authority and SEC
ASPAC-ITEC (Philippines) which sold electronic products, exported by ITEC, license, and (2) that plaintiff is simply engaged in forum shopping which
to their sole customer, the Philippine Long Distance Telephone Company. justifies the application against it of the principle of "forum non conveniens".
4. To facilitate their transactions, ASPAC and PLDT executed a document 9. RTC denied the MTD for being devoid of legal merit with a rejection of both
entitled "PLDT-ASPAC/ITEC PROTOCOL" which defined the project details grounds relied upon and directed the issuance of a writ of preliminary
for the supply of ITEC's Interface Equipment in connection with the Fifth injunction.
Expansion Program of PLDT.
10. Petitioners elevated the case to the Court of Appeals on a Petition for
Certiorari and Prohibition under Rule 65 of the Revised Rules of Court,
Civpro/rule 2 & 3/mpperez Page 3
assailing and seeking the nullification and the setting aside of the Order and having already acceded to the same by virtue of its entry into the
the Writ of Preliminary Injunction issued by the Regional Trial Court. Representative Agreement referred to earlier.
11. MR was also filed which was likewise denied. Hence, this Petition for Thus, having acquired jurisdiction, it is now for the Philippine Court,
Review on Certiorari under Rule 45. based on the facts of the case, whether to give due course to the suit or
dismiss it, on the principle of forum non convenience. Hence, the Philippine
ISSUE: Whether or not ITEC has legal capacity to sue in Phil. courts. Court may refuse to assume jurisdiction in spite of its having acquired
HELD: YES. ITEC had been “engaged in” or “doing business” in the jurisdiction. Conversely, the court may assume jurisdiction over the case if it
Philippines. This is the inevitable result after a scrutiny of the different chooses to do so; provided, that the following requisites are met:
contracts and agreements entered into by ITEC with its various business 1) That the Philippine Court is one to which the parties may conveniently
contacts in the country. Its arrangements, with these entities indicate resort to
convincingly that ITEC is actively engaging in business in the country. 2. That the Philippine Court is in a position to make an intelligent
A foreign corporation doing business in the Philippines may sue in decision as to the law and the facts; and,
Philippine Courts although not authorized to do business here against a 3. That the Philippine Court has or is likely to have power to enforce its
Philippine citizen or entity who had contracted with and benefited by said decision.
corporation. A party is estopped to challenge the personality of a corporation The aforesaid requirements having been met, and in view of the
after having acknowledged the same by entering into a contract with it. And court’s disposition to give due course to the questioned action, the matter
the doctrine of estoppel to deny corporate existence applies to a foreign as of the present forum not being the “most convenient” as a ground for the
well as to domestic corporations. One who has dealt with a corporation of suit’s dismissal, deserves scant consideration.
foreign origin as a corporate entity is estopped to deny its corporate existence
and capacity.
HELD: YES.The Supreme Court held that agency is shown when Hahn
claimed he took orders for BMW cars and transmits them to BMW. Then BMW
fixes the down payment and pricing charges and will notify Hahn of the
scheduled production month for the orders, and reconfirm the orders by
signing and returning to Hahn the acceptance sheets.
FACTS: HELD:
In the afternoon of October 28, 1984, Crispin Gicale was driving the
passenger jeepney owned by his mother Martina Gicale, respondent A. As previously stated, respondents’ cause of action against petitioners arose
herein. It was then raining. out of the same transaction. Thus, the amount of the demand shall be the
While driving north bound along the National Highway in Talavera, Nueva totality of the claims
Ecija, a passenger bus, owned by Pantranco North Express, Inc.,
petitioner, driven by Alexander Buncan, also a petitioner, was trailing Respondent Standard’s claim is P8,000.00, while that of respondent Martina
behind. Gicale is P13,415.00, or a total ofP21,415.00. Section 19 of B.P. Blg. 129
When the two vehicles were negotiating a curve along the highway, the provides that the RTC has "exclusive original jurisdiction over all other cases,
passenger bus overtook the jeepney. In so doing, the passenger bus hit in which the demand, exclusive of interest and cost or the value of the
the left rear side of the jeepney and sped away. property in controversy, amounts to more than twenty thousand pesos
Crispin reported the incident to the Talavera Police Station and (P20,000.00)."
respondent Standard Insurance Co., Inc. (Standard), insurer of the
jeepney. The total cost of the repair was P21,415.00, but respondent Clearly, it is the RTC that has jurisdiction over the instant case. It bears
Standard paid only P8,000.00. Martina Gicale shouldered the balance emphasis that when the complaint was filed, R.A. 7691 expanding the
of P13,415.00. jurisdiction of the Metropolitan, Municipal and Municipal Circuit Trial Courts
Standard and Martina, respondents, demanded reimbursement from had not yet taken effect. It became effective on April 15, 1994.
petitioners Pantranco and its driver Alexander Buncan, but they refused.
This prompted respondents to file with the Regional Trial Court (RTC), B. Permissive joinder of parties requires that:
Branch 94, Manila, a complaint for sum of money. o (a) the right to relief arises out of the same transaction or series of
Petitioners specifically denied the allegations in the complaint and averred transactions;
that it is the Metropolitan Trial Court, not the RTC, which has jurisdiction o (b) there is a question of law or fact common to all the plaintiffs or
over the case. defendants; and
Trial court favored respondents Standard and Martina, affirmed by CA - o (c) such joinder is not otherwise proscribed by the provisions of the
Totality Rule provided for under Sec. 19, Batas PambansaBilang 129, it is Rules on jurisdiction and venue.
the sum of the two claims that determines the jurisdictional amount; total In this case, there is a single transaction common to all, that is, Pantranco’s
of the two claims is definitely more than P20,000.00 which at the time of bus hitting the rear side of the jeepney. There is also a common question of
the incident in question was the jurisdictional amount of the Regional Trial fact, that is, whether petitioners are negligent. There being a single transaction
Court. common to both respondents, consequently, they have the same cause of
action against petitioners.
ISSUE: a. WON the trial court has jurisdiction over the subject of the action
considering that respondents’ respective cause of action against petitioners To determine identity of cause of action, it must be ascertained whether the
did not arise out of the same transaction nor are there questions of law and same evidence which is necessary to sustain the second cause of action
facts common to both petitioners and respondents. YES would have been sufficient to authorize a recovery in the first.
The above provision presupposes that the different causes of action which are
joined accrue in favor of the same plaintiff/s and against the same defendant/s
and that no misjoinder of parties is involved.
In this case, there is no doubt that it is only the petitioner who is the person
interested in sustaining the proceedings in court since she was the one who
sought for the issuance of the writ of preliminary injunction to enjoin the banks
from releasing funds to respondent. As earlier discussed, the banks are not
parties interested in the subject matter of the petition. Thus, it is only petitioner
who should be joined as party defendant with the judge and who should
defend the judge's issuance of injunction.
Held: Yes. The CA correctly ruled that formal substitution of heirs is not
necessary when the heirs themselves voluntarily appeared, participated in the
case and presented evidence in defense of deceased defendant. As
expounded by CA: jurisprudential rule is that failure to make the substitution is
a jurisdictional defect, purpose of this procedural rule is to comply with due
process requirements. For the case to continue, the real party in interest must
be substituted for the deceased. The real party in interest is the one who
would be affected by the judgment. It could be the administrator or executor or
the heirs. In the instant case, the heirs are the proper substitutes. Substitution
gives them the opportunity to continue the defense for the deceased.
Substitution is important because such opportunity to defend is a requirement
to comply with due process. The following are the active participation of the
heirs in the defence after the death of Salazar:
Facts: HELD:NEGATIVE.
Cheng Ban Yek (CBY) is a domestic corp. engaged in business of Sec 19, Rule 3: transfer of interestin case of any transfer of interest, the action
manufacturing edible oil bearing the brand “BAGUIO OIL” and in the may be continued by or against the original party, unless the court upon
conduct of its business, it incurred millions of pesos obligation tp Pet. motion directs the person to whom the interest is transferred to be substituted
SIHI and ALLIED BANKING CORP who is the creditor of SIHI. in the action or joined with the original party.
CBY and SIHI entered into an Agreement for the restructuring of
CBY's obligations to its creditors but excluding ALLIED. It has been held that a transferee PENDENTE LITE does not hav to be
Mortgage Indenture was executed by CBY and FOUR SEAS as included or impleaded by name in order to be bound by judgement because
mortgagors and SIHI as mortgagees involving 23 parcels of registered
the action or suit may be continued for or against the original party or to the
land and improvements.
transferor and still be binding on the transferee.
CBY defaulted in the payment of its obligations which are due and
demandable. SIHI notified the creditor's committee of CBY that it FIL NIPPON as transferee of SIHI's interestspendentelite, is not even an
would institute proceedings for the enforcement of the remedies under
the Mortgage indenture and later on the committee authorized SIHI to indispensable party in the case.
institute the appropriate foreclosure proceedings.
SIHI instituted with the Respondent Court an action for foreclosure of
mortgage.
ALLIED prayed for the dismissal of the complaint.
SIHI then entered into a DEED OF ASSIGNMENT with FIL NIPPON
transferring all rights, interests, claims and cause of action arising out
from the agreement, which the latter agreed to assume all obligations
of SIHI.
FIL NIPPON later on filed a “Motion for Substitution of Party Plaintiff
which was opposed by ALLIED on the grounds that it has a
counterclaim against SIHI arising from irregularities, excesses,
abuses and inimical acts commited by CBY.
The respondent court (RTC)finding no legal basis for the objection of
ALLIED, the MOTION was granted.
ALLIED MR was denied.
CA: granted the petition for certiorari filed by ALLIED.
Hence this petition for review on certiorari.
Facts:
A prayer for annulment or rescission of contract does not operate to efface the
true objectives and nature of the action which is to recover real property.
While it is true that petitioner does not directly seek the recovery of title or
possession of the property in question, his action for annulment of sale and his
claim for damages are closely intertwined with the issue of ownership of the
building which, under the law, is considered immovable property, the recovery
of which is petitioner's primary objective. The prevalent doctrine is that an
action for the annulment or rescission of a sale of real property does not
operate to efface the fundamental and prime objective and nature of the case,
which is to recover said real property. It is a real action. Respondent Court,
therefore, did not err in dismissing the case on the ground of improper venue
(Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16).
HELD: MANILA.It is clear that the case for damages filed with the city court is
based upon tort and not upon a written contract. Section 1 of Rule 4 of the