GRANGER ASSOCIATES vs. MICROWAVE SYSTEMS, INC.

G.R. No. 79986

September 14, 1990

Foreign Corporation doing business in the Philippines

FACTS:

Granger Associates is a foreign corporation which was organized in the United States and has no license to do business in this country.   Microwave Systems, Inc., is a domestic corporation which has been sued for recovery of a sum equivalent to US$900,633.30 allegedly due from it to the petitioner.

The claim arose from a series of agreements concluded between the two parties, giving MSI the license to manufacture and sell its products in the Philippines and extended to the latter certain loans, equipment and parts.  Payment of these contracts not having been made as agreed upon, Granger filed a complaint against MSI and the other private respondents in the Regional Trial Court.

MSI alleged the affirmative defense that the plaintiff had no capacity to sue, being an unlicensed foreign corporation, and moved to dismiss.

Motion to dismiss was granted by RTC which was affirmed by the CA.

In this petition, Granger seeks the reversal of the respondent court on the ground that MSI has failed to prove its affirmative allegation that Granger was transacting business in the Philippines. It insists that it has dealt only with MSI and not the general public and contends that dealing with the public itself is an indispensable ingredient of transacting business. It also argues that its agreements with MSI covered only one isolated transaction for which it did not have to secure a license to be able to file its complaint.

ISSUE:

Whether or not Granger Associates was doing business in the Philippines?

RULING:

YES.  It can be shown that the parties entered into a series of agreements, as in successive sales of the foreign company's regular products, that company shall be deemed as doing business in the Philippines.

The quoted stipulations show that Granger had extended its personality in the Philippines and would receive orders for its products and discharge its warranty obligations through the agency of MSI It would even appear that Granger intended to transact business in the Philippines through the instrumentality of MSI not only for the sale and warranty of its products in this country.

There is also a showing that the investment of Granger in MSI is quite substantial, enabling it to participate in the actual management and control of MSI In fact, it appointed a representative in the board of directors to protect its interests, and this director was so influential that, at his request, the regular board meeting was converted into an annual stockholder's meeting to take advantage of his presence. 

We are convinced from an examination of the terms and conditions of the contracts and agreements entered into between petitioner and private respondents indicate that they established within our country a continuous business, and not merely one of a temporary character. Such agreements did not constitute only one isolated transaction, as the petitioner contends, but a succession of acts signifying the intent of Granger to extend its operations in the Philippines.

The purpose of the rule requiring foreign corporations to secure a license to do business in the Philippines is to enable us to exercise jurisdiction over them for the regulation of their activities in this country, If a foreign corporation operates in the Philippines without submitting to our laws, it is only just that it not be allowed to invoke them in our courts when it should need them later for its own protection. While foreign investors are always welcome in this land to collaborate with us for our mutual benefit, they must be prepared as an indispensable condition to respect and be bound by Philippine law in proper cases, as in the one at bar.

Republic vs. Sandiganbayan

REPUBLIC OF THE PHILIPPINES, (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT) vs. THE HONORABLE SANDIGANBAYAN (FIRST DIVISION) AND EDUARDO COJUANGCO, JR., 
G.R. No. 88809 
July 10, 1991

REPUBLIC OF THE PHILIPPINES, (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT) vs. THE HONORABLE SANDIGANBAYAN (FIRST DIVISION) AND EDUARDO COJUANGCO, JR., 
G.R. No. 88858 
July 10, 1991

Corporation Law, Right of Inspection of a Stockholder, Corporation Code of the Philippines

Facts: 

Private respondent who is a stockholder of SMC sought to the production, inspection, examination/verification and/or photocopying of the SMC corporate records to inform him of the decisions, policies, acts and performance of the management of the SMC under the PCGG-Board.  In another case, same private respondent who was a stockholder of record sought authority to inspect and examine the corporate records of United Coconut Planters Bank.  Both requests were denied by PCGG.

At the time of the request, SMC and UCPB Shares were sequestered by the PCGG.

Issue: 

Whether or not sequestration automatically deprives a stockholder of his right of inspection?

Ruling: 

No. The right of a stockholder to inspect and/or examine the records of a corporation is explicitly provided in Section 74 of the Corporation Code, the pertinent portion of which reads:

Sec. 74. Books to be kept; stock transfer agent. “The records of all business transactions of the corporation and the minutes of any meeting shall be open to the inspection of any director, trustee, stockholder or member of the corporation at reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records or minutes, at his expense.”

Records indicate that private respondent is the ostensible owner of a substantial number of shares and is a stockholder of record in SMC and UCPB. * Being a stockholder beyond doubt, there is therefore no reason why private respondent may not exercise his statutory right of inspection in accordance with Sec. 74 of the Corporation Code, the only express limitation being that:

1) the right of inspection should be exercised at reasonable hours on business days;

2) the person demanding to examine and copy excerpts from the corporation's records and minutes has not improperly used any information secured through any previous examination of the records of such corporation; and

3) the demand is made in good faith or for a legitimate purpose.

The latter two limitations, however, must be set up as a defense by the corporation if it is to merit judicial cognizance. As such, and in the absence of evidence, the PCGG cannot unilaterally deny a stockholder from exercising his statutory right of inspection based on an unsupported and naked assertion that private respondent's motive is improper or merely for curiosity or on the ground that the stockholder is not in friendly terms with the corporation's officers.

Cruz vs. Secretary

CRUZ vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES

G.R. No. 135385              

December 6, 2000

Case Summary:

Petitioners assailed the constitutionality of some of the provisions of the IPRA Law and its Implementing Rules and Regulations. 

The respondent, Secretary of DENR submitted its comment through the Solicitor General:  The Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and prays that the petition be granted in part.

A group of intervenors defended the constitutionality of such act. Even CHR asserts that IPRA is an expression of the principle of parens patriae and that the State has the responsibility to protect and guarantee the rights of those who are at a serious disadvantage like indigenous peoples.

The petitioners in this case contended that the law is unconstitutional on the ground that they amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the Regalian doctrine.

After due deliberation the members of the Court voted 7 – 7.  As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.