Case Digest (G.R. No. 168266)
Facts:
This petition for review under Rule 45 assails the 26 May 2005 Decision of the Court of Appeals in CA-G.R. CV No. 48447. Petitioner Cargill, Inc., a corporation organized under the laws of Delaware, U.S.A., entered on 16 August 1989 into a contract with Northern Mindanao Corporation (NMC) for the purchase of 20,000–24,000 metric tons of molasses at US$44 per ton, to be delivered from January to June 1990, with payment secured by a red clause Letter of Credit. The contract was amended three times: first, on 11 January 1990, increasing the price to US$47.50; second, on 18 June 1990, reducing the volume to 10,500 tons and raising the price to US$55; and third, on 22 August 1990, rescheduling deliveries to late 1990 and early 1991 and requiring NMC to post a performance bond (US$451,500, equivalent to ₱11,287,500) and a surety bond (₱9,978,125). On 10 October 1990, respondent Intra Strata Assurance Corporation issued both bonds. NMC delivered only 219.551 tons. After demand, respondCase Digest (G.R. No. 168266)
Facts:
- Parties and Contract
- Petitioner Cargill, Inc. is a Delaware corporation.
- Respondent Intra Strata Assurance Corporation issued performance and surety bonds for Northern Mindanao Corporation (NMC).
- Original Agreement (16 August 1989)
- NMC to sell 20,000–24,000 MT of molasses (1 Jan–30 Jun 1990) at US$44/MT.
- “Red clause” Letter of Credit allowed NMC to draw up to US$500,000 against presentation of certain documents.
- Contract Amendments
- 11 January 1990: price increased to US$47.50/MT.
- 18 June 1990: quantity reduced to 10,500 MT; price raised to US$55/MT.
- 22 August 1990: shipments split into two tranches of 5,250 MT each; NMC to post a performance bond of US$451,500 (10,500 MT × US$43).
- Bond Issuance and Breach
- 10 October 1990: respondent issued a P11,287,500 performance bond and a P9,978,125 surety bond.
- NMC delivered only 219.551 MT; petitioner demanded bond payment, respondent refused.
- Procedural History
- 12 April 1991: petitioner sued NMC and respondent for sums due.
- 13 December 1991: trial court approved compromise—P3,000,000 payment and delivery of 6,991 MT by NMC.
- NMC defaulted; trial proceeded against respondent.
- 23 November 1994: trial court ordered respondent to pay P16,993,200 plus interests, attorney’s fees and costs; counterclaim dismissed.
- 26 May 2005: Court of Appeals reversed, holding Cargill lacked capacity as an unlicensed foreign corporation doing business in the Philippines.
- Petitioner filed a Rule 45 petition before the Supreme Court.
Issues:
- Whether petitioner is “doing business” in the Philippines and thus lacks capacity to sue.
- Whether respondent is estopped from raising the capacity defense.
- Whether the Supreme Court may review the Court of Appeals’ factual findings.
- Whether the US$500,000 advance was released to NMC without compliance with the red-clause Letter of Credit.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)