G.R. No. 207153 - Development Bank of the Philippines vs. Monsanto Co.

Monsanto International Sales Company (MISCO), a Delaware corporation, sold acrylic fibers to Continental Manufacturing Corporation (CMC) through local indentor Robert Lipton & Co., Inc. (Lipton).
Procedure: CMC specified requirements to Lipton, which relayed them to MISCO; MISCO quoted price, delivery charges, and terms; indent orders were prepared in five copies; payment was by drafts against acceptance, indorsed to Development Bank of the Philippines (DBP) and paid at maturity.

CMC failed to pay aggregate purchases of US$1,417,980.89, prompting MISCO to file a complaint on July 31, 1986 for US$938,267.58, covered by five drafts co-accepted by CMC and DBP.
CMC admitted the debt but argued MISCO lacked capacity to sue as an unlicensed foreign corporation under RA 5455 and that the debt was novated by a revised draft agreement with US$184,000 payments.

DBP denied privity and authority to accept the drafts, asserted no cause of action against it, and joined MISCO’s lack-of-capacity argument.

RTC Branch 165 granted MISCO’s unopposed motion to substitute Monsanto Company (mother corporation and assignee of MISCO’s receivables) as plaintiff, then dismissed the complaint and counterclaims for want of capacity and evidence.
On appeal, the Court of Appeals (CA) reversed and set aside the RTC decision, remanding for trial on the merits; it held that MISCO transacted through an independent indentor and was not “doing business” under RA 7042, and that CMC was estopped from challenging capacity.

DBP sought certiorari review before the Supreme Court, arguing the Omnibus Investments Act (PD 1789) applied, not RA 7042, and renewing the capacity-to-sue challenge.
Monsanto defended the CA ruling, citing PD 1789’s implementing rules excluding independent indentors from “doing business” and the doctrine of estoppel.

Whether MISCO, or its assignee Monsanto, as an unlicensed foreign corporation, had the capacity to maintain suit in Philippine courts.

Whether the CA erred in applying estoppel to bar CMC and DBP from challenging MISCO/Monsanto’s capacity to sue after contracting with and benefiting from the transactions.