G.R. No. 173586 - MCA-MBF Countdown Cards Phil., Inc. vs. MBF Card International, Ltd.

The dispute arose from negotiations between respondent MBF Card International Limited (and its affiliated MBF Discount Card Limited) and petitioners MCA-MBF Countdown Cards Philippines, Inc., along with individuals Amable R. Aguiluz V, Amable C. Aguiluz IX, Cielo C. Aguiluz, Alberto L. Buenviaje, Vicente Acsay, and MCA Holdings, regarding the formation of a joint venture and the operation of a discount card business in the Philippines.
The parties discussed establishing a Joint Venture Company (JVC) wherein MBF Card would hold a 40% share and MCA Holdings a 60% share, with the ensuing JVC to execute a “Countdown Country License Agreement” to market and sell discount cards under the “Countdown” trademark.

In the second half of 1993, respondent MBF Card and petitioner MCA Holdings (through Aguiluz V) entered negotiations for the execution of both a Joint Venture Agreement and a Licensing Agreement.
On January 3, 1994, petitioners represented by Aguiluz V informed MBF Card that a company had already been incorporated (named “MCA-MBF Countdown Cards Philippines, Inc.”) to serve as the eventual JVC.
Responding to a request in the same communication, on January 21, 1994 MBF Card remitted US$74,074.04 to the account of MCA-MBF, with the understanding that such amount would represent MBF Card’s payment for its contemplated 40% stake in the JVC upon execution and approval of the necessary agreements.

Despite ongoing negotiations and without prior consent from MBF Card, petitioners (through the intended JVC) initiated promotional, marketing, and sale activities for the Countdown Discount Card using the “Countdown” name, logo, and trademark.
MBF Card advised petitioners via written communications (notably on March 8 and March 17, 1994) to immediately “freeze” any selling activities until the Joint Venture and Licensing Agreements could be finalized and approved by the proper government agency.
Petitioners acknowledged the freeze in a response confirmed on March 19, 1994; however, on March 30 and April 3, 1994, they proceeded to publish advertisements in the Manila Bulletin that promoted the Countdown Discount Card.
The advertisements misrepresented the authorization from MBF Card, falsely indicating that a joint venture agreement had already been concluded and even offering additional features (such as a purchase protection plan and personal accident insurance) without the backing of any insurance arrangement.
Additionally, on April 15, 1994, petitioners—specifically Aguiluz V in a newspaper column—claimed to represent MCA Holdings in a joint venture agreement with Mr. Gordon Yuen, a misstatement since no such agreement was executed and Mr. Yuen was the president and CEO of MBF Card.

On April 20, 1994, MBF Card formally notified petitioners of its decision not to proceed with the joint venture project. It demanded:

Immediate refund of the US$74,074.04.
Cessation of using the “MBF” and “Countdown” names, logos, and trademarks.
Removal of “MBF” and “Countdown” from MCA-MBF’s corporate name as registered with the Securities and Exchange Commission.

The trial court initially issued a temporary restraining order on April 22, 1994, and later, on May 6, 1994, granted a preliminary injunction enjoining petitioners from continuing the contested activities.
Petitioners subsequently filed an Answer with Counterclaim asserting that:

A perfected contract between the parties had already been reached.
All business acts pertaining to the discount card were conducted jointly, and MBF Card suffered no damage from the promotions.
They sought damages amounting to P22,500,000.00 and demanded execution of the Joint Venture Agreement as previously approved.

The trial court, however, rendered a decision on March 8, 2000 in favor of MBF Card and its affiliate, ordering:

A permanent injunction against petitioners to stop promoting, marketing, and selling the Countdown Discount Cards.
The refund of US$74,074.04 (or its Philippine peso equivalent with legal interest) to MBF Card.
Payment of attorney’s fees and expenses to the respondents and separately to the law firm that recorded its attorney’s lien.

Petitioners filed a Notice of Appeal; however, they failed to submit the required Appellant’s Brief within the period prescribed by the Court of Appeals, leading to an initial dismissal on March 20, 2006 on grounds of abandonment (technical default).
Petitioners then filed a Motion for Reconsideration, explaining that their lawyer resigned and that other counsel were preoccupied with voluminous caseloads; this motion was denied on July 6, 2006.
The present Petition for Review on Certiorari is premised on:

Alleging reversible error for dismissing their appeal solely on technical grounds.
Contending that, on the merits, the trial court erred in its findings regarding the non-perfection of the Joint Venture Agreement, the misapplication of principles of corporate fiction, the enforcement of personal liability against individual petitioners, and the award of attorney’s fees.

Whether the dismissal of petitioners’ appeal due to their failure to timely file the Appellant’s Brief was proper under the strict adherence required by procedural rules.
Whether the explanation provided by petitioners regarding counsel’s resignation and other scheduling conflicts constitutes a justifiable and excusable cause for non-compliance with mandatory filing requirements.

Whether the absence of a written Joint Venture and Licensing Agreement precludes the formation of a binding contract, given the principles that contracts are perfected by mere consent if all essential requisites are present.
Whether the trial court correctly determined that no perfected contract existed despite the parties’ negotiations and partial performances (such as the remittance of funds).

Whether the trial court erred in disregarding the corporate entity (MCA-MBF) by holding individual petitioners personally liable for obligations presumed to arise from the joint venture negotiations.
Whether the trial court properly applied the principles of contract law and corporate fiction in concluding the absence of authorization by key representatives (e.g., Tan Sri) in binding the respondents.