G.R. No. 97816 - Merrill Lynch Futures, Inc. vs. Court of Appeals

On September 28, 1983, Merrill Lynch Futures, Inc. (ML FUTURES), a non-resident foreign corporation organized under Delaware law and licensed as a U.S. futures commission merchant, entered into a Futures Customer Agreement (Account No. 138-12161) with respondents Pedro M. Lara and Elisa G. Lara. Under this agreement, ML FUTURES agreed to act as the Laras’ broker for buying and selling futures contracts on U.S. exchanges.
All orders were transmitted through Merrill Lynch Philippines, Inc. (MLPI), a Philippine corporation servicing foreign futures customers. The Laras were allegedly informed that MLPI was not licensed by the Philippine SEC as a futures broker or trading advisor.
From 1983 to October 1987, the Laras traded “stock index futures,” with regular accountings and money transfers. A final loss of US $160,749.69 on three index-futures transactions was offset against a US $75,913.42 credit owed by ML FUTURES, leaving a balance of US $84,836.27 which the Laras refused to pay, contending that the trades were void for lack of Philippine licensing.

On November 23, 1987, ML FUTURES filed Civil Case No. Q-52360 in the RTC of Quezon City, Branch 84, seeking recovery of the US $84,836.27 (in pesos), P500,000 exemplary damages, attorney’s fees, and a P2,267,139.50 preliminary attachment. Attachment issued ex parte on December 2, 1987.
On December 18, 1987, the Laras moved to dismiss under Rule 16, § 1(d) and (g), alleging (a) ML FUTURES had no capacity to sue because it was doing business in the Philippines without a license, and (b) the complaint stated no cause of action because the real party in interest was Merrill Lynch Pierce Fenner & Smith, Inc. They attached eight agreements and receipts purportedly showing their dealings were with that U.S. corporation.
The RTC granted the motion to dismiss on January 12, 1988, and denied reconsideration on February 29, 1988.
ML FUTURES appealed to the Court of Appeals (CA-G.R. CV No. 16478), which on November 27, 1990, affirmed the dismissal, holding that (a) MLPI was a conduit for ML FUTURES’ Philippine business, (b) ML FUTURES was transacting business here without a license (Corp. Code, § 133), and (c) it thus had no legal personality to sue. The CA denied ML FUTURES’ motion for reconsideration on March 7, 1991.
ML FUTURES filed a petition for certiorari in the Supreme Court, raising issues on (a) admissibility of the Laras’ annexes, (b) procedural due process, and (c) capacity to sue as a foreign corporation doing business without license.

Do the annexes attached by the Laras to their motion to dismiss constitute admissible evidence?
Was ML FUTURES denied procedural due process in the trial court’s consideration of the motion to dismiss?
Do the annexes establish that ML FUTURES was “doing business” in the Philippines without a license (Corp. Code, § 133), and thus has no capacity to sue?