G.R. No. L-28554 - Unno Commercial Enterprises, Inc. vs. General Milling Corp.

The case involves Philippine Products Company as plaintiff and appellant versus Primateria Societe Anonyme Pour Le Commerce Exterieur (referred to as Primateria Zurich) and other defendants (including Primateria (Phil.) Inc., Alexander G. Baylin, and Jose M. Crame) as respondents/appellees.
Primateria Zurich is a foreign juridical entity with its principal office in Zurich, Switzerland, engaged in international trade in agricultural products, particularly oils, fats, oil-seeds, and related products.

On October 24, 1951, Primateria Zurich, through its agent Alexander G. Baylin, entered into an agreement with the plaintiff wherein the latter undertook to purchase copra in the Philippines on behalf of Primateria Zurich during a tentative one-month experimental period.
The initial contract was renewed by mutual agreement, extending the period first to February 24, 1952, and later to 1953.

During the contract period, the plaintiff caused the shipment of copra to foreign countries in accordance with instructions from Primateria Zurich, which were communicated through Primateria (Phil.) Inc.
Alexander G. Baylin and Jose M. Crame, acting as officers and duly authorized agents of Primateria Philippines, executed the transactions and managed the contractual obligations in the Philippines.

As a result of the shipments, the total amount due to the plaintiff as of May 30, 1955, amounted to P33,009.71.
It was proven at trial that defendant Primateria Zurich had already paid P2,000.00 against the claim, leaving a net balance of P31,009.71 owed to the plaintiff.

Defendant Primateria Zurich was declared in default for not filing an answer within the reglementary period, leading to a trial in the Manila court of first instance.
The lower court rendered judgment holding Primateria Zurich liable for the sum of P31,009.71 with legal interest from the filing date, along with P2,000.00 for attorney’s fees, while absolving the other defendants (Primateria (Phil.) Inc., Baylin, and Crame) of liability.
The plaintiff subsequently appealed the portion of the judgment that dismissed its complaint against the three defendants, contending that, as agents, they should be held personally liable under Art. 1897 of the New Civil Code.

The plaintiff argued that Primateria Zurich should be classified as a foreign corporation under Sections 68 and 69 of the Corporation Law, which require a license for foreign corporations to transact business in the Philippines.
Furthermore, the plaintiff contended that because Primateria Zurich transacted business in the Philippines without the requisite license, its agents should be held personally liable for the contracts executed on its behalf.

Whether defendant Primateria Zurich qualifies as a foreign corporation within the meaning of Sections 68 and 69 of the Corporation Law.

Consideration of the nature and classification of the entity as a societe anonyme versus a corporation under Philippine law.

Whether Primateria Zurich, by transacting business in the Philippines without the necessary license, violated the statutory provisions set forth in Sections 68 and 69 of the Corporation Law.

Assessment of whether the activities carried out through its agents constituted “transacting business” as defined by the law.

Whether the agents of Primateria Zurich (namely, Alexander G. Baylin and Jose M. Crame) may be held personally liable on contracts made in the name of the foreign entity, particularly under the provisions of Art. 1897 of the New Civil Code.

Examination of whether the agents exceeded the limits of their authority without giving sufficient notice of such limitations to the contracting party.