Case Summary (G.R. No. 228000)
Regional Trial Court Ruling
The Pasig RTC (Aug. 19, 2008) found that a valid contract existed—including pre-contract services—and held Magna liable. It deducted purported equity participation in a not-formally incorporated venture (SPI), awarding Andersen US$35,694.03 with 12% interest from the complaint’s filing, P50,000 attorney’s fees, and costs. Magna and Andersen both appealed.
Court of Appeals Ruling
The CA (Sept. 8, 2010) affirmed in part and modified:
• Awarded the full US$60,786.59 plus 12% legal interest from the June 26, 1998 extrajudicial demand until full payment
• Granted P30,000 exemplary damages and P50,000 attorney’s fees
• Held that Andersen’s subject contract was an isolated transaction and that Magna waived capacity objections and was estopped from denying the contract’s validity
Issue
Whether Andersen, a foreign corporation without a Philippine license and engaging in contractual services, had legal capacity to sue, or whether its transaction was “isolated” under Section 133 of the Corporation Code.
Supreme Court Ruling
- Capacity to Sue and “Doing Business”
– Under Section 133, a foreign corporation transacting business without a license cannot initiate suit, except on an isolated transaction.
– Tests for “doing business” (Mentholatum substance test; continuity test) show Andersen’s professional services contract aligned with its corporate purpose and implied continuity, not an isolated act. - Estoppel and Waiver
– Magna, having entered into and benefitted from the contract, is estopped from challenging Andersen’s corporate personality or capacity to sue (judicial estoppel; waiver doctrines
Case Syllabus (G.R. No. 228000)
Procedural History
- Petition for Review on Certiorari under Rule 45 filed by Magna Ready Mix Concrete Corporation (MAGNA) assails:
• September 8, 2010 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 92647
• March 14, 2011 Resolution denying MAGNA’s motion for reconsideration - CA had affirmed with modifications the August 19, 2008 Decision of the Regional Trial Court (RTC), Branch 161, Pasig City, in Civil Case No. 69953
- RTC had granted in part Andersen Bjornstad Kane Jacobs, Inc.’s (ANDERSEN) complaint for collection, awarding US$35,694.03 plus interest, P50,000 attorney’s fees, and costs
- Both parties appealed the RTC Decision to the CA; ANDERSEN sought full US$60,786.59, interest from demand, exemplary damages, and higher fees; MAGNA sought dismissal for lack of legal capacity, denial of contract formation, and non-delivery defenses
Factual Background
- ANDERSEN is a Washington State corporation, not licensed to do business in the Philippines; sues on an isolated transaction
- MAGNA is a Philippine corporation engaged in concrete and precast projects
- In 1996, MAGNA issued a purchase order (October 21, 1996) and on November 29, 1996 executed an Agreement for Professional Services with ANDERSEN
- Services included form design, drawing development for a precast plant, double tee design, and preliminary design for Ecocentrum Garage
- ANDERSEN delivered designs in February 1997; MAGNA made partial payments, leaving an unpaid balance of US$60,786.59
- ANDERSEN made repeated extrajudicial demands (June 26, 1998) without success, then filed complaint on April 20, 2004 for sum of money, interest, exemplary damages, and attorney’s fees
Parties’ Contentions
- ANDERSEN alleges MAGNA acted maliciously and in bad faith in refusing payment
- MAGNA denies that ANDERSEN rendered any services, questions timing of contract execution, and contests delivery of certain designs
- MAGNA counterclaims