Case Summary (G.R. No. 138104)
Assignment Agreements to MR Holdings
After Marcopper’s default, Placer Dome caused its subsidiary MR Holdings to assume Marcopper’s remaining ADB obligation (US$ 18.45 M). ADB and Marcopper then executed assignment agreements (March 20 and December 8, 1997) transferring all rights, interests, and mortgaged properties to MR Holdings.
Execution Proceedings by Solidbank
Solidbank obtained a partial judgment against Marcopper (₱52.97 M plus costs) on May 7, 1997, and secured a writ of execution pending appeal. Sheriffs Bajar and Jandusay levied and scheduled a public auction of Marcopper’s properties for August 27, 1998.
MR Holdings’s Third-Party Claim and Injunction
On August 26, 1998, MR Holdings served an Affidavit of Third-Party Claim over the mortgaged properties. Thereafter, it filed a separate reivindicatory action in RTC Boac (Civil Case No. 98-13) with a prayer for preliminary injunction to restrain the sale.
RTC Boac and Court of Appeals Rulings
RTC Boac (Oct. 6, 1998) denied the injunction on grounds that MR Holdings:
- Lacked capacity to sue (foreign corporation doing business without license).
- Sought to stay execution of a final judgment of co-equal court.
- Presented suspiciously timed assignment agreements.
The Court of Appeals (Jan. 8, 1999) affirmed, finding MR Holdings was doing business in the Philippines, that the assignments were not binding on Solidbank and were made in fraud of creditors, and that MR Holdings lacked legal capacity.
Issues for Supreme Court Review
- Capacity of MR Holdings to sue in Philippine courts.
- Whether the deeds of assignment were fraudulent conveyances.
- Whether MR Holdings, Placer Dome, and Marcopper constitute a single entity.
- Alleged forum shopping in filing the third-party claim.
Capacity to Sue: Is MR Holdings “Doing Business”?
Under Corp. Code Sec. 133 and jurisprudence, a foreign corporation doing business without license cannot sue locally; however, isolated transactions remain actionable. “Doing business” implies continuity of commercial dealings, not mere single or occasional acts. MR Holdings’s activities were confined to isolated assignment transactions—payments and transfers pursuant to obligations under the 1992 Standby Credit Agreement—and did not demonstrate an intent to continue Marcopper’s operations. Absent overt acts indicating continuity, MR Holdings is not doing business and retains capacity to sue.
Fraudulent Conveyance: Timing and Consideration
Civil Code Art. 1387 presumes gratuity or alienation after judgment to be fraudulent, but this presumption is rebuttable by showing good faith and valuable consideration. MR Holdings assumed the 1992 loan obligations—supporting a consideration of US$ 18.45 M—and the assignments stemmed from an antecedent Standby Credit Agreement executed four years before Solidbank’s litigation. ADB, a reputable institution, would not collude in sham assignments. Solidbank’s rights as an unsecured judgment creditor cannot prevail over the prior registered mortgage and assignee’s payment of that debt.
Corporate Separateness: Instrumentality Doctrine Inapplicable
Although MR Holdings is a wholly-owned subsidiary of Placer Dome, and Placer Dome a minority shareholder of Marcopper, mere stock ownership does not merge corporate personalities. The record lacks indicia—such as common management, inadequate capitalization, or commingling of assets—warranting piercing the corporate veil. MR Holdings, Placer Dome, and Marcopper remain
Case Syllabus (G.R. No. 138104)
Procedural Posture
- Petitioner MR Holdings, Ltd. filed a Petition for Review on Certiorari before the Supreme Court.
- It assailed the Court of Appeals Decision dated January 8, 1999 (CA-G.R. SP No. 49226) and its Resolution dated March 29, 1999, both of which denied petitioner’s application for a writ of preliminary injunction and motion for reconsideration.
- The injunction sought to restrain the execution sale of properties levied under a Partial Judgment in favor of Solidbank Corporation.
Factual Background
- November 4, 1992: Asian Development Bank (ADB) extended to Marcopper Mining Corporation a principal loan of US$15 million and a complementary loan of US$25 million, secured by a Deed of Real Estate and Chattel Mortgage over Marcopper’s Marinduque assets (registered November 12, 1992).
- Concurrently, Placer Dome, Inc. (40% owner of Marcopper) executed a Support and Standby Credit Agreement to provide cash-flow support for Marcopper’s obligations to ADB.
- Marcopper defaulted. To preserve its credit standing, Placer Dome caused its subsidiary, MR Holdings, Ltd., to assume Marcopper’s debt of US$18,453,450.02.
- March 20, 1997: ADB assigned to MR Holdings all its rights under the loan agreements, mortgage, and standby agreement.
- December 8, 1997: Marcopper executed a Deed of Assignment in favor of MR Holdings, transferring all its mining properties, equipment, and facilities.
- May 7, 1997: Solidbank obtained a Partial Judgment against Marcopper for P52,970,756.89 plus interest, attorney’s fees and costs, and secured a writ of execution pending appeal.
- July–August 1998: Sheriff Bajar levied Marcopper’s real and personal properties and scheduled a public auction for August 27, 1998.
- August 26, 1998: MR Holdings filed an Affidavit of Third-Party Claim, asserting ownership by virtue of the Deeds of Assignment. The Manila RT