Wing On Company v. SYYAP, 64 O.G.

8311 (1967)

Facts
Plaintiff Wing On Company is a foreign partnership, with business address in New York County, New
York, U.S.A which did not have a license to transact business in the Philippines. Sometime in the year 1948, the
defendant, A. Syyap & Co., Inc., a domestic corporation, thru its agent, Murray Kern, in New York,, negotiated
with the plaintiff for the purchase of clothing materials under the agreement that the defendant’ would pay the
plaintiff the value thereof after the sale of the goods by the defendant and that the profits derived from such
sale would be divided between them.

Accordingly, in1948, the plaintiff shipped to the defendant the clothing materials in question, -worth
$22,246.04, which were received by the latter and eventually sold by it. The defendant, however, was able to
pay the plaintiff only the sum of $3,530.00 on account of the value of the merchandise in leaving a balance of
$18,716.04. Despite, however, plaintiff’s demands on the defendant and its agents, Murray Kern, and the
promises of the defendant to pay the account in full, the defendant failed to settle the said account. Neither was
there any accounting or division of the profits made by the defendant as agreed upon by the parties; hence, the
present action was instituted

Appellant‘s contends that

1. The court quo had no jurisdiction to try the case because Wing on is not licensed to do business in
the Philippines therefore, has no legal capacity to sue.

2. That the trial court should have declined jurisdiction over the present suit, pursuant to the principle
of forum non -conveniens in Private International Law “that where the ends of justice strongly indicate that the
controversy may be more suitably tried elsewhere, then jurisdiction should be declined and the parties
relegated to relief to be sought in another forum.

Issues:

1. Whether or not Wing on has a legal capacity to sue ?

2. Whether or not the trial court should decline jurisdiction over the case pursuant to the principle of
forum non–conveniens?

HELD:

1. YES. In the case of Marshall-Wells Co. vs. Henry W. Elser, Co., supra, the Supreme Court stated:
“The object of the statute was to subject the foreign corporation doing business in the Philippines to
the jurisdiction of its courts. The object of the statute was not to prevent the foreign corporation from
performing single acts, but to prevent it from acquiring a domicile for the purpose of business’ without
taking the steps necessary to render it amenable to suit in the local courts. The implication of the law
is that it was never the purpose of the Legislature to exclude a foreign corporation which happens to
obtain an isolated order, for business from the Philippines, from securing redress in the Philippine
courts, and thus, in effect, to permit persons to avoid the contracts made with such foreign
corporations.

In the case at bar, the facts show that the transaction in question was an isolated act, contract
or transaction. As such, it does not constitute “doing or transacting business” within the meaning of
the law; Consequently, the plaintiff, although a foreign juridical person or entity, not duly licensed to
transact business in the Philippines, has the legal personality to bring and maintain the present suit
arising from the transaction in question. In short, in this particular case, the obtaining of a license to
transact business is not a condition precedent to the institution of- the action. 'It is only when the
foreign corporation is doing or transacting business within the purview of the law-that it has to have
a license before it can sue in our courts.
2. NO. There is no merit in this contention. The facts surrounding the present case do not warrant
the application of any recognized rules of Private International Law. It is a well-established practice in
the application of the principle of forum turn conveniens that unless the balance is strongly in favor of
the defendant, the plaintiff’s choice of forum should rarely be disturbed and that, furthermore, the
consideration of inadequacy- to enforce the judgment, which is one of the important factors to be
considered in the application of said principle, would precisely constitute a problem to the plaintiff if
the local courts decline to assume jurisdiction on the basis of said principle, considering that the
defendant is a resident of the Philippines. "
It is true that the agreement in question involving the purchase of clothing materials was
entered into in New York, U.S.A. The goods, however, were delivered to, and received and sold by the
defendant in this jurisdiction. Considering that, as above-stated, the Wing On Company of New York
may sue in Philippine courts in connection with the transaction in question and, considering, further,
that the present suit arising from said transaction is in the nature of a personal action, the case may be
commenced -- and tried where the defendant-resides or may be found, or where the plaintiff resides,
at the election of the plaintiff. (Section 2b, Kule 4 of the Rules of Court.) Consequently, venue in the
instant case was not improperly laid and the court a quo did not err in taking cognizance of the case. -
(Marshall-Wells Co. vs. Henry W. Elser Co., supra; Kelsen’s Principles of International Law, 52 Ed. pp.
264-256.)