Marubeni Nederland v. Tensuan
REITERATIONFacts
The Antecedents: Petitioner Marubeni Nederland B.V. (Marubeni) entered into a contract with D.B. Teodoro Development Corporation (DBT) for the supply of equipment and design for a lime plant in Iloilo, with financing agreements guaranteed by the National Investment and Development Corporation (NIDC). DBT later claimed delays and defects, leading to a "Settlement Agreement." Subsequently, DBT rejected the plant and demanded indemnification. Marubeni denied fault. Procedural History: Private respondent Artemio Gatchalian, a stockholder of DBT, filed a complaint against Marubeni for contractual breach before the Court of First Instance of Rizal, Branch IV, Quezon City, impleading DBT and NIDC. Gatchalian sought indemnification and an injunction against payments to Marubeni. The respondent judge issued a temporary restraining order. Marubeni moved to dismiss, asserting lack of jurisdiction as a foreign corporation not doing business in the Philippines. The motion was denied. The Petition: Marubeni filed a petition for certiorari and prohibition with the Supreme Court, assailing the denial of its motion to dismiss and arguing that the lower court had no jurisdiction over its person. The Supreme Court issued a restraining order.
Issue(s)
Whether the petitioner Marubeni Nederland B.V. is considered "doing business" in the Philippines, thereby subjecting it to the jurisdiction of Philippine courts. Whether the respondent judge denied petitioner due process by peremptorily denying its motion to dismiss without a formal hearing.
Ruling
The petition is DISMISSED for lack of merit. The respondent Court is directed to proceed with the hearing of Civil Case No. Q-35534 with dispatch. The decision is immediately executory. Costs against the petitioner.
Ratio Decidendi
On the issue of "doing business" and jurisdiction: The Supreme Court held that petitioner Marubeni Nederland B.V. can be sued in Philippine courts because it is considered to be "doing business" in the Philippines. The Court reiterated that there is no general rule to determine "doing business," and each case depends on its facts. Applying Republic Act No. 5455 and its implementing rules, the Court found that Marubeni solicited the lime plant business through its Manila branch, with the "turn-key proposal" initiated by the Manila office. The Court noted that the "Marubeni Corporation, Tokyo, Japan" assumed an active role in negotiations, and the signature on behalf of Marubeni Nederland B.V. was by an officer of Marubeni Corporation, Tokyo. Even if Marubeni Nederland B.V. were a separate entity, its actions through the Marubeni Corporation, Tokyo, and its Manila branch constituted soliciting orders, purchases, or service contracts, and appointing representatives to transact business for its account. These circumstances, singly or in combination, fall within the contemplation of "doing business in the Philippines" under the law. The Court emphasized that a foreign corporation doing business in the Philippines, with or without a license, is subject to the jurisdiction of local courts, and it cannot use its lack of license to impugn such jurisdiction. On the issue of denial of due process: The Supreme Court found that the alleged denial of due process was more apparent than real. Under Section 13, Rule 16 of the Revised Rules of Court, a court has options when faced with a motion to dismiss: either to deny or grant it, allow amendment, or defer its determination until the trial on the merits if the ground is not indubitable. The Court stated that even assuming no formal hearing was held prior to the denial, petitioner was not unduly prejudiced because the court still had to conduct a trial on the merits where it could grant the motion if sufficient evidence of lack of jurisdiction was presented. The Court distinguished this from a situation where the motion to dismiss is sustained without a hearing, which would warrant a corrective writ of certiorari.
Main Doctrine
A foreign corporation, even if unlicensed, is deemed to be 'doing business' in the Philippines and is thus subject to the jurisdiction of Philippine courts if its actions, such as soliciting orders or appointing representatives, indicate a continuity of commercial dealings and contemplate the performance of acts incident to its business purpose. The invocation of lack of license cannot be used to evade judicial accountability.