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AGILENT TECHNOLOGIES SINGAPORE LTD. v. INTEGRATED SILICON TECHNOLOGY PHILIPPINES CORP.

FACTS:

The petitioner, Agilent Technologies Singapore (Pte.), Ltd., is a foreign corporation not licensed to do business in the Philippines. The respondent, Integrated Silicon Technology Philippines Corporation, is a private domestic corporation engaged in the manufacturing and assembly of electronics components. The individual respondents are members of Integrated Silicon's board of directors.

The parties' juridical relation can be traced to a 5-year Value Added Assembly Services Agreement (VAASA) entered into between Integrated Silicon and Hewlett-Packard Singapore (Pte.) Ltd. On September 19, 1999, Integrated Silicon consented to the assignment of all rights and obligations in the VAASA to Agilent.

Integrated Silicon subsequently filed a complaint against Agilent for specific performance and damages. In response, Agilent filed a separate complaint against Integrated Silicon and the individual respondents for specific performance, recovery of possession, and sum of money with replevin.

The trial court denied the motion to dismiss filed by the respondents and granted Agilent's application for a writ of replevin. The respondents then filed a petition for certiorari with the Court of Appeals, which granted the petition and ordered the dismissal of Agilent's complaint. Agilent filed the present petition for review assailing the decision of the Court of Appeals.

Civil Case No. 3123-2001-C was filed in the Regional Trial Court (RTC), asserting a claim for specific performance, recovery of possession, and damages. However, the Court of Appeals dismissed the case, citing the pendency of Civil Case No. 3110-2001-C as a reason for lack of jurisdiction. The Court of Appeals also held that a motion for reconsideration was not necessary before resorting to a petition for certiorari.

The petitioners filed a petition for certiorari with the Supreme Court, arguing that the lower court had jurisdiction over Civil Case No. 3123-2001-C and that a motion for reconsideration should have been filed before resorting to a petition for certiorari. The Supreme Court found merit in the petition and held that the pendency of another action does not strip a court of its jurisdiction. Additionally, none of the exceptions for dispensing with a motion for reconsideration were present in this case.

The respondents availed of a premature remedy by filing a petition for certiorari with the Court of Appeals, and the appellate court erred in taking cognizance of the petition instead of dismissing it outright.

In this case, there are two separate civil cases filed. In Civil Case No. 3110-2001-C, the respondents claim that there was a breach of an oral promise to renew the VAASA (Value Added Authorized Sales Agreement). They sought the following reliefs: execution of a written extension or renewal of the VAASA, compliance with the extended VAASA, and payment of overdue accounts, damages, and attorney's fees.

On the other hand, in Civil Case No. 3123-2001-C, the petitioner seeks the right to take possession of the subject properties. The petitioner's right of possession is based on the ownership of the subject goods, which is not disputed and is not dependent on the extension or non-extension of the VAASA.

Hence, the replevin suit can proceed independently while the prior suit is ongoing in the Regional Trial Court.

ISSUES:

  1. Whether the issues presented in the two cases are separate and distinct and involve different causes of action.

  2. Whether there is litis pendentia between the two cases.

  3. Whether there is forum shopping.

  4. Whether or not an unlicensed foreign corporation can bring suit in Philippine courts.

  5. Whether or not a Philippine citizen or entity can be estopped from challenging the corporate personality of a foreign corporation that it had contracted with and benefited from.

  6. Whether or not Agilent is considered "doing business" in the Philippines.

  7. Whether the foreign corporation was doing business in the Philippines

  8. Whether the foreign corporation had the legal capacity to file suit

  9. Whether the complaint stated a cause of action against the individual respondents

RULING:

  1. The issues presented in the two cases are separate and distinct, and involve different causes of action. The breach of an oral promise to renew of the VAASA is the issue in Civil Case No. 3110-2001-C, while the right to take possession of the subject properties is the issue in Civil Case No. 3123-2001-C. The two causes of action are different, and the ownership of the subject goods in Civil Case No. 3123-2001-C is not contingent on the extension of the VAASA.

  2. There is no litis pendentia between the two cases because the elements of res judicata are not present. Any judgment rendered in one of the actions will not amount to res judicata in the other action because there are different causes of action.

  3. There is no forum shopping because there is no litis pendentia between the two cases. The elements of litis pendentia are necessary for forum shopping to exist.

  4. An unlicensed foreign corporation can bring suit in Philippine courts if it is not "transacting business" or "doing business" in the Philippines. However, if the foreign corporation is "doing business" in the Philippines without a license, it is not permitted to maintain or intervene in any action or proceeding before Philippine courts.

  5. A Philippine citizen or entity may be estopped from challenging the corporate personality of a foreign corporation if it has contracted with and benefited from said corporation.

  6. Whether or not Agilent is considered "doing business" in the Philippines is yet to be determined. The Supreme Court did not provide a definitive rule on what constitutes "doing" or "transacting" business in the Philippines. It stated that the term implies a continuity of commercial dealings and arrangements, as well as the performance of acts or works normally incident to the purpose and object of the corporation's organization. The court provided examples from previous cases where the foreign corporation was held to be "doing business" in the Philippines based on factors such as the duration of transactions, the appointment of agents, and the intention to establish a continuous business in the country.

  7. The foreign corporation was not doing business in the Philippines. Its activities were limited to maintaining a stock of goods in the Philippines for processing and consignment of equipment for export.

  8. As a foreign corporation not doing business in the Philippines, it did not need a license to file suit and therefore had the legal capacity to do so.

  9. The complaint stated a cause of action against the individual respondents, and the issue of their divestment of interests or resignation from directorial positions should be resolved during trial.

PRINCIPLES:

  • Different causes of action will not constitute litis pendentia or res judicata. (Civil Case No. 3110-2001-C and Civil Case No. 3123-2001-C)

  • The test for determining forum shopping is the presence of litis pendentia or res judicata between the cases. (Buan v. Lopez)

  • An unlicensed foreign corporation can bring suit in Philippine courts if it is not "transacting business" or "doing business" in the Philippines.

  • A Philippine citizen or entity may be estopped from challenging the corporate personality of a foreign corporation that it had contracted with and benefited from.

  • There is no definitive rule on what constitutes "doing" or "transacting" business in the Philippines. The determination depends on the specific circumstances of each case, but it generally implies a continuity of commercial dealings and arrangements, as well as the performance of acts or works normally incident to the corporation's purpose and object.

  • Definition of "doing business" in the Philippines includes activities that imply a continuity of commercial dealings and arrangements, and the performance of acts or works in pursuit of commercial gain or the purpose and object of the business organization.

  • The acts enumerated in the Implementing Rules and Regulations of the Foreign Investments Act of 1991 that do not constitute "doing business" in the Philippines include mere investment as a shareholder, having a nominee director or officer, appointing a representative or distributor, publication of a general advertisement, maintaining a stock of goods solely for processing, consignment of equipment for processing, collecting information, and performing services auxiliary to an isolated contract of sale.

  • A foreign corporation not doing business in the Philippines does not require a license to file suit before Philippine courts.

  • A motion to dismiss hypothetically admits all allegations in the complaint, which means that the issue of divestment or resignation by individual respondents should be raised during trial.