FACTS:

The case involves a dispute between respondent Surecomp Software and petitioner Global Business Holdings regarding a software license agreement. Surecomp, a foreign corporation, entered into an agreement with Asian Bank Corporation (ABC) for the use of their software system. After ABC merged with Global, Global found the software system unworkable for its operations. Consequently, Global decided to discontinue the agreement and stop making payments.

Surecomp, in response, filed a complaint for breach of contract with damages against Global. However, Global filed a motion to dismiss. They argued that Surecomp did not have the capacity to sue since it was doing business in the Philippines without a license. Additionally, Global contended that the agreement was unenforceable under the Intellectual Property Code of the Philippines.

The Regional Trial Court (RTC) issued an order stating that Global is estopped from denying Surecomp's capacity to sue. However, the second ground raised by Global required a hearing. As a result, the RTC granted Global's motion to serve written interrogatories to determine the enforceability of the contract.

Both parties then filed motions—Surecomp filed a motion for partial reconsideration, while Global filed a motion for reconsideration. The RTC, in response to these motions, issued an order holding the resolution of the motion to dismiss in abeyance until a hearing is conducted on the second ground.

ISSUES:

1. Whether Surecomp had the capacity to sue Global for breach of contract.

2. Whether the cause of action of Surecomp is enforceable under the Intellectual Property Code.

RULING:

1. Surecomp had the capacity to sue Global for breach of contract. Global, as the surviving corporation after merging with Asian Bank Corporation (ABC), was estopped from denying Surecomp's capacity to sue it for alleged breach of the contract. The agreement entered into was a contract between Surecomp and ABC, but Global, as the successor in interest of ABC, assumed the liabilities and obligations of ABC under the agreement. Global's argument that it did not actually contract with Surecomp was of no significance because it still had a contractual obligation under the agreement.

2. The second ground raised by Global, which is the unenforceability of the contract under the Intellectual Property Code, required a separate hearing before the motion to dismiss could be resolved. The court granted Global's motion to serve written interrogatories to Surecomp regarding the alleged unenforceability of the contract. The resolution of the motion to dismiss was held in abeyance until after the hearing on the second ground.

PRINCIPLES:

• A corporation that assumes the liabilities and obligations of another corporation through a merger is estopped from denying the capacity of the other corporation to sue it for breach of contract.

• In a litigation, the availment of mode of discovery, such as written interrogatories, shall be liberally construed to ascertain the truth of the controversy at a lesser expense and with expeditiousness.