8/10/2019 Marcopper v. Bajar Case Digest

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G.R. No. 138104 April 11, 2002

MR HOLDINGS, LTD., vs. SHERIFF CARLOS P. BAJAR, SHERIFF FERDINAND M. JANDUSAY,

SOLIDBANK CORPORATION, AND MARCOPPER MINING CORPORATION.

FACTS: Marcopper loaned from Asian Development Bank (ADB), $40,0000,000. To secure the loan it

executed in favor of ADB a "Deed of Real Estate and Chattel Mortgage"covering substantially all of its

(Marcoppers) properties and assets. Placer Dome, Inc., (Placer Dome), a foreign corporation which owns

40% of Marcopper, executed a "Support and Standby Credit Agreement" with ADB whereby the former

agreed to provide Marcopper with cash flow support for the payment of its obligations to ADB. When

Marcopper defaulted in the payment of its loan obligation; Placer Dome, in fulfilment of its undertaking

under with Marcopper, agreed to have its subsidiary corporation, petitioner MR Holding, Ltd., assumed

Marcoppers obligation. ADB transferred all its rights to collect from Marcopper to MR Holdings, Ltd. In

order to pay MR Holdings, Marcopper assigned all its assets to MR Holdings and executed a Deed of

Assignment in MR Holdings favor.

Meanwhile, another creditor of Marcopper, Solidbank Corporation, won a case against Marcopper. The

court then issued a writ of execution directing Sheriff Bajar to levy Marcoppers assets.

MR Holdings then filed an opposition asserting that it is now the owner of Marcoppers assets hence,

Bajar cannot levy them. The lower court denied MR Holdings on the ground that the Deed of Assignment

was made in bad faith and that MR Holdings was a foreign corporation doing business without a license in

the Philippines (by virtue of the Deed of Assignment) and as such cannot sue in the Philippines.

ISSUE: Whether or not MR Holdings, a foreign corporation may sue on this particular transaction.

HELD: Yes. The Supreme Court emphasized the following rules when it comes to foreign corporations

doing business here in the Philippines:

1.

if a foreign corporation does business in the Philippines without a license, it cannotsuebefore the Philippine courts;

2.

if a foreign corporation is not doing businessin the Philippines, it needs no license to

suebefore Philippine courts on an isolated transaction or on a cause of action entirely

independent of any business transaction;

3.

if a foreign corporation does businessin the Philippines with the required license, it can

suebefore Philippine courts on any transaction.

Being a mere assignee does not constitute doing business in the Philippines. MR Holdings, a foreign

corporation, cannot be said to be doing business simply because it became an assignee of Marcopper. MR

Holdings was not doing anything else other than being a mere assignee. The only time that MR Holdings isconsidered to be doing business here is that if it continues the business of Marcopper which it did not.

Therefore, since it is not doing business here, pursuant to the rules above, it can sue without any license

before Philippine courts on an isolated transaction or on a cause of action entirely independent of any

business transaction.

Anent the issue of bad faith, the same was not proven. It appears that the deed of assignment was an

earlier agreement incidental to the loan agreement between ADB and Marcopper which precedes the

action brought by Solidbank against Marcopper.