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Global Business Holdings, Inc. (formerly Global Business Bank, Inc.) v. Surecomp Software B.V. (2010) Nachura, J. Facts:
Surecomp Software is a foreign corp organized under the laws of the Netherlands. In 1999, it entered into a software license agreement to let Asian Bank Corp (ABC) use Surecomp ’s IMEX Software System for 20 yrs. Pursuant to the agreement, Surecomp installed the system and ABC also undertook to pay professional services and annual maintenance fees for 5 yrs, and committed to purchase some products at discounted prices. ABC also requested Surecomp to purchase a certain software with a promise to reimburse. However, Global failed to reimburse despite Surecomp’s Surecomp’s delivery of the product. Sometime in 2000, ABC merged with Global Business. When Global took over operations, it found the IMEX system unworkable and informed Surecomp that it was going to discontinue with the software agreement and that it was going to stop payments. Surecomp filed a complaint for breach of contract with damages in RTC-Makati for Global ’s failure to pay its obligations in the agreement despite demands. Surecomp demanded payment of actual damages and an additional amount for Global’s unilateral o pretermination of the agreement, and damages. Instead of filing an answer, Global filed an MTD based on two grounds: 1. That Surecomp had no capacity to sue because it was doing business in the Philippines without a license; and 2. That the claim on which the action was founded was unenforceable under the Intellectual Property Code of the Philippines. Being a technology transfer transfer arrangement, Surecomp failed to comply with Sec 87 & 88 of the Intellectual Property Code of the Philippines. RTC ruled that: On Ground 1: Global is estopped from denying Surecomp’s capacity to sue. Global’ Global ’s argument that it was not o the one who actually contracted with Surecomp is of no moment. It does not relieve Global of its contractual obligation. On Gorund 2: This will require a hearing before the MTD can be resolved. o Surecomp moved for an outright denial of the MTD. RTC denied MTD. RTC says it sees no reason to belabor the issue on Surecomp ’s capacity to sue since there o is a prima facie showing that Global entered into a contract with Surecomp and having done so, willingly, it cannot now be made to raise the issue of capacity to sue (Merrill Lynch Futures, Inc. v. CA). As to unenforceability of the contract, it is an executed, rather than an executor contract. The statute of frauds o finds no application here. Global filed a petition for certiorari with prayer for the issuance of a TRO and/or writ of preliminary injunction under Rule 65 before the CA, saying that the RTC abused its discretion and acted in excess of its jurisdiction. CA denied the petition. MR denied. o
Issues/Held: Whether a special civil action for certior ari is the proper remedy for a denial of a motion to dismiss - NO W hether Global is estopped from questioning Surecomp’s capacity to sue - YES
Ratio: An order denying an MTD is an interlocutory order. It neither terminates nor finally dispos es of a case (it leaves s omething to be done by the court before the case is finally decided on the merits). The general rule is that the denial of an MTD cannot be questioned in a special civil action for certiorari. A special civil action for certiorari is a remedy designed to correct errors of jurisdiction and NOT errors of judgment.
To justify the grant of the extraordinary r emedy of certiorari, the denial of the MTD must have been tainted with grave abuse of discretion. "Grave abuse of discretion" is meant such capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by o reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act all in contemplation of law. In this case, Global did not properly substantiate its claim of arbitrariness on the part of the TC judge denying the MTD. In a petition for certiorari, absent such showing of arbitrariness, capriciousness, or ill motive in the disposition of the trial judge in the case, SC is constrained to uphold the r uling, especially because the decision was upheld by the CA.
Petition denied (CA affirmed) ---------
NOT RELATED TO TOPIC: A corporation has a legal status only within the st ate or territory in which it w as organized. For this reason, a corp organized in another country has no personality to file suits in the Philippines. In order to subject a foreign corp to the jurisdiction of our courts, it must acquire a license from the SEC and appoint an agent for service of process. Without the license, it cannot institute a suit in the Philippines.
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EXCEPTION: Estoppel. Global is estopped f rom f rom challenging Surecomp’s capacity to sue. A party is estopped from challenging the personality of a corp after having acknowledged the same by entering into a contract with it. The principle is applied to prevent a person contracting with a foreign corp from later taking advantage of its noncompliance with the statutes, chiefly in cases where such person has received the benefits of the contract.
In the merger of two corps, one of the corps survives and continues, while the other is dissolved, and all rights, properties, and liabilities are acquired by the surviving corp. Global ’s merger with ABC made it as if it was the one which entered into contract with Surecomp. Global assumed all the liabilities of ABC as if it had incurred such liabilities itself. Also, Global has the right to exercise all defenses, rights, privileges, and counter-claims which ABC may have.
