Rimbunan Hijau Group v. Oriental Wood

RIMBUNAN HIJAU GROUP OF COMPANIES

v.

ORIENTAL WOOD PROCESSING CORP.

G.R. No. 152228.

FACTS OF TNE CASE

This case stemmed from a complaint for sum of money, in the amount of US$ 343 000, filed by Rimbunan Hijau Group of Companies (“Rimbunan”) and Niugini Lumber Merchants Pty., Ltd. (“Niugini”) against Oriental Wood Processing Corporation (respondent) before Branch 22 of the Regional Trial Court (RTC) of Malolos, Bulacan. Rimbunan and Niugini (petitioners) are foreign corporations duly organized and existing under the laws of Papua New Guinea (“PNG”) while respondent is a private domestic corporation organized and existing under Philippine laws.

Respondent, Oriental Wood Processing Corp., filed a motion to dismiss the complaint on the ground that Rimbunan, a foreign corporation, has no license to do business in the Philippines and as such has no legal capacity to sue before our domestic court.

The motion to dismiss the case was denied by the trial court. The respondent corporation filed a petition for certiorari under Rule 65 of the 1997 Rules of Court before the Court of Appeals citing a grave abuse of discretion on the part of the trial court. The Court of Appeals granted the petition for certiorari under Rule 65 using as their legal ground the factual allegations of Oriental Wood that Rimbunan has been transacting business in the Philippines for quite a number of times without securing business license, and that they are not classified as isolated transaction that entitles Rimbunan a capacity to sue.

ISSUE

Whether Rimbunan, a foreign corporation without any license to do business in the Philippines, has the capacity to sue before our domestic court.

RULING

The Supreme Court answered in the affirmative. An unlicensed foreign corporation is nonetheless permitted to bring suit in the Philippines if it is suing on an isolated transaction. And even if it’s more than an isolated transaction, respondent is estopped from questioning the petitioner’s lack of capacity to sue after having benefitted from the series of transactions conducted with an unlicensed foreign corporation.

All things considered, respondent can no longer invoke petitioner’s lack of capacity to sue in this jurisdiction. Considerations of fair play dictate that after having contracted and benefited from its business transaction with Rimbunan, respondent should be barred from questioning the latter’s lack of license to transact business in the Philippines.