1) Columbia et al, as foreign film corporations, challenged whether they needed to be licensed to do business in the Philippines to have legal standing in Philippine courts.
2) The court ruled that Columbia et al's ownership of copyrights and exclusive distribution rights in the Philippines did not constitute "doing business" requiring a license.
3) As Columbia et al did not perform any acts indicative of conducting or transacting business in the Philippines, they were not barred from maintaining their action and had legal standing in Philippine courts.
1) Columbia et al, as foreign film corporations, challenged whether they needed to be licensed to do business in the Philippines to have legal standing in Philippine courts.
2) The court ruled that Columbia et al's ownership of copyrights and exclusive distribution rights in the Philippines did not constitute "doing business" requiring a license.
3) As Columbia et al did not perform any acts indicative of conducting or transacting business in the Philippines, they were not barred from maintaining their action and had legal standing in Philippine courts.
1) Columbia et al, as foreign film corporations, challenged whether they needed to be licensed to do business in the Philippines to have legal standing in Philippine courts.
2) The court ruled that Columbia et al's ownership of copyrights and exclusive distribution rights in the Philippines did not constitute "doing business" requiring a license.
3) As Columbia et al did not perform any acts indicative of conducting or transacting business in the Philippines, they were not barred from maintaining their action and had legal standing in Philippine courts.
COLUMBIA V. CA Philippines, Section 133 of Batas Pambansa Blg. 68,
Facts: or the Corporation Code of the Philippines, denies them the right to maintain a suit in Philippine courts The National Bureau of Investigation has engaged in in the absence of a license to do an anti-film piracy drive by investigating various business. Consequently, they have no right to ask video establishments in Metro Manila involving for the issuance of a search warrant. cases violating PD No. 49, as amended, including Sunshine Home Video Inc. (“Sunshine”), owned and Columbia et al’s contention: operated by Danilo A. Pelindario with address at No. Columbia et al denied that they are doing business in 6 Mayfair Center, Magallanes, Makati, Metro Manila. the Philippines and contend that Sunshine have not On November 14, 1987, NBI Senior Agent Lauro C. adduced evidence to prove that petitioners are Reyes applied for a search warrant with the court a doing such business here, as would require them to quo against Sunshine seeking the seizure, among be licensed by the Securities and Exchange others, of pirated video tapes of copyrighted films, Commission. which the court granted. Moreover, an exclusive right to distribute a product In the course of the search of the premises indicated or the ownership of such exclusive right does not in the search warrant, the NBI Agents found and conclusively prove the act of doing business nor seized various video tapes of duly copyrighted establish the presumption of doing business. motion pictures/films owned or exclusively distributed by Columbia Pictures, Inc. et al (Columbia et al.) Ruling: Thereafter, the court has lifted the search warrant No, foreign film corporations do not transact or do which it had therefore issued after a series of business in the Philippines and, therefore, do not motions, up until the CA. need to be licensed in order to take recourse to our courts. In the SC, Sunshine challenged Columbia et al’s legal standing in our courts, they being foreign As acts constitutive of “doing business,” the fact that corporations not licensed to do business in the Columbia et al are admittedly copyright owners or Philippines. owners of exclusive distribution rights in the Philippines of motion pictures or films does not convert such ownership into an indicium of doing Issue: business which would require them to obtain a license before they can sue upon a cause of action in Whether or not Columbia et al were “doing local courts. business” in the Philippines, thus, needs to be licensed before having a legal standing in Philippine Neither is the appointment of Atty. Rico V. Domingo courts. as attorney-in-fact of Columbia et al., with express authority pursuant to a special power of attorney Sunshine’s contention: Columbia et al, being foreign corporations, should have such license to be able to maintain an action in Held: Philippine courts. Based on Article 133 of the Corporation Code and Sunshine point to the fact that Columbia et al are gauged by such statutory standards, Columbia et al the copyright owners or owners of exclusive rights of are not barred from maintaining the present distribution in the Philippines of copyrighted motion action. pictures or films, and also to the appointment of There is no showing that, under our statutory or case Atty. Rico V. Domingo as their attorney-in-fact, as law, Columbia et al are doing, transacting, engaging being constitutive of “doing business in the in or carrying on business in the Philippines as would Philippines” under Section 1(f) (1) and (2), Rule 1 of require obtention of a license before they can seek the Rules of the Board of Investments. redress from our courts. No evidence has been offered to show that arrangements, and contemplates, to that extent, the petitioners have performed any of the enumerated performance of acts or works or the exercise of acts or any other specific act indicative of an some of the functions normally incident to or in intention to conduct or transact business in the progressive prosecution of the purpose and subject Philippines. of its organization. Article 125 and Article 133 of the Corporation Code As a general rule, a foreign corporation will not be of the Philippines, as interpreted, says that any regarded as doing business in the State simply foreign corporation not doing business in the because it enters into contracts with residents of Philippines may maintain an action in our courts the State, where such contracts are consummated upon any cause of action, provided that the subject outside the State. matter and the defendant are within the In fact, a view is taken that a foreign corporation is jurisdiction of the court. not doing business in the state merely because sales It is not the absence of the prescribed license but of its product are made there or other business “doing business” in the Philippines without such furthering its interests is transacted there by an license which debars the foreign corporation from alleged agent, whether a corporation or a natural access to our courts. person, where such activities are not under the direction and control of the foreign corporation but In other words, although a foreign corporation is are engaged in by the alleged agent as an without license to transact business in the independent business. Philippines, it does not follow that it has no capacity to bring an action. It is generally held that sales made to customers in the State by an independent dealer who has Such license is not necessary if it is not engaged in purchased and obtained title from the corporation business in the Philippines. to the products sold are not a doing of business by No general rule or governing principles can be laid the corporation. down as to what constitutes “doing” or “engaging Likewise, a foreign corporation which sells its in” or “transacting” business. products to persons styled “distributing agents” in Each case must be judged in the light of its own the State, for distribution by them, is not doing peculiar environmental circumstances. business in the State so as to render it subject to service of process therein, where the contract with The true tests, however, seem to be whether the these purchasers is that they shall buy exclusively foreign corporation is continuing the body or from the foreign corporation such goods as it substance of the business or enterprise for which it manufactures and shall sell them at trade prices was organized or whether it has substantially retired established by it. from it and turned it over to another. Merely engaging in litigation has been considered as Authorities agrees that a foreign corporation is not a sufficient minimum contact to warrant the “doing,” “transacting,” “engaging in,” or “carrying exercise of jurisdiction over a foreign corporation. on” business in the State when, and ordinarily only when, it has entered the State by its agents and is there engaged in carrying on and transacting through them some substantial part of its ordinary or customary business, usually continuous in the sense that it may be distinguished from merely casual, sporadic, or occasional transactions and isolated acts. The Corporation Code does not itself define or categorize what acts constitute doing or transacting business in the Philippines. Jurisprudence has, however, held that the term implies a continuity of commercial dealings and