Columbia V. Ca Facts:: Quo Against Sunshine Seeking The Seizure, Among

As foreign corporations doing business in the
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

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