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  • 195 - Atlantic Mutual Insurance vs. Cebu Stevedoring

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    This case involves two foreign insurance companies, Atlantic Mutual Insurance Company and Continental Insurance Company, suing a Philippine company, Cebu Stevedoring Co., Inc. over damaged cargo. The trial court dismissed the case because the foreign insurance companies did not allege in their complaint that they complied with requirements for foreign corporations to file lawsuits in the Philippines. The Supreme Court upheld the dismissal, finding that as foreign corporations, the plaintiffs must affirmatively state in their complaint that they have obtained the necessary license to do business in the Philippines or that the transaction being sued over was isolated and did not require a license. Their capacity to sue was disputed and they failed to properly plead this essential element.

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    195_atlantic Mutual Insurance vs. Cebu Stevedoring

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    This case involves two foreign insurance companies, Atlantic Mutual Insurance Company and Continental Insurance Company, suing a Philippine company, Cebu Stevedoring Co., Inc. over damaged cargo. The trial court dismissed the case because the foreign insurance companies did not allege in their complaint that they complied with requirements for foreign corporations to file lawsuits in the Philippines. The Supreme Court upheld the dismissal, finding that as foreign corporations, the plaintiffs must affirmatively state in their complaint that they have obtained the necessary license to do business in the Philippines or that the transaction being sued over was isolated and did not require a license. Their capacity to sue was disputed and they failed to properly plead this essential element.

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    © All Rights Reserved
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    148 views2 pages

    195 - Atlantic Mutual Insurance vs. Cebu Stevedoring

    Uploaded by

    mimiyuki_
    This case involves two foreign insurance companies, Atlantic Mutual Insurance Company and Continental Insurance Company, suing a Philippine company, Cebu Stevedoring Co., Inc. over damaged cargo. The trial court dismissed the case because the foreign insurance companies did not allege in their complaint that they complied with requirements for foreign corporations to file lawsuits in the Philippines. The Supreme Court upheld the dismissal, finding that as foreign corporations, the plaintiffs must affirmatively state in their complaint that they have obtained the necessary license to do business in the Philippines or that the transaction being sued over was isolated and did not require a license. Their capacity to sue was disputed and they failed to properly plead this essential element.

    Copyright:

    © All Rights Reserved
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    of 2

    ATLANTIC MUTUAL INSURANCE COMPANY and CONTINENTAL INSURANCE

    COMPANY vs. CEBU STEVEDORING CO., INC

    (G.R. No. L-18961; August 31, 1966)

    FACTS: Plaintiff-appellants, organized and existing under the laws of the US, sued
    herein defendant-appellee, as subrogee to the shipper and consignee, alleging that the
    latter undertook to carry a shipment of copra for delivery to P&G Company at Cebu City
    but upon discharge, a portion of the copra was found damaged. Defendant moved to
    dismiss on the ground that the complaints on the ground of failure to allege compliance
    with Sec. 69 of the Corporation Law which was granted after failure of the plaintiff to
    comply with the amendment of the complaint.

    ISSUE: WON plaintiff-appellants have the right to sue as to the defects in the pleadings
    and procedures?

    HELD: No. It should be noted that insofar as the allegations in the complaint have a
    bearing on appellants' capacity to sue, all that is averred is that they are both foreign
    corporations existing under the laws of the United States. This averment conjures two
    alternative possibilities: either they are engaged in business in the Philippines or they
    are not so engaged. If the first, they must have been duly licensed in order to maintain
    this suit; if the second, if the transaction sued upon is singular and isolated, no such
    license is required. In either case, the qualifying circumstance is an essential part of the
    element of plaintiffs' capacity to sue and must be affirmatively pleaded. To be sure,
    under the Rules of Court (Section 11, Rule 15) in force prior to the promulgation of the
    Revised Rules on January 1, 1964, it was not necessary to aver the capacity of a party
    to sue except to the extent required to show jurisdiction of the court. In our opinion,
    however, such rule does not apply in all situations and under all circumstances. The
    theory behind a similar rule in the United States is "that capacity ... of a party for
    purpose of suit is not in dispute in the great bulk of cases, and that pleading and proof
    can be simplified by a rule that an averment of such matter is not necessary, except to
    show jurisdiction."1 But where as in the present case, the law denies to a foreign
    corporation the right to maintain suit unless it has previously complied with a certain
    requirement, then such compliance, or the fact that the suing corporation is exempt
    therefrom, becomes a necessary averment in the complaint. These are matters
    peculiarly within the knowledge of appellants alone, and it would be unfair to impose
    upon appellee the burden of asserting and proving the contrary. It is enough that foreign
    corporations are allowed by law to seek redress in our courts under certain conditions:
    the interpretation of the law should not go so far as to include, in effect, an inference
    that those conditions have been met from the mere fact that the party suing is a foreign
    corporation. It was indeed in the light of these and other consideration that this Court
    has seen fit to amend the former rule by requiring in the Revised Rules (Section 4, Rule
    8) that "facts showing the capacity of a party to sue or be sued or the authority of a party
    to sue or be sued in a representative capacity or the legal existence of an organized
    association of persons that is made a party, must be averred."

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