Facts: The National Bureau of Investigation has engaged in an anti-flm piracy drive
by investigating various video establishments in Metro Manila involving cases
violating PD No. !" as amended" including #unshine $ome %ideo Inc. &'#unshine()" o*ned and operated by Danilo +. Pelindario *ith address at No. , Mayfair -enter" Magallanes" Ma.ati" Metro Manila. /n November 0" 0!12" NBI #enior +gent 3auro -. 4eyes applied for a search *arrant *ith the court a quo against #unshine see.ing the sei5ure" among others" of pirated video tapes of copyrighted flms" *hich the court granted. In the course of the search of the premises indicated in the search *arrant" the NBI +gents found and sei5ed various video tapes of duly copyrighted motion pictures6flms o*ned or e7clusively distributed by -olumbia Pictures" Inc. et al &-olumbia et al.) Thereafter" the court has lifted the search *arrant *hich it had therefore issued after a series of motions" up until the -+. In the #-" #unshine challenged -olumbia et al8s legal standing in our courts" they being foreign corporations not licensed to do business in the Philippines. Issue: 9hether or not -olumbia et al *ere 'doing business( in the Philippines" thus" needs to be licensed before having a legal standing in Philippine courts. Sunshines contention: -olumbia et al" being foreign corporations" should have such license to be able to maintain an action in Philippine courts. #unshine point to the fact that -olumbia et al are the copyright o*ners or o*ners of e7clusive rights of distribution in the Philippines of copyrighted motion pictures or flms" and also to the appointment of +tty. 4ico %. Domingo as their attorney-in-fact" as being constitutive of 'doing business in the Philippines( under #ection 0&f) &0) and &:)" 4ule 0 of the 4ules of the Board of Investments. +s foreign corporations doing business in the Philippines" #ection 0;; of Batas Pambansa Blg. ,1" or the -orporation -ode of the Philippines" denies them the right to maintain a suit in Philippine courts in the absence of a license to do business. -onse<uently" they have no right to as. for the issuance of a search *arrant. Columbia et als contention: -olumbia et al denied that they are doing business in the Philippines
and contend that #unshine have not adduced evidence to prove that petitioners are doing such business here" as *ould re<uire them to be licensed by the #ecurities and =7change -ommission. Moreover" an e7clusive right to distribute a product or the o*nership of such e7clusive right does not conclusively prove the act of doing business nor establish the presumption of doing business. Ruling: No" foreign flm corporations do not transact or do business in the Philippines and" therefore" do not need to be licensed in order to ta.e recourse to our courts. +s acts constitutive of 'doing business"( the fact that -olumbia et al are admittedly copyright o*ners or o*ners of e7clusive distribution rights in the Philippines of motion pictures or flms does not convert such o*nership into an indicium of doing business *hich *ould re<uire them to obtain a license before they can sue upon a cause of action in local courts. Neither is the appointment of +tty. 4ico %. Domingo as attorney-in-fact of -olumbia et al." *ith e7press authority pursuant to a special po*er of attorney Held: Based on +rticle 0;; of the -orporation -ode and gauged by such statutory standards" -olumbia et al are not barred from maintaining the present action. There is no sho*ing that" under our statutory or case la*" -olumbia et al are doing" transacting" engaging in or carrying on business in the Philippines as *ould re<uire obtention of a license before they can see. redress from our courts. No evidence has been o>ered to sho* that petitioners have performed any of the enumerated acts or any other specifc act indicative of an intention to conduct or transact business in the Philippines. +rticle 0:? and +rticle 0;; of the -orporation -ode of the Philippines" as interpreted" says that any foreign corporation not doing business in the Philippines may maintain an action in our courts upon any cause of action" provided that the sub@ect matter and the defendant are *ithin the @urisdiction of the court. It is not the absence of the prescribed license but 'doing business( in the Philippines *ithout such license *hich debars the foreign corporation from access to our courts. In other *ords" although a foreign corporation is *ithout license to transact business in the Philippines" it does not follo* that it has no capacity to bring an action. #uch license is not necessary if it is not engaged in business in the Philippines. No general rule or governing principles can be laid do*n as to *hat constitutes 'doing( or 'engaging in( or 'transacting( business. =ach case must be @udged in the light of its o*n peculiar environmental circumstances. The true tests" ho*ever" seem to be *hether the foreign corporation is continuing the body or substance of the business or enterprise for *hich it *as organi5ed or *hether it has substantially retired from it and turned it over to another. +uthorities agrees that a foreign corporation is 'doing"( 'transacting"( 'engaging in"( or 'carrying on( business in the #tate *hen" and ordinarily only *hen" it has entered the #tate 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 -orporation -ode does not itself defne or categori5e *hat acts constitute doing or transacting business in the Philippines. Aurisprudence has" ho*ever" held that the term implies a continuity of commercial dealings and arrangements" and contemplates" to that e7tent" the performance of acts or *or.s or the e7ercise of some of the functions normally incident to or in progressive prosecution of the purpose and sub@ect of its organi5ation. +s a general rule" a foreign corporation *ill not be regarded as doing business in the #tate simply because it enters into contracts *ith residents of the #tate" *here such contracts are consummated outside the #tate. In fact" a vie* is ta.en that a foreign corporation is not doing business in the state merely because sales of its product are made there or other business furthering its interests is transacted there by an alleged agent" *hether a corporation or a natural person" *here such activities are not under the direction and control of the foreign corporation but are engaged in by the alleged agent as an independent business. It is generally held that sales made to customers in the #tate by an independent dealer *ho has purchased and obtained title from the corporation to the products sold are not a doing of business by the corporation. 3i.e*ise" a foreign corporation *hich sells its products to persons styled 'distributing agents( in the #tate" for distribution by them" is not doing business in the #tate so as to render it sub@ect to service of process therein" *here the contract *ith these purchasers is that they shall buy e7clusively from the foreign corporation such goods as it manufactures and shall sell them at trade prices established by it. Merely engaging in litigation has been considered as not a suBcient minimum contact to *arrant the e7ercise of @urisdiction over a foreign corporation.