G.R. No.

154618

April 14, 2004

AGILENT TECHNOLOGIES SINGAPORE (PTE) LTD., petitioner, vs.

INTEGRATED SILICON TECHNOLOGY PHILIPPINES CORPORATION,
TEOH KIANG HONG, TEOH KIANG SENG, ANTHONY CHOO, JOANNE
KATE M. DELA CRUZ, JEAN KAY M. DELA CRUZ and ROLANDO T.
NACILLA, respondents.
NATURE: petition for review assails the Decision of the Court of Appeals,
which dismissed Civil Case No. 3123-2001-C, and annulled and set aside
the Order issued by the Regional Trial Court
FACTS:
1. Petitioner Agilent Technologies Singapore ("Agilent") is a
foreign corporation, which, by its own admission, is not
licensed to do business in the Philipiness.
2. Respondent Integrated Silicon Technology Philippines Corporation
("Integrated Silicon") is a private domestic corporation, 100%
foreign owned, which is engaged in the business of manufacturing
and assembling electronics components. Also, some of the
respondents are members of its board of directors and some are
its former members.
3. Integrated Silicon and the Hewlett-Packard Singapore (Pte.) Ltd.,
Singapore Components Operation ("HP-Singapore") entered into a
5-year Value Added Assembly Services Agreement ("VAASA".)
4. Under the terms of the contract, Integrated Silicon was to locally
manufacture and assemble fiber optics for export to HPSingapore. HP-Singapore, for its part, was to consign raw
materials to Integrated Silicon; transport machinery to the plant of
Integrated Silicon; and pay Integrated Silicon the purchase price of
the finished products.
5. The VAASA had a five-year term with a provision for annual
renewal by mutual written consent. On September 19, 1999, with
the consent of Integrated Silicon, HP-Singapore assigned all its
rights and obligations in the VAASA to Agilent.

6. Integrated Silicon filed a complaint for "Specific Performance and

Damages" against Agilent and its officers. It alleged that Agilent
breached the parties oral agreement to extend the VAASA.
Integrated Silicon thus prayed that defendant be ordered to
execute a written extension of the VAASA for a period of five
years; to comply with the extended VAASA; and to pay damages
7. Summons and a copy of the complaint were served on Atty.
Ramon Quisumbing, who returned these processes on the claim
that he was not the registered agent of Agilent. Later, he entered a
special appearance to assail the courts jurisdiction over the
person of Agilent.
8. Agilent filed a separate complaint against Integrated Silicon,
current members of its board of directors and its former members
for "Specific Performance, Recovery of Possession, and Sum of
Money with Replevin, Preliminary Mandatory Injunction, and
Damages", before the Regional Trial Court
9. Agilent prayed that a writ of replevin or, in the alternative, a writ of
preliminary mandatory injunction, be issued ordering defendants to
immediately return and deliver to plaintiff its equipment,
machineries and the materials to be used for fiber-optic
components which were left in the plant of Integrated Silicon and
to pay damages.
10. Respondents filed a Motion to Dismiss in Civil Case No. 31232001-C, on the grounds of lack of Agilents legal capacity to
sue; litis pendentia; forum shopping; and failure to state a cause of
action.
11. The trial court denied the Motion to Dismiss and granted
petitioner Agilents application for a writ of replevin
12. Without filing a motion for reconsideration, respondents filed a
petition for certiorari with the Court of Appeals. The Court of
Appeals granted respondents petition for certiorari, set aside
the assailed Order of the trial court and ordered the dismissal
of Civil Case No. 3123-2001-C. Hence this petition.
ISSUE: Whether or not the Court of Appeals committed reversible error in
dismissing Civil Case filed by petitioner because the Petitioner Agilent has

commercial gain or of the purpose and object of the business organization.

no capacity to sue being an unregistered foreign corporation doing

business.
HELD: YES. By the clear terms of the VAASA, Agilents activities in the
Philippines were confined to (1) maintaining a stock of goods in the
Philippines solely for the purpose of having the same processed by
Integrated Silicon; and (2) consignment of equipment with Integrated
Silicon to be used in the processing of products for export. As such, we
hold that, based on the evidence presented thus far, Agilent cannot be
deemed to be "doing business" in the Philippines. Respondents
contention that Agilent lacks the legal capacity to file suit is therefore
devoid of merit. As a foreign corporation not doing business in the
Philippines, it needed no license before it can sue before our courts.
Also, a foreign corporation without a license is not ipso facto
incapacitated from bringing an action in Philippine courts. A license
is necessary only if a foreign corporation is "transacting" or "doing
business" in the country as provided by Article 133. The Corporation
Code itself is silent as to what acts constitute doing or transacting business
in the Philippines. Jurisprudence has it, however, that the term "implies a
continuity of commercial dealings and arrangements, and contemplates, to
that extent, the performance of acts or works or the exercise of some of
the functions normally incident to or in progressive prosecution of the
purpose and subject of its organization. The case law definition has
evolved into a statutory definition, having been adopted with some
qualifications in various pieces of legislation like the Foreign Investments
Act of 1991.

Sec. 3, par. (d). The phrase "doing business" shall include soliciting orders, service
contracts, opening offices, whether called "liaison" offices or branches; appointing
representatives or distributors domiciled in the Philippines or who in any calendar
year stay in the country for a period or periods totaling one hundred eighty (180)
days or more; participating in the management, supervision or control of any
domestic business, firm, entity, or corporation in the Philippines; and any other act
or acts that imply a continuity of commercial dealings or arrangements, and
contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in the progressive prosecution of,

By and large, to constitute "doing business", the activity to be

undertaken in the Philippines is one that is for profit making.
The principles regarding the right of a foreign corporation to bring suit in Philippine courts
may thus be condensed in four statements:

(1) If a foreign corporation does business in the Philippines without a license, it

cannot sue before the Philippine courts;
(2) If a foreign corporation is not doing business in the Philippines, it needs no
license to sue before Philippine courts on an isolated transaction or on a cause of
action entirely independent of any business transaction;
(3) If a foreign corporation does business in the Philippines without a license, a
Philippine citizen or entity which has contracted with said corporation may be
estopped from challenging the foreign corporations corporate personality in a suit
brought before Philippine courts; and
(4) If a foreign corporation does business in the Philippines with the required
license, it can sue before Philippine courts on any transaction.

However even if an unregistered foreign corporation is doing

business, SC have held that an unlicensed foreign corporation doing
business in the Philippines may bring suit in Philippine courts
against a Philippine citizen or entity who had contracted with and
benefited from said corporation. Such a suit is premised on the
doctrine of estoppel.
WHEREFORE, PREMISES CONSIDERED, the petition is GRANTED. The
Decision of the Court of Appeals in CA-G.R. SP No. 66574 dated August
12, 2002, which dismissed Civil Case No. 3123-2001-C, is REVERSED
and SET ASIDE. The Order dated September 4, 2001 issued by the
Regional Trial Court of Calamba, Laguna, Branch 92, in Civil Case No.
3123-2001-C, is REINSTATED. Agilents application for a Writ of Replevin
is GRANTED.