RIGHT TO SUE

Mentholatum vs. Mangaliman

Mentholatum Co. a foreign corporation which manufacures Mentholatum a
medicament and salve and the Philippine-American Drug Corporation its
exlusive distributing agent in the Philippines filed an action against
Mangaliman brothers and Director of Bureau of Commerce for infringement of
trademark and unfair competition. Mangalimanbrothers sold a medicament
and salve named Mentholiman which is sold to the public in a container on
the same size, color and shape as Mentulatom.
Petitioners maintain that the Mentholatum Co., Inc., has not sold personally
any of its products in the Philippines; that the Philippine-American Drug Co.,
Inc., was merely an importer of the products of the Mentholatum Co., Inc., and
that the sales of the Philippine-American Drug Co., Inc., were its own and not
for the account of the Mentholatum Co., Inc.
Upon the other hand, the defendants contend that the Philippine-American
Drug Co., Inc., is the exclusive distributing agent in the Philippines of the
Mentholatum Co., Inc., in the sale and distribution of its product known as
"Mentholatum"; that, because of this arrangement, the acts of the latter; and
that the Mentholatum Co., Inc., being thus engaged in business in the
Philippines, and not having acquired the license required by section 68 of the
Corporation Law, neither it nor the Philippine-American Drug co., Inc., could
prosecute the present action.
Issue: Whether or not the plaintiff is engage in doing business in the PH and
consequently not entitled to bring the present suit
Held: Yes. In determining whether a corporation is doing business the true test
is whether the foreign corporation is continuing the body or substance of the
business or enterprise for which it was organized or whether it has
substantially retired from it and turned it over to another 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, and in progressive prosecution of, the purpose
and object of its organization.

The Philippine-American Drug Corporation being its exclusive distributing

agent it follows that whatever transactions the latter had executed in view of
the law, the Mentholatum Co., Inc., did it itself. And, the Mentholatum Co.,
Inc., being a foreign corporation doing business in the Philippines without the
license required by section 68 of the Corporation Law, it may not prosecute this
action for violation of trade mark and unfair competition. Neither may the
Philippine-American Drug Co., Inc., maintain the action here for the reason
that the distinguishing features of the agent being his representative
character and derivative authority), it cannot now, to the advantage of its
principal, claim an independent standing in court.