Exceptions to the License Requirement DISPOSITIVE PORTION

102 Phil 1 (1957) – Eastboard Navigation Ltd. V Juan Ysmael and Co. Inc Plaintiff has capacity
Bautista Angelo J

An arbitration ruling was conducted abroad and confirmed by NY District Court which DIGESTER: Dino De Guzman
orders defendant corporation (PH Corpo) to pay plaintiff corporation (foreign not licensed
to do business in PH). SC ruled that plaintiff has capacity because although the plaintiff is
not licensed, it merely did two isolated transactions which in turn do not require it to have a
license.

DOCTRINE
 Isolated transactions do not constitute engaging in business in the PH within the
purview of Sections 68 and 69 of the Corporation Law so as to bar plaintiff from
seeking redress in courts.

FACTS
1. Plaintiff Eastboard Navigation Ltd of Toronto Canada (Foreign) agreed to charter its
vessel SS Eastwater to defendant Juan Ysmael and Co. Inc,(Domestic) Manila to load
a cargo of scrap iron in the Philippines for Buenos Aires
a. One of the clauses of charter party provides that “it is mutually agreed that
should any dispute arise between the owners and charterers, the matter in
dispute shall be referred to three persons at New York for arbitration, and their
decision or that of any of two of them shall be final.”

2. A dispute arose regarding the collection of payment was submitted for arbitration.
Arbiters rendered decision ordering the defendant Juan Ysmael and Co. to pay
plaintiff Eastboard $53,037 and confirmed by US Disctrict Court.

3. Plaintiff brought this action to enforce the aforesaid Order and Final Decree.
a. Defendant answered by setting up the defense that NY Court had no jurisdiction
over the person of the defendant and that the proceeding where said judgment
was rendered was summary.

4. Lower Court affirmed the decree.

5. Hence this appeal by defendant contending that plaintiff is a foreign corporation

without license to transact business in the Philippines, hence no capacity to sue in this
jurisdiction.

ISSUE with HOLDING

W/N plaintiff has capacity to sue despite lacking license to do business in PH – YES
 While the plaintiff is a foreign corporation without license to transact business in the
Philippines, it does not follow that it has no capacity to bring present action. The
license is not necessary because it is not engaged in business in the PH.
 The transaction involved is the first business undertaken by plaintiff in PH although on
previous occasion plaintiff’s vessel was charted by the National Rice and Corn
Corporation.
o These two are isolated transactions that do not constitute engaging in
business in the PH within the purview of Sections 68 and 69 of the Corporation
Law so as to bar plaintiff from seeking redress in courts.