Global Business Holdings, Inc. v. Surecomp Software, B.V.

raise the issue of capacity to sue and since the contract is executed, rather than
GR No. 173463 – 13 Oct. 2010
Facts:
• Surecomp (corp. registered in Netherlands) entered into software license
agreement with Asian Bank Corp. (ABC) for use of its IMEX Software System in
the bank’s computer system for 20 years.
• ABC merged with Global Business Holdings, Inc. (Global), with Global surviving.
executory, the statute of frauds does not apply. Motion to serve written
interrogatories is premature.
• Global filed a petition for certiorari with the CA, which the CA denied.
Issues:
1. Is Rule 65 proper?
2. Is Global estopped from questioning Surecomp’s capacity to sue?

• Global informed Surecomp that it would discontinue the deal. Surecomp filed a Holding and Ratio:
complaint with RTC Makati for breach of contract. Resolution AFFIRMED, petition DENIED

• Surecomp said it was a foreign corp. not doing business in the Ph, suing on an
isolated transaction. The deal included installation, on-site support and
development of interfaces, and maintenance for 5 years. ABC also promised to
buy 1 or 2 Remote Access solutions at discounted prices.
• Separately, ABC asked Surecomp to purchase on its behalf a software called MF
Cobol Runtime with a promis to reimburse. Global did not pay this as well.
• Global filed a Motion to Dismiss on two grounds:
o Surecomp has no capacity to sue because it had no license to do
business in the Ph – Global argued that the transaction was not isolated
because it was for 20 years. It also claimed that it was not accountable
for any breach because it was not a party to the contract; and
o The claim on which the action was founded was unenforceable under
the IP Code – since the agreement is a technology transfer
arrangement, failure to comply with §87 and 88 of the IP Code renders
it unenforceable.
1. No, it is not. Global did not properly substantiate its claim of arbitrariness. Such
lack constrains the SC to uphold the questioned decision, esp. since the CA also
upheld the same.
2. Yes. Under Sec. 133 of the Corp. Code, an unlicensed foreign non-resident
corporation doing business in the Ph has no capacity to sue. In order to gain such
capacity, it must acquire a license from the SEC and appoint an agent for service
of process. However, the exception to this rule is estoppel.
A foreign corp. doing business in the Ph without a license may sue in Ph courts a
Ph citizen or entity that had contracted with and benefited from it. A party is
estopped from challenging its personality after having acknowledged the same
by entering into a contract with it. This is to prevent abuse/taking advantage.
Since Global survived the merger with ABC, it is as if it entered into the contract
with Surecomp. It assumed all the liabilities and obligations of ABC as if it
incurred them itself. These findings of fact from the lower court were never
contested.

• The RTC ruled that a) Global is estopped from denying Surecomp’s capacity to
sue it because there was a merger, and the agreement itself provided that Global
would be responsible for ABC’s liabilities and obligations; and b) a hearing is
required to resolve the issue on whether the agreement is unenforceable before
the MTD may be resolved, so the motion to serve written interrogatories on
Surecomp is granted. MTD held in abeyance.

• Surecomp moved for partial reconsideration, praying for outright dismissal of

the MTD, while Global moved for reconsideration.

• RTC denied the MTD, ordering Global to file its answer and holding the motion
to serve written interrogatories in abeyance until then. It held that Global cannot