WING ON COMPANY v SYYAP & CO. INC.

(1967)
FACTS:

• Plaintiff Wing On Company a juridical person duly organized and existing under the laws of the
New York State, USA, and its principal office is in New York. On the other hand, Syyap & Co. Inc. is a
domestic corporation.

• In 1948, Syyap ordered various quantities of clothing materials with a total value of $22,246.04
(P44,492.08). The goods were shipped to Manila and received by Syyap with the undertaking that it
would be paid after delivery in Manila.

• In ordering the goods, Syyap claims that it dealt with one Murray Kern of New York through
Oscar Garcia. There was an agreement that after the sale of the merchandise, the profit will be divided
among them.

• Syyap was only able to pay the amount of $3,530.00 (P7,060.00), thus, leaving a balance of
P37,432.08 plus the profits from the sale of the merchandise, as agreed upon.

• Syyap failed and refused to pay the balance and to render accounting of the profits, thus, Wing
On Company filed a complaint for sum of money against defendant Syyap & Co. Inc.

• In its answer with counterclaim, Syyap denied the allegations and raised the special defense that
Wing On, being a foreign corporation not duly licensed to transact business in the Philippines, it had no
capacity to sue.

• The trial court rendered a decision in favor of Wing On and ordered Syyap to pay the amount of
P37,432.08 with legal interest until fully paid plus P3,000 for attorney’s fees. It was also ordered to
render an accounting of the profits from the sale. The court also dismissed Syyap’s counterclaim

• Syyap appealed the judgment of the lower court.

ISSUE/s: Whether or not the lower court had no jurisdiction to try and decide the case –
Answer: NO, the lower court had jurisdiction

Whether or not the trial court should have declined jurisdiction over the present suit on the
basis of the principle of forum non conveniens in Private International Law –
Answer: NO, the facts of the case do not warrant the application of any recognized rules of
PrIL

RULING: WHEREFORE, finding the judgment appealed from to be in accordance with law and the
evidence, the same is hereby affirmed in toto, with costs against defendant- appellant. IT IS SO
ORDERED.
 SUMMARY: Syyap purchased clothing materials from Wing On but only paid partial of
the total amount thereof. Wing On demanded the balance and profits agreed upon by them
upon the sale of the merchandise. Syyap refused alleging that it did not deal with Wing
On, rather it dealt with Murray Kern of NY through Oscar Garcia.

Wing On filed a complaint against Syyap. Syyap raised the defense that the court has no
jurisdiction as the plaintiff lacks capacity to sue, it being a corporation not licensed to do
business in the Philippines.

Also, it asserts that the lower should have not taken cognizance of the case, following the
principle of forum non conveniens in private international law.

The Court ruled in favor of Wing On and held that the court has jurisdiction. The plaintiff
has capacity to sue because the transaction involved was an isolated transaction, thus, it does
not need a license to be able to commence the action. Also, the Court held that the principle
of forum non conveniens does not apply in the case at bar.

DOCTRINE:
It is a well established practice in the application of the principle of forum non
conveniens that unless balance is strongly in favor of the defendant, the
plaintiff’s choice of forum should rarely be disturbed, and furthermore, the
consideration of inadequacy to enforce the judgment (which is one of the
important factors to consider in the application of the principle), would precisely
constitute a problem to the plaintiff if the local courts decline to assume
jurisdiction on the basis of the said principle, considering that the defendant is a
resident of the Philippines

• Appellant’s Argument: the action was filed by one who is not an agent or representative of the
plaintiff authorized to bring and maintain the suit and that the plaintiff had no capacity to sue.
• Court: Appellant’s contention is untenable.
o The records show that the motion to admit amended complaint and the attached amended
complaint were filed by Atty. Bienvenido Tan as “counsel for the plaintiff”

o The authority of the said counsel was never assailed in the court a quo, thus, it is presumed that
the counsel was properly authorized.
On the Capacity of the Plaintiff to Sue in the Philippines
• The Court held that plaintiff had the capacity to sue.
• Marshall-Wells Co. v. Henry Elser Co.: The object of the statute was to subject the foreign
corporation doing business in the Philippines to the jurisdiction of its courts. The object of the statute was
not to prevent the foreign corporation from performing single acts, but to prevent it from acquiring a
domicile for the purpose of business without taking the steps necessary to render it amenable to suit in the
local court.
• It was never the purpose of the Legislature to exclude a foreign corporation which happens to
obtain an isolated order for business from the Philippines, from securing redress in the Philippine Courts,
and thus, in effect, permit person to avoid their contracts made with such foreign corporations.
• The effect of the statute preventing foreign corporations from doing business and from bring
actions in the local courts, except on compliance with elaborate requirements, must not be unduly
extended or improperly applied
• It should not be construed to extend beyond the plain meaning of its terms, considered in
connection with its object, and in connection with the spirit of the entire law.
• In the case at bar, the transaction in question was an isolated act, contract or transaction, thus, it
does not constitute “doing or transacting business” within the meaning of the law (Corporation Law, Sec
68 and 69). Consequently, although a foreign juridical person or entity not duly licensed to transact
business in the Philippines, has the legal personality to bring and maintain the present suit arising from
the transaction in question
o In this case, the obtaining a license to transact business is not a condition precedent to the
institution of the action. It is only when a corporation is doing or transacting business that it has to have a
license before it can sue in our courts.

• The Principle of Forum non Conveniens state that “where the ends of justice strongly indicate
that the controversy may be more suitably tried elsewhere, then jurisdiction should be declined and the
parties relegated to relief to be sought in another forum.”
• It is a well established practice in the application of the principle of forum non conveniens that
unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be
disturbed, and furthermore, the consideration of inadequacy to enforce the judgment (which is one of the
important factors to consider in the application of the principle), would precisely constitute a problem to
the plaintiff if the local courts decline to assume jurisdiction on the basis of the said principle, considering
that the defendant os a resident of the Philippines.
• It is true that the agreement involving the purchase of clothing materials was entered into in NY,
USA. However, the goods were delivered to, received and sold by the defendant in this jurisdiction.
• Further, since the suit is in the nature of a personal action, the case may be commenced and tried
where the defendant resides or may be found, or where the plaintiff resides, at the election of the plaintiff.
Consequently, venue was not improperly laid down, thus, the court a quo did not err in taking cognizance
of the case.
On the claim of prescription
• While it is true that actions involving an oral contract must be commenced within 6 years
(Art.1145,CC), the prescriptive period has been interrupted when there is written extrajudicial demand
from the plaintiff.
o In this case, the defendant sent a letter acknowledging the debt and promising to pay as soon as
possible interrupted the running of the prescriptive period.
o The extrajudicial demand was sent 3 years after the transaction occurred.
On the Question of the Amount Already Paid
• Defendant relies on Exhibit 9-A to support its claim that it had already paid the plaintiff.
However, said exhibit was a mere statement of accountability prepared by the defendant’s accountant.
Thus, it is not the best evidence of payment. It was even repudiate by defendant’s own agent

• The best evidence of such payment is the receipt showing the same. However, the defendant
failed to prove by a preponderance of evidence the alleged payment made.