G.R. No.

173463, October 13, 2010

Global Business Holdings, Inc. (formerly Global Business Bank, Inc.), Petitioner, vs. Surecomp
Software, B.V., Respondent

Facts:

On March 29, 1999, Surecomp Software, B.V. (Surecomp), a foreign corporation organized under the
laws of the Netherlands, entered into a software license agreement with Asian Bank Corporation (ABC),
a domestic corporation, for the use of its IMEX Software System for 20 years. In July 2000, ABC merged
with Global Business Holdings, Inc. (Global), with Global as the surviving corporation. Global found the
System unworkable for its operations and informed Surecomp of its decision to discontinue the
agreement and stop further payments.

Due to Global's failure to pay its obligations under the agreement, Surecomp filed a complaint for
breach of contract with damages before the Regional Trial Court (RTC) of Makati. Surecomp alleged that
it was a foreign corporation not doing business in the Philippines and was suing on an isolated
transaction. Global filed a motion to dismiss, arguing that Surecomp had no capacity to sue as it was
doing business in the Philippines without a license and that the claim was unenforceable under the
Intellectual Property Code of the Philippines.

RTC Ruling:

The RTC denied Global’s motion to dismiss, stating that there was a contract between Surecomp and
Global, which took over ABC's obligations due to the merger. The RTC also held that Global was
estopped from denying Surecomp's capacity to sue. The RTC found that the agreement between the
parties was an executed contract, not falling under the statute of frauds, and did not require further
evidence on the matter.

CA Ruling:

Global filed a petition for certiorari with the Court of Appeals (CA), contending that the RTC abused its
discretion. The CA denied the petition, affirming the RTC's orders, and held that Global's arguments
were without merit.

Issues:

1. Whether a special civil action for certiorari is the proper remedy for the denial of a motion to
dismiss.

2. Whether Global is estopped from questioning Surecomp’s capacity to sue.

Ruling:

The Supreme Court's Decision:

1. Proper Remedy:

 The Supreme Court held that an order denying a motion to dismiss is interlocutory and cannot
be questioned via a special civil action for certiorari. Certiorari is meant to correct errors of
 jurisdiction, not errors of judgment. Global failed to substantiate its claim of grave abuse of
discretion by the RTC.

2. Estoppel on Capacity to Sue:

 The Court ruled that Global is estopped from questioning Surecomp’s capacity to sue. The
doctrine of estoppel applies as Global, through the merger with ABC, assumed all liabilities and
obligations of ABC. The Court emphasized that a foreign corporation not licensed to do business
in the Philippines may sue on isolated transactions. Since Global benefited from the contract
with Surecomp, it cannot later challenge Surecomp's legal capacity after having benefited from
the contract.

The Court concluded that there was no grave abuse of discretion by the RTC or the CA in denying
Global’s motion to dismiss.

Disposition:

The Supreme Court affirmed the Decision dated May 5, 2006, and the Resolution dated July 10, 2006, of
the Court of Appeals in CA-G.R. SP No. 75524. Costs against petitioner.