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[G.R. No. 114730.December 5, 2001]

BRISBANE TRADING CO. INC. vs. CA, et al.

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated DEC 5 2001.

G.R. No. 114730(Brisbane Trading Co., Inc., vs. Honorable Court of Appeals, Interworld Assurance Corp.)

This petition for review on certiorari under Rule 45 of the Revised Rules of Court seeks the reversal of the decision dated March 18, 1994, of the Court of Appeals in CA-G.R.CV-No.38154 which overturned the Regional Trial Court's ruling in favor of the petitioner.

The facts of this case are as follows:

On November 13, 1986, petitioner, a foreign corporation, agreed to purchase raw sugar from IDC Industries, Inc., another foreign corporation. In turn, IDC sought to procure raw sugar from Nelson Relies, a Philippine supplier doing business under the name NG Trading.

On January 28, 1987, Brisbane offered to supply Lombard World Trade, Inc. with raw sugar. Upon the application of Lombard, the Bank of New York issued Letter of Credit No. 1-27551, for $9 million, with Brisbane as beneficiary. On the other hand, Brisbane also opened in favor of Lombard irrevocable Letter of Credit No. S-2163/042, for $400,000 through its sister company Machinery and Equipment Co., to secure performance of its obligation.

On January 28, 1987, IDC instructed Brisbane to assign a portion of Letter of Credit No. 1-27551 to NG Trading through Banque Nationale de Paris. The transfer was confirmed on March 3, 1987, by said bank's correspondent bank in Manila, the Metropolitan Bank and Trust Company.

On March 5, 1987, Metrobank advised NG Trading that the letter of credit was transferred in NG Trading's favor and would expire on May 31, 1987.

On March 12, 1987, IDC assigned to Brisbane its rights and interests in the performance bond that may be given by NG Trading in accordance with a memorandum of agreement signed by NG Trading and IDC. However, the assignment was made subject to the conformity of NG Trading and the bonding company. A signature appears on the space provided for the bonding company, but the name of the bonding company and its representative were not specified.

Notably, Relles applied for a performance bond only on May 31, 1987, or several weeks after the execution of the deed of assignment between IDC and Brisbane. The performance bond was finally issued on April 6, 1987, by Interworld, in the amount of P10 million.

No shipment of raw sugar ever took place and the letter of credit expired. As a result, Brisbane allegedly failed to comply with its obligation to Lombard and the amount of Letter of Credit No. S-2163/042 was credited to Lombard.

On June 3, 1987, Brisbane demanded payment of the Pl0 million performance bond from Interworld. The latter refused to pay, prompting Brisbane to file an action for a sum of money against Interworld and Relies. The trial court ruled in favor of Brisbane. On appeal, the Court of Appeals reversed the decision of the trial court and found in favor of Relies and Interworld.

According to the Court of Appeals, petitioner's failure to allege in its complaint who its duly authorized representative or resident agent is in the Philippines, is a fatal, jurisdictional defect. But even without this defect, the complaint would still be dismissed on the merits, since it does not appear that Interworld gave its consent to be bound by the performance bond executed allegedly in favor of Brisbane. whether or not the failure of a foreign corporation, suing on an isolated transaction, to allege in its complaint its .authorized representative or resident agent is a fatal jurisdictional defect; and (2) whether or not private respondent agreed to be bound by the performance bond.

On the first issue, petitioner contends that the requirement of naming in the complaint the duly authorized representative or resident agent of a foreign corporation doing business in the Philippines on an isolated transaction refers only to foreign corporations desiring to do business in the Philippines, conformably with Sec. 68 of the former Corporation Code (Act. No. 1459), amended by Rep. Act. No. 337 and Sec. 125 of the New Corporation Code. Brisbane claims that there is no specific law requiring foreign corporations suing in Philippine courts on a "single, isolated transaction" to allege the name of its authorized representative or resident agent. Petitioner argues that since it is not doing business in the Philippines and is suing only on a singular isolated transaction, it is not prohibited from suing in Philippine courts and is not required to allege in its complaint its duly authorized representative or resident agent.

This assertion of the petitioner is without merit. While it is true that a foreign corporation not doing business in the Philippines, suing on a single, isolated transaction, does not need a license in order to sue in Philippine courts. However, in New York Marine Managers, Inc. vs. Court of Appeals, 249 SCRA 416, 420-421 (1995), we ruled:

.petitioner's complaint is fatally defective for failing to allege its duly authorized representative or resident agent in this jurisdiction. The pleadings filed by counsel for petitioner do not suffice (emphasis ours). True, a lawyer is generally presumed to be properly authorized to represent any cause in which he appears, and no written power of attorney is required to authorize him to appear in court for his client. But this presumption is disputable. Where said authority has been challenged or attacked by the adverse party the lawyer is required to show proof of such authority or representation in order to bind his client. The requirement of the production of authority is essential because the client will be bound by his acquiescence resulting from his knowledge that he was being represented by said attorney. (Citations omitted.)

As shown by the records, the complaint in this case merely alleged that:

...plaintiff is a foreign corporation duly organized and existing under and by virtue of the laws of California, U.S.A., and is suing in Philippine Court on a single and isolated business transaction it has with defendants herein sued upon, and therefore, plaintiff is not required under Philippine laws to secure prior license to do business in the Philippines to be able to sue in Philippine courts; xxx (Records, p. 1)

The appellate court was correct in holding that the complaint suffered a fatal jurisdictional defect for the failure of petitioner to allege its duly authorized representative or resident agent in the Philippines, as required by this Court in previous rulings.

Petitioner also questions the factual findings of the Court of Appeals. The general rule, however, is that questions of fact should not be raised in a petition for review under Rule 45 of the Rules of Court except in certain instances such as when the factual findings of the RTC and the CA are contradictory. In this case, we note that the findings of the Court of Appeals are duly supported by the record. We are, thus, constrained to affirm the decision of the appellate court.

WHEREFORE, the petition is hereby DENIED and the decision of the respondent Court of Appeals dated March 18, 1994, is AFFIRMED.

SO ORDERED.

Very truly yours,

(Sgd.) TOMASITA M. DRIS
Clerk of Court


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