G.R. No.

184088 July 6, 2010

IGLESIA EVANGELICA METODISTA EN LAS ISLAS FILIPINAS (IEMELIF) (Corporation Sole), INC., REV. NESTOR PINEDA, REV.
ROBERTO BACANI, BENJAMIN BORLONGAN, JR., DANILO SAUR, RICHARD PONTI, ALFREDO MATABANG and all the other
members of the IEMELIF TONDO CONGREGATION of the IEMELIF CORPORATION SOLE, Petitioners,
vs.
BISHOP NATHANAEL LAZARO, REVERENDS HONORIO RIVERA, DANIEL MADUCDOC, FERDINAND MERCADO, ARCADIO
CABILDO, DOMINGO GONZALES, ARTURO LAPUZ, ADORABLE MANGALINDAN, DANIEL VICTORIA and DAKILA CRUZ, and
LAY LEADER LINGKOD MADUCDOC and CESAR DOMINGO, acting individually and as members of the Supreme
Consistory of Elders and those claiming under the Corporation Aggregate, Respondents.

DECISION

ABAD, J.:

The present dispute resolves the issue of whether or not a corporation may change its character as a corporation sole into
a corporation aggregate by mere amendment of its articles of incorporation without first going through the process of
dissolution.

The Facts and the Case

In 1909, Bishop Nicolas Zamora established the petitioner Iglesia Evangelica Metodista En Las Islas Filipinas, Inc. (IEMELIF)
as a corporation sole with Bishop Zamora acting as its "General Superintendent." Thirty-nine years later in 1948, the
IEMELIF enacted and registered a by-laws that established a Supreme Consistory of Elders (the Consistory), made up of
church ministers, who were to serve for four years. The by-laws empowered the Consistory to elect a General
Superintendent, a General Secretary, a General Evangelist, and a Treasurer General who would manage the affairs of the
organization. For all intents and purposes, the Consistory served as the IEMELIF’s board of directors.

Apparently, although the IEMELIF remained a corporation sole on paper (with all corporate powers theoretically lodged
in the hands of one member, the General Superintendent), it had always acted like a corporation aggregate. The Consistory
exercised IEMELIF’s decision-making powers without ever being challenged. Subsequently, during its 1973 General
Conference, the general membership voted to put things right by changing IEMELIF’s organizational structure from a
corporation sole to a corporation aggregate. On May 7, 1973 the Securities and Exchange Commission (SEC) approved the
vote. For some reasons, however, the corporate papers of the IEMELIF remained unaltered as a corporation sole.

Only in 2001, about 28 years later, did the issue reemerge. In answer to a query from the IEMELIF, the SEC replied on April
3, 2001 that, although the SEC Commissioner did not in 1948 object to the conversion of the IEMELIF into a corporation
aggregate, that conversion was not properly carried out and documented. The SEC said that the IEMELIF needed to amend
its articles of incorporation for that purpose.1

Acting on this advice, the Consistory resolved to convert the IEMELIF to a corporation aggregate. Respondent Bishop
Nathanael Lazaro, its General Superintendent, instructed all their congregations to take up the matter with their
respective members for resolution. Subsequently, the general membership approved the conversion, prompting the
IEMELIF to file amended articles of incorporation with the SEC. Bishop Lazaro filed an affidavit-certification in support of
the conversion.2

Petitioners Reverend Nestor Pineda, et al., which belonged to a faction that did not support the conversion, filed a civil
case for "Enforcement of Property Rights of Corporation Sole, Declaration of Nullity of Amended Articles of Incorporation
from Corporation Sole to Corporation Aggregate with Application for Preliminary Injunction and/or Temporary Restraining
Order" in IEMELIF’s name against respondent members of its Consistory before the Regional Trial Court (RTC) of
Manila.3 Petitioners claim that a complete shift from IEMELIF’s status as a corporation sole to a corporation aggregate
required, not just an amendment of the IEMELIF’s articles of incorporation, but a complete dissolution of the existing
corporation sole followed by a re-incorporation.
Unimpressed, the RTC dismissed the action in its October 19, 2005 decision.4 It held that, while the Corporation Code on
Religious Corporations (Chapter II, Title XIII) has no provision governing the amendment of the articles of incorporation of
a corporation sole, its Section 109 provides that religious corporations shall be governed additionally "by the provisions
on non-stock corporations insofar as they may be applicable." The RTC thus held that Section 16 of the Code 5 that
governed amendments of the articles of incorporation of non-stock corporations applied to corporations sole as well.
What IEMELIF needed to authorize the amendment was merely the vote or written assent of at least two-thirds of the
IEMELIF membership.

Petitioners Pineda, et al. appealed the RTC decision to the Court of Appeals (CA).6 On October 31, 2007 the CA rendered
a decision,7 affirming that of the RTC. Petitioners moved for reconsideration, but the CA denied it by its resolution of
August 1, 2008,8 hence, the present petition for review before this Court.

The Issue Presented

The only issue presented in this case is whether or not the CA erred in affirming the RTC ruling that a corporation sole may
be converted into a corporation aggregate by mere amendment of its articles of incorporation.

The Court’s Ruling

Petitioners Pineda, et al. insist that, since the Corporation Code does not have any provision that allows a corporation sole
to convert into a corporation aggregate by mere amendment of its articles of incorporation, the conversion can take place
only by first dissolving IEMELIF, the corporation sole, and afterwards by creating a new corporation in its place.

Religious corporations are governed by Sections 109 through 116 of the Corporation Code. In a 2009 case involving
IEMELIF, the Court distinguished a corporation sole from a corporation aggregate.9 Citing Section 110 of the Corporation
Code, the Court said that a corporation sole is "one formed by the chief archbishop, bishop, priest, minister, rabbi or other
presiding elder of a religious denomination, sect, or church, for the purpose of administering or managing, as trustee, the
affairs, properties and temporalities of such religious denomination, sect or church." A corporation aggregate formed for
the same purpose, on the other hand, consists of two or more persons.

True, the Corporation Code provides no specific mechanism for amending the articles of incorporation of a corporation
sole. But, as the RTC correctly held, Section 109 of the Corporation Code allows the application to religious corporations
of the general provisions governing non-stock corporations.

For non-stock corporations, the power to amend its articles of incorporation lies in its members. The code requires two-
thirds of their votes for the approval of such an amendment. So how will this requirement apply to a corporation sole that
has technically but one member (the head of the religious organization) who holds in his hands its broad corporate powers
over the properties, rights, and interests of his religious organization?

Although a non-stock corporation has a personality that is distinct from those of its members who established it, its articles
of incorporation cannot be amended solely through the action of its board of trustees. The amendment needs the
concurrence of at least two-thirds of its membership. If such approval mechanism is made to operate in a corporation
sole, its one member in whom all the powers of the corporation technically belongs, needs to get the concurrence of two-
thirds of its membership. The one member, here the General Superintendent, is but a trustee, according to Section 110
of the Corporation Code, of its membership.1avvphi1

There is no point to dissolving the corporation sole of one member to enable the corporation aggregate to emerge from
it. Whether it is a non-stock corporation or a corporation sole, the corporate being remains distinct from its members,
whatever be their number. The increase in the number of its corporate membership does not change the complexion of
its corporate responsibility to third parties. The one member, with the concurrence of two-thirds of the membership of
the organization for whom he acts as trustee, can self-will the amendment. He can, with membership concurrence,
increase the technical number of the members of the corporation from "sole" or one to the greater number authorized
by its amended articles.
Here, the evidence shows that the IEMELIF’s General Superintendent, respondent Bishop Lazaro, who embodied the
corporation sole, had obtained, not only the approval of the Consistory that drew up corporate policies, but also that of
the required two-thirds vote of its membership.1avvphi1

The amendment of the articles of incorporation, as correctly put by the CA, requires merely that a) the amendment is not
contrary to any provision or requirement under the Corporation Code, and that b) it is for a legitimate purpose. Section
17 of the Corporation Code10 provides that amendment shall be disapproved if, among others, the prescribed form of the
articles of incorporation or amendment to it is not observed, or if the purpose or purposes of the corporation are patently
unconstitutional, illegal, immoral, or contrary to government rules and regulations, or if the required percentage of
ownership is not complied with. These impediments do not appear in the case of IEMELIF.

Besides, as the CA noted, the IEMELIF worked out the amendment of its articles of incorporation upon the initiative and
advice of the SEC. The latter’s interpretation and application of the Corporation Code is entitled to respect and recognition,
barring any divergence from applicable laws. Considering its experience and specialized capabilities in the area of
corporation law, the SEC’s prior action on the IEMELIF issue should be accorded great weight.

WHEREFORE, the Court DENIES the petition and AFFIRMS the October 31, 2007 decision and August 1, 2008 resolution of
the Court of Appeals in CA-G.R. SP 92640. SO ORDERED.
G.R. No. 102223 August 22, 1996

COMMUNICATION MATERIALS AND DESIGN, INC., ASPAC MULTI-TRADE, INC., (formerly ASPAC-ITEC PHILIPPINES, INC.)
and FRANCISCO S. AGUIRRE, petitioners,
vs.
THE COURT OF APPEALS, ITEC INTERNATIONAL, INC., and ITEC, INC., respondents.

TORRES, JR., J.:p

Business Corporations, according to Lord Coke, "have no souls." They do business peddling goods, wares or even
services across national boundaries in "souless forms" in quest for profits albeit at times, unwelcomed in these
strange lands venturing into uncertain markets and, the risk of dealing with wily competitors.

This is one of the issues in the case at bar.

Contested in this petition for review on Certiorari is the Decision of the Court of Appeals on June 7, 1991,
sustaining the RTC Order dated February 22, 1991, denying the petitioners' Motion to Dismiss, and directing the
issuance of a writ of preliminary injunction, and its companion Resolution of October 9, 1991, denying the
petitioners' Motion for Reconsideration.

Petitioners COMMUNICATION MATERIALS AND DESIGN, INC., (CMDI, for brevity) and ASPAC MULTI-TRADE INC.,
(ASPAC, for brevity) are both domestic corporations, while petitioner Francisco S. Aguirre is their President and
majority stockholder. Private Respondents ITEC, INC. and/or ITEC, INTERNATIONAL, INC. (ITEC, for brevity) are
corporations duly organized and existing under the laws of the State of Alabama, United States of America. There
is no dispute that ITEC is a foreign corporation not licensed to do business in the Philippines.

On August 14, 1987, ITEC entered into a contract with petitioner ASPAC referred to as "Representative
Agreement".1 Pursuant to the contract, ITEC engaged ASPAC as its "exclusive representative" in the Philippines for
the sale of ITEC's products, in consideration of which, ASPAC was paid a stipulated commission. The agreement
was signed by G.A. Clark and Francisco S. Aguirre, presidents of ITEC and ASPAC respectively, for and in behalf of
their companies.2 The said agreement was initially for a term of twenty-four months. After the lapse of the agreed
period, the agreement was renewed for another twenty-four months.

Through a "License Agreement"3 entered into by the same parties on November 10, 1988, ASPAC was able to
incorporate and use the name "ITEC" in its own name. Thus , ASPAC Multi-Trade, Inc. became legally and publicly
known as ASPAC-ITEC (Philippines).

By virtue of said contracts, ASPAC sold electronic products, exported by ITEC, to their sole customer, the Philippine
Long Distance Telephone Company, (PLDT, for brevity).

To facilitate their transactions, ASPAC, dealing under its new appellation, and PLDT executed a document entitled
"PLDT-ASPAC/ITEC PROTOCOL"4 which defined the project details for the supply of ITEC's Interface Equipment in
connection with the Fifth Expansion Program of PLDT.

One year into the second term of the parties' Representative Agreement, ITEC decided to terminate the same,
because petitioner ASPAC allegedly violated its contractual commitment as stipulated in their agreements.5

ITEC charges the petitioners and another Philippine Corporation, DIGITAL BASE COMMUNICATIONS, INC. (DIGITAL,
for brevity), the President of which is likewise petitioner Aguirre, of using knowledge and information of ITEC's
products specifications to develop their own line of equipment and product support, which are similar, if not
identical to ITEC's own, and offering them to ITEC's former customer.
On January 31, 1991, the complaint6 in Civil Case No. 91-294, was filed with the Regional Trial Court of Makati,
Branch 134 by ITEC, INC. Plaintiff sought to enjoin, first, preliminarily and then, after trial, permanently; (1)
defendants DIGITAL, CMDI, and Francisco Aguirre and their agents and business associates, to cease and desist
from selling or attempting to sell to PLDT and to any other party, products which have been copied or
manufactured "in like manner, similar or identical to the products, wares and equipment of plaintiff," and (2)
defendant ASPAC, to cease and desist from using in its corporate name, letter heads, envelopes, sign boards and
business dealings, plaintiff's trademark, internationally known as ITEC; and the recovery from defendants in
solidum, damages of at least P500,000.00, attorney's fees and litigation expenses.

In due time, defendants filed a motion to dismiss7 the complaint on the following grounds:

(1) That plaintiff has no legal capacity to sue as it is a foreign corporation doing business in the Philippines without
the required BOI authority and SEC license, and (2) that plaintiff is simply engaged in forum shopping which
justifies the application against it of the principle of "forum non conveniens".

On February 8, 1991, the complaint was amended by virtue of which ITEC INTERNATIONAL, INC. was substituted
as plaintiff instead of ITEC, INC.8

In their Supplemental Motion to Dismiss,9 defendants took note of the amendment of the complaint and asked
the court to consider in toto their motion to dismiss and their supplemental motion as their answer to the
amended complaint.

After conducting hearings on the prayer for preliminary injunction, the court a quo on February 22, 1991, issued
its Order: 10 (1) denying the motion to dismiss for being devoid of legal merit with a rejection of both grounds
relied upon by the defendants in their motion to dismiss, and (2) directing the issuance of a writ of preliminary
injunction on the same day.

From the foregoing order, petitioners elevated the case to the respondent Court of Appeals on a Petition
for Certiorari and Prohibition11 under Rule 65 of the Revised Rules of Court, assailing and seeking the nullification
and the setting aside of the Order and the Writ of Preliminary Injunction issued by the Regional Trial Court.

The respondent appellate court stated, thus:

We find no reason whether in law or from the facts of record, to disagree with the (lower court's) ruling.
We therefore are unable to find in respondent Judge's issuance of said writ the grave abuse of discretion
ascribed thereto by the petitioners.

In fine, We find that the petition prima facie does not show that Certiorari lies in the present case and
therefore, the petition does not deserve to be given due course.

WHEREFORE, the present petition should be, as it is hereby, denied due course and accordingly, is hereby
dismissed. Costs against the petitioners.

SO ORDERED.12

Petitioners filed a motion for reconsideration13 on June 7, 1991, which was likewise denied by the respondent
court.

WHEREFORE, the present motion for reconsideration should be, as it is hereby, denied for lack of merit.
For the same reason, the motion to have the motion for reconsideration set for oral argument likewise
should be and is hereby denied.

SO ORDERED.14
Petitioners are now before us via Petition for Review on Certiorari15 under Rule 45 of the Revised Rules of Court.

It is the petitioners' submission that private respondents are foreign corporations actually doing business in the
Philippines without the requisite authority and license from the Board of Investments and the Securities and
Exchange Commission, and thus, disqualified from instituting the present action in our courts. It is their contention
that the provisions of the Representative Agreement, petitioner ASPAC executed with private respondent ITEC,
are similarly "highly restrictive" in nature as those found in the agreements which confronted the Court in the
case of Top-Weld Manufacturing, Inc. vs. ECED S.A. et al.,16 as to reduce petitioner ASPAC to a mere conduit or
extension of private respondents in the Philippines.

In that case, we ruled that respondent foreign corporations are doing business in the Philippines because when
the respondents entered into the disputed contracts with the petitioner, they were carrying out the purposes for
which they were created, i.e., to manufacture and market welding products and equipment. The terms and
conditions of the contracts as well as the respondents' conduct indicate that they established within our country
a continuous business, and not merely one of a temporary character. The respondents could be exempted from
the requirements of Republic Act 5455 if the petitioner is an independent entity which buys and distributes
products not only of the petitioner, but also of other manufacturers or transacts business in its name and for its
account and not in the name or for the account of the foreign principal. A reading of the agreements between the
petitioner and the respondents shows that they are highly restrictive in nature, thus making the petitioner a mere
conduit or extension of the respondents.

It is alleged that certain provisions of the "Representative Agreement" executed by the parties are similar to those
found in the License Agreement of the parties in the Top-Weld case which were considered as "highly restrictive"
by this Court. The provisions in point are:

2.0 Terms and Conditions of Sales.

2.1 Sale of ITEC products shall be at the purchase price set by ITEC from time to time. Unless otherwise
expressly agreed to in writing by ITEC the purchase price is net to ITEC and does not include any
transportation charges, import charges or taxes into or within the Territory. All orders from customers are
subject to formal acceptance by ITEC at its Huntsville, Alabama U.S.A. facility.

xxx xxx xxx

3.0 Duties of Representative

3.1. REPRESENTATIVE SHALL:

3.1.1. Not represent or offer for sale within the Territory any product which competes with an existing
ITEC product or any product which ITEC has under active development.

3.1.2. Actively solicit all potential customers within the Territory in a systematic and business like manner.

3.1.3. Inform ITEC of all request for proposals, requests for bids, invitations to bid and the like within the
Territory.

3.1.4. Attain the Annual Sales Goal for the Territory established by ITEC. The Sales Goals for the first 24
months is set forth on Attachment two (2) hereto. The Sales Goal for additional twelve month periods, if
any, shall be sent to the Sales Agent by ITEC at the beginning of each period. These Sales Goals shall be
incorporated into this Agreement and made a part hereof.

xxx xxx xxx

 6.0. Representative as Independent Contractor

xxx xxx xxx

6.2. When acting under this Agreement REPRESENTATIVE is authorized to solicit sales within the Territory
on ITEC's behalf but is authorized to bind ITEC only in its capacity as Representative and no other, and
then only to specific customers and on terms and conditions expressly authorized by ITEC in writing.17

Aside from the abovestated provisions, petitioners point out the following matters of record, which allegedly bear
witness to the respondents' activities within the Philippines in pursuit of their business dealings:

a. While petitioner ASPAC was the authorized exclusive representative for three (3) years, it solicited from
and closed several sales for and on behalf of private respondents as to their products only and no other,
to PLDT, worth no less than US $ 15 Million (p. 20, tsn, Feb. 18, 1991);

b. Contract No. 1 (Exhibit for Petitioners) which covered these sales and identified by private respondents'
sole witness, Mr. Clarence Long, is not in the name of petitioner ASPAC as such representative, but in the
name of private respondent ITEC, INC. (p. 20, tsn, Feb. 18, 1991);

c. The document denominated as "PLDT-ASPAC/ITEC PROTOCOL (Annex C of the original and amended
complaints) which defined the responsibilities of the parties thereto as to the supply, installation and
maintenance of the ITEC equipment sold under said Contract No. 1 is, as its very title indicates, in the
names jointly of the petitioner ASPAC and private respondents;

d. To evidence receipt of the purchase price of US $ 15 Million, private respondent ITEC, Inc. issued in its
letter head, a Confirmation of payment dated November 13, 1989 and its Invoice dated November 22,
1989 (Annexes 1 and 2 of the Motion to Dismiss and marked as Exhibits 2 and 3 for the petitioners), both
of which were identified by private respondent's sole witness, Mr. Clarence Long (pp. 25-27, tsn, Feb. 18,
1991).18

Petitioners contend that the above acts or activities belie the supposed independence of petitioner ASPAC from
private respondents. "The unrebutted evidence on record below for the petitioners likewise reveal the continuous
character of doing business in the Philippines by private respondents based on the standards laid down by this
Court in Wang Laboratories, Inc. vs. Hon. Rafael T . Mendoza, et al.19 and again in TOP-WELD. (supra)" It thus
appears that as the respondent Court of Appeals and the trial court's failure to give credence on the grounds relied
upon in support of their Motion to Dismiss that petitioners ascribe grave abuse of discretion amounting to an
excess of jurisdiction of said courts.

Petitioners likewise argue that since private respondents have no capacity to bring suit here, the Philippines is not
the "most convenient forum" because the trial court is devoid of any power to enforce its orders issued or
decisions rendered in a case that could not have been commenced to begin with, such that in insisting to assume
and exercise jurisdiction over the case below, the trial court had gravely abused its discretion and even actually
exceeded its jurisdiction.

As against petitioner's insistence that private respondent is "doing business" in the Philippines, the latter maintains that
it is not.

We can discern from a reading of Section 1 (f) (1) and 1 (f) (2) of the Rules and Regulations Implementing the Omnibus
Investments Code of 1987, the following:

(1) A foreign firm is deemed not engaged in business in the Philippines if it transacts business through
middlemen, acting in their own names, such as indebtors, commercial bookers commercial merchants.
 (2) A foreign corporation is deemed not "doing business" if its representative domiciled in the Philippines
has an independent status in that it transacts business in its name and for its account. 20

Private respondent argues that a scrutiny of its Representative Agreement with the Petitioners will show that
although ASPAC was named as representative of ITEC., ASPAC actually acted in its own name and for its own
account. The following provisions are particularly mentioned:

3.1.7.1. In the event that REPRESENTATIVE imports directly from ITEC, REPRESENTATIVE will pay for its
own account; all customs duties and import fees imposed on any ITEC products; all import expediting or
handling charges and expenses imposed on ITEC products; and any stamp tax fees imposed on ITEC.

xxx xxx xxx

4.1. As complete consideration and payment for acting as representative under this Agreement,
REPRESENTATIVE shall receive a sales commission equivalent to a per centum of the FOB value of all ITEC
equipment sold to customers within the territory as a direct result of REPRESENTATIVE's sales efforts.21

More importantly, private respondent charges ASPAC of admitting its independence from ITEC by entering and
ascribing to provision No. 6 of the Representative Agreement.

6.0 Representative as Independent Contractor

6.1. When performing any of its duties under this Agreement, REPRESENTATIVE shall act as an
independent contractor and not as an employee, worker, laborer, partner, joint venturer of ITEC as these
terms are defined by the laws, regulations, decrees or the like of any jurisdiction, including the jurisdiction
of the United States, the state of Alabama and the Territory.22

Although it admits that the Representative Agreement contains provisions which both support and belie the
independence of ASPAC, private respondent echoes the respondent court's finding that the lower court did not
commit grave abuse of discretion nor acted in excess of jurisdiction when it found that the ground relied upon by
the petitioners in their motion to dismiss does not appear to be indubitable.23

The issues before us now are whether or not private respondent ITEC is an unlicensed corporation doing business
in the Philippines, and if it is, whether or not this fact bars it from invoking the injunctive authority of our courts.

Considering the above, it is necessary to state what is meant by "doing business" in the Philippines. Section 133
of the Corporation Code, provides that "No foreign corporation, transacting business in the Philippines without a
license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding
in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against
before Philippine Courts or administrative tribunals on any valid cause of action recognized under Philippine
laws."24

Generally, a "foreign corporation" has no legal existence within the state in which it is foreign. This proceeds from
the principle that juridical existence of a corporation is confined within the territory of the state under whose laws
it was incorporated and organized, and it has no legal status beyond such territory. Such foreign corporation may
be excluded by any other state from doing business within its limits, or conditions may be imposed on the exercise
of such privileges.25 Before a foreign corporation can transact business in this country, it must first obtain a license
to transact business in the Philippines, and a certificate from the appropriate government agency. If it transacts
business in the Philippines without such a license, it shall not be permitted to maintain or intervene in any action,
suit, or proceeding in any court or administrative agency of the Philippines, but it may be sued on any valid cause
of action recognized under Philippine laws.26
In a long line of decisions, this Court has not altogether prohibited foreign corporation not licensed to do business
in the Philippines from suing or maintaining an action in Philippine Courts. What it seeks to prevent is a foreign
corporation doing business in the Philippines without a licensed from gaining access to Philippine Courts.27

The purpose of the law in requiring that foreign corporations doing business in the Philippines be licensed to do
so and that they appoint an agent for service of process is to subject the foreign corporation doing business in the
Philippines to the jurisdiction of its courts. The object is 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 steps necessary
to render it amenable to suit in the local courts.28 The implication of the law is that 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, and thus, in effect, to permit persons to avoid their contracts made with such foreign corporations.29

There is no exact rule or governing principle as to what constitutes "doing" or "engaging" or "transacting" business.
Indeed, such case must be judged in the light of its peculiar circumstances, upon its peculiar facts and upon the
language of the statute applicable. The true test, however, seems to be whether the foreign corporation is
continuing the body or substance of the business or enterprise for which it was organized.30

Article 44 of the Omnibus Investments Code of 1987 defines the phrase to include:

soliciting orders, purchases, service contracts, opening offices, whether called "liaison" offices or
branches; appointing representatives or distributors who are domiciled in the Philippines or who in any
calendar year stay in the Philippines for a period or periods totalling one hundred eighty (180) days or
more; participating in the management, supervision or control of any domestic business firm, entity or
corporation in the Philippines, and any other act or acts that imply a continuity or commercial dealings or
arrangements and contemplate to that extent the performance of acts or works, or the exercise of some
of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose
and object of the business organization.

Thus, a foreign corporation with a settling agent in the Philippines which issued twelve marine policies covering
different shipments to the Philippines31 and a foreign corporation which had been collecting premiums on
outstanding policies 32 were regarded as doing business here.

The same rule was observed relating to a foreign corporation with an "exclusive distributing agent" in the
Philippines, and which has been selling its products here since 1929,33 and a foreign corporation engaged in the
business of manufacturing and selling computers worldwide, and had installed at least 26 different products in
several corporations in the Philippines, and allowed its registered logo and trademark to be used and made it
known that there exists a designated distributor in the Philippines.34

In Georg Grotjahn GMBH and Co. vs. Isnani,35 it was held that the uninterrupted performance by a foreign
corporation of acts pursuant to its primary purposes and functions as a regional area headquarters for its home
office, qualifies such corporation as one doing business in the country.

These foregoing instances should be distinguished from a single or isolated transaction or occasional, incidental,
or casual transactions, which do not come within the meaning of the law,36 for in such case, the foreign
corporation is deemed not engaged in business in the Philippines.

Where a single act or transaction, however, is not merely incidental or casual but indicates the foreign
corporation's intention to do other business in the Philippines, said single act or transaction constitutes "doing"
or "engaging in" or "transacting" business in the Philippines.3 7

In determining whether a corporation does business in the Philippines or not, aside from their activities within the
forum, reference may be made to the contractual agreements entered into by it with other entities in the country.
Thus, in the Top-Weld case (supra), the foreign corporation's LICENSE AND TECHNICAL AGREEMENT and
DISTRIBUTOR AGREEMENT with their local contacts were made the basis of their being regarded by this Tribunal
as corporations doing business in the country. Likewise, in Merill Lynch Futures, Inc.vs. Court of Appeals, etc. 38 the
FUTURES CONTRACT entered into by the petitioner foreign corporation weighed heavily in the court's ruling.

With the abovestated precedents in mind, we are persuaded to conclude that private respondent had been
"engaged in" or "doing business" in the Philippines for some time now. This is the inevitable result after a scrutiny
of the different contracts and agreements entered into by ITEC with its various business contacts in the country,
particularly ASPAC and Telephone Equipment Sales and Services, Inc. (TESSI, for brevity). The latter is a local
electronics firm engaged by ITEC to be its local technical representative, and to create a service center for ITEC
products sold locally. Its arrangements, with these entities indicate convincingly ITEC's purpose to bring about the
situation among its customers and the general public that they are dealing directly with ITEC, and that ITEC is
actively engaging in business in the country.

In its Master Service Agreement39 with TESSI, private respondent required its local technical representative to
provide the employees of the technical and service center with ITEC identification cards and business cards, and
to correspond only on ITEC, Inc., letterhead. TESSI personnel are instructed to answer the telephone with "ITEC
Technical Assistance Center.", such telephone being listed in the telephone book under the heading of ITEC
Technical Assistance Center, and all calls being recorded and forwarded to ITEC on a weekly basis.

What is more, TESSI was obliged to provide ITEC with a monthly report detailing the failure and repair of ITEC
products, and to requisition monthly the materials and components needed to replace stock consumed in the
warranty repairs of the prior month.

A perusal of the agreements between petitioner ASPAC and the respondents shows that there are provisions
which are highly restrictive in nature, such as to reduce petitioner ASPAC to a mere extension or instrument of
the private respondent.

The "No Competing Product" provision of the Representative Agreement between ITEC and ASPAC provides: "The
Representative shall not represent or offer for sale within the Territory any product which competes with an
existing ITEC product or any product which ITEC has under active development." Likewise pertinent is the following
provision: "When acting under this Agreement, REPRESENTATIVE is authorized to solicit sales within the Territory
on ITEC's behalf but is authorized to bind ITEC only in its capacity as Representative and no other, and then only
to specific customers and on terms and conditions expressly authorized by ITEC in writing."

When ITEC entered into the disputed contracts with ASPAC and TESSI, they were carrying out the purposes for
which it was created, i.e., to market electronics and communications products. The terms and conditions of the
contracts as well as ITEC's conduct indicate that they established within our country a continuous business, and
not merely one of a temporary character.40

Notwithstanding such finding that ITEC is doing business in the country, petitioner is nonetheless estopped from
raising this fact to bar ITEC from instituting this injunction case against it.

A foreign corporation doing business in the Philippines may sue in Philippine Courts although not authorized to
do business here against a Philippine citizen or entity who had contracted with and benefited by said
corporation.41 To put it in another way, a party is estopped to challenge the personality of a corporation after
having acknowledged the same by entering into a contract with it. And the doctrine of estoppel to deny corporate
existence applies to a foreign as well as to domestic corporations.42 One who has dealt with a corporation of
foreign origin as a corporate entity is estopped to deny its corporate existence and capacity: The principle will be
applied to prevent a person contracting with a foreign corporation from later taking advantage of its
noncompliance with the statutes chiefly in cases where such person has received the benefits of the contract.43

The rule is deeply rooted in the time-honored axiom of Commodum ex injuria sua non habere debet — no person
ought to derive any advantage of his own wrong. This is as it should be for as mandated by law, "every person
must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith."44

Concededly, corporations act through agents, like directors and officers. Corporate dealings must be characterized
by utmost good faith and fairness. Corporations cannot just feign ignorance of the legal rules as in most cases,
they are manned by sophisticated officers with tried management skills and legal experts with practiced eye on
legal problems. Each party to a corporate transaction is expected to act with utmost candor and fairness and,
thereby allow a reasonable proportion between benefits and expected burdens. This is a norm which should be
observed where one or the other is a foreign entity venturing in a global market.

As observed by this Court in TOP-WELD (supra), viz:

The parties are charged with knowledge of the existing law at the time they enter into a contract and at the time
it is to become operative. (Twiehaus v. Rosner, 245 SW 2d 107; Hall v. Bucher, 227 SW 2d 98). Moreover, a person
is presumed to be more knowledgeable about his own state law than his alien or foreign contemporary. In this
case, the record shows that, at least, petitioner had actual knowledge of the applicability of R.A. No. 5455 at the
time the contract was executed and at all times thereafter. This conclusion is compelled by the fact that the same
statute is now being propounded by the petitioner to bolster its claim. We, therefore sustain the appellate court's
view that "it was incumbent upon TOP-WELD to know whether or not IRTI and ECED were properly authorized to
engage in business in the Philippines when they entered into the licensing and distributorship agreements." The
very purpose of the law was circumvented and evaded when the petitioner entered into said agreements despite
the prohibition of R.A. No. 5455. The parties in this case being equally guilty of violating R.A. No. 5455, they are in
pari delicto, in which case it follows as a consequence that petitioner is not entitled to the relief prayed for in this
case.

The doctrine of lack of capacity to sue based on the failure to acquire a local license is based on considerations of
sound public policy. The license requirement was imposed to subject the foreign corporation doing business in
the Philippines to the jurisdiction of its courts. It was never intended to favor domestic corporations who enter
into solitary transactions with unwary foreign firms and then repudiate their obligations simply because the latter
are not licensed to do business in this country.45

In Antam Consolidated Inc. vs. Court of Appeals, et al.46 we expressed our chagrin over this commonly used
scheme of defaulting local companies which are being sued by unlicensed foreign companies not engaged in
business in the Philippines to invoke the lack of capacity to sue of such foreign companies. Obviously, the same
ploy is resorted to by ASPAC to prevent the injunctive action filed by ITEC to enjoin petitioner from using
knowledge possibly acquired in violation of fiduciary arrangements between the parties.

By entering into the "Representative Agreement" with ITEC, Petitioner is charged with knowledge that ITEC was
not licensed to engage in business activities in the country, and is thus estopped from raising in defense such
incapacity of ITEC, having chosen to ignore or even presumptively take advantage of the same.

In Top-Weld, we ruled that a foreign corporation may be exempted from the license requirement in order to
institute an action in our courts if its representative in the country maintained an independent status during the
existence of the disputed contract. Petitioner is deemed to have acceded to such independent character when it
entered into the Representative Agreement with ITEC, particularly, provision 6.2 (supra).

Petitioner's insistence on the dismissal of this action due to the application, or non application, of the private
international law rule of forum non conveniens defies well-settled rules of fair play. According to petitioner, the
Philippine Court has no venue to apply its discretion whether to give cognizance or not to the present action,
because it has not acquired jurisdiction over the person of the plaintiff in the case, the latter allegedly having no
personality to sue before Philippine Courts. This argument is misplaced because the court has already acquired
jurisdiction over the plaintiff in the suit, by virtue of his filing the original complaint. And as we have already
observed, petitioner is not at liberty to question plaintiff's standing to sue, having already acceded to the same by
virtue of its entry into the Representative Agreement referred to earlier.

Thus, having acquired jurisdiction, it is now for the Philippine Court, based on the facts of the case, whether to
give due course to the suit or dismiss it, on the principle of forum non convenience.4 7 Hence, the Philippine Court
may refuse to assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the court may assume
jurisdiction over the case if it chooses to do so; provided, that the following requisites are met: 1) That the
Philippine Court is one to which the parties may conveniently resort to; 2) That the Philippine Court is in a position
to make an intelligent decision as to the law and the facts; and, 3) That the Philippine Court has or is likely to have
power to enforce its decision.48

The aforesaid requirements having been met, and in view of the court's disposition to give due course to the
questioned action, the matter of the present forum not being the "most convenient" as a ground for the suit's
dismissal, deserves scant consideration.

IN VIEW OF THE FOREGOING PREMISES, the instant Petition is hereby DISMISSED. The decision of the Court of
Appeals dated June 7, 1991, upholding the RTC Order dated February 22, 1991, denying the petitioners' Motion
to Dismiss, and ordering the issuance of the Writ of Preliminary Injunction, is hereby affirmed in toto.

SO ORDERED.
G.R. No. 168266 March 15, 2010

CARGILL, INC., Petitioner,

vs.
INTRA STRATA ASSURANCE CORPORATION, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the 26 May 2005 Decision2 of the Court of Appeals in CA-G.R. CV No. 48447.

The Facts

Petitioner Cargill, Inc. (petitioner) is a corporation organized and existing under the laws of the State of Delaware, United
States of America. Petitioner and Northern Mindanao Corporation (NMC) executed a contract dated 16 August 1989
whereby NMC agreed to sell to petitioner 20,000 to 24,000 metric tons of molasses, to be delivered from 1 January to 30
June 1990 at the price of $44 per metric ton. The contract provides that petitioner would open a Letter of Credit with the
Bank of Philippine Islands. Under the "red clause" of the Letter of Credit, NMC was permitted to draw up to $500,000
representing the minimum price of the contract upon presentation of some documents.

The contract was amended three times: first, on 11 January 1990, increasing the purchase price of the molasses to $47.50
per metric ton;3 second, on 18 June 1990, reducing the quantity of the molasses to 10,500 metric tons and increasing the
price to $55 per metric ton;4 and third, on 22 August 1990, providing for the shipment of 5,250 metric tons of molasses
on the last half of December 1990 through the first half of January 1991, and the balance of 5,250 metric tons on the last
half of January 1991 through the first half of February 1991.5 The third amendment also required NMC to put up a
performance bond equivalent to $451,500, which represents the value of 10,500 metric tons of molasses computed at
$43 per metric ton. The performance bond was intended to guarantee NMC’s performance to deliver the molasses during
the prescribed shipment periods according to the terms of the amended contract.

In compliance with the terms of the third amendment of the contract, respondent Intra Strata Assurance Corporation
(respondent) issued on 10 October 1990 a performance bond6 in the sum of ₱11,287,500 to guarantee NMC’s delivery of
the 10,500 tons of molasses, and a surety bond7 in the sum of ₱9,978,125 to guarantee the repayment of downpayment
as provided in the contract.

NMC was only able to deliver 219.551 metric tons of molasses out of the agreed 10,500 metric tons. Thus, petitioner sent
demand letters to respondent claiming payment under the performance and surety bonds. When respondent refused to
pay, petitioner filed on 12 April 1991 a complaint8 for sum of money against NMC and respondent.

Petitioner, NMC, and respondent entered into a compromise agreement,9 which the trial court approved in its
Decision10 dated 13 December 1991. The compromise agreement provides that NMC would pay petitioner ₱3,000,000
upon signing of the compromise agreement and would deliver to petitioner 6,991 metric tons of molasses from 16-31
December 1991. However, NMC still failed to comply with its obligation under the compromise agreement. Hence, trial
proceeded against respondent.

On 23 November 1994, the trial court rendered a decision, the dispositive portion of which reads:

WHEREFORE, judgment is rendered in favor of plaintiff [Cargill, Inc.], ordering defendant INTRA STRATA ASSURANCE
CORPORATION to solidarily pay plaintiff the total amount of SIXTEEN MILLION NINE HUNDRED NINETY-THREE THOUSAND
AND TWO HUNDRED PESOS (₱16,993,200.00), Philippine Currency, with interest at the legal rate from October 10, 1990
until fully paid, plus attorney’s fees in the sum of TWO HUNDRED THOUSAND PESOS (₱200,000.00), Philippine Currency
and the costs of the suit.

The Counterclaim of Intra Strata Assurance Corporation is hereby dismissed for lack of merit.

SO ORDERED.11

On appeal, the Court of Appeals reversed the trial court’s decision and dismissed the complaint. Hence, this petition.

The Court of Appeals’ Ruling

The Court of Appeals held that petitioner does not have the capacity to file this suit since it is a foreign corporation doing
business in the Philippines without the requisite license. The Court of Appeals held that petitioner’s purchases of molasses
were in pursuance of its basic business and not just mere isolated and incidental transactions.

The Issues

Petitioner raises the following issues:

1. Whether petitioner is doing or transacting business in the Philippines in contemplation of the law and
established jurisprudence;

2. Whether respondent is estopped from invoking the defense that petitioner has no legal capacity to sue in the
Philippines;

3. Whether petitioner is seeking a review of the findings of fact of the Court of Appeals; and

4. Whether the advance payment of $500,000 was released to NMC without the submission of the supporting
documents required in the contract and the "red clause" Letter of Credit from which said amount was drawn.12

The Ruling of the Court

We find the petition meritorious.

Doing Business in the Philippines and Capacity to Sue

The principal issue in this case is whether petitioner, an unlicensed foreign corporation, has legal capacity to sue before
Philippine courts. Under Article 12313 of the Corporation Code, a foreign corporation must first obtain a license and a
certificate from the appropriate government agency before it can transact business in the Philippines. Where a foreign
corporation does business in the Philippines without the proper license, it cannot maintain any action or proceeding
before Philippine courts as provided under Section 133 of the Corporation Code:

Sec. 133. Doing business without a license. – No foreign corporation transacting business in the Philippines without a
license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before
Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.

Thus, the threshold question in this case is whether petitioner was doing business in the Philippines. The Corporation Code
provides no definition for the phrase "doing business." Nevertheless, Section 1 of Republic Act No. 5455 (RA
5455),14 provides that:
x x x the phrase "doing business" shall include soliciting orders, purchases, service contracts, opening offices, whether
called ‘liaison’ offices or branches; appointing representatives or distributors who are domiciled in the Philippines or who
in any calendar year stay in the Philippines for a period or periods totalling one hundred eighty days or more; participating
in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines; and any
other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution
of, commercial gain or of the purpose and object of the business organization. (Emphasis supplied)

This is also the exact definition provided under Article 44 of the Omnibus Investments Code of 1987.

Republic Act No. 7042 (RA 7042), otherwise known as the Foreign Investments Act of 1991, which repealed Articles 44-56
of Book II of the Omnibus Investments Code of 1987, enumerated not only the acts or activities which constitute "doing
business" but also those activities which are not deemed "doing business." Section 3(d) of RA 7042 states:

[T]he phrase "doing business" shall include "soliciting orders, service contracts, opening offices, whether called ‘liaison’
offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year
stay in the country for a period or periods totalling one hundred eighty (180) days or more; participating in the
management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other
act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution
of, commercial gain or of the purpose and object of the business organization: Provided, however, That the phrase ‘doing
business’ shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations
duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to
represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines
which transacts business in its own name and for its own account.

Since respondent is relying on Section 133 of the Corporation Code to bar petitioner from maintaining an action in
Philippine courts, respondent bears the burden of proving that petitioner’s business activities in the Philippines were not
just casual or occasional, but so systematic and regular as to manifest continuity and permanence of activity to constitute
doing business in the Philippines. In this case, we find that respondent failed to prove that petitioner’s activities in the
Philippines constitute doing business as would prevent it from bringing an action.

The determination of whether a foreign corporation is doing business in the Philippines must be based on the facts of
each case.15 In the case of Antam Consolidated, Inc. v. CA,16 in which a foreign corporation filed an action for collection of
sum of money against petitioners therein for damages and loss sustained for the latter’s failure to deliver coconut crude
oil, the Court emphasized the importance of the element of continuity of commercial activities to constitute doing
business in the Philippines. The Court held:

In the case at bar, the transactions entered into by the respondent with the petitioners are not a series of commercial
dealings which signify an intent on the part of the respondent to do business in the Philippines but constitute an isolated
one which does not fall under the category of "doing business." The records show that the only reason why the respondent
entered into the second and third transactions with the petitioners was because it wanted to recover the loss it sustained
from the failure of the petitioners to deliver the crude coconut oil under the first transaction and in order to give the latter
a chance to make good on their obligation. x x x

x x x The three seemingly different transactions were entered into by the parties only in an effort to fulfill the basic
agreement and in no way indicate an intent on the part of the respondent to engage in a continuity of transactions with
petitioners which will categorize it as a foreign corporation doing business in the Philippines.17

Similarly, in this case, petitioner and NMC amended their contract three times to give a chance to NMC to deliver to
petitioner the molasses, considering that NMC already received the minimum price of the contract. There is no showing
that the transactions between petitioner and NMC signify the intent of petitioner to establish a continuous business or
extend its operations in the Philippines.
The Implementing Rules and Regulations of RA 7042 provide under Section 1(f), Rule I, that "doing business" does not
include the following acts:

1. Mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business,
and/or the exercise of rights as such investor;

2. Having a nominee director or officer to represent its interests in such corporation;

3. Appointing a representative or distributor domiciled in the Philippines which transacts business in the
representative's or distributor's own name and account;

4. The publication of a general advertisement through any print or broadcast media;

5. Maintaining a stock of goods in the Philippines solely for the purpose of having the same processed by another
entity in the Philippines;

6. Consignment by a foreign entity of equipment with a local company to be used in the processing of products
for export;

7. Collecting information in the Philippines; and

8. Performing services auxiliary to an existing isolated contract of sale which are not on a continuing basis, such
as installing in the Philippines machinery it has manufactured or exported to the Philippines, servicing the same,
training domestic workers to operate it, and similar incidental services.

Most of these activities do not bring any direct receipts or profits to the foreign corporation, consistent with the ruling of
this Court in National Sugar Trading Corp. v. CA18 that activities within Philippine jurisdiction that do not create earnings
or profits to the foreign corporation do not constitute doing business in the Philippines.19 In that case, the Court held that
it would be inequitable for the National Sugar Trading Corporation, a state-owned corporation, to evade payment of a
legitimate indebtedness owing to the foreign corporation on the plea that the latter should have obtained a license first
before perfecting a contract with the Philippine government. The Court emphasized that the foreign corporation did not
sell sugar and derive income from the Philippines, but merely purchased sugar from the Philippine government and
allegedly paid for it in full.

In this case, the contract between petitioner and NMC involved the purchase of molasses by petitioner from NMC. It was
NMC, the domestic corporation, which derived income from the transaction and not petitioner. To constitute "doing
business," the activity undertaken in the Philippines should involve profit-making.20 Besides, under Section 3(d) of RA
7042, "soliciting purchases" has been deleted from the enumeration of acts or activities which constitute "doing business."

Other factors which support the finding that petitioner is not doing business in the Philippines are: (1) petitioner does not
have an office in the Philippines; (2) petitioner imports products from the Philippines through its non-exclusive local
broker, whose authority to act on behalf of petitioner is limited to soliciting purchases of products from suppliers engaged
in the sugar trade in the Philippines; and (3) the local broker is an independent contractor and not an agent of petitioner.21

As explained by the Court in B. Van Zuiden Bros., Ltd. v. GTVL Marketing Industries, Inc.:22

An exporter in one country may export its products to many foreign importing countries without performing in the
importing countries specific commercial acts that would constitute doing business in the importing countries. The mere
act of exporting from one’s own country, without doing any specific commercial act within the territory of the importing
country, cannot be deemed as doing business in the importing country. The importing country does not require jurisdiction
over the foreign exporter who has not yet performed any specific commercial act within the territory of the importing
country. Without jurisdiction over the foreign exporter, the importing country cannot compel the foreign exporter to
secure a license to do business in the importing country.
Otherwise, Philippine exporters, by the mere act alone of exporting their products, could be considered by the importing
countries to be doing business in those countries. This will require Philippine exporters to secure a business license in
every foreign country where they usually export their products, even if they do not perform any specific commercial act
within the territory of such importing countries. Such a legal concept will have deleterious effect not only on Philippine
exports, but also on global trade.1avvphi1

To be doing or "transacting business in the Philippines" for purposes of Section 133 of the Corporation Code, the foreign
corporation must actually transact business in the Philippines, that is, perform specific business transactions within the
Philippine territory on a continuing basis in its own name and for its own account. Actual transaction of business within
the Philippine territory is an essential requisite for the Philippines to to acquire jurisdiction over a foreign corporation and
thus require the foreign corporation to secure a Philippine business license. If a foreign corporation does not transact such
kind of business in the Philippines, even if it exports its products to the Philippines, the Philippines has no jurisdiction to
require such foreign corporation to secure a Philippine business license.23 (Emphasis supplied)

In the present case, petitioner is a foreign company merely importing molasses from a Philipine exporter. A foreign
company that merely imports goods from a Philippine exporter, without opening an office or appointing an agent in the
Philippines, is not doing business in the Philippines.

Review of Findings of Fact

The Supreme Court may review the findings of fact of the Court of Appeals which are in conflict with the findings of the
trial court.24 We find that the Court of Appeals’ finding that petitioner was doing business is not supported by evidence.

Furthermore, a review of the records shows that the trial court was correct in holding that the advance payment of
$500,000 was released to NMC in accordance with the conditions provided under the "red clause" Letter of Credit from
which said amount was drawn. The Head of the International Operations Department of the Bank of Philippine Islands
testified that the bank would not have paid the beneficiary if the required documents were not complete. It is a requisite
in a documentary credit transaction that the documents should conform to the terms and conditions of the letter of credit;
otherwise, the bank will not pay. The Head of the International Operations Department of the Bank of Philippine Islands
also testified that they received reimbursement from the issuing bank for the $500,000 withdrawn by NMC.25 Thus,
respondent had no legitimate reason to refuse payment under the performance and surety bonds when NMC failed to
perform its part under its contract with petitioner.

WHEREFORE , we GRANT the petition. We REVERSE the Decision dated 26 May 2005 of the Court of Appeals in CA-G.R. CV
No. 48447. We REINSTATE the Decision dated 23 November 1994 of the trial court.

SO ORDERED.