April 2012 Philippine Supreme Court Decisions on Commercial Law

Here are select April 2012 rulings of the Philippine Supreme Court on commercial law:

Corporation; derivative suit. In Hi-Yield Realty, Incorporated v. Court of Appeals, the Court enumerated the requisites for filing a derivative suit, as follows:

(a)  the party bringing the suit should be a shareholder as of the time of the act or transaction complained of, the number of his shares not being material;

(b)  he has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief but the latter has failed or refused to heed his plea; and

(c)  the cause of action actually devolves on the corporation, the wrongdoing or harm having been, or being caused to the corporation and not to the particular stockholder bringing the suit. Lisam Enterprises, Inc., represented by Lolita A. Soriano and Lolita A. Soriano vs. Banco de Oro Unibank, Inc., et al., G.R. No. 143264, April 23, 2012.

Corporation; doing business without a license.  The appointment of a distributor in the Philippines is not sufficient to constitute “doing business” unless it is under the full control of the foreign corporation.  On the other hand, if the distributor is an independent entity which buys and distributes products, other than those of the foreign corporation, for its own name and its own account, the latter cannot be considered to be doing business in the Philippines.  It should be kept in mind that the determination of whether a foreign corporation is doing business in the Philippines must be judged in light of the attendant circumstances.

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