Mr. Benjamin S. Santos

January 10, 1995 Mr. Benjamin S. Santos Shellfish Development and Marketing Corporation 8441 LMN Condominium Dr. A. Santos Ave.,Paraaque S i r : This refers to your letter of January 4, 1995, requesting advice on the following queries posed therein on the basis of the following facts: As stated, your corporation, Shellfish Development and Marketing Corporation entered into a Prawn Production Joint Venture Agreement with W.R. Brown and Associates, an American Company, which has no offices or other business operations here in the Philippines at the time of signing of the Agreement. They appointed Espejo and Panguluyan (EPLAW) as lawyer and auditor for the joint venture operation. Under the Agreement, your corporation has the obligation to raise Black Tiger Prawns, harvest, process, pack and export these prawns, while the American Company would provide the funds for the project. In the actual operation, the American Partner provided only for USD 94,500 instead of USD 650,000 as stipulated in the agreement but with the promise that the whole amount of initial funding will be released after the delivery of the prawns. In order to support the initial operation, your corporation borrowed locally but after you were ready to harvest, process and pack the first batch of Black Tiger Prawns, the American Partner refused to open a letter of credit that will ensure continuity of the project. In the process, as the borrowed resources were eaten up by the monthly overhead, your corporation was forced to stop its operation. Your queries are; 1. Whether W.R. Brown and Associates, an American company which has no office in the Philippines at the time of signing of the Agreement, can be sued under Philippine Laws? 2. Whether the above company has subsequently established business offices and registered with the SEC? 3. Whether EPLAW has the legal authority to represent the American Company? 4. Whether under the given circumstances, Shellfish Development and Marketing Corporation has the legal right to file a case against the American Partner? Please be advised that the Commission does not, as matter of settled policy render opinion on queries based on allegations or issues which may eventually be litigated in the future or which could only be clarified and determined in a proper proceeding, such as those presented in your letter. The opinion which may be rendered thereon would not be binding upon private parties who would in all probability, if the opinion happens to be adverse to their interest, take issue therewith, and contest it before the proper forum. For this reason, the Commission has to refrain from rendering categorical answers to the above queries so that it will not be stopped to decide the same if brought before it in a proper proceeding. However, for purposes of information only, the following are imparted. As a general rule, an unlicensed foreign corporation cannot sue or maintain suits in Philippine Courts, but it can be sued under the "Doctrine of Quasi-Estoppel By Acceptance of Benefits." It is against justice and equity for an unlicensed foreign corporation to execute contract with domestic firms and then repudiate their obligations thereunder or plead immunity to Philippine jurisdiction just because the former has not obtained license in the Philippines. Section 14 of Rule 14 of the Rules of Court of the Philippines expressly provides that service of summons may be made on any of its officers or agents in the Philippines. Be advised further that the Law or Auditing firm which represents the above foreign application in its transactions in the Philippines need not be registered with the SEC in order to have the personality to represent its clients. While the SEC allows practice of profession to be registered as a partnership, it is the individual lawyer or accountant who represents the client, not the firm, who engages the practice of profession and is responsible for his act in representing the client. As to whether or not the above-mentioned foreign corporation and law/auditing firm are registered with the SEC, you may directly verify from the Records Division of this Commission located at the ground floor of the SEC Building. That Division is authorized to issue certification on the matter. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner