La Chemise Lacoste Vs Fernandez

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La Chemise Lacoste vs Fernandez

GR L-63796-97 May 2, 198


The petitioner is a foreign corporation, organized and existing under the laws of France
and not doing business in the Philippines. Petitioner filed a case against respondent for
acts of unfair competition. Search warrants were issued by the respondent court.
However, court was later convinced that there was no probable cause to ustify the
search warrants and seized items were ordered to return to the respondent. So the main
issue in this case is whether or not the petitioner, a foreign corporation not doing
business in the Philippines can sue before Philippine courts.
!he co"rt r"#ed in a$$irmative% !n the case ofWestern Equipment and Supply Co. v.
Reyes "#$ Phil. $$#%, this &ourt held that a foreign corporation which has never done
any business in the Philippines and which is unlicensed and unregistered to do business
here, but is widely and favorably 'nown in the Philippines through the use therein of its
products bearing its corporate and tradename, has a legal right to maintain an action in
the Philippines to restrain the residents and inhabitants thereof from organizing a
corporation therein bearing the same name as the foreign corporation, when it appears
that they have personal 'nowledge of the existence of such a foreign corporation, and it
is apparent that the purpose of the proposed domestic corporation is to deal and trade in
the same goods as those of the foreign corporation.
(errill )ynch Futures !nc. vs. Hon &ourt of *ppeals
The main issue in this case is whether or not ML FUTURES is prohibited from suing in Philippine Courts
because they are doing business in the country without a license and that whether or not it is not a real party in
interest since the Lara Spouses had not been doing business with it but with another corporation Merrill Lynch
Pierce Fenner ! Smith "nc#
The Court is satisfied that the facts on record ade$uately establish that ML FUTURES operating in the United
States had indeed done business with the Lara Spouses in the Philippines o%er se%eral years had done so at all
times through Merrill Lynch Philippines "nc# &MLP"' a corporation organi(ed in this country and had e)ecuted all
these transactions without ML FUTURES being licensed to so transact business here and without MLP" being
authori(ed to operate as a commodity futures trading ad%isor#
The Court is satisfied too that the Laras did transact business with ML FUTURES through its agent corporation
organi(ed in the Philippines it being unnecessary to determine whether this domestic firm was MLP" &Merrill Lynch
Philippines "nc#' or Merrill Lynch Pierce Fenner ! Smith &MLP"*s alleged predecessor'# The fact is that ML
FUTURES did deal with futures contracts in e)changes in the United States in behalf and for the account of the
Lara Spouses and that on se%eral occasions the latter recei%ed account documents and money in connection with
those transactions#
the crucial $uestion is whether or not ML FUTURES may sue in Philippine Courts to establish and enforce its rights
against said spouses in light of the undeniable fact that it had transacted business in this country without being
licensed to do so# "n other words if it be true that during all the time that they were transacting with ML FUTURES
the Laras were fully aware of its lac+ of license to do business in the Philippines and in relation to those
transactions had made payments to and recei%ed money from it for se%eral years the $uestion is whether or not
the Lara Spouses are now estopped to impugn ML FUTURES* capacity to sue them in the courts of the forum#
The rule is that a party is estopped to challenge the personality of a corporation after ha%ing ac+nowledged the
same by entering into a contract with it# ,nd the -doctrine of estoppel to deny corporate e)istence applies to
foreign as well as to domestic corporations.- -one who has dealt with a corporation of foreign origin as a corporate
entity is estopped to deny its corporate e)istence and capacity#-

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