Case Title: Date

Case Title: Date:
TIME, Inc. v Reyes May 31, 1971

39 SCRA 303, 313; G.R. No. L-28882
Doctrine:
COMMERCIAL LAW; PRIVATE CORPORATIONS; DOCTRINE THAT FOREIGN
CORPORATION NOT LICENSED TO DO BUSINESS CANNOT MAINTAIN SUIT NOT
APPLICABLE TO CASE AT BAR. — Private respondents also invoke the ruling in Marshall-
Wells Co. vs. Elser & Co., Inc. that no foreign corporation may be permitted to maintain any suit
in the local courts unless it shall have the license required by the law, and the ruling in Atlantic
Mutual Ins. Co., Inc. vs. Cebu Stevedoring Co., Inc. that "where . . . the law denies to a foreign
corporation the right to maintain suit unless it has previously complied with a certain
requirement, then such compliance or the fact that the suing corporation is exempt therefrom,
becomes a necessary averment in the complaint." We fail to see how these doctrines can be a
propos in the case at bar, since the petitioner is not "maintaining any suit" but is merely
defending one against itself; it did not file any complaint but only a corollary defensive petition
to prohibit the lower court from further proceeding with a suit that it had no jurisdiction to
entertain.
ID.; ID.; FOREIGN CORPORATION'S FAILURE TO AVER ITS LEGAL CAPACITY TO

INSTITUTE PETITION FOR PROHIBITION NOT FATAL. — "A foreign corporation may, by
writ of prohibition, seek relief against the wrongful assumption of jurisdiction. And a foreign
corporation seeking a writ of prohibition against further maintenance of a suit, on the ground of
want of jurisdiction, is not bound by the ruling of the court in which the suit was brought, on a
motion to quash service of summons, that it has jurisdiction."
Facts:
Respondents Mayor Antonio Villegas (Villegas) and Juan Ponce Enrile (Enrile) filed a
case against petitioner Time, Inc. for alleged libel for their apparent false and malicious
accusations on its “Corruption in Asia” article in their Time Asia magazine, wherein Villegas,
the mayor of Manila, was cited as an example for corruption and nepotism, and that Enrile is the
government official that lent Villegas 30,000 pesos because he was Villegas’ compadre. Upon
motion by the Villegas, et, al., respondent Judge Andres Reyes (Reyes) granted them leave to
take the depositions of the petitioners and ordered the attachment on the real and personal estate
of Time, Inc. Time filed a motion to dismiss for lack of jurisdiction and improper venue, relying
upon the provisions of RA 4363, amending Art. 360 of the RPC. However, Judge Reyes deferred
the determination of the MTD as RA 4363 is applicable to non-resident defendants.” Also, the
respondents Villegas and Enrile voted to dismiss the petition on the ground that Time failed to
allege its capacity to sue in Philippine courts, relying on Sec. 69 of the Corporation Code which
provides: “No foreign corporation or corporations formed, organized, or existing under any laws
other than those of the Philippines shall be permitted to…maintain by itself or assignee any suit
for the recovery of any debt, claim, or demand whatever, unless it shall have the license
prescribed in the section immediately preceding…”
Issue:
1. Whether or not RA 4363 is applicable to an action against a foreign or non-resident

corporation.
2 .Whether or not the Time’s petition, being a foreign corporation, is dismissed for failure
to allege legal capacity to sue.
Ruling/Ratio:
1. YES. The assertion that a foreign corporation or a non-resident defendant is not

inconvenienced by an out-of-town suit is irrelevant and untenable, for venue and jurisdiction are
not dependent upon convenience or inconvenience to a party; and moreover, venue was fixed
under Republic Act No. 4363, pursuant to the basic policy of the law that is, as previously stated,
to protect the interest of the public service when the offended party is a public officer, by
minimizing as much as possible any interference with the discharge of his duties. Art. 360, as
amended, clearly indicates that if the offended party is a public official holding office in Manila
at the time of the commission of the offense, the case must be filed in the RTC of Manila only, in
case the libelous publication is originally published or printed outside the Philippines. Thus, the
libel case filed in RTC Rizal should be dismissed for lack of jurisdiction and improper venue.
2. NO. Sec. 69 of the Corporation Code, as well as the cited Marshall-Wells case
which provides that a foreign corporation must have a license required by law before it can
maintain any suit in the Philippines, is not applicable in the case at bar as Time was not
maintaining any suit but rather defending itself against one, that being the suit filed by Villegas
and Enrile. It did not file any complaint but only a corollary defense petition to bar the lower
court from deciding a case in which it has no jurisdiction to. Also, a foreign corporation's failure
to aver its legal capacity to institute petition for prohibition not fatal. "A foreign corporation
may, by writ of prohibition, seek relief against the wrongful assumption of jurisdiction. And a
foreign corporation seeking a writ of prohibition against further maintenance of a suit, on the
ground of want of jurisdiction, is not bound by the ruling of the court in which the suit was
brought, on a motion to quash service of summons, that it has jurisdiction." Thus, Time, even
though it is a foreign corporation, can still defend itself against the allegations brought upon by
the respondents Villegas and Enrile without needing to prove legal capacity to sue in Philippine
courts.

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TIME, Inc. v Reyes May 31, 1971

ID.; ID.; FOREIGN CORPORATION'S FAILURE TO AVER ITS LEGAL CAPACITY TO

1. Whether or not RA 4363 is applicable to an action against a foreign or non-resident

1. YES. The assertion that a foreign corporation or a non-resident defendant is not

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