Philippine Products Company vs Primateria Societe Anonyme Pour Le Commerce Exterieur

written by Howard

G.R. No. L-17160 – 122 Phil. 698 – 15 SCRA 301 – Mercantile Law – Corporation Law – Liability of Foreign Corporations and their Agents 

Primateria Societe Anonyme Pour Le Commerce Exterieur (Primateria Zurich, a sociedad anonima formed in Zurich), through Alexander Baylin, entered into an agreement with Philippine Products Company (PPC) whereby it was agreed that from 1951 to 1953, PPC shall ship copra products abroad.

Apparently, Primateria Zurich was not licensed by the Securities and Exchange Commission to do business in the Philippines. Primateria Zurich also failed to pay its obligations amounting to P31,. PPC sued Primateria Zurich and it impleaded Baylin, Primateria Philippines, and one Jose Crame, the latter three being impleaded as agents of Primateria Zurich.

The lower court ruled in favor PPC but it absolved Baylin, Crame, and Primateria Philippines.

PPC appealed as it insists that Baylin et al should be liable as agents because under Section 68 and 69 of the Corporation Law, the agents of foreign corporations not licensed to transact in the Philippines  shall be personally liable for contracts made in their (foreign corporation’s) behalf.

ISSUE: Whether or not PPC is correct.

HELD: No. PPC was not able to prove that Primateria Zurich, a sociedad anonima, is a foreign corporation. And as a sociedad anonima, Primateria Zurich is not a corporation under our Corporation Law. As such, Sections 68 and 69 cannot be invoked in order to make the alleged agents of Primateria Zurich be liable. PPC will have to enforce the judgment against Primateria Zurich alone.

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