MERRILL LYNCH FUTURES, INC. VS. COURT OF APPEALS, SPOUSES PEDRO M. LARA AND ELISA G. LARA G.R. No. 97816
July 24, 1992
Merrill Lynch Futures, Inc. filed a complaint against the Spouses Pedro M. Lara and Elisa G. Lara for the recovery of a debt and interest thereon, damages, and attorney's fees. In its complaint ML FUTURES alleged the following: that it entered into a Futures Customer Agreement with the defendant spouses, in virtue of which it agreed to act as the latter's broker for the purchase and sale of futures contracts in the U.S.; that the orders to buy and sell futures contracts were transmitted to ML FUTURES by the Lara Spouses "through the facilities of Merrill Lynch Philippines, Inc., a Philippine corporation and a company servicing plaintiffs customers; the Lara Spouses "knew and were duly advised that Merrill Lynch Philippines, Inc. was not a broker in futures contracts," and that it "did not have a license from the SEC to operate as a commodity trading advisor; the Lara Spouses actively traded in futures contracts for four years; that because of a loss incurred said spouses became indebted to ML FUTURES; that the Lara Spouses refused to pay this balance, "alleging that the transactions were null and void because Merrill Lynch Philippines, Inc., had no license to operate as a 'commodity and/or financial futures broker.'" ISSUE:
Whether or not a foreign corporation has a capacity to maintain an action in the Philippines against residents thereof HELD:
The Court is satisfied that the facts on record adequately establish that ML FUTURES, operating in the United States, had indeed done business with the Lara Spouses in the Philippines over several years, had done so at all times through Merrill Lynch Philippines, Inc, a corporation organized in this country, and had executed all these transactions without ML FUTURES being licensed to so transact business here, and without MLPI being authorized to operate as a commodity...
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