38. [G.R. No. 207039. August 14, 2019.

]
COMMISSIONER OF INTERNAL REVENUE vs. INTERPUBLIC GROUP OF COMPANIES, INC.
J.C. REYES, JR.,  J

FACTS: Interpublic Group of Companies, Inc. (IGC) is a non-resident foreign corporation duly organized and existing
under and by virtue of the laws of the State of Delaware, United States of America.
The IGC owns 2,999,998 shares or 30% of the total outstanding and voting capital stock of McCann Worldgroup
Philippines, Inc. (McCann), a domestic corporation duly organized and existing under the laws of the Philippines
engaged in the general advertising business.
The IGC filed an administrative claim for refund or issuance of tax credit certificate (TCC), representing the alleged
overpaid FWT on dividends paid by McCann to IGC. In the said administrative claim, the IGC averred that as a non-
resident foreign corporation, it may avail of the preferential FWT rate of 15% on dividends received from a
domestic corporation under Section 28 (B) (5) (b) of the Tax Code.
The IGC submitted to CIR additional documents in support of its administrative claim for refund or issuance of TCC.
The CIR failed to act on IGC's claim for refund or issuance of TCC. This prompted the IGC to file a petition for review
with the CTA.
ISSUE: Whether or not the IGC has the capacity to sue in Philippine courts. Otherwise stated, can a non-resident
foreign corporation which collects dividends from the Philippines sue here to claim tax refund?
RULING: We agree with the CTA that the issue is not one of first impression.
Section 133 of the Corporation Code provides:
SEC. 133. Doing business without a license. — No foreign corporation transacting business in the Philippines
without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or
proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or
proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized
under Philippine laws.
The aforementioned provision bars a foreign corporation "transacting business" in the Philippines without a license
access to our courts. Thus, in order for a foreign corporation to sue in Philippine courts, a license is necessary only
if it is "transacting or doing business" in the country. 5 Conversely, if an unlicensed foreign corporation is not
transacting or doing business in the Philippines, it can be permitted to bring an action even without such license.
The general rule that a foreign corporation is the same juridical entity as its branch office in the Philippines cannot
apply here. This rule is based on the premise that the business of the foreign corporation is conducted through its
branch office, following the principal-agent relationship theory. It is understood that the branch becomes its agent
here. So that when the foreign corporation transacts business in the Philippines independently of its branch, the
principal-agent relationship is set aside. The transaction becomes one of the foreign corporation, not of the
branch. Consequently, the taxpayer is the foreign corporation, not the branch or the resident foreign corporation.
Corollarily, if the business transaction is conducted through the branch office, the latter becomes the taxpayer, and
not the foreign corporation.
||| (Commissioner of Internal Revenue v. Interpublic Group of Companies, Inc., G.R. No. 207039, [August 14,
2019])
 39. FIRST LEPANTO-TAISHO INSURANCE CORPORATION VS LAVINE LOUNGEWEAR MANUFACTURING
GR No. 197219

FACTS: The issues relevant to the consolidated petitions hinges on the fire loss claims by Lavine Loungewear
Manufacturing with the Philippine Fire and Marine Insurance Corp, Rizal surety and Insurance Co. Tabacalera
Insurance Corp. and First Lepanto-Taisho Insurance Corp. in connection with its loan and mortgage contract with
Equitable Banking (now BDO Unibank).

CA held that the dismissal of the main complaint did not render the intervention ineffective. The CA set the proper
valuation of the loss assessment based on the recommendation of the Association of Philippine Adjustment
Companies (APAC). It found the insurance companies not guilty of unreasonable delay in the payment of the
proceeds which would warrant the imposition of interest twice the ceiling prescribed by the Monetary Board.
Instead, the CA fixed the insurance companies’ interest liability at six percent (6%) under Article 2209 of the Civil
Code and ordered the remand of the case to the trial court to determine the correct amount of the loan.

ISSUE: Whether or not insurance companies are liable under Article 2209 of the Civil Code

RULING: Yes. The insurance companies are liable under Article 2209 of the Civil Code. PFMIC, RSIC, and First
Lepanto assert in common the improper imposition of any interest payments over their respective obligations.
They argued that the CA’s finding of the absence of delay in the release of the insurance proceeds ran counter to
any charge of interest. The Insurance companies’ refusal to pay the claim was due to the intra-corporate dispute
among the board of directors of Lavine and the conflicting claims to the insurance proceeds. While their
explanation satisfactorily negated the conclusion that their refusal to pay was done unjustifiably so as to warrant
the application of Sections 243 and 244 of the Insurance Code, the same was not sufficient to free them from any
liability under their respective policies.
 40. [G.R. No. 210906. October 16, 2019.]
AGO REALTY & DEVELOPMENT CORPORATION (ARDC) vs. DR. ANGELITA F. AGO
A.B. REYES, JR., J  p:
FACTS: Ago Realty & Development Corporation (ARDC) is a close corporation. Its stockholders are petitioner
Emmanuel F. Ago; his wife Corazon; their children, Emmanuel, et al; and Emmanuel's sister, Angelita.
This controversy arose when Angelita introduced improvements on Lot No. H-3, titled in the name of ARDC,
without the proper resolution from the corporation's Board of Directors. The improvements also encroached
on Lot No. H-1 and Lot No. H-2, which also belonged to ARDC. 
ARDC and Emmanuel, et al., filed a complaint before the Legazpi City Regional Trial Court (RTC). They
essentially alleged that Angelita, in connivance with Teresita P. Apin (Teresita), Maribel Amaro (Maribel), and
certain local officials of Legazpi City, introduced unauthorized improvements on corporate property. For her
part, Teresita was accused of operating a restaurant named "Kicks Resto Bar" in the improvements, while
Maribel was impleaded as Angelita's employee. On the other hand, the local officials were impleaded as
defendants since they were responsible for issuing the permits relative to the improvements introduced by
Angelita and the business concerns thereon. Teresita denied all the material allegations and averred that her
restaurant was operating not on Lot No. H-3, as stated in the complaint, but on Lot No. 1-B, which is not
ARDC's property.
The RTC gave consideration to the undisputed fact that the properties in litigation belonged to ARDC,
concluding that Emmanuel, et al., in their individual capacities, were not the real parties in interest. The
appellate court held that the case partook of the nature of a derivative suit. As such, Emmanuel, et al.,
needed the imprimatur of ARDC's Board of Directors to institute the action.
ISSUE: Whether or not Emmanuel, et al., may sue on behalf of ARDC absent a resolution or any other grant of
authority from its Board of Directors sanctioning the institution of the case. 
RULING: One of the powers expressly granted by law to corporations is the power to sue.  As with other
corporate powers, the power to sue is lodged in the board of directors, acting as a collegial body. 
As an exception, jurisprudence has recognized certain instances when minority stockholders may bring suits
on behalf of corporations. Where the board of directors itself is a party to the wrong, either because it is the
author thereof or because it refuses to take remedial action, equity permits individual stockholders to seek
redress. 
A board resolution is not needed for the institution of a derivative suit. Since the board is guilty of breaching
the trust reposed in it by the stockholders, it is but logical to dispense with the requirement of obtaining from
its authority to institute the case and to sign the certification against forum shopping. Thus, the institution of a
derivative suit need not be preceded by a board resolution.
||| (Ago Realty & Development Corp. v. Ago, G.R. Nos. 210906 & 211203, [October 16, 2019])
 41. [G.R. No. 222955. October 16, 2019.]
PEOPLE OF THE PHILIPPINES vs. INDUSTRIAL INSURANCE COMPANY, INC
INTING, J  p:
FACTS: IICI, a non-life insurance company, alleged that it executed a General Agency Agreement (GAA) with FGE
Insurance Management (FGE), a single proprietorship owned by Feliciano Enriquez (Enriquez), whereby it
designated FGE as its general agent for the solicitation of non-life insurance including bonds. 5 Thereafter, through
its Board of Directors, IICI also appointed Enriquez as its Operations Manager for Judicial Bonds — Criminal Cases
with authority to issue bonds in criminal cases up to the maximum amount of P100,000.00.
IICI revoked Enriquez's authority after discovering that Enriquez had not been remitting proper premiums or giving
a full and written accounting of all his bail bond transactions with the courts or furnishing copies of IICI bail bonds
that he filed in court, including the bail bond of the accused. The Court Administrator and the Sandiganbayan were
then notified of the revocation of Enriquez's authority.
For failure of the accused to appear at the hearing on May 31, 2010, Judge Fonacier issued an Order declaring the
subject bond forfeited in favor of the Government and directing IICI to produce the accused in court 30 days from
receipt of the Order and to show cause why judgment should not be rendered against the bond. For failure of IICI
to do so and considering the manifestation of the accused's counsel that the accused had already gone abroad, the
RTC issued its Order giving IICI a period of 30 days from receipt of the Order to show cause as to why judgment
should not be rendered against the bond.
RTC issued an Order 15 denying the motion to lift and recall forfeiture order and directing the issuance of a writ of
execution against the bail bond. IICI filed a motion for reconsideration, but this was denied by Judge Fonacier.
Thus, IICI filed a petition for certiorari before the CA. 
CA granted the petition. Petitioner filed a motion for reconsideration of the CA Decision, but this was denied.
Hence, the instant petition.
ISSUE: Whether or not the bail bond was void because it was issued in violation of Sections 226 and 361 of the
Insurance Code\
RULING: The Court grants the petition.
Here, the Court finds that IICI is estopped from assailing the vailidity of the bail bond. By IICI's silence and failure
to notify the RTC despite repeated notice as to the existence of the bail bond in favor of the accused, Judge
Fonacier was made to believe that Enriquez' act of issuing the bail bond was authorized by IICI. Had IICI been
diligent in informing the court and moving for the cancellation of the bail bond after knowledge of its existence,
the RTC could have cancelled it. Further, the RTC could have prevented the accused from fleeing from the trial of
her case.
||| (People v. Industrial Insurance Co., Inc., G.R. No. 222955 (Resolution), [October 16, 2019])