FILIPINAS COMPANIA DE SEGUROS v.

MANDANAS
Facts: The Philippine Rating Bureau is a formation of non life
insurance companies in the country. It was created as a mechanism
for members to jointly fix rates, determine risks, gather information,
etc. In Art. 22 of their constitution states that: “Members of the
Bureau agree not to represent nor to effect reinsurance with, nor to
accept reinsurance from any company, body, or underwriter,
licensed to do business in the Philippines not a member in good
standing of the Bureau.” Defendant Mandanas seeks to have this
stricken down as an illegal restraint on trade.

Held: The test as to whether a given agreement constitute an

unlawful machination or a combination in restraint of trade is
whether, under the particular circumstances of the case and the
nature of the particular contract involved in it, the contract is, or is
not, unreasonable. There is nothing unlawful or contrary to public
policy either in the objectives thus sought to be attained by the
Bureau, or the means to their ends. It is very clear that the purpose
of the assailed article is to promote ethical practices, not to prevent
or eliminate competition.