001 Hilton v.

Guyot
[159 U.S. 113; June 3, 1895]
TOPIC: Conflict Rules
PONENTE:

AUTHOR: RC
NOTES:
A citizen & resident of US who has a principal place of
business in US but has an agent in France and is accustomed
to purchase and store large quantities of goods there and in a
suit brought against him by a citizen and in a court of that
country, appears and defends with the sole object of
preventing his property within said jurisdiction (but not in
the custody of that court) from being taken in satisfaction of
any judgment that may be recovered against him.
** There are still justly due and owing from the defendants
to the plaintiffs upon the said judgments amounting to
1,008,783 francs equivalent to $195,122.47.

FACTS:
1. It was admitted that for several years prior to 1876, the firm of Alexander T. Stewart & Co., composed of Stewart and
Libbey, conducted their business as merchants in the City of NY, with branches in other cities of America and Europe; that
both partners were citizens and residents of NY. And that Stewart died, and Hilton and Libbey formed a partnership to
continue the business under the same firm name, and became the owners of all the property and rights of the old firm.
2. The first of the 2 cases was an action at law in the Circuit Court of the US for the Southern District of NY by Gustave
Bertin Guyot, as official liquidator of the firm of Charles Fortin & Co., and by the surviving members of that firm, all
aliens and citizens of the Republic of France, against Henry Hilton and William Libbey, citizens of the US and of the State
of NY and trading as copartners in the cities of NY and Paris and elsewhere under the firm name of A. T. Stewart & Co.
3. The action was upon a judgment recovered in a French court at Paris, in the Republic of France, by the firm of Charles
Fortin & Co., all French citizens, against Hilton & Libbey, as copartners, and citizens of the US and of NY.
4. The complaint alleged that in 1886 and since, during the time of all the transactions included in the judgment sued on,
Hilton and Libbey, as successors to Alexander T. Stewart and Libbey, under the firm name of A. T. Stewart & Co., carried
on a general business as merchants in the Cities of NY and Paris and elsewhere, and maintained a regular store and place
of business at Paris; that during the same time, Charles Fortin & Co. carried on the manufacture and sale of gloves at Paris,
and the 2 firms had large dealings and controversies arose in the adjustment of accounts between them.
5. The complaint further alleged that 5 suits were brought by Fortin & Co. against Stewart & Co. for sums alleged to be
due and 3 suits by Stewart & Co. against Fortin & Co., in the Tribunal of Commerce of the Department of the Seine, a
judicial tribunal or court organized and existing under the laws of France, sitting at Paris and having jurisdiction of suits
and controversies between merchants or traders growing out of commercial dealings between them; that Stewart & Co.
appeared by their authorized attorneys in all those suits, and that, after full hearing before an arbitrator appointed by that
court and before the court itself, and after all the suits had been consolidated by the court, final judgment was rendered.
(Ordered that Fortin & Co. recover of Stewart & Co. various sums, arising out of the dealings between them, amounting to
660,847 francs with interest and dismissed part of Fortin & Co.'s claim.)
6. The complaint also alleged that appeals were taken by both parties to the CA of Paris (Dismissed appeal).
7. The defendants, in their answer, set forth in detail the original contracts and transactions in France between the parties
and the subsequent dealings between them modifying those contracts, and alleged that the plaintiffs had no just claim
against the defendants, but that, on the contrary, the defendants, upon a just settlement of the accounts, were entitled to
recover large sums from the plaintiffs.
8. The answer admitted the proceedings and judgments in the French courts and that the defendants gave up their business
in France before the judgment on appeal. They had no property within the jurisdiction of France to which the judgment
could be collected.
9. The answer alleged the ff.:
that they were then residents and citizens of the State of NY, and neither of them at that time, or within 4 years
before, had been within, or resident or domiciled within, the jurisdiction of that tribunal or owed any allegiance to
France, but that they were the owners of property situated in that country which would by the law of France have
been liable to seizure if they did not appear in that tribunal, and that they unwillingly, and solely for the purpose
of protecting their property, authorized and caused an agent to appear for them in the proceedings;
that pending the litigation, the defendants discovered gross frauds in the accounts of Fourtin & Co.;
that the arbitrator and tribunal declined to compel Fortin & Co. to produce their books and papers for inspection;
that there was not a full and fair trial of the controversies before the arbitrator;

that no witness was sworn or affirmed;

that the arbitrator was deceived and misled by the false and fraudulent accounts introduced by Fortin & Co. and
by the hearsay testimony given, without the solemnity of an oath and without cross-examination, and by the
fraudulent suppression of the books and papers; and
that Fortin & Co. made up their statements and accounts falsely and fraudulently, and with intent to deceive the
defendants and the arbitrator and the said courts of France.
10. The laws of France provides: "That the construction given to said statutes by the judicial tribunals of France is such
that no comity is displayed towards the judgments of tribunals of foreign countries against the citizens of France, when
sued upon in said courts of France, and the merits of the controversies upon which the said judgments are based are
examined anew, unless a treaty to the contrary effect exists between the said Republic of France and the country in which
such judgment is obtained. That no treaty exists between the said Republic of France and the United States, by the terms or
effect of which the judgments of either country are prevented from being examined anew upon the merits, when sued upon
in the courts of the country other than that in which it is obtained. That the tribunals of the Republic of France give no
force and effect, within the jurisdiction of the said country, to the duly rendered judgments of courts of competent
jurisdiction of the United States against citizens of France, after proper personal service of the process of said courts is
made thereon in this country."
11. The defendants filed a bill in equity against the plaintiffs setting forth the same matters as in their answer to the action
and prayed for a discovery and for an injunction against the prosecution of the action. (Bill was dismissed.)
12. From the decree dismissing the bill, an appeal was taken which is the second case now before this Court.
ISSUE:
Whether or not a judgment for a sum of money, rendered by a court of a foreign country, having jurisdiction of the cause
and of the parties, in a suit brought by one of its citizens against an American is conclusive upon US courts.
HELD:
No, it is prima facie evidence only, and not conclusive of the merits of the claim in an action brought here upon the
judgment if by the law of the foreign country, as in France, judgments of our own courts are not recognized as conclusive.
RATIO:
1. International law, in its widest and most comprehensive sense -- including not only questions of right between nations,
governed by what has been appropriately called the "law of nations," but also questions arising under what is usually called
"private international law," or the "conflict of laws," and concerning the rights of persons within the territory and dominion
of one nation by reason of acts, private or public, done within the dominions of another nation -- is part of our law, and
must be ascertained and administered by the courts of justice as often as such questions are presented in litigation between
man and man, duly submitted to their determination.
2. The most certain guide for the decision of such questions is a treaty or a statute of this country. But when there is no
written law upon the subject, the duty still rests upon the judicial tribunals for ascertaining and declaring what the law is,
whenever it becomes necessary to do so in order to determine the rights of parties to suits regularly brought before them.
3. No law has any effect beyond the limits of the sovereignty from which its authority is derived. The extent to which the
law of one nation, as put in force within its territory, whether by executive order, legislative act, or judicial decree shall be
allowed to operate within the dominion of another nation depends upon what our greatest jurists have been content to call
"the comity of nations."
4. "Comity," in the legal sense, is neither a matter of absolute obligation nor of mere courtesy and goodwill. It is the
recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another
nation, having due regard both to international duty and convenience and to the rights of its own citizens or of
other persons was are under the protection of its laws.
5. Mr. Justice Story: XXX Every nation must be the final judge for itself not only of the nature and extent of the duty, but
of the occasions on which its exercise may be justly demanded."
6. Chief Justice Taney: "XXX The comity thus extended to other nations is no impeachment of sovereignty. It is the
voluntary act of the nation by which it is offered, and is inadmissible when contrary to its policy, or prejudicial to its
interests. But it contributes so largely to promote justice between individuals and to produce a friendly intercourse between
the sovereignties to which they belong, that courts of justice have continually acted upon it as a part of the voluntary law of
nations. . . . It is not the comity of the courts, but the comity of the nation, which is administered and ascertained in the
same way, and guided by the same reasoning, by which all other principles of municipal law are ascertained and guided."
7. Mr. Wheaton: "All the effect which foreign laws can have in the territory of a state depends absolutely on the express or
tacit consent of that stateXXX but their application is admitted only from considerations of utility and the mutual
convenience of states, ex commitate, ob reciprocam utilitatem."
8. Wheaton's International Law: "No sovereign is bound, unless by special compact, to execute within his dominions a
judgment rendered by the tribunals of another state, and if execution be sought by suit upon the judgment or otherwise, the

tribunal in which the suit is brought, or from which execution is sought, is on principle at liberty to examine into the merits
of such judgment, and to give effect to it or not, as may be found just and equitable. The general comity, utility, and
convenience of nations have, however, established a usage among most civilized states by which the final judgments of
foreign courts of competent jurisdiction are reciprocally carried into execution, under certain regulations and restrictions,
which differ in different countries."
9. Chancellor Kent: "The effect to be given to foreign judgments is altogether a matter of comity in cases where it is not
regulated by treaty."
10. Every foreign judgment, of whatever nature, in order to be entitled to any effect, must have been rendered by a court
having jurisdiction of the cause, and upon regular proceedings, and due notice. In alluding to different kinds of judgments,
therefore, such jurisdiction, proceedings, and notice will be assumed. It will also be assumed that they are untainted by
fraud, the effect of which will be considered later.
11. A judgment in rem, adjudicating the title to a ship or other movable property within the custody of the court, is treated
as valid everywhere. As said by Chief Justice Marshall:"The sentence of a competent court proceeding in rem is conclusive
with respect to the thing itself, and operates as an absolute change of the property. By such sentence, the right of the
former owner is lost and a complete title given to the person who claims under the decree. No court of coordinate
jurisdiction can examine the sentence. The question, therefore, respecting its conformity to general or municipal law can
never arise, for no coordinate tribunal is capable of making the inquiry."
12. A judgment affecting the status of persons, such as a decree confirming or dissolving a marriage, is recognized as valid
in every country unless contrary to the policy of its own law.
13. Other judgments, not strictly in rem, under which a person has been compelled to pay money, are so far conclusive that
the justice of the payment cannot be impeached in another country, so as to compel him to pay it again. For instance, a
judgment in foreign attachment is conclusive, as between the parties, of the right to the property or money attached.
14. The extraterritorial effect of judgments in personam at law or in equity may differ according to the parties to the cause.
A judgment of that kind between two citizens or residents of the country, and subject to the jurisdiction in which it is
rendered, may be held conclusive as between them everywhere. So if a foreigner invokes the jurisdiction by bringing an
action against a citizen, both may be held bound by a judgment in favor of either, and if a citizen sues a foreigner and
judgment is rendered in favor of the latter, both may be held equally bound.
CASE LAW/ DOCTRINE:

AUTHOR: JANNA
002 SAUDI ARABIAN AIRLINES v. CA, Milagros P. Morada and
Hon. Rodolfo A. Ortiz (RTC QC)
G.R. No. 122191. October 8, 1998
TOPIC: Conflicts of Rules Preliminary Question
PONENTE: Quisumbing
FACTS:
1. Jan. 21, 1988: SAUDIA hired MILAGROS as a flight attendant for its airlines based in Jeddah, Saudi Arabia.
2. April 27, 1990: While on a lay-over in Jakarta, Indonesia, MILAGROS went to a disco dance with fellow crew
members, Thamer Al-Gazzawi (THAMER) and Allah Al-Gazzawi (ALLAH), both Saudi nationals. It was almost morning
when they returned to their hotels, so the three agreed to have breakfast in THAMERs room. After they got to
THAMERs room, ALLAH left on some pretext, and shortly after, THAMER attempted to rape MILAGROS.
3. Fortunately, a roomboy and several security personal heard her cries for help and rescued her. Indonesian police
arrested THAMER and ALLAH, with the latter as an accomplice.
4. MILAGROS returned to Jeddah a few days later and was interrogated by several SAUDIA officials, who then requested
her to return to Jakarta and help arrange for the release of THAMER and ALLAH. MILAGROS refused to cooperate, so
the negotiations for the release of THAMER and ALLAH by SAUDIA Legal Officer Sirah Akkad and base manager
Baharini with the Indonesian police did not succeed.
MILAGROS refusal was due to fears that she might be tricked into something she did not want because of her inability to
understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect.
6. Eventually, SAUDIA allowed MILAGROS to return to Jeddah but barred her from the Jakarta flights.
10. MILAGROS learned that Indonesian authorities agreed to deport THAMER and ALLAH after two weeks of detention,
through the Saudi Arabian governments intercession. Eventually, the two were again put in service by SAUDIA.
7. In Sep. 1990, SAUDIA transferred MILAGROS to Manila. On Jan. 14, 1992, just when MILAGROS thought that the
Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy (MENIEWY), Chief Legal
Officer of SAUDIA, in Jeddah, Saudi Arabia. When MILAGROS met up with MENIEWY, he brought her to the police
station where the police took her passport and questioned her about the Jakarta incident.
8. MINIEWY simply stood by as the police pressured MILAGROS to make a statement dropping the case. Only after
she agreed, did the police return her passport and allowed her to catch the afternoon flight out of Jeddah.
9. June 16, 1993: Minutes before departure of a flight to Manila from Riyadh, MILAGROS was not allowed to board the
plane, and was ordered to take a later flight to Jeddah to see MINIEWY.
10. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a
document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah.
11. As it turned out, MILAGROS signed a notice to her to appear before the court on June 27, 1993.
12. MILAGROS returned to Manila, and shortly after, she was summoned by SAUDIA to report to Jeddah once again to
see MINIEWY on June 27, 1993 for further investigation.SAUDIAs Manila manager, Aslam Saleemi assured her that
the investigation was routinary and that it posed no danger to her.
13. June 27, 1993: MILAGROS was brought to the same Saudi court by a SAUDIA officer. The next day, she was
interrogated by a Saudi judge through an interpreter about the Jakarta incident, and was let go after an hour.
14. MILAGROS was forbidden to take her flight by a SAUDIA officer, just as her plane was about to take off.
15. MILAGROS passport was taken away by the secretary of Mr. Yahya Saddick, at the Inflight Service Office, where
she was told to go, and she was told to remain in Jeddah, at the crew quarters, until further orders.
16. July 3, 1993: a SAUDIA legal officer escorted MILAGROS to Court, where was sentenced, translated to her in
English, to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta.
17. The court found MILAGROS guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in
violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition.
SAUDIA refused any assistance to MILAGROS, so she asked the Philippine Embassy to help her while her case is on
appeal. She worked on the domestic flights for her upkeep. Thamer & Allah continued to serve in the international flights.
18. The Prince of Makkah dismissed the case against MILAGROS because of wrongful conviction, and allowed her to
leave Saudi Arabia, but shortly before her return to Manila, she was dismissed by SAUDIA without being informed why.
19. MILAGROS filed a Complaint for damages against SAUDIA and and Khaled AL-BALAWI, its country manager.
20. SAUDIA filed to dismiss, stating lack of jurisdiction. MILAGROS opposed, then filed an Amended Complaint
dropping case against AL-BALAWI. Motion to dismiss was denied. MR was denied.
21. CA denied SAUDIAs Pet. for Issuance of a Writ of Preliminary Injuction. SAUDIA filed Petition for review at SC.
22. While pending, CA ruled: (1) PH is an appropriate forum considering that the Amended Complaints basis for recovery
of damages is Article 21 of the Civil Code; (2) certiorari is not the proper remedy in a denial of a Motion to Dismiss.
petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal, was rendered.

ISSUE(S): (1) Whether CA erred in holding that RTC of QC has jurisdiction to try and hear Civil Case No. Q-93-18394
Milagros Morada v. Saudi Arabian Airlines; (2) Whether CA erred in Ruling that Philippine Law should govern;
(Whether the case presents a conflict of rules: YES)
SAUDIAs contention: There is a conflict of laws that must be settled at the outset. MILAGROS claim for alleged abuse
of rights occurred in the Kingdom of Saudi Arabia, thus the the existence of a foreign element qualifies the instant case for
the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.
MILAGROS MORADAs contention: Since her Amended Complaint is based on Art. 19 and 21 of the Civil Code, then
the instant case is properly a matter of domestic law.
HELD: YES; NO; YES. WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-9318394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby REMANDED to Regional Trial Court of Quezon
City, Branch 89 for further proceedings.
RATIO:
1.Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner
that the problem herein could present a conflicts case. A factual situation that cuts across territorial lines and is affected
by the diverse laws of two or more states is said to contain a foreign element. The presence of a foreign element is
inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of
their birth or conception. The forms in which this foreign element may appear are many. The foreign element may simply
consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between
nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a
complex form.
In the case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and
that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner
Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly
from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise.
2. We thus find private respondents (MILAGROS MORADAs) assertion that the case is purely domestic,
imprecise. A conflicts problem presents itself here, and the question of jurisdiction[43] confronts the court a quo.
3. After a careful study of the private respondents Amended Complaint,[44] and the Comment thereon, we note that she
aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code.
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice give everyone his due and
observe honesty and good faith.
Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,[45] this Court held that:
The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondents
assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.

4. Based on the allegations[46] in the Amended Complaint, read in the light of the Rules of Court on jurisdiction[47] we find
that the Regional Trial Court (RTC) of Quezon City possesses jurisdiction over the subject matter of the suit.
5. Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it
refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would
have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines no unnecessary
difficulties and inconvenience have been shown by either of the parties. The choice of forum of the plaintiff (now private
respondent) should be upheld. Similarly, the trial court also possesses jurisdiction over the persons of the parties
herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntary submitted
herself to the jurisdiction of the court.

6. The records show that petitioner SAUDIA has filed several motions[50] praying for the dismissal of Moradas Amended
Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam dated February 20, 1995. What is very patent and
explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner
SAUDIA has effectively submitted to the trial courts jurisdiction by praying for the dismissal of the Amended
Complaint on grounds other than lack of jurisdiction. Clearly, petitioner had submitted to the jurisdiction of the Regional
Trial Court of Quezon City. Thus, we find that the trial court has jurisdiction over the case and that its exercise thereof,
justified.
7. As to the choice of applicable law, we note that choice-of-law problems seek to answer two important
questions: (1) What legal system should control a given situation where some of the significant facts occurred in two
or more states; and (2) to what extent should the chosen legal system regulate the situation.
Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as
characterization, or the doctrine of qualification. It is the process of deciding whether or not the facts relate to the kind of question specified in a
conflicts rule.[55] The purpose of characterization is to enable the forum to select the proper law. Our starting point of analysis here is not a legal
relation, but a factual situation, event, or operative fact.[57] An essential element of conflict rules is the indication of a test or connecting factor or
point of contact. Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or
point of contact, such as thesitus of the res, the place of celebration, the place of performance, or the place of wrongdoing.
8. Note that

one or more circumstances may be present to serve as the possible test for the determination of the
applicable law. [59] These test factors or points of contact or connecting factors could be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real
rights are involved;
(4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage
celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power
of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done. The lex forithe law of the forumis particularly
important because, as we have seen earlier, matters of procedure not going to the substance of the claim involved are governed by it;
and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case
for the reason that it falls under one of the exceptions to the applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as
such. It also covers contractual relationships particularly contracts of affreightment.[60] (Underscoring ours.)

9.After a careful study of the pleadings on record, we are convinced that there is reasonable basis for private
respondents assertion that although she was already working in Manila, petitioner brought her to Jeddah on the
pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew
members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial
for very serious charges, including adultery and violation of Islamic laws and tradition. There is likewise logical basis
on record for the claim that the handing over or turning over of the person of private respondent to Jeddah
officials, petitioner may have acted beyond its duties as employer. Petitioners purported act contributed to and
amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner
thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the guise of petitioners
authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the
Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the
injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to
provide compensation or redress for the wrongs done, once duly proven.
10. Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact
could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious
conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a
Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of
its rights and in the performance of its duties, act with justice, give her her due and observe honesty and good
faith. Instead, petitioner failed to protect her, she claimed.

11. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view
what is important here is the place where the over-all harm or the fatality of the alleged injury to the person,
reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort.
12. As already discussed, there is basis for the claim that over-all injury occurred and lodged in the
Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner,
a resident foreign corporation engaged here in the business of international air carriage. Thus, the relationship between
the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From
the record, the claim that the Philippines has the most significant contact with the matter in this dispute,[63] raised by
private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established.
13. Prescinding from this premise that the Philippines is the situs of the tort complaint of and the place having the
most interest in the problem, we find, by way of recapitulation, that the Philippine law on tort liability should have
paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the
respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint; the
appropriate venue is in Quezon City, which could properly apply Philippine law.
14. Moreover, we find untenable petitioners insistence that [s]ince private respondent instituted this suit, she has the
burden of pleading and proving the applicable Saudi law on the matter.[64] As aptly said by private respondent, she has
no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on
Articles 19 and 21 of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings she
never alleged that Saudi law should govern this case.[65] And as correctly held by the respondent appellate court,
considering that it was the petitioner who was invoking the applicability of the law of Saudi Arabia, thus the
burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is.[66]
15. Lastly, no error could be imputed to the respondent appellate court in upholding the trial courts denial of defendants
(herein petitioners) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal
after trial was obviously available, and the expeditious trial itself indicated by the nature of the case at hand. Indubitably,
the Philippines is the state intimately concerned with the ultimate outcome of the case below not just for the benefit
of all the litigants, but also for the vindication of the countrys system of law and justice in a transnational
setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant
Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should
be construed as prejudging the results of the case in any manner whatsoever.
CASE LAW/ DOCTRINE:
> Where the factual antecedents satisfactorily establish the existence of a foreign element, [] the problem herein
could present a conflicts case. A factual situation that cuts across territorial lines and is affected by the diverse laws of
two or more states is said to contain a foreign element. The presence of a foreign element is inevitable since social and
economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception.
The forms in which this foreign element may appear are many. The foreign element may simply consist in the fact that one
of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves
properties situated in another State. In other cases, the foreign element may assume a complex form.
>test factors or points of contact or connecting factors for determining applicable law:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin; (2) the seat of a legal or juridical person, such as a
corporation; (3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real
rights are involved; (4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage
celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is
to be exercised; (6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done. The lex forithe law of the forumis particularly important
because, as we have seen earlier, matters of procedure not going to the substance of the claim involved are governed by it; and because the lex
fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under
one of the exceptions to the applications of foreign law; and (8) the flag of a ship, which in many cases is decisive of practically all legal relationships
of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.

Filipino at time of wedding

American at time of divorce

03 PAULA T. LLORENTE, petitioner, vs. COURT OF

Foreign laws do not prove themselves in our
APPEALS and ALICIA F. LLORENTE, respondents.
G.R. No. 124371, 23 November 2000
jurisdiction and our courts are not authorized to
TOPIC: Conflict of Laws
take judicial notice of them. Like any other fact, they
Ponente: Pardo, J.
must be alleged and proved.
FACTS:
1. Lorenzo Llorente (deceased) and petitioner Paula Llorente got married in 1937 in Nabua, Cam Sur.
2. Lorenzo was an enlisted serviceman of the US Navy from 1927-1957.
3. In 1943, he became a US Citizen. When he returned to visit his wife, he discovered that Paula was pregnant and was
living in and having an adulterous relationship with his brother, Ceferino Llorente.
4. Lorenzo refused to forgive and live with Paula so they made a written agreement to the effect that (1) all the family
allowances allotted by the United States Navy as part of Lorenzos salary and all other obligations for Paulas daily
maintenance and support would be suspended; (2) they would dissolve their marital union in accordance with judicial
proceedings; (3) they would make a separate agreement regarding their conjugal property acquired during their marital life;
and (4) Lorenzo would not prosecute Paula for her adulterous act since she voluntarily admitted her fault and agreed to
separate from Lorenzo peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paulas
father and stepmother. A notary public notarized the agreement.
5. Lorenzo then filed a divorce in California, which later on became final (1952).
6. He returned to the Phil. and in 1958, he married Alicia and they lived together for 25 years. They had 3 children.
7. In 1981, he made his last will and testament stating that all his properties will be given to Alicia and their three children.
He filed a petition for the probate and allowance of his last will and testament, wherein he moved that Alicia be appointed
Special Administratrix of his estate. This motion was denied by the court for the reason that Lorenzo was still alive.
8. The trial court then admitted the will to probate. But before the proceeding could be terminated, Lorenzo died.
9. Paula (1st wife) then filed a letter of administration over Llorentes estate in her favor. She contended (1) that she was
Lorenzos surviving spouse, (2) that the various property were acquired during their marriage, (3) that Lorenzos will
disposed of all his property in favor of Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal
property.
10. Alicia (2nd wife) filed in the testate proceeding a petition for the issuance of letters testamentary. But without
terminating the testate proceedings, the trial court gave due course to Paulas petition.
11. The trial court ruled that the divorce was void and inapplicable in the Philippines; therefore Lorenzo and Alicias
marriage is likewise void. It further ruled that Alicia is not entitled to receive any share from the estate even if the will
especially said so having gained the status of paramour. The court declared that Paula is entitled as conjugal partner to onehalf of their conjugal properties, and as primary compulsory heir, to one-third of the estate; and then one-third should go to
the illegitimate children.
12. On appeal by Alicia, the CA ruled that Alicia is a co-owner of whatever properties she and the deceased may have
acquired during the 25 years of cohabitation.
ISSUES: 1. Who are entitled to inherit from the late Lorenzo N. Llorente?
2. In relation to the topic: Which law shall apply? Foreign/National law or Philippine law?
HELD: 1. We do not agree with the decision of the Court of Appeals. We remand the case to the trial court for ruling on
the intrinsic validity of the will of the deceased.
2. The foreign law applies. The Civil Code provides that intestate and testamentary succession, both with respect to the
order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall
be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of
the property and regardless of the country wherein said property may be found. In this case, Lorenzo was an American
citizen.
RATIO:
1. The applicable law: FOREIGN LAW
Lorenzo N. Llorente became an American citizen long before and at the time of: (1) his divorce from Paula; (2)
marriage to Alicia; (3) execution of his will; and (4) death.
Thus, as a rule, issues arising from these incidents are necessarily governed by foreign law.
The Civil Code clearly provides:
Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding

upon citizens of the Philippines, even though living abroad.

Art. 16. Real property as well as personal property is subject to the law of the country where it is situated.
However, intestate and testamentary succession, both with respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the
person whose succession is under consideration, whatever may be the nature of the property and regardless of the country
wherein said property may be found. (emphasis ours)
True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial
notice of them. Like any other fact, they must be alleged and proved.
While the substance of the foreign law was pleaded, the Court of Appeals did not admit the foreign law. The Court of
Appeals and the trial court called to the fore the renvoi doctrine, where the case was referred back to the law of the
decedents domicile, in this case, Philippine law.
We note that while the trial court stated that the law of New York was not sufficiently proven, in the same breath it
made the categorical, albeit equally unproven statement that American law follows the domiciliary theory hence,
Philippine law applies when determining the validity of Lorenzos will.
First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot
possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the
United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can
therefore refer to no other than the law of the State of which the decedent was a resident. Second, there is no showing that
the application of the renvoi doctrine is called for or required by New York State law.
2. Other matters discussed: Validity of the Foreign Divorce and Validity of the Will:
Owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the
policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. In the
same case, the Court ruled that aliens may obtain divorces abroad, provided they are valid according to their national law.
We hold that the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid and recognized in this
jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the decedent) are
matters best left to the determination of the trial court.

Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the
country in which they are executed.
When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a
foreign country, the solemnities established by Philippine laws shall be observed in their execution. (underscoring ours)
The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the
will he executed. We do not wish to frustrate his wishes, since he was a foreigner, not covered by our laws on family
rights and duties, status, condition and legal capacity.
Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law which
must be pleaded and proved. Whether the will was executed in accordance with the formalities required is answered by
referring to Philippine law. In fact, the will was duly probated.

AUTHOR:
004 LWV Construction v. Dupo
NOTES:
G.R. No. 172342
TOPIC:
PONENTE: Quisimbing, J.
FACTS:
1. LWV Construction (petitioner), a domestic corporation which recruits Filipino workers, hired Marcelo Dupo
(respondent) as Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil
Group/Establishment (MMG).
2. On February 26, 1992, respondent signed his first overseas employment contract, renewable after one year.
2.1 The employment contract was renewed 5 times and the contracts were for a period of 1 year.
2.2 The sixth and last contract stated that respondents employment starts upon reporting to work and ends when he
leaves the work site.
2.3 He left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May 1, 1999.
3. On May 28, 1999, respondent informed MMG, through the petitioner, that he needs to extend his vacation because
his son was hospitalized. He also sought a promotion with salary adjustment.
4. Reply of MMG: his promotion is subject to managements review; that his services are still needed; that he was
issued a plane ticket for his return flight to Saudi Arabia on May 31, 1999; and that his decision regarding his
employment must be made within seven days, otherwise, MMG will be compelled to cancel [his] slot.
5. On July 6, 1999, respondent resigned.
5.1 He sent a letter to MMG claiming that he is entitled for a long service award for his more than 7 years of
service.
5.2 Basis: Saudi Labor Law: that an employee who rendered at least five (5) years in a company within the
jurisdiction of Saudi Arabia, is entitled to the so-called long service award which is known to others as
longevity pay of at least one half month pay for every year of service. In excess of five years an employee is
entitled to one month pay for every year of service. In both cases inclusive of all benefits and allowances.
6. However, MMG did not respond to respondents claim.
7. Hence, respondent filed a complaint for payment of service award against petitioner.
8. Petitioners defense:
8.1 MMG pays its workers their Service Award or Severance Pay every conclusion of their Labor Contracts
pursuant to Article 87 of the [Saudi Labor Law]. Under Article 87, payment of the award is at the end or
termination of the Labor Contract concluded for a specific period. Based on the payroll, respondent was
already paid his service award or severance pay for his latest (sixth) employment contract.
8.2 The one-year prescriptive period had lapsed because respondent filed his complaint on December 11, 2000 or
one year and seven months after his sixth contract ended.
9. LA: petitioner to pay respondent longevity pay of US$12,640.33 or P648,562.69 and attorneys fees of P64,856.27
or a total of P713,418.96.
9.1 respondents seven-year employment with MMG had sufficiently oriented him on the benefits given to
workers; that petitioner was unable to convincingly refute respondents claim that MMG offered him longevity
pay before he went on vacation on May 1, 1999; and that respondents claim was not barred by prescription
since his claim on July 6, 1999, made a month after his cause of action accrued, interrupted the prescriptive
period under the Saudi Labor Law until his claim was categorically denied.
10. NLRC: affirmed. Respondent is entitled to longevity pay which is different from severance pay.
11. CA: Under Article 87 of the Saudi Labor and Workmen Law (Saudi Labor Law), respondent Marcelo Dupo is
entitled to a service award or longevity pa.
ISSUE(S):
1. Whether or not respondent is entitled to a service award or longevity pay of US$12,640.33 under the provisions of
the Saudi Labor Law.
Entitled to the pmt even though iba
2. Whether or not respondents action has prescribed
yung tawag niya doon sa payment
HOWEVER, SC didnt rule in R's favor
HELD:
since binayaran na pala siya
1. No.
2. No.
RATIO:
RE: Service Award or Longevity Pay
Article 87 clearly grants a service award. It reads:
Article 87
Where the term of a labor contract concluded for a specified period comes to an end or where the employer cancels a contract of

unspecified period, the employer shall pay to the workman an award for the period of his service to be computed on the basis of half a
months pay for each of the first five years and one months pay for each of the subsequent years. The last rate of pay shall be taken as basis for
the computation of the award. For fractions of a year, the workman shall be entitled to an award which is proportionate to his service period
during that year. Furthermore, the workman shall be entitled to the service award provided for at the beginning of this article in the following
cases:
A.
B.
C.

If he is called to military service.

If a workman resigns because of marriage or childbirth.
If the workman is leaving the work as a result of a force majeure beyond his control.

Respondent, however, has called the benefit other names such as long service award and longevity pay. On the
other hand, petitioner claimed that the service award is the same as severance pay. Notably, the Labor Arbiter was unable
to specify any law to support his award of longevity pay. He anchored the award on his finding that respondents
allegations were more credible because his seven-year employment at MMG had sufficiently oriented him on the benefits
given to workers. To the NLRC, respondent is entitled to service award or longevity pay under Article 87 and
that longevity pay is different from severance pay. The Court of Appeals agreed.
Considering that Article 87 expressly grants a service award, why is it correct to agree with respondent that service
award is the same as longevity pay, and wrong to agree with petitioner that service award is the same as severance
pay? And why would it be correct to say that service award is severance pay, and wrong to call service award as longevity
pay?
We found the answer in the pleadings and evidence presented. Respondents position paper mentioned how his
long service award or longevity pay is computed: half-months pay per year of service and one-months pay per year after
five years of service. Article 87 has the same formula to compute the service award.
The payroll submitted by petitioner showed that respondent received severance pay of SR2,786 for his sixth employment
contract covering the period April 21, 1998 to April 29, 1999. The computation below shows that respondents severance pay of
SR2,786 was his service award under Article 87.
Service Award = (SR5,438) + (9 days/365 days) x (SR5,438)
Service Award = SR2,786.04
Respondents service award for the sixth contract is equivalent only to half-months pay plus the proportionate
amount for the additional nine days of service he rendered after one year. Respondents employment contracts expressly
stated that his employment ended upon his departure from work. Each year he departed from work and successively new
contracts were executed before he reported for work anew. His service was not cumulative. Pertinently, in Brent School,
Inc. v. Zamora, we said that a fixed term is an essential and natural appurtenance of overseas employment contracts, as
in this case. We also said in that case that under American law, [w]here a contract specifies the period of its duration, it
terminates on the expiration of such period. A contract of employment for a definite period terminates by its own terms at
the end of such period. As it is, Article 72 of the Saudi Labor Law is also of similar import. It reads:
A labor contract concluded for a specified period shall terminate upon the expiry of its term. If both parties continue to enforce the
contract, thereafter, it shall be considered renewed for an unspecified period.

Regarding respondents claim that he was offered US$12,640.33 as longevity pay before he returned to
the Philippines on May 1, 1999, we find that he was not candid on this particular point. His categorical assertion about the
offer being engrained in his mind such that he reconstructed the computation and arrived at the computation
exactly the same with the amount he was previously offered is not only beyond belief. Such assertion is also a stark
departure from his July 6, 1999 letter to MMG where he could only express his hope that he was entitled to a long service
award and where he never mentioned the supposed previous offer. Moreover, respondents claim that his monthly
compensation is SR10,248.92 is belied by the payroll which shows that he receives SR5,438 per month.
We therefore emphasize that such payroll should have prompted the lower tribunals to examine closely
respondents computation of his supposed longevity pay before adopting that computation as their own.

RE: Prescription
What applies is Article 291 of our Labor Code which reads:
ART. 291. Money claims. All money claims arising from employer-employee relations accruing during the effectivity of this Code
shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

xxxx
In Cadalin v. POEAs Administrator, we held that Article 291 covers all money claims from employer-employee
relationship and is broader in scope than claims arising from a specific law. It is not limited to money claims recoverable
under the Labor Code, but applies also to claims of overseas contract workers. The following ruling inCadalin v. POEAs
Administrator is instructive:
First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a
Philippine law on prescription that shall be the governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the
contract x x x.
As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of
actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign
substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).
A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or
substantive, depending on the characterization given such a law.
xxxx
However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a
borrowing statute. Said statute has the practical effect of treating the foreign statute of limitation as one of substance (Goodrich, Conflict of
Laws, 152-153 [1938]). A borrowing statute directs the state of the forum to apply the foreign statute of limitations to the pending claims based
on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of borrowing statutes, one form provides that an action barred by
the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles,
Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides:
If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those
provisions of the Code of Civil Procedure as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which
is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws, 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil Procedure] cannot be enforced ex proprio
vigore insofar as it ordains the application in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign claim obnoxious to the forums public policy x x x. To enforce the one-year
prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor.
xxxx
Thus, in our considered view, respondents complaint was filed well within the three-year prescriptive period under Article 291 of our Labor Code. This
point, however, has already been mooted by our finding that respondents service award had been paid, albeit the payroll termed such payment as severance pay.

CASE LAW/ DOCTRINE:

DISSENTING/CONCURRING OPINION(S):

005
IDONAH
SLADE
PERKINS,
petitioner, AUTHOR: Krystelle Candor
vs. ARSENIO P. DIZON, Judge of First Instance of NOTES: (if applicable)
Manila, EUGENE ARTHUR PERKINS, and BENGUET
CONSOLIDATED MINING COMPANY, respondents.
G.R. No. 46631; November 16, 1939
TOPIC: Resolution of Conflicts Problems: Jurisddiction
PONENTE: MORAN, J.
FACTS: (chronological order)
1. On July 6, 1938, respondent, Eugene Arthur Perkins, instituted an action in the Court of First Instance of Manila against
the Benguet Consolidated Mining Company for dividends amounting to P71,379.90 on 52,874 shares of stock registered
in his name, payment of which was being withheld by the company; and, for the recognition of his right to the control
and disposal of said shares, to the exclusion of all others.
2. To the complaint, the company filed its answer alleging, by way of defense, that the withholding of such dividends and
the non-recognition of plaintiff's right to the disposal and control of the shares were due to certain demands made with
respect to said shares by the petitioner herein, Idonah Slade Perkins, and by one George H. Engelhard.
3. The answer prays that the adverse claimants be made parties to the action and served with notice thereof by publication,
and that thereafter all such parties be required to interplead and settle the rights among themselves.
4. On September 5, 1938, the trial court ordered respondent Eugene Arthur Perkins to include in his complaint as parties
defendant petitioner, Idonah Slade Perkins, and George H. Engelhard. The complaint was accordingly amended and in
addition to the relief prayed for in the original complaint, respondent Perkins prayed that petitioner Idonah Slade Perkins
and George Engelhard be adjudged without interest in the shares of stock in question and excluded from any claim they
assert thereon.
5. Thereafter, summons by publication were served upon the non-resident defendants, Idonah Slade Perkins and George H.
Engelhard, pursuant to the order of the trial court. On December 9, 1938, Engelhard filed his answer to the amended
complaint, and on December 10, 1938, petitioner Idonah Slade Perkins, through counsel, filed her pleading entitled
"objection to venue, motion to quash, and demurrer to jurisdiction" wherein she challenged the jurisdiction of the lower
court over her person.
6. Petitioner's objection, motion and demurrer having been overruled as well as her motion for reconsideration of the order
of denial, she now brought the present petition for certiorari, praying that the summons by publication issued against
her be declared null and void, and that, with respect to her, respondent Judge be permanently prohibited from taking any
action on the case.
ISSUE(S): Whether or not the CFI of Manila has acquired jurisdiction over the person of the present petitioner as a non-resident
defendant.
HELD: YES. The action being in quasi in rem, The Court of First Instance of Manila has jurisdiction over the person of the
non-resident. In order to satisfy the constitutional requirement of due process, summons has been served upon her by
publication.
RATIO:
Section 398 of our Code of Civil Procedure provides that when a non-resident defendant is sued in the Philippine courts and it
appears, by the complaint or by affidavits, that the action relates to real or personal property within the Philippines in which said
defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in
excluding such person from any interest therein, service of summons maybe made by publication.
We have fully explained the meaning of this provision in El Banco Espaol Filipino vs. Palanca, 37 Phil., 921, wherein we laid
down the following rules:
(1) In order that the court may validly try a case, it must have jurisdiction over the subject-matter and over the
persons of the parties. Jurisdiction over the subject-matter is acquired by concession of the sovereign
authority which organizes a court and determines the nature and extent of its powers in general and thus fixes
its jurisdiction with reference to actions which it may entertain and the relief it may grant. Jurisdiction over
the persons of the parties is acquired by their voluntary appearance in court and their submission to its
authority, or by the coercive power of legal process exerted over their persons.
(2) When the defendant is a non-resident and refuses to appear voluntary, the court cannot acquire jurisdiction
over his person even if the summons be served by publication, for he is beyond the reach of judicial process.
No tribunal established by one State can extend its process beyond its territory so as to subject to its decisions
either persons or property located in another State. "There are many expressions in the American reports from
which it might be inferred that the court acquires personal jurisdiction over the person of the defendant by
publication and notice; but such is not the case. In truth, the proposition that jurisdiction over the person of a
non-resident cannot be acquired by publication and notice was never clearly understood even in the American
courts until after the decision had been rendered by the Supreme Court of the United States in the leading case

of Pennoyer v. Neff . In the light of that decisions which have subsequently been rendered in that and
other courts, the proposition that jurisdiction over the person cannot be thus acquired by publication
and notice is no longer open to question; and it is now fully established that a personal judgment upon
constructive or substituted service against a non-resident who does not appear is wholly invalid. This
doctrine applies to all kinds of constructive or substituted process, including service by publication and
personal service outside of the jurisdiction in which the judgment is rendered; and the only exception seems to
be found in the case where the non-resident defendant has expressly or impliedly consented to the mode of
service.
(3) The general rule, therefore, is that a suit against a non-resident cannot be entertained by a Philippine court.
Where, however, the action is in rem or quasi in rem in connection with property located in the Philippines,
the court acquires jurisdiction over the res, and its jurisdiction over the person of the non-resident is nonessential. In order that the court may exercise power over the res, it is not necessary that the court should take
actual custody of the property, potential custody thereof being sufficient. There is potential custody when,
from the nature of the action brought, the power of the court over the property is impliedly recognized by law.
"An illustration of what we term potential jurisdiction over the res, is found in the proceeding to register the
title of land under our system for the registration of land. Here the court, without taking actual physical control
over the property, assumes, at the instance of some person claiming to be owner, to exercise a jurisdiction in
rem over the property and to adjudicate the title in favor of the petitioner against all the world."
(4) As before stated, in an action in rem or quasi in rem against a non-resident defendant, jurisdiction over his
person is non-essential, and if the law requires in such case that the summons upon the defendant be served by
publication, it is merely to satisfy the constitutional requirement of due process. If any be said, in this
connection, that "may reported cases can be cited in which it is assumed that the question of the sufficiency of
publication or notice in the case of this kind is a question affecting the jurisdiction of the court, and the court is
sometimes said to acquire jurisdiction by virtue of the publication. This phraseology was undoubtedly
originally adopted by the court because of the analogy between service by publication and personal service of
process upon the defendant; and, as has already been suggested, prior to the decision of Pennoyer v. Neff
(supra), the difference between the legal effects of the two forms of service was obscure. It is accordingly not
surprising that the modes of expression which had already been moulded into legal tradition before that case
was decided have been brought down to the present day. But it is clear that the legal principle here involved is
not affected by the peculiar languages in which the courts have expounded their ideas."
The reason for the rule that Philippine courts cannot acquire jurisdiction over the person of a non-resident, as laid down by the
Supreme Court of the United States in Pennoyer v. Neff, supra, may be found in a recognized principle of public law to the effect
that "no State can exercise direct jurisdiction and authority over persons or property without its territory. The several States are
of equal dignity and authority, and the independence of one implies the exclusion of power from all others. And so it is laid down
by jurists, as an elementary principle, that the laws of one State have no operation outside of its territory, except so far as is
allowed by comity; and that no tribunal established by it can extend its process beyond that territory so as to subject
either persons or property to its decisions. "Any exertion of authority of this sort beyond this limit," says Story, "is a
mere nullity, and incapable of binding such persons or property in any other tribunals."
When, however, the action relates to property located in the Philippines, the Philippine courts may validly try the case, upon the
principle that a "State, through its tribunals, may subject property situated within its limits owned by non-residents to the
payment of the demand of its own citizens against them; and the exercise of this jurisdiction in no respect infringes upon the
sovereignty of the State where the owners are domiciled. Every State owes protection to its citizens; and, when non-residents
deal with them, it is a legitimate and just exercise of authority to hold and appropriate any property owned by such non-residents
to satisfy the claims of its citizens. It is in virtue of the State's jurisdiction over the property of the non-resident situated within its
limits that its tribunals can inquire into the non-resident's obligations to its own citizens, and the inquiry can then be carried only
to the extent necessary to control the disposition of the property. If the non-resident has no property in the State, there is nothing
upon which the tribunals can adjudicate." (Pennoyer v. Neff, supra.)
In the instant case, there can be no question that the action brought by Eugene Arthur Perkins in his amended complaint against
the petitioner, Idonah Slade Perkins, seeks to exclude her from any interest in a property located in the Philippines. That property
consists in certain shares of stocks of the Benguet Consolidated Mining Company, a sociedad anonima, organized in the
Philippines under the provisions of the Spanish Code of Commerce, with its principal office in the City of Manila and which
conducts its mining activities therein. The situs of the shares is in the jurisdiction where the corporation is created, whether the
certificated evidencing the ownership of those shares are within or without that jurisdiction. Under these circumstances, we hold
that the action thus brought is quasi in rem, for while the judgement that may be rendered therein is not strictly a judgment in

rem, "it fixes and settles the title to the property in controversy and to that extent partakes of the nature of the judgment in rem."
As held by the Supreme Court of the United States in Pennoyer v. Neff (supra);
It is true that, in a strict sense, a proceeding in rem is one taken directly against property, and has for its object
the disposition of the property, without reference to the title of individual claimants; but , in a large and more
general sense, the terms are applied to actions between parties, where the direct object is to reach and dispose
of property owned by them, or of some interest therein.
The action being in quasi in rem, The CFI of Manila has jurisdiction over the person of the non-resident. In order to satisfy the
constitutional requirement of due process, summons has been served upon her by publication. There is no question as to the
adequacy of publication made nor as to the mailing of the order of publication to the petitioner's last known place of residence in
the United States. But, of course, the action being quasi in rem and notice having be made by publication, the relief that may be
granted by the Philippine court must be confined to the res, it having no jurisdiction to render a personal judgment against the
non-resident. In the amended complaint filed by Eugene Arthur Perkins, no money judgment or other relief in personam is
prayed for against the petitioner. The only relief sought therein is that she be declared to be without any interest in the shares in
controversy and that she be excluded from any claim thereto.
Petitioner contends that the proceeding instituted against her is one of interpleading and is therefore an action in personam.
Section 120 of our Code of Civil Procedure provides that whenever conflicting claims are or may be made upon a person for or
relating to personal property, or the performance of an obligation or any portion thereof, so that he may be made subject to
several actions by different persons, such person may bring an action against the conflicting claimants, disclaiming personal
interest in the controversy, and the court may order them to interplead with one another and litigate their several claims among
themselves, there upon proceed to determine their several claims. Here, The Benguet Consolidated Mining Company, in its
answer to the complaint filed by Eugene Arthur Perkins, averred that in connection with the shares of stock in question,
conflicting claims were being made upon it by said plaintiff, Eugene Arthur Perkins, his wife Idonah Slade Perkins, and one
named George H. Engelhard, and prayed that these last two be made parties to the action and served with summons by
publication, so that the three claimants may litigate their conflicting claims and settle their rights among themselves. The court
has not issued an order compelling the conflicting claimants to interplead with one another and litigate their several claims
among themselves, but instead ordered the plaintiff to amend his complaint including the other two claimants as parties
defendant. The plaintiff did so, praying that the new defendants thus joined be excluded fro any interest in the shares in question,
and it is upon this amended complaint that the court ordered the service of the summons by publication. It is therefore, clear that
the publication of the summons was ordered not in virtue of an interpleading, but upon the filing of the amended complaint
wherein an action quasi in rem is alleged.
Had not the complaint been amended, including the herein petitioner as an additional defendant, and had the court, upon the
filing of the answer of the Benguet Consolidated Mining Company, issued an order under section 120 of the Code of Civil
Procedure, calling the conflicting claimants into court and compelling them to interplead with one another, such order could not
perhaps have validly been served by publication or otherwise, upon the non-resident Idonah Slade Perkins, for then the
proceeding would be purely one of interpleading. Such proceeding is a personal action, for it merely seeks to call conflicting
claimants into court so that they may interplead and litigate their several claims among themselves, and no specific relief is
prayed for against them, as the interpleader have appeared in court, one of them pleads ownership of the personal property
located in the Philippines and seeks to exclude a non-resident claimant from any interest therein, is a question which we do not
decide not. Suffice it to say that here the service of the summons by publication was ordered by the lower court by virtue of an
action quasi in rem against the non-resident defendant.
Respondents contend that, as the petitioner in the lower court has pleaded over the subject-matter, she has submitted herself to its
jurisdiction. We have noticed, however, that these pleas have been made not as independent grounds for relief, but merely as
additional arguments in support of her contention that the lower court had no jurisdiction over the person. In other words, she
claimed that the lower court had no jurisdiction over her person not only because she is a non-resident, but also because the court
had no jurisdiction over the subject-matter of the action and that the issues therein involved have already been decided by the
New York court and are being relitigated in the California court. Although this argument is obviously erroneous, as neither
jurisdiction over the subject-matter nor res adjudicata nor lis pendens has anything to do with the question of jurisdiction over
her person, we believe and so hold that the petitioner has not, by such erroneous argument, submitted herself to the jurisdiction
of the court. Voluntary appearance cannot be implied from either a mistaken or superflous reasoning but from the nature of the
relief prayed for.
For all the foregoing, petition is hereby denied, with costs against petitioner.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

AUTHOR: De Guzman, Bien

006 Asiavest Limited vs Court of Appeals
NOTES:
G.R. No. 128803, September 25, 1998
TOPIC: Resolution of Conflicts Problems: Jurisdiction
PONENTE: Davide, Jr. J;
FACTS:
The defendant Antonio Heras was sued on the basis of his personal guarantee of the obligations of Compania Hermanos de
Navegacion S.A. in Hongkong. But before said judgment was issued and even during trial, Heras already left for good
Hong Kong and he returned to the Philippines. Thus, The plaintiff Asiavest Limited filed a complaint on December 3,
1987 against the defendant praying that said defendant be ordered to pay to the plaintiff the amounts awarded by the Hong
Kong Court Judgment dated December 28, 1984 and amended on April 13, 1987, to wit: US$1,810,265.40 with legal
interest from December 28, 1984, interest on the sum of US$1,500.00 at 9.875% per annum from October 31, 1984 to
December 28, 1984; and HK$905.00 at fixed cost in the action; and at least $80,000.00 representing attorney's fees,
litigation expenses and cost.
On October 19, 1988, defendant filed his Answer. HERAS maintained that the Hong Kong court did not have jurisdiction
over him because the fundamental rule is that jurisdiction in personam over non-resident defendants, so as to sustain a
money judgment, must be based upon personal service of summons within the state which renders the judgment.
The case was then set for pre-trial conference. At the conference, the parties could not arrive at any settlement. However,
they agreed on the following stipulations of facts:
1. The defendant admits the existence of the judgment dated December 28, 1984 as well as its amendment dated April 13,
1987, but not necessarily the authenticity or validity thereof;
2. The plaintiff is not doing business and is not licensed to do business in the Philippines;
3. The residence of defendant, Antonio Heras, is New Manila, Quezon City.
The plaintiff presented only documentary evidence to show rendition, existence, and authentication of such judgment by
the proper officials concerned. In addition, the plaintiff presented testimonial and documentary evidence to show its
entitlement to attorney's fees and other expenses of litigation.
On the other hand, the defendant presented two witnesses, namely. Fortunata dela Vega and Russel Warren Lousich.
The gist of Ms. dela Vega's testimony is to the effect that no writ of summons or copy of a statement of claim of
Asiavest Limited was ever served in the office of the Navegante Shipping Agency Limited and/or for Mr. Antonio
Heras, and that no service of the writ of summons was either served on the defendant at his residence in New Manila,
Quezon City. Her knowledge is based on the fact that she was the personal secretary of Mr. Heras during his JD Transit
days up to the latter part of 1972 when he shifted or diversified to shipping business in Hong Kong.
Mr. Lousich was presented as an expert on the laws of Hong Kong, and as a representative of the law office of the
defendant's counsel stated that There is no record that a writ of summons was served on the person of the defendant
in Hong Kong, or that any such attempt at service was made. Likewise, there is no record that a copy of the
judgment of the High Court was furnished or served on the defendant; anyway, it is not a legal requirement to do
so under Hong Kong laws. On cross-examination by counsel for ASIAVEST, Lousich' testified that the Hong Kong court
authorized service of summons on HERAS outside of its jurisdiction, particularly in the Philippines. He admitted also the
existence of an affidavit of one Jose R. Fernandez of the Sycip Salazar Hernandez & Gatmaitan law firm stating that he
(Fernandez) served summons on HERAS on 13 November 1984 at No. 6, 1st St., Quezon City, by leaving a copy with
HERAS's son-in-law Dionisio Lopez. On redirect examination, Lousich declared that such service of summons would be
valid under Hong Kong laws provided that it was in accordance with Philippine laws.
The trial court held that since the Hong Kong court judgment had been duly proved, it is a presumptive evidence of a right
as between the parties; hence, the party impugning it had the burden to prove want of jurisdiction over his person. HERAS
failed to discharge that burden. He did not testify to state categorically and under oath that he never received summons.
Even his own witness Lousich admitted that HERAS was served with summons in his Quezon City residence. As to De la
Vega's testimony regarding non-service of summons, the same was hearsay and had no probative value. As to HERAS'
contention that the Hong Kong court judgment violated the Constitution and the procedural laws of the Philippines because
it contained no statements of the facts and the law on which it was based, the trial court ruled that since the issue relate to
procedural matters, the law of the forum, i.e., Hong Kong laws, should govern. As testified by the expert witness Lousich,
such legalities were not required under Hong Kong laws. The trial Court also debunked HERAS' contention that the
principle of excussion under Article 2058 of the Civil Code of the Philippines was violated. It declared that matters of

substance are subject to the law of the place where the transaction occurred; in this case, Hong Kong laws must govern.
The trial court concluded that the Hong Kong court judgment should be recognized and given effect in this
jurisdiction for failure of HERAS to overcome the legal presumption in favor of the foreign judgment.
The Court of Appeals rendered its decision reversing the decision of the trial court and dismissing ASIAVEST's complaint
without prejudice. It underscored the fact that a foreign judgment does not of itself have any extraterritorial application.
For it to be given effect, the foreign tribunal should have acquired jurisdiction over the person and the subject matter. If
such tribunal has not acquired jurisdiction, its judgment is void. It then stressed that where the action is in personam
and the defendant is in the Philippines, the summons should be personally served on the defendant pursuant to
Section 7, Rule 14 of the Rules of Court. 4 Substituted service may only be availed of where the defendant cannot be
promptly served in person, the fact of impossibility of personal service should be explained in the proof of service. It
also found as persuasive HERAS' argument that instead of directly using the clerk of the Sycip Salazar Hernandez &
Gatmaitan law office, who was not authorized by the judge of the court issuing the summons, ASIAVEST should have
asked for leave of the local courts to have the foreign summons served by the sheriff or other court officer of the place
where service was to be made, or for special reasons by any person authorized by the judge.
The Court of Appeals agreed with HERAS that "notice sent outside the state to a non-resident is unavailing to give
jurisdiction in an action against him personally for money recovery." Summons should have been personally served on
HERAS in Hong Kong, for, as claimed by ASIAVEST, HERAS was physically present in Hong Kong for nearly 14 years.
Since there was not even an attempt to serve summons on HERAS in Hong Kong, the Hong Kong Supreme Court
did not acquire jurisdiction over HERAS.
ISSUE(S): Whether or not the foreign judgment can be enforced against Heras in the Philippines?
HELD: No. Although the foreign judgment was duly authenticated (Asiavest was able to adduce evidence in support
thereto) and Heras was never able to overcome the validity of it, it cannot be enforced against Heras here in the Philippines
because Heras was not properly served summons. Hence, as far as Philippine law is concerned, the Hong Kong court has
never acquired jurisdiction over Heras. This means then that Philippine courts cannot act to enforce the said foreign
judgment.
RATIO:
Under paragraph (b) of Section 50, Rule 39 of the Rules of Court, a foreign judgment against a person rendered by a court
having jurisdiction to pronounce the judgment is presumptive evidence of a right as between the parties and their
successors in interest by the subsequent title. However, the judgment may be repelled by evidence of want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact. Also, Section 3(n) of Rule 131 of the New
Rules of Evidence provides that in the absence of proof to the contrary, a court, or judge acting as such, whether in the
Philippines or elsewhere, is presumed to have acted in the lawful exercise of jurisdiction.
At the pre-trial conference, HERAS admitted the existence of the Hong Kong judgment. The judgment is thus presumed to
be valid and binding in the country from which it comes, until the contrary is shown. Lousich declared that the record of
the Hong Kong case failed to show that a writ of summons was served upon HERAS in Hong Kong or that any such
attempt was made. Neither did the record show that a copy of the judgment of the court was served on HERAS. He stated
further that under Hong Kong laws (a) a writ of summons could be served by the solicitor of the claimant or plaintiff; and
(b) where the said writ or claim was not contested, the claimant or plaintiff was not required to present proof under oath in
order to obtain judgment. There is, however, nothing in the testimony of Mr. Lousich that touched on the specific law
of Hong Kong in respect of service of summons either in actions in rem or in personam, and where the defendant is
either a resident or nonresident of Hong Kong. In view of the absence of proof of the Hong Kong law on this
particular issue, the presumption of identity or similarity or the so-called processual presumption shall come into
play. It will thus be presumed that the Hong Kong law on the matter is similar to the Philippine law.
In Valmonte vs. Court of Appeals, it will be helpful to determine first whether the action is in personam, in rem, or quasi in
rem because the rules on service of summons under Rule 14 of the Rules of Court of the Philippines apply according to the
nature of the action. An action in personam is an action against a person on the basis of his personal liability. An action in
rem is an action against the thing itself instead of against the person. An action quasi in rem is one wherein an individual is
named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening
the property.
In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide
the case. Jurisdiction over the person of a resident defendant who does not voluntarily appear in court can be acquired by
personal service of summons as provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served

with summons within a reasonable time, substituted service may be made in accordance with Section 8 of said Rule. If he
is temporarily out of the country, any of the following modes of service may be resorted to: (1) substituted service set forth
in Section 8; (2) personal service outside the country, with leave of court; (3) service by publication, also with leave of
court; or (4) any other manner the court may deem sufficient.
However, in an action in personam wherein the defendant is a non-resident who does not voluntarily submit himself
to the authority of the court, personal service of summons within the state is essential to the acquisition of
jurisdiction over her person. This method of service is possible if such defendant is physically present in the country. If
he is not found therein, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the
case against him. An exception was laid down in Gemperle v. Schenker, wherein a non-resident was served with summons
through his wife, who was a resident of the Philippines and who was his representatives and attorney-in-fact in a prior civil
case filed by him; moreover, the second case was a mere offshoot of the first case.
In the case at bar, the action filed in Hong Kong against HERAS was in personam, since it was based on his personal
guarantee of the obligation of the principal debtor. Before we can apply the foregoing rules, we must determine first
whether HERAS was a resident of Hong Kong.
We note that the residence of HERAS insofar as the action for the enforcement of the Hong Kong court judgment is
concerned, was never in issue. He never challenged the service of summons on him through a security guard in his Quezon
City residence and through a lawyer in his office in that city. In his Motion to Dismiss, he did not question the jurisdiction
of the Philippine court over his person on the ground of invalid service of summons. What was in issue was his residence
as far as the Hong Kong suit was concerned. We therefore conclude that the stipulated fact that HERAS "is a resident of
New Manila, Quezon City, Philippines" refers to his residence at the time jurisdiction over his person was being sought by
the Hong Kong court. With that stipulation of fact, ASIAVEST cannot now claim that HERAS was a resident of Hong
Kong at the time.
Accordingly, since HERAS was not a resident of Hong Kong and the action against him was, indisputably, one in
personam, summons should have been personally served on him in Hong Kong. The extraterritorial service in the
Philippines was therefore invalid and did not confer on the Hong Kong court jurisdiction over his person. It follows that
the Hong Kong court judgment cannot be given force and effect here in the Philippines for having been rendered without
jurisdiction.
Even assuming that HERAS was formerly a resident of Hong Kong, he was no longer so in November 1984 when the
extraterritorial service of summons was attempted to be made on him. As declared by his secretary, which statement was
not disputed by ASIAVEST, HERAS left Hong Kong in October 1984 "for good." His absence in Hong Kong must have
been the reason why summons was not served on him therein; thus, ASIAVEST was constrained to apply for leave to
effect service in the Philippines, and upon obtaining a favorable action on the matter, it commissioned the Sycip Salazar
Hernandez & Gatmaitan law firm to serve the summons here in the Philippines.
In Brown v. Brown, the defendant was previously a resident of the Philippines. Several days after a criminal action for
concubinage was filed against him, he abandoned the Philippines. Later, a proceeding quasi in rem was instituted against
him. Summons in the latter case was served on the defendant's attorney-in-fact at the latter's address. The Court held that
under the facts of the case, it could not be said that the defendant was "still a resident of the Philippines because he ha[d]
escaped to his country and [was] therefore an absentee in the Philippines." As such, he should have been "summoned in the
same manner as one who does not reside and is not found in the Philippines."
Similarly, HERAS, who was also an absentee, should have been served with summons in the same manner as a nonresident not found in Hong Kong. Section 17, Rule 14 of the Rules of Court providing for extraterritorial service will not
apply because the suit against him was in personam. Neither can we apply Section 18, which allows extraterritorial service
on a resident defendant who is temporarily absent from the country, because even if HERAS be considered as a resident of
Hong Kong, the undisputed fact remains that he left Hong Kong not only "temporarily" but "for good."
CASE LAW/ DOCTRINE:
it was R who was trying to prove the foreign law to prove
DISSENTING/CONCURRING OPINION(S):

that he wasnt properly served with summons

However, he failed to do so
So hongkong law was presumed to be the same as phil law
Which worked to his advantage
Had to determine if he was HK or Phil resident to see if
summons were properly served since in personam action siya

007 St. Aviation Services v. Grand International AUTHOR: RAVZ

Airways, G.R. No. 140288, 23 October 2006
TOPIC: Jurisdiction
PONENTE: SANDOVAL-GUTIERREZ, J.:
FACTS:
1. St. Aviation Services Co., Pte., Ltd., petitioner, is a foreign corporation based in Singapore. It is engaged in the
manufacture, repair, and maintenance of airplanes and aircrafts.
Grand International Airways, Inc., respondent is a domestic corporation engaged in airline operations.
2. Petitioner and respondent executed an Agreement for the Maintenance and Modification of Airbus A 300 B4-103
Aircraft Registration No. RP-C8882 (First Agreement). Under this stipulation, petitioner agreed to undertake
maintenance and modification works on respondents aircraft.
3. The parties agreed on the mode and manner of payment by respondent of the contract price, including interest in
case of default. They also agreed that the construction, validity and performance thereof shall be governed by the
laws of Singapore. They further agreed to submit any suit arising from their agreement to the non-exclusive
jurisdiction of the Singapore courts.
4. At about the same time, or on January 12, 1996, the parties verbally agreed that petitioner will repair and
undertake maintenance works on respondents other aircraft, Aircraft No. RP-C8881; and that the works shall be
based on a General Terms of Agreement (GTA). The GTA terms are similar to those of their First Agreement.
5. Petitioner undertook the contracted works and thereafter promptly delivered the aircrafts to respondent. Petitioner
billed respondent in the total amount of US$303,731.67 or S$452,560.18. But despite petitioners repeated
demands, respondent failed to pay, in violation of the terms agreed upon.
6. Petitioner filed with the High Court of the Republic of Singapore an action for the sum of S$452,560.18, including
interest and costs, against respondent, docketed as Suit No. 2101.
7. Upon petitioners motion, the court issued a Writ of Summons to be served extraterritorially or outside Singapore
upon respondent. The court sought the assistance of the sheriff of Pasay City to effect service of the summons
upon respondent. However, despite receipt of summons, respondent failed to answer the claim.
8. On motion of petitioner, the Singapore High Court rendered a judgment by default against respondent. Thereafter,
the petitioner filed with the RTC a Petition for Enforcement of Judgment.
9. Respondent filed a Motion to Dismiss the Petition on two grounds: (1) the Singapore High Court did not acquire
jurisdiction over its person; and (2) the foreign judgment sought to be enforced is void for having been rendered in
violation of its right to due process.
10. On October 30, 1998, the RTC denied respondents motion to dismiss, holding that neither one of the two
grounds (of Grand) is among the grounds for a motion to dismiss under Rule 16 of the 1997 Rules of Civil
Procedure. Respondent filed a motion for reconsideration but was denied.
11. On February 15, 1999, respondent filed with the Court of Appeals a Petition for Certiorari assailing the RTC Order
denying its motion to dismiss. Respondent alleged that the extraterritorial service of summons on its office in the
Philippines is defective and that the Singapore court did not acquire jurisdiction over its person.
12. The Court of Appeals issued its Decision granting the petition and setting aside the Orders of the RTC without
prejudice to the right of private respondent to initiate another proceeding before the proper court to enforce its
claim. It found:
In the case at bar, the complaint does not involve the personal status of plaintiff, nor any
property in which the defendant has a claim or interest, or which the private respondent has
attached but purely an action for collection of debt. It is a personal action as well as an action in

personam, not an action in rem or quasi in rem. As a personal action, the service of summons
should be personal or substituted, not extraterritorial, in order to confer jurisdiction on the
court.
ISSUE(S): (1) whether the Singapore High Court has acquired jurisdiction over the person of respondent by the service of
summons upon its office in the Philippines;
(2) whether the judgment by default in Suit No. 2101 by the Singapore High Court is enforceable in the
Philippines.
HELD: YES
RATIO:
1. Generally, in the absence of a special contract, no sovereign is bound to give effect within its dominion to a
judgment rendered by a tribunal of another country; however, under the rules of comity, utility and convenience,
nations have established a usage among civilized states by which final judgments of foreign courts of competent
jurisdiction are reciprocally respected and rendered efficacious under certain conditions that may vary in different
countries. Certainly, the Philippine legal system has long ago accepted into its jurisprudence and procedural rules
the viability of an action for enforcement of foreign judgment, as well as the requisites for such valid enforcement,
as derived from internationally accepted doctrines.
2. The conditions for the recognition and enforcement of a foreign judgment in our legal system are contained in
Section 48, Rule 39 of the 1997 Rules of Civil Procedure, as amended, thus:
SEC. 48. Effect of foreign judgments. The effect of a judgment or final order of a
tribunal of a foreign country, having jurisdiction to render the judgment or final order is
as follows:
(a) In case of a judgment or final order upon a specific thing, the
judgment or final order is conclusive upon the title to the thing; and
(b) In case of a judgment or final order against a person, the judgment
or final order is presumptive evidence of a right as between the parties
and their successors in interest by a subsequent title;
In either case, the judgment or final order may be repelled by evidence
of a want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.
3. Under the above Rule, a foreign judgment or order against a person is merely presumptive evidence of a right as
between the parties. It may be repelled, among others, by want of jurisdiction of the issuing authority or by want
of notice to the party against whom it is enforced. The party attacking a foreign judgment has the burden of
overcoming the presumption of its validity.
4. Generally, matters of remedy and procedure such as those relating to the service of process upon a defendant are
governed by the lex fori or the internal law of the forum, which in this case is the law of Singapore. Here,
petitioner moved for leave of court to serve a copy of the Writ of Summons outside Singapore. In an Order dated
December 24, 1997, the Singapore High Court granted leave to serve a copy of the Writ of Summons on the
Defendant by a method of service authorized by the law of the Philippines. This service of summons outside
Singapore is in accordance with Order 11, r. 4(2) of the Rules of Court 1996 of Singapore, which provides.
(2) Where in accordance with these Rules, an originating process is to be served on a
defendant in any country with respect to which there does not subsist a Civil Procedure
Convention providing for service in that country of process of the High Court, the
originating process may be served
a) through the government of that country, where that government is
willing to effect service;

b) through a Singapore Consular authority in that country, except where

service through such an authority is contrary to the law of the country; or
c) by a method of service authorized by the law of that country for
service of any originating process issued by that country.
5. In the Philippines, jurisdiction over a party is acquired by service of summons by the sheriff,[7] his deputy or other
proper court officer either personally by handing a copy thereof to the defendant[8] or by substituted service. In
this case, the Writ of Summons issued by the Singapore High Court was served upon respondent at its office
located at Mercure Hotel (formerly Village Hotel), MIA Road, Pasay City. The Sheriffs Return shows that it was
received on May 2, 1998 by Joyce T. Austria, Secretary of the General Manager of respondent company. But
respondent completely ignored the summons, hence, it was declared in default.
6. Considering that the Writ of Summons was served upon respondent in accordance with our Rules, jurisdiction was
acquired by the Singapore High Court over its person. Clearly, the judgment of default rendered by that court
against respondent is valid.
7. WHEREFORE, we GRANT the petition. The challenged Decision and Resolution of the Court of Appeals in CAG.R. SP No. 51134 are SET ASIDE.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

008 RAYTHEON INTERNATIONAL, INC., petitioner,

vs. STOCKTON W. ROUZIE, JR., respondent.
[G.R. No. 162894 February 26, 2008]

AUTHOR: DJEE
NOTES: As for the other issue - general rule, the
elementary test for failure to state a cause of action is
whether the complaint alleges facts which if true would
justify the relief demanded.

TOPIC:
PONENTE: TINGA, J.:
FACTS:
1. 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the
State of Connecticut, United States of America, and Stockton W. Rouzie, Jr., an American citizen, entered
into a contract.
a. written contract between respondent and BMSI included a valid choice of law clause, that is, that the
contract shall be governed by the laws of the State of Connecticut.
b. It also mentions the presence of foreign elements (in the dispute) namely, the parties and
witnesses involved are American corporations and citizens and the evidence to be presented is
located outside the Philippines
2. BMSI hired respondent as its representative to negotiate the sale of services in several government projects
in the Philippines for an agreed remuneration of 10% of the gross receipts.
3. 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of
BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows.
4. 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission
(NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning
for alleged nonpayment of commissions, illegal termination and breach of employment contract.
5. 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to
pay respondents money claims.5 Upon appeal by BMSI, the NLRC reversed the decision and dismissed
respondents complaint on the ground of lack of jurisdiction
6. Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997.
The Resolution became final and executory on 09 November 1998.
7. 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before (RTC) of
Bauang, La Union.
a. The complaint essentially reiterated:
i. the allegations in the labor case that BMSI verbally employed respondent to negotiate the
sale of services in government projects and that respondent was not paid the commissions
due him from the Pinatubo dredging project which he secured on behalf of BMSI.
ii. The complaint also averred that BMSI and RUST as well as petitioner itself had combined
and functioned as one company.
8. petitioner on its answer:
a. it was a foreign corporation duly licensed to do business in the Philippines and denied entering into
any arrangement with respondent or paying the latter any sum of money.
b. denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the
said companies
c. NLRC decision which disclosed that per the written agreement between respondent and BMSI and
RUST, denominated as "Special Sales Representative Agreement," the rights and obligations of the
parties shall be governed by the laws of the State of Connecticut.
d. dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens
and prayed for damages by way of compulsory counterclaim.
9. petitioner filed an Omnibus Motion for Preliminary Hearing
10. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the
Philippine Consulate General in Chicago.
11. 13 September 2000, the RTC denied petitioners omnibus motion.
a. the factual allegations in the complaint, assuming the same to be admitted, were sufficient for the
trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens
was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign
corporation licensed to do business in the Philippines.

12. Petitioner filed a MR. the trial court denied petitioners motion. Thus, it filed a Rule 65 Petition19 with the
Court of Appeals praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin
orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from
conducting further proceedings.
13. CA denied the motion and the subsequent MR:
a. although the trial court should not have confined itself to the allegations in the complaint and should
have also considered evidence aliunde in resolving petitioners omnibus motion, it found the
evidence presented by petitioner, that is, the deposition of Walter Browning, insufficient for purposes
of determining whether the complaint failed to state a cause of action. The appellate court also
stated that it could not rule one way or the other on the issue of whether the corporations, including
petitioner, named as defendants in the case had indeed merged together based solely on the
evidence presented by respondent. Thus, it held that the issue should be threshed out during trial.23
Moreover, the appellate court deferred to the discretion of the trial court when the latter decided not
to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non
conveniens.
ISSUE(S): WON PH has jurisdiction despite the valid choice of law clause.
HELD: Yes.
RATIO:
SC Discussion on Conflicts of Law:
the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems,
namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances27
where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign
element, the following requisites had to be proved:
(1) that the Philippine Court is one to which the parties may conveniently resort;
(2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts;
and
(3) that the Philippine Court has or is likely to have the power to enforce its decision.
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and
where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the
case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an
exercise of sovereign prerogative of the country where the case is filed.
Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law30 and
by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or
some of the claims or reliefs sought therein.
Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a
defendant to travel to this state; choice of law asks the further question whether the application of a substantive
law which will determine the merits of the case is fair to both parties.
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its
jurisdiction where it is not the most "convenient" or available forum and the parties are not precluded from
seeking remedies elsewhere.
Application to the case:
Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the
nature of the action and the amount of damages prayed are within the jurisdiction of the RTC.
As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party
plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party
defendant) was acquired by its voluntary appearance in court.
the subject contract included a stipulation that the same shall be governed by the laws of the State of

Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are
precluded from hearing the civil actionThe choice of law stipulation will become relevant only when the
substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial
court.
Petitioners averments of the foreign elements in the instant case are not sufficient to oust the trial court of its
jurisdiction over Civil Case No. No. 1192-BG and the parties involved.
Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual
determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of
the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the courts desistance.35
Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can
assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers
to the sound discretion of the lower courts because their findings are binding on this Court.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

009 Sps. Belen v. Hon. Chavez

G.R. No. 175334, March 26, 2008
TOPIC: Jurisdiction
PONENTE: Tinga, J.

AUTHOR:
NOTES: (if applicable)

FACTS:

1. Private respondents spouses Pacleb, represented by their attorney-in-fact, Joselito Rioveros, filed an action for the enforcement
of a foreign judgment against Petitioner spouses Belen. The complaint alleged that the Pacleb secured a judgment
by default rendered by Judge John W. Green of the Superior Court of the State of California, which ordered the
spouses Belen to pay $56,204.69 representing loan repayment and share in the profits plus interest and costs of
suit. The summons was served on the Belens address in Laguna, as was alleged in the complaint, and received by
Marcelo M. Belen.
2. 5 December 2000: Atty. Alcantara entered his appearance as counsel for petitioners. He subsequently filed an
answer, alleging that contrary to private respondents averment, petitioners were actually residents of California,
USA and their liability had been extinguished via a release of abstract judgment issued in the same collection case.
3. Since the petitioners fail to attend the scheduled pre-trial conference, the RTC ordered the ex parte presentation of
evidence for private respondents.
4. Atty. Alcantara filed a motion to dismiss, citing the judgment of dismissal issued by the Superior Court of the
State of California, which allegedly dismissed Case No. NC021205. But, the Motion to Dismiss was denied for failure
to present a copy of the alleged judgment of dismissal.
5. For their part, private respondents filed a motion for the amendment of the complaint stating that they were
constrained to withdraw their complaint against petitioners from the California court because of the prohibitive
cost of litigation, which withdrawal was favorably considered by said court.
6. For failure of spouses Belen and their lawyer to appear in the rescheduled pre-trial conference, RTC declared
Belen in default and allowed the presentation of ex parte evidence. In the meantime, the counsel (Alcantara) of
petitioners died without the RTC being informed of such fact. The RTC ruled against Belen and ordered them to pay Pacleb
7. A copy of the RTC decision intended for Atty. Alcantara was returned with the notation Addressee Deceased. A
copy of the RTC decision was then sent to the purported address of petitioners in San Gregorio, Alaminos, Laguna
and was received by a certain Leopoldo Avecilla on 14 August 2003. Meanwhile, immediately after the
promulgation of the RTC decision, private respondents filed an ex-parte motion for preliminary attachment which
the RTC granted in its Order dated 15 September 2003.
8. 24 November 2003: private respondents sought the execution of the RTC decision. In its Order dated 10 December
2003, the RTC directed the issuance of a writ of execution. Upon the issuance of a writ of execution, the real
properties belonging to petitioners were levied upon and the public auction scheduled on 15 January 2004.
9. 16 December 2003: Atty. Carmelo B. Culvera entered his appearance as counsel for petitioners. On 22 December
2003, Atty. Culvera filed a Motion to Quash Writ of Execution (With Prayer to Defer Further Actions). On 6
January 2004, he filed a Notice of Appeal from the RTC Decision averring that he received a copy thereof only on
29 December 2003. -> DENIED
10. Thus, petitioners filed a Rule 65 petition before the Court of Appeals, imputing on the RTC grave abuse of
discretion tantamount to lack or excess of jurisdiction (1) in rendering its decision although it had not yet acquired
jurisdiction over their persons in view of the improper service of summons; (2) in considering the decision final
and executory although a copy thereof had not been properly served upon petitioners; (3) in issuing the writ of
execution before the decision had become final and executory and despite private respondents failure to comply
with the procedural requirements in filing the motion for the issuance of the said writ; and (4) in denying
petitioners motion to quash the writ of execution and notice of appeal despite sufficient legal bases in support
thereof. -> DISMISSED -> thus, an instant petition for review on certiorari under Rule 45 was filed by the
petitioners before the SC.
ISSUE(S):
1. Whether the RTC acquired jurisdiction over the persons of petitioners through either the proper service of summons or
the appearance of the late Atty. Alcantara on behalf of petitioners
2. Whether there was a valid service of the copy of the RTC decision on petitioners.
HELD:
1. YES
2. NO.

RATIO:
ISSUE 1

1. On one hand, courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the other hand,

2.

3.
4.

5.

6.

jurisdiction over the defendants in a civil case is acquired either through the service of summons upon them or
through their voluntary appearance in court and their submission to its authority. As a rule, if defendants have not
been summoned, the court acquires no jurisdiction over their person, and a judgment rendered against them is null
and void. To be bound by a decision, a party should first be subject to the courts jurisdiction.
The action filed against petitioners, prior to the amendment of the complaint, is for the enforcement of a foreign
judgment in a complaint for breach of contract whereby petitioners were ordered to pay private respondents the
monetary award. It is in the nature of an action in personam because private respondents are suing to enforce their
personal rights under said judgment.
In an action in personam, jurisdiction over the person of the defendant who does not voluntarily submit himself to
the authority of the court is necessary for the court to validly try and decide the case through personal service or, if
this is not possible and he cannot be personally served, substituted service as provided in Rule 14, Sections 6-7.
In an action strictly in personam, personal service on the defendant is the preferred mode of service, that is, by
handing a copy of the summons to the defendant in person. If the defendant, for justifiable reasons, cannot be
served with the summons within a reasonable period, then substituted service can be resorted to. While substituted
service of summons is permitted, it is extraordinary in character and in derogation of the usual method of
service.
If defendant cannot be served with summons because he is temporarily abroad, but otherwise he is a Philippine
resident, service of summons may, by leave of court, be effected out of the Philippines under Rule 14, Section 15.
In all of these cases, it should be noted, defendant must be a resident of the Philippines, otherwise an action in
personam cannot be brought because jurisdiction over his person is essential to make a binding decision.
However, the records of the case reveal that herein petitioners have been permanent residents of California, U.S.A.
since the filing of the action up to the present. From the time Atty. Alcantara filed an answer purportedly at the
instance of petitioners relatives, it has been consistently maintained that petitioners were not physically present in
the Philippines. In the answer, Atty. Alcantara had already averred that petitioners were residents of California,
U.S.A. and that he was appearing only upon the instance of petitioners relatives. In addition, private respondents
attorney-in-fact, Joselito Rioveros, testified during the ex parte presentation of evidence that he knew petitioners to
be former residents of Alaminos, Laguna but are now living in California, U.S.A. That being the case, the service
of summons on petitioners purported address in San Gregorio, Alaminos, Laguna was defective and did not serve
to vest in court jurisdiction over their persons. BUT, the CA correctly concluded that the appearance of Atty.
Alcantara and his filing of numerous pleadings were sufficient to vest jurisdiction over the persons of petitioners.
Through certain acts, Atty. Alcantara was impliedly authorized by petitioners to appear on their behalf. For
instance, in support of the motion to dismiss the complaint, Atty. Alcantara attached thereto a duly authenticated
copy of the judgment of dismissal and a photocopy of the identification page of petitioner Domingo Belens U.S.
passport. These documents could have been supplied only by petitioners, indicating that they have consented to the
appearance of Atty. Alcantara on their behalf. In sum, petitioners voluntarily submitted themselves through Atty.
Alcantara to the jurisdiction of the RTC.

ISSUE 2
1. As a general rule, when a party is represented by counsel of record, service of orders and notices must be made
upon said attorney and notice to the client and to any other lawyer, not the counsel of record, is not notice in law.
The exception to this rule is when service upon the party himself has been ordered by the court. In cases where
service was made on the counsel of record at his given address, notice sent to petitioner itself is not even
necessary.
2. In the instant case, a copy of the RTC decision was sent first to Atty. Alcantara, petitioners counsel of record.
However, the same was returned unserved in view of the demise of Atty. Alcantara. Thus, a copy was
subsequently sent to petitioners last known address in San Gregorio, Alaminos, Laguna, which was received by
a certain Leopoldo Avecilla. Undoubtedly, upon the death of Atty. Alcantara, the lawyer-client relationship
between him and petitioners has ceased, thus, the service of the RTC decision on him is ineffective and did not
bind petitioner.
3. The subsequent service on petitioners purported last known address by registered mail is also defective because

it does not comply with the requisites under the aforequoted Section 7 of Rule 13 on service by registered mail.
Section 7 of Rule 13 contemplates service at the present address of the party and not at any other address of the
party. Service at the partys former address or his last known address or any address other than his present address
does not qualify as substantial compliance with the requirements of Section 7, Rule 13. Therefore, service by
registered mail presupposes that the present address of the party is known and if the person who receives the same
is not the addressee, he must be duly authorized by the former to receive the paper on behalf of the party.
4. Since the filing of the complaint, petitioners could not be physically found in the country because they had already
become permanent residents of California, U.S.A. It has been established during the trial that petitioners are
former residents of Alaminos, Laguna, contrary to the averment in the complaint that they reside and may be
served with court processes thereat. The service of the RTC decision at their former address in Alaminos, Laguna
is defective and does not bind petitioners.
5. In view of the foregoing, the running of the fifteen-day period for appeal did not commence upon the service of the
RTC decision at the address on record of Atty. Alcantara or at the Laguna address. It is deemed served on
petitioners only upon its receipt by Atty. Culvera on 29 December 2003. Therefore, the filing of the Notice of
Appeal on 06 January 2004 is within the reglementary period and should be given due course.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

010 & 30 PAKISTAN INTERNATIONAL AIRLINES AUTHOR:

CORPORATION vs HON. BLAS F. OPLE, in his capacity NOTES: (if applicable)
as Minister of Labor; HON. VICENTE LEOGARDO, JR.,
in his capacity as Deputy Minister; ETHELYNNE B.
FARRALES and MARIA MOONYEEN MAMASIG
G.R. No. 61594 September 28, 1990
TOPIC: Choice of Law/Conracts
PONENTE: FELICIANO, J.
FACTS:
1. Petitioner Pakistan International Airlines Corporation (PIA), a foreign corporation licensed to do business in the
Philippines, executed in Manila 2 separate contracts of employment, one with private respondent Ethelynne B. Farrales
and the other with private respondent Ma. M.C. Mamasig.
2. One of the stipulations in the contracts is:
10. APPLICABLE LAW: This agreement shall be construed and governed under and by the laws of Pakistan, and only
the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.
3. Roughly 1 year and 4 months prior to the expiration of the contracts of employment, PIA through Mr. Oscar Benares,
counsel for and official of the local branch of PIA, sent separate letters both dated 1 August 1980 to private respondents
Farrales and Mamasig advising both that their services as flight stewardesses would be terminated "effective 1 September
1980.
4. Farrales and Mamasig jointly instituted a complaint, for illegal dismissal and non-payment of company benefits and
bonuses, against PIA with the then Ministry of Labor and Employment (MOLE).
5. Regional Director ordered reinstatement and payment of full back wages or in the alternative payment of their salaries
for the remainder of the 3-year period.
they have attained status of regular employees.
The provision stipulating a three-year period of employment is null and void for violating Labor Code provisions
on regular employment
Dismissal without clearance from MOLE entitles employees to reinstatement
6.Deputy Minister affirmed the RDs order.
7.PIA filed a petition for certiorari before the SC.
assails the award of the Regional Director and the Order of the Deputy Minister as having been rendered without
jurisdiction
PIAs relationship with Farrles and Mamasig was governed by the provisions of its contract rather than by the
general provisions of the Labor Code
ISSUE(S):
1. What law governs the relationship of the parties to the contract? Which court has jurisdiction?
HELD: PHILIPPINE LAW. PHILIPPINE COURTS
RATIO:
1. Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law of
Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute arising out of or
in connection with the agreement "only [in] courts of Karachi Pakistan". The first clause of paragraph 10 cannot be
invoked to prevent the application of Philippine labor laws and regulations to the subject matter of this case, i.e., the
employer-employee relationship between petitioner PIA and private respondents. We have already pointed out that the
relationship is much affected with public interest and that the otherwise applicable Philippine laws and regulations
cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship. Neither may
petitioner invoke the second clause of paragraph 10, specifying the Karachi courts as the sole venue for the settlement of
dispute; between the contracting parties. Even a cursory scrutiny of the relevant circumstances of this case will show
the multiple and substantive contacts between Philippine law and Philippine courts, on the one hand, and the
relationship between the parties, upon the other: the contract was not only executed in the Philippines, it was also

performed here, at least partially; private respondents are Philippine citizens and respondents, while petitioner,
although a foreign corporation, is licensed to do business (and actually doing business) and hence resident in the
Philippines; lastly, private respondents were based in the Philippines in between their assigned flights to the Middle
East and Europe. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for
the resolution of contractual disputes between the parties. Under these circumstances, paragraph 10 of the employment
agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by
Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan
law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the
applicable provisions of Philippine law.
2. PIA invokes paragraphs 5 and 6 of its contract of employment with private respondents Farrales and Mamasig, arguing
that its relationship with them was governed by the provisions of its contract rather than by the general provisions of the
Labor Code.
Paragraph 5 of that contract set a term of three (3) years for that relationship, extendible by agreement between the parties;
while paragraph 6 provided that, notwithstanding any other provision in the Contract, PIA had the right to terminate the
employment agreement at any time by giving one-month's notice to the employee or, in lieu of such notice, one-months
salary.
A contract freely entered into should, of course, be respected, as PIA argues, since a contract is the law between the
parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article
1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem
convenient, "provided they are not contrary to law, morals, good customs, public order or public policy." Thus,
counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable
law, especially provisions relating to matters affected with public policy, are deemed written into the contract. Put a little
differently, the governing principle is that parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and
employment is clearly such an area and parties are not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each other. It is thus necessary to appraise the contractual
provisions invoked by petitioner PIA in terms of their consistency with applicable Philippine law and regulations.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

011 CADALIN v POEA

G.R. No. L-104776. December 5, 1994

AUTHOR: Jade
NOTES: (if applicable)

Cadalin v. NLRC
G.R. Nos. 104911-14. December 5, 1994

Petitions are filed under Rule 65 of the Revised Rules of

Court ; the 3 cases were consolidated

Asia Intl Builder Corp. & Brown & Root Intl Inc v.
NLRC, Cadalin et. al
TOPIC:
PONENTE: Quiason, J.
FACTS:
6 June 1984 0 Bienvenido Cadalin et al, in their own behalf and on behalf of 728 other overseas contract
workers instituted a class suit by filing an Amended Complaint with the POEA for money claims arising from
their recruitment by AIBC and employment by BRII. The claimants were represented by Atty. Gerardo del
Mundo.
BRII is a foreign corporation with headquarters in Houston, Texas and is engaged in construction.
AIBS is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino workers
for overseas employment on behalf of its foreign principals.
The claimants alleged that they were recruited by AIBC for its accredited foreign principal, Brown & Root on
various dates from 1975 to 1983.
They were all deployed at various projects undertaken by BRII in several countries in the Middle East, such as
Saudi Arabia, Libya, UAE and Bahrain, as well as in Southeast Asia, in Indonesia and Malaysia.
The claimants had been officially processed as overseas contract workers by the Philippine Government; all
signed standard overseas employment contracts with AIBC before their departure from the Philippines.
The overseas employment contracts invariably contained the following relevant terms and conditions:
o The employee is employed at the hourly rate and overtime rate.
o The hours of work shall be those set by the employer and the employer, at his sole option, change of
adjust such hours as may be deemed necessary from time to time.
o The employer may, at his sole discretion, terminate employees service with case, at any time.
o If the employer terminates the services of the employee because of the completion or termination or
suspension of the work where the employees services were being utilized, or because of reduction in
force due to a decrease in scope of work or change in the type of construction of such work, the
employer will be responsible for the employees return transportation to his country of origin, normally
on the most expeditious air route, economy class accommodation.
o After 1 year of continuous service and/or satisfactory completion of contract, employee shall be entitled
to 12-days vacation leave with pay, computed at the basic wage rate; fraction of a years service will be
computed on a pro-rata basis.
o Sick leave of 15 days shall be granted to the employee for every year of service for non-work related
injuries/illness. If unavailed, sick leave benefits shall be forfeited at the end of the year.
o A bonus of 20% for offshore work of gross income will be accrued and payable only upon satisfactory
completion of contract.
o The 7th day of the week shall be observed as rest day with 8 hours regular pay. If work is performed on a
rest day, all hours work shall be paid at the premium rate. However, off-day pay is applicable only when
the laws of the Host Country require payments for rest days.
Most of the claimants were deployed in the State of Bahrain, where His Majesty Isa Bin Salman Al Kaifa, the
Amir of Bahrain, issued his Amiri Decree # 23 of 16 June 1976, otherwise known as the Labor Law for the
Private Sector. This took effect on 16 August 1976.
Some provisions of the Amiri Decree # 23 relevant to the claims are as follows:
o Art. 79 A worker shall receive payment for each extra hour equivalent to his wage entitlement
increased by a minimum of 25% thereof for hours worked during the day; and by a minimum of 50%
thereof for hours worked during the night, from 7pm until 7am. [overtime & night differential]
o Art. 80 Friday shall be deemed to be a weekly day of rest on full pay; an employer may require a
worker, with his consent, to work on his weekly rest day if circumstances require, with an additional
sum equivalent to 150% of his normal wage.

Art. 81 When conditions of work require the worker to work on any official holiday, he shall be paid an
additional sum equivalent to 150% of his normal wage [holiday pay].
o Art. 84 Every worker who has completed 1 year continuous service with his employer shall be entitled
to leave on full pay for a period of not less than 21 days for each year increased to a period not less than
28 days after 5 continuous years of service. A worker shall be entitled to such leave upon a quantum
meruit in respect of the proportion of his service in that year.
o Art. 107 A contract of employment with indefinite duration may be terminated by either party to the
contract after giving the other party 30 days prior notice before such termination, in writing, in respect
of monthly paid workers and 15 days notice in respect of other workers. The party terminating a
contract without giving the required notice shall pay to the other party compensation equivalent to the
amount of wages payable to the worker for the period of such notice or the unexpired portion thereof.
o Art. 111 The employer concerned shall pay to such worker, upon termination of employment, a
leaving indemnity for the period of his employment calculated on the basis of 15 days wages for each
year of the first 3 years of service and of 1 months wages for each year of service thereafter. Such
worker shall be entitled to payment of leaving indemnity upon a quantum meruit in proportion to the
period of his service completed within a year.
All claimants have already been repatriated to the Philippines at the time of the filing of their cases.
The amended complaint principally sought the payment of the unexpired portion of the employment contracts,
which was terminated prematurely; they also sought the payment of the interest of the earnings of the Travel
and Reserved Fund, interest on all the unpaid benefits, area wage, salary differential pay, fringe benefits, refund
of SSS and premium not remitted to the SSS, refund of withholding tax not remitted to the BIR, penalties for
committing prohibited practices; and suspension of the license of AIBC and the accreditation of BRII.
25 June 1984 AIBS was furnished a copy of the complaint and together with BRII, was given until 5 July 1984
to file an answer.
3 July 1984 the POEA Administration ordered the claimants to file a bill of particulars within 10 days from
receipt of the order.
13 July 1984 the claimants submitted their Compliance and Manifestation.
23 July 1984 AIBC filed a Motion to Strike Out of the Records the Complaint and the Compliance and
Manifestation.
25 July 1984 the claimants filed their Rejoinder and Comments, averring the failure of AIBC and BRII to file
their answers and to attend the pre-trial conference.
The claimants alleged that AIBC and BRII had waived
their right to present evidence and had defaulted by failing to file their answers and to attend the pre-trial
conference.
2 October 1984 the POEA administrator denied the Motion to Strike Out of the Records filed by AIBC but
ordered the claimant to correct the deficiencies in the complaint pointed out in the order.
10 October 1984 the claimants asked for time within which to comply with the October 2 Order and filed an
Urgent Manifestation praying that the POEA Administrator direct the parties to submit simultaneously their
position papers, after which the case should be deemed submitted for decision.
Same day Atty. Florante de Castro filed another complaint for the same money claims and benefits in behalf of
several claimants.
19 October 1984 claimants filed their Compliance with the October 2 Order and an Urgent Manifestation,
praying that the POEA direct the parties to submit simultaneously their positon papers after which the case
would be submitted for decision.
Same day AIBC asked for time to file its comment on the Compliance and Urgent Manifestation of claimants;
AIBC filed a second motion for extension of time to file the comment.
8 November 1984 POEA Administrator granted AIBCs motion for extension.
14 November 1984 claimants filed an opposition to the motions for extension of time and asked that AIBC and
BRII be declared in default for failure to file their answers.
20 November 1984 - AIBC and BRII filed a Comment praying among other reliefs that claimants should be
ordered to amend their complaint.
27 December 1984 the POEA Administrator issued an order directing AIBc and BRII to file their answers
within 10 days from receipt of the order.
27 February 1985 AIBC and BRII appealed to NLRC seeking the reversal of the order of the POEA
Administrator. Claimants opposed the appeal, claiming that it was dilatory and the AIBC and BRII should be
declared in default.
o

2 April 1985 the original claimants filed an amended complaint/position paper dated 24 March 1985 adding
new demands: payment of overtime pay, extra night work pay, annual leave differential pay, leave indemnity
pay, retirement and savings benefits and their share of forfeitures.
15 april 1985 POEA administrator directed AIBC to file its answer to the amended complaint.
28 May 1985 claimants filed an Urgent Motion for Summary Judgment.
Same day POEA ordered AIBC and BRII to file their answers to the Amended Complaint, otherwise they would
be deemed to have waived their right to present evidence and the case would be resolved based on the
claimants evidence.
5 June 1985 - AIBC filed a Motion to Dismiss as Improper Class Suit and Motion for Bill of Particulars on the
Amended Complaint dated March 24. Claimants opposed the motions.
4 September 1985 POEA reiterated his directive to AIBC and BRII to file their answers.
18 September 1985 AIBC filed its 2nd appeal to the NLRC and a petition for issuance of a writ of injunction.
Same day NLRC enjoined the POEA Administrator from hearing the labor cases and suspended the period for
filing the answers of AIBC and BRII.
19 September 1985 claimants asked the POEA Administrator to include additional claimants in the case to
investigate alleged wrongdoings of BRII, AIBC and their lawyers.
10 October 1985 Romeo Patag et al filed a complaint against AIBC and BRII with the POEA, demanding
monetary claims similar to the existing complaints. Solomon Reyes also filed his own complaint against AIBC
and BRII in the same month.
17 October 1985 the law firm of Florante M. de Castro & Associates asked for the substitution of the original
counsel of record and the cancellation of the special powers of attorney given to the original counsel.
29 May 1986 Atty de Castro filed a complaint for money claims in behalf of 11 claimants including Cadalin.
12 December 1986 NLRC dismissed the 2 appeals filed by AIBC and BRII.
Note also that 2 cases were filed in the Supreme Court by the claimants were SC issued a resolution directing
the POEA Administrator to resolve the issues raised in the motions and oppositions and to decide the labor
cases with deliberate dispatch.
AIBC also filed a petition in the SC questioning the Order of the POEA issued 4 September 1985; the petition was
dismissed because AIBCs technical objections may be properly resolved in the hearings before the POEA.
Several claimants also filed before the Ombudsman complaints against the POEA Administrator and several
NLRC Commissioners where the Ombudsman merely referred the complaint to the Secretary of DOLE with a
request for early disposition of the case; another was filed against AIBC and BRII for violation of labor and social
legislations.
13 January 1987 AIBC filed a motion for reconsideration of the NLRC Resolution dismissing its 2 appeals.
28 April 1987 NLRC en banc denied AIBCs motion for reconsideration.
19 June 1987 hearing was finally held.
30 January 1989 POEA Administrator rendered his decision awarding the amount of $824,652.44 in favor of
only 324 claimants.
10 February 1989 claimants submitted their Appeal Memorandum for Partial Appeal ; AIBC filed a motion for
reconsideration/appeal.
17 February 1989 claimants filed their Answer to Appeal, praying for the dismissal of the appeal of AIBC and
BRII.
15 March 1989 claimants filed their Supplement to Complainants Appeal Memorandum together with their
newly discovered evidence consisting of payroll records.
5 April 1989 AIBC and BRII submitted to the NRLC their Manifestation stating that there were only 728 named
claimants.
20 April 1989 claimants filed their Counter-Manifestation alleging that there were 1767 claimants.
27 July 1989 claimants filed their Urgent Motion for Execution of the POEA decision on the ground that BRII
failed to appeal on time and AIBC had not posted the supersedeas bond amounting to $824,652.44.
23 Decembver 1989 claimants filed another motion to resolve the labor cases.
21 August 1990 claimants filed their Manifestational Motion, praying that all 1767 claimants be awarded their
monetary claims for failure of AIBC and BRII to file their answers within the reglamentary period required by
law.
2 September 1991 NLRC promulgated its Resolution, modifying the POEA decision:
o Claims if identified 94 complainants are dismissed due to prescription;

AIBC and BRII are ordered, jointly and severally, to pay the 149 claimants, the peso equivalent, at the
time of payment, of the total amount in US$ indicated opposite their names;
o The awards given by the POEA to 19 complainants who appear to have worked elsewhere than in
Bahrain are set aside.
o All claims other than those indicated in Annex B, including those for overtime work, which have been
favorably granted by the POEA, are dismissed for lack of substantial evidence.
o That in the exercise of its powers and authority under Article 218-c of the Labor Code as amended by RA
6715, the NLRC directs LA Fatima Franco to summon parties, conduct hearings and receive evidence
and submit a written report to NLRC of the proceedings taken regarding the claims of the complainants
whose claims were dismissed by the POEA for lack of proof of employment in Bahrain; and
complainants whose awards decreed by the POEA which are not supported by substantial evidence per
NLRCs opinion.
27 November 1991 Amado Tolentino et al filed a petition for certiorari with the SC; petition was dismissed.
Both claimants and AIBC and BRII filed a petition for certiorari with the SC which was dismissed.
3 motions for reconsideration were filed which were all denied by the NLRC.
Hence, this case.
The claimants and AIBC and BRII have submitted compromise agreements for the Courts approval and jointly
moved for the dismissal of their respective petitions.
o

ISSUE(S):
Whether or not the claimants are entitled to benefits provided by Amiri Decree # 23 of Bahrain
Whether or not the complaints qualify as a class suit
Whether or not the proceedings conducted by the POEA, as well as the decision that is the subject of these appeals,
conformed with the requirements of due process / right to speedy disposition of cases.
HELD
Yes, the claimants deployed in Bahrain are entitled to benefits provided by Amiri Decree # 23 of Bahrain.
Only the claimants claiming under the Bahrain Labor Law are qualified to be in 1 class suit.
There was no deprivation of due process and right to speedy disposition of cases.
RATIO:
All petitions raise the common issue of prescription although there was disagreement as to the time that should
be embraced within the prescriptive period.
o POEA Administrator prescriptive period is 10 years, as per Article 1144 of the Civil Code of the
Philippines
o NLRC prescriptive period is 3 years, as per Article 291 of the Labor Code of the Philippines
o Solicitor General prescriptive period is 1 year, as per Amiri Decree # 23 of 1976 but deferred to the
ruling of NLRC that Article 291 of the Labor Code was the operative law.
In the instant case, respondents did not violate the rights of workers as provided by the Labor Code, but the
provisions of the Amiri Decree # 23 issued in Bahrain, which ipso facto amended the workers contracts of
employment.
Respondents consciously failed to conform to these provisions which specifically provide for the increase of the
workers rate. It was only after 30 June 1983, 4 months after the claimants brought suit against BRII in Bahrain
when AIBCs contracts have undergone amendments in Bahrain for the new hires/renewals.
In overruling the POEA Administrator, the NLRC argued that Article 291 of the Labor Code provides that all
money claims arising from employer-employee relations shall be filed within 3 years from the time the cause of
action accrued, otherwise forever barred. The 3 year prescriptive period should be counted from the
repatriation date of each individual claimant, considering that the case is filed in the Philippines. The NLRC
further opined that the applicability of the Amiri Decree # 23 was one of characterization, i.e., whether to
characterize the foreign law on prescription or statute of limitation as substantive or procedural.
The claimants viewed the Article 291 of the Labor Code refers only to claims arising from the employers
violation of the employees rights as provided by the Labor Code. They assert that their claims are based on the

violation of their employment contracts, as amended by the Amiri Decree; therefore, claims may be brought
within 10 years.
AIBC and BRII insisted that the claims have prescribed under the Amiri Decree, which they argued to have force
in the Philippines as borrowing law (Section 48 of the Code of Civil Procedure where such kind of law exists
it takes precedence over the common-law conflicts rule).
Article 156 of the Amiri Decree provides that a claim arising out of a contract of employment shall not be
actionable after the lapse of 1 year for the expiry date of the contract.
COURT RULING ON PRESCRIPTION: Premises considered, the applicable law of prescription to this case
is Article 1144 of the Civil Code.
Herein money claims of the complainants against AIBC and BRII shall prescribe in 10 years from 16
August 1976. All claims were filed within the 10-year prescriptive period, so no claim suffered the
infirmity of being prescribed.
o As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters are
governed by the laws of the forum. This is applicable even if the action is based upon a foreign
substantive law.
o A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed
either as procedural or substantive, depending on the characterization given such a law.
o The characterization of a statute into a procedural or substantive law becomes irrelevant when the
country of the forum has a "borrowing statute." Said statute has the practical effect of treating the
foreign statute of limitation as one of substance. A "borrowing statute" directs the state of the forum to
apply the foreign statute of limitations to the pending claims based on a foreign law. While there are
several kinds of "borrowing statutes," one form provides that an action barred by the laws of the place
where it accrued, will not be enforced in the forum even though the local statute has not run against it.
o Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: If by the laws of the state
or country where the cause of action arose, the action is barred, it is also barred in the Philippines
Islands.
o Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said
Code repealed only those provisions of the Code of Civil Procedures as to which were inconsistent with
it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory
to Section 48 of the Code of Civil Procedure.
o In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as
it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. (See 1987
Constitution Declaration of Principles and State Policies & Social Justice and Human Rights)
o The courts of the forum will not enforce any foreign claim obnoxious to the forum's public policy. To
enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in
question would contravene the public policy on the protection to labor.
While the constitutional right to a speedy disposition of cases is not limited to the accused in a criminal case,
speedy disposition of cases is a relative term (Caballero v. Alfonso, Jr.) Speedy of disposition of cases is a flexible
concept and is consistent with delays and depends upon the circumstances of each case. What the Constitution
prohibits are unreasonable, arbitrary and oppressive delays which render rights nugatory.
Factors that may be taken into consideration in determining whether or not the right to a speedy disposition of
cases has been violated: length of delay, reason for delay, assertion of the right or failure to assert it, and
prejudice caused by the delay. The same factors may also be considered in answering judicial inquiry whether
or not a person officially charged with the administration of justice has violated the speedy disposition of cases.
(Caballero v Alfonso)
The right to speedy trial is deemed violated only when the proceeding is attended by vexatious, capricious, and
oppressive delays, or when unjustified postponements of the trial are asked for and secured, or when without
case or justified motive a long period of time is allowed to elapse without the party having his case tried.
(Gonzales v. Sandiganbayan)
In this case, the claimants had been asking the POEA to declare AIBC and BRII in default for failure to file their
answers within the 10-day period according to the POEA Rules and Regulations.
The motion to declare AIBC and BRII in default was filed a month after they were served with a copy of the
amended complaint and during that time, there was a pending motion of AIBC and NRII to strike out of the
records the amended complaint and the compliance of claimants to submit a bill of particulars.

The final disposition in the administrative level (POEA) came out 7 years after the cases were filed. However, it
still cannot be said to be attended by unreasonable, arbitrary, and oppressive delays as to violate the
constitutional rights to a speedy disposition of the cases of complainants.
It must be noted that the amended complaint filed in June 1984 involved a total of 1767 claimants and said
complaint had undergone several amendments, first on April 1985. The claimants were hired on various dates
from 1975 to 1983, deployed in different areas, and monetary claims amounted to more than US$65 million.
It was right for the POEA to order the claimants to comply with the motion of AIBC for a bill or particulars for
the complaints did not allege with sufficient definiteness and clarify of some facts. It was also right to order the
claimants to correct the deficiencies pointed out by AIBC. Before respondent could give an intelligent answer to
the complaint, the records of employment of the more than 1700 claimants had to be retrieved from various
countries in the Middle East. Some of the records dated as far back as 1975.
The hearings on the merits of the claims before the POEA Administrator were interrupted several times due to
the following reasons: various appeals to the NLRC and to the SC, inclusion of additional claimants and filing of
new cases, squabble between lawyers of claimants.
COURT RULING ON SPEEDY DISPOSITION ISSUE Delay was not due to POEA/NLRCs fault.
A class suit is proper where the subject matter of the controversy is one of common or general interest to many
and the parties are so numerous that it is impracticable to bring them all before the court. (Revised Rules of
Court, Rule 3, Sec. 12)
All the claims are for the benefits granted under the Bahrain Law, however, many of the claimants worked
outside Bahrain and were deployed in Indonesia and Malaysia under different employment terms and
conditions. Each claimant is only interested in his own demand and not in the other employees claims.
While there are common defendants/respondents and the nature of the claims is the same, there is no common
question of law or fact.
In an improperly instituted class suit, there would be no problem if the decision secured is favorable to the
plaintiffs. The problem arises when the decision is adverse to them, in which case the others who were
impleaded by their self-appointed representatives, would surely claim denial of due process. This is why the
Court is extra-cautious in allowing class suits because they are the exceptions to the condition sine qua non,
requiring the joinder of all indispensable parties.
COURT RULING ON CLASS SUIT ISSUE - NLRC and the POEA Administrator are correct in their stance that
inasmuch as the first requirement of a class suit is not present (common or general interest based on
the Amiri Decree of the State of Bahrain), it is only logical that only those who worked in Bahrain shall
be entitled to file their claims in a class suit.
Claimants charge NLRC with grave abuse of discretion in not accepting their formula of Three Hours Average
Daily Overtime in computing the overtime payments.
Claimants alleged that it was BRII which proposed the formula during the negotiations for the settlement of
their claims in Bahrain and therefore, BRII is in estoppel to disclaim said offer.
Claimants presented a Memorandum of the Ministry of Labor of Bahrain dated 16 April 1983 showing the
computation, however, AIBC and BRII claimed that it was not prepared by them but by a subordinate official in
the Bahrain Department of Labor and there was no approval from the Bahrain Minister of Labor and that the
offer was made in the course of the negotiation for an amicable settlement.
Said document was presented to the POEA without observing the rule on presenting official documents of a
foreign government as provided by Rule 132 of the Revised Rules on Evidence, but it can be admitted in
evidence in proceedings before an administrative body. Both parties have a copy of the said document and they
could easily verify its authenticity and accuracy.
However, under Rule 130 of the 1989 Revised Rules on Evidence, an offer to settle a claim is not an admission
that anything is due. This Rule is not only a rule of procedure to avoid the cluttering of the record with
unwanted evidence but a statement of public policy. There is great public interest in having the protagonists
settle their differences amicable before these ripen into litigation. Every effort must be taken to encourage them
to arrive at a settlement. The submission of offers and counter-offers in the negotiation table is a step in the
right direction. But to bind a party to his offers, as what claimants would make this Court do, would defeat the

salutary purpose of the Rule.

AIBC and BRII claim that NLRC acted capriciously and whimsically when it refused to enforce the overseas
employment contracts, which became the law of the parties. They contend that the principle that a law is
deemed to be a part of a contract applies only to provision of Philippine law in relation to contracts executed in
the Philippines.
NLRC applied the Amiri Decree which provides for greater benefits than those stipulated in the contract of
claimants because it was of the belief that where the laws of the host country are more favorable and beneficial
to the workers, then the laws of the host country shall form part of the overseas employment contract.
Court: The contracts prepared by AIBC and BRII themselves, provided that the laws of the host country became
applicable to said contracts if they offer terms and conditions more favorable than those stipulated therein.The
overseas-employment contracts could have been drafted more felicitously. While a part thereof provides that
the compensation to the employee may be "adjusted downward so that the total computation (thereunder) plus
the non-waivable benefits shall be equivalent to the compensation" therein agreed, another part of the same
provision categorically states "that total remuneration and benefits do not fall below that of the host country
regulation and custom."
Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII, the parties
that drafted it (Eastern Shipping Lines, Inc. v. Margarine-Verkaufs-Union / Article 1377, Civil Code). Said rule of
interpretation is applicable to contracts of adhesion where there is already a prepared form containing the
stipulations of the employment contract and the employees merely "take it or leave it."
Applying the said legal precepts, the overseas-employment contracts in question as adopting the provisions of
the Amiri Decree No. 23 of 1976 as part and parcel thereof.
The parties to a contract may select the law by which it is to be governed (Cheshire, Private International Law,
187 [7th ed.]). In such a case, the foreign law is adopted as a "system" to regulate the relations of the parties,
including questions of their capacity to enter into the contract, the formalities to be observed by them, matters
of performance, and so forth (16 Am Jur 2d,150-161).
Instead of adopting the entire mass of the foreign law, the parties may just agree that specific provisions of a
foreign statute shall be deemed incorporated into their contract "as a set of terms." By such reference to the
provisions of the foreign law, the contract does not become a foreign contract to be governed by the foreign law.
The said law does not operate as a statute but as a set of contractual terms deemed written in the contract
(Anton, Private International Law, 197 [1967]; Dicey and Morris, The Conflict of Laws, 702-703, [8th ed.]).
A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected by giving
effect to the parties' own choice of the applicable law. The choice of law must, however, bear some relationship to
the parties or their transaction There is no question that the contracts sought to be enforced by claimants have
a direct connection with the Bahrain law because the services were rendered in that country.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

012 Saudi Arabia Airlines v CA

G.R. No. 122191, October 1998
TOPIC: Choice of Law
PONENTE: Quisumbing, J.

AUTHOR:
NOTES: (if applicable)

FACTS:
1. Petitioner SAUDIA hired private respondent MORADA as a flight attendant in 1988, based in Jeddah.
On 1990, while on a lay-over in Jakarta, Indonesia, she went to party with 2 male attendants, and on the
following morning in their hotel, one of the male attendants attempted to rape her. She was rescued by
hotel attendants who heard her cry for help. The Indonesian police arrested the 2.
2. MORADA returned to Jeddah, but was asked by the company to go back to Jakarta and help arrange the
release of the 2 male attendants. MORADA did not cooperate when she got to Jakarta.
3. What followed was a series of interrogations from the Saudi Courts which she did not understand as this
was in their language. In 1993, she was surprised, upon being ordered by SAUDIA to go to the Saudi
court, that she was being convicted of (1) adultery; (2) going to a disco, dancing and listening to the
music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic
tradition, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that
the Saudi court had tried her, together with the 2, for what happened in Jakarta.
4. SAUDIA denied her the assistance she requested, But because she was wrongfully convicted, Prince of
Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return
to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause.
5. On November 23, 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi
(Al-Balawi), its country manager.
SAUDIA ALLEGES: Private respondents claim for alleged abuse of rights occurred in the Kingdom of
Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant case for the
application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.
MORADA ALLEGES: Since her Amended Complaint is based on Articles 19 and 21 of the Civil Code, then the
instant case is properly a matter of domestic law.
ISSUE(S):
1. Whether the RTC acquired jurisdiction over the petitioners
HELD:
3. YES
RATIO:
There is likewise logical basis on record for the claim that the handing over or turning over of the
person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as
employer. Petitioners purported act contributed to and amplified or even proximately caused additional
humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest,
detention and prosecution of private respondent under the guise of petitioners authority as employer, taking
advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah,
the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or
harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to
provide compensation or redress for the wrongs done, once duly proven.

Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of
contact could be the place or places where the tortious conduct or lex loci actus occurred. And applying the
torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where
the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed
that petitioner would, in the exercise of its rights and in the performance of its duties, act with justice, give her
her due and observe honesty and good faith. Instead, petitioner failed to protect her, she claimed. That certain
acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the fatality of the alleged injury to the person, reputation,
social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories
and rules on tort liability] have been advanced to offer fresh judicial approaches to arrive at just results. In
keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the
most significant relationship rule, which in our view should be appropriate to apply now, given the factual
context of this case.
In applying said principle to determine the State which has the most significant relationship, the following
contacts are to be taken into account and evaluated according to their relative importance with respect to the
particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
As already discussed, there is basis for the claim that over-all injury occurred and lodged in the
Philippines. There is likewise no question that private respondent is a resident Filipina national, working with
petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the
relationship between the parties was centered here, although it should be stressed that this suit is not based on
mere labor law violations. From the record, the claim that the Philippines has the most significant contact with
the matter in this dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in
our view, has been properly established.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

013 G.R. No. 162894 Raytheon International, Inc.

petitioner vs. Stockton W. Rouzie, Jr. respondent
TOPIC: Resolution of Conflicts Problems
PONENTE: Tinga, J.

AUTHOR: Bea Mationg

NOTES:
Jurisdiction considers whether it is fair to cause
a defendant to travel to this state; choice of law asks the
further question whether the application of a
substantive law which will determine the merits of the
case is fair to both parties. The choice of law stipulation
will become relevant only when the substantive issues of
the instant case develop, that is, after hearing on the
merits proceeds before the trial court.

FACTS:
Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of
Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a
contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several
government projects in the Philippines for an agreed remuneration of 10% of the gross receipts.
On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of
BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows.
On 16 July 1994, respondent filed before the National Labor Relations Commission (NLRC) a suit against
BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of
commissions, illegal termination and breach of employment contract.
LABOR ARBITER: rendered judgment ordering BMSI and RUST to pay respondents money claims.
APPEAL: The NLRC reversed the decision of the Labor Arbiter and dismissed respondents complaint on the
ground of lack of jurisdiction.
RTC: Respondent, instituted an action for damages before the Regional Trial Court (RTC) of Bauang, La
Union. The Complaintnamed as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST,
the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the
labor case that BMSI verbally employed respondent to negotiate the sale of services in government projects and
that respondent was not paid the commissions due him from the Pinatubo dredging project which he secured on
behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself had combined and
functioned as one company.
ANSWER: It was a foreign corporation duly licensed to do business in the Philippines and denied entering
into any arrangement with respondent or paying the latter any sum of money. Petitioner also denied combining
with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies. It also referred to the
NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST,
denominated as Special Sales Representative Agreement, the rights and obligations of the parties shall be
governed by the laws of the State of Connecticut. Petitioner sought the dismissal of the complaint on grounds of
failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory
counterclaim.
RTCS ORDER: Held that the factual allegations in the complaint, assuming the same to be admitted, were
sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non
conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign
corporation licensed to do business in the Philippines.
CA: The appellate court deferred to the discretion of the trial court when the latter decided not to desist
from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens.

ISSUE(S): (1) WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO

DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON
INTERNATIONAL, INC.
(2) WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE
COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.
HELD: (1) NO. THE CA DID NOT ERR; (2) THE CA DID NOT ERR ALSO. THE PETITION LACKS MERIT.
RATIO: Petitioner mainly asserts that the written contract between respondent and BMSI included a valid
choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also
mentions the presence of foreign elements in the dispute namely, the parties and witnesses involved are
American corporations and citizens and the evidence to be presented is located outside the Philippines that
renders our local courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute
necessitate the immediate application of the doctrine of forum non conveniens.
The Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems,
namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances where the
Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the
following requisites had to be proved: (1) that the Philippine Court is one to which the parties may conveniently
resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and
(3) that the Philippine Court has or is likely to have the power to enforce its decision.
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court
and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the
case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an
exercise of sovereign prerogative of the country where the case is filed.
Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law and
by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or
some of the claims or reliefs sought therein. The civil case is an action for damages arising from an alleged breach of
contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the jurisdiction of the
RTC.
As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as
party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as
party defendant) was acquired by its voluntary appearance in court.
That the subject contract included a stipulation that the same shall be governed by the laws of the State
of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are
precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question
whether the application of a substantive law which will determine the merits of the case is fair to both parties. The
choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is,
after hearing on the merits proceeds before the trial court.
Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a
factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion
of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the courts desistance.
As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged
together requires the presentation of further evidence, which only a full-blown trial on the merits can afford.
CASE LAW/ DOCTRINE:

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on
its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from
seeking remedies elsewhere. Petitioners averments of the foreign elements in the instant case are not sufficient to
oust the trial court of its jurisdiction and the parties involved.
DISSENTING/CONCURRING OPINION(S):

014 Mijares vs. Ranada

GR. No. 139325; April 12, 2005
TOPIC:
PONENTE: Tinga

AUTHOR: Revy Neri

NOTES: The petitioners in this case are prominent victims
of human rights violations who, deprived of the opportunity
to directly confront the man who once held absolute rule
over this country, have chosen to do battle instead with the
earthly representative, his estate.

FACTS:
1. On 9 May 1991, a complaint was filed with the United States District Court (US District Court), District of
Hawaii, against the Estate of former Philippine President Ferdinand E. Marcos (Marcos Estate).
2. The action was brought forth by ten Filipino citizens who each alleged having suffered human rights abuses such
as arbitrary detention, torture and rape in the hands of police or military forces during the Marcos regime.
3. The Alien Tort Act was invoked as basis for the US District Courts jurisdiction over the complaint, as it involved
a suit by aliens for tortious violations of international law.
4. These plaintiffs brought the action on their own behalf and on behalf of a class of similarly situated individuals,
particularly consisting of all current civilian citizens of the Philippines, their heirs and beneficiaries, who between
1972 and 1987 were tortured, summarily executed or had disappeared while in the custody of military or
paramilitary groups.
5. Plaintiffs alleged that the class consisted of approximately ten thousand (10,000) members; hence, joinder of all
these persons was impracticable.
6. The institution of a class action suit was warranted under Rule 23(a) and (b)(1)(B) of the US Federal Rules of Civil
Procedure, the provisions of which were invoked by the plaintiffs.
7. Subsequently, the US District Court certified the case as a class action and created three (3) sub-classes of torture,
summary execution and disappearance victims.
8. Trial ensued, and subsequently a jury rendered a verdict and an award of compensatory and exemplary damages in
favor of the plaintiff class.
9. Then, on 3 February 1995, the US District Court, presided by Judge Manuel L. Real, rendered a Final Judgment
(Final Judgment) awarding the plaintiff class a total of One Billion Nine Hundred Sixty Four Million Five
Thousand Eight Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90).
10. The Final Judgment was eventually affirmed by the US Court of Appeals for the Ninth Circuit, in a decision
rendered on 17 December 1996.
11. On 20 May 1997, the present petitioners filed Complaint with the Regional Trial Court, City of Makati (Makati
RTC) for the enforcement of the Final Judgment.
12. They alleged that they are members of the plaintiff class in whose favor the US District Court awarded damages.
They argued that since the Marcos Estate failed to file a petition for certiorari with the US Supreme Court after the
Ninth Circuit Court of Appeals had affirmed the Final Judgment, the decision of the US District Court had become
final and executory, and hence should be recognized and enforced in the Philippines, pursuant to Section 50, Rule
39 of the Rules of Court then in force.
13. On 5 February 1998, the Marcos Estate filed a motion to dismiss, raising, among others, the non-payment of the
correct filing fees.
14. It alleged that petitioners had only paid Four Hundred Ten Pesos (P410.00) as docket and filing fees,
notwithstanding the fact that they sought to enforce a monetary amount of damages in the amount of over Two and
a Quarter Billion US Dollars (US$2.25 Billion).
15. The Marcos Estate cited Supreme Court Circular No. 7, pertaining to the proper computation and payment of
docket fees.
16. In response, the petitioners claimed that an action for the enforcement of a foreign judgment is not capable of
pecuniary estimation; hence, a filing fee of only Four Hundred Ten Pesos (P410.00) was proper, pursuant to
Section 7(c) of Rule 141.
17. On 9 September 1998, respondent Judge Santiago Javier Ranada of the Makati RTC issued the subject Order
dismissing the complaint without prejudice. Respondent judge opined that contrary to the petitioners submission,
the subject matter of the complaint was indeed capable of pecuniary estimation, as it involved a judgment rendered
by a foreign court ordering the payment of definite sums of money, allowing for easy determination of the value of
the foreign judgment. On that score, Section 7(a) of Rule 141 of the Rules of Civil Procedure would find
application, and the RTC estimated the proper amount of filing fees was approximately Four Hundred Seventy
Two Million Pesos, which obviously had not been paid.
18. Petitioners filed a Motion for Reconsideration, which Judge Ranada denied in an Order dated 28 July 1999.

19. From this denial, petitioners filed a Petition for Certiorari under Rule 65 assailing the twin orders of respondent
judge.
20. They prayed for the annulment of the questioned orders, and an order directing the reinstatement of Civil Case No.
97-1052 and the conduct of appropriate proceedings thereon.
21. Petitioners submit that their action is incapable of pecuniary estimation as the subject matter of the suit is the
enforcement of a foreign judgment, and not an action for the collection of a sum of money or recovery of
damages.
22. They also point out that to require the class plaintiffs to pay Four Hundred Seventy Two Million Pesos
(P472,000,000.00) in filing fees would negate and render inutile the liberal construction ordained by the Rules of
Court, as required by Section 6, Rule 1 of the Rules of Civil Procedure, particularly the inexpensive disposition of
Where case should be filed
every action.
Procedure in enforcing foreign judgment - file civil action
Cause of action arises from judgment, not tortious act itself
paid the correctProve
docketjudgment
fees.
not facts

ISSUE(S): WON the petitioner

HELD: YES. But on a different basisamount merely corresponds to the same amount required for other actions not
involving property.
RATIO:
RTC Makati erred in concluding that the filing fee should be computed on the basis of the total sum claimed or the stated
value of the property in litigation. The Petitioners Complaint was lodged against the Estate of Marcos but it is clearly
based on a judgment, the Final Judgment of the US District Court. However, the Petitioners err in stating that the Final
Judgment is incapable of pecuniary estimation because it is so capable. On this point, Petitioners state that this might lead
to an instance wherein a first level court (MTC, MeTC, etc.) would have jurisdiction to enforce a foreign judgment. Under
the B.P.129, such courts are not vested with such jurisdiction. 33 of B.P.129 refers to instances wherein the cause of
action or subject matter pertains to an assertion of rights over property or a sum of money. But here, the subject matter is
the foreign judgment itself. 16 of B.P.129 reveals that the complaint for enforcement of judgment even if capable of
pecuniary estimation would fall under the jurisdiction of the RTCs. Thus, the Complaint to enforce the US District Court
judgment is one capable of pecuniary estimations but at the same time, it is also an action based on judgment against an
estate, thus placing it beyond the ambit of 7(a) of Rule 141. What governs the proper computation of the filing fees over
Complaints for the enforcement of foreign judgments is 7(b)(3), involving other actions not involving property.
There is an evident distinction between a foreign judgment in an action in rem and one in personam. For an action in rem,
the foreign judgment is deemed conclusive upon the title to the thing, while in an action in personam, the foreign judgment
is presumptive, and not conclusive, of a right as between the parties and their successors in interest by a subsequent title.
However, in both cases, the foreign judgment is susceptible to impeachment in our local courts on the grounds of want of
jurisdiction or notice to the party, collusion, fraud, or clear mistake of law or fact. Thus, the party aggrieved by the foreign
judgment is entitled to defend against the enforcement of such decision in the local forum. It is essential that there should
be an opportunity to challenge the foreign judgment, in order for the court in this jurisdiction to properly determine its
efficacy.
It is clear then that it is usually necessary for an action to be filed in order to enforce a foreign judgment, even if such
judgment has conclusive effect as in the case of in rem actions, if only for the purpose of allowing the losing party an
opportunity to challenge the foreign judgment, and in order for the court to properly determine its efficacy. Consequently,
the party attacking a foreign judgment has the burden of overcoming the presumption of its validity.
The rules are silent as to what initiatory procedure must be undertaken in order to enforce a foreign judgment in the
Philippines. But there is no question that the filing of a civil complaint is an appropriate measure for such purpose. A civil
action is one by which a party sues another for the enforcement or protection of a right, and clearly an action to enforce a
foreign judgment is in essence a vindication of a right prescinding either from a conclusive judgment upon title or the
presumptive evidence of a right. Absent perhaps a statutory grant of jurisdiction to a quasi-judicial body, the claim for
enforcement of judgment must be brought before the regular courts.
There are distinctions, nuanced but discernible, between the cause of action arising from the enforcement of a foreign
judgment, and that arising from the facts or allegations that occasioned the foreign judgment. They may pertain to the
same set of facts, but there is an essential difference in the right-duty correlatives that are sought to be vindicated. For
example, in a complaint for damages against a tortfeasor, the cause of action emanates from the violation of the right of the

complainant through the act or omission of the respondent. On the other hand, in a complaint for the enforcement of a
foreign judgment awarding damages from the same tortfeasor, for the violation of the same right through the same manner
of action, the cause of action derives not from the tortious act but from the foreign judgment itself.
More importantly, the matters for proof are different. Using the above example, the complainant will have to establish
before the court the tortious act or omission committed by the tortfeasor, who in turn is allowed to rebut these factual
allegations or prove extenuating circumstances. Extensive litigation is thus conducted on the facts, and from there the right
to and amount of damages are assessed. On the other hand, in an action to enforce a foreign judgment, the matter left for
proof is the foreign judgment itself, and not the facts from which it prescinds.
The preclusion of an action for enforcement of a foreign judgment in this country merely due to an exhorbitant assessment
of docket fees is alien to generally accepted practices and principles in international law. Indeed, there are grave concerns
in conditioning the amount of the filing fee on the pecuniary award or the value of the property subject of the foreign
decision. Such pecuniary award will almost certainly be in foreign denomination, computed in accordance with the
applicable laws and standards of the forum. The vagaries of inflation, as well as the relative low-income capacity of the
Filipino, to date may very well translate into an award virtually unenforceable in this country, despite its integral validity,
if the docket fees for the enforcement thereof were predicated on the amount of the award sought to be enforced. The
theory adopted by respondent judge and the Marcos Estate may even lead to absurdities, such as if applied to an award
involving real property situated in places such as the United States or Scandinavia where real property values are
inexorably high. We cannot very well require that the filing fee be computed based on the value of the foreign property as
determined by the standards of the country where it is located.
As crafted, Rule 141 of the Rules of Civil Procedure avoids unreasonableness, as it recognizes that the subject matter of an
action for enforcement of a foreign judgment is the foreign judgment itself, and not the right-duty correlatives that resulted
in the foreign judgment. In this particular circumstance, given that the complaint is lodged against an estate and is based
on the US District Courts Final Judgment, this foreign judgment may, for purposes of classification under the governing
procedural rule, be deemed as subsumed under Section 7(b)(3) of Rule 141, i.e., within the class of all other actions not
involving property. Thus, only the blanket filing fee of minimal amount is required.
Finally, petitioners also invoke Section 11, Article III of the Constitution, which states that [F]ree access to the courts and
quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty. Since the
provision is among the guarantees ensured by the Bill of Rights, it certainly gives rise to a demandable right. However,
now is not the occasion to elaborate on the parameters of this constitutional right. Given our preceding discussion, it is not
necessary to utilize this provision in order to grant the relief sought by the petitioners. It is axiomatic that the
constitutionality of an act will not be resolved by the courts if the controversy can be settled on other grounds or unless the
resolution thereof is indispensable for the determination of the case.
One more word. It bears noting that Section 48, Rule 39 acknowledges that the Final Judgment is not conclusive yet, but
presumptive evidence of a right of the petitioners against the Marcos Estate. Moreover, the Marcos Estate is not precluded
to present evidence, if any, of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact. This ruling, decisive as it is on the question of filing fees and no other, does not render verdict on the enforceability of
the Final Judgment before the courts under the jurisdiction of the Philippines, or for that matter any other issue which may
legitimately be presented before the trial court. Such issues are to be litigated before the trial court, but within the confines
of the matters for proof as laid down in Section 48, Rule 39. On the other hand, the speedy resolution of this claim by the
trial court is encouraged, and contumacious delay of the decision on the merits will not be brooked by this Court.
CASE LAW/ DOCTRINE:

009 Sps. Belen v. Hon. Chavez

G.R. No. 175334, March 26, 2008
TOPIC: Recognition and Enforcement of Judgment
PONENTE: Tinga, J.

AUTHOR:
NOTES: From Gelenes digest

FACTS:

11. Private respondents spouses Pacleb, represented by their attorney-in-fact, Joselito Rioveros, filed an action for the enforcement
of a foreign judgment against Petitioner spouses Belen. The complaint alleged that the Pacleb secured a judgment
by default rendered by Judge John W. Green of the Superior Court of the State of California, which ordered the
spouses Belen to pay $56,204.69 representing loan repayment and share in the profits plus interest and costs of
suit. The summons was served on the Belens address in Laguna, as was alleged in the complaint, and received by
Marcelo M. Belen.
12. 5 December 2000: Atty. Alcantara entered his appearance as counsel for petitioners. He subsequently filed an
answer, alleging that contrary to private respondents averment, petitioners were actually residents of California,
USA and their liability had been extinguished via a release of abstract judgment issued in the same collection case.
13. Since the petitioners fail to attend the scheduled pre-trial conference, the RTC ordered the ex parte presentation of
evidence for private respondents.
14. Atty. Alcantara filed a motion to dismiss, citing the judgment of dismissal issued by the Superior Court of the
State of California, which allegedly dismissed Case No. NC021205. But, the Motion to Dismiss was denied for failure
to present a copy of the alleged judgment of dismissal.
15. For their part, private respondents filed a motion for the amendment of the complaint stating that they were
constrained to withdraw their complaint against petitioners from the California court because of the prohibitive
cost of litigation, which withdrawal was favorably considered by said court.
16. For failure of spouses Belen and their lawyer to appear in the rescheduled pre-trial conference, RTC declared
Belen in default and allowed the presentation of ex parte evidence. In the meantime, the counsel (Alcantara) of
petitioners died without the RTC being informed of such fact. The RTC ruled against Belen and ordered them to pay Pacleb
17. A copy of the RTC decision intended for Atty. Alcantara was returned with the notation Addressee Deceased. A
copy of the RTC decision was then sent to the purported address of petitioners in San Gregorio, Alaminos, Laguna
and was received by a certain Leopoldo Avecilla on 14 August 2003. Meanwhile, immediately after the
promulgation of the RTC decision, private respondents filed an ex-parte motion for preliminary attachment which
the RTC granted in its Order dated 15 September 2003.
18. 24 November 2003: private respondents sought the execution of the RTC decision. In its Order dated 10 December
2003, the RTC directed the issuance of a writ of execution. Upon the issuance of a writ of execution, the real
properties belonging to petitioners were levied upon and the public auction scheduled on 15 January 2004.
19. 16 December 2003: Atty. Carmelo B. Culvera entered his appearance as counsel for petitioners. On 22 December
2003, Atty. Culvera filed a Motion to Quash Writ of Execution (With Prayer to Defer Further Actions). On 6
January 2004, he filed a Notice of Appeal from the RTC Decision averring that he received a copy thereof only on
29 December 2003. -> DENIED
20. Thus, petitioners filed a Rule 65 petition before the Court of Appeals, imputing on the RTC grave abuse of
discretion tantamount to lack or excess of jurisdiction (1) in rendering its decision although it had not yet acquired
jurisdiction over their persons in view of the improper service of summons; (2) in considering the decision final
and executory although a copy thereof had not been properly served upon petitioners; (3) in issuing the writ of
execution before the decision had become final and executory and despite private respondents failure to comply
with the procedural requirements in filing the motion for the issuance of the said writ; and (4) in denying
petitioners motion to quash the writ of execution and notice of appeal despite sufficient legal bases in support
thereof. -> DISMISSED -> thus, an instant petition for review on certiorari under Rule 45 was filed by the
petitioners before the SC.
ISSUE(S):
1. Whether there was a valid service of the copy of the RTC decision on petitioners.
HELD:
4. NO.
RATIO:

6. As a general rule, when a party is represented by counsel of record, service of orders and notices must be made
upon said attorney and notice to the client and to any other lawyer, not the counsel of record, is not notice in law.
The exception to this rule is when service upon the party himself has been ordered by the court. In cases where
service was made on the counsel of record at his given address, notice sent to petitioner itself is not even
necessary.
7. In the instant case, a copy of the RTC decision was sent first to Atty. Alcantara, petitioners counsel of record.
However, the same was returned unserved in view of the demise of Atty. Alcantara. Thus, a copy was
subsequently sent to petitioners last known address in San Gregorio, Alaminos, Laguna, which was received by
a certain Leopoldo Avecilla. Undoubtedly, upon the death of Atty. Alcantara, the lawyer-client relationship
between him and petitioners has ceased, thus, the service of the RTC decision on him is ineffective and did not
bind petitioner.
8. The subsequent service on petitioners purported last known address by registered mail is also defective because
it does not comply with the requisites under the aforequoted Section 7 of Rule 13 on service by registered mail.
Section 7 of Rule 13 contemplates service at the present address of the party and not at any other address of the
party. Service at the partys former address or his last known address or any address other than his present address
does not qualify as substantial compliance with the requirements of Section 7, Rule 13. Therefore, service by
registered mail presupposes that the present address of the party is known and if the person who receives the same
is not the addressee, he must be duly authorized by the former to receive the paper on behalf of the party.
9. Since the filing of the complaint, petitioners could not be physically found in the country because they had already
become permanent residents of California, U.S.A. It has been established during the trial that petitioners are
former residents of Alaminos, Laguna, contrary to the averment in the complaint that they reside and may be
served with court processes thereat. The service of the RTC decision at their former address in Alaminos, Laguna
is defective and does not bind petitioners.
10. In view of the foregoing, the running of the fifteen-day period for appeal did not commence upon the service of the
RTC decision at the address on record of Atty. Alcantara or at the Laguna address. It is deemed served on
petitioners only upon its receipt by Atty. Culvera on 29 December 2003. Therefore, the filing of the Notice of
Appeal on 06 January 2004 is within the reglementary period and should be given due course.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

016 In the matter Estate of Edward Randolph Hix,

deceased. A.W. FLUEMER, petitioner-appellant, vs.
ANNIE COUSHING HIX, oppositor-appellee.
[G.R. No. L-32636 March 17, 1930]
TOPIC: Renvoi
PONENTE: MALCOLM, J.

AUTHOR: Ernest
NOTES: The laws of a

foreign jurisdiction do not prove themselves in our

courts. Such laws must be proved as facts.
The due execution of a will alleged to have been executed inanother jurisdiction
must be established. Where the witnesses to the will reside without (outside) the
Philippine Islands, it is the duty of the petitioner to prove execution by some other
means.

NATURE: The special administrator of the estate of Edward Randolph Hix appeals from the decision of Judge of First
Instance Tuason denying the probate of the document alleged to be the last will and testament of the deceased.
FACTS:
1. Petitioner is the special administrator of Hixs estate.
2. On November 3, 1925, Hix allegedly executed a will in Elkins, West Virginia, where he had his residence.
3. Probate of the will in the Philippines was filed on February 20, 1929, while the proceedings in West Virginia have
been initiated on June 8, 1929.
4. Probate was denied on several grounds pursuant to the Code of civil procedure, hence appeal.
Argument: Petitioner alleges that Hixs will was executed pursuant to the laws of West Virginia. To this end, the
petitioner submitted a copy of Section 3868 of Acts 1882, c.84 as found in West Virginia Code, annotated by Hogg,
Charles E., vol.2 1914, p. 1690 and as certified to by the Director of National Library. (an extract from a book)
ISSUE(S):
a. Whether or not it is necessary to prove the existence of West Virginia law in Philippine jurisdiction in order to
allow the probate of the will.
b. Whether or not the extract from a book is sufficient to prove existence of the said law.
HELD:
a. Yes. The laws of a foreign jurisdiction do not prove themselves in our courts. Such laws must be proved as facts.
b. No. It is not sufficient
RATIO:
First, There was no proof as to the law of foreign jurisdiction presented in the CFI:
a. There was no showing that the book from which the extract was taken was printed or published under the authority
of the State of West Virginia, as provided in section 300 of the Code of Civil Procedure.
b. Nor was the extract from the law attested by the certificate of the officer having charge of the original, under the
seal of the State of West Virginia, as provided in section 301 of the Code of Civil Procedure.; and
c. No evidence was introduced to show that the extract from the laws of West Virginia was in force at the time the
alleged will was executed.
Second, the due execution of the will was not established because there was nothing to indicate that the will was
acknowledged by the testator in the presence of two competent witnesses, of that these witnesses subscribed the will in the
presence of the testator and of each other as the law of West Virginia seems to require. On the supposition that the
witnesses to the will reside without (outside) the Philippine Islands, it would then the duty of the petitioner to prove
execution by some other means (Code of Civil Procedure, sec. 633.) The only evidence on this point is to be found in the
testimony of the petitioner.
Third, the petitioner failed to prove that the testator had his domicile in West Virginia and not establish this fact consisted
of the recitals in the will and the testimony of the petitioner.
Fourth, the application for the probate of the will in the Philippines was filed on February 20, 1929, while the proceedings
in West Virginia appear to have been initiated on June 8, 1929. These facts are strongly indicative of an intention to make
the Philippines the principal administration and West Virginia the ancillary administration. However this may be, no
attempt has been made to comply with Civil Procedure, for no hearing on the question of the allowance of a will said to
have been proved and allowed in West Virginia has been requested. There is no showing that the deceased left any
property at any place other than the Philippine Islands and no contention that he left any in West Virginia.
DISPOSITIVE: For all of the foregoing, the judgment appealed from will be affirmed, with the costs of this instance
against the appellant.

18
PHILIPPINE COMMERCIAL AND INDUSTRIAL
BANK, Administrator of the Testate Estate of Charles
Newton Hodges (Sp. Proc. No. 1672 of the Court of First
Instance of Iloilo), petitioner,
vs.
THE HONORABLE VENICIO ESCOLIN, Presiding
Judge of the Court of First Instance of Iloilo, Branch II,
and AVELINA A. MAGNO, respondents.

AUTHOR: Gabriel Uy
NOTES: the case is 50+ pages long. Sorry for the long
digest

[G.R. NUMBER; DATE ]

G.R. Nos. L-27860 and L-27896 March 29, 1974

TOPIC: Renvoi
PONENTE: Barredo
FACTS:
1. Charles Newton Hodges and Linnie Jane Hodges were married in Texas, USA. they had acquired and accumulated
considerable assets and properties in the Philippines and in Oklahoma and Texas in the US. They both lived, worked and
were domiciled in Iloilo City for around 50 years. Before she died, Linnie Jane executed a will leaving her estate, less her
debts and funeral expenses, to her husband Charles. The will further provides that after Charles death, the remainder of
her estate go to her brothers and sisters, share and share alike. Should any of the brothers and sisters die before the
husband, Linnie willed that the heirs of the said sibling be substituted in the deceaseds siblings place.
2. Charles took the will to probate court, and was appointed Executor, then later, Special Administrator when Linnie died.
He moved to be allowed to continue administering the family business, as per Linnie Janes wishes, and to engage in sales,
conveyances, leases, mortgages and other necessary transactions. He also filed the necessary and appurtenant
administration/accounting records, and income tax returns for the estate. Charles named seven brothers and sisters of
Linnie Jane as her heirs (Esta, Emma, Leonard, Aline, David, Sadie, Era and Nimroy), but the order admitting the will to
probate unfortunately omitted one of the heirs, Roy (Nimroy?) Higdon, so Charles filed a verified motion to have Roys
name included.
3. he was bound to file tax returns for the estate he was administering under American law because he was the executor.
He did file such as estate tax return on August 8, 1958. In Schedule "M" of such return, he answered "Yes" to the question
as to whether he was contemplating "renouncing the will". On the question as to what property passed to him as the
surviving spouse, he answered:
None, except for purposes of administering the Estate, paying debts, taxes and other legal charges. It is the
intention of the surviving husband of deceased to distribute the remaining property and interests of the deceased in
their Community estate to the devisees and legatees named in the will when the debts, liabilities, taxes and
expenses of administration are finally determined and paid.
4. Charles died in Iloilo in December 1962 without having liquidated Linnies estate, which includes her share in the
conjugal partnership. A longtime employee of the Hodges, Avelina Magno, was appointed Administratrix (for Linnies
estate) and a Special Administratrix (for Charles). Magno was appointed, but later Harold Davies (representative of
Charles heirs in the US) was designated Co-Special Administrator, who was then replaced by one Joe Hodges, Charles
nephew. One Atty. Mirasol was also appointed as co-administrator, and an order of probate and letters of administration
were issued to Hodges and Mirasol.
5. At this point, the SC was already very much confused about the gaps in the facts, convinced that the parties representing
both estates had cooked up a modus operandi to settle money matters (a settlement with records the Court never saw)
which, however, went awry, with more and more heirs from the US flocking to the Iloilo shores, and lawyers (Ozaetas!

Mabantas! Manglapuses!) filing their respective claims for retainer fees. Much much later, PCIB became the administrator
of Charles estate, asserting a claim to all of his estate, including those properties/assets that passed to him upon Linnie
Janes death. Avelina naturally opposed this, as Linnie Janes other heirs (the HIGDONS) would be prejudiced, so she
continued acting in her capacity as administrator (entering into sales and other such conveyances). For these acts, the PCIB
dismissed her as an employee of Charles estate, to which she responded by locking up the premises being used by PCIB
as offices, which were among the estates properties.
6. PCIBs Claims
Linnie Janes will should be governed by Philippine Law, with respect to the order of succession, the amount of
successional rights, and the intrinsic validity of its testamentary provisions.
Linnie intended Philippine laws to govern her Will.
Article 16, CC, provides that "the national law of the person whose succession is under consideration, whatever
may be the nature of the property and regardless of the country wherein said property may be found", shall prevail.
However, the Conflict of Law of Texas, which is the "national law" of the testatrix, Linnie Jane Hodges, provide
that the domiciliary law (Philippine law) should govern the testamentary dispositions and successional rights over
movables, and the law of the situs of the property (also Philippine law as to properties located in the Philippines)
as regards immovables.
Thus applying the "Renvoi Doctrine", as approved and applied in the Christensen case (1963), Philippine law
should apply.
Under Philippine and Texas law, the conjugal or community estate of spouses shall, upon dissolution, be divided
equally between them. Thus, upon Linnies death, of the entirety of the assets of the Hodges spouses
constituting their conjugal estate pertained automatically to Charles, not by way of inheritance, but in his own right
as partner in the conjugal partnership.
The other one-half (1/2) portion forming part of Linnies estate, cannot, under a clear and specific provision of her
Will, be enhanced or increased by income, earnings, rents, or emoluments accruing after her death. All rents,
emoluments and income from said estate shall belong to him (C. N. Hodges) and he is further authorized to use
any part of the principal of said estate as he may need or desire."
Articles 900, 995 and 1001 provide that the surviving spouse of a deceased leaving no ascendants or descendants is
entitled, as a matter of right and by way of irrevocable legitime, to at least one-half (1/2) of the estate of the
deceased, and no testamentary disposition by the deceased can legally and validly affect this right of the surviving
spouse. In fact, her husband is entitled to said one-half (1/2) portion of her estate by way of legitime. (Article 886)
Clearly, therefore, immediately upon the death of Linnie Jane Hodges, C. N. Hodges was the owner of at least 3/4
or 75% percent of all of the conjugal assets of the spouses, 50% by way of conjugal partnership share and 1/4 or
25% by way of inheritance and legitime) plus all "rents, emoluments and income" accruing to said conjugal estate
from the moment of Linnie Jane Hodges' death.
In his capacity as sole heir and successor to Linnies estate, Charles appropriated to himself the entirety of her
estate. He operated all the assets, engaged in business and performed all acts in connection with the entirety of the
conjugal estate, in his own name alone, just as he had been operating, engaging and doing while the late Linnie
Jane Hodges was still alive. Upon his death on December 25, 1962, therefore, all said conjugal assets were in his
sole possession and control, and registered in his name alone, not as executor, but as exclusive owner of all said
assets.
As the sole and exclusive heir, Charles did not need to liquidate the estate. Neither was there any asset left to
Linnies estate at the time of Charles death, though Linnies estate may have referred to all of the rest, residue
and remainder of my estate which would go to her siblings in the event of Charles death. The provision is thus
void and invalid at least as to Philippine assets.
There are generally only two kinds of substitution provided for and authorized by our Civil Code (Articles 857870), namely, (1) simple or common substitution, sometimes referred to as vulgar substitution (Article 859), and
(2) fideicommissary substitution (Article 863). All other substitutions are merely variations of these. The
substitution provided for by paragraph four of the Will of Linnie Jane Hodges is not fideicommissary substitution,
because there is clearly no obligation on the part of C. N. Hodges as the first heir designated, to preserve the
properties for the substitute heirs. At most, it is a vulgar or simple substitution. However, in order that
a vulgar orsimple substitution can be valid, three alternative conditions must be present, namely, that the first
designated heir (1) should die before the testator; or (2) should not wish to accept the inheritance; or (3) should be

incapacitated to do so. None of these conditions apply to C. N. Hodges, and, therefore, the substitution provided
for by the above-quoted provision of the Will is not authorized by the Code, and, therefore, it is void. Manresa
even said, when another heir is designated to inherit upon the death of a first heir, the second designation can
have effect only in case the first instituted heir dies before the testator, whether or not that was the true intention of
said testator.
The remedy of the Higdons, then, who are claiming dubious rights to of the conjugal estate of the Hodges, is to
file a claim against the estate of Charles.
It also follows that the conveyances executed by Avelina, claiming to be merely in continuation of the Hodges
businesses, and which corresponding deeds of sale were confirmed by the probate court, are null and void and
should be subject to reconveyance
7. Avelina Magnos Claims
NOTE: Linnies heirs wanted to have Avelina removed from her capacity as administrator,at one point, but the
lower court reversed its earlier grant of the motion, on account of a previous injunction it issued.)
Linnie Jane merely gave Charles a life-estate or a usufruct over all her estate, and gave a vested remainder-estate
or the naked title over the same estate, to her relatives.
After Linnies death, Charles, as administrator and executor of the will, unequivocably and clearly through oral
and written declarations and sworn public statements, renounced, disclaimed and repudiated his life-estate and
usufruct.
Since there was no separation or segregation of the interests of Linnie and Charles in the combined conjugal estate,
as there has been no such separation or segregation, and because of Charles repudiation, both interests have
continually earned exactly the same amount of rents, emoluments and income.
ISSUE(S): Issue:
1. Is Linnies disposition in favor of her siblings void?
2. How should the estate be partitioned/liquidated?
HELD: (YES/NO, and a short explanation)
1. No. The stipulation in favor of Charles gave him the full ownership over the properties which he can dispose
intervivos but not mortis causa
2. It was remanded to the trial court to determine what the Texas Law is.
RATIO:
1. PCIBs contention that Linnies testamentary substitution, when viewed as a substitution, may not be given effect, is
correct,but this is only to a certain extent. Indeed, legally speaking, Linnies will provides neither for a simple or vulgar
substitution under Article 859 of the Civil Code nor for a fideicommissary substitution under Article 863 thereof. There is
no vulgar substitution because there is no provision for either (1) predecease of the testator by the designated heir or (2)
refusal or (3) incapacity of the latter to accept the inheritance, as required by Article 859; and neither is there a
fideicommissary substitution therein because no obligation is imposed thereby upon Hodges to preserve the estate or any
part thereof for anyone else. But from these premises, it is not correct to jump to the conclusion, as PCIB does, that the
testamentary dispositions in question are therefore inoperative and invalid.
The error in PCIB's position lies simply in the fact that it views the said disposition exclusively in the light of substitutions
covered by the Civil Code section on that subject, (Section 3, Chapter 2, Title IV, Book III) when it is obvious that
substitution occurs only when another heir is appointed in a will "so that he may enter into inheritance in default of the heir
originally instituted," (Article 857) and, in the present case, no such possible default is contemplated. The brothers and
sisters of Mrs. Hodges are not substitutes for Hodges because, under her will, they are not to inherit what Hodges cannot,
would not or may not inherit, but what he would not dispose of from his inheritance; rather, therefore, they are also heirs
instituted simultaneously with Hodges, subject, however, to certain conditions, partially resolutory insofar as Hodges was
concerned and correspondingly suspensive with reference to his brothers and sisters-in-law. It is partially resolutory, since
it bequeaths unto Hodges the whole of her estate to be owned and enjoyed by him as universal and sole heir with absolute
dominion over them only during his lifetime, which means that while he could completely and absolutely dispose of any
portion thereof inter vivos to anyone other than himself, he was not free to do so mortis causa, and all his rights to what
might remain upon his death would cease entirely upon the occurrence of that contingency, inasmuch as the right of his

brothers and sisters-in-law to the inheritance, although vested already upon the death of Mrs. Hodges, would automatically
become operative upon the occurrence of the death of Hodges in the event of actual existence of any remainder of her
estate then.

Contrary to Avelinas view, however, it was not the usufruct alone of Linnies estate, as contemplated in Article 869, that
she bequeathed to Charles during his lifetime, but the full ownership thereof, although the same was to last also during his
lifetime only, even as there was no restriction whatsoever against his disposing or conveying the whole or any portion
thereof to anybody other than himself. The Court saw no legal impediment to this kind of institution, except that it cannot
apply to the legitime of Charles as the surviving spouse, consisting of one-half of the estate, considering that Linnie had no
surviving ascendants nor descendants. (Arts. 872, 900, and 904.)
Hodges acts of administration and accounting strongly negate PCIBs claims that he had adjudicated to himself all of
Linnies estate. While he may have used language like herein executor (being) the only devisee or legatee of the deceased,
in accordance with the last will and testament already probated there is no other person interested in the Philippines of
the time and place of examining herein account to be given notice, he wouldve known that doing so would impute bad
faith unto him. Also, in his very motions, Hodges asserted the rights of Linnies named heirs. He even moved to include
Roys name included in the probate courts order, lest Roys heirs think that they had been omitted.
Thus, he recognized, in his own way, the separate identity of his wifes estate from his own share of the conjugal
partnership up to the time of his death, more than 5 years after that of his wife. He never considered the whole estate as a
single one belonging exclusively to himself. The only conclusion one can gather from this is that he could have been
preparing the basis for the eventual transmission of his wife's estate, or, at least, so much thereof as he would not have
been able to dispose of during his lifetime, to her brothers and sisters in accordance with her expressed desire, as intimated
in his tax return in the US. And assuming that he did pay the corresponding estate and inheritance taxes in the Philippines
on the basis of his being sole heir, such payment is not necessarily inconsistent with his recognition of the rights of his coheirs. The Court thus viewed that under the peculiar provisions of his wife's will, and for purposes of the applicable
inheritance tax laws, Hodges had to be considered as her sole heir, pending the actual transmission of the remaining
portion of her estate to her other heirs, upon the eventuality of his death, and whatever adjustment might be warranted
should there be any such remainder then is a matter that could well be taken care of by the internal revenue authorities in
due time. The Court also considered as basis of Charles intentions several questionnaires in solemn forms in filing estate
taxes abroad, though they have not been introduced in evidence (!!!), only referred to several times by the parties.
It is obvious, though, that Charles procrastinating in settling Linnies estate, and his sole administration of it, commingled
his and his co-heirs interests, making it difficult to properly make an accounting of their shares. PCIB, then, cannot
administer the properties on its own. What would be just and proper is for both administrators of the two estates to act
conjointly until after said estates have been segregated from each other.
2. The parties were in disagreement as to how Article 16 of the Civil Code should be applied. On the one hand, PCIB
claimed that inasmuch as Linnie was a resident of the Philippines at the time of her death, under said Article 16, construed
in relation to the pertinent laws of Texas and the principle of renvoi, what should be applied here should be the rules of
succession under the Civil Code, and, therefore, her estate could consist of no more than one-fourth of the said conjugal
properties, the other fourth being, as already explained, the legitime of her husband (Art. 900) which she could not have
disposed of nor burdened with any condition (Art. 872). On the other hand, Avelina denied that Linnie died a resident of
the Philippines, since allegedly she never changed nor intended to change her original residence of birth in Texas, United
States of America, and contends that, anyway, regardless of the question of her residence, she being indisputably a citizen
of Texas, under said Article 16 of the Civil Code, the distribution of her estate is subject to the laws of said State which,
according to her, do not provide for any legitime, hence, Linnies brothers and sisters are entitled to the remainder of the
whole of her share of the conjugal partnership properties consisting of one-half thereof. Avelina further maintained that, in
any event, Charles had renounced his rights under the will in favor of his co-heirs, as allegedly proven by the documents
touching on the point already mentioned earlier, the genuineness and legal significance of which PCIB questioned.

The Court cannot decide on the claims, though, for neither the evidence submitted by the parties appeared to be
adequate enough for it to render an intelligent comprehensive and just resolution. No clear and reliable proof of
what in fact the possibly applicable laws of Texas are, was presented (Remember judicial notice in case of foreign
laws?). Then also, the genuineness of documents relied upon by Avelina is disputed. In Justice, therefore, to all the parties
concerned, these and all other relevant matters should first be threshed out fully in the trial court in the proceedings
thereafter to be held for the purpose of ascertaining and adjudicating and/or distributing the estate of Mrs. Hodges to her
heirs in accordance with her duly probated will.
It is necessary that the Texas law be ascertained. Here it must be proven whether a renvoi will happen or whether
Texas law makes the testamentary provisions valid. In line with Texas law, that which should be proven is the law
enforced during the death of Hodges and not in any other time.
The Supreme Court held that the estate of Mrs. Hodges inherited by her brothers and sisters could be more than just stated,
but this would depend on (1) whether upon the proper application of the principle of renvoi in relation to Article 16 of the
Civil Code and the pertinent laws of Texas, it will appear that Hodges had no legitime as contended by Magno, and (2)
whether or not it can be held that Hodges had legally and effectively renounced his inheritance from his wife. The Court is
not in a position to make a final ruling, whether of fact or of law, on any of these two issues

Linnies estate is the remainder of 1/4 of the conjugal partnership properties, considering that even PCIB did not maintain
that the application of the laws of Texas would result in the other heirs of Mrs. Hodges not inheriting anything under her
will. And since PCIB's representations in regard to the laws of Texas virtually constitute admissions of fact which the other
parties and the Court are being made to rely and act upon, PCIB is not permitted to contradict them or subsequently take a
position contradictory to or inconsistent with them.
The only question that remains to be settled in the remand to the court below are: (A) whether or not the applicable laws of
Texas do provide in effect for more, such as, when there is no legitime provided therein and (B) whether or not Hodges has
validly waived his whole inheritance from Mrs. Hodges.
In the course of the deliberations, it was brought out by some members of the Court that to avoid or, at least, minimize
further protracted legal controversies between the respective heirs of the Hodges spouses, it is imperative to elucidate on
the possible consequences of dispositions made by Charles after Linnies death, from the mass of the unpartitioned estates
without any express indication in the pertinent documents as to whether his intention is to dispose of part of his inheritance
from his wife or part of his own share of the conjugal estate as well as of those made by PCIB after the death of Hodges.
After a long discussion, the consensus arrived at was as follows:
any such dispositions made gratuitously in favor of third parties, whether these be individuals, corporations or
foundations, shall be considered as intended to be of properties constituting part of Hodges' inheritance from his
wife, it appearing from the tenor of his motions of May 27 and December 11, 1957 that in asking for general
authority to make sales or other disposals of properties under the jurisdiction of the court, which include his own
share of the conjugal estate, he was not invoking particularly his right over his own share, but rather his right to
dispose of any part of his inheritance pursuant to the will of his wife;
as regards sales, exchanges or other remunerative transfers, the proceeds of such sales or the properties taken in by
virtue of such exchanges, shall be considered as merely the products of "physical changes" of the properties of her
estate which the will expressly authorizes Hodges to make, provided that whatever of said products should remain
with the estate at the time of the death of Hodges should go to her brothers and sisters;
the dispositions made by PCIB after the death of Hodges must naturally be deemed as covering only the properties
belonging to his estate considering that being only the administrator of the estate of Hodges, PCIB could not have
disposed of properties belonging to the estate of his wife. Neither could such dispositions be considered as
involving conjugal properties, for the simple reason that the conjugal partnership automatically ceased when
Linnie died, and by the peculiar provision of her will, under discussion, the remainder of her share descended also
automatically upon the death of Hodges to her brothers and sisters, thus outside of the scope of PCIB's
administration. Accordingly, these constructions of Linnies will should be adhered to by the trial court in its final
order of adjudication and distribution and/or partition of the two estates in question.

Disposition
Remand for determination of proper application of Art. 16, CC (renvoi), and of Charles alleged renunciation of his
ineritance under Linnies will. Avelina remains to be the administrator of Linnies estate. The said estate consists of of
the community properties of the said spouses, as of the time of Linnies death on May 23, 1957, minus whatever the
husband had already gratuitously disposed of in favor of third persons from said date until his death, provided, first, that
with respect to remunerative dispositions, the proceeds thereof shall continue to be part of the wife's estate, unless
subsequently disposed of gratuitously to third parties by the husband, and second, that should the purported renunciation
be declared legally effective, no deductions whatsoever are to be made from said estate. PCIB and Avelina should act
thenceforth always conjointly, never independently from each other, as administrators.

019 Zalamea v. CA
G.R. No. 104235, 18 November 1993
TOPIC: Exception to the Application of Foreign Laws
PONENTE: Nocon, J.

AUTHOR:
NOTES: (if applicable)

Summary:
The petitioners in Zalamea were passengers of Trans World Airlines, Inc. ("TWA") who held confirmed discounted tickets. Petitioners were,
however, wait-listed and eventually prevented from boarding the airplane because TWA had overbooked the flight and gave preference to other
passengers who were holders of full-fare tickets. TWA observed the practice of overbooking and the system of boarding priorities. SC held TWA
liable for moral damages because TWA did not stipulate these policies in the contract and did not inform the petitioners of the overbooked condition
of the flight or of the hierarchy of priorities in booking passengers. TWA was in bad faith when, failing to thus inform petitioners when it could
have easily done so, TWA kept them as passengers up to the last minute. TWA's conscious disregard of petitioners' rights made it liable not
only for actual but moral damages as well.
June 6, 1984 Flight: Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them in TWA Flight 007 departing from
New York to Los Angeles despite possession of confirmed tickets, petitioners filed an action for damages before Makati RTC Br. 145.
RTC Decision: Advocating petitioner's position, the trial court categorically ruled that respondent TransWorld Airlines (TWA) breached its
contract of carriage with petitioners and that said breach was "characterized by bad faith."
On appeal, however, the appellate court found that while there was a breach of contract on respondent TWA's part, there was neither fraud
nor bad faith because under the Code of Federal Regulations by the Civil Aeronautics Board of the United States of America it is allowed to
overbook flights.

FACTS:
1. Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana Zalamea, purchased three (3)
airline tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a flight to New York to Los Angeles on
June 6, 1984. The tickets of petitioners-spouses were purchased at a discount of 75% while that of their daughter
was a full fare ticket. All three tickets represented confirmed reservations.
2. While in New York, on June 4, 1984, petitioners received notice of the reconfirmation of their reservations for said
flight.
3. On the appointed date, however, petitioners checked in at 10:00 a.m., an hour earlier than the scheduled flight at 11:00
a.m. but were placed on the wait-list because the number of passengers who had checked in before them had already taken
all the seats available on the flight. Liana Zalamea appeared as the No. 13 on the wait-list while the two other Zalameas
were listed as "No. 34, showing a party of two."
4. Out of the 42 names on the wait list, the first 22 names were eventually allowed to board the flight to Los Angeles,
including petitioner Cesar Zalamea. The two others, on the other hand, at No. 34, being ranked lower than 22, were not
able to fly.
5. As it were, those holding full-fare tickets were given first priority among the wait-listed passengers. Mr. Zalamea, who
was holding the full-fare ticket of his daughter, was allowed to board the plane; while his wife and daughter, who
presented the discounted tickets were denied boarding. According to Mr. Zalamea, it was only later when he discovered the
he was holding his daughter's full-fare ticket.
6. Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be accommodated because it was
also fully booked. Thus, they were constrained to book in another flight and purchased two tickets from American Airlines
at a cost of Nine Hundred Eighteen ($918.00) Dollars.
RTC Decision:
a. Upon their arrival in the Philippines, petitioners filed an action for damages based on breach of contract of air carriage
before the RTC. judgment is hereby rendered ordering the defendant to pay plaintiffs the following amounts:
(1)
US $918.00, or its peso equivalent at the time of payment representing the price of the tickets bought by
Suthira and Liana Zalamea from American Airlines, to enable them to fly to Los Angeles from New York City;
(2)
US $159.49, or its peso equivalent at the time of payment, representing the price of Suthira Zalamea's ticket
for TWA Flight 007;
(3)
Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty Centavos (P8,934.50, Philippine Currency,
representing the price of Liana Zalamea's ticket for TWA Flight 007,
(4)
Two Hundred Fifty Thousand Pesos (P250,000.00), Philippine Currency, as moral damages for all the
plaintiffs'

(5)
(6)

One Hundred Thousand Pesos (P100,000.00), Philippine Currency, as and for attorney's fees; and
The costs of suit.

CA Decision: WHEREFORE, in view of all the foregoing, the decision under review is hereby MODIFIED in that the
award of moral and exemplary damages to the plaintiffs is eliminated, and the defendant-appellant is hereby ordered to pay
the plaintiff.
a. Respondent CA held that moral damages are recoverable in a damage suit predicated upon a breach of contract of
carriage only where there is fraud or bad faith. Since it is a matter of record that overbooking of flights is a common and
accepted practice of airlines in the United States and is specifically allowed under the Code of Federal Regulations by the
Civil Aeronautics Board, no fraud nor bad faith could be imputed on respondent TransWorld Airlines.
b. Moreover, while respondent TWA was remiss in not informing petitioners that the flight was overbooked and that even
a person with a confirmed reservation may be denied accommodation on an overbooked flight, nevertheless it ruled that
such omission or negligence cannot under the circumstances be considered to be so gross as to amount to bad faith.
c. Finally, it also held that there was no bad faith in placing petitioners in the wait-list along with forty-eight (48) other
passengers where full-fare first class tickets were given priority over discounted tickets.
(1)
US$159.49, or its peso equivalent at the time of the payment, representing the price of Suthira Zalamea's
ticket for TWA Flight 007;
(2)
US$159.49, or its peso equivalent at the time of the payment, representing the price of Cesar Zalamea's ticket
for TWA Flight 007;
(3)
P50,000.00 as and for attorney's fees.
(4)
The costs of suit.

Filed with SC: Not satisfied with the decision, petitioners raised the case on petition for review on certiorari and alleged
the following errors committed by the respondent Court of Appeal.
ISSUE(S): WON TWZ acted with bad faith and would entitle Zalameas to Moral and Examplary damages.
HELD: YES. TWA was in bad faith when, failing to thus inform petitioners when it could have easily done so, TWA kept
them as passengers up to the last minute. TWA's conscious disregard of petitioners' rights made it liable not only for actual
but moral damages as well.
RATIO:
The U.S. law or regulation allegedly authorizing overbooking has never been proved. Foreign laws do not prove
themselves nor can the courts take judicial notice of them. Like any other fact, they must be alleged and proved.
Written law may be evidenced by an official publication thereof or by a copy attested by the officer having the
legal custody of the record, or by his deputy, and accompanied with a certificate that such officer has custody. The
certificate may be made by a secretary of an embassy or legation, consul general, consul, vice-consul, or consular
agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record
is kept, and authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer service agent, in her
deposition that the Code of Federal Regulations of the Civil Aeronautics Board allows overbooking. No official
publication of said code was presented as evidence. Thus, respondent courts finding that overbooking is
specifically allowed by the US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to the case at bar in
accordance with the principle of lex loci contractus which require that the law of the place where the airline ticket
was issued should be applied by the court where the passengers are residents and nationals of the forum and the
ticket is issued in such State by the defendant airline. Since the tickets were sold and issued in the Philippines, the
applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the passengers concerned
to an award of moral damages. In Alitalia Airways v. Court of Appeals, where passengers with confirmed
bookings were refused carriage on the last minute, this Court held that when an airline issues a ticket to a
passenger confirmed on a particular flight, on a certain date, a contract of carriage arises, and the passenger has
every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to
a suit for breach of contract of carriage. Where an airline had deliberately overbooked, it took the risk of having to
deprive some passengers of their seats in case all of them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said passenger is entitled to an award of moral
damages.

For a contract of carriage generates a relation attended with public duty a duty to provide public service and
convenience to its passengers which must be paramount to self-interest or enrichment.
Respondent TWA is still guilty of bad faith in not informing its passengers beforehand that it could breach the
contract of carriage even if they have confirmed tickets if there was overbooking. Respondent TWA should have
incorporated stipulations on overbooking on the tickets issued or to properly inform its passengers about these
policies so that the latter would be prepared for such eventuality or would have the choice to ride with another
airline.
Respondent TWA was also guilty of not informing its passengers of its alleged policy of giving less priority to
discounted tickets. Neither did it present any argument of substance to show that petitioners were duly apprised of
the overbooked condition of the flight or that there is a hierarchy of boarding priorities in booking passengers. It is
evident that petitioners had the right to rely upon the assurance of respondent TWA, thru its agent in Manila, then
in New York, that their tickets represented confirmed seats without any qualification. The failure of respondent
TWA to so inform them when it could easily have done so thereby enabling respondent to hold on to them as
passengers up to the last minute amounts to bad faith. Evidently, respondent TWA placed its self-interest over the
rights of petitioners under their contracts of carriage. Such conscious disregard of petitioners rights makes
respondent TWA liable for moral damages. To deter breach of contracts by respondent TWA in similar fashion in
the future, we adjudge respondent TWA liable for exemplary damages, as well.
In the case of Alitalia Airways v. Court of Appeals, this Court explicitly held that a passenger is entitled to be
reimbursed for the cost of the tickets he had to buy for a flight to another airline. Thus, instead of simply being
refunded for the cost of the unused TWA tickets, petitioners should be awarded the actual cost of their flight from
New York to Los Angeles.
SC:
The award to petitioners of attorney's fees is also justified under Article 2208(2) of the Civil Code which allows recovery
when the defendant's act or omission has compelled plaintiff to litigate or to incur expenses to protect his interest.
However, the award for moral damages and exemplary damages by the trial court is excessive in the light of the fact that
only Suthira and Liana Zalamea were actually "bumped off." An award of P50,000.00 moral damages and another
P50,000.00 exemplary damages would suffice under the circumstances obtaining in the instant case.
WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court of Appeals is hereby
MODIFIED to the extent of adjudging respondent TransWorld Airlines to pay damages to petitioners in the following
amounts, to wit:
(1)
US$918.00 or its peso equivalent at the time of payment representing the price of the tickets bought by Suthira and
Liana Zalamea from American Airlines, to enable them to fly to Los Angeles from New York City;
(2)
P50,000.00 as moral damages;
(3)
P50,000.00 as exemplary damages;
(4)
P50,000.00 as attorney's fees; and
(5)
Costs of suit.

020 BANK OF AMERICA NT & SA vs. AMERICAN AUTHOR: Dannaloo

REALTY CORPORATION and COURT OF
APPEALS
G.R. No. 133876 | December 29, 1999
TOPIC: Renvoi
PONENTE: Buena, J.
FACTS:
1. Petitioner Bank of America NT & SA (BANTSA) is an international banking and financing institution duly
licensed to do business in the Philippines, organized and existing under and by virtue of the laws of the State of
California, United States of America while private respondent American Realty Corporation (ARC) is a domestic
corporation.
2. BANTSA granted 3 multi-million United States (US) Dollar loans to the following corporate borrowers: (1)
Liberian Transport Navigation, S.A.; (2) El Challenger S.A. and (3) Eshley Compania Naviera S.A. (hereinafter
collectively referred to as "borrowers"), all of which are existing under and by virtue of the laws of the Republic of
Panama and are foreign affiliates of private respondent.
3. Due to the default in the payment of the loan amortizations, BANTSA and the corporate borrowers signed and
entered into restructuring agreements. As additional security for the restructured loans, private respondent ARC, as
third party mortgagor, executed 2 real estate mortgages over its parcels of land located at Barrio Sto. Cristo, San
Jose Del Monte, Bulacan.
4. Eventually, the corporate borrowers defaulted in the payment of the restructured loans prompting BANTSA to file
civil actions before foreign courts for the collection of the principal loan. The civil actions were filed:
In Englands High Court of Justice, Queen's Bench Division, Commercial Court on June 17, 1992;
In Englands High Court of Justice, Queen's Bench Division, Commercial Court on July 2, 1992;
In Hong Kongs Supreme Court of Hong Kong High Court on November 19, 1992; and
In Hong Kongs Supreme Court of Hong Kong High Court on November 21, 1992.
5. 16 December 1992 - BANTSA filed before the Office of the Provincial Sheriff of Bulacan, Philippines an
application for extrajudicial foreclosure of real estate mortgage.
6. 22 January 1993 - After due publication and notice, the mortgaged real properties were sold at public auction in an
extrajudicial foreclosure sale.
7. 12 February 1993 - Private Respondent filed before the Pasig RTC an action for damages against BANTSA, for
the latter's act of foreclosing extrajudicially the real estate mortgages despite the pendency of civil suits before
foreign courts for the collection of the principal loan.
8. BANTSAs contention: English Law is the governing law with regard to the principal agreements. Under English
law, the mortgagee does not lose its security interest by simply filing civil actions for sums of money.
ISSUE: Whether or not English law is applicable and, therefore, BANTSA did not lose its security interest when it
instituted a collection suit against the principal debtors before foreign courts
HELD: No, English law is not applicable. Therefore, by filing the collection suit, BANTSA is considered to have waived
its remedy of foreclosure.
RATIO:
1. [T]here is no judicial notice of any foreign law. A foreign law must be properly pleaded and proved as a fact.
Thus, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law
is the same as our local or domestic or internal law. This is what we refer to as the doctrine of processual
presumption.
2. In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved in
accordance with Section 24, Rule 132 of the Rules of Court and the jurisprudence laid down in Yao Kee, et al. vs.
Sy-Gonzales, said foreign law would still not find applicability.
3. [W]hen the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the
said foreign law, judgment or order shall not be applied.
4. Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object
public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated,
or by determinations or conventions agreed upon in a foreign country.
5. The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction
proscribing the splitting up of a single cause of action.
6. Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent If two or more suits are instituted on the
basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a
ground for the dismissal of the others.

7. Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens
or residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or
contract that is obviously unjust negates the fundamental principles of Conflict of Laws. Clearly then, English Law
is not applicable.
CASE LAW/ DOCTRINE:
[W]hen the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the
said foreign law, judgment or order shall not be applied.
[P]rohibitive laws concerning persons, their acts or property, and those which have for their object public order,
public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign country.
NOTE
SCs Ruling on the issue in relation to credit transactions
In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative.
Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen
upon the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure of
mortgage. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of
the petition not with any court of justice but with the Office of the Sheriff of the province where the sale is to be
made.
In the case at bar, petitioner BANTSA only has one cause of action which is non-payment of the debt.
Nevertheless, alternative remedies are available for its enjoyment and exercise. Petitioner then may opt to exercise
only one of two remedies so as not to violate the rule against splitting a cause of action.
Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of filing four civil suits
before foreign courts, necessarily abandoned the remedy to foreclose the real estate mortgages constituted over the
properties of third-party mortgagor and herein private respondent ARC. Moreover, by filing the four civil actions
and by eventually foreclosing extra-judicially the mortgages, petitioner in effect transgressed the rules against
splitting a cause of action well-enshrined in jurisprudence and our statute books.

AUTHOR: RC
021 Wildvalley Shipping v. CA
NOTES:
[G.R. No. 119602. October 6, 2000]
TOPIC: Renvoi
Pet. for review on certiorari
PONENTE: Buena, J.
FACTS:
1. Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc. (private resp.)
arrived in Puerto Ordaz, Venezuela, to load iron ore.
2. Upon the completion of the loading and when the vessel was ready to leave the port, Mr. Ezzar del Valle Solarzano
Vasquez, an official pilot of Venezuela, was designated by the harbour authorities in Puerto Ordaz to navigate the
Philippine Roxas through the Orinoco River. He was asked to pilot the said vessel boarding it that night at 11:00 p.m.
3. The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge together with the pilot
(Vasquez), the vessel's third mate (then the officer on watch), and a helmsman when the vessel left the port.
4. Captain Colon left the bridge when the vessel was under way.
5. The Philippine Roxas experienced some vibrations when it entered the San Roque Channel at mile 172.
6. The vessel proceeded on its way, with the pilot assuring the watch officer that the vibration was a result of the
shallowness of the channel.
7. Between mile 158 and 157, the vessel again experienced some vibrations. It was then that the watch officer called the
master to the bridge.
8. The master (captain) checked the position of the vessel and verified that it was in the centre of the channel. He then went
to confirm, or set down, the position of the vessel on the chart. He ordered Simplicio A. Monis, Chief Officer of the
President Roxas, to check all the double bottom tanks.
9. At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River obstructing the ingress & egress of vessels.
10. As a result of the blockage, the Malandrinon, a vessel owned by petitioner Wildvalley Shipping Company, Ltd., was
unable to sail out of Puerto Ordaz that day.
11. Wildvalley Shipping Company, Ltd. filed a suit with the RTC of Manila, Branch III against Philippine President Lines,
Inc. and Pioneer Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the form of unearned
profits, and interest amounting to US $400,000.00 plus attorney's fees, costs, and expenses of litigation.
12. The complaint against Pioneer Insurance Company was dismissed in an Order.
13. At the pre-trial conference, the parties agreed on the following facts:
XXX
7. That at the time of the incident, the vessel, Philippine Roxas, was under the command of the pilot Ezzar Solarzano,
assigned by the government thereat, but plaintiff claims that it is under the command of the master;
8. The plaintiff filed a case in Middleburg, Holland which is related to the present case;
XXX

14. RTC: In favor of Wildvalley Shipping Co., Ltd. (Ordering Philippine President Lines, Inc. to pay U.S. $259,243.43, as
actual and compensatory damages, and U.S. $162,031.53, as expenses incurred abroad for its foreign lawyers, plus
additional sum of U.S. $22,000.00, as and for attorney's fees of plaintiff's local lawyer, and to pay the cost of this suit.)
15. Defendant's counterclaim was dismissed for lack of merit.
16. Both parties appealed: the petitioner appealing the non-award of interest while private respondent questioned the
decision on the merits of the case.
17. CA: Reversed RTC and dismissed the complaint. (MR denied.)
ISSUE:
Whether or not Venezuelan law is applicable to the case at bar.
Whether or not under Philippine law, no fault or negligence can be attributed to the master nor the owner of the ship for the
grounding of said vessel which resulted to the blockage of the port.
HELD:
Both no, under the rules of private international law, a foreign law must be properly pleaded and proved as a fact. In the
absence of pleading and proof, the laws of a foreign country, or state, will be presumed to be the same as our own
local or domestic law and this is known as processual presumption.
RATIO:
1. It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take
judicial notice of them. Like any other fact, they must be alleged and proved.
2. A distinction is to be made as to the manner of proving a written and an unwritten law. The former falls under Section
24, Rule 132 of the Rules of Court, as amended, the entire provision of which is quoted hereunder. Where the foreign law
sought to be proved is "unwritten," the oral testimony of expert witnesses is admissible, as are printed and published books
of reports of decisions of the courts of the country concerned if proved to be commonly admitted in such courts.
3. Section 24 of Rule 132 of the Rules of Court provides:

Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having
the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a
certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate
may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office.

4. The court has interpreted Section 25 (now Section 24) to include competent evidence like the testimony of a witness to
prove the existence of a written foreign law.
5. Willamette Iron & Steel Works vs. Muzzal: "The foreign law is a matter of fact You ask the witness what the law is;
he may, from his recollection, or on producing and referring to books, say what it is.
6. We do not dispute the competency of Capt. Monzon, the Assistant Harbor Master and Chief of Pilots at Puerto Ordaz,
Venezuela, to testify on the existence of the pilotage law of Venezuela and the rules governing the navigation of the
Orinoco River. Captain Monzon has held the posts for 8 years. Nevertheless, we take note that these written laws were not
proven in the manner provided by Section 24 of Rule 132 of the Rules of Court.
7. The Reglamento General de la Ley de Pilotaje (pilotage law) was published in the Gaceta Oficial of the Republic of
Venezuela. A photocopy of the Gaceta Oficial was presented in evidence as an official publication of the Republic of
Venezuela. The rules governing the navigation is published in a book issued by the Ministerio de Comunicaciones of
Venezuela. Only a photocopy of the said rules was likewise presented as evidence.
8. Both of these documents are considered in Philippine jurisprudence to be public documents for they are the written
official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers of
Venezuela. For a copy of a foreign public document to be admissible, the following requisites are mandatory: (1) It
must be attested by the officer having legal custody of the records or by his deputy; and (2) It must be accompanied
by a certificate by a secretary of the embassy or legation, consul general, consul, vice consular or consular agent or
foreign service officer, and with the seal of his office. The latter requirement is not a mere technicality but is intended to
justify the giving of full faith and credit to the genuineness of a document in a foreign country.
9. It is required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain Monzon, who attested the
documents, is the officer who had legal custody of those records made by a secretary of the embassy or legation, consul
general, consul, vice consul or consular agent or by any officer in the foreign service of the Philippines stationed in
Venezuela, and authenticated by the seal of his office accompanying the copy of the public document. No such certificate
could be found in the records of the case.
10. With respect to proof of written laws, parol proof is objectionable, for the written law itself is the best evidence.
According to the weight of authority, when a foreign statute is involved, the best evidence rule requires that it be
proved by a duly authenticated copy of the statute.
11. The Venezuelan law was not pleaded before the lower court. A foreign law is considered to be pleaded if there is an
allegation in the pleading about the existence of the foreign law, its import and legal consequence on the event or
transaction in issue. A review of the Complaint revealed that it was never alleged or invoked.
12. With regard to the damages: There being no contractual obligation, the private respondent is obliged to give only the
diligence required of a good father of a family in accordance with the provisions of Article 1173 of the New Civil Code.
13. The diligence of a good father of a family requires only that diligence which an ordinary prudent man would exercise
with regard to his own property. This we have found private respondent to have exercised when the vessel sailed only after
the "main engine, machineries, and other auxiliaries" were checked and found to be in good running condition; when the
master left a competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating the
Orinoco River; when the master ordered the inspection of the vessel's double bottom tanks when the vibrations occurred.
14. The Philippine rules on pilotage is embodied in Philippine Ports Authority Administrative Order No. 03-85, otherwise
known as the Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine
Ports. The law is very explicit. The master remains the overall commander of the vessel even when there is a pilot on
board. He remains in control of the ship as he can still perform the duties conferred upon him by law despite the presence
of a pilot who is temporarily in charge of the vessel. It is not required of him to be on the bridge while the vessel is being
navigated by a pilot.
15. However, Section 8 of PPA Administrative Order No. 03-85, provides: Sec. 8. Compulsory Pilotage Service - For
entering a harbor and anchoring thereat, or passing through rivers or straits within a pilotage district, as well as docking
and undocking at any pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign trade
shall be under compulsory pilotage. xxx.
>> The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who was presumed to be
knowledgeable of every shoal, bank, deep and shallow ends of the river.
16. The law does provide that the master can countermand or overrule the order or command of the harbor pilot on board.

17. Based on these declarations, it comes as no surprise to us that the master chose not to regain control of the ship.
Admitting his limited knowledge of the Orinoco River, Captain Colon relied on the knowledge and experience of pilot
Vasquez to guide the vessel safely.
18. Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different class from ordinary employees,
for they assume to have a skill and a knowledge of navigation in the particular waters over which their licenses extend
superior to that of the master; pilots are bound to use due diligence and reasonable care and skill. XXX
19. We find that the grounding of the vessel is attributable to the pilot. When the vibrations were first felt the watch officer
asked him what was going on, and pilot Vasquez replied that "(they) were in the middle of the channel and that the
vibration was as (sic) a result of the shallowness of the channel."
20. Pilot Vasquez was assigned to pilot the vessel Philippine Roxas as well as other vessels on the Orinoco River due to his
knowledge of the same. In his experience as a pilot, he should have been aware of the portions which are shallow and
which are not. His failure to determine the depth of the said river and his decision to plod on his set course, in all
probability, caused damage to the vessel. Thus, we hold him as negligent and liable for its grounding.
21. The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances surrounding the injury do
not clearly indicate negligence on the part of the private respondent. For the said doctrine to apply, the following
conditions must be met: (1) the accident was of such character as to warrant an inference that it would not have happened
except for defendant's negligence; (2) the accident must have been caused by an agency or instrumentality within the
exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not
have been due to any voluntary action or contribution on the part of the person injured.
22. As to the claim that the ship was unseaworthy, we hold that it is not.
>> The Lloyds Register of Shipping confirmed the vessels seaworthiness in a Confirmation of Class issued. Also, Engr.
Mata of the Philippine Roxas submitted an accident report wherein he stated that he checked and prepared the main engine,
machineries and all other auxiliaries and found them all to be in good running condition and ready for maneuvering. That
same day the main engine, bridge and engine telegraph and steering gear motor were also tested.

022 Manila Hotel Corp. & Manila Hotel Intl. Ltd. v.

AUTHOR: JANNA | Neither NLRC nor POEA is the
NLRC, Arbiter Ceferina J. Diosana, and Marcelo G. Santos proper forum for the adjudication of the case between
SANTOS and MHC et al. because the main aspects of the
[G.R. No. 120077; October 13, 2000]
case transpired in two foreign jurisdictions, and he was
TOPIC:
PONENTE:PARDO, J.:
hired directly, and not through the intervention of POEA.
FACTS:
1. SANTOS was an overseas worker employed as a printer at the Mazoon Printing Press, in Oman. During his
employement, he received a letter from Mr. Gerhard R. SCHMIDT, General Manager, Palace Hotel, Beijing, China
(PALACE). SCHMIDT informed him that he was recommended by one Nestor Buenio, a friend of his.
2. SANTOS was offered the same position as printer, but with a higher monthly salary and inceased benefits, with the
position slated to open on 10/1/88. On 5/8/88 SANTOS wrote SCHMIDT and signified his acceptance of the offer.
3. May 19, 1988: PALACEs hotel manager, Mr. Hans J. HENK mailed a ready to sign employment contract to
respondent Santos. HENK advised SANTOS to return the contract to him if he finds it acceptable, together with his
passport and two additional pictures for his visa to China.
4. SANTOS resigned from the Mazoon Printing Press, under the pretext that he was needed at home to help with the
family's piggery and poultry business. He then wrote PALACE, acknowledging HENKs letter, enclosed 4 signed copies
of the employment contract, and notified them that he was going to arrive in Manila during the 1st week of July 1988.
6. The employment contract of June 4, 1988 stated that: (a) his employment would commence September 1, 1988; (b)
for a period of two years; (c) for a monthly salary of $900 net of taxes, payable 14 times a year.
7. SANTOS was deemed resigned from his previous work on 6/30/88, and he arrived in Manila the next day. On 11/5/88,
he left for Beijing, China and started to work at the Palace Hotel. Subsequently, he signed an amended "employment
agreement" with the Palace Hotel, effective the 11/5/88. In the contract, SCHMIDT represented the Palace Hotel. The
Vice President (Operations and Development) of petitioner Manila Hotel Intl. Co. Ltd. (MHICL), Miguel D. Cergueda
signed the employment agreement under the word "noted".
8. SANTOS was on vacation leave from June 8-29, 1989 in the Philippines, and returned to China to reassume his post
on July 17, 1989. Five days later, SCHMIDTs Executive Secretary, a certain Joanna suggested in a handwritten note
that respondent Santos be given one (1) month notice of his release from employment.
9. August 10, 1989: PALACE informed SANTOS by letter signed by SCHMIDT that his employment at the print shop
would be terminated due to business reverses due to political upheaval in China. (referring to Tiannamen Square
incidents). It was also stated that they regret having to make such a decision, but that such does not in any way reflect on
his past performance, which they found up to their expectations, and that should business turn for the better, they will
contact him directly and give him priority for future assignment..
11. September 5, 1989: SANTOS was terminated by PALACE and paid all benefits due him, including airfare to RP.
12. On October 3, 1989, respondent SANTOS was repatriated to the Philippines, and on Oct. 24, he wrote SCHMIDT
(through his lawyer Att. Ednave) demanding full compensation pursuant to the employment agreement.
13. SCHMIDT replied, stating that: (a) SANTOS was not abrubtly terminated; (b) they followed the 1 month notice
clause and gave him all benefits due him; (c) the Print Shop at the Palace Hotel is still not operational; (d) retrenchment in
various departments of hotel is ongoing because of low business outlook a normal management practice to control costs;
(e) SANTOS performance rating was below average; (f) a Chinese National now doing the job shows a better approach;
(g) When SANTOS received the notice, he hardly showed up for work, but still enjoyed free accommodation/laudry/meals.
14. Feb. 2090: SANTOS filed a complaint for illegal dismissal against MHC, MHICL, PALACE, and SCHMIDT.
15. June 27, 1991: Arbiter DIOSANA rendered judgment against petitioners, and directed them to pay SANTOS jointly
and severally. MHC et al. appealed to NLRC, arguing that POEA has jurisdiction over the case.
16. NLRC ruled initially ruled in MHC et als favour, and declared NLRC decision null and void for lack of
jurisdiction. NLRC enjoined SANTOS to file complaint with POEA. However, SANTOS moved for MR, arguing he
is not a overseas contract worker, thus the case is not cognizable by POEA. NLRC granted the motion and reversed
itself, directing Arbiter Tumanon to hear the case on whether SANTOS was retrenched or dismissed.
17. Jan. 13, 1994: Arbiter Tumanon completed the proceedings based on the testimonial and documentary evidence
presented to and heard by him, but the case was transferred to Arbiter de Vera, when Tumanon was re-assigned.
18. Nov. 25, 1994: Arbiter de Vera submitted his report, finding SANTOS was illegally dismissed, and recommended
payment of actual damages equaivalent to salaries from his unexpired contract. NLRC ruled in favour of SANTOS.
19. MHC et al. filed MR, but the same was denied. Hence this petition. MHC et al. filed urgent motion for TRO, but was
denied. Court required respondents to file their respective comments, without giving due course to the petition.
20. SOLGEN filed a manifestation, stating that after going over petition and annexes,it cannot defend NLRCs position,
and requested that they be excused from filing a comment in NLRCs behalf, which Court granted. SANTOS and NLRC
filed their own comments.

ISSUE(S): Whether the NLRC is the proper forum for the adjudication of the case between SANTOS and MHC et al.
HELD: NO, because noting that the main aspects of the case transpired in two foreign jurisdictions, involving purely
foreign elements, NLRC was a seriously inconvenient forum to adjudicate the same.
RATIO:
1. We note that the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign
elements. The only link that the Philippines has with the case is that respondent Santos is a Filipino citizen. The
Palace Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here.
2. The employment contract. Respondent Santos was hired directly by the Palace Hotel, a foreign employer,
through correspondence sent to the Sultanate of Oman, where respondent Santos was then employed. He was hired
without the intervention of the POEA or any authorized recruitment agency of the government.36
3. Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it
chooses to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort to; (2) that
the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) that the
Philippine court has or is likely to have power to enforce its decision.37 The conditions are unavailing in the case at bar.
4. Not Convenient. We fail to see how the NLRC is a convenient forum given that all the incidents of the case from
the time of recruitment, to employment to dismissal occurred outside the Philippines. The inconvenience is
compounded by the fact that the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines.
Neither .are they "doing business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and Mr. Henk are nonresidents of the Philippines.
5. No power to determine applicable law. Neither can an intelligent decision be made as to the law governing the
employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex
loci contractus (the law of the place where the contract was made).38
6. The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance by
writing a letter while he was in the Republic of Oman. This letter was sent to the Palace Hotel in the PRC.
7. No power to determine the facts. Neither can the NLRC determine the facts surrounding the alleged illegal
dismissal as all acts complained of took place in Beijing, People's Republic of China. The NLRC was not in a position
to determine whether the Tiannamen Square incident truly adversely affected operations of the Palace Hotel as to
justify respondent Santos' retrenchment.
8. Principle of effectiveness, no power to execute decision. Even assuming that a proper decision could be reached by
the NLRC, such would not have any binding effect against the employer, the Palace Hotel. The Palace Hotel is a
corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person
was not acquired.
9. This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign
employers. Neither are we saying that we do not have power over an employment contract executed in a foreign
country. If Santos were an "overseas contract worker", a Philippine forum, specifically the POEA, not the NLRC,
would protect him.39 He is not an "overseas contract worker" a fact which he admits with conviction. 40
10. Even assuming that the NLRC was the proper forum, even on the merits, the NLRC's decision cannot be sustained. Even if we assume two
things: (1) that the NLRC had jurisdiction over the case, and (2) that MHICL was liable for Santos' retrenchment, still MHC, as a separate and
distinct juridical entity cannot be held liable. True, MHC is an incorporator of MHICL and owns fifty percent (50%) of its capital stock.
However, this is not enough to pierce the veil of corporate fiction between MHICL and MHC.Respondent Santos predicates MHICL's liability on
the fact that MHICL "signed" his employment contract with the Palace Hotel. This fact fails to persuade us. First, we note that the Vice President
(Operations and Development) of MHICL, Miguel D. Cergueda signed the employment contract as a mere witness. He merely signed under the
word "noted".When one "notes" a contract, one is not expressing his agreement or approval, as a party would Mr. Cergueda merely signed the
"witnessing part" of the document. The "witnessing part" of the document is that which, "in a deed or other formal instrument is that part which
comes after the recitals, or where there are no recitals, after the parties (emphasis ours)." Second, and more importantly, there was no existing
employer-employee relationship between Santos and MHICL.

11. Considering that the NLRC was forum non-conveniens and considering further that no employer-employee
relationship existed between MHICL, MHC and respondent Santos, Labor Arbiter Ceferina J. Diosana clearly had
no jurisdiction over respondent's claim in NLRC NCR Case No. 00-02-01058-90.WHEREFORE, the Court hereby
GRANTS the petition for certiorari and ANNULS the orders and resolutions of the National Labor Relations
Commission dated May 31, 1993, December 15, 1994 and March 30, 1995 in NLRC NCR CA No. 002101-91 (NLRC
NCR Case No. 00-02-01058-90).
CASE LAW/ DOCTRINE: Under the rule of forum non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided: (1) that the Philippine court is one to which the parties may
conveniently resort to; (2) that the Philippine court is in a position to make an intelligent decision as to the law and the
facts; and (3) that the Philippine court has or is likely to have power to enforce its decision.

The doctrine of forum non conveniens should not be used as a ground

23 Pioneer v. Todaro
G.R. No. 154830, 8 June 2007
for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court
TOPIC: Dealings with a Conflicts Problem; does not include said doctrine as a ground.
Dismissal of Case; Doctrine of forum non
PIL: corporation duly organized and existing under the laws of Australia and is principally engaged
conveniens
in the ready-mix concrete and concrete aggregates business;
PPHI: company established by PIL to own and hold the stocks of its operating company in the
Ponente: Austria-Martinez, J.
Philippines;
PCPI: company established by PIL to undertake its business of ready-mix concrete, concrete
aggregates and quarrying operations in the Philippines;
McDonald: Chief Executive of the Hongkong office of PIL;
Klepzig: President and Managing Director of PPHI and PCPI
Betonval: company engaged in pre-mixed concrete and concrete aggregate production

FACTS:
1. Respondent Antonio Todaro filed a complaint for Sum of Money and Damages with Preliminary Attachment against
petitioners: Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings,
Inc. (PPHI), John G. McDonald (McDonald) and Philip J. Klepzig.
2. Todaro has been the managing director of Betonval Readyconcrete, Inc. (Betonval); after he resigned from Betonval,
PIL contacted Todaro and asked him if he was available to join them in connection with their intention to establish a
ready-mix concrete plant and other related operations in the Philippines. Todaro informed PIL of his availability and
interest to join them.
3. PIL and Todaro then came to an agreement wherein the former consented to engage the services of the latter as a
consultant for two to three months, after which, he would be employed as the manager of PIL's ready-mix concrete
operations should the company decide to invest in the Philippines.
4. PIL started its operations in the Philippines; however, it refused to comply with its undertaking to employ Todaro on a
permanent basis.
5. PPHI, PCPI and Klepzig separately moved to dismiss the complaint. Grounds: complaint states no cause of action; RTC
has no jurisdiction over the subject matter of the complaint, as the same is within the jurisdiction of the NLRC; and
complaint should be dismissed on the basis of the doctrine of forum non conveniens.
6. RTC denied their motion to dismiss. Motion for reconsideration also denied. They filed a Petition for Certiorari with the
CA but the latter denied it as well. Motion for reconsideration also denied.
Contentions as to the applicability of the doctrine of forum non conveniens:
Petitioners: the principle of forum non conveniens dictates that even where exercise of jurisidiction is authorized by law,
courts may refuse to entertain a case involving a foreign element where the matter can be better tried and decided
elsewhere, either because the main aspects of the case transpired in a foreign jurisdiction or the material witnesses
have their residence there and the plaintiff sought the forum merely to secure procedural advantage or to annoy or
harass the defendant. They further assert that since the majority of the defendants in the present case are not residents of
the Philippines, they are not subject to compulsory processes of the Philippine court handling the case for purposes of
requiring their attendance during trial; and the events, which led to the present controversy, occurred outside the
Philippines.
Respondent Todero: the question of whether a suit should be entertained or dismissed on the basis of the principle of
forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the
trial judge, who is in the best position to determine whether special circumstances require that the court desist from
assuming jurisdiction over the suit.
ISSUES: 1. (main issue) WON the complaint should be dismissed on the basis of the doctrine of forum non conveniens
2. WON the complaint states a cause of action
3. WON the RTC has jurisdiction over the subject matter of the complaint
HELD: 1. No. The doctrine of forum non conveniens should not be used as a ground for a motion to dismiss because
Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground. The factual circumstances cited by
petitioners that would allegedly justify the application of the doctrine of forum non conveniens are matters of defense, the
merits of which should properly be threshed out during trial.
2. Yes. Based on the allegations in the Complaint and the annexes attached thereto, respondent has a cause of action

against herein petitioners.

3. Yes. No employer-employee relationship exists between petitioners and respondent. Where no employer-employee
relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code,
other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction.
RATIO:
Re: applicability of the principle of forum non conveniens
The doctrine of forum non conveniens, literally meaning the forum is inconvenient, emerged in private
international law to deter the practice of global forum shopping, that is to prevent non-resident litigants from choosing the
forum or place wherein to bring their suit for malicious reasons, such as to secure procedural advantages, to annoy and
harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. Under this doctrine, a court, in
conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most convenient or available
forum and the parties are not precluded from seeking remedies elsewhere.
Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the
particular case and is addressed to the sound discretion of the trial court. In the case of Communication Materials and
Design, Inc. vs. Court of Appeals, this Court held that xxx [a] Philippine Court may assume jurisdiction over the case if
it chooses to do so; provided, that the following requisites are met: (1) that the Philippine Court is one to which the
parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the
law and the facts; and, (3) that the Philippine Court has or is likely to have power to enforce its decision.
Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of Appeals, that the doctrine of forum
non conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of
Court does not include said doctrine as a ground. This Court further ruled that while it is within the discretion of the
trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the courts desistance; and that the propriety of
dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is
more properly considered a matter of defense. (emphasis supplied) (Bank of America NT & SA v. Court of Appeals)

In the present case, the factual circumstances cited by petitioners which would allegedly justify the application of the
doctrine of forum non conveniens are matters of defense, the merits of which should properly be threshed out during trial.
Re: Cause of Action
In resolving whether or not the Complaint in the present case states a cause of action, the trial court correctly limited itself to
examining the sufficiency of the allegations in the Complaint as well as the annexes thereto. It is proscribed from inquiring into the
truth of the allegations in the Complaint or the authenticity of any of the documents referred or attached to the Complaint, since these
are deemed hypothetically admitted by the respondent. This Court has reviewed respondents allegations in its Complaint. In a
nutshell, respondent alleged that herein petitioners reneged on their contractual obligation to employ him on a permanent
basis. This allegation is sufficient to constitute a cause of action for damages.
The Court does not agree with petitioners' contention that they were not privy to the negotiations for respondent's possible
employment. It is evident from the Complaint that, on various occasions, Klepzig conducted negotiations with respondent regarding the
latter's possible employment. In fact, Annex H of the complaint shows that it was Klepzig who informed respondent that his
company was no longer interested in employing respondent. Hence, based on the allegations in the Complaint and the annexes
attached thereto, respondent has a cause of action against herein petitioners.

Re: Jurisdiction:
Where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to
the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In the
present case, no employer-employee relationship exists between petitioners and respondent. In fact, in his complaint, private
respondent is not seeking any relief under the Labor Code, but seeks payment of damages on account of petitioners' alleged
breach of their obligation under their agreement to employ him. It is settled that an action for breach of contractual obligation
is intrinsically a civil dispute. In the alternative, respondent seeks redress on the basis of the provisions of Articles 19 and 21 of the
Civil Code. Hence, it is clear that the present action is within the realm of civil law, and jurisdiction over it belongs to the regular
courts.