Equal Employment Opportunity Commission v. Arabian American Oil Co.

Brief Fact Summary

Boureslan (Plaintiff), an American working abroad for Aramco (Defendant), an American

corporation, claimed employment discrimination in violation of the 1964 Civil Rights Act.

Synopsis of Rule of Law.

The 1964 Civil Rights Act does not apply to American employers abroad.

Facts
Boureslan (Plaintiff) had been an employee of Arabian American Oil Co. (Aramco) (Defendant),
working in Saudia Arabia. He was discharged, and afterward filed a suit in U.S. District Court,
claiming employment discrimination on the basis of race, religion, and national origin, in
violation of the 1964 Civil Rights Act. The district court dismissed, ruling that the Act did not
have extraterritorial application. The Fifth Circuit affirmed, and the Supreme Court granted
review.

Issue
Does the 1964 Civil Rights Act apply to American employers abroad?

Held
(Rehnquist, C.J.) No. The 1964 Civil Rights Act does not apply to American employers abroad.
The only determination to make in this issue is the intent to Congress. The analysis begins with
the presumption that laws are not intended to have extraterritorial application. To reach a
contrary conclusion, a court must find clear evidence of legislative intent. The Act contains no
language to this effect. The jurisdictional language in the statute, while broad, is unclear
regarding extraterritorial application. In addition, the Act provides no mechanisms for foreign
enforcements and contains no provisions for conflicts with foreign laws, as most statutes with
foreign application do. In this case, the Equal Employment Opportunity Commission (Plaintiff),
which has intervened, urges extraterritorial application. Courts must show some regard to
administrative agency interpretations of law, but the final decision must be left to the courts. It
seems clear in this case that Congress did not intend the Act to have foreign application.
Affirmed.
Discussion
The presumption against extraterritorial application of a law is merely that, a presumption. It
does not address the power of Congress to legislate in such a manner. This power, without
doubt, exists. It is universally recognized in international law that a government can legislate
regarding the activities of its citizens abroad.
Small v. United States

Facts of the case

Federal law made gun possession illegal for any person "convicted in any court" for crimes
punishable by more than a year in prison. A Japanese court convicted Gary Sherwood Small for
crimes punishable by a prison term longer than one year. Years later a U.S. District Court
convicted Small, because of his prior conviction, of illegally possessing a gun. Small appealed
and argued the term "convicted in any court" did not include convictions in foreign courts. The
Third Circuit Court of Appeals ruled against Small.

Question

Federal law made gun possession illegal for any person "convicted in any court" for crimes
punishable by more than a year in prison. Does "convicted in any court" include convictions in
foreign courts?

No. In a 5-3 opinion delivered by Justice Stephen Breyer, the Court held that the federal law's
phrase, "convicted in any court," encompassed only domestic, not foreign, convictions. The
majority reasoned that in determining the scope of the phrase, it was appropriate to assume
Congress had domestic concerns in mind. Moreover, the statute's overall language suggested
no intent to reach beyond domestic convictions.
--------------------------------------------------
033 SIM v. NLRC
G.R. No. 157376
October 2, 2007
Digested By: Joyce Baylon
--------------------------------------------------

Petitioner: CORAZON C. SIM

Respondents: NATIONAL LABOR RELATIONS COMMISSION AND EQUITABLE PCI-BANK

Petition: Illegal dismissal; Appeal by Certiorari under Rule 45 of the Rules of Court
Ponente: Austria-Martinez

FACTS:
1. Corazon Sim filed a case for illegal dismissal with the Labor Arbiter, alleging that she was
initially employed by Equitable PCI-Bank in 1990 as Italian Remittance Marketing
Consultant to the Frankfurt Representative Office.
2. Eventually, she was promoted to Manager position, until September 1999, when she
received a letter from Remegio David -- the Senior Officer, European Head of PCIBank,
and Managing Director of PCIB- Europe -- informing her that she was being dismissed
due to loss of trust and confidence based on alleged mismanagement and
misappropriation of funds.
3. Equitable PCI Bank denied any employer-employee relationship between them, and
sought the dismissal of the complaint.
4. The Labor Arbiter rendered its Decision dismissing the case for want of jurisdiction
and/or lack of merit. According to the Labor Arbiter: It should be stressed at this
juncture that the labor relations system in the Philippines has no extra-territorial
jurisdiction. It is limited to the relationship between labor and capital within the
Philippines.
5. Sim was accused of withdrawing P3,000,000.00 lire from the bank's account.
6. Sim does not deny withdrawing the said amount. What she submits is that she used said
amount for the Radio Pilipinas sa Roma radio program of the company.
7. Equitable PCI-Bank countered that at the time Sim withdrew said amount, the radio
program was already off the air. She is a managerial employee. Thus, loss of trust and
confidence is a valid ground for her dismissal.

ISSUE/S:
1. Whether or not the Labor Relations System of the Philippines has extraterritorial
jurisdiction
2. Whether or not the National Labor Relations Commission has jurisdiction over overseas
Filipino workers
RULING/RATIO: Yes to both issues. The Labor relations system in the Philippines has extra-
territorial jurisdiction and the Labor Arbiters of the National Labor Relations Commission (NLRC)
have jurisdiction to hear and decide, within the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.

Article 217 of the Labor Code provides for the jurisdiction of the Labor Arbiter and the National
Labor Relations Commission, viz.:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided
under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wage, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount of exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.

Moreover, Section 10 of Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas
Filipinos Act of 1995, provides:

SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint,
the claims arising out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary
and other forms of damages.

Also, Section 62 of the Omnibus Rules and Regulations Implementing R.A. No. 8042 provides
that the Labor Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and
decide all claims arising out of employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages, subject to the rules and procedures of the NLRC.
In Philippine National Bank v. Cabansag, the Court pronounced:

Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of
Philippine labor and social legislation, contract stipulations to the contrary notwithstanding.
This pronouncement is in keeping with the basic public policy of the State to afford protection to
labor, promote full employment, ensure equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers and employers. For the State assures the
basic rights of all workers to self-organization, collective bargaining, security of tenure, and just
and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section
18, Article II and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered
imperative by Article 17 of the Civil Code which states that laws "which have for their object
public order, public policy and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determination or conventions agreed upon in a foreign country."

DISPOSITIVE: Petition was denied due to procedural issues. The CA did not commit any error in
dismissing the petition before it for failure to file a prior motion for reconsideration with the
NLRC. The Labor Arbiter and the NLRC's factual findings as regards the validity of petitioner's
dismissal are accorded great weight and respect and even finality when the same are supported
by substantial evidence.

DOCTRINE: Labor arbiters have original and exclusive jurisdiction over claims arising from
employer-employee relations, including termination disputes involving all workers, among
whom are overseas Filipino workers.
Kirtsaeng v. John Wiley & Sons, Inc.

Facts of the case

Supap Kirtsaeng came to the United States from Thailand in 1997. He obtained an
undergraduate degree at Cornell University before being accepted into a PhD program at the
University of Southern California. To subsidize the cost of his education, Kirtsaeng asked friends
and family in Thailand to buy copies of textbooks in Thailand and to ship those books to him in
the United States. Kirstaeng then sold the textbooks on eBay at a profit. Among the books
Kirtsaeng sold, were eight textbooks printed in Asia by John Wiley and Sons, Inc.

Wiley sued Kirtsaeng in district court for copyright infringement under Section 602(a)(1) of the
Copyright Act, which makes it impermissible to import a work "without the authority of the
owner." Kirtsaeng asserted a defense under Section 109(a) of the Copyright Act, which allows
the owner of a copy "lawfully made under this title" to sell or otherwise dispose of the copy
without the copyright owner's permission. The district court rejected Kirtsaeng's argument, and
held that the doctrine was inapplicable to goods manufactured in a foreign country.

Kirtsaeng appealed to the United States Court of Appeals for the Second Circuit. A divided panel
acknowledged that it was a difficult question of statutory construction, but the majority held
that Section 109(a) referred specifically to works that are made in the United States and did not
apply to works manufactured abroad. Kirtsaeng's request for rehearing was denied, and he
appealed the appellate court's decision.

Question
If a copy was made legally, acquired abroad and then imported into the United States, can that
foreign-made copy ever be resold within the United States without the copyright owner's
permission under Section 602(a)(1) and Section 109(a) of the copyright act?

Conclusion

Yes. Justice Stephen G. Breyer delivered the opinion of the 6-3 majority. The Supreme Court
held that there was no geographic restriction on the "first sale" doctrine, which states that the
copyright owner maintains control of the first sale only. The language and common-law history
of the Copyright Act support a non-geographic reading of the Act that allows for unrestricted
resale of copyrighted goods regardless of the location of their manufacture. The Court also held
that a geography-based reading of the "first sale" doctrine would drastically harm the used-
book business as it would force book sellers to be subject to the whim of foreign copyright
holders.
In her concurring opinion, Justice Elena Kagan wrote that the majority's decision did not limit
copyright protection for copyright owners any further than previous decisions had. She argued
that a stricter reading of copyright protection goes against the demonstrated legislative intent
of the Act. Justice Samuel A. Alito, Jr. joined in the concurrence.

Justice Ruth Bader Ginsburg wrote a dissenting opinion in which she argued that the majority's
opinion runs counter to the Copyright Act's purpose of protecting copyright owners from the
importation of low-cost versions of their products. The language and legislative history of the
Copyright Act indicate that Congress did not intend the "first sale" doctrine to apply to copies
manufactured abroad. She also argued that the majority's opinion drastically shifts the
government's policy in regards to international copyright agreements. Justice Anthony M.
Kennedy and Justice Antonin Scalia joined in the dissent.
BMW of North America, Inc. v. Gore

Brief Fact Summary. The Respondent, Ira Gore, Jr. (Respondent), purchased a new BMW and
later learned that the car had been repainted. In a suit for suppression of a material fact, the
Respondent was awarded $2 million in punitive damages. The Petitioner, BMW of North
America, Inc. (Petitioner), appeals, claiming the punitive damages award is grossly excessive.

Synopsis of Rule of Law. The Due Process Clause of the 14th Amendment of the United States
Constitution (Constitution) limits the amount recoverable in punitive damages when the
damages constitute grossly excessive punishment for a tortfeasor.

Facts. The Respondent purchased a BMW sports sedan from an authorized BMW dealer in
Birmingham, Alabama. After approximately nine months, Respondent took the car to an
independent detailer to have the car detailed. The proprietor of the independent detailer
detected evidence that the car had been repainted. The repainting was done by BMW to repair
acid rain damage that occurred when the car was in transit from Germany. Respondent brought
suit against the Petitioner alleging that the failure to disclose the fact that the car had been
repainted constituted suppression of a material fact. At trial, Petitioner acknowledged it had
adopted a nationwide policy of selling cars as new without advising the dealer that any repairs
had been made when the repair cost did not exceed three percent of the suggested retail price.
At trial, Respondent introduced evidence that his repainted car was worth less than a car that
had not been refinished. In support of a punitive damages claim, he introduced
evidence that since 1983 Petitioner had sold nine hundred eighty three refinished cars as new,
including fourteen in Alabama. Petitioner disputed evidence that refinished cars were worth
less, argued that its good-faith belief made punitive damages inappropriate and that
transactions other than Alabama had no relevance to respondents claim. The jury found
Petitioner liable for $4,000 in compensatory damages and $4 million in punitive damages. The
trial judge denied Petitioners motion to set aside the punitive damages, finding that it was not
grossly excessive, and therefore did not violate the Due Process Clause of the 14th Amendment
of the Constitution. After post-trial motions, the Alabama Supreme Court reduced the award to
$2 million on the ground that the jury improperly multiplied Gores compensatory damages by
the number of similar sales in all States.

Issue. Was the $2 million punitive damages award to the purchaser of a refinished car grossly
excessive, so as to violate the Due Process Clause of the 14th Amendment of the Constitution?
Held. Yes. Judgment reversed and case remanded.
* Punitive damages may be imposed to further a States legitimate interests in punishing
unlawful conduct and deterring its repetition. States have considerable flexibility to protect its
citizens by prohibiting deceptive trade practices. State sovereignty, however, prevents states
from imposing economic sanctions with the intent of changing the tortfeasors lawful conduct
in other States. Alabama does not have the power to punish petitioner for conduct that was
lawful where it occurred and had no impact on Alabama.
* Three guideposts lead the Supreme Court of the United States (Supreme Court) to the
determination that the $2 million award against Petitioner is grossly excessive: (i) the degree of
reprehensibility; (ii) the disparity between the harm suffered and the punitive damage award;
and (iii) the difference between this remedy and civil penalties authorized in comparable cases.
* First, the degree of reprehensibility. Nonviolent crimes are less serious than violent crimes.
Trickery and deceit is more reprehensible than negligence. The harm Petitioner inflicted was
purely economic in nature. There is no evidence Petitioner acted in bad faith. Petitioner
reasonably relied on state disclosure statutes, allowing the car sales in this case in most states.
Based on these facts, Petitioners conduct was not sufficiently reprehensible to warrant a $2
million exemplary damages award.
* Second, the ratio between the harm suffered and the punitive damage award. There must be
a reasonable relationship between the punitive damages award and the compensatory
damages. Although the Supreme Court refuses to draw a mathematical bright line, this punitive
damages award is 500 times the amount of the actual harm determined by the jury. This
exceptional difference raises suspicions.
* Third, sanctions for comparable misconduct. Substantial deference should be given to
legislative judgments concerning appropriate sanctions for the conduct at issue. In this case,
the punitive damages were tantamount to that of a severe criminal penalty. This Court believes
that based on these three guidelines, the punitive damage award imposed, violates the
constitutional limit of the 14th Amendment of the Constitution.

Dissent. Justice Antonin Scalias (J. Scalia) dissent, in which Justice Clarence Thomas (J. Thomas)
joined, is omitted. Justice Ruth Bader Ginsburgs (J. Ginsburg) dissent, in which the Chief Justice
joined, is omitted.
Concurrence. Justice Stephen Breyers (J. Breyer) concurrence, in which Justice Sandra Day
OConner (J. OConnor) and Justice David Souter (J. Souter) joined, is omitted.

Discussion. On remand, the Alabama Supreme Court ordered a remittitur of the punitive
damages award to $50,000 and Respondent accepted.
Spector v. Norwegian Cruise Line Ltd

Brief Fact Summary. A class action which sought declarative and injunctive relief against the
Norwegian Cruise Line Ltd (NCL) (D) under the Title III of the ADA, which prohibits
discrimination based on disability was filed by disabled individuals (P) and their companions (P)
who had bought tickets for round-trip cruises from a U.S. port.

Synopsis of Rule of Law. The Title III of the Americans with Disabilities Act does not seek to
regulate a vessels internal affairs but it is applies to foreign-flag ships in U.S. waters.

Facts. With its principal place of business in Miami, Florida, NCL (D), a Bermuda Corporation,
operated cruise ships that departed from and returned to port in the United States. A large
chunk of the companys revenue came from the U.S but almost all of NCLs (D) vessels were
registered in other countries. A class action was brought against the cruise company by disabled
individuals (P) and their companions (P) who had purchased tickets for round-trip cruises from
a U.S. port.

The plaintiffs sought declarative and injunctive relief against NCL (D) under the Title III of the
ADA, which prohibit discrimination. Because the ADA does not apply to foreign-flag vessels in
U.S. territory absent a clear indication of congressional intent to the contrary, the court of
appeals dismissed the claim. But the U.S. Supreme Court granted certiorari.

Issue. Does the Title III of the Americans with Disabilities Act seek to regulate a vessels internal
affairs and does it applies to foreign-flag ships in U.S. waters?

Held. (kennedy, J.) Yes. The Title III of the Americans with Disabilities Act does not seek to
regulate a vessels internal affairs but it is applies to foreign-flag ships in U.S. waters. It is only
when the of the United States or its citizens rather than the interest internal to the ship are at
stake that the general statutes are presumed to apply to conduct that takes place aboard a
foreign-flag vessel in U.S. territory.
The absence of a clear statement of congressional intent is the narrow exception to this
presumption which is based on international comity, and the general statute is not applicable
to foreign-flag vessels as to matters involving order and discipline of the vessel. If the Title III
were to be read to require permanent and significant structural modifications to foreign
vessels, then clear-statement rule would most likely come into play. Otherwise, Title III is
applicable to NCLs (D) foreign-flag cruise ship. Reversed and remanded.

Dissent. (Scalia, J) It is when laws interfere with the regulation of a ship internal order that the
clear-statement rule comes into play and this is designed to promote international comity and
avoid international discord. It is not applicable in situation whereby the pervasive regulation of
the internal order of a ship is not present.

The structural modifications needed under Title III for compliance with its barrier-removal
provisions clearly would affect the internal order of the ship because the physical aspect of the
ship would be altered and some of this is related to safety, which under international law
traditionally has been the province of the ships flag state. This would not be in consonance
with the International Convention for the Safety of Life at Sea (SOLAS) and other similar
inconsistencies might exist between the structural requirements of Title III and the disability
laws of other countries. According, the ADA should not apply to foreign-flag cruise ships in U.S.
waters.

Discussion. Unlike the statutes unambiguous general terms, the clear-statement rul is an
implied limitation and operates much like other implied rules, which avoid applications of
otherwise unambiguous statutes that would intrude on sensitive domains in a way that
Congress is unlikely to have intended had it considered the matter.
An all-or-nothing approach to the rule was avoided by the court in this case, under which a
statute is altogether inapplicable if but one of its specific applications trenches on the domain
protected by a clear-statement rule. This approach taking would change the clear-statement
rule from a principle of interpretive caution into a trap for an unwary Congress, which would
require the cancellation of the entire statute or of some arbitrary set of applications larger than
the domain the rule protects.
Pennoyer v. Neff

Brief Fact Summary. Defendant Neff was being sued by Mitchell in Oregon for unpaid legal
fees. A default judgment was entered against Defendant for his failure to come to court or
otherwise resist the lawsuit, despite the fact that he was not personally served with process,
nor was a resident of Oregon. Later, in an attempt to collect upon his judgment, Mitchell
attached land located in Oregon belonging to Defendant, and had it sold to Plaintiff Pennoyer
through a Sheriffs sale.

Synopsis of Rule of Law. Proceedings in a court of law to determine the personal rights and
obligations of parties over whom the court has not jurisdiction are invalid for want of due
process of law.

Facts. Mitchell, a lawyer, sued Defendant, his client, in Oregon state court for unpaid legal fees.
At the time Defendant was a non-resident of the state who was not personally served with
process. Constructive service was issued upon Defendant by publication. Defendant did not
come to court or otherwise resist the lawsuit, and default judgment was entered against him.
After the default judgment, Defendant acquired 300 acres of land in Oregon. To satisfy his
judgment against Defendant, Mitchell had the sheriff seize and sell Defendants land. The land
was purchased by Plaintiff, who received a sheriffs deed as evidence of title. The sheriff then
turned the sale proceeds over to Mitchell. Shortly after the sheriffs sale, Defendant discovered
what had happened to his land and brought suit against Plaintiff to recover the land. This
appeal followed after Defendant lost his suit against Plaintiff.

Issue. Can judgments obtained against non-residents who fail to appear in court be sustained
by default judgments where service of process is accomplished solely through publication (i.e.
constructive service)?
Is constructive service sufficient notice to attach property within the forum state owned by a
non-resident?

Held. No. The personal judgment recovered in the state court of Oregon against Plaintiff was
without validity, and the decision of the Court of Appeals overturning that judgment was
affirmed.
When a suit is merely in personam (i.e. against a person), constructive service through
publication upon a non-resident is ineffective.

No state can exercise direct jurisdiction and authority over persons or property without its
territory. However, a state may subject property within its boundaries to the payments of its
citizens, even when the land is owned by a non-resident, without infringing upon the
sovereignty of the state of residency of the landowner.
Discussion. Here the Supreme Court of the United States is distinguishing between suits in
personam, and in rem. An in personam suit is a suit against a person, whose purpose is to
determine the personal rights and obligations of the defendant. An in rem action, meanwhile, is
an action where jurisdiction pertains to property. Thus the court reasoned that constructive
service is sufficient to inform parties of action taken against any properties owned by them
within the forum state, because property is always in possession of the owner, and seizure of
the property will inform the owner of legal action taken against him.
Asiavest Limited vs Court of Appeals

295 SCRA 469 Conflict of Laws Private International Law Service of Summons to a Non
Resident Processual Presumption
In 1984, a Hong Kong court ordered Antonio Heras to pay US$1.8 million or its equivalent, with
interest, to Asiavest Ltd. Apparently, Heras guaranteed a certain loan in Hong Kong and the
debtor in said loan defaulted hence, the creditor, Asiavest, ran after Heras. But before said
judgment was issued and even during trial, Heras already left for good Hong Kong and he
returned to the Philippines. So when in 1987, when Asiavest filed a complaint in court seeking
to enforce the foreign judgment against Heras, the latter claim that he never received any
summons, not in Hong Kong and not in the Philippines. He also claimed that he never received a
copy of the foreign judgment. Asiavest however contends that Heras was actually given service
of summons when a messenger from the Sycip Salazar Law Firm served said summons by
leaving a copy to one Dionisio Lopez who was Heras son in law.
ISSUE: 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.
The action against Heras is an action in personam and as far as Hong Kong is concerned, Heras
is a non resident. He is a non resident because prior to the judgment, he already abandoned
Hong Kong. The Hong Kong law on service of summons in in personam cases against non
residents was never presented in court hence processual presumption is applied where it is
now presumed that Hong Kong law in as far as this case is concerned is the same as Philippine
laws. And under our laws, 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. Without a personal service of summons, the Hong
Kong court never acquired jurisdiction. Needless to say, the summons tendered to Lopez was
an invalid service because the same does not satisfy the requirement of personal service.
Banco Do Brasil vs Court of Appeals

333 SCRA 545 Conflict of Laws Private International Law Service of Summons in In
Personam Cases
In 1989, Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former incurred
when one of the latters ship ran aground causing losses to Urbino. Urbino impleaded Banco Do
Brasil (BDB), a foreign corporation not engaged in business in the Philippines nor does it have
any office here or any agent. BDB was impleaded simply because it has a claim over the sunken
ship. BDB however failed to appear multiple times. Eventually, a judgment was rendered and
BDB was adjudged to pay $300,000.00 in damages in favor of Urbino for BDB being a nuisance
defendant.
BDB assailed the said decision as it argued that there was no valid service of summons because
the summons was issued to the ambassador of Brazil. Further, the other summons which were
made through publication is not applicable to BDB as it alleged that the action against them
is in personam.
ISSUE: Whether or not the court acquired jurisdiction over Banco Do Brasil.
HELD: No. Banco Do Brasil is correct. Although the suit is originally in rem as it was BDBs claim
on the sunken ship which was used as the basis for it being impleaded, the action nevertheless
became an in personam one when Urbino asked for damages in the said amount. As such, only
a personal service of summons would have vested the court jurisdiction over BDB. Where the
action is in personam, one brought against a person on the basis of his personal liability,
jurisdiction over the person of the defendant is necessary for the court to validly try and decide
the case. When the defendant is a non-resident, personal service of summons within the state
is essential to the acquisition of jurisdiction over the person. This cannot be done, however, if
the defendant is not physically present in the country, and thus, the court cannot acquire
jurisdiction over his person and therefore cannot validly try and decide the case against him.
 Victoria Regner vs Cynthia Logarta

537 SCRA 277 Conflict of Laws Private International Law Service of Summons Personal
Action Real Action Extraterritorial Service
Cynthia Logarta and Teresa Tormis were the daughters of Luis Regner in his first marriage with
Anicita Regner. Victoria Regner is the second wife of Luis.
In 1999, Victoria alleged that Cynthia and Teresa with the help of another sibling defrauded
Luis, who was then very ill and was unable to write, into placing his thumbmark into a Deed of
Donation. In said Deed, Luis purportedly donated a Proprietary Ownership Certificate pertaining
to membership shares in the Cebu Country Club. Victoria alleged that said Deed is void because
the placing of thumbmark by Luis was done without the latters free will and voluntariness
considering his physical state; that it was done without Luiss lawyer; that the ratification made
by Luis before he died is likewise void because of similar circumstances.
In the same year, Victoria filed a complaint to annul said deed with the RTC of Cebu. The sheriff
could not deliver the summonses against Cynthia and Teresa because apparently, although they
are Filipinos, they are not residing here; they are residing in California. It was only in the year
2000 that one of the summonses was served to one of the sisters, Teresa, when she came back
to the Philippines.
Teresa immediately filed a motion to dismiss on the ground that Victoria failed to prosecute her
case for an unreasonable length of time. Naturally, Victoria opposed the MTD. Teresa, in her
rejoinder, alleged that the case should be dismissed because Cynthia, who is an indispensable
party, was not issued any summons, hence, since an indispensable party is not served with
summons, without her who has such an interest in the controversy or subject matter there can
be no proper determination of the case. The trial court ruled in favor of Teresa; this was
affirmed by the Court of Appeals.
ISSUE: Whether or not the dismissal of Victorias complaint is correct.
HELD: Yes. The Supreme Court agreed with the arguments presented by Teresa. The Supreme
Court also emphasized:
There are generally two types of actions: actions in rem and actions in personam. An action in
personam is an action against a person on the basis of his personal liability, while an action in
rem is an action against the thing itself, instead of against the person.
The certificate, subject of the donation, is a personal property. The action filed by Victoria is
therefore a personal action. So in order for the court to acquire jurisdiction over the
respondents, summons must be served upon them. Further, the certificate is indivisible,
Cynthias and Teresas interests thereto can only be determined if both are summoned in court.
In personal actions, if the respondents are residents of the Philippines, they may be served
summons in the following order:

1. Personal Service;
2. If (1) is not possible, Substituted Service;
3. If respondent cant be found because he is abroad but still a resident of the Philippines, by
publication with leave of court.

In personal actions still, if the respondents are non-residents, they may be served summons in
the following manner:

1. Personal service through the Philippine embassy;

2. By publication in a newspaper of general circulation in such places and for such time as the
court may order, in which case a copy of the summons and order of the court should be sent by
registered mail to the last known address of the defendant; or
3. in any other manner which the court may deem sufficient.

The above must be with leave of court.

In the case at bar, Cynthia was never served any summons in any of the manners authorized by
the Rules of Court. The summons served to Teresa cannot bind Cynthia. It is incumbent upon
Victoria to compel the court to authorize the extraterritorial service of summons against
Cynthia. Her failure to do so for a long period of time constitutes a failure to prosecute on her
part.

What if the petition is an action in rem? What are the applicable rules?
If the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not
essential for giving the court jurisdiction so long as the court acquires jurisdiction over the res.
If the defendant is a nonresident and he is not found in the country, summons may be served
extraterritorially in the following instances:

1. when the action affects the personal status of the plaintiff;

2. when the action relates to, or the subject of which is property within the Philippines, on which
the defendant claims a lien or an interest, actual or contingent;
3. when the relief demanded in such action consists, wholly or in part, in excluding the defendant
from any interest in property located in the Philippines; and
4. when the defendant non-residents property has been attached within the Philippines.

In the above instances, summons may be effected by:

1. personal service out of the country, with leave of court;

2. publication, also with leave of court; or
3. any other manner the court may deem sufficient.
G.R. No. 175799 November 28, 2011

NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED, Petitioner,

vs.
LEPANTO CONSOLIDATED MINING COMPANY, Respondent.

Facts:

On August 30, 2005, respondent Lepanto Consolidated Mining Company filed with the
Regional Trial Court (RTC) of Makati City a Complaint against petitioner NM Rothschild & Sons
(Australia) Limited praying for a judgment declaring the loan and hedging contracts between
the parties void for being contrary to Article 2018 of the Civil Code of the Philippines and for
damages. Upon respondents (plaintiffs) motion, the trial court authorized respondents
counsel to personally bring the summons and Complaint to the Philippine Consulate General in
Sydney, Australia for the latter office to effect service of summons on petitioner (defendant).

On October 20, 2005, petitioner filed a Special Appearance With Motion to

Dismiss praying for the dismissal of the Complaint on the following grounds: (a) the court has
not acquired jurisdiction over the person of petitioner due to the defective and improper
service of summons; (b) the Complaint failed to state a cause of action and respondent does
not have any against petitioner; (c) the action is barred by estoppel; and (d) respondent did not
come to court with clean hands.

On November 29, 2005, petitioner filed two Motions: (1) a Motion for Leave to take the
deposition of Mr. Paul Murray (Director, Risk Management of petitioner) before the Philippine
Consul General; and (2) a Motion for Leave to Serve Interrogatories on respondent.

On December 9, 2005, the trial court issued an Order denying the Motion to Dismiss.
According to the trial court, there was a proper service of summons through the Department of
Foreign Affairs (DFA) on account of the fact that the defendant has neither applied for a license
to do business in the Philippines, nor filed with the Securities and Exchange Commission a
Written Power of Attorney designating some person on whom summons and other legal
processes maybe served. The trial court also held that the Complaint sufficiently stated a cause
of action. The other allegations in the Motion to Dismiss were brushed aside as matters of
defense which can best be ventilated during the trial.

On March 6, 2006, the trial court issued an Order denying the December 27, 2005
Motion for Reconsideration and disallowed the twin Motions for Leave to take deposition and
serve written interrogatories.
 On April 3, 2006, petitioner sought redress via a Petition for Certiorari with the Court of
Appeals, alleging that the trial court committed grave abuse of discretion in denying its Motion
to Dismiss. The Petition was docketed as CA-G.R. SP No. 94382.

On September 8, 2006, the Court of Appeals rendered the assailed Decision dismissing
the Petition for Certiorari. The Court of Appeals ruled that since the denial of a Motion to
Dismiss is an interlocutory order, it cannot be the subject of a Petition for Certiorari, and may
only be reviewed in the ordinary course of law by an appeal from the judgment after trial. On
December 12, 2006, the Court of Appeals rendered the assailed Resolution denying the
petitioners Motion for Reconsideration.

Notwithstanding the foregoing, petitioner filed the present petition assailing the
September 8, 2006 Decision and the December 12, 2006 Resolution of the Court of Appeals.
Arguing against the ruling of the appellate court, petitioner insists that (a) an order denying a
motion to dismiss may be the proper subject of a petition for certiorari; and (b) the trial court
committed grave abuse of discretion in not finding that it had not validly acquired jurisdiction
over petitioner and that the plaintiff had no cause of action.

Respondent, on the other hand, posits that: (a) the present Petition should be dismissed
for not being filed by a real party in interest and for lack of a proper verification and certificate
of non-forum shopping; (b) the Court of Appeals correctly ruled that certiorari was not the
proper remedy; and (c) the trial court correctly denied petitioners motion to dismiss.

Issue:

1) Whether or not petitioner is real party in interest -- irrelevant

Petitioner changed its name to Investec Australia Limited. By filing (the
certiorari and signing the verification and certification against forum
shopping) in its capacity as NM Rothschild, circumstances dictate that it is
still the same entity having the same lawyers (short discussion on real party
in interest; person benefitted or injured etc.)
2) Propriety of resort to a Petition for Certiorari with the CA irrelevant
As a general rule, denial of MTD cannot be appealed by certiorari (kasi
interlocutory order lang) which is a remedy designed to correct errors of
jurisdiction and not errors of judgment.
However, we have likewise held that when the denial of the Motion to
Dismiss is tainted with grave abuse of discretion, the grant of the
extraordinary remedy of Certiorari may be justified. The resolution of the
present Petition therefore entails an inquiry into whether the Court of
 Appeals correctly ruled that the trial court did not commit grave abuse of
discretion in its denial of petitioners Motion to Dismiss. A mere error in
judgment on the part of the trial court would undeniably be inadequate for
us to reverse the disposition by the Court of Appeals.
3) Issues more properly ventilated during the trial of the case
Defenses of petitioner (failure to state cause of action, barred by estoppel, in
pari delicto) can be best ventilated in the trial. Basta evident yung
establishment of a cause of action, okay.
4) Whether or not Jurisdiction over the person of Petitioner was properly acquired.
YES.
Held:

Petitioner alleges that the RTC has not acquired jurisdiction over its person on account
of the improper service of summons. Summons was served on petitioner through the DFA, with
respondents counsel personally bringing the summons and Complaint to the Philippine
Consulate General in Sydney, Australia.

In the pleadings filed by the parties before this Court, the parties entered into a lengthy
debate as to whether or not petitioner is doing business in the Philippines. However, such
discussion is completely irrelevant in the case at bar, for two reasons. Firstly, since the
Complaint was filed on August 30, 2005, the provisions of the 1997 Rules of Civil Procedure
govern the service of summons. Section 12, Rule 14 of said rules provides:

Sec. 12. Service upon foreign private juridical entity. When the defendant is a
foreign private juridical entitywhich has transacted business in the Philippines, service
may be made on its resident agent designated in accordance with law for that purpose,
or, if there be no such agent, on the government official designated by law to that
effect, or on any of its officers or agents within the Philippines.

The coverage of the present rule is thus broader.30 Secondly, the service of summons to
petitioner through the DFA by the conveyance of the summons to the Philippine Consulate
General in Sydney, Australia was clearly made not through the above-quoted Section 12, but
pursuant to Section 15 of the same rule which provides:

Sec. 15. Extraterritorial service. When the defendant does not reside and is not
found in the Philippines, and the action affects the personal status of the plaintiff or
relates to, or the subject of which is property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant from any interest
therein, or the property of the defendant has been attached within the Philippines,
 service may, by leave of court, be effected out of the Philippines by personal service as
under section 6; or by publication in a newspaper of general circulation in such places
and for such time as the court may order, in which case a copy of the summons and
order of the court shall be sent by registered mail to the last known address of the
defendant, or in any other manner the court may deem sufficient. Any order granting
such leave shall specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer.

Breaking down Section 15, Rule 14, it is apparent that there are only four instances
wherein a defendant who is a non-resident and is not found in the country may be served with
summons by extraterritorial service, to wit: (1) when the action affects the personal status of
the plaintiffs; (2) when the action relates to, or the subject of which is property, within the
Philippines, in which the defendant claims a lien or an interest, actual or contingent; (3) when
the relief demanded in such action consists, wholly or in part, in excluding the defendant from
any interest in property located in the Philippines; and (4) when the defendant non-resident's
property has been attached within the Philippines. In these instances, service of summons may
be effected by (a) personal service out of the country, with leave of court; (b) publication, also
with leave of court; or (c) any other manner the court may deem sufficient.

Undoubtedly, extraterritorial service of summons applies only where the action is in

rem or quasi in rem, but not if an action is in personam.

The Complaint in the case at bar is an action to declare the loan and Hedging Contracts
between the parties void with a prayer for damages. It is a suit in which the plaintiff seeks to
be freed from its obligations to the defendant under a contract and to hold said defendant
pecuniarily liable to the plaintiff for entering into such contract. It is therefore an action in
personam, unless and until the plaintiff attaches a property within the Philippines belonging to
the defendant, in which case the action will be converted to one quasi in rem. Since the action
involved in the case at bar is in personam and since the defendant, petitioner
Rothschild/Investec, does not reside and is not found in the Philippines, the Philippine courts
cannot try any case against it because of the impossibility of acquiring jurisdiction over its
person unless it voluntarily appears in court.

In this regard, respondent vigorously argues that petitioner should be held to have
voluntarily appeared before the trial court when it prayed for, and was actually afforded,
specific reliefs from the trial court. Respondent points out that while petitioners Motion to
Dismiss was still pending, petitioner prayed for and was able to avail of modes of discovery
against respondent, such as written interrogatories, requests for admission, deposition, and
motions for production of documents.
 It appears, however, that petitioner misunderstood our ruling in La Naval. A close
reading of La Naval reveals that the Court intended a distinction between the raising of
affirmative defenses in an Answer (which would not amount to acceptance of the jurisdiction of
the court) and the prayer for affirmative reliefs (which would be considered acquiescence to
the jurisdiction of the court)

In order to conform to the ruling in La Naval, which was decided by this Court in 1994,
the former Section 23, Rule 1444 concerning voluntary appearance was amended to include a
second sentence in its equivalent provision in the 1997 Rules of Civil Procedure:

SEC. 20. Voluntary appearance. The defendant's voluntary appearance in the

action shall be equivalent to service of summons. The inclusion in a motion to dismiss
of other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance.

The new second sentence, it can be observed, merely mentions other grounds in a
Motion to Dismiss aside from lack of jurisdiction over the person of the defendant. This clearly
refers to affirmative defenses, rather than affirmative reliefs. Thus, while mindful of our ruling
in La Naval and the new Section 20, Rule 20, this Court, in several cases, ruled that seeking
affirmative relief in a court is tantamount to voluntary appearance therein.

In view of the above, we therefore rule that petitioner, by seeking affirmative reliefs
from the trial court, is deemed to have voluntarily submitted to the jurisdiction of said court.
A party cannot invoke the jurisdiction of a court to secure affirmative relief against his
opponent and after obtaining or failing to obtain such relief, repudiate or question that same
jurisdiction. Consequently, the trial court cannot be considered to have committed grave abuse
of discretion amounting to lack or excess of jurisdiction in the denial of the Motion to Dismiss
on account of failure to acquire jurisdiction over the person of the defendant.
International Shoe Co. v. Washington

Brief Fact Summary. Defendant was an out of state company that employed salesmen within
the state of Washington. Washington sued Defendant to recover unpaid unemployment taxes
and served Defendant in two ways: (1) by mail and (2) by serving one of its salesmen within the
state. Defendant appealed from a verdict for Washington, claiming that Washington had no
personal jurisdiction over Defendant.
Synopsis of Rule of Law. In order for a state to exercise personal jurisdiction over a defendant,
the defendant must have such minimum contacts with the state so that exercising jurisdiction
over the defendant would not offend traditional notions of fair play and substantial justice.

Facts. International Shoe Co., Defendant, was a company based in Delaware with an office in St.
Louis, Missouri. Defendant employed salesmen that resided in Washington to sell their product
in the state of Washington. Defendant regularly shipped orders to the salesmen who accepted
them, the salesmen would display the products at places in Washington, and the salesmen
were compensated by commission for sale of the products. The salesmen were also reimbursed
for the cost of renting the places of business in Washington. Washington sued Defendant after
Defendant failed to make contributions to an unemployment compensation fund exacted by
state statutes. The Washington statute said that the commissioner could issue personal service
if Defendant was found within the state, or by mailing it to Defendant if Defendant was not in
the state. The notice of assessment was served upon Defendants salesperson and a copy of the
notice was mailed to Defendant. Defendant appeared specially, moving to set aside the order
that service upon the salesperson was proper service. Defendant also argued that it did not do
business in the state, that there was no agent upon which service could be made, and that
Defendant did not furnish employment within the meaning of the statute. Defendant also
argued that the statute violated the Due Process Clause of the Fourteenth Amendment and
imposed a prohibitive burden of interstate commerce. The trial court found for Washington and
the Supreme Court of Washington affirmed, reasoning that the continuous flow of Defendants
product into Washington was sufficient to establish personal jurisdiction. Defendant appealed.

Issue. Is service of process upon Defendants agent sufficient notice when the corporations
activities result in a large volume of interstate business so that the corporation receives the
protection of the laws of the state and the suit is related to the activities which make the
corporation present?

Held. Yes. Affirmed. The general rule is that in order to have jurisdiction with someone outside
the state, the person must have certain minimum contacts with it such that the maintenance of
the suit does not offend traditional notions of fair play and substantial justice. For a
corporation, the minimum contacts required are not just continuous and systematic activities
but also those that give rise to the liabilities sued on. Defendant could have sued someone in
Washington. It was afforded the protection of the laws of that state, and therefore it should be
subject to suit.
Dissent. The states power to tax should not be qualified by an ambiguous statement regarding
fair play and substantial justice.

Discussion. This decision articulates the rule for determining whether a state has personal
jurisdiction over an absent defendant via the minimum contacts test. In general, International
Shoe demonstrates that contacts with a state should be evaluated in terms of how fair it
would be to exercise jurisdiction over an absent defendant.
Kulko v. Superior Court

Brief Fact Summary. Appellee separated from appellant and moved to California. After their
children joined her in California, appellee attempted to bring a divorce suit in California against
appellant, who still resided in New York.

Synopsis of Rule of Law. In order to establish personal jurisdiction a defendant must have
certain minimum contacts with the forum State so as not to offend traditional notions of fair
play and substantial justice.

Facts. Appellant Ezra Kulko married appellee Sharon Kulko Horn in 1959 during appellants
three-day stopover in California en route from a military base in Texas to a tour of duty in
Korea. At the time both parties were domiciled in and residents of New York. Appellee
immediately returned to New York after the marriage, as did appellant after his tour of duty.
The two lived in New York for 13 years and then separated. Appellant remained in New York
with their children, while appellee moved to California. She briefly returned to sign a separation
agreement providing the children would live in New York. Immediately afterward appellee flew
to Haiti and procured a divorce incorporating the terms of the agreement. In 1973 appellants
daughter told her father that she wanted to remain in California after her Christmas vacation.
Appellant bought her a one-way ticket. In 1976 appellants other child called his mother and
told her he wanted to live with her in California. She sent h
im a plane ticket unbeknownst to his father, and he flew to California and took up residence
with his mother and sister. Less than a month later, appellee commenced this action against
appellant in the California Superior Court seeking to establish the Haitian divorce decree as a
California judgment; to modify the judgment to award her full custody of the children; and to
increase appellants child-support obligations. Appellant appeared specially and moved to
quash service of the summons on the ground that he was not a California resident and lacked
sufficient minimum contacts with the State to warrant assertion of personal jurisdiction over
him. The trial court summarily denied the motion to quash, and appellee sought review. The
California Supreme Court sustained the lower court rulings.

Issue. Did appellant have sufficient minimum contacts with California to allow California to
assert personal jurisdiction over him in this matter?

Held. Appellants act of permitting his daughter to spend more time in California did not
amount to his purposefully availing himself of the benefits and protections of Californias laws
so as to permit California to assert personal jurisdiction.
The California Supreme Court found that personal jurisdiction may be exercised when a
nonresident defendant caused an effect in that State and jurisdiction over causes arising from
that effect is reasonable. It found that appellant had purposefully availed himself of the
protections and laws of California by sending his daughter to live there with her mother.

The Due Process Clause operates as a limitation on the jurisdiction of state courts over
nonresident defendants. In order to exercise such jurisdiction certain minimum contacts must
be established so as to not offend traditional notions of fair play and substantial justice.

In reaching its decision the Court did not rely on the appellants glancing presence in the State
or his marriage there, nor could it have. It did not rely on the fact that at separation appellant
ha agreed to allow his children to live in California 3 months per year because it would
discourage parents from entering into reasonable visitation agreements and it could arbitrarily
subject one parent to suit in any State the other parent chose to spend time while having
custody.

The purposeful act of allowing his daughter to spend more time in California than required
under the agreement is insufficient to show that he purposefully availed himself of the benefits
and protections of its laws. Californias assertion of personal jurisdiction was unreasonable in
that it involved an agreement entered into with virtually no connection to the forum State.

Basic considerations of fairness favor appellants State of domicile as the proper forum. It was
the State of the marital domicile where his entire family resided prior to the separation. The
single act of allowing his daughter to spend more time in California is not one that a reasonable
parent would expect to result in the substantial financial burden and personal strain of
litigation in a forum 3,000 miles away. Jurisdiction in such cases would impose an unreasonable
burden on family relations.

Discussion. The Court found that the single act of permitting his daughter to spend more time
in California than required under a separation agreement was insufficient to establish the
minimum contacts with California such that it would not offend traditional notions of fair play
and substantial justice to assert personal jurisdiction over appellant.
Burnham v. Superior Court

Brief Fact Summary. Plaintiff Dennis Burnham, a New Jersey resident, was served with process
for divorce by his wife in California, while he was visiting California on business.

Synopsis of Rule of Law. Jurisdiction based on physical presence alone constitutes due process
because it is one of the continuing traditions of our legal system that define the due process
standard.

Facts. Plaintiff a New Jersey resident, visited Southern California on business, after which he
went to visit his children in the San Francisco Bay area, where his wife resided. Upon returning
the children to his wifes home, Plaintiff was served with a California court summons and a copy
of his wifes divorce petition. Plaintiff made a special appearance in California for the purpose
of filing a motion to dismiss on the ground that the court lacked personal jurisdiction over him.
The Superior Court denied the motion, and the California Court of Appeal denied mandamus
relief. The Supreme Court of the United States then granted certiorari.

Issue. Whether the Due Process clause denies a state court jurisdiction over a non-resident who
was personally served with process while temporarily in that state, in a suit unrelated to his
activities in that state.

Held. No. The Supreme Court upheld the ruling of the California Superior Court.
Jurisdiction based on physical presence alone constitutes due process because it is one of the
continuing traditions of our legal system that define the due process standard. That standard
was developed by analogy to physical presence.

Concurrence. Justice Brennan concurred, in which he was joined by Justices Marshall,

Blackmun, and Justice Sandra Day OConnor. Justice Brennan differs from the majority in that
he believes physical presence in a state permits jurisdiction not because service of process
occurred on the person in the state, but because by voluntarily coming into the state, the
defendant avails himself of the benefit and privileges of the law of the state, even if only for a
short period of time.

Justice Stevens also concurred. His concurrence only notes that this was a very easy case to
decide given the historical evidence and considerations of fairness.

Discussion. An individuals physical presence in a state at the time process is served upon them
satisfies traditional notions of fair play and substantial justice. Thus the Court rejected the
argument that a state lacks jurisdiction unless the litigation arises out of his activities in the
state.
World Wide Volkswagen Corp v. Woodson

Brief Fact Summary. A family that purchased a car in New York sued the auto manufacturer and
retailer after they became involved in an accident in Oklahoma while driving to Arizona.
Synopsis of Rule of Law. A consumers unilateral act of bringing the defendants product into
the forum state is not a sufficient basis for exercising personal jurisdiction over the defendant.

Facts. Harry and Kay Robinson purchased an Audi automobile from Seaway Volkswagen, Inc. in
New York State in 1976. The following year they left New York to move to Arizona. While they
were driving through Oklahoma, another car struck them, causing a fire which burned Kay
Robinson and two of her children. The Robinsons brought a products liability suit in Oklahoma
claiming that their injuries resulted from defective design and placement for the Audis gas tank
and fuel system. The Robinsons joined as defendants the auto manufacturer, Audi, its importer,
Volkswagen of America, Inc., its regional distributor, World Wide Volkswagen Corporation, and
its retail dealer, Seaway. The court found that World Wide was incorporated and had its
business office in New York. It distributed Vehicles, under Contract with Volkswagen, to retail
dealers in New York, Connecticut, and New Jersey. Seaway is a retail dealer whose place of
business is in New York. There was no evidence that either World-Wide or Seaway did any
business in Oklahoma, shipped or sold any products in that state, had an agent to receive
process there, or advertised in Oklahoma. Seaway and World-Wide made special apperances
for the purpose of opposing jurisdiction in Oklahoma. The Oklahoma court denied their motion
and this appeal followed, whereby the Supreme Court of the United States granted Seaway and
World-Wide a writ of certiorari.

Issue. Whether an Oklahoma court may exercise in personam jurisdiction over a non- resident
automobile retailer and its wholesale distributor in a products liability suit, when the
defendants only connection with Oklahoma is the fact that an auto sold in New York to New
York residents became involved in an accident in Oklahoma?

Held. No. The Supreme Court reversed the Oklahoma courts ruling. Forseeability of being
asked to defend a suit in a particular forum is not a sufficient benchmark for personal
jurisdiction under the Due Process Clause. Instead, it is the defendants conduct and connection
with the forum state that determines whether it is reasonable for a defendant to be haled into
court. Because Seaway and World-Wide had no contacts, ties or relations with the state of
Oklahoma, jurisdiction would violate the Due Process Clause.

Dissent. Justice Brennan dissented. He found that the courts over-reliance on contacts
between the defendant and the state obscures whether being subject to a suit there would
actually cause any inconvenience to the defendant. Additionally, he found that because the
interest in having the suit in Oklahoma was strong, given that the plaintiffs were hospitalized
there and key witnesses resided there, jurisdiction should have been granted. A dissenting
opinion by Justice Marshal, joined by Justice Blackmun, was omitted by the casebook editors.
Discussion. The courts reasoning for not extending jurisdiction is that the two purposes of the
minimum contacts requirement, i.e. protecting defendants against the burden of litigating in a
distant forum and ensuring that State courts do not reach beyond the limits established by the
federal system, would not be served if jurisdiction were granted. Specifically, the court relied on
the fact that Seaway and World-Wide carry on no activity whatsoever in Oklahoma, perform no
services there, and avail themselves of none of the privileges and benefits of Oklahoma law.
The court will look not to whether it was foreseeable to the defendant that he could be sued in
a given state, but whether a suit there is reasonable given the defendants ties and relations
with the state.
Asahi Metal Industry Co. v. Superior Court

Brief Fact Summary. A person injured in a motorcycle accident sued the manufacturer of the
motorcycles tire, who then filed a cross-complaint against the manufacturer of one part of the
tire.
Synopsis of Rule of Law. The substantial connection between the Defendant and the forum
state necessary for a finding of minimum contacts must come about by an action of the
Defendant purposefully directed toward the forum state.

Facts. Gary Zurcher was severely injured and his wife was killed after he lost control of his
Honda motorcycle and collided with a tractor in Solano County, California. Zurcher filed a
products liability in California state court, alleging that the motorcycle tire, tube and sealant
were defective. Zuchers complaint named Cheng Shin Rubber Industrial, Co., Ltd., the
Taiwanese manufacturer of the tube. Cheng Shin then filed a cross- complaint against Asahi
Metal Industry Co., Ltd., the manufacturer of the tubes valve assembly. Asahi is a Japanese
corporation that manufactures tire valve assemblies in Japan and sells them to Cheng Shin and
others for use as components in finished tire tubes. Approximately 20 percent of Cheng Shins
sales in the United States are in California. A manager of Cheng Shin submitted an affidavit
alleging that Asahi was aware that parts were sold in the U.S. The president of Asahi submitted
an affidavit alleging that Asahi never contemplated that they could be subject to suit in
California through its sales of tire valves to Cheng Shin in Taiwan. Asahi moved to dismiss the
suit against it for want of jurisdiction. California court denied the motion and the Supreme
Court of the United States granted a writ of certiorari.

Issue. Whether the mere awareness of the part of a foreign Defendant that the components it
manufactured, sold, and delivered outside the United States would reach the forum state in the
stream of commerce constitutes sufficient minimum contacts rendering jurisdiction
appropriate.

Held. No. The Supreme Court of the United States reversed the Supreme Court of Californias
ruling upholding jurisdiction. Due Process requires more than that the Defendant was aware of
its products entry into the forum state through the stream of commerce in order for the state
to exercise jurisdiction over the Defendant. The substantial connection between the Defendant
and the forum state necessary for a finding of minimum contacts must come about by an action
of the Defendant purposefully directed toward the forum state. The placement of a product in
the stream of commerce, without more, is not an act of the Defendant purposefully directed
toward the forum state. Concurrence. Justice Brennan concurred, in which he was joined by
Justices White, Marshall, and Blackmun. Justice Brennan disagreed with the stream of
commerce theory, as well as the courts conclusion that Asahi did not purposely avail itself of
the California market. However, despite finding sufficient minimum contacts, Justice Brennan
still found jurisdiction improper because fair play and substantial justice would not be achieved.
Justice Stevens also concurred, in which he was joined by Justices White and Blackmun.
Specifically, he found that minimum contacts are not always necessary for a state court to
invoke jurisdiction.

Discussion. In analyzing whether jurisdiction would offend traditional notions of fair play and
substantial justice, the court noted that the burden on the Defendant to defend the suit would
be severe. Moreover, the court noticed that Californias interest in the suit is slight, since the
Plaintiff is not a California resident.
Societe Nationale Industrielle Areospatiale v. U.S. District Court

Brief Fact Summary. Plaintiffs brought action against manufacturer for a personal injury arising
from the crash of an aircraft that was made in France.

Synopsis of Rule of Law. The United States, France, and 15 other countries have agreed to The
Hague Evidence Convention, which provides procedures by which a judicial authority in one
contracting state may request evidence located in another.

Facts. Plaintiffs brought suit for personal injuries resulting from the crash of an aircraft built and
sold by two corporations owned by France. Initially, the Defendants answered the complaints
without inquiring about the court"s jurisdiction, and cooperated in initial discovery without
objection. However, when plaintiffs served successive discovery requests under the Federal
Rules of Civil Procedure, the manufacturer filed a motion for a protective order, claiming that
the Convention dictated the exclusive procedures that must be adhered to since petitioners are
French and the discovery sought must be conducted in France. A Magistrate denied the motion,
and the Court of Appeals denied the manufacturers mandamus petition and certiorari was
granted.

Issue. Whether Hague Evidence Convention provides exclusive and mandatory procedures for
obtaining documents and information located in a foreign signatorys territory

Held. No. The Supreme Court, Justice Stevens, held that: (1) Hague Evidence Convention
applied to request for information from foreign national which was a party to the litigation; (2)
Hague Evidence Convention did not provide exclusive and mandatory procedure for obtaining
documents and information located within territorial foreign signatory; (3) first resort to Hague
Convention was not required; and (4) Hague Convention did not deprive district court of
jurisdiction it otherwise possessed to order foreign national party before it to produce evidence
physically located within a foreign signatory nation. Vacated and remanded.

Discussion. When a district court has jurisdiction over a foreign litigant, the Convention does
not apply even though the information sought may be physically located within the territory of
a foreign signatory to the Convention.
Dulay vs Dulay
Case Digest GR 158857 Nov 11 2005

Facts:

Rodrigo is a naturalized American citizen. He has a nephew Pheger who immigrated to America
and stayed with him. Because of love, trust and affection for his nephew, he opened a trust
account in the Bank of Boston and named Pheger as trustee thereof. He found out later that
Pheger emptied the account and duped him, so he filed a complaint for recovery of his bank
deposits with attachment and damages. The case was filed in the Philippines. He also filed a
petition for the issuance of letters rogatory in order to get the depositions of several witnesses
residing abroad.

The American court however brushed the Letters aside, so the deposition was taken instead
before a notary public in New York. When Rodrigo submitted the deposition to the court, the
other party objected to its admissibility and moved for the dismissal of the complaint. The court
however denied the motion. The other party filed a certiorari imputing grave abuse of
discretion on the trial court.

Issue: W/N the act of the court in allowing the deposition is proper

Yes. The use of discovery procedures is directed to the sound discretion of the trial courts,
which, in general, are given wide latitude in granting motions for discovery in order to enable
the parties to prepare for trial or otherwise to settle the controversy prior thereto.

While the letters rogatory issued by the trial court specifically directed the Clerk of Court of
Boston to take the depositions needed in the case, it became impossible to follow the directive
since the Clerk of Court of Boston merely brushed it aside and refused to cooperate.
Respondent cannot be faulted for the resultant delay brought about by this circumstance.
Neither can the trial court be faulted for allowing the admission of the depositions taken not in
strict adherence to its original directive, nor for directing the petitioner to have the depositions
authenticated. Obviously, it was not within the trial courts power, much less the respondents to
force the Clerk of Court of Boston to have the deposition taken before it. It would be illogical
and unreasonable to expect respondent to comply with the letters rogatory without the
cooperation of the very institution or personality named in the letters rogatory and requested
to examine the witnesses. After all, while a court had the authority to entertain a discovery
request, it is not required to provide judicial assistance thereto. This reality was recognized by
the trial court when it ordered respondent to have the questioned depositions authenticated
by the Philippine consulate.
Indeed, refusing the allowance of the depositions in issue would be going directly against the
purpose of taking the depositions in the first place, that is, the disclosure of facts which are
relevant to the proceedings in court.
Navida v Dizon

Facts:
Beginning 1993, a number of personal injury suits were filed in different Texas state courts by
citizens of twelve foreign countries, including the Philippines. The thousands of plaintiffs sought
damages for injuries they allegedly sustained from their exposure to dibromochloropropane
(DBCP), a chemical used to kill nematodes (worms), while working on farms in 23 foreign
countries. The cases were eventually transferred to, and consolidated in, the Federal District
Court for the Southern District of Texas, Houston Division. The defendants in the consolidated
cases prayed for the dismissal of all the actions under the doctrine of forum non conveniens.

In a Memorandum Order, the Federal District Court conditionally granted the defendants
motion to dismiss provided the defendants:

(1) participated in expedited discovery in the United States

(2) either waived or accepted service of process and waived any other jurisdictional defense in
any action commenced by a plaintiff in these actions in his home country or the country in
which his injury occurred.

(3) waived any limitations-based defense that has matured since the commencement of these
actions in the courts of Texas;

(4) stipulated that any discovery conducted during the pendency of these actions may be used
in any foreign proceeding to the same extent as if it had been conducted in proceedings
initiated there; and

(5) submitted an agreement binding them to satisfy any final judgment rendered in favor of
plaintiffs by a foreign court.

In the event that the highest court of any foreign country finally affirms the dismissal for lack of
jurisdiction of an action commenced by a plaintiff in these actions in his home country or the
country in which he was injured, that plaintiff may return to this court and, upon proper
motion, the court will resume jurisdiction over the action as if the case had never been
dismissed for.
Case 1 (125078) and 2 (125598):

336 plaintiffs from General Santos City filed a Joint Complaint in the RTC of General Santos City.
Named as defendants therein were: Shell Oil Co. (SHELL); Dow Chemical Co. (DOW); Occidental
Chemical Corp. (OCCIDENTAL); Dole Food Co., Inc., Dole Fresh Fruit Co., Standard Fruit Co.,
Standard Fruit and Steamship Co. (hereinafter collectively referred to as DOLE); Chiquita
Brands, Inc. and Chiquita Brands International, Inc. (CHIQUITA); Del Monte Fresh Produce N.A.
and Del Monte Tropical Fruit Co. (hereinafter collectively referred to as DEL MONTE); Dead Sea
Bromine Co., Ltd.; Ameribrom, Inc.; Bromine Compounds, Ltd.; and Amvac Chemical Corp. (The
aforementioned defendants are hereinafter collectively referred to as defendant companies.)

NAVIDA, et al., prayed for the payment of damages in view of the illnesses and injuries to the
reproductive systems which they allegedly suffered because of their exposure to DBCP. They
claimed, among others, that they were exposed to this chemical during the early 1970s up to
the early 1980s when they used the same in the banana plantations where they worked at;
and/or when they resided within the agricultural area where such chemical was used. NAVIDA,
et al., claimed that their illnesses and injuries were due to the fault or negligence of each of the
defendant companies in that they produced, sold and/or otherwise put into the stream of
commerce DBCP-containing products. According to NAVIDA, et al., they were allowed to be
exposed to the said products, which the defendant companies knew, or ought to have known,
were highly injurious to the formers health and well-being.

Without resolving the motions filed by the parties, the RTC of General Santos City issued an
Order dismissing the complaint. First, the trial court determined that it did not have jurisdiction
to hear the case because the substance of the cause of action as stated in the complaint against
the defendant foreign companies cites activity on their part which took place abroad and had
occurred outside and beyond the territorial domain of the Philippines. These acts of defendants
cited in the complaint included the manufacture of pesticides, their packaging in containers,
their distribution through sale or other disposition, resulting in their becoming part of the
stream of commerce. The subject matter stated in the complaint and which is uniquely
particular to the present case, consisted of activity or course of conduct engaged in by foreign
defendants outside Philippine territory, hence, outside and beyond the jurisdiction of Philippine
Courts, including the present Regional Trial Court.

Second, the RTC of General Santos City adjudged that NAVIDA, et al., were coerced into
submitting their case to the Philippine courts, merely to comply with the U.S. District Courts
Order and in order to keep open to the plaintiffs the opportunity to return to the U.S. District
Court.

Third, the trial court ascribed little significance to the voluntary appearance of the defendant
companies. Defendants have appointed their agents authorized to accept service of
summons/processes in the Philippines pursuant to the agreement in the U.S. court that
defendants will voluntarily submit to the jurisdiction of this court. While it is true that this court
acquires jurisdiction over persons of the defendants through their voluntary appearance, it
appears that such voluntary appearance of the defendants in this case is conditional. Thus in
the Defendants Amended Agreement Regarding Conditions of Dismissal for Forum Non
Conveniens filed with the U.S. District Court, defendants declared that (t)he authority of each
designated representative to accept service of process will become effective upon final
dismissal of these actions by the Court. The decision of the U.S. District Court dismissing the
case is not yet final and executory since both the plaintiffs and defendants appealed therefrom.
Consequently, since the authority of the agent of the defendants in the Philippines is
conditioned on the final adjudication of the case pending with the U.S. courts, the acquisition of
jurisdiction by this court over the persons of the defendants is also conditional.

Fourth, the RTC of General Santos City ruled that the act of NAVIDA, et al., of filing the case in
the Philippine courts violated the rules on forum shopping and litis pendencia. This court
frowns upon the fact that the parties herein are both vigorously pursuing their appeal of the
decision of the U.S. District court dismissing the case filed thereat. To allow the parties to
litigate in this court when they are actively pursuing the same cases in another forum, violates
the rule on forum shopping so abhorred in this jurisdiction. Moreover, the filing of the case in
the U.S. courts divested this court of its own jurisdiction. This court takes note that the U.S.
District Court did not decline jurisdiction over the cause of action. The case was dismissed on
the ground of forum non conveniens, which is really a matter of venue. By taking cognizance of
the case, the U.S. District Court has, in essence, concurrent jurisdiction with this court over the
subject matter of this case. It is settled that initial acquisition of jurisdiction divests another of
its own jurisdiction.

Case 3 (126654), 4 (127856), 5(128398)

Another joint complaint for damages against SHELL, DOW, OCCIDENTAL, DOLE, DEL MONTE,
and CHIQUITA was filed before Branch 16 of the RTC of Davao City by 155 plaintiffs from Davao
City. They alleged that as workers in the banana plantation and/or as residents near the said
plantation, they were made to use and/or were exposed to nematocides, which contained the
chemical DBCP. According to ABELLA, et al., such exposure resulted in serious and permanent
injuries to their health, including, but not limited to, sterility and severe injuries to their
reproductive capacities.

The RTC of Davao City, however, junked Civil Cases. The Court however is constrained to
dismiss the case at bar not solely on the basis of the above but because it shares the opinion of
legal experts given in the interview made by the Inquirer in its Special report Pesticide Cause
Mass Sterility, Former Justice Secretary Demetrio Demetria in a May 1995 opinion said: The
Philippines should be an inconvenient forum to file this kind of damage suit against foreign
companies since the causes of action alleged in the petition do not exist under Philippine laws.
There has been no decided case in Philippine Jurisprudence awarding to those adversely
affected by DBCP. This means there is no available evidence which will prove and disprove the
relation between sterility and DBCP.

Eventually, the cases reached the SC!

Present case:

The main contention of the petitioners states that the allegedly tortious acts and/or omissions
of defendant companies occurred within Philippine territory. Said fact allegedly constitutes
reasonable basis for our courts to assume jurisdiction over the case.

DOLE similarly maintains that the acts attributed to defendant companies constitute a quasi-
delict, which falls under Article 2176 of the Civil Code. DOLE also argues that if indeed there is
no positive law defining the alleged acts of defendant companies as actionable wrong, Article 9
of the Civil Code dictates that a judge may not refuse to render a decision on the ground of
insufficiency of the law. The court may still resolve the case, applying the customs of the place
and, in the absence thereof, the general principles of law.

CHIQUITA (another petitioner) argues that the courts a quo had jurisdiction over the subject
matter of the cases filed before them. CHIQUITA avers that the pertinent matter is the place of
the alleged exposure to DBCP, not the place of manufacture, packaging, distribution, sale, etc.,
of the said chemical. This is in consonance with the lex loci delicti commisi theory in
determining the situs of a tort, which states that the law of the place where the alleged wrong
was committed will govern the action. CHIQUITA and the other defendant companies also
submitted themselves to the jurisdiction of the RTC by making voluntary appearances and
seeking for affirmative reliefs during the course of the proceedings.

Issue:
Whether or not the RTCs have jurisdiction over the subject matter in these cases.
Held: Yes.

1. The rule is settled that jurisdiction over the subject matter of a case is conferred by law and is
determined by the allegations in the complaint and the character of the relief sought,
irrespective of whether the plaintiffs are entitled to all or some of the claims asserted therein.
Once vested by law, on a particular court or body, the jurisdiction over the subject matter or
nature of the action cannot be dislodged by anybody other than by the legislature through the
enactment of a law.

At the time of the filing of the complaints, the jurisdiction of the RTC in civil cases under Batas
Pambansa Blg. 129, as amended by Republic Act No. 7691, was:

In all other cases in which the demand, exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses, and costs or the value of the property in controversy
exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the abovementioned items exceeds Two hundred thousand
pesos (P200,000.00).

Supreme Court Administrative Circular No. 09-94, states:

The exclusion of the term damages of whatever kind in determining the jurisdictional amount
under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to
cases where the damages are merely incidental to or a consequence of the main cause of
action. However, in cases where the claim for damages is the main cause of action, or one of
the causes of action, the amount of such claim shall be considered in determining the
jurisdiction of the court.

It is clear that the claim for damages is the main cause of action and that the total amount
sought in the complaints is approximately P2.7 million for each of the plaintiff claimants. The
RTCs unmistakably have jurisdiction over the cases filed in General Santos City and Davao City.

2. The jurisdiction of the court cannot be made to depend upon the defenses set up in the
answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost
entirely depend upon the defendants. What determines the jurisdiction of the court is the
nature of the action pleaded as appearing from the allegations in the complaint. The averments
therein and the character of the relief sought are the ones to be consulted.

Clearly then, the acts and/or omissions attributed to the defendant companies constitute a
quasi-delict which is the basis for the claim for damages filed by NAVIDA, et al., and ABELLA, et
al., with individual claims of approximately P2.7 million for each plaintiff claimant, which
obviously falls within the purview of the civil action jurisdiction of the RTCs.

3. It is, therefore, error on the part of the courts a quo when they dismissed the cases on the
ground of lack of jurisdiction on the mistaken assumption that the cause of action narrated by
NAVIDA, et al., and ABELLA, et al., took place abroad and had occurred outside and beyond the
territorial boundaries of the Philippines, i.e., the manufacture of the pesticides, their
packaging in containers, their distribution through sale or other disposition, resulting in their
becoming part of the stream of commerce, and, hence, outside the jurisdiction of the RTCs.

Certainly, the cases below are not criminal cases where territoriality, or the situs of the act
complained of, would be determinative of jurisdiction and venue for trial of cases. In personal
civil actions, such as claims for payment of damages, the Rules of Court allow the action to be
commenced and tried in the appropriate court, where any of the plaintiffs or defendants
resides, or in the case of a non-resident defendant, where he may be found, at the election of
the plaintiff.

In a very real sense, most of the evidence required to prove the claims of NAVIDA, et al., and
ABELLA, et al., are available only in the Philippines. First, plaintiff claimants are all residents of
the Philippines, either in General Santos City or in Davao City. Second, the specific areas where
they were allegedly exposed to the chemical DBCP are within the territorial jurisdiction of the
courts a quo wherein NAVIDA, et al., and ABELLA, et al., initially filed their claims for damages.
Third, the testimonial and documentary evidence from important witnesses, such as doctors,
co-workers, family members and other members of the community, would be easier to gather
in the Philippines.

----
Re: Jurisdiction over the person

The RTC of General Santos City and the RTC of Davao City validly acquired jurisdiction over the
persons of all the defendant companies. All parties voluntarily, unconditionally and knowingly
appeared and submitted themselves to the jurisdiction of the courts a quo. All the defendant
companies submitted themselves to the jurisdiction of the courts a quo by making several
voluntary appearances, by praying for various affirmative reliefs, and by actively participating
during the course of the proceedings below.

In line herewith, this Court, in Meat Packing Corporation of the Philippines v. Sandiganbayan,
held that jurisdiction over the person of the defendant in civil cases is acquired either by his
voluntary appearance in court and his submission to its authority or by service of summons.
Furthermore, the active participation of a party in the proceedings is tantamount to an
invocation of the courts jurisdiction and a willingness to abide by the resolution of the case,
and will bar said party from later on impugning the court or bodys jurisdiction.

---
Jurisdiction v Exercise of Jurisdiction

It may also be pertinently stressed that jurisdiction is different from the exercise of
jurisdiction. Jurisdiction refers to the authority to decide a case, not the orders or the decision
rendered therein. Accordingly, where a court has jurisdiction over the persons of the
defendants and the subject matter, as in the case of the courts a quo, the decision on all
questions arising therefrom is but an exercise of such jurisdiction. Any error that the court may
commit in the exercise of its jurisdiction is merely an error of judgment, which does not affect
its authority to decide the case, much less divest the court of the jurisdiction over the case.

----
Re: Bad faith in filing cases to procure a dismissal and to allow petitioners to return to the
forum of their choice.

This Court finds such argument much too speculative to deserve any merit.

It must be remembered that this Court does not rule on allegations that are unsupported by
evidence on record. This Court does not rule on allegations which are manifestly conjectural, as
these may not exist at all. This Court deals with facts, not fancies; on realities, not appearances.

* We REMAND the records of this case to the respective Regional Trial Courts of origin for
further and appropriate proceedings in line with the ruling herein that said courts have
jurisdiction over the subject matter of the amended complaints.
G.R. No. 179232, G.R. No. 179232, August 23, 2012

Del Monte Fresh Produce, petitioner vs DOW Chemical Company, etc., respondents

G.R. No. 179290

DOW Chamical Company and Occidental Chemical Corp., petitioners vs Hon. Jesus Grageda,
etc., respondents

Ponente: Villarama

Facts:

August 11, 1995, a joint complaint for damages based on quasi-delict was filed before the RTC
of Panabo City, Davao by 1,185 individuals against Del Monte, Dow Chemical Corporations and
other companies alleging that the companies were negligent in the manufacture, distribution
and sale or in not informing the users of the hazardous effects of the chemical they used. They
said that they were exposed to the chemicals since 1970s that they suffered serious and
permanent injuries to their health.

Del Monte filed motions/oppositions saying that the complaint must be dismissed because the
claimants had been paid, waived, abandoned and extinguish their rights in effect of their
compromise agreement with the claimants.

Court rendered that all other motions filed by the parties in relation to or in connection to the
issues hereinabove resolved but which have been wittingly or unwittingly left unresolved are
hereby considered moot and academic; likewise, all previous orders contrary to or not in
accordance with the foregoing resolutions are hereby reconsidered, set aside and vacated.

The Dow/Occidental defendants argue, among others, that the RTC gravely abused its
discretion when it did not dismiss the cross-claims filed by the Dole, Del Monte and Chiquita
defendants despite the following: (1) the cross-claims were already filed beyond the
reglementary period; and (2) the complaint against them and the Del Monte and Chiquita
defendants, including their respective counterclaims, were already dismissed on the basis of
the compromise agreements they each had with the plaintiffs.

The CA, however, ruled that the RTC gravely abused its discretion when it admitted the cross-
claims against the Dow/Occidental defendants without any qualification. It held that only the
cross-claims filed by the Dole defendants, the Chiquita defendants (with respect to the claims
of James Bagas and Dante Bautista) and the Del Monte defendants (with respect to the 16 non-
compromising plaintiffs) against the Dow/Occidental defendants can be rightly admitted by the
RTC.
Unsatisfied, the Dow/Occidental defendants, as petitioners in G.R. No. 179290, come to this
Court arguing that the CA committed reversible error in not finding that the cross-claims of the
Dole, Del Monte and Chiquita defendants should all be dismissed and the Request for
Admission was timely filed and proper.

Issues:

(1) Does the dismissal of the civil case against the Dow/Occidental defendants carry with it the
dismissal of cross-claims against them? (2) Is the Request for Admission by the Dow/Occidental
defendants proper?

Held:

Deny the petitions

There are two requisites for a court to allow an omitted counterclaim or cross-claim by
amendment: (1) there was oversight, inadvertence, or excusable neglect, or when justice
requires; and (2) the amendment is made before judgment.

The CA correctly held that there is basis for allowing the cross-claims of the Dole, Del Monte
and Chiquita defendants against the Dow/Occidental defendants as they complied with the
rules. It is undisputed that the Dole, Del Monte and Chiquita defendants sought to amend their
answers to include their cross-claims before judgment. More importantly, justice requires that
they be allowed to do so in consonance with the policy against multiplicity of suits.

We also uphold the appellate courts ruling that the RTC gravely abused its discretion when it
admitted the cross-claims against the Dow/Occidental defendants without any qualification.
The Del Monte and Chiquita defendants cross-claims against the Dow/Occidental defendants
cannot extend to the plaintiffs with whom they had settled.