Bank of America v.

CA

Facts:

Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas) were engaged in

the shipping business owning 2 vessels: Don Aurelio and El Champion.
Because their business where doing well, Bank of America NT&SA and Bank
of America International, Ltd. (defendant banks) offered them easy loans to
increase the number of their ships.

Defendant Banks acquired through Litonjuas’ corporations as borrowers four

more ships. The vessels were registered in the names of the corporations
while the operation and the funds derived therefrom were placed under the
complete and exclusive control and disposition of the defendant banks. The
possession the vessels were also placed by defendant banks in the hands of
persons selected and designated by them (defendant banks).

May 10, 1993: Litonjuas filed a complaint to the RTC Pasig claming that
during its operations and the foreclosure sale, defendant banks as trutees
failed to fully render an account of the income. They lost all their 6 vessels
and 10% of their personal funds and they still have an unpaid balance of
their loans.

Defendant banks filed a Motion to Dismiss on grounds of forum non

conveniens and lack of cause of action against them. Defendant banks claim
that the Litonjuas have already waived their alleged causes of action in the
case at bar for their refusal to contest the foreign civil cases earlier filed by
the petitioners against them in Hongkong and England.

RTC and CA: Dismissed

Issue:

(1) Whether or not the complaint should be dismissed on the ground of

forum non-conveniens? (NO)

Ruling:

The doctrine of forum non-conveniens, literally meaning ‘the forum is

inconvenient’, emerged in private international law to deter the practice of
global forum shopping, that is to prevent non-resident litigants from
choosing the forum or place wherein to bring their suit for malicious reasons,
such as to secure procedural advantages, to annoy and harass the
defendant, to avoid overcrowded dockets, or to select a more friendly venue.
Under this doctrine, a court, in conflicts of law cases, may refuse impositions
on its jurisdiction where it is not the most “convenient” or available forum
and the parties are not precluded from seeking remedies elsewhere.

Whether a suit should be entertained or dismissed on the basis of said

doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. In the case of
Communication Materials and Design, Inc. vs. Court of Appeals, this Court
held that “x x x [a] Philippine Court may assume jurisdiction over the case if
it chooses to do so; provided, that the following requisites are met: (1) that
the Philippine Court is one to which the parties may conveniently resort to;
(2) that the Philippine Court is in a position to make an intelligent decision
as to the law and the facts; and, (3) that the Philippine Court has or is likely
to have power to enforce its decision.” Evidently, all these requisites are
present in the instant case.

Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court

of Appeals, that the doctrine of forum non-conveniens should not be used as
a ground for a motion to dis miss because Sec. 1, Rule 16 of the Rules of
Court does not include said doctrine as a ground. This Court further ruled
that while it is within the discretion of the trial court to abstain from
assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the court’s
desistance; and that the propriety of dismissing a case based on this
principle of forum non-conveniens requires a factual determination, hence it
is more properly considered a matter of defense.

(2) Whether or not the Litonjuas are guilty of forum shopping because of the
pendency of a foreign action? (NO)

Ruling:

Forum shopping exists where the elements of litis pendentia are present and
where a final judgment in one case will amount to res judicata in the other.
Parenthetically, for litis pendentia to be a ground for the dismissal of an
action there must be:

(a) identity of the parties or at least such as to represent the same interest
in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded
on the same acts; and

(c) the identity in the two cases should be such that the judgment which
may be rendered in one would, regardless of which party is successful,
amount to res judicata in the other.

In case at bar, not all the requirements for litis pendentia are present. While
there may be identity of parties, notwithstanding the presence of other
respondents, as well as the reversal in positions of plaintiffs and defendants,
still the other requirements necessary for litis pendentia were not shown by
petitioner. It merely mentioned that civil cases were filed in Hongkong and
England without however showing the identity of rights asserted and the
reliefs sought for as well as the presence of the elements of res judicata
should one of the cases be adjudged.

Raytheon International v. Rouzie

Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing
under the laws of Connecticut, & Stockton Rouzie, Jr., an American citizen,
entered into a contract. BMSI hired Rouzie as its representative to negotiate
the sale of services in several government projects in the Philippines for an
agreed remuneration of 10% of the gross receipts. Rouzie secured a service
contract with the Republic of the Philippines on behalf of BMSI for the
dredging of rivers affected by the Mt.Pinatubo eruption & mudflows.

Rouzie filed before the NLRC a suit against BMSI and Rust International
(Rust) for alleged nonpayment of commissions, illegal termination, & breach
of employment contract.

LA: ordered BMSI & Rust to pay Rouzie’s money claims.

NLRC: reversed & dismissed Rouzie’s complaint on the ground of lack of

jurisdiction.
Rouzie filed an action for damages before the RTC of La Union (where he
was a resident) against Raytheon International. He reiterated that he was
not paid the commissions due him from the Pinatubo dredging project which
he secured on behalf of BMSI. The complaint also averred that BMSI, RUST
and Raytheon had combined & functioned as 1 company.

Raytheon sought the dismissal of the complaint on the grounds of failure to

state acause of action & forum non conveniens & prayed for damages by
way of compulsory counterclaim.

RTC: denied raytheon’s motion.

CA: affirmed RTC decision.

Raytheon’s contention: The written contract between Rouzie & BMSI

included a valid choice of law clause, that is, that the contract shall be
governed by the laws of the State of Connecticut. It also mentions the
presence of foreign elements in the dispute, namely that the parties &
witnesses involved are American corporations & citizens & the evidence to be
presented is located outside the Philippines that renders our local courts
inconvenient forums. The foreign elements of the dispute necessitate the
immediate application of the doctrine of forum non conveniens.

Issue:

(1) Whether or not RTC has jurisdiction over the case? (YES)

Ruling:

Recently in Hasegawa v. Kitamura, 538 SCRA 261 (2007), the Court outlined
three consecutive phases involved in judicial resolution of conflicts-of-laws
problems, namely: jurisdiction, choice of law, and recognition and
enforcement of judgments. Thus, in the instances where the Court held that
the local judicial machinery was adequate to resolve controversies with a
foreign element, the following requisites had to be proved: (1) that the
Philippine Court is one to which the parties may conveniently resort; (2) that
the Philippine Court is in a position to make an intelligent decision as to the
law and the facts; and (3) that the Philippine Court has or is likely to have
the power to enforce its decision.
On the matter of jurisdiction over a conflicts-of-laws problem where the case
is filed in a Philippine court and where the court has jurisdiction over the
subject matter, the parties and the res, it may or can proceed to try the case
even if the rules of conflict-of-laws or the convenience of the parties point to
a foreign forum. This is an exercise of sovereign prerogative of the country
where the case is filed.

Jurisdiction over the nature and subject matter of an action is conferred by

the Constitution and the law and by the material allegations in the
complaint, irrespective of whether or not the plaintiff is entitled to recover all
or some of the claims or reliefs sought therein. Civil Case No. 1192-BG is an
action for damages arising from an alleged breach of contract. Undoubtedly,
the nature of the action and the amount of damages prayed are within the
jurisdiction of the RTC.

That the subject contract included a stipulation that the same shall be
governed by the laws of the State of Connecticut does not suggest that the
Philippine courts, or any other foreign tribunal for that matter, are precluded
from hearing the civil action. Jurisdiction and choice of law are two distinct
concepts. Jurisdiction considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further question whether the
application of a substantive law which will determine the merits of the case
is fair to both parties. The choice of law stipulation will become relevant only
when the substantive issues of the instant case develop, that is, after
hearing on the merits proceeds before the trial court.

(2) Whether or not the complaint should be dismissed on the ground of

forum on conveniens? (NO)

Ruling:

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws

cases, may refuse impositions on its jurisdiction where it is not the most
“convenient” or available forum and the parties are not precluded from
seeking remedies elsewhere. Petitioner’s averments of the foreign elements
in the instant case are not sufficient to oust the trial court of its jurisdiction
over Civil Case No. No. 1192-BG and the parties involved.
Moreover, the propriety of dismissing a case based on the principle of forum
non conveniens requires a factual determination; hence, it is more properly
considered as a matter of defense. While it is within the discretion of the trial
court to abstain from assuming jurisdiction on this ground, it should do so
only after vital facts are established, to determine whether special
circumstances require the court’s desistance.