Saudi Arabian Airlines vs. Court of Appeals: - First Division

3/6/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 297 3/6/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 297
In the instant case, the foreign element consisted in the fact

that private respondent Morada is a resident Philippine
national, and that petitioner SAUDIA is a resident foreign
corporation. Also, by virtue of the employment of Morada
with the petitioner SAUDIA as a flight stewardess, events
did transpire during her many occasions of travel across
national borders, particularly from Manila, Philippines to
VOL. 297, OCTOBER 8, 1998 469
Jeddah, Saudi Arabia, and vice versa, that caused a
Saudi Arabian Airlines vs. Court of Appeals “conflicts” situation to arise.
*
G.R. No. 122191. October 8, 1998. Same; Same; Damages; While Article 19 of the Civil Code
merely declares a principle of law, Article 21 gives flesh to its
SAUDI ARABIAN AIRLINES, petitioner, vs. COURT provisions; Violations of Articles 19 and 21 are actionable,
OF APPEALS, MILAGROS P. MORADA and HON. with judicially enforceable remedies in the municipal forum.
RODOLFO A. ORTIZ, in his capacity as Presiding —Although Article 19
Judge of Branch 89, Regional Trial Court of Quezon
City, respondents. ________________
* FIRST DIVISION.
Conflict of Laws; Actions; Where the factual antecedents
satisfactorily establish the existence of a foreign element, the
problem could present a “conflicts” case.—Where the factual
470
antecedents satisfactorily establish the existence of a foreign
element, we agree with petitioner that the problem herein
could present a “conflicts” case. A factual situation that cuts
across territorial lines and is affected by the diverse laws of 470 SUPREME COURT REPORTS ANNOTATED
two or more states is said to contain a “foreign element.” The
presence of a foreign element is inevitable since social and Saudi Arabian Airlines vs. Court of Appeals
economic affairs of individuals and associations are rarely
confined to the geographic limits of their birth or conception. merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, we agree with private respondent’s
Same; Same; The forms in which a foreign element may assertion that violations of Articles 19 and 21 are actionable,
appear are many, such as the fact that one party is a resident with judicially enforceable remedies in the municipal forum.
Philippine national, and that the other is a resident foreign Based on the allegations in the Amended Complaint, read in
corporation.—The forms in which this foreign element may the light of the Rules of Court on jurisdiction we find that the
appear are many. The foreign element may simply consist in Regional Trial Court (RTC) of Quezon City possesses
the fact that one of the parties to a contract is an alien or has jurisdiction over the subject matter of the suit. Its authority
a foreign domicile, or that a contract between nationals of to try and hear the case is provided for under Section 1 of
one State involves properties situated in another State. In Republic Act No. 7691.
other cases, the foreign element may assume a complex form.
www.central.com.ph/sfsreader/session/00000178079a7032f54149cc003600fb002c009e/t/?o=False 1/52 www.central.com.ph/sfsreader/session/00000178079a7032f54149cc003600fb002c009e/t/?o=False 2/52

Same; Same; Forum Non Conveniens; Forum Shopping;

Plaintiff may not, by choice of an inconvenient forum, ‘vex,’ VOL. 297, OCTOBER 8, 1998 471
‘harass,’ or ‘oppress’ the defendant, e.g. by inflicting upon him
needless expense or disturbance, but unless the balance is Saudi Arabian Airlines vs. Court of Appeals
strongly in favor of the defendant, the plaintiff’s choice of
forum should rarely be disturbed.—Pragmatic considerations, reliefs under the premises. Undeniably, petitioner SAUDIA
including the convenience of the parties, also weigh heavily has effectively submitted to the trial court’s jurisdiction by
in favor of the RTC Quezon City assuming jurisdiction. praying for the dismissal of the Amended Complaint on
Paramount is the private interest of the litigant. grounds other than lack of jurisdiction.
Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are Same; Choice-of-law problems seek to answer two
equally important. Plaintiff may not, by choice of an important questions: (1) What legal system should control a
inconvenient forum, ‘vex,’ ‘harass,’ or ‘oppress’ the defendant, given situation where some of the significant facts occurred in
e.g. by inflicting upon him needless expense or disturbance. two or more states; and (2) to what extent should the chosen
But unless the balance is strongly in favor of the defendant, legal system regulate the situation.—As to the choice of
the plaintiff’s choice of forum should rarely be disturbed. applicable law, we note that choice-of-law problems seek to
answer two important questions: (1) What legal system
Same; Same; Forcing a party to seek remedial action in a should control a given situation where some of the significant
place where she no longer maintains substantial connections facts occurred in two or more states; and (2) to what extent
would cause a fundamental unfairness to her.—Weighing the should the chosen legal system regulate the situation.
relative claims of the parties, the court a quo found it best to
hear the case in the Philippines. Had it refused to take Same; Although ideally, all choice-of-law theories should
cognizance of the case, it would be forcing plaintiff (private intrinsically advance both notions of justice and
respondent now) to seek remedial action elsewhere, i.e. in the predictability, they do not always do so, in which case the
Kingdom of Saudi Arabia where she no longer maintains forum is then faced with the problem of deciding which of
substantial connections. That would have caused a these two important values should be stressed.—Several
fundamental unfairness to her. theories have been propounded in order to identify the legal
system that should ultimately control. Although ideally, all
Same; Same; A party effectively submits to the trial choice-of-law theories should intrinsically advance both
court’s jurisdiction by praying for the dismissal of the notions of justice and predictability, they do not always do so.
complaint on grounds other than lack of jurisdiction.—The The forum is then faced with the problem of deciding which
records show that petitioner SAUDIA has filed several of these two important values should be stressed.
motions praying for the dismissal of Morada’s Amended
Complaint. SAUDIA also filed an Answer In Ex Abundante Same; Characterization or Doctrine of Qualification;
Cautelam dated February 20, 1995. What is very patent and Words and Phrases; Characterization is the “process of
explicit from the motions filed, is that SAUDIA prayed for deciding whether or not the facts relate to the kind of question
other specified in a conflicts rule.”—Before a choice can be made, it
is necessary for us to determine under what category a
471 certain set of facts or rules fall. This process is known as
“characterization,” or the “doctrine of qualification.” It is the
“process of deciding whether or not the facts relate to the come into effect, e.g., the place of performance of contractual
kind of question specified in a conflicts rule.” The purpose of duties, or the place where a power of attorney is to be
“characterization” is to enable the forum to select the proper exercised; (6) the intention of the contracting parties as to
law. the law that should govern their agreement, the lex loci
intentionis; (7) the place where judicial or administrative
Same; Same; An essential element of conflict rules is the proceedings are instituted or done. The lex fori—the law of
indication of a “test” or “connecting factor” or “point of the forum—is particularly important because, as we have
contact.”—Our starting point of analysis here is not a legal seen earlier, matters of ‘procedure’ not going to the substance
relation, but a factual situation, event, or operative fact. An of the claim involved are governed by it; and because the lex
essential element of conflict rules is the indication of a “test” fori applies whenever the content of the otherwise applicable
or “connecting factor” or “point of contact.” Choice-of-law foreign law is excluded from application in a given case for
rules invariably consist of a factual relation- the reason that it falls under one of the exceptions to the
applications of foreign law; and (8) the flag of a ship, which in
472 many cases is decisive of practically all legal relationships of
the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of
affreightment.” (Italics ours.)
472 SUPREME COURT REPORTS ANNOTATED
Saudi Arabian Airlines vs. Court of Appeals Same; Same; Same; Torts; Where the action is one
involving torts, the “connecting factor” or “point of contact”
could be the place or places where the tortious conduct or lex
ship (such as property right, contract claim) and a connecting
loci actus occurred; The Philippines is the situs of the tort
factor or point of contact, such as the situs of the res, the
where it is in the Philippines where the defendant allegedly
place of celebration, the place of performance, or the place of
deceived the plaintiff, a citizen residing and working here,
wrongdoing.
and the fact that certain acts or parts of the injury occurred in
another country is of no moment, for what is important is the
Same; Same; “Test Factors” or “Points of Contact” or place where the over-all harm or the totality of the injury to
“Connecting Factors.”—Note that one or more circumstances the person, reputation, social standing and human rights of
may be present to serve as the possible test for the the plaintiff
determination of the applicable law. These “test factors” or
“points of contact” or “connecting factors” could be any of the 473
following: “(1) the nationality of a person, his domicile, his
residence, his place of sojourn, or his origin; (2) the seat of a
legal or juridical person, such as a corporation; (3) the situs
of a thing, that is, the place where a thing is, or is deemed to VOL. 297, OCTOBER 8, 1998 473
be situated. In particular, the lex situs is decisive when real
Saudi Arabian Airlines vs. Court of Appeals
rights are involved; (4) the place where an act has been done,
the locus actus, such as the place where a contract has been
made, a marriage celebrated, a will signed or a tort had lodged.—Considering that the complaint in the court a
committed. The lex loci actus is particularly important in quo is one involving torts, the “connecting factor” or “point of
contracts and torts; (5) the place where an act is intended to contact” could be the place or places where the tortious
conduct or lex loci actus occurred. And applying the torts Same; Same; Same; Same; Same; Where the Philippines
principle in a conflicts case, we find that the Philippines is the situs of the tort complained of and the place “having the
could be said as a situs of the tort (the place where the most interest in the problem,” the Philippine law on tort
alleged tortious conduct took place). This is because it is in liability should have
the Philippines where petitioner allegedly deceived private
respondent, a Filipina residing and working here. According 474
to her, she had honestly believed that petitioner would, in
the exercise of its rights and in the performance of its duties,
“act with justice, give her her due and observe honesty and
good faith.” Instead, petitioner failed to protect her, she 474 SUPREME COURT REPORTS ANNOTATED
claimed. That certain acts or parts of the injury allegedly
occurred in another country is of no moment. For in our view Saudi Arabian Airlines vs. Court of Appeals
what is important here is the place where the over-all harm
or the totality of the alleged injury to the person, reputation, paramount application to and control in the resolution of the
social standing and human rights of complainant, had legal issues arising therein.—As already discussed, there is
lodged, according to the plaintiff below (herein private basis for the claim that over-all injury occurred and lodged in
respondent). All told, it is not without basis to identify the the Philippines. There is likewise no question that private
Philippines as the situs of the alleged tort. respondent is a resident Filipina national, working with
petitioner, a resident foreign corporation engaged here in the
Same; Same; Same; Same; “State of the Most Significant business of international air carriage. Thus, the
Relationship” Rule; The “State of the most significant “relationship” between the parties was centered here,
relationship” rule is the appropriate modern theory on tort although it should be stressed that this suit is not based on
liability to apply in the instant case.—With the widespread mere labor law violations. From the record, the claim that
criticism of the traditional rule of lex loci delicti commissi, the Philippines has the most significant contact with the
modern theories and rules on tort liability have been matter in this dispute, raised by private respondent as
advanced to offer fresh judicial approaches to arrive at just plaintiff below against defendant (herein petitioner), in our
results. In keeping abreast with the modern theories on tort view, has been properly established. Prescinding from this
liability, we find here an occasion to apply the “State of the premise that the Philippines is the situs of the tort
most significant relationship” rule, which in our view should complained of and the place “having the most interest in the
be appropriate to apply now, given the factual context of this problem,” we find, by way of recapitulation, that the
case. In applying said principle to determine the State which Philippine law on tort liability should have paramount
has the most significant relationship, the following contacts application to and control in the resolution of the legal issues
are to be taken into account and evaluated according to their arising out of this case. Further, we hold that the respondent
relative importance with respect to the particular issue: (a) Regional Trial Court has jurisdiction over the parties and the
the place where the injury occurred; (b) the place where the subject matter of the complaint; the appropriate venue is in
conduct causing the injury occurred; (c) the domicile, Quezon City, which could properly apply Philippine law.
residence, nationality, place of incorporation and place of
business of the parties; and (d) the place where the Same; Pleadings and Practice; Evidence; A party whose
relationship, if any, between the parties is centered. cause of action is based on a Philippine law has no obligation
to plead and prove the law of another State.—We find

9
untenable petitioner’s insistence that “[s]ince private Decision, are as follows:
respondent instituted this suit, she has the burden of
pleading and proving the applicable Saudi law on the “On January 21, 1988 defendant SAUDIA hired plaintiff as a
matter.” As aptly said by private respondent, she has “no Flight Attendant for its airlines based in Jeddah, Saudi
obligation to plead and prove the law of the Kingdom of Arabia. x x x
Saudi Arabia since her cause of action is based on Articles 19 On April 27, 1990, while on a lay-over in Jakarta,
and 21” of the Civil Code of the Philippines. In her Amended Indonesia, plaintiff went to a disco dance with fellow crew
Complaint and subsequent pleadings, she never alleged that members Thamer AlGazzawi and Allah Al-Gazzawi, both
Saudi law should govern this case. And as correctly held by Saudi nationals. Because it was almost morning when they
the respondent appellate court, “considering that it was the returned to their hotels, they agreed to have breakfast
petitioner who was invoking the applicability of the law of together at the room of Thamer. When they were in te (sic)
Saudi Arabia, then the burden was on it [petitioner] to plead room, Allah left on some pretext. Shortly after he did,
and to establish what the law of Saudi Arabia is.”
________________
PETITION for review on certiorari of a decision of the
1 Annex “A,” PETITION, October 13, 1995; rollo, p. 36.
Court of Appeals.
2 Annex “A,” SUPPLEMENTAL PETITION, April 30, 1996; rollo, pp. 88-
The facts are stated in the opinion of the Court. 102.
Siguion Reyna, Montecillo & Ongsiako for 3 Penned by Associate Justice Bernardo L1. Salas, and concurred in by
petitioner. Associate Justice Jorge S. Imperial and Associate Justice Pacita Cañizares-
Nye.
475 4 Entitled “Saudi Arabian Airlines vs. Hon. Judge Rodolfo A. Ortiz, in his
capacity as Presiding Judge of Branch 89 of the Regional Trial Court of
Quezon City and Milagros P. Morada.”
VOL. 297, OCTOBER 8, 1998 475
5 Issued by respondent Judge Hon. Rodolfo A. Ortiz of Branch 89,
Saudi Arabian Airlines vs. Court of Appeals Regional Trial Court of Quezon City.
6 Annex “B,” PETITION, October 13, 1995; rollo, pp. 37-39.
Padilla, Jimenez, Kintanar & Asuncion Law Offices 7 Annex “B,” PETITION, October 13, 1995; rollo, p. 40.
for private respondent. 8 Entitled “Milagros P. Morada vs. Saudi Arabian Airlines.”
9 Supra, note 2.
QUISUMBING, J.:
476
This petition for certiorari pursuant to Rule 45 of the
Rules of Court seeks to annul and set aside the
1
Resolution
2
dated September 27, 1995 and the3
Decision dated April 10, 1996 of the Court of Appeals Saudi Arabian Airlines vs. Court of Appeals
4 5
in CA-G.R. SP No. 6
36533, and the Orders
7
dated
August 29, 1994 and February 2, 1995 that were Thamer attempted to rape plaintiff. Fortunately, a roomboy
8
issued by the trial court in Civil Case No. Q-93-18394. and several security personnel heard her cries for help and
The pertinent antecedent facts which gave rise to rescued her. Later, the Indonesian police came and arrested
the instant petition, as stated in the questioned Thamer and Allah Al-Gazzawi, the latter as an accomplice.
9
When plaintiff returned to Jeddah a few days later, signed a notice to her to appear before the court on June 27,
several SAUDIA officials interrogated her about the Jakarta 1993. Plaintiff then returned to Manila.
incident. They then requested her to go back to Jakarta to
help arrange the release of Thamer and Allah. In Jakarta, 477
SAUDIA Legal Officer Sirah Akkad and base manager

Baharini negotiated with the police for the immediate release VOL. 297, OCTOBER 8, 1998 477
of the detained crew members but did not succeed because
plaintiff refused to cooperate. She was afraid that she might
be tricked into something she did not want because of her
inability to understand the local dialect. She also declined to Shortly afterwards, defendant SAUDIA summoned plaintiff
sign a blank paper and a document written in the local to report to Jeddah once again and see Miniewy on June 27,
dialect. Eventually, SAUDIA allowed plaintiff to return to 1993 for further investigation. Plaintiff did so after receiving
Jeddah but barred her from the Jakarta flights. assurance from SAUDIA’s Manila manager, Aslam Saleemi,
Plaintiff learned that, through the intercession of the that the investigation was routinary and that it posed no
Saudi Arabian government, the Indonesian authorities danger to her.
agreed to deport Thamer and Allah after two weeks of In Jeddah, a SAUDIA legal officer brought plaintiff to the
detention. Eventually, they were again put in service by same Saudi court on June 27, 1993. Nothing happened then
defendant SAUDIA (sic). In September 1990, defendant but on June 28, 1993, a Saudi judge interrogated plaintiff
SAUDIA transferred plaintiff to Manila. through an interpreter about the Jakarta incident. After one
On January 14, 1992, just when plaintiff thought that the hour of interrogation, they let her go. At the airport,
Jakarta incident was already behind her, her superiors however, just as her plane was about to take off, a SAUDIA
requested her to see Mr. Ali Meniewy, Chief Legal Officer of officer told her that the airline had forbidden her to take
SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he flight. At the Inflight Service Office where she was told to go,
brought her to the police station where the police took her the secretary of Mr. Yahya Saddick took away her passport
passport and questioned her about the Jakarta incident. and told her to remain in Jeddah, at the crew quarters, until
Miniewy simply stood by as the police put pressure on her to further orders.
make a statement dropping the case against Thamer and On July 3, 1993, a SAUDIA legal officer again escorted
Allah. Not until she agreed to do so did the police return her plaintiff to the same court where the judge, to her
passport and allowed her to catch the afternoon flight out of astonishment and shock, rendered a decision, translated to
Jeddah. her in English, sentencing her to five months imprisonment
One year and a half later or on June 16, 1993, in Riyadh, and to 286 lashes. Only then did she realize that the Saudi
Saudi Arabia, a few minutes before the departure of her court had tried her, together with Thamer and Allah, for
flight to Manila, plaintiff was not allowed to board the plane what happened in Jakarta. The court found plaintiff guilty of
and instead ordered to take a later flight to Jeddah to see (1) adultery; (2) going to a disco, dancing and listening to the
Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she music in violation of Islamic laws; and (3) socializing10
with
did, a certain Khalid of the SAUDIA office brought her to a the male crew, in contravention of Islamic tradition.”
Saudi court where she was asked to sign a document written
Facing conviction, private respondent sought the help
in Arabic. They told her that this was necessary to close the
of her employer, petitioner SAUDIA. Unfortunately,
case against Thamer and Allah. As it turned out, plaintiff
she was denied any assistance. She then asked the
Philippine Embassy in Jeddah to help her while her
case is on appeal. Meanwhile, to pay for her upkeep, Manifestation

18
and Motion to Dismiss Amended
she worked on the domestic flight of SAUDIA, while Complaint. 19
Thamer and Allah11 continued to serve in the The trial court issued an Order dated August 29,
international flights. 1994 denying the Motion to Dismiss Amended
Because she was wrongfully convicted, the Prince of Complaint filed by SAUDIA. 20
Makkah dismissed the case against her and allowed From the Order of respondent Judge denying the
her to leave
12
Saudi Arabia. Shortly before her return to Motion to Dismiss, SAUDIA filed on21September 20,
Manila, she was 1994, its Motion for Reconsideration of the Order
dated August 29, 1994. It alleged that the trial court
________________ has no jurisdiction to hear and try
10 Decision, pp. 2-4; see rollo, pp. 89-91.

________________
11 Private respondent’s Comment; rollo, p. 50.
12 Ibid., pp. 50-51. 13 Dated November 19, 1993, and docketed as Civil Case No. Q-93-
18394, Branch 89, Regional Trial Court of Quezon City.
478 14 Dated January 14, 1994.
15 Dated February 4, 1994.

16 Reply dated March 1, 1994.
17 Records, pp. 65-84.
Saudi Arabian Airlines vs. Court of Appeals 18 Rollo, p. 65.
19 Supra, note 6.
terminated from the service by SAUDIA, without her 20 Hon. Rodolfo A. Ortiz.
being informed of the cause. 13
21 Dated September 19, 1994.
On November 23, 1993, Morada filed a Complaint
for damages against SAUDIA, and Khaled Al-Balawi 479
(“Al-Balawi”), its country manager.
On January 19, 1994,14
SAUDIA filed an Omnibus VOL. 297, OCTOBER 8, 1998 479
Motion To Dismiss which raised the following
grounds, to wit: (1) that the Complaint states no cause Saudi Arabian Airlines vs. Court of Appeals
of action against SAUDIA; (2) that defendant Al-
Balawi is not a real party in interest; (3) that the claim the case on the basis of Article 21 of the Civil Code,
or demand set forth in the Complaint has been waived, since the proper law applicable is the law of the
abandoned or otherwise extinguished; and (4) that the Kingdom of Saudi Arabia.22 On October 14, 1994,
trial court has no jurisdiction to try the case. Morada filed her Opposition (To Defendant’s Motion
On February 10, 1994, 15Morada filed her Opposition for Reconsideration).
23
16
(To Motion to Dismiss). SAUDIA filed a reply In the Reply filed with the trial court on October
thereto on March 3, 1994. 24, 1994, SAUDIA alleged that since its Motion for
On June 23, 1994, Morada filed an Amended Reconsideration raised lack of jurisdiction as its cause
17
Complaint wherein Al-Balawi was dropped as party of action, the Omnibus Motion Rule does not apply,
defendant. On August 11, 1994, SAUDIA filed its even if that ground is raised for the first time on
appeal. Additionally, SAUDIA alleged that the
Philippines does not have any substantial interest in Writ of Preliminary

26
Injunction and/or Temporary
the prosecution of the instant case, and hence, without Restraining Order with the Court of Appeals.
jurisdiction to adjudicate the same. Respondent Court of Appeals promulgated 27
a
Respondent
24
Judge subsequently issued another Resolution with Temporary Restraining Order dated
Order dated February 2, 1995, denying SAUDIA’s February 23, 1995, prohibiting the respondent Judge
Motion for Reconsideration. The pertinent portion of from further conducting any proceeding, unless
the assailed Order reads as follows: otherwise directed, in the28interim.
In another Resolution promulgated on September
“Acting on the Motion for Reconsideration of defendant Saudi 27, 1995, now assailed, the appellate court denied
Arabian Airlines filed, thru counsel, on September 20, 1994, SAUDIA’s Petition for the Issuance of a Writ of
and the Opposition thereto of the plaintiff filed, thru counsel, Preliminary Injunction dated February 18, 1995, to
on October 14, 1994, as well as the Reply therewith of wit:
defendant Saudi Arabian Airlines filed, thru counsel, on
October 24, 1994, considering that a perusal of the plaintiff’s “The Petition for the Issuance of a Writ of Preliminary
Amended Complaint, which is one for the recovery of actual, Injunction is hereby DENIED, after considering the Answer,
moral and exemplary damages plus attorney’s fees, upon the with Prayer to Deny Writ of Preliminary Injunction (Rollo, p.
basis of the applicable Philippine law, Article 21 of the New 135) the Reply and Rejoinder, it appearing that herein
Civil Code of the Philippines, is, clearly, within the petitioner is not clearly entitled thereto (Unciano
jurisdiction of this Court as regards the subject matter, and Paramedical College, et al. v. Court of Appeals, et al., G.R.
there being nothing new of substance which might cause the No. 100335, April 7, 1993, Second Division).
reversal or modification of the order sought to be SO ORDERED.”
reconsidered, the motion for reconsideration of the
defendant, is DENIED. On October 20, 1995, SAUDIA 29filed with this
25
SO ORDERED.” Honorable Court the instant Petition for Review with
Prayer for Temporary Restraining Order dated October
Consequently, on February 20, 1995, SAUDIA filed its 13, 1995.
Petition for Certiorari and Prohibition with Prayer for However, during the pendency of the instant
Issuance of Petition,30 respondent Court of Appeals rendered the
Decision dated April 10, 1996, now also assailed. It
________________ ruled that the Philippines is an appropriate forum
considering that the Amended Complaint’s basis for
22 Records, pp. 108-116. recovery of damages is Article 21 of the Civil Code, and
23 Records, pp. 117-128. thus, clearly within the jurisdiction of respondent
24 Supra, note 7. Court. It further held that certiorari is not the proper
25 Ibid. remedy in a denial of a Motion to Dismiss, inasmuch as
the petitioner should have proceeded to trial, and in
480
case of an adverse ruling, find recourse in an appeal.
480 SUPREME COURT REPORTS ANNOTATED ________________
Saudi Arabian Airlines vs. Court of Appeals 26 Dated February 18, 1995; see supra, note 4.

27 Supra, note 7. III.

28 Records, p. 180.
29 Rollo, pp. 1-44.
Petitioner received on April 22, 1996 the April 10, 1996
30 Supra, note 2.
decision in CA-G.R. SP No. 36533 entitled ‘Saudi Arabian
Airlines v. Hon. Rodolfo A. Ortiz, et al.’ and filed its April 30,
481 1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order on May 7, 1996 at 10:29 a.m.
or within the 15-day reglementary period as provided for
VOL. 297, OCTOBER 8, 1998 481
under Section 1, Rule 45 of the Revised
________________
On May 7, 1996, SAUDIA filed its Supplemental
31 Rollo, pp. 80-86.
Petition for Review with Prayer for Temporary
31 32 Memorandum for Petitioner dated October 9, 1996, rollo, pp. 149-180;
Restraining Order dated April 30, 1996, given due
and Memorandum for Private Respondent, October 30, 1996, rollo, pp. 182-
course by this Court. After both parties submitted
32 210.
their Memoranda, the instant case is now deemed
submitted for decision. 482
Petitioner SAUDIA raised the following issues:
“I. 482 SUPREME COURT REPORTS ANNOTATED

The trial court has no jurisdiction to hear and try Civil Case
No. Q-93-18394 based on Article 21 of the New Civil Code
since the proper law applicable is the law of the Kingdom of Rules of Court. Therefore, the decision in CA-G.R. SP No.
Saudi Arabia inasmuch as this case involves what is known 36533 has not yet become final and executory33 and this
in private international law as a ‘conflicts problem.’ Honorable Court can take cognizance of this case.”
Otherwise, the Republic of the Philippines will sit in
From the foregoing factual and procedural
judgment of the acts done by another sovereign state which
antecedents, the following issues emerge for our
is abhorred.
resolution:
II. I.
Leave of court before filing a supplemental pleading is not WHETHER RESPONDENT APPELLATE COURT ERRED
a jurisdictional requirement. Besides, the matter as to IN HOLDING THAT THE REGIONAL TRIAL COURT OF
absence of leave of court is now moot and academic when this QUEZON CITY HAS JURISDICTION TO HEAR AND TRY
Honorable Court required the respondents to comment on CIVIL CASE NO. Q-93-18394 ENTITLED “MILAGROS P.
petitioner’s April 30, 1996 Supplemental Petition For Review MORADA V. SAUDI ARABIAN AIRLINES.”
With Prayer For A Temporary Restraining Order Within Ten
(10) Days From Notice Thereof. Further, the Revised Rules of II.
Court should be construed with liberality pursuant to Section
2, Rule 1 thereof. WHETHER RESPONDENT APPELLATE COURT
ERRED IN RULING THAT IN THIS CASE PHILIPPINE
LAW SHOULD GOVERN. “2. Defendant SAUDI ARABIAN AIRLINES or

SAUDIA is a foreign airlines corporation doing
Petitioner SAUDIA claims that before us is a conflict of business in the Philippines. It may be served
laws that must be settled at the outset. It maintains with summons and other court processes at
that private respondent’s claim for alleged abuse of Travel Wide Associated Sales (Phils.), Inc., 3rd
rights occurred in the Kingdom of Saudi Arabia. It Floor, Cougar Building, 114 Valero St., Salcedo
alleges that the existence of a foreign element qualifies Village, Makati, Metro Manila.x x x x x x
the instant case for the application of the law of the x x x
Kingdom of Saudi Arabia, by virtue of the lex loci
34 6. Plaintiff learned that, through the intercession
delicti commissi rule.
of the Saudi Arabian government, the
On the other hand, private respondent contends
Indonesian authorities agreed to deport
that since her Amended Complaint is based on Articles
35 36 Thamer and Allah after two weeks of detention.
19 and 21 of
Eventually, they were again put in service by
defendant SAUDIA. In September 1990,
________________ defendant SAUDIA transferred plaintiff to
Manila.
33 Rollo, pp. 157-159. All caps in the original.
34 Memorandum for Petitioner, p. 14, rollo, p. 162. 7. On January 14, 1992, just when plaintiff
35 Art. 19. Every person must, in the exercise of his rights and in thought that the Jakarta incident was already
the performance of his duties, act with justice, give everyone his due, behind her, her superiors requested her to see
and observe honesty and good faith. Mr. Ali Meniewy, Chief Legal Officer of
36 Art. 21. Any person who wilfully causes loss or injury to SAUDIA, in Jeddah, Saudi Arabia. When she
another in a manner that is contrary to morals, good customs or saw him, he brought her to the police station
public policy shall compensate the latter for the damages. where the police took her passport and
questioned her about the Jakarta incident.
483 Miniewy simply stood by as the police put
pressure on her to make a statement dropping
VOL. 297, OCTOBER 8, 1998 483 the case against Thamer and Allah. Not until
she agreed to do so did the police return her
Saudi Arabian Airlines vs. Court of Appeals passport and allowed her to catch the afternoon
flight out of Jeddah.
the Civil Code, then the37
instant case is properly a 8. One year and a half later or on June 16, 1993,
matter of domestic law. in Riyadh, Saudi Arabia, a few minutes before
Under the factual antecedents obtaining in this the departure of her flight to Manila, plaintiff
case, there is no dispute that the interplay of events was not allowed to board the plane and instead
occurred in two states, the Philippines and Saudi ordered to take a later flight to Jeddah to see
Arabia. Mr. Meniewy, the Chief Legal Officer of
As stated
38
by private respondent in her Amended SAUDIA. When she did, a certain Khalid of the
Complaint dated June 23, 1994: SAUDIA office brought her to a Saudi court
where she was asked to sign a document
written in Arabic. They told her that this was
necessary to close the case against Thamer and On July 3, 1993 a SAUDIA legal officer again
Allah. As it 11. escorted plaintiff to the same court where the
judge, to her astonishment and shock, rendered
a decision, translated to her in English,
________________
sentencing her to five months imprisonment
37 Memorandum for Private Respondent, p. 9, rollo, p. 190. and to 286 lashes. Only then did she realize
38 Records, pp. 65-71. that the Saudi court had tried her, together
with Thamer and Allah, for what happened in
484 Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing, and
484 SUPREME COURT REPORTS ANNOTATED listening to the music in violation of Islamic
laws; (3) socializing with the male crew, in
contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in
turned out, plaintiff signed a notice to her to appear the case, plaintiff sought the help of the
before the court on June 27, 1993. Plaintiff then Philippine Embassy in Jeddah. The latter
returned to Manila. helped her pursue an appeal from the decision
of the court. To pay for her upkeep, she worked
9. Shortly afterwards, defendant SAUDIA
on the domestic flights of defendant SAUDIA
summoned plaintiff to report to Jeddah once
while, ironically, Thamer and39 Allah freely
again and see Miniewy on June 27, 1993 for
served the international flights.”
further investigation. Plaintiff did so after
receiving assurance from SAUDIA’s Manila
Where the factual antecedents satisfactorily establish
manager, Aslam Saleemi, that the investigation
the existence of a foreign element, we agree with
was routinary and that it posed no danger to
petitioner that the problem herein could present a
her.
“conflicts” case.
10. In Jeddah, a SAUDIA legal officer brought A factual situation that cuts across territorial lines
plaintiff to the same Saudi court on June 27, and is affected by the diverse laws of two or more
1993. Nothing happened then but on June 28, states is said to
1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta
________________
incident. After one hour of interrogation, they
let her go. At the airport, however, just as her 39 Supra, note 17, pp. 65-68.
plane was about to take off, a SAUDIA officer
told her that the airline had forbidden her to 485
take that flight. At the Inflight Service Office
where she was told to go, the secretary of Mr.
VOL. 297, OCTOBER 8, 1998 485
Yahya Saddick took away her passport and told
her to remain in Jeddah, at the crew quarters, Saudi Arabian Airlines vs. Court of Appeals
until further orders.

contain a “foreign element.” The presence of a foreign 44 Supra, note 17.

element is inevitable since social and economic affairs
486
of individuals and associations are rarely confined 40
to
the geographic limits of their birth or conception.
The forms
41
in which this foreign element may appear 486 SUPREME COURT REPORTS ANNOTATED
are many. The foreign element may simply consist in
the fact that one of the parties to a contract is an alien
or has a foreign domicile, or that a contract between
nationals of one State involves properties situated in “Art. 19. Every person must, in the exercise of his rights and
another State. In other 42cases, the foreign element may in the performance of his duties, act with justice give
assume a complex form. everyone his due and observe honesty and good faith.”
In the instant case, the foreign element consisted in
On the other hand, Article 21 of the New Civil Code
the fact that private respondent Morada is a resident
provides:
Philippine national, and that petitioner SAUDIA is a
resident foreign corporation. Also, by virtue of the “Art. 21. Any person who willfully causes loss or injury to
employment of Morada with the petitioner SAUDIA as another in a manner that is contrary to morals, good customs
a flight stewardess, events did transpire during her or public policy shall compensate the latter for damages.”
many occasions of travel across national borders,
particularly from Manila, Philippines to Jeddah, Saudi Thus, in45Philippine National Bank (PNB) vs. Court of
Arabia, and vice versa, that caused a “conflicts” Appeals, this Court held that:
situation to arise.
“The aforecited provisions on human relations were intended
We thus find private respondent’s assertion that the
to expand the concept of torts in this jurisdiction by granting
case is purely domestic, imprecise. A conflicts problem 43
adequate legal remedy for the untold number of moral
presents itself here, and the question of jurisdiction
wrongs which is impossible for human foresight to
confronts the court a quo.
specifically provide in the statutes.”
After a careful study
44
of the private respondent’s
Amended Complaint, and the Comment thereon, we Although Article 19 merely declares a principle of law,
note that she aptly predicated her cause of action on Article 21 gives flesh to its provisions. Thus, we agree
Articles 19 and 21 of the New Civil Code. with private respondent’s assertion that violations of
On one hand, Article 19 of the New Civil Code Articles 19 and 21 are actionable, with judicially
provides: enforceable remedies in the municipal forum.
46
Based on the allegations in the Amended
________________ Complaint, 47read in the light of the Rules of Court on
jurisdiction we find that the Regional Trial Court
40 Salonga, Private International Law, 1995 edition, p. 3.
(RTC) of Quezon City possesses jurisdiction over the
41 Ibid., citing Cheshire and North, Private International Law, p. 48
subject matter of the suit. Its authority
5 by P.M. North and J.J. Faucett (Butterworths; London, 1992).
42 Ibid.
________________
43 Paras, Philippine Conflict of Laws, sixth edition (1984), p. 24,
citing Leflar, The Law of Conflict of Laws, pp. 5-6. 45 83 SCRA 237, 247.

46 Supra, note 17, at p. 6. Morada prays that judgment be defendants resides or may be found, or where the plaintiff or
rendered against SAUDIA, ordering it to pay: (1) not less than any of the plaintiff resides, at the election of the plaintiff.”
P250,000.00 as actual damages; (2) P4 million in moral damages; (3)
P500,000.00 in exemplary damages; and (4) P500,000.00 in Pragmatic considerations, including the convenience of
attorney’s fees. the parties, also weigh heavily in favor of the RTC
47 Baguioro v. Barrios, 77 Phil. 120. Quezon City assuming jurisdiction. Paramount is the
48 Jurisdiction over the subject matter is conferred by law and is
private interest of the litigant. Enforceability of a
defined as the authority of a court to hear and decide cases of the
judgment if one is obtained is quite obvious. Relative
advantages and obstacles to a fair trial are equally
487 important. Plaintiff may not, by choice of an
inconvenient forum, ‘vex,’ ‘harass,’ or ‘oppress’ the
defendant, e.g. by inflicting upon him needless expense
VOL. 297, OCTOBER 8, 1998 487
or disturbance.
________________
to try and hear the case is provided for under Section 1
of Republic Act No. 7691, to wit: general class to which the proceedings in question belong. (Reyes
v. Diaz, 73 Phil. 484, 487)
“Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise
known as the “Judiciary Reorganization Act of 1980,” is 488
hereby amended to read as follows:
SEC. 19. Jurisdiction in Civil Cases.—Regional Trial 488 SUPREME COURT REPORTS ANNOTATED
Courts shall exercise exclusive jurisdiction:
x x x x x x x x x Saudi Arabian Airlines vs. Court of Appeals
(8) In all other cases in which demand, exclusive of
interest, damages of whatever kind, attorney’s fees, litigation But unless the balance is strongly in favor of the
expenses, and cost or the value of the property in controversy defendant, the49
plaintiff’s choice of forum should rarely
exceeds One hundred thousand pesos (P100,000.00) or, in be disturbed.
such other cases in Metro Manila, where the demand, Weighing the relative claims of the parties, the
exclusive of the above-mentioned items exceeds Two hundred court a quo found it best to hear the case in the
thousand pesos (P200,000.00). (Emphasis ours) Philippines. Had it refused to take cognizance of the
x x x x x x x x x case, it would be forcing plaintiff (private respondent
now) to seek remedial action elsewhere, i.e. in the
And following Section 2(b), Rule 4 of the Revised Rules Kingdom of Saudi Arabia where she no longer
of Court—the venue, Quezon City, is appropriate: maintains substantial connections. That would have
caused a fundamental unfairness to her.
“SEC. 2. Venue in Courts of First Instance.—[Now Regional
Moreover, by hearing the case in the Philippines no
Trial Court]
unnecessary difficulties and inconvenience have been
(a) x x x x x x x x x
shown by either of the parties. The choice of forum of
(b) Personal actions.—All other actions may be
the plaintiff (now private respondent) should be
commenced and tried where the defendant or any of the
upheld.
Similarly, the trial court also possesses jurisdiction and Co., Ltd. availed of an affirmative defense on the basis of
over the persons of the parties herein. By filing her which it prayed the court to resolve controversy in its favor.
Complaint and Amended Complaint with the trial For the court to validly decide the said plea of defendant Ker
court, private respondent has voluntarily submitted & Co., Ltd., it necessarily had to acquire jurisdiction upon
herself to the jurisdiction of the court. the latter’s person, who, being the proponent of the
The records show
50
that petitioner SAUDIA has filed affirmative defense, should be deemed to have abandoned its
several motions praying for the dismissal of Morada’s special appearance and voluntarily submitted itself to the
Amended Complaint. SAUDIA also filed an Answer In jurisdiction of the court.”
Ex Abundante Cautelam dated February 20, 1995.
What is very patent and explicit from the motions Similarly, the case of De Midgely vs. Ferandos, held
filed, is that SAUDIA prayed for other reliefs under that:
the premises. Undeniably, petitioner SAUDIA has “When the appearance is by motion for the purpose of
effectively submitted to the trial court’s jurisdiction by objecting to the jurisdiction of the court over the person, it
praying for the dismissal of the Amended Complaint on must be for the sole and separate purpose of objecting to the
grounds other than lack of jurisdiction. jurisdiction of the court. If his motion is for any other
purpose than to object to the jurisdiction of the court over his
________________ person, he thereby submits himself to the jurisdiction of the
court. A special appearance by motion made for the purpose
49 Supra, note 37, p. 58, citing Gulf Oil Corporation v. Gilbert, 350
of objecting to the jurisdiction of the court over the person
U.S. 501, 67 Sup. Ct. 839 (1947).
will be held to be a general appearance, if the party in said
50 Omnibus Motion to Dismiss dated January 14, 1994; Reply (to
motion should, for example, ask for a dismissal of the action
Plaintiff’s Opposition) dated February 19, 1994; Comment (to
upon the further ground52 that the court had no jurisdiction
Plaintiff’s Motion to Admit Amended Complaint dated June 23,
over the subject matter.”
1994) dated July 20, 1994; Manifestation and Motion to Dismiss
Amended Complaint dated June 23, 1994 under date August 11, Clearly, petitioner had submitted to the jurisdiction of
1994; and Motion for Reconsideration dated September 19, 1994. the Regional Trial Court of Quezon City. Thus, we find
that the trial court has jurisdiction over the case and
489
that its exercise thereof, justified.
As to the choice of applicable law, we note that
VOL. 297, OCTOBER 8, 1998 489 choice-of-law problems seek to answer two important
Saudi Arabian Airlines vs. Court of Appeals questions: (1) What legal system should control a given
situation where
As held by this
51
Court in Republic vs. Ker and
Company, Ltd.: ________________
“We observe that the motion to dismiss filed on April 14,

51 18 SCRA 207, 213-214.
1962, aside from disputing the lower court’s jurisdiction over

52 64 SCRA 23, 31.
defendant’s person, prayed for dismissal of the complaint on 490

the ground that plaintiff’s cause of action has prescribed. By
interposing such second ground in its motion to dismiss, Ker
490 SUPREME COURT REPORTS ANNOTATED 55 Supra, note 40 at p. 94, citing Falconbridge, Essays on the
Conflict of Laws, p. 50.
56 Ibid.
57 Supra, note 37 at p. 136; cf. Mussbaum, Principle of Private
some of the significant facts occurred in two or more
International Law, p. 173; and Rabel, The Conflict of Laws: A
states; and (2) to what extent53 should the chosen legal
Comparative Study, pp. 51-52.
system regulate the situation.
58 Supra, note 37, p. 137.
Several theories have been propounded in order to
identify the legal system that should ultimately 491
control. Although ideally, all choice-of-law theories
should intrinsically advance both notions of justice and
predictability, they do not always do so. The forum is VOL. 297, OCTOBER 8, 1998 491
then faced with the problem of deciding which
54
of these Saudi Arabian Airlines vs. Court of Appeals
two important values should be stressed.
Before a choice can be made, it is necessary for us to 59
ble law. These “test factors” or “points of contact” or
determine under what category a certain set of facts or
“connecting factors” could be any of the following:
rules fall. This process is known as “characterization,”
or the “doctrine of qualification.” It is the “process of “(1) the nationality of a person, his domicile, his
deciding whether or not the facts relate55
to the kind of residence, his place of sojourn, or his origin;
question specified in a conflicts rule.” The purpose of
(2) the seat of a legal or juridical person, such as a
“characterization” is to enable the forum to select the
56 corporation;
proper law.
Our starting point of analysis here is not a legal (3) the situs of a thing, that is, the place where a
relation, but a factual situation, event, or operative thing is, or is deemed to be situated. In
57
fact. An essential element of conflict rules is the particular, the lex situs is decisive when real
indication of a “test” or “connecting factor” or “point of rights are involved;
contact.” Choice-of-law rules invariably consist of a (4) the place where an act has been done, the locus
factual relationship (such as property right, contract actus, such as the place where a contract has
claim) and a connecting factor or point of contact, such been made, a marriage celebrated, a will signed
as the situs of the res, the place of celebration, the or a tort committed. The lex loci actus is
58
place of performance, or the place of wrongdoing. particularly important in contracts and torts;
Note that one or more circumstances may be (5) the place where an act is intended to come into
present to serve as the possible test for the effect, e.g., the place of performance of
determination of the applica- contractual duties, or the place where a power
of attorney is to be exercised;
________________ (6) the intention of the contracting parties as to
the law that should govern their agreement,
53 Coquia and Pangalangan, Conflict of Laws, 1995 edition, p. 65,
the lex loci intentionis;
citing Von Mehren, Recent Trends in Choice-of-Law Methodology, 60
(7) the place where judicial or administrative
Cornell L. Rev. 927 (1975).
proceedings are instituted or done. The lex fori
54 Ibid.
—the law of the forum—is particularly face trial for very serious charges, including adultery
important because, as we have seen earlier, and violation of Islamic laws and tradition.
matters of ‘procedure’ not going to the There is likewise logical basis on record for the
substance of the claim involved are governed by claim that the “handing over” or “turning over” of the
it; and because the lex fori applies whenever person of private respondent to Jeddah officials,
the content of the otherwise applicable foreign petitioner may have acted beyond its duties as
law is excluded from application in a given case employer. Petitioner’s purported act contributed to and
for the reason that it falls under one of the amplified or even proximately caused additional
exceptions to the applications of foreign law; humiliation, misery and suffering of private
and respondent. Petitioner thereby allegedly facilitated the
(8) the flag of a ship, which in many cases is arrest, detention and prosecution of private respondent
decisive of practically all legal relationships of under the guise of petitioner’s authority as employer,
the ship and of its master or owner as such. It taking advantage of the trust, confidence and faith she
also covers contractual relationships reposed upon it. As purportedly found by the Prince of
60
particularly contracts of affreightment.” Makkah, the alleged conviction and imprisonment of
(Italics ours.) private respondent was wrongful. But these capped the
injury or harm allegedly inflicted upon her person and
After a careful study of the pleadings on record, reputation, for which petitioner could be liable as
including allegations in the Amended Complaint claimed, to provide compensation or redress for the
deemed admitted for purposes of the motion to dismiss, wrongs done, once duly proven.
we are convinced that there is reasonable basis for Considering that the complaint in the court a quo is
private respondent’s assertion that one involving torts, the “connecting factor” or “point of
contact” could be the place or places where the tortious
conduct or lex loci actus occurred. And applying the
________________
torts principle in a conflicts case, we find that the
59 Ibid. Philippines could be said as a situs of the tort (the
60 Supra, note 37 at pp. 138-139. place where the alleged tortious conduct took place).
This is because it is in the Philippines where petitioner
492 allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had
492 SUPREME COURT REPORTS ANNOTATED honestly believed that petitioner would, in the exercise
of its rights and in the performance of its duties, “act
Saudi Arabian Airlines vs. Court of Appeals with justice, give her her due and observe honesty and
good faith.” Instead, petitioner failed to protect her,
although she was already working in Manila, she claimed. That certain acts or parts of the injury
petitioner brought her to Jeddah on the pretense that allegedly occurred in another country is of no moment.
she would merely testify in an investigation of the For in our view what is important here is the place
charges she made against the two SAUDIA crew where the
members for the attack on her person while they were
493
in Jakarta. As it turned out, she was the one made to

VOL. 297, OCTOBER 8, 1998 493 ________________
Saudi Arabian Airlines vs. Court of Appeals 61 Includes the (1) German rule of elective concurrence; (2) “State
of the most significant relationship” rule (the Second Restatement of
over-all harm or the totality of the alleged injury to the 1969); (3) State-interest analysis; and (4) Caver’s Principle of
person, reputation, social standing and human rights Preference.
of complainant, had lodged, according to the plaintiff 62 Supra, note 37, p. 396.
below (herein private respondent). All told, it is not
without basis to identify the Philippines as the situs of 494
the alleged tort.

Moreover, with the widespread criticism of the 494 SUPREME COURT REPORTS ANNOTATED
traditional rule of lex loci delicti commissi, modern
61
theories and rules on tort liability have been
advanced to offer fresh judicial approaches to arrive at 63
just results. In keeping abreast with the modern with the matter in this dispute, raised by private
theories on tort liability, we find here an occasion to respondent as plaintiff below against defendant
apply the “State of the most significant relationship” (herein petitioner), in our view, has been properly
rule, which in our view should be appropriate to apply established.
now, given the factual context of this case. Prescinding from this premise that the Philippines
In applying said principle to determine the State is the situs of the tort complained of and the place
which has the most significant relationship, the “having the most interest in the problem,” we find, by
following contacts are to be taken into account and way of recapitulation, that the Philippine law on tort
evaluated according to their relative importance with liability should have paramount application to and
respect to the particular issue: (a) the place where the control in the resolution of the legal issues arising out
injury occurred; (b) the place where the conduct of this case. Further, we hold that the respondent
causing the injury occurred; (c) the domicile, residence, Regional Trial Court has jurisdiction over the parties
nationality, place of incorporation and place of and the subject matter of the complaint; the
business of the parties; and (d) the place where 62the appropriate venue is in Quezon City, which could
relationship, if any, between the parties is centered. properly apply Philip-pine law. Moreover, we find
As already discussed, there is basis for the claim untenable petitioner’s insistence that “[s]ince private
that overall injury occurred and lodged in the respondent instituted this suit, she has the burden of
Philippines. There is likewise no question that private pleading64and proving the applicable Saudi law on the
respondent is a resident Filipina national, working matter.” As aptly said by private respondent, she has
with petitioner, a resident foreign corporation engaged “no obligation to plead and prove the law of the
here in the business of international air carriage. Kingdom of Saudi Arabia since her cause of action is
Thus, the “relationship” between the parties was based on Articles 19 and 21” of the Civil Code of the
centered here, although it should be stressed that this Philippines. In her Amended Complaint and
suit is not based on mere labor law violations. From subsequent pleadings, she 65never alleged that Saudi
the record, the claim that the Philippines has the most law should govern this case. And as correctly held by
significant contact the respondent appellate court, “considering that it
was the petitioner who was invoking the applicability
of the law of Saudi Arabia, then the burden was on it Court of Quezon City, Branch 89 for further
[petitioner] to plead
66
and to establish what the law of proceedings.
Saudi Arabia is.” SO ORDERED.
Lastly, no error could be imputed to the respondent
appellate court in upholding the trial court’s denial of Davide, Jr. (Chairman), Bellosillo, Vitug and
defendant’s (herein petitioner’s) motion to dismiss the Panganiban, JJ., concur.
case. Not only was jurisdiction in order and venue
Petition dismissed, Civil Case No. Q-93-18394
properly laid, but appeal after trial was obviously
remanded to lower court.
available, and expeditious trial itself indicated by the
nature of the case at hand. Indubitably, the Notes.—Forum-shopping originated as a concept in
private international law, where non-resident litigants
________________ are given the option to choose the forum or place
wherein to bring their suit for various reasons or
63 Supra, note 59, p. 79, citing Ruben v. Irving Trust Co., 305 N.Y.
excuses, including to secure procedural advantages, to
288, 305, 113 N.E. 2d 424, 431.
annoy and harass the defendant, to avoid overcrowded
64 Memorandum for Petitioner, p. 22; rollo, p. 170.
dockets, or to select a more friendly venue. (First
65 Memorandum for Private Respondent, pp. 21-22; rollo, pp. 202-
Philippine International Bank vs. Court of Appeals,
203.
252 SCRA 259 [1996])
66 CA Decision, p. 10; rollo, p. 97.
After having acquired jurisdiction over a plaintiff
495 foreign corporation by virtue of the filing of the original
complaint, the Philippine court now has the discretion,
based on the facts of the case, to either give due course
VOL. 297, OCTOBER 8, 1998 495 to the suit or dismiss it, on the principle of forum non
Saudi Arabian Airlines vs. Court of Appeals conveniens. (Communication Materials and Design,
Inc. vs. Court of Appeals, 260 SCRA 673 [1996])
Philippines is the state intimately concerned with the
——o0o——
ultimate outcome of the case below, not just for the
benefit of all the litigants, but also for the vindication 496
of the country’s system of law and justice in a
transnational setting. With these guidelines in mind,
the trial court must proceed to try and adjudge the 496 SUPREME COURT REPORTS ANNOTATED
case in the light of relevant Philippine law, with due Everett Steamship Corporation vs. Court of Appeals
consideration of the foreign element or elements
involved. Nothing said herein, of course, should be G.R. No. 122494. October 8, 1998.
*
construed as prejudging the results of the case in any

manner whatsoever.
EVERETT STEAMSHIP CORPORATION, petitioner,
WHEREFORE, the instant petition for certiorari is
vs. COURT OF APPEALS and HERNANDEZ
hereby DISMISSED Civil Case No. Q-93-18394
TRADING CO., INC., respondents.
entitled “Milagros P. Morada vs. Saudi Arabia
Airlines” is hereby REMANDED to Regional Trial
Common Carriers; Contracts; Bills of Lading; A ________________

stipulation in the bill of lading limiting the common carrier’s
liability for loss or destruction of a cargo to a certain sum, * SECOND DIVISION.
unless the shipper or owner declares a greater value, is

sanctioned by law.—A stipulation in the bill of lading
497
limiting the common carrier’s liability for loss or destruction
of a cargo to a certain sum, unless the shipper or owner
declares a greater value, is sanctioned by law, particularly
Articles 1749 and 1750 of the Civil Code.
VOL. 297, OCTOBER 8, 1998 497
Same; Same; Same; Contracts of Adhesion; Contracts of Everett Steamship Corporation vs. Court of Appeals
adhe-L; sion are not invalid per se.—The trial court’s
ratiocination that private respondent could not have “fairly tracts must be carefully scrutinized “in order to shield the
and freely” agreed to the limited liability clause in the bill of unwary (or weaker party) from deceptive schemes contained
lading because the said conditions were printed in small in ready-made contracts.”—Greater vigilance, however, is
letters does not make the bill of lading invalid. We ruled in required of the courts when dealing with contracts of
PAL, Inc. vs. Court of Appeals that the “juris-prudence on the adhesion in that the said contracts must be carefully
matter reveals the consistent holding of the court that scrutinized “in order to shield the unwary (or weaker party)
contracts of adhesion are not invalid per se and that it has on from deceptive schemes contained in ready-made covenants,”
numerous occasions upheld the binding effect thereof.” Also, such as the bill of lading in question. The stringent
in Philippine American General Insurance Co., Inc. vs. Sweet requirement which the courts are enjoined to observe is in
Lines, Inc. this Court, speaking through the learned Justice recognition of Article 24 of the Civil Code which mandates
Florenz D. Re-galado, held: “x x x Ong Yiu vs. Court of that “(i)n all contractual, property or other relations, when
Appeals, et al., instructs us that ‘contracts of adhesion one of the parties is at a disadvantage on account of his moral
wherein one party imposes a ready-made form of contract on dependence, ignorance, indigence, mental weakness, tender
the other x x x are contracts not entirely prohibited. The one age or other handicap, the courts must be vigilant for his
who adheres to the contract is in reality free to reject it protection.”
entirely; if he adheres he gives his consent.’ In the present
case, not even an allegation of ignorance of a party excuses Same; Same; Same; Even if the consignee is not a
non-compliance with the contractual stipulations since the signatory to the contract of carriage between the shipper and
responsibility for ensuring full comprehension of the the carrier, the consignee can still be bound by the contract.—
provisions of a contract of carriage devolves not on the carrier The next issue to be resolved is whether or not private
but on the owner, shipper, or consignee as the case may be.” respondent, as consignee, who is not a signatory to the bill of
(Emphasis supplied) lading is bound by the stipulations thereof. Again, in Sea-
Land Service, Inc. vs. Intermediate Appellate Court (supra),
Same; Same; Same; Same; Greater vigilance is required we held that even if the consignee was not a signatory to the
of the courts when dealing with contracts of adhesion in that contract of carriage between the shipper and the carrier, the
the said con- consignee can still be bound by the contract. Speaking
through Mr. Chief Justice Narvasa, we ruled: “To begin with,

there is no question of the right, in principle, of a consignee Petitioner Everett Steamship Corporation, through
in a bill of lading to recover from the carrier or shipper for this petition
1
for review, seeks the reversal of the
loss of, or damage to goods being transported under said bill, decision of the Court of Appeals, dated June 14, 1995,
although that document may have been—as in practice it in CA-G.R. No. 428093, which affirmed the decision of
oftentimes is—drawn up only by the consignor and the carrier the Regional Trial Court of Kalookan City, Branch 126,
without the intervention of the consignee. x x x. in Civil Case No. C-15532, finding petitioner liable to
private respondent Hernan-dez Trading Co., Inc. for
Same; Same; Same; When the consignee formally claims the value of the lost cargo.
reimbursement for the missing goods from the common Private respondent imported three crates of bus
carrier and subsequently files a case against the latter based spare parts marked as MARCO C/No. 12, MARCO
on the very same bill of lading, it accepts the provisions of the C/No. 13 and MARCO C/No. 14, from its supplier,
contract and thereby makes itself a party thereto.—When Maruman Trading Company, Ltd. (Maruman Trading),
private respondent formally claimed reimbursement for the a foreign corporation based in Inazawa, Aichi, Japan.
missing goods from petitioner and subsequently filed a case The crates were shipped from Nagoya, Japan to Manila
against the latter based on the very same bill of lading, it on board “ADELFAEVERETTE,” a vessel owned by
(private respondent) accepted the provisions of the contract petitioner’s principal, Everett Orient Lines. The said
and thereby made itself a party thereto, or at least has come crates were covered by Bill of Lading No. NGO53MN.
to court to enforce it. Thus, private respondent cannot now Upon arrival of the port of Manila, it was discovered
reject or disregard the carrier’s limited liability stipulation in that the crate marked MARCO C/No. 14 was missing.
the bill of lading. In This was confirmed and admitted by petitioner in its
letter of January 13, 1992 addressed to private
498 respondent, which thereafter made a formal claim
upon petitioner for the value of the lost cargo
amounting to One Million Five Hundred Fifty Two

________________
Everett Steamship Corporation vs. Court of Appeals
1 Penned by Justice Pacita Canizares-Nye and concurred in by
Justices Conchita Carpio-Morales and Antonio P. Solano; Rollo, pp.
other words, private respondent is bound by the whole 33-40.
stipulations in the bill of lading and must respect the same.
499
PETITION for review on certiorari of a decision of the
Court of Appeals.
VOL. 297, OCTOBER 8, 1998 499
The facts are stated in the opinion of the Court. Everett Steamship Corporation vs. Court of Appeals
Soo, Gutierrez, Leogardo & Lee for petitioner.
Atilano Huaben B. Lim for private respondent. Thousand Five Hundred (¥1,552,500.00) Yen, the
amount shown in an Invoice No. MTM-941, dated
MARTINEZ, J.:
November 14, 1991. However, petitioner offered to pay
only One Hundred Thousand (¥100,000.00) Yen, the
maximum amount stipulated under Clause 18 of the 2 Penned by Judge Oscar M. Payawal, Rollo, pp. 43-50.
covering bill of lading which limits the liability of
500
petitioner.
Private respondent rejected the offer and thereafter
instituted a suit for collection docketed as Civil Case 500 SUPREME COURT REPORTS ANNOTATED
No. C-15532, against petitioner before the Regional Everett Steamship Corporation vs. Court of Appeals
Trial Court of Caloocan City, Branch 126.
At the pre-trial conference, both parties manifested terioration of the goods is valid, if it is reasonable and just
that they have no testimonial evidence to offer and under the circumstances, and has been fairly and freely
agreed instead to file their respective memoranda. 2 agreed upon.’
On July 16, 1993, the trial court rendered judgment “It is required, however, that the contract must be
in favor of private respondent, ordering petitioner to reasonable and just under the circumstances and has been
pay: (a) ¥1,552,500.00; (b) ¥20,000.00 or its peso fairly and freely agreed upon. The requirements provided in
equivalent representing the actual value of the lost Art. 1750 of the New Civil Code must be complied with
cargo and the material and packaging cost; (c) 10% of before a common carrier can claim a limitation of its
the total amount as an award for and as contingent pecuniary liability in case of loss, destruction of deterioration
attorney’s fees; and (d) to pay the cost of the suit. The of the goods it has undertaken to transport.
trial court ruled: “In the case at bar, the Court is of the view that the
“Considering defendant’s categorical admission of loss and its requirements of said article have not been met. The fact that
failure to overcome the presumption of negligence and fault, those conditions are printed at the back of the bill of lading
the Court conclusively finds defendant liable to the plaintiff. in letters so small that they are hard to read would not
The next point of inquiry the Court wants to resolve is the warrant the presumption that the plaintiff or its supplier
extent of the liability of the defendant. As stated earlier, was aware of these conditions such that he had “fairly and
plaintiff contends that defendant should be held liable for the freely agreed” to these conditions. It can not be said that the
whole value for the loss of the goods in the amount of plaintiff had actually entered into a contract with the
¥1,552,500.00 because the terms appearing at the back of the defendant, embodying the conditions as printed at the back
bill of lading was so written in fine prints and that the same of the bill of lading that was issued by the defendant to
was not signed by plaintiff or shipper thus, they are not plaintiff.”
bound by the clause stated in paragraph 18 of the bill of
On appeal, the Court of Appeals deleted the award of
lading. On the other hand, defendant merely admitted that it
attorney’s fees but affirmed the trial court’s findings
lost the shipment but shall be liable only up to the amount of
with the additional observation that private
¥100,000.00.
respondent can not be bound by the terms and
“The Court subscribes to the provisions of Article 1750 of
conditions of the bill of lading because it was not privy
the New Civil Code—
to the contract of carriage. It said:
Art. 1750. ‘A contract fixing the sum that may be recovered by the
“As to the amount of liability, no evidence appears on record
owner or shipper for the loss, destruction or de-
to show that the appellee (Hernandez Trading Co.) consented
to the terms of the Bill of Lading. The shipper named in the
________________
Bill of Lading is Maruman Trading Co., Ltd. whom the

appellant (Everett Steamship Corp.) contracted with for the declares a greater value, is sanctioned by law,
transportation of the lost goods. particularly Articles 1749 and 1750 of the Civil Code
“Even assuming arguendo that the shipper Maruman which provide:
Trading Co., Ltd. accepted the terms of the bill of lading
when it delivered the cargo to the appellant, still it does not “ART. 1749. A stipulation that the common carrier’s
necessarily follow that appellee Hernandez Trading liabilityis limited to the value of the goods appearing in the
Company as consignee is bound thereby considering that the bill of lading,unless the shipper or owner declares a greater
latter was never privy to the shipping contract. value, is binding.”
x x x x x x x x x “ART. 1750. A contract fixing the sum that may be recovered
“Never having entered into a contract with the appellant, by the owner or shipper for the loss, destruction, or
appellee should therefore not be bound by any of the terms deterioration of the goods is valid, if it is reasonable and just
and conditions in the bill of lading. under the circumstances, and has been freely and fairly
agreed upon.”
501
Such limited-liability clause has also been consistently
3
upheld by this Court in a number of cases. Thus, in
VOL. 297, OCTOBER 8, 1998 501 Sea-Land
Everett Steamship Corporation vs. Court of Appeals
________________
“Hence, it follows that the appellee may recover the full value
3 St. Paul Fire and Marine Insurance Co. vs. Macondray & Co., 70
of the shipment lost, the basis of which is not the breach of
SCRA 122 [1976]; Sea Land Services, Inc. vs. Intermediate Appellate
contract as appellee was never a privy to the any contract
Court, 153 SCRA 552 [1987]; Pan American World Airways, Inc. vs.
with the appellant, but is based on Article 1735 of the New
Intermediate Appellate Court, 164 SCRA 268 [1988]; Phil. Airlines,
Civil Code, there being no evidence to prove satisfactorily
Inc. vs. Court of Appeals, 255 SCRA 63 [1996].
that the appellant has overcome the presumption of
negligence provided for in the law.” 502
Petitioner now comes to us arguing that the Court of

Appeals erred (1) in ruling that the consent of the 502 SUPREME COURT REPORTS ANNOTATED
consignee to the terms and conditions of the bill of Everett Steamship Corporation vs. Court of Appeals
lading is necessary to make such stipulations binding
upon it; (2) in holding that the carrier’s limited 4
Service, Inc. vs. Intermediate Appellate Court, we
package liability as stipulated in the bill of lading does
ruled:
not apply in the instant case; and (3) in allowing
private respondent to fully recover the full alleged “It seems clear that even if said section 4 (5) of the Carriage
value of its lost cargo. of Goods by Sea Act did not exist, the validity and binding
We shall first resolve the validity of the limited effect of the liability limitation clause in the bill of lading
liability clause in the bill of lading. here are nevertheless fully sustainable on the basis alone of
A stipulation in the bill of lading limiting the the cited Civil Code Provisions. That said stipulation is just
common carrier’s liability for loss or destruction of a and reasonable is arguable from the fact that it echoes Art.
cargo to a certain sum, unless the shipper or owner
1750 itself in providing a limit to liability only if a greater Everett Steamship Corporation vs. Court of Appeals
value is not declared for the shipment in the bill of lading. To
hold otherwise would amount to questioning the justness and The above stipulations are, to our mind, reasonable
fairness of the law itself, and this the private respondent and just. In the bill of lading, the carrier made it clear
does not pretend to do. But over and above that that its liability would only be up to One Hundred
consideration, the just and reasonable character of such Thousand (¥100,000.00) Yen. However, the shipper,
stipulation is implicit in it giving the shipper or owner the Maruman Trading, had the option to declare a higher
option of avoiding accrual of liability limitation by the simple valuation if the value of its cargo was higher than the
and surely far from onerous expedient of declaring the limited liability of the carrier. Considering that the
nature and value of the shipment in the bill of lading.” shipper did not declare a higher valuation, it had itself
to blame for not complying with the stipulations.
Pursuant to the afore-quoted provisions of law, it is
The trial court’s ratiocination that private
required that the stipulation limiting the common
respondent could not have ‘‘fairly and freely’’ agreed to
carrier’s liability for loss must be “reasonable and just
the limited liability clause in the bill of lading because
under the circumstances, and has been freely and
the said conditions were printed in small letters does
fairly agreed upon.”
not make the bill of lading invalid.
The bill of lading subject of the present controversy 5
We ruled in PAL, Inc. vs. Court of Appeals that the
specifically provides, among others:
“jurisprudence on the matter reveals the consistent
“18. All claims for which the carrier may be liable shall be holding of the court that contracts of adhesion are not
adjusted and settled on the basis of the shipper’s net invoice invalid per se and that it has on numerous occasions
cost plus freight and insurance premiums, if paid, and in no upheld the binding effect thereof.” Also, in Philippine
event shall the carrier be liable for any loss of possible profits American
6
General Insurance Co., Inc. vs. Sweet Lines,
or any consequential loss. Inc. this Court, speaking through the learned Justice
“The carrier shall not be liable for any loss of or any Florenz D. Regalado, held:
damage to or in any connection with, goods in an amount
“x x x Ong Yiu vs. Court of Appeals, et al., instructs us that
exceeding One Hundred Thousand Yen in Japanese Currency
‘contracts of adhesion wherein one party imposes a ready-
(¥100,000.00) or its equivalent in any other currency per
made form of contract on the other x x x are contracts not
package or customary freight unit (whichever is least) unless
entirely prohibited. The one who adheres to the contract is in
the value of the goods higher than this amount is declared in
reality free to reject it entirely; if he adheres he gives his
writing by the shipper before receipt of the goods by the
consent.’ In the present case, not even an allegation of
carrier and inserted in the Bill of Lading and extra freight is
ignorance of a party excuses non-compliance with the
paid as required.” (Emphasis supplied)
contractual stipulations since the responsibility for ensuring
full comprehension of the provisions of a contract of carriage
________________ devolves not on the carrier but on the owner, shipper, or
4 153 SCRA 552 [1987].
consignee as the case may be.” (Emphasis supplied)
503 It was further

7
explained in Ong Yiu vs. Court of
Appeals that stipulations in contracts of adhesion are
valid and binding.
VOL. 297, OCTOBER 8, 1998 503
________________ handicap, the courts must be vigilant for his

protection.”
5 255 SCRA 48, 58 [1996].
The shipper, Maruman Trading, we assume, has
6 212 SCRA 194, 212-213 [1992].
been extensively engaged in the trading business. It
7 91 SCRA 223 [1979]; Philippine Airlines, Inc. vs. Court of
can not be said to be ignorant of the business
Appeals, 255 SCRA 63 [1996].
transactions it entered into involving the shipment of
504 its goods to its customers. The shipper could not have
known, or should know the stipulations in the bill of
lading and there it should have declared a higher
504 SUPREME COURT REPORTS ANNOTATED valuation of the goods shipped. Moreover, Maruman
Everett Steamship Corporation vs. Court of Appeals Trading has not been heard to complain that it has
been deceived or
“While it may be true that petitioner had not signed the
plane ticket x x, he is nevertheless bound by the provisions ________________
thereof. ‘Such provisions have been held to be a part of the
8 Ayala Corporation vs. Ray Burton Development Corporation,
contract of carriage, and valid and binding upon the
G.R. No. 126699, August 7, 1998. See also Qua Chee Gan vs. Law
passenger regardless of the latter’s lack of knowledge or
Union and Rock Insurance Co., Ltd., 98 Phil. 95 [1955].
assent to the regulation.’ It is what is known as a contract of
‘adhesion,’ in regards which it has been said that contracts of 505
adhesion wherein one party imposes a ready-made form of
contract on the other, as the plane ticket in the case at bar,
are contracts not entirely prohibited. The one who adheres to VOL. 297, OCTOBER 8, 1998 505
the contract is in reality free to reject it entirely; if he Everett Steamship Corporation vs. Court of Appeals
adheres, he gives his consent. x x x, a contract limiting
liability upon an agreed valuation does not offend against the rushed into agreeing to ship the cargo in petitioner’s
policy of the law forbidding one from contracting against his vessel. In fact, it was not even impleaded in this case.
own negligence.” (Emphasis supplied) The next issue to be resolved is whether or not
private respondent, as consignee, who is not a
Greater vigilance, however, is required of the courts
signatory to the bill of lading is bound by the
when dealing with contracts of adhesion in that the
stipulations thereof.
said contracts must be carefully scrutinized “in order
Again, in Sea-Land Service, Inc. vs. Intermediate
to shield the unwary (or weaker party) from deceptive
8
Appellate Court (supra), we held that even if the
schemes contained in ready-made covenants,” such as
consignee was not a signatory to the contract of
the bill of lading in question. The stringent
carriage between the shipper and the carrier, the
requirement which the courts are enjoined to observe
consignee can still be bound by the contract. Speaking
is in recognition of Article 24 of the Civil Code which
through Mr. Chief Justice Narvasa, we ruled:
mandates that “(i)n all contractual, property or other
relations, when one of the parties is at a disadvantage “To begin with, there is no question of the right, in principle,
on account of his moral dependence, ignorance, of a consignee in a bill of lading to recover from the carrier or
indigence, mental weakness, tender age or other shipper for loss of, or damage to goods being transported
under said bill, although that document may have been—as When private respondent formally claimed
in practice it oftentimes is—drawn up only by the consignor reimbursement for the missing goods from petitioner
and the carrier without the intervention of the consignee. x x and subsequently filed a case against the latter based
x. on the very same bill of lading, it (private respondent)
‘x x x the right of a party in the same situation as accepted the provisions of the contract and thereby
respondent here, to recover for loss of a shipment consigned to made itself a party9 thereto, or at least has come to
him under a bill of lading drawn up only by and between the court to enforce it. Thus, private respondent cannot
shipper and the carrier, springs from either a relation of now reject or disregard the carrier’s limited liability
agency that may exist between him and the shipper or stipulation in the bill of lading. In other words, private
consignor, or his status as stranger in whose favor some respondent is bound by the whole stipulations in the
stipulation is made in said contract, and who becomes a party bill of lading and must respect the same.
thereto when he demands fulfillment of that stipulation, in Private respondent, however, insists that the carrier
this case the delivery of the goods or cargo shipped. In neither should be liable for the full value of the lost cargo in
capacity can he assert personally, in bar to any provision of the amount of ¥1,552,500.00, considering that the
the bill of lading, the alleged circumstance that fair and free shipper, Maruman Trading, had “fully declared the
agreement to such provision was vitiated by its being in such shipment x x x, the contents of each crate, 10 the
fine print as to be hardly readable. Parenthetically, it may be dimensions, weight and value of the contents,” as
observed that in one comparatively recent case (Phoenix shown in the commercial Invoice No. MTM-941.
Assurance Company vs. Macondray & Co., Inc., 64 SCRA 15) This claim was denied by petitioner, contending
where this Court found that a similar package limitation that it did not know of the contents, quantity and value
clause was “printed in the smallest type on the back of the bill of “the shipment which consisted of three pre-packed
of lading,” it nonetheless ruled that the consignee was bound crates described in Bill of Lading No. 11
NGO-53MN
thereby on the strength of authority holding that such merely as ‘3 CASES SPARE PARTS.’ ”
provisions on liability limitation are as much a part of a bill The bill of lading in question confirms petitioner’s
of lading as though physically in it and as though placed contention. To defeat the carrier’s limited liability, the
therein by agreement of the parties. aforecited Clause 18 of the bill of lading requires that
There can, therefore, be no doubt or equivocation about the shipper should have declared in writing a higher
the validity and enforceability of freely-agreed-upon valuation of its goods before receipt thereof by the
stipulations in a contract of carriage or bill of lading limiting carrier and insert the said declaration in the bill of
the liability of the carrier to an agreed valuation unless the lading, with the extra freight paid. These
shipper declares a higher value requirements in the bill of lading were never complied
with by the shipper, hence, the liability of the carrier
506
under the limited liability clause stands. The
commercial Invoice No. MTM-
Everett Steamship Corporation vs. Court of Appeals ________________
9 See Mendoza vs. Philippine Air Lines, Inc., 90 Phil. 836, 845-
and inserts it into said contract or bill. This proposition,
846.
moreover, rests upon an almost uniform weight of authority.” 10 Rollo, p. 116.
(Italics supplied)
11 Rollo, p. 13. A contract of adhesion is one in which one of the

contracting parties imposes a ready-made form of
507
contract which the other party may accept or reject,
but cannot modify. (Polotan, Sr. vs. Court of Appeals,
VOL. 297, OCTOBER 8, 1998 507 296 SCRA 247 [1998])
Everett Steamship Corporation vs. Court of Appeals ——o0o——
941 does not in itself sufficiently and convincingly 508

show that petitioner has knowledge of the value of the
cargo as contended by private respondent. No other
evidence was proffered by private respondent to
support its contention. Thus, we are convinced that
petitioner should be liable for the full value of the lost
cargo.
In fine, the liability of petitioner for the loss of the © Copyright 2021 Central Book Supply, Inc. All rights reserved.
cargo is limited to One Hundred Thousand
(¥100,000.00) Yen, pursuant to Clause 18 of the bill of
lading.
WHEREFORE, the decision of the Court of Appeals
dated June 14, 1995 in C.A.-G.R. CV No. 42803 is
hereby REVERSED and SET ASIDE.
SO ORDERED.
Regalado (Actg. C.J.), Melo, Puno and Mendoza,

JJ., concur.
Judgment reversed and set aside.
Notes.—Parties to sales contracts and/or bills of

lading are bound by arbitration clauses thereat.
(Puromines, Inc. vs. Court of Appeals, 220 SCRA 281
[1993])
The validity of provisions limiting the liability of
carriers contained in bills of lading have been
consistently upheld, though the Supreme Court has
likewise cautioned against blind reliance on adhesion
contracts where the facts and circumstances warrant
that they should be disregarded. (Philippine Airlines,
Inc. vs. Court of Appeals, 255 SCRA 48 [1996])

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3/6/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 297 3/6/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 297

In the instant case, the foreign element consisted in the fact

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Same; Same; Forum Non Conveniens; Forum Shopping;

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The facts are stated in the opinion of the Court. 102.

SAUDIA Legal Officer Sirah Akkad and base manager

case is on appeal. Meanwhile, to pay for her upkeep, Manifestation

10 Decision, pp. 2-4; see rollo, pp. 89-91.

478 SUPREME COURT REPORTS ANNOTATED

Philippines does not have any substantial interest in Writ of Preliminary

480 SUPREME COURT REPORTS ANNOTATED ________________

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27 Supra, note 7. III.

“I. 482 SUPREME COURT REPORTS ANNOTATED

LAW SHOULD GOVERN. “2. Defendant SAUDI ARABIAN AIRLINES or

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contain a “foreign element.” The presence of a foreign 44 Supra, note 17.

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“We observe that the motion to dismiss filed on April 14,

1962, aside from disputing the lower court’s jurisdiction over

defendant’s person, prayed for dismissal of the complaint on 490

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VOL. 297, OCTOBER 8, 1998 493 ________________

the alleged tort.

construed as prejudging the results of the case in any

Common Carriers; Contracts; Bills of Lading; A ________________

unless the shipper or owner declares a greater value, is

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498 SUPREME COURT REPORTS ANNOTATED

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Petitioner now comes to us arguing that the Court of

503 It was further

________________ handicap, the courts must be vigilant for his

11 Rollo, p. 13. A contract of adhesion is one in which one of the

941 does not in itself sufficiently and convincingly 508

Regalado (Actg. C.J.), Melo, Puno and Mendoza,

Judgment reversed and set aside.

Notes.—Parties to sales contracts and/or bills of

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