Outline and Discussion by Atty. Javier: Book by Coquia & Pangalangan

Notes by cobentry & legally_twirly
Conflict of Laws
Book by Coquia & Pangalangan
Outline and Discussion by Atty. Javier
I. INTRODUCTION
A. Nature, Definition and Significance of Conflict of Laws
The principles of conflicts of laws incorporated in municipal laws are based not on the extraterritorial validity of
the law of a foreign state but on comity of nations.
Conflicts of Law
-when there is an involvement of a foreign element in an event dispute, and transaction
Ex: buying internationally like Amazon; mixed-marriages
-most important source of conflicts of law: jurisprudence (since there are no codified laws)
Hilton v. Guyot (1895): definition of comity; foreign judgment only a prima facie evidence due to want of
reciprocity of the binding effect of the judgments of the 2 countries over the other
-NYC residents sued in France for debts
-“Comity” – neither a matter of absolute obligation nor of mere courtesy and good will upon the other; it is the
recognition which one nation allows within its territory to the legislative, executive or judicial acts of another
nation, having due regard both to international duty and convenience, and to the rights of tis own citizens or of
other persons who are under the protection of its laws
-dissenting opinion: application of doctrine of res judicata to domestic judgments should be applied to foreign
judgments as well
-there was no reciprocity between the 2 countries so the French decision was taken only as a prima facie
evidence before the US court (no comity; there was a showing of fraud)
*It does not mean however that comity may not be exercised in other cases even if there is no reciprocity
between the countries. Locally, the SC may recognize foreign judgments even in the absence of reciprocity.
Private International Law – that part of municipal law which governs cases involving a foreign element.
-Minor: those universal principles of right and justice which govern the courts of one state having before them
cases involving the operation and effect of laws of another state or country
-Chesire: that part of law which comes into play when the issue before the court affects some fact or event, or
transaction that is so closely connected with a foreign system of law as to necessitate recourse to that system
-2nd Edition of American Jurisprudence: that part of the law of each state or nation which determines whether, in
dealing with a legal situation, the law of some other state or nation will be recognized, given effect, or applied
Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 1

-Hilton v. Guyot, US SC: the law concerning the rights of persons within the territory and dominion of one
nation, by reason of acts, private or public, done within the dominion of another nation
Object and Function of Conflict of Laws

-to provide rational and valid rules or guidelines in deciding cases where either the parties, events or
transactions are linked to more than 1 jurisdiction
-to promote stability and uniformity of solutions provided by the laws and courts of each state called upon to
decide conflicts cases
B. History of Conflict of Laws

B.i. Origin
Roman Law Origin
“ius gentium”
-law of nations and more specifically, the law that governs the relations of States
Bartolus (1314-1357)
-acknowledged as the “Father of Conflict of Laws”; formulated the “Theory of Statutes”
B.ii. Modern Views/Developments

B.iii. Conflict of Laws in the Philippines
C. Conflicts of Laws vs. Public International Law

Public International Law vs. Private International Law
Public International Law Private International Law
Subject Matter Principally governs states in their Principally governs individuals in
relationships amongst themselves their private transactions which
XPN: cases involving violations of involve a foreign element, e.g.
human rights cutting across more than 1
municipal law jurisdiction
Sources of Law Article 38 of the Statute of the Derived from the internal law of
International Court of Justice: each state
1. Custom XPN: conflict of laws questions
2. Treaty which is governed by a treat, e.g.
3. General principles of law Hague Convention on the Conflict
recognized by civilized of Laws relating to the Form of
nations Testamentary Dispositions
4. Juridical decisions and
teaching of highly qualified In summary:
publicists 1. National conflict rules

which refer to the internal
law of each country
2. International conflict rules
which constitute
international conventions,
foreign case law and
commentaries interpreting
these conventions
As to persons involved Governs only states and Governs individuals or
internationally recognized corporations
organizations
As to transactions Involves state-to-state or Relates to private transactions
government-to-government between individuals
matters
As to remedies A state may resort to: All remedies are provided by the
-diplomatic protest municipal law of the state, such as
-peaceful means of settlement of resort to courts or administrative
international disputes, such as tribunals
diplomatic negotiations,
arbitration or conciliation, or
adjudication by filing a case before
international tribunals
-use force short of war or
eventually go to war
Difference of Public International Law and Private International Law

-actors: public international law – states and internationally recognized organizations
-sources: private international law – (1) Codes and Statutes; (2) Treaties and International Conventions; (3)
Treatises, Commentaries and Studies of Learned Societies; and (4) Judicial Decisions
D. Sources of Conflict of Laws Rules

1. Codes and Statutes
2. Treaties and International Conventions
3. Treatises, Commentaries and Studies of Learned Societies
4. Judicial Decisions

II. ADDRESSING CONFLICTS OF LAW PROBLEMS

A. Elements for the Application of Conflict of Laws
Saudi Arabian Airlines v. Court of Appeals, G.R. No. 122191, October 8, 1998
FACTS: SAUDIA hired respondent Milagros Morada as a Flight Attendant for its airlines based in Jeddah, Saudi
Arabia. While on a lay-over in Jakarta, Indonesia, Morada went to a disco dance with fellow crew members
Thamer AlGazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they
returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in the
room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape Morada. Fortunately, a room
boy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came
and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.
Just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her
to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought
her to the police station where the police put pressure on her to make a statement dropping the case against
Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch
the afternoon flight out of Jeddah. 1.5 years after in Riyadh, Saudi Arabia, a few minutes before the departure
of her flight to Manila, Morada was not allowed to board the plane and instead ordered to take a later flight to
Jeddah to see Mr. Miniewy. a certain Khalid of the SAUDIA office brought her to a Saudi court where she was
asked to sign a document written in Arabic. They told her that this was necessary to close the case against
Thamer and Allah. As it turned out, she signed a notice to her to appear before the court. Morada returned to
Manila.
A Saudi judge interrogated Morada for an hour through an interpreter about the Jakarta incident,
before letting her go. A SAUDIA legal officer again escorted her to the same court where the judge, to her
astonishment and shock, rendered a decision, translated to her in English, sentencing her to 5 months
imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with
Thamer and Allah, for what happened in Jakarta. The court found her guilty of (1) adultery; (2) going to a
disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in
contravention of Islamic tradition.
Despite seeking help, her employer SAUDIA 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, she worked on the
domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights. Because she
was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi
Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her
being informed of the cause.

Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi (“Al-Balawi”), its country
manager. SAUDIA filed an Omnibus Motion To Dismiss which raised the following grounds, to wit: (1) that the
Complaint states no cause of action against SAUDIA; (2) that defendant Al-Balawi is not a real party-in-interest;
(3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished;
and (4) that the trial court has no jurisdiction to try the case. Later, Morada filed an Amended Complaint and
dropped Al-Bawi as party defendant.
ISSUE: Whether or not it is a conflicts of law case.
RULING: YES. There is no dispute that the interplay of events occurred in 2 states: the Philippines and Saudi
Arabia.
Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with
petitioner that the problem herein could present a “conflicts” case. A factual situation that cuts across
territorial lines and is affected by the diverse laws of 2 or more states is said to contain a “foreign element.”
The presence of a foreign element is inevitable since social and economic affairs of individuals and associations
are rarely confined to the geographic limits of their birth or conception.
The forms in which this foreign element may appear are many. The foreign element may simply consist in the
fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between
nationals of one State involves properties situated in another State. In other cases, the foreign element may
assume a complex form. In the instant case, the foreign element consisted in the fact that respondent Morada
is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of
the employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her
many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia,
and vice versa, that caused a “conflicts” situation to arise.
Plaintiff may not, by choice of an inconvenient forum, ‘vex,’ ‘harass,’ or ‘oppress’ the defendant, e.g. by
inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the
defendant, the plaintiff’s choice of forum should rarely be disturbed. Weighing the relative claims of the parties,
the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it
would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of
Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental
unfairness to her. Forcing a party to seek remedial action in a place where she no longer maintains substantial
connections would cause a fundamental unfairness to her.

Undeniably, petitioner SAUDIA has effectively submitted to the trial court’s jurisdiction by praying for the
dismissal of the Amended Complaint on grounds other than lack of jurisdiction. The records show that
petitioner SAUDIA has filed several motions praying for the dismissal of Morada’s Amended Complaint. SAUDIA
also filed an Answer In Ex Abundante Cautelam.What is very patent and explicit from the motions filed, is that
SAUDIA prayed for other reliefs under the premises.
As to the choice of applicable law, we note that choice-of-law problems seek to answer two important
questions: (1) What legal system should control a given situation where some of the significant facts occurred
in two or more states; and (2) to what extent should the chosen legal system regulate the situation.
Several theories have been propounded in order to identify the legal system that should ultimately 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 then faced with the problem of deciding which of these
two important values should be stressed. Before a choice can be made, it is necessary for us to determine under
what category a certain set of facts or rules fall. This process is known as “characterization,” or the “doctrine of
qualification.” It is the “process of deciding whether or not the facts relate to the kind of question specified in
a conflicts rule.” The purpose of “characterization” is to enable the forum to select the proper law.
Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An
essential element of conflict rules is the indication of a “test” or “connecting factor” or “point of contact.”
Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a
connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing.
Note that one or more circumstances maybe present to serve as the possible test for the determination of the
applicable law. These “test factors” or “points of contact” or “connecting factors” could be any of the following:
“(1) the nationality of a person, his domicile, his residence, his place of sojourn, or his origin ; (2) the seat of a
legal or juridical person, such as a corporation; (3) the situs of a thing, that is, the place where a thing is, or is
deemed to be situated. In particular, the lex situs is decisive when real rights are involved; (4) the place where
an act has been done, the locus actus, such as the place where a contract has been made, a marriage
celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts ;
(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties,
or the place where a power of attorney is to be exercised; (6) the intention of the contracting parties as to the

law that should govern their agreement, the lex loci intentionis; (7) the place where judicial or administrative
proceedings are instituted or done. The lex fori—the law of the forum—is particularly important because, as we
have seen earlier, matters of ‘procedure’ not going to the substance of the claim involved are governed by it;
and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from
application in a given case for the reason that it falls under one of the exceptions to the applications of foreign
law; and (8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and
of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.”
Considering that the complaint in the court a quo is one involving torts, the “connecting factor” or “point of
contact” could be the place or places where the tortious conduct or lex loci actus occurred. And applying the
torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where
the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed
that petitioner would, in the exercise of its rights and in the performance of its duties, “act with justice, give her
her due and observe honesty and good faith.” Instead, petitioner failed to protect her, she claimed. That certain
acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the totality of the alleged injury to the person,
reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below
(herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged
tort.
We find here an occasion to apply the “State of the most significant relationship” rule, which in our view should
be appropriate to apply now, given the factual context of this case. In applying said principle to determine the
State which has the most significant relationship, the following contacts are to be taken into account and
evaluated according to their relative importance with respect to the particular issue: (a) the place where the
injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence,
nationality, place of incorporation and place of business of the parties; and (d) the place where the
relationship, if any, between the parties is centered.
There is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no
question that private respondent is a resident Filipina national, working with petitioner, a resident foreign
corporation engaged here in the business of international air carriage. Thus, the “relationship” between the
parties was centered here, although it should be stressed that this suit is not based on mere labor law violations.

From the record, the claim that the Philippines has the most significant contact with the matter in this dispute,
raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been
properly established. Prescinding from this premise that the Philippines is the situs of the tort complained of
and the place “having the most interest in the problem,” we find, by way of recapitulation, that the Philippine
law on tort liability should have paramount application to and control in the resolution of the legal issues
arising out of this case.
This is a conflicts of law case. Morada is not precluded from filing a case in Saudi Arabia, but considering she
no longer has ties in said country, it was proper that the case was filed in the Philippines.
Laurel vs. Garcia, 187 SCRA 797 (1990)

FACTS: Roponggi property
ISSUE: Whether or not Philippine law applies. – YES
RULING: We see no reason why a conflict of law rule should apply when no conflict of law situation exists.
A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable,
such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity
and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined; and (2) A
foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same
matters. Hence, the need to determine which law should apply. In the instant case, none of the above
elements exists. The issues are not concerned with validity of ownership or title. There is no question that the
property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of
property belonging to the State and the validity of the procedures adopted to effect its sale. This is governed
by Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is
misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor
the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the
Secretary merely explains that it is the foreign law which should determine who can acquire the properties so
that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities
wholly owned by Filipinos is inapplicable.

B. Judicial Resolution of Conflict Cases

Hasegawa v. Kitamura, G.R. No. 149177, November 23, 2007
FACTS: Nippon, a Japanese consultancy firm entered into an Independent Contractor Agreement (ICA) in Japan
with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. Nippon then
assigned respondent to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the
Philippines. Later, petitioner Kazuhiro Hasegawa, Nippon’s general manager for its International Division,
informed respondent that the company had no more intention of automatically renewing his ICA. His services
would be engaged by the company only up to the substantial completion of the STAR Project, just in time for the
ICA’s expiry. Threatened with impending unemployment, respondent, through his lawyer, requested a
negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted that
respondent’s contract was for a fixed term. As he was not able to generate a positive response from the
petitioners, respondent consequently initiated an action for specific performance and damages with the RTC.
Petitioners contended that the ICA had been perfected in Japan and executed by and between Japanese
nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pre-
termination of respondent’s ICA could only be heard and ventilated in the proper courts of Japan following the
principles of lex loci celebrationis and lex contractus. The RTC, denied the motion to dismiss. Petitioners on
certiorari invoked the defense of forum non conveniens. On petition for review before this Court, petitioners
dropped their other arguments, maintained the forum non conveniens defense, and introduced their new
argument that the applicable principle is the [state of the] most significant relationship rule.
ISSUE: Whether or not the subject matter jurisdiction of Philippine courts in civil cases for specific performance
and damages involving contracts executed outside the country by foreign nationals may be assailed on the
principles of lex loci celebrationis, lex contractus, the “state of the most significant relationship rule,” or forum
non conveniens?
RULING: NO. Philippine court has jurisdiction over
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are
involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
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 power to exercise
jurisdiction does not automatically give a state constitutional authority to apply forum law. To succeed in its
motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim, the movant

must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the
power to adjudicate the claims.
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly
vested by law with jurisdiction to hear the subject controversy for, indeed, the case for specific performance
and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City.
Lex loci celebrationis relates to the “law of the place of the ceremony” or the law of the place where a contract
is made. The doctrine of lex contractus or lex loci contractus means the “law of the place where a contract is
executed or to be performed.”
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by
respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and
appellate courts correctly denied the petitioners’ motion to dismiss.
This case is not yet in the second phase because upon the RTC’s taking cognizance of the case, Hasegawa
immediately filed a motion to dismiss, which was denied. He filed a motion for reconsideration, which was also
denied. Then he bypassed the proper procedure by immediately filing a petition for certiorari. The question of
which law should be applied should have been settled in the trial court had Hasegawa not improperly
appealed the interlocutory order denying his MFR.
III. JURISDICTION
A. Basis of Exercise of Judicial Jurisdiction
The bases on which courts may exercise judicial jurisdiction fall into 3 groups: jurisdiction over the person;
jurisdiction over the property; and jurisdiction over the subject matter.
*In the absence of a jurisdictional basis, a court should not try the case. In the event that it does, its judgment is
invalid.
Pennoyer v. Neff
FACTS: This was an action to recover possession of a tract of land to which both parties asserted title. Pennoyer
claimed to have acquired the premises under a sheriff's deed made upon a sale of the property resulting from a
judgment recovered against Neff by a certain J. H. Mitchell in one of the circuit courts of the state of Oregon. At
the time, Neff was not a resident of Oregon and a default judgment was obtained by Mitchell after Neff failed to
come to court despite service of the process by publication. The case turned upon the validity of that judgment.

ISSUE: Can a state court exercise personal jurisdiction against a non-resident who was not personally served
with process within the state but by publication in a newspaper?
RULING: No.
Since the adoption of U.S. Const. amend. XIV, the validity of judgments against persons who have not been
personally summoned or had notice of the proceeding may be directly questioned, and their enforcement in the
State resisted, on the ground that proceedings in a court of justice to determine the personal rights and
obligations of parties over whom that court has no jurisdiction do not constitute due process of law.
The judgment from the underlying action was invalid since the plaintiff was a non-resident of the state in which
the action was brought and was not personally served. The validity of judgments against persons who have not
been personally summoned or had notice of the proceeding may be directly questioned, and their enforcement
in the State resisted, on the ground that proceedings in a court of justice to determine the personal rights and
obligations of parties over whom that court has no jurisdiction do not constitute due process of law.
International Shoe v. Washington

FACTS: International Shoe Co. was incorporated in Delaware and had its principal place of business in St. Louis,
Missouri. While the corporation did not have an office in Washington (“State”), it employed eleven to thirteen
salesmen, who were residents of the State and who exhibited product samples to prospective buyers from the
State. The corporation compensated the salesmen in the form of commissions for any sales from customers they
solicited. Due to these business activities, the State issued a Notice of Assessment holding the corporation liable
for contributions to the State’s unemployment compensation fund by virtue of the Washington Unemployment
Compensation Act. Notice was served via mail and personal service to the Washington salesmen. The
corporation refused to pay, arguing that they were not conducting business in Washington and thus the State
had no jurisdiction over it. They further argued that the service of notice was insufficient to constitute due
process. The trial court ruled in favor of the State and the Supreme Court of Washington ruled that there was
sufficient business activity to hold the corporation liable for taxes to the State. The corporation appealed the
decision to the Supreme Court of the United States.
ISSUE: Can a non-resident corporation's activities in a state make it subject to the jurisdiction of that state?
RULING: Yes
- Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present
within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the
suit does not offend "traditional notions of fair play and substantial justice." The activities carried on in the state
of Washington on behalf of the Corporation were neither irregular nor casual. They were systematic and
continuous throughout the years in question. They resulted in a large volume of interstate business, in the

course of which appellant received the benefits and protection of the laws of the state, including the right to
resort to the courts for the enforcement of its rights. The obligation which is here sued upon arose out of those
very activities. It is evident that the operations of the salesmen in Washington established sufficient contacts or
ties with the state to make it reasonable and just, according to traditional conception of fair play and substantial
justice, to permit the state to enforce the obligations which appellant has incurred there. Hence, we cannot say
that the maintenance of the present suit in the State of Washington involves an unreasonable or undue
procedure. It is enough that appellant established such contacts with the state that the particular form of
substituted service adopted there gives reasonable assurance that the notice will be actual.
Jurisdiction was acquired over petitioner. They were given reasonable assurance of notice of the action
through substituted service with the agents/salesmen in Washington – “notice to them is notice to you”
1. Jurisdiction over the Person

Jurisdiction over the person is acquired by the voluntary appearance of a part and his submission to authority.
-the court acquires the jurisdiction over the person of the plaintiff the moment he invokes the aid of the court
by filing a suit.
-law authorizes jurisdiction over the person of the defendant when he enters his appearance or is served with
the legal process within the state
--defendant or lawyer appears in court, giving consent to the forum’s exercise of jurisdiction over him (XPN: if he
appears for the purpose of protesting the jurisdiction of the court)
--non-resident plaintiff who files a suit over subsequent proceedings arising out of the original cause of action,
including the counterclaim filed by the defendant
--personal or substituted service of summons under the ROC
2020 Rules of Civil Procedure
RULE 14 – Summons
Section 5. Service in person on defendant. – Whenever practicable, the summons shall be served by
handing a copy thereof to the defendant in person and informing the defendant that he or she is being
served, or, if he or she refuses to receive and sign for it, by leaving the summons within the view and in
the presence of the defendant.
Section 6. Substituted service. – If, for justifiable causes, the defendant cannot be served personally after
at least 3 attempts on 2 different dates, service may be effected:
(a) By leaving copies of the summons at the defendant’s residence to a person at least 18 years of age
and of sufficient discretion residing therein;
(b) By leaving copies of the summons at [the] defendant’s office or regular place of business with some
competent person in charge thereof. A competent person includes, but is not limited to, one who
customarily receives correspondences for the defendant;
(c) By leaving copies of the summons, if refused entry upon making his or her authority and purpose
known, with any of the officers of the homeowners’ association or condominium corporation, or its chief
security officer in charge of the community or the building where the defendant may be found; and

(d) By sending an electronic mail to the defendant’s electronic mail address, if allowed by the court.
Mullane v. Hannover Band & Trust Co., 399 US 306 (1950)

FACTS: Appellee bank and a trust company established a common trust fund that complied with N.Y. Banking
Law Section 100-c. Appellee petitioned for a settlement of its first account as a common trustee. Upon the filing
of the petition, appellant was appointed the special guardian. The only notice given to the beneficiaries was by a
publication in a local newspaper that was in strict compliance with Section 100-c. Appellant objected,
contending that the notice and statutory provisions for notice to beneficiaries were inadequate to afford due
process. The New York Court of Appeals overruled the objection.
ISSUE: Was the notice required under Section 100-c adequate notice?
RULING: NO.
The Court reversed, holding that the notice requirement under Section 100-c was inadequate because it did not
provide for a means to contact those who could easily be informed by other means. The notice had to
reasonably convey the required information and afford a reasonable time for those interested to make their
appearance.
The means employed must be such as one desirous of actually informing the absentee might reasonably adopt
to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be
defended on the ground that it is in itself reasonably certain to inform those affected.
Where the names and post office addresses of those affected are at hand, the reasons disappear for resort to
means less likely than the mails to apprise them of its pendency. We find no tenable ground for dispensing with
a serious effort to inform them (the beneficiaries) personally of the accounting, at least by ordinary mail to the
record addresses.
Shaffer v. Heitner, 433 US 186 (977)

FACTS: A nonresident of Delaware, who owned stock in a corporation which was incorporated in Delaware but
which maintained its principal office in Arizona, brought a shareholder's derivative action in the Court of
Chancery for New Castle County, Delaware, naming as defendants the corporation, a wholly owned subsidiary of
the corporation, and 28 present or former officers of one or both corporations. Pursuant to the plaintiff's motion
under 10 Del C 366, the court sequestered certain property, primarily stock, of a number of the nonresident
individual defendants. The defendants contended, inter alia, that they did not have sufficient contacts with
Delaware to sustain the jurisdiction of that state's courts, but the Court of Chancery ruled that the situs of the

stock, which was by Delaware statute considered to be within that state, provided a sufficient basis for the
exercise of quasi in rem jurisdiction by a Delaware Court. On appeal, the Delaware Supreme Court affirmed,
holding that the minimum contacts rule was not applicable since the jurisdiction in the instant case was quasi in
rem and founded on the presence of stock in the state.
ISSUE: Whether or not a nonresident must have minimum contacts with the forum state in order for the state to
exercise in rem jurisdiction.
RULING: YES.
Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to
the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. That
clause does not contemplate that a state may make binding a judgment in personam against an individual or
corporate defendant with which the state has no contacts, ties, or relations.
The Court held that (1) all assertions of state jurisdiction, including in rem and quasi in rem actions, must be
evaluated according to the minimum contacts standard, and (2) neither the presence of the nonresident
defendants' stock in Delaware nor the fact that the nonresident defendants were officers of a Delaware
chartered corporation, provided the requisite contacts to establish the jurisdiction of Delaware courts.
In support of its ruling, the court held that the minimum contacts test of International Shoe should have been
applied to assertions of in rem as well as in personam jurisdiction. The court noted that appellant's seized
property did not have sufficient contacts with the state to support Delaware's assertion of jurisdiction over
appellants. The court further held that appellants had neither purposefully availed themselves of the privilege of
conducting activities within the state, nor had any reason to expect to be brought before a Delaware court.
-Doesn’t mean that the corporation was incorporated at Delaware, does not mean that the case can be filed
in Delaware. None of the actions assailed happened in Delaware.
Macasaet v. Co, G.R. No. 156759, June 5, 2013

FACTS: Co, a retired police officer, sued petitioners Abante Tonite before the RTC of Manila claiming damages
because of an allegedly libelous article published in Abante Tonite. In the morning, the RTC Sheriff Raul Medina
proceeded to the business address of Abante Tonite at Monica Publishing Corporation, 301-305 3rd Floor, BF
Condominium Building, Solana Street corner A. Soriano Street, Intramuros, Manila, to effect the personal service
of the summons on the petitioners but they were then out of the office. He returned in the afternoon but
petitioners were still out of the office as was informed by Lu-Ann Quijano and Rene Esleta. He decided to resort
to substituted service of the summons and in his sheriff's return had explained the reasons.

Later, petitioners moved for the dismissal of the complaint, alleging lack of jurisdiction over their
persons because of the invalid and ineffectual substituted service of summons in accordance with Section 6 and
Section 7, Rule 14 of the Rules of Court. They further moved to drop Abante Tonite as a defendant by virtue of
its being neither a natural nor a juridical person that could be impleaded as a party in a civil action. The RTC
denied the motion and directed them to file their answers to the complaint within the remaining period.
Substituted service of summonses was validly applied considering that summonses cannot be served within a
reasonable time to the persons of all the defendants. Quijano, Secretary of the President and the wife of the
defendant, and Esleta, Editorial Assistant of the defendant, were considered competent persons with sufficient
discretion to realize the importance of the legal papers served upon them and to relay it to petitioners (Sec. 7,
Rule 14). The RTC denied petitioners' MR because substituted service of summons by sheriff considers the
nature of the work of the defendants that they are always on field. Regarding the impleading of Abante Tonite
as defendant, the RTC held, Abante Tonite possesses attributes of a juridical person thus the doctrine of
corporation by estoppel may appropriately apply. Petitioners brought a petition for certiorari, prohibition,
mandamus in the CA which dismissed it, upholding the trial court's finding.
ISSUE: Whether or not the summons was duly served to acquire jurisdiction over respondents.
RULING: YES. We are strict in insisting on personal service on the defendant but we do not cling to such
strictness when circumstances already justify substituted service instead. It is the spirit of the procedural rules,
not their letter that governs.
The plaintiff in a civil action voluntarily submits himself to the jurisdiction of the court by the act of filing the
initiatory pleading. As to the defendant, the court acquires jurisdiction over his person either by the proper
service of the summons, or by a voluntary appearance in the action.
That summons received by their substitutes is sufficient compliance to inform the parties unless substantially
show the otherwise. That substituted service of summons can be resorted to with sufficient reasons as when
efforts to effect personal service occurred to be futile or impossible within reasonable time.
-Personal service must first be tried before substituted service may be availed
of.
Spouses Belen v. Chavez, G.R. No. 175334, March 26, 2008

FACTS: The petition originated from the action for the enforcement of a foreign judgment against petitioners,
spouses Belen, filed by private respondent spouses Pacleb before the RTC of Rosario, Batangas. The complaint
alleged that respondents secured a judgment by default rendered by a certain Judge John W. Green of the
Superior Court of the State of California, which ordered petitioners to pay private respondents the amount of
$56,204.69, representing loan repayment and share in the profits plus interest and costs of suit. The answer by
the petitioners claimed that petitioners’ liability had been extinguished via a release of abstract judgment issued
in the same collection case since the petitioners were really residents of the USA.
The RTC rendered a Decision in favor of the plaintiffs. Private respondents sought the execution of the
RTC decision to levy real properties belonging to defendants. Petitioners filed a Rule 65 petition before the Court
of Appeals, imputing, among others, the RTC grave abuse of discretion tantamount to lack or excess of
jurisdiction (1) in rendering its decision although it had not yet acquired jurisdiction over their persons in view of
the improper service of summons; and (2) in considering the decision final and executory although a copy
thereof had not been properly served upon petitioners
ISSUES:
1. Whether or not the RTC acquired jurisdiction over the persons of petitioners through either the proper service
of summons or the appearance of the late Atty. Alcantara on behalf of petitioners; and
2. Whether or not there was a valid service of the copy of the RTC decision on petitioners.
RULING:
(1) YES, the RTC acquired jurisdiction over the persons of the defendants through appearance of Atty. Alcantara
on behalf of petitioners. In an action strictly in personam, personal service on the defendant is the preferred
mode of service, that is, by handing a copy of the summons to the defendant in person. If the defendant, for
justifiable reasons, cannot be served with the summons within a reasonable period, then substituted service can
be resorted to. While substituted service of summons is permitted, it is extraordinary in character and in
derogation of the usual method of service. Records of the case reveal that herein petitioners have been
permanent residents of California, U.S.A. since the filing of the action up to the present. From the time Atty.
Alcantara filed an answer purportedly at the instance of petitioners’ relatives, it has been consistently
maintained that petitioners were not physically present in the Philippines. That being the case, the service of
summons on petitioners’ purported address in San Gregorio, Alaminos, Laguna was defective and did not serve
to vest in court jurisdiction over their persons. Nevertheless, the Court of Appeals correctly concluded that the
appearance of Atty. Alcantara and his filing of numerous pleadings were sufficient to vest jurisdiction over the
persons of petitioners. Through certain acts, Atty. Alcantara was impliedly authorized by petitioners to appear
on their behalf. For instance, in support of the motion to dismiss the complaint, Atty. Alcantara attached thereto
a duly authenticated copy of the judgment of dismissal and a photocopy of the identification page of petitioner
Domingo Belen’s U.S. passport. These documents could have been supplied only by petitioners, indicating that
they have consented to the appearance of Atty. Alcantara on their behalf. In sum, petitioners voluntarily
submitted themselves through Atty. Alcantara to the jurisdiction of the RTC.

(2) NO, there was no valid service of the copy of the decision to the petitioners. As a general rule, when a party
is represented by counsel of record, service of orders and notices must be made upon said attorney and notice
to the client and to any other lawyer, not the counsel of record, is not notice in law. The exception to this rule is
when service upon the party himself has been ordered by the court. In cases where service was made on the
counsel of record at his given address, notice sent to petitioner itself is not even necessary. Undoubtedly, upon
the death of Atty. Alcantara, the lawyer-client relationship between him and petitioners has ceased, thus, the
service of the RTC decision on him is ineffective and did not bind petitioners. Since the filing of the complaint,
petitioners could not be physically found in the country because they had already become permanent residents
of California, U.S.A. document-embed
Gemperle v. Schenker, 19 SCRA 45 (1967)

FACTS: This case was the result of William Gemperle’s retaliatory act when respondent spouses Paul and Helen
Schenker filed a case against him for the enforcement of Schenker's allegedly initial subscription to the shares of
stock of the Philippines-Swiss Trading Co., Inc. and the exercise of his alleged pre-emptive rights to the then
unissued original capital stock of said corporation and the increase thereof, as well as for an accounting and
damages. Petitioner alleged that the said complaint tainted his name as a businessman. He then filed a
complaint for damages and prays for the retraction of statements made by Helen Schenker.
Summons was personally served to Helen Schenker but not to Paul Schenker. Helen then filed an answer
with a counterclaim, but Paul Schenker filed a motion to dismiss arguing that the court never acquired
jurisdiction over his person since admittedly, he is a Swiss citizen, residing in Zurich, Switzerland, and has not
been actually served with summons in the Philippines.
ISSUE: Whether or not the court acquired jurisdiction over the person of Paul Schenker.
RULING: Yes, although as a rule, when the defendant is a non-resident and in an accion in personam, jurisdiction
over the person of the defendant can be acquired only through voluntary appearance or personal service of
summons. But this case is an exception to the said rule. The Supreme ratiocinated:
“We hold that the lower court had acquired jurisdiction over said defendant, through service of the summons
addressed to him upon Mrs. Schenker, it appearing from said answer that she is the representative and
attorney-in-fact of her husband aforementioned civil case No. Q-2796, which apparently was filed at her behest,
in her aforementioned representative capacity. In other words, Mrs. Schenker had authority to sue, and had
actually sued on behalf of her husband, so that she was, also, empowered to represent him in suits filed against
him, particularly in a case, like the of the one at bar, which is consequence of the action brought by her on his
behalf.”

Briefly, in an accion in personam where the defendant is a non-resident, substituted service of summons does
not apply. However, by way of exception, substituted service of summons may be effected, if the following
requisites are present:
1. The summons is served to the spouse of the defendant
2. The spouse must be residing in the Philippines
3. The spouse is appointed as attorney-in-fact of the spouse defendant in a previous case involving the
non-resident spouse.
~read together Rule 14, Sec. 17, ROC
-service upon the wife in this case was allowed because the 2nd case arose out of the 1st case where the wife
was given authority to file the 1st case
Regner vs. Logarta, 537 SCRA 277, October 19, 2007

FACTS: Luis had 3 daughters with his 1 st wife, Anicita: Cynthia Logarta, and Teresa Tormis (respondents herein),
and Melinda Regner-Borja. Petitioner Victoria Regner is the 2 nd wife of Luis.
During the lifetime of Luis, he acquired several properties, among which is a share at Cebu Country Club
Inc. Luis executed a Deed of Donation in favor of respondents Cynthia and Teresa covering Proprietary
Ownership Certificate of the Cebu Country Club, Inc.
Luis passed away. Victoria filed a Complaint for Declaration of Nullity of the Deed of Donation, claiming
that Luis made a written declaration wherein he stated that due to his illness and forgetfulness, he would not
sign any document without the knowledge of his lawyer, Atty. Francis Zosa. When Luis was already very ill and
no longer of sound and disposing mind, Cynthia and Teresa, conspiring and confederating with each other,
fraudulently made or caused to be fraudulently made a Deed of Donation since Luis no longer had the ability to
write or affix his signature, Melinda fraudulently manipulated the hand of Luis.
Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family Clinic in
Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to receive the summonses for her
sisters and informed the sheriff that their lawyer, Atty. Francis Zosa would be the one to receive the same. Upon
her arrival in the Philippines, Teresa was personally served the summons. Teresa filed a motion to dismiss
because of petitioner's failure to prosecute her action for an unreasonable length of time.
Petitioner opposed the motion and filed her own motion to set the case for pre-trial, to which Teresa
filed her rejoinder on the ground that their sister, Cynthia, an indispensable party, had not yet been served a
summons. Thus, Teresa prayed for the dismissal of petitioner's complaint.
ISSUE: Whether or not jurisdiction over the person of co-donee Cynthia was validly attained.
RULING: NO.

The rationale for treating all the co-owners of a property as indispensable parties in a suit involving the co-
owned property is to prevent multiplicity of suits by requiring the person asserting a right against the defendant
to include with him, either as co-plaintiffs or as co-defendants, all persons standing in the same position, so that
the whole matter in dispute may be determined once and for all in 1 litigation. Petitioner questions the
participation and shares of Cynthia and Teresa in the transferred Country Club membership. The membership
certificate from the Cebu Country Club is a personal property. Thus, the action instituted by petitioner before
the RTC is in personam.
Being an action in personam, the general rule requires the personal service of summons on Cynthia within the
Philippines, but this is not possible in the present case because Cynthia is a non-resident and is not found
within the Philippines. As Cynthia is a nonresident who is not found in the Philippines, service of summons on
her must be in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be effective outside
the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general
circulation in such places and for such time as the court may order, in which case a copy of the summons and
order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any
other manner which... the court may deem sufficient. The third mode, like the first two, must be made
outside the Philippines, such as through the Philippine Embassy in the foreign country where Cynthia resides .
Since in the case at bar, the service of summons upon Cynthia was not done by any of the authorized modes,
the trial court was correct in dismissing petitioner's complaint.
Asiavest Limited v. Court of Appeals, G.R. No. 128803, September 25, 1998
FACTS: In 1984, a HK court ordered Antonio Heras to pay US$1.8M or its equivalent, with interest, to petitioner
Asiavest. Apparently, Heras guaranteed a certain loan in HK and the debtor defaulted, hence petitioner running
after him. But before said judgment was issued and even during trial, Heras already left HK for good and had
returned to the Philippines. So in 1987, Asiavest filed a complaint in court seeking to enforce the foreign
judgment against Heras. He claims he never received any summons, both in the HK and in the Philippines. He
also claims he never received a copy of the foreign judgment. Asiavest contends that he was validly served
summons when a messenger from Sycip Salazar Law Firm left a copy of the summons to Dionisio Lopez, Heras’
son-in-law.
ISSUE: Whether or not the foreign judgment can be enforced against Heras in the Philippines.
RULING: NO.
Although the foreign judgment was duly authenticated and Heras was never able to overcome the validity of it,
it cannot be enforced against Heras here in the Philippines because he was not properly served the summons. As

far as Philippine law is concerned, the HK court never acquired jurisdiction over Heras. Accordingly, the
Philippine courts cannot act to enforce the said foreign judgment.
The action against Heras is an action in personam and as far as HK is concerned, Heras is a non-resident. He is a
non-resident because prior to the judgment, he already abandoned Hong Kong. The HK law on service of
summons in in personam cases against non-residents was never presented in court hence processual
presumption is applied where it is now presumed that Hong Kong law in as far as this case is concerned is the
same as Philippine laws. And under our laws, in an action in personam wherein the defendant is a non-
resident who does not voluntarily submit himself to the authority of the court, personal service of summons
within the state is essential to the acquisition of jurisdiction over her person. This method of service is possible
if such defendant is physically present in the country. If he is not found therein, the court cannot acquire
jurisdiction over his person and therefore cannot validly try and decide the case against him. Without a
personal service of summons, the Hong Kong court never acquired jurisdiction. Needless to say, the summons
tendered to Lopez was an invalid service because the same does not satisfy the requirement of personal
service.
2. Jurisdiction over the Subject Matter and Issues of the Case

Constitution, Art. VIII, Secs. 4-5
SECTION 4. (1) The Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices.
It may sit en banc or in its discretion, in divisions of 3, 5, or 7 Members. Any vacancy shall be filled within
ninety days from the occurrence thereof.
(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law,
which shall be heard by the Supreme Court en banc, and all other cases which under the Rules of Court
are required to be heard en banc, including those involving the constitutionality, application, or
operation of presidential decrees, proclamations, orders, instructions, ordinances, and other regulations,
shall be decided with the concurrence of a majority of the Members who actually took part in the
deliberations on the issues in the case and voted thereon.
(3) Cases or matters heard by a division shall be decided or resolved with the concurrence of a majority
of the Members who actually took part in the deliberations on the issues in the case and voted thereon,
and in no case, without the concurrence of at least 3 of such Members. When the required number is not
obtained, the case shall be decided en banc: Provided, that no doctrine or principle of law laid down by
the court in a decision rendered en banc or in division may be modified or reversed except by the court
sitting en banc.
SECTION 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,
and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement,
law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in
relation thereto.
(c) All cases in which the jurisdiction of any lower court is in issue.
(d) All criminal cases in which the penalty imposed is reclusion perpetua or higher.
(e) All cases in which only an error or question of law is involved.
(3) Assign temporarily judges of lower courts to other stations as public interest may require. Such
temporary assignment shall not exceed six months without the consent of the judge concerned.
(4) Order a change of venue or place of trial to avoid a miscarriage of justice.
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal
assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the
speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall
remain effective unless disapproved by the Supreme Court.
(6) Appoint all officials and employees of the Judiciary in accordance with the Civil Service Law.
BP 129 - The Judiciary Reorganization Act of 1980
Civil Code, Arts. 2042-2046

CHAPTER 2-ARBITRATIONS
Art. 2042. The same persons who may enter into a compromise may submit their controversies to one or
more arbitrators for decision. (1820a)
Art. 2043. The provisions of the preceding Chapter upon compromises shall also be applicable to
arbitrations. (1821a)
Art. 2044. Any stipulation that the arbitrators' award or decision shall be final, is valid, without prejudice
to Articles 2038, 2039, and 2040. (n)
Art. 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence,
or
falsity of documents, is subject to the provisions of Article 1330 of this Code.
However, one of parties cannot set up a mistake of fact as against the other if the latter,
by
virtue of the compromise, has withdrawn from a litigation already commenced. (1817a)
Art. 1330. A contract where consent is given through mistake, violence, intimidation, undue
influence, or fraud is voidable.
Art. 2039. When the parties compromise generally on all differences which they might have with
each
other, the discovery of documents referring to one or more but not to all of the questions settled
shall not itself be a cause for annulment or rescission of the compromise, unless said documents
have
been concealed by one of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing to which
one of the parties has no right, as shown by the newly-discovered documents. (n)
Art. 2040. If after a litigation has been decided by a final judgment, a compromise should be agreed
upon, either or both parties being unaware of the existence of the final judgment, the compromise
may be rescinded.
Ignorance of a judgment which may be revoked or set aside is not a valid ground for

attacking a compromise. (1819a)

Art. 2045. Any clause giving one of the parties power to choose more arbitrators than the other is void
and of no effect. (n)
Art. 2046. The appointment of arbitrators and the procedure for arbitration shall be governed by the
provisions of such rules of court as the Supreme Court shall promulgate.
Labor Code, Art. 217

Article 224[217]. Jurisdiction of the Labor Arbiters and the Commission.
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within 30 calendar days after the submission of the
case by the parties for decision without extension, even in the absence of stenographic notes,
the following cases involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and
(6) Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding P5,000 regardless
of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements. (As amended by Sec. 9, RA 6715, 04/21/1989)
Republic Act No. 9285, April 2, 2004 - Alternative Dispute Resolution Act of 2004
Jurisdiction over the Subject Matter

Subject matter jurisdiction or competence is “more than the general power conferred by law to take cognizance
of a general class to which the case belongs. It is not enough that the court has a power in abstract to try and
decide the case; it is necessary that the power is invoked by filing of a petition.”
Subject matter jurisdiction cannot be conferred by consent of the parties and a “decision is void and may be set
aside either directly or collaterally, where the court exceeds its jurisdiction and power in rendering it.” [Caluag v.
Pecson]
Caluag v. Pecson, 82 Phil. 8 (1948)

FACTS: On August 10, 1937, Alejo filed a complaint against Caluag and Garcia for the redemption of ½ pro
indiviso of a parcel of land in Guiguinto, Bulacan. After trial, the CFI Bulacan rendered judgment ordering
petitioners to execute a deed of sale in favor of Fortunato Alejo, upon payment by plaintiff , as purchase price,
of the amount of P2,551. Petitioners filed an appeal to the CA but it was denied.
Consequently, Alejo filed a Motion for Execution. When the petitioners opposed, Alejo filed before CFI
a petition for contempt and it was granted by the respondent. A petition for certiorari was filed against the
respondent judge, allegedly acted without or in excess of the jurisdiction of the court in rendering the resolution
which declares the petitioners guilty of contempt of court for not complying or performing its prior order
requiring the petitioners to execute a deed of sale in favor of plaintiff over ½ of the land pro indiviso in question.
The petitioners in support of the present petition for certiorari, alleged other 2 grounds, to wit: (1) that plaintiff's
action abated or was extinguished upon the death of the plaintiff Fortunato Alejo, because his right of legal
redemption was a personal one, and therefore not transferable to his successors in interest; and (2) that, even
assuming that it is a personal one and therefore transferable, his successors in interest have failed to secure the
substitution of said deceased by his legal representative under section 17, Rule 3.
ISSUE: Whether or not respondent Judge Angel Mojica acted without jurisdiction in proceeding against and
declaring the petitioners guilty of contempt.
RULING: YES.
It is well settled that jurisdiction of the subject matter of a particular case is something more than the general
power conferred by law upon a court to take cognizance of cases of the general class to which the particular
case belongs. The respondent Judge Mojica acted not only without jurisdiction in proceeding against and
declaring the petitioners guilty of contempt, but also in excess of jurisdiction in ordering the confinement of
the petitioners, because it had no power to impose such punishment upon the latter. The respondent judge
has no power under the law to order the confinement of the petitioners until they have compiled with the
order of the court.
A wrong decision made within the limits of the court's authority is erroneous and may be corrected on appeal
or other direct review, but a wrong, or for that matter a correct, decision is void, and may be set aside either
directly or collaterally, where the court exceeds its jurisdiction and power in rendering it. Hence, though the
court has acquired jurisdiction over the subject matter and the particular case has been submitted properly to
it for hearing and decision, it will overstep its jurisdiction if it renders a judgment which it has no power under
the law to render.

Idonah Perkins vs. Roxas, 72 Phil. 514 (1941)

FACTS: Eugene Perkins filed a case in the CFI of Manila against Benguet Consolidated Mining Co. (BCMC) for
recovery of P71,379 consisting of dividends payable in shares of stocks registered in his name. BCMC alleges
that it withheld Eugene’s right to the shares due to adverse claims made by Idonah Perkins and George
Engelhard, both non-residents. When Eugene amended his complaint to include them, summons by publication
was served on them.
Idonah Perkins filed her answer with a cross complaint, raising the judgment she obtained from the
NYC SC which adjudged her as sole owner of the shares. She filed the present petition alleging that
respondent judge is about to render judgment disregarding her constitutional rights and in effect annulling
the NY decision, and that the judge is without jurisdiction to take cognizance of the case.
ISSUE: Whether or not the CFI has jurisdiction over the case in the adjudication of the title of BCMC shares.
RULING: YES. The respondent’s action calls for the adjudication of title to certain shares of stock of BCMC and
the granting of affirmative reliefs fall within the general jurisdiction of the CFI of Manila. Idonah’s cross-
complaint against Eugene Perkins and BCMC upon the alleged judgment of the DC and asked the court to
enforce the NY judgment is a form of action recognized by [Sec. 48, Rule 39, ROC] and which falls under the
general jurisdiction of the CFI.
By jurisdiction over the subject matter, it is meant that the nature of the cause of action and of the relief
sought. And this is conferred by the sovereign authority which organizes the court, and is to be sought for in
general nature of its powers, or in authority specially conferred.
Whether or not the respondent judge in the course of the proceedings will give validity and effectivity to the
NY judgment set up by petition in her cross complaint is a question that goes into the merits of the
controversy and relates to the rights of the parties as between each other, and not to the jurisdiction or
power of the court. The test of jurisdiction is whether or not the tribunal has the power to enter upon the
inquiry, not whether its conclusion in the course of it is right or wrong. If the decision is erroneous, its
judgment can be reversed on appeal; but its determination of the question which the petitioner here anticipates
and seeks to prevent, is the exercise by that court – and the rightful exercise of its jurisdiction.
Lhuiller v. British Airways, G.R. No. 171092, March 15, 2010

FACTS: Edna Diago Lhuillier took British Airway flight 548 from London to Rome. Once on board, she requested
Julian Halliday, one of its flight attendants, to assist her in placing her hand-carried luggage in the overhead

bin. Halliday allegedly refused to help and assist her, and even sarcastically remarked that "If I were to help all
300 passengers in this flight, I would have a broken back!". Edna further alleged that when the plane was about
to land in Rome, another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the
passengers in the business class section to lecture on plane safety. Upon arrival in Rome, petitioner complained
to British Airways’s ground manager and demanded an apology. However, the latter declared that the flight
stewards were "only doing their job."
Edna then filed a complaint against British Airways before the RTC of Makati City. Summons, together
with a copy of the complaint, was served on British Airways through Violeta Echevarria, General Manager of
Euro-Philippine Airline Services, Inc. British Airways filed a Motion to Dismiss on grounds of lack of jurisdiction
over the case and over the person of the respondent. It alleged that only the courts of London, United Kingdom
or Rome, Italy, have jurisdiction over the complaint for damages pursuant to the Warsaw Convention, Article
28(1).
The RTC of Makati City granted the Motion toDismiss. Edna filed a Motion for Reconsideration but the
motion was denied. Hence, this petition.
Parties: Common Carrier – British Airways Route – London -> Rome
Passenger – Edna Diago Lhuillier CC’s domicile & principal place of business – London
ISSUE: Whether or not Philippine Courts have jurisdiction over a tortious conduct committed against a Filipino
citizen and resident by airline personnel of a foreign carrier travelling beyond the territorial limit of any foreign
country.
RULING: NO.
In Santos III v. NOA we held that: “The Republic of the Philippines is a party to the Convention for the Unification
of Certain Rules Relating to International Transportation by Air, otherwise known as the Warsaw Convention. It
took effect on February 13, 1933. The Convention was concurred in by the Senate, through its Resolution No. 19,
on May 16, 1950. The Philippine instrument of accession was signed by President Elpidio Quirino on October 13,
1950, and was deposited with the Polish government on November 9, 1950. The Convention became applicable
to the Philippines on February 9, 1951. On September 23, 1955, President Ramon Magsaysay issued
Proclamation No. 201, declaring our formal adherence thereto, “to the end that the same and every article and
clause thereof may be observed and fulfilled in good faith by the Republic of the Philippines and the citizens
thereof.” The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as
such, has the force and effect of law in this country. The Warsaw Convention applies because the air travel,
where the alleged tortious conduct occurred, was between the United Kingdom and Italy, which are both
signatories to the Warsaw Convention.

When the place of departure and the place of destination in a contract of carriage are situated within the
territories of two High Contracting Parties, said carriage is deemed an "international carriage". The High
Contracting Parties referred to herein (UK and Italy) were the signatories to the Warsaw Convention and those
which subsequently adhered to it. Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the
action for damages before –
1. the court where the carrier is domiciled
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has been made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in London, United Kingdom
with London as its principal place of business. Hence, under the first and second jurisdictional rules, the
petitioner may bring her case before the courts of London in the United Kingdom. In the passenger ticket and
baggage check presented by both the petitioner and respondent, it appears that the ticket was issued in
Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option to bring her case
before the courts of Rome in Italy. Finally, both the petitioner and respondent aver that the place of
destination is Rome, Italy, which is properly designated given the routing presented in the said passenger ticket
and baggage check. Accordingly, petitioner may bring her action before the courts of Rome, Italy. The Court
finds that the RTC of Makati correctly ruled that it does not have jurisdiction over the case filed by the
petitioner.
Korea Technologies, Co., Ltd., v. Lerma, G.R. No. 143581, January 7, 2008
FACTS: Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply
and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent
Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.
PGSMC and KOGIES executed a Contract whereby KOGIES would set up an LPG Cylinder Manufacturing
Plant in Carmona, Cavite. The contract was executed in the Philippines. Later, the parties executed, in Korea,
an Amendment for the contract in the terms of payment. The contract and its amendment stipulated that
KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would
pay USD 1,224,000. KOGIES would install and initiate the operation of the plant for which PGSMC bound itself to
pay USD 306,000 upon the plants production of the 11-kg. LPG cylinder samples. Thus, the total contract price
amounted to USD 1,530,000.

PGSMC entered into a Contract of Lease with Worth Properties, Inc. (Worth) for use of Worth’s
5,079sqm property with a 4,032sqm warehouse building to house the LPG manufacturing plant. The monthly
rental was PhP 322,560 commencing on January 1, 1998 with a 10% annual increment clause. Subsequently, the
machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and
installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000. However, gleaned from the Certificate
executed by the parties, after the installation of the plant, the initial operation could not be conducted as
PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree
that KOGIES would be deemed to have completely complied with the terms and conditions of the contract.
For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued 2
postdated checks: (1) BPI Check dated January 30, 1998 for PhP 4,500,000; and (2) BPI Check dated March 30,
1998 for PhP 4,500,000. When KOGIES deposited the checks, these were dishonored for the reason PAYMENT
STOPPED.
Thus, KOGIES sent a demand letter to PGSMC threatening criminal action for violation of BP 22 in case
of non-payment. The wife of PGSMCs President faxed a letter to KOGIES President who was then staying at a
Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from
that agreed upon but it had not delivered several equipment parts already paid for. PGSMC further informed
KOGIES that it was cancelling their contract because of the altered quantity and lowered quality of the
machineries, and that it would dismantle and transfer the machineries already installed from the Carmona plant.
Finally, PGSMC filed before the Office of the Prosecutor a Complaint-Affidavit for estafa against Mr. Dae Hyun
Kang, President of KOGIES. KOGIES informed PGSMC that it could not unilaterally rescind the contract, and
sought to enforce the arbitration clause by instituting an Application for Arbitration before the Korean
Commercial Arbitration Board in Seoul, Korea. KOGIES also filed an action for specific performance against
PGSMC before the RTC of Muntinlupa for the latter’s failure to resort to arbitration. PGSMC assails the validity
of the arbitration clause for being against public policy as it ousts the local courts of jurisdiction over the instant
controversy.
ISSUE: Whether or not the arbitration clause is valid.
RULING: YES. The arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in
accordance with the Commercial Arbitration Rules of the KCAB, and that the arbitral award is final and binding,
is not contrary to public policy.
While it is established in this jurisdiction is the rule that the law of the place where the contract is made governs
—lex loci contractus—Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the
finality and binding effect of an arbitral award. Established in this jurisdiction is the rule that the law of the

place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in
the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the
validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award . Art. 2044
provides, “Any stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to
Articles 2038, 2039 and 2040.” Arts. 2038, 2039, and 2040 above-cited refer to instances where a compromise
or an arbitral award, as applied to Art. 2044 pursuant to Art. 2043, may be voided, rescinded, or annulled, but
these would not denigrate the finality of the arbitral award.
While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law
which has a retroactive effect. Under Sec. 24 of R.A. 9285, the Regional Trial Court does not have jurisdiction
over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the
referral to arbitration in such cases.
Even if foreign arbitral awards are mutually stipulated by the parties in the arbitration clause to be final and
binding, the same are not immediately enforceable or cannot be implemented immediately— they must still
be confirmed by the Regional Trial Court. It is now clear that foreign arbitral awards when confirmed by the RTC
are deemed not as a judgment of a foreign court but as a foreign arbitral award, and when confirmed, are
enforced as final and executory decisions of our courts of law. Thus, it can be gleaned that the concept of a final
and binding arbitral award is similar to judgments or awards given by some of our quasi-judicial bodies, like
the National Labor Relations Commission and Mines Adjudication Board, whose final judgments are stipulated
to be final and binding, but not immediately executory in the sense that they may still be judicially reviewed,
upon the instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they
need first to be confirmed by the RTC.
While the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the
parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or
vacate it. The differences between a final arbitral award from an international or foreign arbitral tribunal and an
award given by a local arbitral tribunal are the specific grounds or conditions that vest jurisdiction over our
courts to review the awards. For foreign or international arbitral awards which must first be confirmed by the
RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of
the UNCITRAL Model Law. For final domestic arbitral awards, which also need confirmation by the RTC pursuant
to Sec. 23 of RA 876 and shall be recognized as final and executory decisions of the RTC, they may only be
assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.

The pendency of an arbitral proceeding does not foreclose resort to the courts for provisional reliefs—the RTC
has authority and jurisdiction to grant interim measures of protection.
Philippine National Bank v. Cabansag, G.R. No. 157010, June 21, 2005
FACTS: Florence Cabansag went to Singapore as a tourist. While she was there, she looked for a job and
eventually applied with the Singapore Branch of the Philippine National Bank. PNB is a private banking
corporation organized and existing under Philippine laws. She was eventually employed and was issued an
employment pass. In her job offer, it was stated, among others, that she was to be put on probation for 3
months and termination of her employment may be made by either party after 1 day notice while on
probation, and 1 month notice or 1 month pay in lieu of notice upon confirmation. She accepted the terms
and was issued an OEC by the POEA. She was commended for her good work. However, she was informed by
Ruben Tobias, the bank president, that she would have to resign in line with some cost cutting and realignment
measures of the company. She refused but was informed by Tobias that if she does not resign, he will terminate
her instead.
ISSUE: Whether or not arbitration of the NLRC in the NCR has jurisdiction and is the proper venue.
RULING: YES.
Labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee relations
including termination disputes involving all workers, including OFWs. Here, Cabansag applied for and secured
an OEC from the POEA through the Philippine Embassy. The OEC authorized her working status in a foreign
country and entitled her to all benefits and processes under our statutes. Although she may been a direct hire
at the commencement of her employment, she became an OFW who was covered by Philippine labor laws and
policies upon certification by the POEA. When she was illegally terminated, she already possessed the POEA
employment certificate.
A migrant worker “refers to a person who is to be engaged, is engaged or has been engaged in a remunerated
activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino
worker.” Here, Cabansag was a Filipino, not a legal resident of Singapore, and employed by petitioner in its
branch office in Singapore. She is clearly an OFW/migrant worker. Thus, she has the option where to file her
Complaint for illegal dismissal. She can either file at the Regional Arbitration Branch where she resides or the
RAB where the employer is situated. Thus, in filing her Complaint before the RAB office in Quezon City, she
has made a valid choice of proper venue.

The appellate court was correct in holding that respondent was already a regular employee at the time of her
dismissal, because her three-month probationary period of employment had already ended. This ruling is in
accordance with Article 281 of the Labor Code: “An employee who is allowed to work after a probationary
period shall be considered a regular employee.” Indeed, petitioner recognized respondent as such at the time it
dismissed her, by giving her one month’s salary in lieu of a one-month notice, consistent with provision No. 6 of
her employment Contract.
3. Jurisdiction over the Res or the Thing which is the Subject of the Litigation
Rules of Court, Rule 57
RULE 57 – Preliminary Attachment
Section 1. Grounds upon which attachment may issue. – At the commencement of the action or at any
time before entry of judgment, a plaintiff or any proper party may have the property of the adverse party
attached as security for the satisfaction of any judgment that may be recovered in the following cases:
(a) In an action for the recovery of a specified amount of money or damages, other than moral
and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasidelict
against a party who is about to depart from the Philippines with intent to defraud his
creditors;
(b) In an action for money or property embezzled or fraudulently misapplied or converted to
his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker,
agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary
capacity, or for a willful violation of duty;
(c) In an action to recover the possession of property unjustly or fraudulently taken, detained or
converted, when the property, or any part thereof, has been concealed, removed, or disposed
of to prevent its being found or taken by the applicant or an authorized person;
(d) In an action against a party who has been guilty of a fraud in contracting the debt or incurring
the obligation upon which the action is brought, or in the performance thereof;
(e) In an action against a party who has removed or disposed of his property, or is about to do so,
with intent to defraud his creditors; or
(f) In an action against a party who does not reside and is not found in the Philippines, or on
whom summons may be served by publication. (1a)
Section 3. Affidavit and bond required. – An order of attachment shall be granted only when it appears
by the affidavit of the applicant, or of some other person who personally knows the facts, that a
sufficient
cause of action exists, that the case is one of those mentioned in section 1 hereof, that there is no other
sufficient security for the claim sought to be enforced by the action, and that the amount due to the
applicant, or the value of the property the possession of which he is entitled to recover, is as much as the
sum for which the order is granted above all legal counterclaims. The affidavit, and the bond required by
the next succeeding section, must be duly filed with the court before the order issues. (3a)
Valmonte v. Court of Appeals, G.R. No. 108538, January 22, 1996

FACTS: Petitioners Lourdes and Alfredo are husband and wife both residents of 90222 Carkeek Drive South
Seattle, Washington, USA. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however,
practices his profession in the Philippines, commuting for this purpose between his residence in the state of
Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.
Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition
against former and her husband. She alleged that, the plaintiff is of legal age, a widow and is at present a
resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses but, for
purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St.,
Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmonte’s spouse holds
office and where he can be found. Her husband was also her counsel, who has a law office in the Philippines.
The summons was served on her husband.
Petitioner in a letter, referred private respondent’s counsel to her husband as the party to whom all
communications intended for her should be sent. Service of summons was then made upon petitioner Alfredo at
his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes, on the ground
that he was not authorized to accept the process on her behalf. Accordingly, the process server left without
leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A.
Valmonte, however, did not file her Answer. For this reason, private respondent moved to declare her in
default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the
private respondent’s motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default.
Said decision was received by Alfredo hence this petition.
ISSUE: Whether or not petitioner Lourdes A. Valmonte was validly served with summons.
RULING: NO. There was no valid service of summons on Lourdes.
The action herein is in the nature of an action quasi in rem. Such an action is essentially for the purpose of
affecting the defendant’s interest in a specific property and not to render a judgment against him. As petitioner
Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be
in accordance with Rule 14, § 17. Such service, to be effective outside the Philippines, must be made either (1)
by personal service; (2) by publication in a newspaper of general circulation in such places and for such time
as the court may order, in which case a copy of the summons and order of the court should be sent by
registered mail to the last known address of the defendant; or (3) in any other manner which the court may
deem sufficient.

In the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of
any of the first two modes. This mode of service, like the first two, must be made outside the Philippines, such
as through the Philippine Embassy in the foreign country where the defendant resides. The service of summons
on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, § 17 and
certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be
valid and, on that basis, declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.
Secondly, the service in the attempted manner on petitioner was not made upon prior leave of the trial court
as required also in Rule 14, § 17. As provided in § 19, such leave must be applied for by motion in writing,
supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the
application. Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes
was not given ample time to file her Answer which, according to the rules, shall be not less than 60 days after
notice.
Philsec Investment Corp. v. Court of Appeals, G.R. No. 103493, June 19, 1997
FACTS: Private respondent Ventura O. Ducat obtained separate loans from petitioners Ayala and Philsec in the
sum of US$2,500,000, secured by shares of stock owned by Ducat with a market value of P14,088,995. In order
to facilitate the payment of the loans, respondent 1488, Inc. through its president Drago Daic, assumed
Ducat’s obligation under an Agreement, whereby respondent 1488, Inc. executed a Warranty Deed with
Vendor’s Lien by which it sold to petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in Harris County,
Texas, U.S.A., for US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in the amount of
US$2,500,000 as initial payment of the purchase price. The balance of US$307,209.02 was to be paid by means
of a promissory note executed by ATHONA in favor of 1488, Inc. Subsequently, upon their receipt of the
US$2,500,000 from 1488, Inc., PHILSEC and AYALA released Ducat from his indebtedness and delivered to
1488, Inc. all the shares of stock in their possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by
the note became due and demandable. Private respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and
ATHONA in the US for payment of the balance of US$307,209.02 and for damages for breach of contract and
for fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock
delivered to 1488, Inc. under the Agreement. Originally instituted in the US District Court of Texas, 165th Judicial
District, the venue of the action was later transferred to the US District Court for the Southern District of
Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original complaint.

While the US case was pending, petitioners filed a complaint “For Sum of Money with Damages and
Writ of Preliminary Attachment” against private respondents in the RTC of Makati. The complaint reiterated
the allegation of petitioners in their respective counterclaims in the US case that private respondents
committed fraud by selling the property at a price 400 percent more than its true value of US$800,000.
Petitioners claimed that, as a result of private respondents’ fraudulent misrepresentations, ATHONA, PHILSEC,
and AYALA were induced to enter into the Agreement and to purchase the Houston property. Petitioners prayed
that private respondents be ordered to return to ATHONA the excess payment of US$1,700,000 and to pay
damages.
The trial court issued a writ of preliminary attachment against the real and personal properties of
private respondents. Private respondent Ducat moved to dismiss the Philippine case on the grounds of (1) litis
pendentia, vis-a-vis the US cased filed by 1488, Inc., (2) forum non conveniens, and (3) failure of petitioners
PHILSEC and BPI-IFL to state a cause of action. Ducat contended that the alleged overpricing of the property
prejudiced only petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale
and whose only participation was to extend financial accommodation to ATHONA under a separate loan
agreement.
While the present case was pending in the CA, the US District Court for the Southern District of Texas
rendered judgment in favor of private respondents, was affirmed on appeal by the Circuit Court of Appeals.
ISSUE: Whether or not the civil case in the Philippines is barred by the judgment of the US Court.
RULING: NO.
Jurisdiction, with respect to actions in personam, as distinguished from actions in rem, in a foreign judgment
merely constitutes prima facie evidence of the justness of the claim of a party and, as such, is subject to proof
to the contrary. Rule 39, §50 provides:
Sec. 50. Effect of foreign judgments. — The effect of a judgment of a tribunal of a foreign country, having
jurisdiction to pronounce the judgment is as follows:
(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between
the parties and their successors in interest by a subsequent title; but the judgment may be repelled by
evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact.
It was error therefore for the Court of Appeals to summarily rule that petitioners’ action is barred by the
principle of res judicata. Petitioners in fact questioned the jurisdiction of the U.S. court over their persons, but
their claim was brushed aside by both the trial court and the Court of Appeals.

In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by private
respondents in connection with the motion to dismiss. It failed to consider that one of the plaintiffs (PHILSEC) is
a domestic corporation and one of the defendants (Ventura Ducat) is a Filipino, and that it was the
extinguishment of the latter’s debt which was the object of the transaction under litigation. The trial court
arbitrarily dismissed the case even after finding that Ducat was not a party in the U.S. case.
It was error we think for the CA and the trial court to hold that jurisdiction over 1488, Inc. and Daic could not be
obtained because this is an action in personam and summons were served by extraterritorial service. Rule 14,
§17 on extraterritorial service provides that service of summons on a non-resident defendant may be effected
out of the Philippines by leave of Court where, among others, “the property of the defendant has been
attached within the Philippines.” It is not disputed that the properties, real and personal, of the private
respondents had been attached prior to service of summons under the Order of the trial court.
B. Ways of Dealing with a Conflicts Problem

Ways of Dealing with a Conflicts of Law Problem
When the court is faced with a conflict of laws problem, it may either: 1) dismiss the case for lack of jurisdiction
or on the ground of forum non conveniens, or 2) assumed jurisdiction and apply either forum or foreign law.
1. Dismiss the Case

i. Lack of Jurisdiction
ii. Forum Non Conveniens
Doctrine of forum non conveniens
-Even if the court assumes jurisdiction over the parties and the subject matter, it may decline to try the case on
the ground that the controversy may be more suitably tried elsewhere.
-Latin phrase literally means that jurisdiction should be declined because “the forum is inconvenient”
-Appears to have been first used in the 1800’s to describe a practice of Scottish trial courts which refused to hear
cases when “the ends of justice would best be served by trial in another forum.”
-English and Scottish courts have applied the principle when there was “another available and more appropriate
forum, in which the ends of justice would be better served in view of the interests of all parties, by eliminating
the vexatious or oppressive character of the pending proceedings and by removing any unfairness to either
party which would result from trial in the forum seized of the case.”

-It also avoids global forum shopping, which is the filing of repetitious suits in courts of different jurisdictions.
--Forum shopping originated as a concept of 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 excuses, including to
secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a
more friendly venue.
Heine v. New York Insurance Co., 45 F2d 426 (1940)

FACTS: The New York Life Insurance Company and the Guardian Insurance Company ("the insurance
companies") were corporations created in New York, USA. As conditions to be allowed to conduct business in
Germany, they were made to agree to be supervised by German authorities, to invest the proceeds of policies
in German securities, and to establish a local agency to whom summons may be served. The insurance
companies were later sued before courts in both the US and Germany for the recovery on some 240 life
insurance policies issued in Germany to German nationals, payable in German currency.
ISSUE: Whether or not the US courts may dismiss the case on the ground of forum non conveniens.
RULING: YES.
Under the circumstances, the case may be more suitably tried before German courts. The courts in both
jurisdictions are competent to try the case and summons may be served upon the insurance companies in both
jurisdictions. Requiring the insurance companies to defend their interests in the US would subject them to
great and unnecessary inconvenience and expenses, including the possibility of having to bring documentary
evidence all the way from their office in Germany. Moreover, trying the case in the US additionally burden the
courts in that jurisdiction, to the detriment of other litigants. The assumption of jurisdiction over a case the
cause of action of which arose from another jurisdiction and wherein both parties are non-residents is
discretionary upon the court.
In Re: Union Carbide, 634 F. Supp 842 (1986)

FACTS: On the night of 23 December 1984, a gas leak occurred at the pesticide plant of Union Carbide India
Limited (UCIL) in Bhopal, India resulting in the deaths of more than 2,000 people and injuries to more than
200,000 others. Thereafter, the India passed a law giving the Indian government the exclusive right to represent
the victims of the disaster. As thus, the Indian government filed a complaint before a New York district court.
The Union Carbide Corporation (UCC) filed a motion to dismiss on the ground of forum non conveniens and
lack of personality. The district court granted the motion on 3 conditions, namely, that UCC: (1) consent to the
jurisdiction of Indian courts and waive defenses based on the Statute of Limitations; (2) agree to the satisfy the
judgement of the Indian court, provided it complied with the requirements of due process; and (3) be subject to
discovery under the Federal Rules of Civil Procedure of the US. Consequently, the Indian government filed sued
the UCIL and the UCC before a district court in India. The UCC appealed the conditions. Arguments for the
Defendant: While Indian courts may provide an adequate alternative forum, they adhere to standards of due
process much lower than that followed in the US. Hence, US courts must supervise the proceedings before
Indian courts.
ISSUE: Whether or not the dismissal on the ground of forum non conveniens is proper.
RULING: YES. The Indian courts are adequate alternative fora.
Almost all of the estimated 200,000 plaintiffs are citizens and residents of India who have revoked their
representation by an American counsel in favor of the Indian government, which now prefers Indian courts.
Further, the UCC has already consented to the assumption of jurisdiction by the Indian courts. All the witnesses
and evidence are likewise in India.
As to the conditions, the first is valid in order to secure the viability of the Indian courts as alternate fora. The
second is problematic as it gives the impression that foreign judgments the UCC's consent is necessary in order
for the judgement of the Indian courts to be enforceable in New York. The laws of New York, in fact, recognizes
that a judgment rendered by a foreign court may be enforced in that State except if such judgment was
rendered in violation of due process or without jurisdiction over the person of the defendant. The request of
UCC of supervision by US courts of Indian courts is untenable. The power of US courts cannot extend beyond
their territorial jurisdiction. Moreover, once US courts dismiss a case on the ground of forum non conveniens,
they lose any further jurisdiction over the case, except in case of an action for enforcement later on. Denial of
due process may, however, constitute a defense against the enforcement of the Indian judgment. The third
condition is likewise invalid. Basic justice dictates that both parties must be given equal access to evidence in
each other's possession. Hence, both parties may be subjected to the modes of discovery under the Federal
Rules of Civil Procedure on equal terms subject to approval by Indian courts.
Wing On Co. V. Syyap, 64 O.G. 8311 (1967)

FACTS: Plaintiff Wing On Company a juridical person duly organized and existing under the laws of the New
York State, USA, and its principal office is in New York. On the other hand, Syyap & Co. Inc. is a domestic
corporation. In 1948, Syyap ordered various quantities of clothing materials with a total value of $22,246.04
(P44,492.08). The goods were shipped to Manila and received by Syyap with the undertaking that it would be

paid after delivery in Manila. In ordering the goods, Syyap claims that it dealt with one Murray Kern of New
York through Oscar Garcia. There was an agreement that after the sale of the merchandise, the profit will be
divided among them. Syyap was only able to pay the amount of $3,530.00 (P7,060.00), thus, leaving a balance
of P37,432.08 plus the profits from the sale of the merchandise, as agreed upon. Syyap failed and refused to
pay the balance and to render accounting of the profits, thus, Wing On Company filed a complaint for sum of
money against defendant Syyap & Co. Inc. In its answer with counterclaim, Syyap denied the allegations and
raised the special defense that Wing On, being a foreign corporation not duly licensed to transact business in
the Philippines, it had no capacity to sue. The trial court rendered a decision in favor of Wing On and ordered
Syyap to pay the amount of P37,432.08 with legal interest until fully paid plus P3,000 for attorney’s fees. It was
also ordered to render an accounting of the profits from the sale. The court also dismissed Syyap’s counterclaim
Syyap appealed the judgment of the lower court.
ISSUE: Whether or not the trial court should have declined jurisdiction over the present suit on the basis of the
principle of forum non conveniens in Private International Law.
RULING: NO. The facts of the case do not warrant the application of any recognized rules of Private International
Law. Plaintiff’s choice of forum should not be disturbed “unless the balance is strongly in favor of the
defendant.”
The Principle of Forum non Conveniens state that “where the ends of justice strongly indicate that the
controversy may be more suitably tried elsewhere, then jurisdiction should be declined and the parties
relegated to relief to be sought in another forum.” It is a well-established practice in the application of the
principle of forum non conveniens that unless the balance is strongly in favor of the defendant, the plaintiff’s
choice of forum should rarely be disturbed, and furthermore, the consideration of inadequacy to enforce the
judgment (which is one of the important factors to consider in the application of the principle), would precisely
constitute a problem to the plaintiff if the local courts decline to assume jurisdiction on the basis of the said
principle, considering that the defendant is a resident of the Philippines. It is true that the agreement involving
the purchase of clothing materials was entered into in NY, USA. However, the goods were delivered to,
received and sold by the defendant in this jurisdiction. Further, since the suit is in the nature of a personal
action, the case may be commenced and tried where the defendant resides or may be found, or where the
plaintiff resides, at the election of the plaintiff. Consequently, venue was not improperly laid down, thus, the
court a quo did not err in taking cognizance of the case.
Puyat v. Zabarte, G.R. No. 141536. February 26, 2001

FACTS: Gil Miguel Puyat, a foreigner, lost a collection suit filed against him by Ron Zabarte in a court in
California, USA. The California court ordered Puyat to pay the amount of $241k. Puyat was only able to pay $5k.
In January 1994, Zabarte filed an action to enforce the California judgment here in the Philippines
against Puyat. Puyat filed an Answer where he alleged, among others, that the California court had no
jurisdiction over the case, hence, the foreign judgment is void. He likewise averred that the trial court had no
jurisdiction because the issue involved are partnership matters which are under the jurisdiction of the Securities
and Exchange Commission (SEC). Zabarte then filed a motion for summary judgment as he argued that Puyat’s
Answer tendered no issue. The trial court granted the motion and eventually gave a favorable judgment for
Zabarte. The Court of Appeals affirmed the decision of the trial court. On appeal, Puyat now avers that the trial
court should have never taken cognizance of the case because it had no jurisdiction over the case pursuant to
the forum non conveniens rule. He averred that under this principle, since all the transaction involved in this
case occurred in California, he being a foreigner, and the California law was not properly determined, the trial
court had no jurisdiction. He also assailed the validity of the trial court’s act in granting the motion for summary
judgment filed by Zabarte.
ISSUE: Whether or not Puyat is correct.
RULING: NO. The allowance of summary judgment is proper.
In this case, Puyat’s Answer did not really tender an issue. Summary judgment is resorted to in order to avoid
long drawn out litigations and useless delays. When affidavits, depositions and admissions on file show that
there are no genuine issues of fact to be tried, the Rules allow a party to pierce the allegations in the pleadings
and to obtain immediate relief by way of summary judgment. In short, since the facts are not in dispute, the
court is allowed to decide the case summarily by applying the law to the material facts. In this case, Puyat’s
Answer merely alleged that the California court, a civil court, had no jurisdiction because the case involved was a
partnership issue. He however admitted that the issue involved is the payment of money upon promissory notes
with damages. Puyat also did not attach a copy of the complaint filed by Zabarte with the California court. As
such, the trial court properly presumed, applying the principle of processual presumption, that the California law
is the same as Philippine law – that cases involving collection of money is cognizable by civil courts. And by
applying the principle of processual presumption, there’s no longer a need to try the facts in this case, hence, a
summary judgment was in order.
Anent the issue of forum non conveniens, such does not exist in this case. Under the principle of forum non
conveniens, even if the exercise of jurisdiction is authorized by law, courts may nonetheless refuse to entertain a
case for any of the following practical reasons:
1. The belief that the matter can be better tried and decided elsewhere, either because the main aspects of
the case transpired in a foreign jurisdiction or the material witnesses have their residence there;

2. The belief that the non-resident plaintiff sought the forum[,] a practice known as forum shopping[,] merely
to secure procedural advantages or to convey or harass the defendant;
3. The unwillingness to extend local judicial facilities to non-residents or aliens when the docket may already
be overcrowded;
4. The inadequacy of the local judicial machinery for effectuating the right sought to be maintained; and The
difficulty of ascertaining foreign law.”
None of the above existed in this case, hence, the trial court properly took cognizance of the case.
Bank of America NT & SA v. Court of Appeals, G.R. No. 120135, March 31, 2003
FACTS: The Litonjuas (Eduardo and Aurelio), private respondents, were engaged in the shipping business. They
owned 2 vesselsthrough their company and deposited their revenues with the petitioner banks in both
Hongkong and UK. The respondents alleged that the petitioner offered easy loans to help them acquire
additional three (3) vessels through their company. The operation and the funds were then placed under the
control of the petitioner while the possession of the vessels were left in the hands of persons designated.
The said vessels were subsequently foreclosed when the business of respondents declined. However,
the bank as trustee failed to render an accounting of the incomes of the said vessels. This prompted the
Litonjuas to file a complaint. The petitioner bank filed a motion to dismiss on the ground of forum non
conveniens and lack of cause of action. The MD was denied by the lower court. The petitioner filed a petition for
review on certiorari with the CA. The Court of Appeals dismissed. It was treated by the CA as a petition
for certiorari.
ISSUE: Whether or not the case should have been dismissed on the ground of forum non conveniens?
RULING:
NO. Whether a suit is to be dismissed on the ground of forum non conveniens depends largely upon the facts of
the case and is addressed to the sound discretion of the courts. The following requisites must be met:
- The Philippine court must be one to which the parties may conveniently resort to
- The Philippine courts is in the position to make intelligent decisions as to law and facts
- It has or likely have the power to enforce its decision.
As to the issue on forum shopping, the court held that there is no forum shopping due to the pendency of the
foreign action. Forum shopping exists where elements of litis pendentia are present and where a final
judgement is one case will amount to res judicata in the other. Litis pendentia presuposses the existence of

these elements; identity of parties, identity of righs asserted and relief prayed for (founded on the same acts)
and the identity of the two cases is such that judgement in one case would amount to res judicata in the other.
Not all the elements for litis pendentia are present here. The petitioner failed to show these as it merely
mentioned that civil cases were filed in Hongkong and UK without showing the identity of the rights asserted or
reliefs sought, as well as the presence of elements of res judicata should one of the case be adjudged.
Pioneer Concrete Philippines, Inc. v. Todaro, G.R. No. 154830, June 8, 2007
FACTS: Antonio D. Todaro filed with the RTC of Makati City, a complaint for Sum of Money and Damages with
Preliminary Attachment against Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc. (PCPI),
Pioneer Philippines Holdings, Inc. (PPHI), John G. McDonald (McDonald) and Philip J. Klepzig (Klepzig).
Todaro alleged that PIL is a corporation duly organized and existing under the laws of Australia and is
principally engaged in the ready-mix concrete and concrete aggregates business; PPHI is the company
established by PIL to own and hold the stocks of its operating company in the Philippines ; PCPI is the company
established by PIL to undertake its business of ready-mix concrete, concrete aggregates and quarrying
operations in the Philippines; McDonald is the Chief Executive of the Hongkong office of PIL; and, Klepzig is the
President and Managing Director of PPHI and PCPI; Todaro has been the managing director of Betonval
Readyconcrete, Inc., a company engaged in pre-mixed concrete and concrete aggregate production; he resigned
from Betonval in February 1996; in May 1996, PIL contacted Todaro and asked him if he was available to join
them in connection with their intention to establish a ready-mix concrete plant and other related operations
in the Philippines; Todaro informed PIL of his availability and interest to join them; subsequently, PIL and
Todaro came to an agreement wherein the former consented to engage the services of the latter as a
consultant for two to three months, after which, he would be employed as the manager of PIL's ready-mix
concrete operations should the company decide to invest in the Philippines; subsequently, PIL started its
operations in the Philippines; however, it refused to comply with its undertaking to employ Todaro on a
permanent basis. Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss the
complaint on the grounds that the complaint states no cause of action, that the RTC has no jurisdiction over the
subject matter of the complaint, as the same is within the jurisdiction of the NLRC, and that the complaint
should be dismissed on the basis of the doctrine of forum non conveniens. RTC dismissed the Motion to Dismiss
which was affirmed by the CA.

ISSUE: Whether or not the RTC should have dismissed the case on the basis of forum non conveniens due to a
presence of a foreign element.
RULING: NO.
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 "[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."
The doctrine of forum non conveniens should not be used as a ground for a motion to dismiss because Sec. 1,
Rule 16 of the Rules of Court does not include said doctrine as a ground. This Court further ruled that while it is
within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only
after vital facts are established, to determine whether special circumstances require the 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.
NOTE: the case was also being dismissed on the ground that there was no cause of action but SC held that there
was cause of action, to sustain a motion to dismiss for lack of cause of action, the complaint must show that the
claim for relief does not exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite or
uncertain. And it was also argued in this case that jurisdiction is with the NLRC and not with the RTC. SC held it
was with RTC, SC has consistently held that where no employer-employee relationship exists between the
parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or
any collective bargaining agreement, it is the RTC that has jurisdiction.
Raytheon International v. Rouzie, Jr., G.R. No. 162894, February 26, 2008
FACTS: Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the
State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen,
entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services
in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts.

Respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a
suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged
nonpayment of commissions, illegal termination and breach of employment contract which rendered
judgment ordering BMSI and RUST to pay respondent’s money claims.
Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed respondent’s
complaint on the ground of lack of jurisdiction. Respondent elevated the case to this Court but was dismissed in
a Resolution which became final and executory.
Respondent, then a resident of La Union, instituted an action for damages before the RTC of Bauang,
La Union to Raytheon International, Inc. as well as BMSI and RUST, the 2 corporations impleaded in the earlier
labor case. The complaint essentially reiterated the allegations in the labor case that BMSI verbally employed
respondent to negotiate the sale of services in government projects and that respondent was not paid the
commissions due him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint
also averred that BMSI and RUST as well as petitioner itself had combined and functioned as one company.
In response, petitioner alleged that contrary to respondent’s claim, it was a foreign corporation duly
licensed to do business in the Philippines and denied entering into any arrangement with respondent or paying
the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the purpose of assuming
the alleged obligation of the said companies. Petitioner sought the dismissal of the complaint on grounds of
failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory
counterclaim.
Petitioner then filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for
Summary Judgment seeking the dismissal of the complaint on grounds of forum non conveniens and failure to
state a cause of action. Respondent opposed the same. Pending the resolution of the omnibus motion, the
deposition of Walter Browning was taken before the Philippine Consulate General in Chicago.
RTC denied petitioner’s omnibus motion and held that the factual allegations in the complaint, assuming
the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that
the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on
petitioner, it being a foreign corporation licensed to do business in the Philippines.
The Court of Appeals rendered the assailed Decision denying the petition for certiorari for lack of merit,
and also denied petitioner’s motion for reconsideration.
ISSUE: Whether or not the Court of Appeals erred in refusing to dismiss the complaint on the ground of forum
non conveniens.

RULING: NO. The court finds lack of merit on the complaint on ground of forum non conveniens and states that
the Philippine Courts have the jurisdiction over the parties notwithstanding the stipulation that the case shall be
governed by the laws of the State of Connecticut.
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.
The civil case is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of
the action and the amount of damages prayed are within the jurisdiction of the RTC. As to jurisdiction over the
parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the
complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its
voluntary appearance in court. 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
In Hasegawa v. Kitamura, the Court outlined 3 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 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.

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 averred foreign elements present in this case which include (1) BRII
and RUST are foreign corporations and respondent Rouzie is an American citizen, and (2) The evidence to be
presented is located outside the Philippines. The Court held that these are not sufficient to oust the trial court
of its jurisdiction over the case 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.
The Court found a failure to state a cause of action against Raytheon International, Inc., referring to the
insufficiency of allegation in the pleading. As a general rule, the elementary test for failure to state a cause of
action is whether the complaint alleges facts which if true would justify the relief demanded. The evidences are
not quite sufficient to meet a ruling that the complaint fails to state a cause of action.
The Manila Hotel Corp v. NLRC, G.R. No. 120077, October 13, 2000
FACTS: Petitioners are the Manila Hotel Corporation/MHC and the Manila Hotel International Company,
Limited/MHICL. When the case was filed in 1990, MHC was still a GOCC under Philippine law. MHICL is a HK
corporation. MHC is an "incorporator" of MHICL, owning 50% of its capital stock. By virtue of a "management
agreement" with the Palace Hotel, MHICL trained the personnel and staff of the Palace Hotel at Beijing, China.
Private respondent Marcelo Santos was an overseas worker employed as a printer at the Mazoon Printing Press,
Sultanate of Oman. Subsequently, he was directly hired by the Palace Hotel in Beijing, China, signing the
employment contract emailed to him, resigning an amended employment agreement in China. But later on, he
was terminated due to retrenchment due to political upheaval. Despite payment by Palace Hotel of all his
benefits due to him and his fare back to the Philippines, respondent Santos filed a complaint for illegal dismissal
with the NCR NLRC, praying for an award of US$19,923 as actual damages, P40,000 as exemplary damages and
attorney's fees equivalent to 20% of the damages prayed for. The complaint named MHC, MHICL, the Palace
Hotel and Palace Hotel’s representative Mr. Shmidt as respondents. The Palace Hotel and Mr. Shmidt were not
served with summons and neither participated in the proceedings before the LA.

ISSUE: Whether or not the case was filed in the proper forum before the NLRC.
RULING: NO. The NLRC was a seriously inconvenient forum.
The main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign
elements. The only link that the Philippines has with the case is that respondent Santos is a Filipino citizen.
The Palace Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here.
The employment contract. — Respondent Santos was hired directly by the Palace Hotel, a foreign employer,
through correspondence sent to the Sultanate of Oman, where respondent Santos was then employed. He was
hired without the intervention of the POEA or any authorized recruitment agency of the government.
Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if
it chooses to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort
to; (2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision. The conditions are
unavailing in the case at bar.
Not Convenient. — We fail to see how the NLRC is a convenient forum given that all the incidents of the case —
from the time of recruitment, to employment to dismissal occurred outside the Philippines. The inconvenience is
compounded by the fact that the proper defendants, the Palace Hotel and MHICL are not nationals of the
Philippines. Neither are they "doing business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and
Mr. Henk are non-residents of the Philippines.
No power to determine applicable law. — Neither can an intelligent decision be made as to the law governing
the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle
of lex loci contractus (the law of the place where the contract was made).
The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance by
writing a letter while he was in the Republic of Oman. This letter was sent to the Palace Hotel in the People's
Republic of China.
No power to determine the facts. — Neither can the NLRC determine the facts surrounding the alleged illegal
dismissal as all acts complained of took place in Beijing, People's Republic of China. The NLRC was not in a
position to determine whether the Tiannamen Square incident truly adversely affected operations of the Palace
Hotel as to justify respondent Santos' retrenchment.

Principle of effectiveness, no power to execute decision. — Even assuming that a proper decision could be
reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel. The Palace
Hotel is a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction
over its person was not acquired.
This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign
employers. Neither are we saying that we do not have power over an employment contract executed in a
foreign country. If Santos were an "overseas contract worker", a Philippine forum, specifically the POEA, not the
NLRC, would protect him. He is not an "overseas contract worker" a fact which he admits with conviction.
2. Assume Jurisdiction and Apply Internal Law of the Forum
3. Assume Jurisdiction and Apply Foreign Law

Fleumer vs. Hix, 54 Phil. 610 (1930)
FACTS: Petitioner Fleumer is the special administrator of the estate of Hix, appealed the decision of the lower
court that denied the probate of a document alleged to be the will of Hix. Fleumer states that the will was
executed in West Virginia by Hix who was residing there and that West Virginia law should govern. He submitted
a copy of Section 3868 of Act 1882 as found in the Virginia Code, certified by the Director of our National Library.
ISSUE: Whether or not West Virginia Law should govern the due execution of the will.
RULING: NO. West Virginia law was not sufficiently proven before the court.
The laws of a foreign jurisdiction do not prove themselves in our courts. The Philippine courts are not authorized
to take judicial notice of the laws of the various states of America. Such laws must be proved as facts. Here the
requirements of the law were not met. There was no showing that the book from which the extract was taken
was printed or published under the authority of the State of West Virginia. Nor was the extract from the law
attested by the certificate of the officer having charge of the original under the seal of the State of West Virginia.
No evidence was introduced to show that the extract from the laws of West Virginia was in force at the time the
alleged will was executed.
In addition, the due execution of the will was not established even under West Virginia law. The only evidence
presented was petitioner’s testimony. There was no indication that the will was acknowledged by the testator in
the presence of 2 competent witnesses, or that these witnesses subscribed to the will in the presence of the
testator and of each other as the law of West Virginia seems to require. On the supposition that the witnesses to

the will reside outside the Philippines, it would then be the duty of petitioner to prove execution by some other
means.
Philippine Trust Co. vs. Bohanan, 106 Phil. 997 (1960)

FACTS: Upon introduction of said Nevada law, CFI of Manila admitted to probate the will of C.O. Bohanan where
it was declared that he was a Nevadan (USA) citizen since he selected such as his domicile and permanent
address, and also named petitioner Philippine Trust Co. as executor of the will. In a subsequent case for a
proposed project of partition, where the Nevada law was not introduced. Widow Magdalena Bohanan and her 2
children questioned the validity of the will which gave P90,819.67 (of P211,639) and half of the shares of stock
of several mining companies to the grandson, his brother and his sister, leaving only P6,000 to each of his
children.
ISSUE: Whether or not Nevada law should apply in the partition of the estate in accordance with the will despite
the Nevada law not being introduced in the proceedings thereof.
RULING: YES.
The old Civil Code is applicable in this case because the testator died in 1944, which expressly provides that
successional rights to personal property are to be governed by the national law of the person whose succession
is in question.
The issue is whether the testamentary dispositions, especially those for the children which are short of the
legitime given to them by the Civil Code are valid. The law of Nevada, being a foreign law, can only be proved in
our courts in the form and manner provided for by the Rules. However, upon checking of the records on the
probate of the will, Magdalena’s motion for the withdrawal of P20,000 of her share, the Nevada law was
introduced by appellant’s counsel for the executor and admitted by the court. In addition, the other appellants –
the children of the testator – did not dispute the provisions of the Nevada law. Considering these, the pertinent
law of Nevada can be taken judicial notice of by us, without proof of such law having been offered at the hearing
of the project of partition.
As in accordance to the Civil Code, the validity of testamentary dispositions are to be governed by the national
law of the testator, and as it has been decided that that it is not disputed that the national law of the testator is
the State of Nevada, where it allows a testator to dispose of all his property according to his will, as in the case
at bar, the order of the court approving the project of partition made in accordance with the testamentary
disposition must be affirmed, with costs against appellants.

When foreign law cannot be applied

Forum law should be applied in cases falling under any of these exceptions:
1. When the foreign law is contrary to an important public policy of the forum;
2. When the foreign law is penal in nature;
3. When the foreign law is procedural in nature;
4. When the foreign law is purely fiscal or administrative in nature;
5. When the application of the foreign law will work undeniable injustice to the citizens of the forum;
6. When the case involves real or personal property situated in the forum;
7. When the application of the foreign law might endanger the vital interest of the state;
8. When the foreign law is contrary to good morals.

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Notes by cobentry & legally_twirly

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 1

Object and Function of Conflict of Laws

B. History of Conflict of Laws

B.ii. Modern Views/Developments

C. Conflicts of Laws vs. Public International Law

publicists 1. National conflict rules

Difference of Public International Law and Private International Law

D. Sources of Conflict of Laws Rules

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 3

II. ADDRESSING CONFLICTS OF LAW PROBLEMS

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 4

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 5

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 6

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 7

Laurel vs. Garcia, 187 SCRA 797 (1990)

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 8

B. Judicial Resolution of Conflict Cases

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 9

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 10

International Shoe v. Washington

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 11

1. Jurisdiction over the Person

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 12

Mullane v. Hannover Band & Trust Co., 399 US 306 (1950)

Shaffer v. Heitner, 433 US 186 (977)

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 13

Macasaet v. Co, G.R. No. 156759, June 5, 2013

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 14

Spouses Belen v. Chavez, G.R. No. 175334, March 26, 2008

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 16

Gemperle v. Schenker, 19 SCRA 45 (1967)

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 17

Regner vs. Logarta, 537 SCRA 277, October 19, 2007

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 18

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 19

2. Jurisdiction over the Subject Matter and Issues of the Case

SECTION 5. The Supreme Court shall have the following powers:

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 20

BP 129 - The Judiciary Reorganization Act of 1980

Civil Code, Arts. 2042-2046

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 21

attacking a compromise. (1819a)

Labor Code, Art. 217

Jurisdiction over the Subject Matter

Caluag v. Pecson, 82 Phil. 8 (1948)

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 22

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 23

Idonah Perkins vs. Roxas, 72 Phil. 514 (1941)

Lhuiller v. British Airways, G.R. No. 171092, March 15, 2010

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 24

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 25

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 26

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 27

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 28

Conflicts of Law Notes | 2nd Sem, ’20-‘21 | 29

Valmonte v. Court of Appeals, G.R. No. 108538, January 22, 1996