CONFLICT OF LAWS (1) the Government of the Philippine Islands had amended
Laws No. 80 and No. 224 and had thereby materially altered
CASE DIGESTS
(Week 17 & 18 Coverage)
Based on Atty. Kristine Mae M. Quibod’s Syllabus
Jose Maria College – College of Law
OBLIGATIONS AND CONTRACTS
a. Definition of Contracts
b. Elements of a Contract
c. Lex Loci Celebrationis
d. Lex Loci Contractus
e. Limitations and Principles in the Choice of Law
f. Depecage
CASES:
THE GOVT OF THE PHILIPPINE ISLANDS vs. FRANK
G. R. No. 2935 MARCH 23, 1909
FACTS:
In 1903, in the city of Chicago, Illinois, Frank entered into a
contract for a period of 2 years with the Plaintiff, by which
Frank was to receive a salary as a stenographer in the service
of the said Plaintiff, and in addition thereto was to be paid in
advance the expenses incurred in traveling from the said city
of Chicago to Manila, and one-half salary during said period of
travel.
Said contract contained a provision that in case of a violation
of its terms on the part of Frank, he should become liable to
the Plaintiff for the amount expended by the Government by
way of expenses incurred in traveling from Chicago to Manila
and the one-half salary paid during such period.
Frank entered upon the performance of his contract and was
paid half-salary from the date until the date of his arrival in the
Philippine Islands.
Thereafter, Frank left the service of the Plaintiff and refused to
make a further compliance with the terms of the contract.
The Plaintiff commenced an action in the CFI-Manila to recover
from Frank the sum of money, which amount the Plaintiff
claimed had been paid to Frank as expenses incurred in
traveling from Chicago to Manila, and as half-salary for the
period consumed in travel. It was expressly agreed between
the parties to said contract that Laws No. 80 and No. 224
should constitute a part of said contract.
The Defendant filed a general denial and a special defense,
alleging in his special defense that
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
the said contract, and also that
(2) he was a minor at the time the contract was entered into
and was therefore not responsible under the law.
the lower court rendered a judgment against Frank and in
favor of the Plaintiff for the sum of 265. 90 dollars
ISSUE:
1. Did the amendment of the laws altered the tenor of the
contract entered into between Plaintiff and Defendant?
2. Can the defendant allege minority/infancy?
RULING:
The judgment of the lower court is affirmed
1. NO; It may be said that the mere fact that the legislative
department of the Government of the Philippine Islands had
amended said Acts No. 80 and No. 224 by Acts No. 643 and No.
1040 did not have the effect of changing the terms of the
contract made between the Plaintiff and the Defendant. The
legislative department of the Government is expressly
prohibited by section 5 of the Act of Congress of 1902 from
altering or changing the terms of a contract. The right which
the Defendant had acquired by virtue of Acts No. 80 and No.
224 had not been changed in any respect by the fact that said
laws had been amended. These acts, constituting the terms of
the contract, still constituted a part of said contract and were
enforceable in favor of the Defendant.
2. NO; The Defendant alleged in his special defense that he was
a minor and therefore the contract could not be enforced
against him. The record discloses that, at the time the contract
was entered into in the State of Illinois, he was an adult under
the laws of that State and had full authority to contract. Frank
claims that, by reason of the fact that, under that laws of the
Philippine Islands at the time the contract was made, made
persons in said Islands did not reach their majority until they
had attained the age of 23 years, he was not liable under said
contract, contending that the laws of the Philippine Islands
governed.
It is not disputed — upon the contrary the fact is admitted —
that at the time and place of the making of the contract in
question the Defendant had full capacity to make the same. No
rule is better settled in law than that matters bearing upon the
execution, interpretation and validity of a contract are
determined b the law of the place where the contract is made.
Matters connected with its performance are regulated by the
law prevailing at the place of performance. Matters respecting
a remedy, such as the bringing of suit, admissibility of
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evidence, and statutes of limitations, depend upon the law of
the place where the suit is brought.
NORSE MANAGEMENT vs. NATIONAL SEAMEN
G.R. No. L-54204 SEPTEMBER 30, 1982
FACTS:
Napoleon B. Abordo, the deceased husband of private
respondent Restituta C. Abordo, was the Second Engineer of
M.T. "Cherry Earl" when he died from an apoplectic stroke in
the course of his employment with petitioner NORSE
MANAGEMENT COMPANY (PTE). The M.T. "Cherry Earl" is a
vessel of Singaporean Registry.
In her complaint for compensation benefits filed before the
National Seamen Board, private respondent alleged that the
amount of compensation due her from petitioners should be
based on the law where the vessel is registered. Petitioners
contend that the law of Singapore should not be applied in this
case because the National Seamen Board cannot take judicial
notice of the Workmen's Insurance Law of Singapore instead
must be based on Board’s Memeorandum Circular No. 25.
Ministry of Labor and Employment ordered the petitioner to
pay jointly and severally the private respondent. Petitioner
appealed to the Ministry of Labor but same decision. Hence,
this petition.
ISSUE:
Whether or not the law of Singapore ought to be applied in this
case.
RULING:
YES. In the aforementioned "Employment Agreement"
between petitioners and the late Napoleon B. Abordo, it is
clear that compensation shall be paid under Philippine Law or
the law of registry of petitioners' vessel, whichever is greater.
Since private respondent Restituta C. Abordo was offered
P30,000.00 only by the petitioners, Singapore law was
properly applied in this case.
The "Employment Agreement" is attached to the
Supplemental Complaint of Restituta C. Abordo and,
therefore, it forms part thereof. As it is familiar with Singapore
Law, the National Seamen Board is justified in taking judicial
notice of and in applying that law.
Furthermore, Article 20, Labor Code of the Philippines,
provides that the National Seamen Board has original and
exclusive jurisdiction over all matters or cases including money
claims, involving employer-employee relations, arising out of
or by virtue of any law or contracts involving Filipino seamen
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
for overseas employment. Thus, it is safe to assume that the
Board is familiar with pertinent Singapore maritime laws
relative to workmen's compensation. Moreover, the Board
may apply the rule on judicial notice and, "in administrative
proceedings, the technical rules of procedure — particularly of
evidence — applied in judicial trials, do not strictly apply."
Finally, Article IV of the Labor Code provides that "all doubts in
the implementation and interpretation of the provisions of this
code, including its implementing rules and resolved in favor of
labor. Thus, the petition was denied.
UNITED AIRLINES, INC. vs. CA
G.R. NO. 124110 APRIL 20, 2001
FACTS:
Anicieto Fontanilla purchased from United Airlines through its
agent in Manila 3 airline tickets for himself and his family. They
proceeded to US as planned. When they were in Los Angeles,
they bought additional tickets boarded to San Francisco which
boarding passes indicated “CHECK-IN REQUIRED”.
When the flight was called, the stewardess did not allow them
to board the plane as they have no assigned seat numbers and
directed them to go back the “check-in counter” where Linda
had been overbooked and asked them to wait. Fontanillas
explained the special circumstances of their visit but Linda told
them in an arrogant manner:
"So what, I can not do anything about it. it’s not my fault. It’s
the fault of the company. Just sit down and wait." Mr.
Fontanilla reminded Linda of the inconvenience being caused
to them, she bluntly retorted, "Who do you think you are? You
lousy Flips are good for nothing beggars. You always ask for
American aid." After which she remarked "Don’t worry about
your baggage. Anyway there is nothing in there. What are you
doing here anyway? I will report you to immigration. You
Filipinos should go home."
Such rude statements were made in front of other people in
the airport causing the Fontanillas to suffer shame, humiliation
and embarrassment.
Fontanillas claimed that upon their arrival to the airport, they
proceeded to the counter where Linda examined their tickets,
punched something on her computer and told them boarding
would be in 15 minutes. However, United Airlines denied such
claiming that they instead proceeded to join the queue
boarding the aircraft without first securing their seat
assignments as required in their ticket and boarding passes.
Linda also denies uttering the derogatory and racist words
attributed to her by the Fontanillas.
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CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
The RTC dismissed the complaint. However, upon appeal, CA
reversed it and applied the US laws.
ISSUE:
Was CA correct when it applied US laws?
HELD:
NO. Philippine law is the applicable law. Although, the
contract of carriage was to be performed in the United States,
the tickets were purchased through petitioner’s agent in
Manila. It is true that the tickets were "rewritten" in
Washington, D.C. however, such fact did not change the
nature of the original contract of carriage entered into by the
parties in Manila.
Doctrine of lex loci contractus. According to the doctrine, as a
general rule, the law of the place where a contract is made or
entered into governs with respect to its nature and validity,
obligation and interpretation. This has been said to be the rule
even though the place where the contract was made is
different from the place where it is to be performed, and
particularly so, if the place of the making and the place of
performance are the same. Hence, the court should apply the
law of the place where the airline ticket was issued, when the
passengers are residents and nationals of the forum and the
ticket is issued in such State by the airline.
The law of the forum on the subject matter is Economic
Regulations No. 7 as amended by Boarding Priority and Denied
Board Compensation of the Civil Aeronautics Board which
provides that the check-in requirement be complied with
before a passenger may claim against a carrier for being denied
boarding.
On the issue of damages, the SC ruled that the derogatory
remarks claimed by Fontanilla was not supported by evidences
to conclude that there indeed was fraud or bad faith entitling
them for award of damages.
BAGONG FILIPINAS OVERSEAS CORPORATION vs. NATIONAL
LABOR RELATIONS COMMISSION
G.R. No. L-66006 February 28, 1985
FACTS:
The shipboard employment contract dated June 1, 1978 was
executed in this country between Pancho and Bagong Filipinas
Overseas Corporation, the local agent of Golden Star Shipping.
Golden Star Shipping, is a Hongkong based firm. Pancho was
hired as an oiler in the M/V Olivine for 12 months. Therafter
he had a cerebral stroke. He was rushed to the hospital while
the vessel was docked at Gothenberg, Sweden. He was
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
repatriated to the Philippines and confined at the San Juan de
Dios Hospital where he died eventually.
The National Seamen Board awarded his widow, Proserfina,
P20,000 as disability compensation benefits pursuant to the
above-mentioned employment contract.
Proserfina appealed to the National Labor Relations
Commission which awarded her $621 times 36 months or its
equivalent in Philippine currency plus 10% of the benefits as
attorney's fees. Golden Star Shipping assailed that decision by
certiorari.
ISSUE:
What law should govern the amount of death compensation
due to the wife of Guillermo Pancho: the shipboard
employment contract or Hongkong law?
RULING:
The shipboard employment contract.
The contract provides that the beneficiaries of the seaman are
entitled to P20,000 "over and above the benefits" for which
the Philippine Government is liable under Philippine law.
Hongkong law on workmen's compensation is not the
applicable law. The case of Norse Management Co. vs.
National Seamen Board, G. R. No. 54204, September 30, 1982,
117 SCRA 486 cannot be a precedent because it was expressly
stipulated in the employment contract in that case that the
workmen's compensation payable to the employee should be
in accordance with Philippine Law or the Workmen's Insurance
Law of the country where the vessel is registered "whichever
is greater". The Solicitor General opines that the employment
contract should be applied. For that reason, he refused to
uphold the decision of the NLRC.
JOSE B. ATIENZA vs. PHILIMARE SHIPPING AND EQUIPMENT
SUPPLY
G.R. No. 71604 AUGUST 11, 1989
FACTS:
Joseph B. Atienza was engaged by Philimare Shipping and
Equipment Supply, as agent for Trans Ocean Liner Pte. Ltd. of
Germany, based on Singapore, to work as Third Mate on board
the MV Tibati. The Crew Agreement signed by the parties on
January 3, 1981, provided for insurance benefits "as per NSB
Standard Format" and was validated and approved by the
National Seamen Board.
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CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
On May 12, 1981, Atienza died as a result of an accident which
befell him while working on the vessel in Bombay, India. In due
time, his father, the herein petitioner, filed a claim for death
benefits computed at the rate of 36 months times the
seaman's monthly salary plus ten per cent thereof in
accordance with the Workmen's Compensation Law of
Singapore, for a total of $30,600.00. The, Philimare Shipping,
while admitting liability, contended that this was limited to
only P40,000.00 under Section D(1) of the NSB Standard
Format.
Philippine Overseas Employment Administration sustained
Philimare Shipping and held that the applicable law was
Philippine law. On appeal, the decision was affirmed by the
NLRC except that it increased the award to P75,000.00
pursuant to NSB Memorandum Circular No. 71, Series of 1981.
A petition then filed by Atienza asking to reverse the Decision
of NLRC on the ground that Singaporean law should have been
applied in line with the ruling in Norse Management Co. v.
National Seamen Board where the foreign law was held
controlling because it provided for greater benefits for the
claimant. For their part, Philimare Shipping question the
application of NSB Memorandum Circular No. 71, Series of
1981, which they say became effective after the seaman's
death.
ISSUES:
(1) Should Singaporean Law be applied in line with the ruling
in Norse Management Co. v. National Seamen Board where
the foreign law was held controlling because it provided for
greater benefits for the claimant?
(2) Should NSB Memorandum Circular No. 71, Series of 1981
be applied in the case?
HELD:
(1) NO. Norse is not applicable to the present petition.
The, reason is that in that case, it was specifically stipulated by
the parties in the Crew Agreement that "compensation shall
be paid to employee in accordance with and subject to the
limitations of the Workmen's Compensation Act of the
Philippines or the Workmen's Insurance Law of the registry of
the vessel, whichever is greater”. That was why the higher
benefits prescribed by the foreign law were awarded.
By contrast, no such stipulation appears in the Crew
Agreement now under consideration. Instead, it is clearly
stated therein that the insurance benefits shall be "as per NSB
Standard Format," in the event "of death of the seaman during
the term of his contract, over and above the benefits for which
the Philippine Government is liable under Philippine law.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
Atienza argues that the Standard Format prescribed only the
minimum benefits and does not preclude the parties from
stipulating for higher compensation. That may be true enough.
But the point is that the parties in this case did not provide for
such higher benefits as the parties did in the Norse case. There
was no stipulation in the Crew Agreement of January 3, 1981,
that the employee would be entitled to whichever greater
insurance benefits were offered by either Philippine law or the
foreign law; on the contrary, it was plainly provided that
insurance benefits would be determined according to the NSB
Standard Format then in force. The consequence is that the
Atienza cannot now claim a higher award than the
compensation prescribed in the said format.
(2) NO. The NLRC, apparently laboring under the belief that
Memorandum Circular No. 71 was already effective at the time
of the seaman's death on May 12, 1981, increased the death
benefits to P75,000.00 as provided thereunder. The fact,
though, is that the new rule became effective only in
December 1981, as certified by the POEA itself, or seven
months after Joseph Atienza's fatal accident.
On Atienza's claim that the award should be adjusted in view
of the decrease in the purchasing power of the Philippine peso,
it suffices to cite the following relevant ruling of the Court in
Sta. Rita and Well Run Maritime SA Ltd. v. NLRC:
Regarding the third contention of the petitioners, the records
show that when Sta. Rita died on September 14, 1981, NSB
Memorandum Circular No. 46 (Series of 1979) was the
applicable law. Pursuant to this circular, in case of a seaman's
death during the terms of his contract, the company shall pay
his beneficiaries the amount of P30,000.00. On November 18,
1981 or more than one month after Sta. Rita's death the
administrative regulations were amended to increase death
compensation for seamen to P50,000.00, effective December
1, 1981.
Considering that the applicable law governing death
compensation for seamen at the time of Sta. Rita's death was
Memorandum Circular No. 46, Series of 1979, the petitioner's
liability should be limited to P30,000.00. Moreover, if manning
agents or shipping corporations secure employer's insurance
to cover their liabilities for death, total disability and sickness
of officers and ratings on board foreign going vessels, the
extent of the coverage is based on the applicable law at the
time. It would be unjust to compel them to pay benefits based
on a law not yet in effect at the time the contingency occurs.
PAKISTAN INTERNATIONAL AIRLINES CORPORATION vs.
HON. BLAS F. OPLE
G.R. No. 61594 SEPTEMBER 28, 1990
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FACTS:
Pakistan International Airlines Corporation ("PIA"), a foreign
corporation licensed to do business in the Philippines,
executed in Manila two (2) separate contracts of employment,
one with private respondent Ethelynne B. Farrales and the
other with private respondent Ma. M.C. Mamasig. The
contracts provided in pertinent portion as follows:
5. DURATION OF EMPLOYMENT AND PENALTY
This agreement is for a period of three (3) years, but can be
extended by the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided, PIA
reserves the right to terminate this agreement at any time by
giving the EMPLOYEE notice in writing in advance one month
before the intended termination or in lieu thereof, by paying
the EMPLOYEE wages equivalent to one month's salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under and by
the laws of Pakistan, and only the Courts of Karachi, Pakistan
shall have the jurisdiction to consider any matter arising out of
or under this agreement.
Respondents then commenced training in Pakistan. Roughly 1
year and 4 months prior to the expiration of the contracts of
employment, PIA sent separate letters to private respondents
advising both that their services as flight stewardesses would
be terminated conformably to clause 6 (b) of the employment
agreement [they had) executed. Private respondents jointly
instituted a complaint for illegal dismissal and non-payment of
company benefits and bonuses, against PIA. The Ministry of
Labor and Employment (MOLE) ruled in favor of the
respondents.
ISSUE:
Whether the present case is governed by the provisions of the
contract rather than by the general provisions of the Labor
Code
RULING:
The case should be governed by the Labor Code.
A contract freely entered into should, of course, be respected,
as PIA argues, since a contract is the law between the parties.
The principle of party autonomy in contracts is not, however,
an absolute principle. The rule in Article 1306, of our Civil Code
is that the contracting parties may establish such stipulations
as they may deem convenient, "provided they are not contrary
to law, morals, good customs, public order or public policy."
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
The law relating to labor and employment is clearly such an
area and parties are not at liberty to insulate themselves and
their relationships from the impact of labor laws and
regulations by simply contracting with each other.
The first clause of paragraph 10 cannot be invoked to prevent
the application of Philippine labor laws and regulations to the
subject matter of this case, i.e., the employer-employee
relationship between petitioner PIA and private respondents.
The relationship is much affected with public interest and that
the otherwise applicable Philippine laws and regulations
cannot be rendered illusory by the parties agreeing upon some
other law to govern their relationship.
The court concludes that private respondents Farrales and
Mamasig were illegally dismissed.
PCL SHIPPING PHILIPPINES, INC. vs. NLRC
G.R. No. 153031 DECEMBER 14, 2006
FACTS:
In April 1996, Steve Rusel was employed as seaman by PCL
Shipping Philippines for and in behalf of its foreign principal, U-
Ming Marine. Steve Rusel thereby joined the vessel MV
Cemtex for 12 months with a basic monthly salary of
US$400.00, living allowance of US$140.00, fixed overtime rate
of US$120.00 per month, vacation leave with pay of US$40.00
per month and special allowance of US$175.00.
On July 16, 1996, while Steve Rusel was cleaning the vessel's
kitchen, he slipped, and as a consequence thereof, he suffered
a broken/sprained ankle on his left foot. A request for medical
examination was flatly denied by the captain of the vessel. On
August 13, 1996, feeling an unbearable pain in his ankle, Steve
Rusel jumped off the vessel using a life jacket and swam to
shore. He was brought to a hospital where he was confined for
8 days. On August 22, 1996, a vessel's agent fetched Steve
Rusel from the hospital and was required to board a plane
bound for the Philippines.
On September 26, 1996, Steve Rusel filed a complaint for
illegal dismissal, non-payment of wages, overtime pay, claim
for medical benefits, sick leave pay and damages against PCL
Shipping and U-Ming Marine before the arbitration branch of
the NLRC. In their answer, the latter alleged that Steve Rusel
deserted his employment by jumping off the vessel.
Labor Arbiter held that respondent is liable for the unjust
repatriation of the complainant. NLRC affirmed the finding of
the Labor Arbiter.
ISSUE:
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CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
Whether or not Steve Rusel was guilty of desertion to justify
his dismissal.
HELD:
No. For a seaman to be considered as guilty of desertion, it is
essential that there be evidence to prove that if he leaves the
ship or vessel in which he had engaged to perform a voyage,
he has the clear intention of abandoning his duty and of not
returning to the ship or vessel. In the present case, however,
petitioners PCL Shipping lines failed to present clear and
convincing proof to show that when private respondent Steve
Rusel jumped ship, he no longer had the intention of returning.
The fact alone that he jumped off the ship where he was
stationed, swam to shore and sought medical assistance for
the injury he sustained is not a sufficient basis for petitioners
PCL shipping to conclude that he had the intention of deserting
his post.
The reason for his jumping overboard was unmitigated pain he
was suffering which was compounded by the inattention of the
vessel's captain to provide him with the necessary treatment
inspite of the fact that the ship was moored for about two
weeks at the anchorage of Takehara, Japan; and, that Rusel's
act was a desperate move to protect himself and to seek relief
for his physical suffering.
ISSUE:
Whether or not the provisions of the Constitution as well as
the Labor Code which afford protection to labor apply to
Filipino employees working abroad.
HELD:
Yes, it does. PCL Shipping admit that they did not inform Steve
Rusel in writing of the charges against him and that they failed
to conduct a formal investigation to give him opportunity to air
his side. However, petitioners PCL Shipping contend that the
twin requirements of notice and hearing applies strictly only
when the employment is within the Philippines and that these
need not be strictly observed in cases of international
maritime or overseas employment.
The provisions of the Constitution as well as the Labor Code
which afford protection to labor apply to Filipino employees
whether working within the Philippines or abroad. Moreover,
the principle of lex loci contractus (the law of the place where
the contract is made) governs in this jurisdiction.
In the present case, it is not disputed that the Contract of
Employment entered into by and between petitioners and
private respondent was executed here in the Philippines with
the approval of the Philippine Overseas Employment
Administration (POEA). Hence, the Labor Code together with
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
its implementing rules and regulations and other laws
affecting labor apply in this case. Accordingly, as to the
requirement of notice and hearing in the case of a seafarer, the
Court has already ruled in a number of cases that before a
seaman can be dismissed and discharged from the vessel, it is
required that he be given a written notice regarding the
charges against him and that he be afforded a formal
investigation where he could defend himself personally or
through a representative. Hence, the employer should strictly
comply with the twin requirements of notice and hearing
without regard to the nature and situs of employment or the
nationality of the employer. Petitioners failed to comply with
these twin requirements.
SAMEER OVERSEAS PLACEMENT AGENCY, INC. v. JOY C.
CABILES
G.R. No. 170139 AUGUST 05, 2014
FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc. is a
recruitment and placement agency. Respondent, Joy C.
Cabiles, submitted her application for a quality control job in
Taiwan, and signed with a one-year employment contract for
a monthly salary of NT$15,360.00. The agency required her to
pay a placement fee of P70,000.00 when she signed the
employment contract.
She was deployed to work in Taiwan for Wacoal, but was given
a position as a cutter.
Sameer Overseas Placement Agency claims that on July 14,
1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that “she
should immediately report to their office to get her salary and
passport.” She was asked to “prepare for immediate
repatriation.”
Joy claims that she was told that from June 26 to July 14, 1997,
she only earned a total of NT$9,000. According to her, Wacoal
deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint17 with the National
Labor Relations Commission against petitioner and Wacoal.
She claimed that she was illegally dismissed. She asked for the
return of her placement fee, the withheld amount for
repatriation costs, payment of her salary for 23 months as well
as moral and exemplary damages. She identified Wacoal as
Sameer Overseas Placement Agency’s foreign principal.
Sameer’s Defense:
Respondent’s termination was due to her inefficiency,
negligence in her duties, and her failure to comply with the
work requirements of her foreign employer.
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Petitioner also reiterates that since Wacoal’s accreditation was
validly transferred to Pacific at the time respondent filed her
complaint, it should be Pacific that should now assume
responsibility for Wacoal’s contractual obligations to the
workers originally recruited by petitioner. This was denied by
the Pacific.
ISSUE:
WON Pacific should now assume responsibility for Wacoal’s
contractual obligations to the workers originally recruited by
petitioner.
RULING:
NO. Finally, we clarify the liabilities of Wacoal as principal and
petitioner as the employment agency that facilitated
respondent’s overseas employment.
Section 10 of the Migrant Workers and Overseas Filipinos Act
of 1995 provides that the foreign employer and the local
employment agency are jointly and severally liable for money
claims including claims arising out of an employer-employee
relationship and/or damages. This section also provides that
the performance bond filed by the local agency shall be
answerable for such money claims or damages if they were
awarded to the employee.
This provision is in line with the state’s policy of affording
protection to labor and alleviating workers’ plight.
In overseas employment, the filing of money claims against the
foreign employer is attended by practical and legal
complications. The distance of the foreign employer alone
makes it difficult for an overseas worker to reach it and make
it liable for violations of the Labor Code. There are also possible
conflict of laws, jurisdictional issues, and procedural rules that
may be raised to frustrate an overseas worker’s attempt to
advance his or her claims.
It may be argued, for instance, that the foreign employer must
be impleaded in the complaint as an indispensable party
without which no final determination can be had of an action.
The provision on joint and several liability in the Migrant
Workers and Overseas Filipinos Act of 1995 assures overseas
workers that their rights will not be frustrated with these
complications.
The fundamental effect of joint and several liability is that
“each of the debtors is liable for the entire obligation.” A final
determination may, therefore, be achieved even if only one of
the joint and several debtors are impleaded in an action.
Hence, in the case of overseas employment, either the local
agency or the foreign employer may be sued for all claims
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
arising from the foreign employer’s labor law violations. This
way, the overseas workers are assured that someone — the
foreign employer’s local agent — may be made to answer for
violations that the foreign employer may have committed.
The Migrant Workers and Overseas Filipinos Act of 1995
ensures that overseas workers have recourse in law despite
the circumstances of their employment. By providing that the
liability of the foreign employer may be “enforced to the full
extent” against the local agent, the overseas worker is assured
of immediate and sufficient payment of what is due them.
Corollary to the assurance of immediate recourse in law, the
provision on joint and several liability in the Migrant Workers
and Overseas Filipinos Act of 1995 shifts the burden of going
after the foreign employer from the overseas worker to the
local employment agency. However, it must be emphasized
that the local agency that is held to answer for the overseas
worker’s money claims is not left without remedy. The law
does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the
employee to answer for the money claims against the foreign
employer.
A further implication of making local agencies jointly and
severally liable with the foreign employer is that an additional
layer of protection is afforded to overseas workers. Local
agencies, which are businesses by nature, are inoculated with
interest in being always on the lookout against foreign
employers that tend to violate labor law. Lest they risk their
reputation or finances, local agencies must already have
mechanisms for guarding against unscrupulous foreign
employers even at the level prior to overseas employment
applications.
With the present state of the pleadings, it is not possible to
determine whether there was indeed a transfer of obligations
from petitioner to Pacific. This should not be an obstacle for
the respondent overseas worker to proceed with the
enforcement of this judgment. Petitioner is possessed with the
resources to determine the proper legal remedies to enforce
its rights against Pacific, if any.
The decision of the Court of Appeals is AFFIRMED with
modification. Petitioner Sameer Overseas Placement Agency is
ORDERED to pay respondent Joy C. Cabiles the amount
equivalent to her salary for the unexpired portion of her
employment contract at an interest of 6% per annum from the
finality of this judgment. Petitioner is also ORDERED to
reimburse respondent the withheld NT$3,000.00 salary and
pay respondent attorney’s fees of NT$300.00 at an interest of
6% per annum from the finality of this judgment.
(Repeated Case)
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CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
 SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA,
v. MA. JOPETTE M. REBESENCIO, MONTASSAH B. SACAR-
ADIONG, ROUEN RUTH A. CRISTOBAL AND LORAINE S.
SCHNEIDER-CRUZ
G.R. No. 198587, January 14, 2015
FACTS:
Rebesencio et al were recruited and hired by Saudi Arabian
Airlines (Saudia), a foreign corporation established and
existing under the laws of Jeddah, Kingdom of Saudi Arabia, as
Permanent Flight Attendants. They entered into Cabin
Attendant contracts with Saudia.
Rebesencio et al continued their employment with Saudia until
they were separated from service on various dates in 2006.
Rebesencio et al contended that the termination of their
employment was illegal. They alleged that the termination was
made solely because they were pregnant. They alleged that
they had informed Saudia of their respective pregnancies and
had gone through the necessary procedures to process their
maternity leaves. Initially, Saudia had given its approval but
later on informed them that its management in Jeddah, Saudi
Arabia had disapproved their maternity leaves. In addition, it
required them to file their resignation letters and that if they
do not resign, Saudia would terminate them all the same.
Saudia anchored its disapproval of Rebesencio et al's
maternity leaves and demand for their resignation on its
"Unified Employment Contract for Female Cabin Attendants"
(Unified Contract). Under the Unified Contract, the
employment of a Flight Attendant who becomes pregnant is
rendered void.
Rebesencio et al filed a Complaint against Saudia and its
officers for illegal dismissal and for underpayment of salary
and other benefits before the Labor Arbiter.
Saudia assailed the jurisdiction of the Labor Arbiter. It claimed
that all the determining points of contact referred to foreign
law and insisted that the Complaint ought to be dismissed on
the ground of forum non conveniens.
The Labor Arbiter rendered a decision dismissing Rebesencio
et al's Complaint.
On appeal, National Labor Relations Commission reversed the
ruling of Labor. It explained that "[considering that
complainants-appellants are OFWs, the Labor Arbiters and the
NLRC has [sic] jurisdiction to hear and decide their complaint
for illegal termination." On the matter of forum non
conveniens, it noted that there were no special circumstances
that warranted its abstention from exercising jurisdiction.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
On appeal, CA denied Saudia’s petition.
ISSUE:
Does the Philippine Courts in position to make intelligent
decision as to what law governs this case?
HELD:
Yes, the Philippine Courts is in position to make intelligent
decision as to what law governs this case.
Saudia asserts that Philippine courts and/or tribunals are not
in a position to make an intelligent decision as to the law and
the facts. This is because respondents' Cabin Attendant
contracts require the application of the laws of Saudi Arabia,
rather than those of the Philippines. It claims that the difficulty
of ascertaining foreign law calls into operation the principle
of forum non conveniens, thereby rendering improper the
exercise of jurisdiction by Philippine tribunals.
A choice of law governing the validity of contracts or the
interpretation of its provisions does not necessarily
imply forum non conveniens. Choice of law and forum non
conveniens are entirely different matters.
Choice of law provisions are an offshoot of the fundamental
principle of autonomy of contracts.
In contrast, forum non conveniens is a device akin to the rule
against forum shopping. It is designed to frustrate illicit means
for securing advantages and vexing litigants that would
otherwise be possible if the venue of litigation (or dispute
resolution) were left entirely to the whim of either party.
Contractual choice of laws factors into transnational litigation
in any or a combination of four (4) ways: (1) procedures for
settling disputes, e.g., arbitration; (2) forum, i.e., venue; (3)
governing law; and (4) basis for interpretation. Forum non
conveniens relates to one of these: choosing between multiple
possible fora.
Forum non conveniens literally translates to "the forum is
inconvenient."62 It is a concept in private international law and
was devised to combat the "less than honorable" reasons and
excuses that litigants use to secure procedural advantages,
annoy and harass defendants, avoid overcrowded dockets,
and select a "friendlier" venue.63 Thus, the doctrine of forum
non conveniens addresses the same rationale that the rule
against forum shopping does, albeit on a multijurisdictional
scale.
Forum non conveniens, like res judicata, is a concept
originating in common law.65 However, unlike the rule on res
judicata, as well as those on litis pendentia and forum
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CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
shopping, forum non conveniens finds no textual anchor,
whether in statute or in procedural rules, in our civil law
system. Nevertheless, jurisprudence has applied forum non
conveniens as basis for a court to decline its exercise of
jurisdiction.
Forum non conveniens is soundly applied not only to address
parallel litigation and undermine a litigant's capacity to vex and
secure undue advantages by engaging in forum shopping on an
international scale. It is also grounded on principles of comity
and judicial efficiency.
Consistent with the principle of comity, a tribunal's desistance
in exercising jurisdiction on account of forum non
conveniens is a deferential gesture to the tribunals of another
sovereign. It is a measure that prevents the former's having to
interfere in affairs which are better and more competently
addressed by the latter. Further, forum non conveniens entails
a recognition not only that tribunals elsewhere are better
suited to rule on and resolve a controversy, but also, that these
tribunals are better positioned to enforce judgments and,
ultimately, to dispense justice. Forum non
conveniens prevents the embarrassment of an awkward
situation where a tribunal is rendered incompetent in the face
of the greater capability — both analytical and practical — of
a tribunal in another jurisdiction.
Accordingly, under the doctrine of forum non conveniens, "a
court, in conflicts of law cases, may refuse impositions on its
jurisdiction where it is not the most 'convenient' or available
forum and the parties are not precluded from seeking
remedies elsewhere." In Puyat v. Zabarte, this court
recognized the following situations as among those that may
warrant a court's desistance from exercising jurisdiction:
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
5. The difficulty of ascertaining foreign law.
Here, the circumstances of the parties and their relation do not
approximate the circumstances enumerated in Puyat, which
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
this court recognized as possibly justifying the desistance of
Philippine tribunals from exercising jurisdiction.
First, there is no basis for concluding that the case can be more
conveniently tried elsewhere. As established earlier, Saudia is
doing business in the Philippines. For their part, all four (4)
respondents are Filipino citizens maintaining residence in the
Philippines and, apart from their previous employment with
Saudia, have no other connection to the Kingdom of Saudi
Arabia. It would even be to respondents' inconvenience if this
case were to be tried elsewhere.
Second, the records are bereft of any indication that
respondents filed their Complaint in an effort to engage in
forum shopping or to vex and inconvenience Saudia.
Third, there is no indication of "unwillingness to extend local
judicial facilities to non-residents or aliens."93 That Saudia has
managed to bring the present controversy all the way to this
court proves this.
Fourth, it cannot be said that the local judicial machinery is
inadequate for effectuating the right sought to be maintained.
Summons was properly served on Saudia and jurisdiction over
its person was validly acquired.
Lastly, there is not even room for considering foreign law.
Philippine law properly governs the present dispute.
As the question of applicable law has been settled, the
supposed difficulty of ascertaining foreign law (which requires
the application of forum non conveniens) provides no
insurmountable inconvenience or special circumstance that
will justify depriving Philippine tribunals of jurisdiction.
INDUSTRIAL PERSONNEL AND MANAGEMENT SERVICES,
INC. (IPAMS) V. DE VERA
G.R. NO. 205703 MARCH 07, 2016
FACTS:
Petitioner Industrial Personnel & Management Services, Inc.
(IPAMS) is a local placement agency duly organized and
existing under Philippine laws. Petitioner SNC Lavalin
Engineers & Contractors, Inc. (SNC-Lavalin) is the principal of
IPAMS, a Canadian company with business interests in several
countries.
Respondent Alberto Arriola, a licensed general surgeon in the
Philippines, was hired by SNC-Lavalin, through its local
manning agency, IPAMS, as a safety officer in its Ambatovy
Project site in Madagascar. After three months, Arriola
received a notice of pre-termination of employment due to
9
CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
diminishing workload in the area of his expertise and the
unavailability of alternative assignments. Consequently,
Arriola was repatriated and he filed a complaint against the
petitioners for illegal dismissal and non-payment of overtime
pay, vacation leave and sick leave pay before the Labor Arbiter
(LA).
He claimed that SNC-Lavalin still owed him unpaid salaries
equivalent to the three-month unexpired portion of his
contract and asserted that the latter never offered any valid
reason for his early termination and that he was not given
enough notice regarding the same. He also insisted that the
petitioners must prove the applicability of Canadian law before
the same could be applied to his employment contract.
The petitioner denied the charge of illegal dismissal against
them. They relied on a copy of the Employment Standards Act
(ESA) of Ontario, which was duly authenticated by the
Canadian authorities and certified by the Philippine Embassy.
They insisted that all of Arriola's employment documents were
processed in Canada, not to mention that SNC Lavalin's office
was in Ontario, the principle of lex loci celebrationis was
applicable. Hence, they insisted that Canadian laws governed
the contract.
The said foreign law did not require any ground for early
termination of employment, and the only requirement was the
written notice of termination. Even if Philippine laws should
apply, Arriola would still be validly dismissed because domestic
law recognized retrenchment and redundancy as legal grounds
for termination.
The Labor Arbiter (LA) dismissed the complaint of Arriola,
while the NLRC reversed the LA's ruling stating the Filipino
workers are protected by our labor laws wherever they may be
working. The petitioners filed a petition for certiorari before
the CA arguing that it should be the ESA, or the Ontario labor
law, that should be applied in Arriola's employment contract,
but the Court of Appeals affirmed NLRC. Hence, this petition.
ISSUE:
Whether or not Canadian law shall be applied to this case.
RULING:
No, the foreign law invoked is contrary to the Constitution and
the Labor Code. As a rule, Philippine laws apply even to
overseas employment contracts. This rule is rooted in the
constitutional provision of Section 3, Article XIII that the State
shall afford full protection to labor, whether local or overseas.
Hence, even if the OFW has his employment abroad, it does
not strip him of his rights to security of tenure, humane
conditions of work and a living wage under our Constitution.
As an exception, the parties may agree that a foreign law shall
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
govern the employment contract. A synthesis of the existing
laws and jurisprudence reveals that this exception is subject to
the following requisites:
1. That it is expressly stipulated in the overseas employment
contract that a specific foreign law shall govern;
2. That the foreign law invoked must be proven before the
courts pursuant to the Philippine rules on evidence;
3. That the foreign law stipulated in the overseas employment
contract must not be contrary to law, morals, good customs,
public order, or public policy of the Philippines; and
4. That the overseas employment contract must be processed
through the POEA.
The Court is of the view that these four (4) requisites must be
complied with before the employer could invoke the
applicability of a foreign law to an overseas employment
contract. With these requisites, the State would be able to
abide by its constitutional obligation to ensure that the rights
and well-being of our OFWs are fully protected. Lacking any
one of the four requisites would invalidate the application of
the foreign law, and the Philippine law shall govern the
overseas employment contract.
In the present case, as correctly held by the CA, even though
an authenticated copy of the ESA was submitted, it did not
mean that said foreign law could be automatically applied to
this case. The petitioners miserably failed to adhere to the two
other requisites. The petitioners failed to comply with the first
requisite because no foreign law was expressly stipulated in
the overseas employment contract with Arriola. The
petitioners did not directly cite any specific provision or
stipulation in the said labor contract which indicated the
applicability of the Canadian labor laws or the ESA. They failed
to show on the face of the contract that a foreign law was
agreed upon by the parties. Rather, they simply asserted that
the terms and conditions of Arriola’s employment were
embodied in the Expatriate Policy, Ambatovy Project - Site,
Long Term.
The provisions of the ESA are patently inconsistent with the
right to security of tenure.Both the Constitution and the Labor
Code provide that this right is available to any employee. In a
host of cases, the Court has upheld the employee's right to
security of tenure in the face of oppressive management
behavior and management prerogative. Security of tenure is a
right which cannot be denied on mere speculation of any
unclear and nebulous basis. Furthermore, not only do these
provisions collide with the right to security of tenure, but they
also deprive the employee of his constitutional right to due
process by denying him of any notice of termination and the
opportunity to be heard.
In fine, as the petitioners failed to meet all the four (4)
requisites on the applicability of a foreign law, then the
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CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
Philippine labor laws must govern the overseas employment
contract of Arriola.
TORTS AND DAMAGES
a. Elements of a Tort
b. Lex Loci delicti comisii/Locus Delicti
c. Theories to determine the locus delicti
d. Issues governed by the Locus Delicti
e. Collision
CASES:
(Repeated Case)
SAUDI ARABIA AIRLINES vs. CA
G.R. No. 122191, October 8, 1998
FACTS:
On January 21, 1988, SAUDI ARABIAN AIRLINES or SAUDIA
(foreign airlines corporation doing business in the Philippines)
hired MORADA as a Flight Attendant for its airlines based in
Jeddah, Saudi Arabia. On April 27, 1990, while on a lay-over in
Jakarta, Indonesia, Morada went to a disco dance with fellow
crewmembers Thamer Al-Gazzawi 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. After Allah left, Thamer
attempted to rape Morada. A roomboy and several security
personnel heard Morada’s cries for help and rescued her. The
Indonesian police came and arrested Thamer and Allah Al-
Gazzawi, the latter as an accomplice.
In September 1990, defendant SAUDIA transferred Morada to
Manila.On January 14, 1992, 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. The police put pressure on her to make a statement
dropping the case against Thamer and Allah. She agreed so the
police returned her passport and allowed her to catch the
afternoon flight out of Jeddah.
On lune 16, 1993, Morada was ordered to take a later flight to
Jeddah. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sign a
document written in Arabic purportedly to close the case
against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993.
Morada then returned to Manila.
On June 28, 1993, a Saudi judge interrogated Morada for 1
hour through an interpreter about the Jakarta incident. At the
airport, the airline had forbidden her to take flight, her
passport was taken away and told her to remain in Jeddah.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff
to the same court where the judge, to her astonishment and
shock, rendered a decision sentencing her to five months
imprisonment and to 286 lashes. The court found plaintiff
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. 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.
On November 23, 1993, 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
was denied, by the trial court. Consequently, SAUDIA filed its
Petition for Certiorari and Prohibition xxx. The Court of
Appeals ruled that the Philippines is an appropriate forum
considering that the Amended Complaint's basis for recovery
of damages is Article 21 of the Civil Code, and thus, clearly
within the jurisdiction of respondent Court.
SAUDIA claimed: that the trial court has no jurisdiction to hear
and try based on Article 21 of the New Civil Code since the
proper law applicable is the law of the Kingdom of Saudi Arabia
inasmuch as this case involves what is known in private
international law as a "conflicts problem". Otherwise, the
Republic of the Philippines will sit in judgment of the acts done
by another sovereign state, which is abhorred. That this is a
conflict of laws, which must be settled at the outset. That
Morada’s claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. The existence of a foreign element
qualifies the instant case for the application of the law of the
Kingdom of Saudi Arabia, by virtue of the lex loci
delicticommissi rule.
ISSUES:
1. Whether or not the problem herein presents a “conflicts”
case. Yes
2. Whether or not Regional Trial Court of Quezon City has
Jurisdiction to hear and try the civil case entitled "Milagros p.
Morada v. Saudi Arabian Airlines". Yes
3. Whether or not Philippine law should govern in this case.
Yes
RULING:
(1): YES. Where the factual antecedents satisfactorily establish
the existence of a foreign element, the problem herein could
present a "conflicts" case. A factual situation that cuts across
11
CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18
territorial lines and is affected by the diverse laws of two or
more states is said to contain a "foreign element".
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 private respondent Morada is a resident Philippine
national, and that petitioner SAUDIA is a resident foreign
corporation. Also, by virtue of the employment of Morada with
the petitioner Saudia as a flight stewardess, events did
transpire during her many occasions of travel across national
borders, particularly from Manila, Philippines to Jeddah, Saudi
Arabia, and vice versa, that caused a "conflicts" situation to
arise.
(2): YES. The Regional Trial Court (RTC) of Quezon City
possesses jurisdiction over the subject matter of the suit.
Morada predicated her cause of action on Articles 19 and 21
of the New Civil Code.
The RTC’s authority to try and hear the case is provided for
under Section 1 of Republic Act No. 7691 which amended Sec.
1. Section 19 of Batas PambansaBlg. 129, otherwise known as
the "Judiciary Reorganization Act of 1980”, to wit: Sec. 19.
Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise
exclusive jurisdiction: x xx x xx x xx
(8) In all other cases in which demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses,
and cots or the value of the property in controversy exceeds
One hundred thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand, exclusive of the
above-mentioned items exceeds Two hundred Thousand
pesos (P200,000.00). (Emphasis ours) x xx x xx x xx
Section 2 (b), Rule 4 of the Revised Rules of Court — the venue,
Quezon City, is appropriate: Sec. 2 xxx. (b) Personal actions. —
All other actions may be commenced and tried where the
defendant or any of the defendants resides or may be found,
or where the plaintiff or any of the plaintiff resides, at the
election of the plaintiff.
Pragmatic considerations, including the convenience of the
parties, also weigh heavily in favor of the RTC Quezon City
assuming jurisdiction. Paramount is the private interest of the
litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are
equally important.
The court a quo found it best to hear the case in the
Philippines. Otherwise, it would be forcing Morada to seek
remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
where she no longer maintains substantial connections. That
would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines, no
unnecessary difficulties and inconvenience have been shown
by either of the parties.
Similarly, the trial court also possesses jurisdiction over the
persons of the parties herein. By filing her Complaint and
Amended Complaint with the trial court, Morada has voluntary
submitted herself to the jurisdiction of the court. The records
show that petitioner SAUDIA has filed several motions 50
praying for the dismissal of Morada's Amended Complaint.
SAUDIA prayed for other reliefs under the premises.
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.
HELD (3): YES. As to the choice of applicable law, there are two
important questions: (1) What legal system should control a
given situation where some of the significant facts occurred in
two or more states; and (2) to what extent should the chosen
legal system regulate the situation.
Before a choice can be made, it is necessary for us to
determine under what category a certain set of facts or rules
fall. This process is known as "characterization", or the
"doctrine of qualification". It is the "process of deciding
whether or not the facts relate to the kind of question
specified in a conflicts rule." 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. 58
These "test factors" or "points of contact" or "connecting
factors" could be any of the following:
The nationality of a person, his domicile, his residence, his
place of sojourn, or his origin;the seat of a legal or juridical
person, such as a corporation; 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; 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;
The place where an act is intended to come into effect, e.g.,
the place of performance of contractual duties xxx.
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The intention of the contracting parties as to the law that
should govern their agreement, the lex loci intentionis;
The place where judicial or administrative proceedings are
instituted or done. The lexfori — the law of the forum xxx.
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. Xxx.
Although Morada was already working in Manila, SAUDIA
brought her to Jeddah on the pretense that she would merely
testify in an investigation of the charges against her SAUDIA
crewmembers. As it turned out, she was the one made to face
trial for very serious charges, including adultery and violation
of Islamic laws and tradition.
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
SAUDIA allegedly deceived Morada, a Filipina residing and
working here.
In applying the State of the most significant relationshiprule 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: the place where the injury
occurred; the place where the conduct causing the injury
occurred; the domicile, residence, nationality, place of
incorporation and place of business of the parties, and the
place where the relationship, if any, between the parties is
centered.
As already discussed, there is basis for the claim that over-all
injury occurred and lodged in the Philippines. Also, Morada is
a resident Filipina national, working with SAUDIA, 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.
Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case. Further, the Regional Trial Court has
jurisdiction over the parties and the subject matter of the
complaint; the appropriate venue is in Quezon City, which
could properly apply Philippine law.
Lastly, Morada has "no obligation to plead and prove the law
of the Kingdom of Saudi Arabia since her cause of action is
based on Articles 19 and 21" of the Civil Code of the Philippines
and never alleged that Saudi law should govern this case. And
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
as correctly held by the respondent appellate court,
"considering that it was SAUDIA who was invoking the
applicability of the law of Saudi Arabia, then the burden was
on it to plead and to establish what the law of Saudi Arabia is"
RESURECCION SUZARA v. JUDGE ALFREDO L. BENIPAYO
G.R. no. L-57999 August 15, 1989
FACTS:
Suzara et al entered into employment contracts with
Magsaysay lines to work aboard vessels
owned/operated/manned by the latter for a period of 12
calendar months and with different rating/position,
salary, overtime pay and allowance. The contracts were
approved by the National Seamen Board. Upon
arrival at the port of Vancouver, C a n a d a , d e m a n d s
for increase in wages were made t hrough the
h e l p o f t h e International Transport Worker’s
Federation (ITF), a militant worldwide especially in
Canada, Australia, Scandinavia, and various European
countries, interdicting foreign vessels and demanding wage
increases for third world seamen. Wages were increased but
complaints were filed by Magsaysay before the NSB. NSB
ordered the return of the additional wages paid for being
obtained thru violent means and for lacking NSB
approval. NLRC affirmed the order. Meanwhile, Magsaysay
filed estafa charges against the seamen. In this petition, the
seamen seek for the reversal of the NLRC decision.
ISSUE:
Are the petitioners entitled to the amounts they received from
the private respondent representing additional wages as
determined in the special agreement?
HELD:
YES.
It is impractical for the NSB to require the petitioners, caught
in the middle of a labor struggle between the ITF and owners
of ocean going vessels halfway around the world in Vancouver,
British Columbia to first secure the approval of the NSB in
Manila before signing an agreement which the employer was
willing to sign. It is also totally unrealistic to expect the
petitioners while in Canada to exhibit the will and strength to
oppose the ITF's demand for an increase in their wages,
assuming they were so minded.
the public respondents' conclusions that the acts of the
petitioners in demanding and receiving wages over and above
the rates appearing in their NSB-approved contracts is in effect
an alteration of their valid and subsisting contracts because
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the same were not obtained through. mutual consent and
without the prior approval of the NSB to be without basis, not
only because the private respondent's consent to pay
additional wages was not vitiated by any violence or
intimidation on the part of the petitioners but because the said
NSB-approved form contracts are not unalterable contracts
that can have no room for improvement during their effectivity
or which ban any amendments during their term.
The Supreme court cannot affirm the NSB and NLRC's finding
that there was violence, physical or otherwise employed by
the petitioners in demanding for additional wages. The fact
that the petitioners placed placards on the gangway of their
ship to show support for ITF's demands for wage differentials
for their own benefit and the resulting ITF's threatened
interdiction do not constitute violence. The petitioners were
exercising their freedom of speech and expressing sentiments
in their hearts when they placed the placard We Want ITF
Rates." Under the facts and circumstances of these petitions,
we see no reason to deprive the seamen of their right to
freedom of expression guaranteed by the Philippine
Constitution and the fundamental law of Canada where they
happened to exercise it.
Filipino seamen are admittedly as competent and reliable as
seamen from any other country in the world. Otherwise, there
would not be so many of them in the vessels sailing in every
ocean and sea on this globe. It is competence and reliability,
not cheap labor that makes our seamen so greatly in demand.
Filipino seamen have never demanded the same high salaries
as seamen from the United States, the United Kingdom, Japan
and other developed nations. But certainly they are entitled to
government protection when they ask for fair and decent
treatment by their employer and when they exercise the right
to petition for improved terms of employment, especially
when they feel that these are sub-standard or are capable of
improvement according to internationally accepted rules. In
the domestic scene, there are marginal employers who
prepare two sets of payrolls for their employees — one in
keeping with minimum wages and the other recording the sub-
standard wages that the employees really receive. The reliable
employers, however, not only meet the minimums required by
fair labor standards legislation but even go away above the
minimums while earning reasonable profits and prospering.
The same is true of international employment. There is no
reason why this court and the Ministry of Labor and
Employment or its agencies and commissions should come out
with pronouncements based on the standards and practices of
unscrupulous or inefficient shipowners, who claim they cannot
survive without resorting to tricky and deceptive schemes,
instead of Government maintaining labor law and
jurisprudence according to the practices of honorable,
competent, and law-abiding employers, domestic or foreign.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
PURITA MAPA vs COURT OF APPEALS
G.R. No. 122308 July 8, 1997
FACTS:
Sps. Mapa entered into a contract of air transportation with
TWA evidenced by tickets purchased in Thailand (place of
destination: Chicago, USA). Domicile of TWA (carrier) and its
place of business are Kansas, Missouri, USA. Mrs. Purita Mapa
and their daughter left Manila on board PAL flight for Los
Angeles. Upon arrival at LA, they stayed there until they left for
New York. They deported for Boston, taking a connecting flight
on TWAs carrier from JFK Airport, NY, to Bostons Logan
Airport, checking in seven (7) pieces of luggage at the TWA
counter in the JFK Airport. After they had presented their
confirmed TWA tickets at TWA’s ticket counter, they were
issued their boarding passes. However, due to an error in the
boarding gate (as they were wrongly instructed by TWA
personnel), they were not able to board the plane. Upon
arriving in Boston, they proceeded to the carousel to claim
their baggage and found only three out of the seven they
checked in. They immediately reported the loss of their 4
baggage to the TWA Baggage Office at Logan Airport. Despite
repeated demands, they were still unable to recover the lost
baggage so, Sps Mapa and their daughter then filed with RTC
of Quezon City, a complaint for damages. TWA countered
raising, as special and affirmative defense, lack of jurisdiction
of PH courts over the action for damages in that pursuant to
Article 28(1) of the Warsaw Convention, the action could only
be brought either in Bangkok where the contract was entered
into, or in Boston which was the place of destination, or in
Kansas City which is the carrier's domicile and principal place
of business. RTC dismissed the case for lack of jurisdiction.
ISSUE:
Is the Warsaw Convention applicable in this case?
HELD:
NO.
Contracts of transportation between Purita and Carmina, and
TWA were not contracts of international transportation under
Warsaw Convention. Hence, the Philippine Court has
jurisdiction to hear the case.
As provided in Article I(2) of the Warsaw Convention, a
contract is one of international transportation only if according
to the contract made by the parties, the place of departure and
the place of destination, whether or not there be a break in the
transportation or a transshipment, are situated either within
the territories of two High Contracting Parties (signatories to
the Convention and those w/c subsequently adhered thereto),
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or within the territory of a single High Contracting Party, if
there is an agreed stopping place within a territory subject to
the sovereignty, mandate or authority of another power, even
though that power is not a party to this convention.
Two categories of international transportation:
(1) where the place of departure and the place of destination
are situated within the territories of two High Contracting
Parties regardless of whether or not there be a break in the
transportation or a transshipment; and
(2) where the place of departure and the place of destination
are within the territory of a single High Contracting Party if
there is an agreed stopping place within a territory subject to
the sovereignty, mandate, or authority of another power, even
though the power is not a party to the Convention.
The contracts of transportation in this case are evidenced by
the two TWA tickets both purchased and issued in Bangkok,
Thailand. On the basis alone of the provisions therein, it is
obvious that the place of departure and the place of
destination are all in the territory of the United States, or of a
single High Contracting Party. The contracts, therefore, cannot
come within the purview of the first category of international
transportation. Neither can it be under the second category
since there was NO agreed stopping place within a territory
subject to the sovereignty, mandate, or authority of another
power. The only way to bring the contracts between Purita and
Carmina Mapa and TWA, within the first category of
international transportation is to link them with, or to make
them an integral part of, the Manila-Los Angeles travel of
Purita and Carmina through PAL aircraft.
It must be underscored that the first category of international
transportation under the Warsaw Convention is based on the
contract made by the parties. TWA does not claim that the
Manila-Los Angeles contracts of transportation which brought
Purita and Carmina to Los Angeles were also its contracts. TWA
does not deny
the assertion of the petitioners that those contracts were
independent of the TWA tickets issued in Bangkok, Thailand.
No evidence was offered that TWA and PAL had an agreement
concerning transportation of passengers from points of
departures not served with aircrafts of one or the other.
TWA relies on Article I(3) of the Convention: A carriage to be
performed by several successive air carriers is deemed, for the
purposes of this Convention, to be one undivided carriage, if it
has been regarded bythe parties as a single operation, whether
it had been agreed upon under the form of a single contract or
of a series of contracts, and it shall not lose its international
character merely because one contract or a series of contracts
is to be performed entirely within a territory subject to the
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
sovereignty, suzerainty, mandate, or authority of the same
High Contracting Party. TWA also points to Article 15 of the
IATA Recommend Practice 1724, which provides: Carriage to
be performed by several successive carriers under one ticket, or
under a ticket and any conjunction ticket issued in connection
therewith, is regarded as a single operation.
The flaw of TWA’s position is their presumption that the
parties have regarded as an undivided carriage or as a single
operation the carriage from Manila to Los Angeles through PAL
then to New York-Boston- St. Louis-Chicago through TWA.
TWA should have offered evidence for its affirmative defenses
at the preliminary hearing therefor. Without any
further evidence as earlier discussed, the trial court should
have denied the affirmative defense of lack of jurisdiction
because it did not appear to be indubitable.
NAVIDA vs. DIZON ET. AL
G.R. NO. 125078 MAY 30, 2011
FACTS:
Beginning 1993, a number of personal injury suits were filed in
different Texas state courts by citizens of twelve foreign
countries, including the Philippines. The thousands of plaintiffs
sought damages for injuries they allegedly sustained from their
exposure to dibromochloropropane (DBCP), a chemical used
to kill nematodes (worms), while working on farms in 23
foreign countries. The cases were eventually transferred to,
and consolidated in, the Federal District Court for the Southern
District of Texas, Houston Division. The cases therein that
involved plaintiffs from the Philippines were "Jorge Colindres
Carcamo, et al. v. Shell Oil Co., et al.," which was docketed as
Civil Action No. H-94-1359, and "Juan Ramon Valdez, et al. v.
Shell Oil Co., et al.," which was docketed as Civil Action No. H-
95-1356. The defendants in the consolidated cases prayed for
the dismissal of all the actions under the doctrine of forum non
conveniens.
In a Memorandum and Order dated July 11, 1995, the Federal
District Court conditionally granted the defendants' motion to
dismiss.
NAVIDA, et al., prayed for the payment of damages in view of
the illnesses and injuries to the reproductive systems which
they allegedly suffered because of their exposure to DBCP.
They claimed, among others, that they were exposed to this
chemical during the early 1970's up to the early 1980's when
they used the same in the banana plantations where they
worked at; and/or when they resided within the agricultural
area where such chemical was used. NAVIDA, et al., claimed
that their illnesses and injuries were due to the fault or
negligence of each of the defendant companies in that they
produced, sold and/or otherwise put into the stream of
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commerce DBCP-containing products. According to NAVIDA,
et al., they were allowed to be exposed to the said products,
which the defendant companies knew, or ought to have
known, were highly injurious to the former's health and well-
being.
The RTC of General Santos City issued an Order dismissing the
complaint. First, the trial court determined that it did not have
jurisdiction to hear the case because the acts of defendants
cited in the complaint included the manufacture of pesticides,
their packaging in containers, their distribution through sale or
other disposition, resulting in their becoming part of the
stream of commerce which occurred abroad.
Second, the RTC of General Santos City declared that the tort
alleged by NAVIDA, et al., in their complaint is a tort category
that is not recognized in Philippine laws.
ISSUE:
Whether or not DOLE Inc., should be held liable for damages
due to exposure of the nematocides.
RULING:
YES. Quite evidently, the allegations in the Amended Joint-
Complaints of NAVIDA, et al., and ABELLA, et al., attribute to
defendant companies certain acts and/or omissions which led
to their exposure to nematocides containing the chemical
DBCP. According to NAVIDA, et al., and ABELLA, et al., such
exposure to the said chemical caused ill effects, injuries and
illnesses, specifically to their reproductive system.
Thus, these allegations in the complaints constitute the cause
of action of plaintiff claimants — a quasi-delict, which under
the Civil Code is defined as an act, or omission which causes
damage to another, there being fault or negligence. To be
precise, Article 2176 of the Civil Code provides:
Article 2176.Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a
quasi- delict and is governed by the provisions of this Chapter.
Moreover, the injuries and illnesses, which NAVIDA, et al., and
ABELLA, et al., allegedly suffered resulted from their exposure
to DBCP while they were employed in the banana plantations
located in the Philippines or while they were residing within
the agricultural areas also located in the Philippines. The
factual allegations in the Amended Joint-Complaints all point
to their cause of action, which undeniably occurred in the
Philippines. The RTC of General Santos City and the RTC of
Davao City obviously have reasonable basis to assume
jurisdiction over the cases.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
a.2 Requisites
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.
f. Warsaw Convention
g. Liability of Aircrafts
CASES:
AUGUSTO SANTOS III, represented by his father AUGUSTO
SANTOS II vs. NORTHWEST ORIENT AIRLINES
G.R. No 101538 JUNE 23, 1992
FACTS:
The petitioner is a minor and a resident of the Philippines.
Private respondent Northwest Orient Airlines (NOA) is a
foreign corporation with principal office in Minnesota, U.S.A.
and licensed to do business and maintain a branch office in the
Philippines.
On October 21, 1986, the petitioner purchased from NOA a
round-trip ticket in San Francisco. U.S.A., for his flight from San
Francisco to Manila via Tokyo and back. The scheduled
departure date from Tokyo was December 20, 1986. No date
was specified for his return to San Francisco.
On December 19, 1986, the petitioner checked in at the NOA
counter in the San Francisco airport for his scheduled
departure to Manila. Despite a previous confirmation and re-
confirmation, he was informed that he had no reservation for
his flight from Tokyo to Manila. He therefore had to be wait-
listed.
On March 12, 1987, the petitioner sued NOA for damages in
the RTC of Makati. On April 13, 1987, NOA moved to dismiss
the complaint on the ground of lack of jurisdiction, citing
Article 28(1) of the Warsaw Convention, reading as follows:
Art. 28. (1) An action for damage must be brought at the option
of the plaintiff, in the territory of one of the High Contracting
Parties, either before the court of the domicile of the carrier or
of his principal place of business, or where he has a place of
business through which the contract has been made, or before
the court at the place of destination.
The private respondent contended that the Philippines was
not its domicile nor was this its principal place of business.
Neither was the petitioner’s ticket issued in this country nor
was his destination Manila but San Francisco in the United
States. Lower court granted the dismissal, CA affirmed.
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ISSUE:
Whether or not Art. 28(1) of the Warsaw Convention does not
apply to actions based on tort.
RULING:
YES. Notably, the domicile of the carrier is only one of the
places where the complaint is allowed to be filed under Article
28(1). By specifying the three other places, to wit, the principal
place of business of the carrier, its place of business where the
contract was made, and the place of destination, the article
clearly meant that these three other places were not
comprehended in the term "domicile."
The petitioner alleges that the gravamen of the complaint is
that private respondent acted arbitrarily and in bad faith,
discriminated against the petitioner, and committed a willful
misconduct because it canceled his confirmed reservation and
gave his reserved seat to someone who had no better right to
it. In short. the private respondent committed a tort.
Such allegation, he submits, removes the present case from
the coverage of the Warsaw Convention. He argues that in at
least two American cases, itt was held that Article 28(1) of the
Warsaw Convention does not apply if the action is based on
tort.
However, the private respondent correctly contends that the
allegation of willful misconduct resulting in a tort is insufficient
to exclude the case from the comprehension of the Warsaw
Convention. The petitioner has apparently misconstrued the
import of Article 25(l) of the Convention, which reads as
follows:
Art. 25 (1). The carrier shall not be entitled to avail himself of
the provisions of this Convention which exclude or limit his
liability. if the damage is caused by his willful misconduct or by
such default on his part as, in accordance with the law of the
court to which the case is submitted, is considered to be
equivalent to willful misconduct.
It is understood under this article that the court called upon to
determine the applicability of the limitation provision must
first be vested with the appropriate jurisdiction. Article 28(1)
is the provision in the Convention which defines that
jurisdiction. Article 22 merely fixes the monetary ceiling for the
liability of the carrier in cases covered by the Convention. If the
carrier is indeed guilty of willful misconduct, it can avail itself
of the limitations set forth in this article. But this can be done
only if the action has first been commenced properly under the
rules on jurisdiction set forth in Article 28(1).
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
SEBANA BELGIAN WORLD AIRLINES V. CA
G.R. NO. 104685 MARCH 14, 1996
FACTS:
Paula San Agustin was a passenger on board Flight SN 284
originating from Casablanca to Brussels and then from Brussels
to Manila. She checked in her luggage containing jewelries and
accessories valued at $4,265.00 which she was issued a tag.
She stayed overnight in Brussels and her luggage was left on
the plane.
Upon her arrival to Manila, she submitted her tag to facilitate
the release of her luggage. However, she was advised that it
was missing. She then filed and submit a property Irregularity
Report in the same day. She followed up her claim 12 days
after but her luggage remained missing.
She then filed a formal complaint to Sebana Belgian’s
manager. 15 days after, she was informed that her luggage was
found in their Brussel’s office and that they destroyed its locks
and was notified that it would be shipped to Manila next
month after. But again, she was informed that her luggage was
lost for the second time.
Paula San Agustin demanded from the Airline the money value
of the luggage but the Airline refused to settle the claim. She
filed a Complaint for damages.
The airline answered and contended that the loss of her
luggage was due to Paula’s contributory negligence. That she
should have declared the value of her luggage and retrieved it
out upon arriving in Brussels because the flight from Brussels
to Manila still needs confirmation. Also, they contended that
general principles of International law provides that carriers
assume no liability for fragile, valuable or perishable articles
that granting without conceding that defendant is liable, its
liability is limited only to US $20.00 per kilo due to plaintiffs
failure to declare a higher value on the contents of her checked
in luggage and pay additional charges thereon.
RTC ruled in favor of Paula San Agustin which the CA affirmed
in toto.
ISSUE:
Was the airline liable for the loss of the luggage?
HELD:
YES. The very nature of their business and by reasons of public
policy, common carriers are bound to observe extraordinary
diligence in the vigilance over the goods transported by them.
This extraordinary responsibility, according to Art. 1736, lasts
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from the time the goods are unconditionally placed in the
possession of and received by the carrier until they are
delivered actually or constructively to the consignee or person
who has the right to receive them. Art. 1737 states that the
common carrier's duty to observe extraordinary diligence in
the vigilance over the goods transported by them remains in
full force and effect even when they are temporarily unloaded
or stored in transit. And Art. 1735 establishes the presumption
that if the goods are lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted
negligently.
It remained undisputed that private respondent's luggage was
lost while it was in the custody of petitioner. It was supposed
to arrive on the same flight that private respondent took in
returning to Manila on 02 September 1987. When she
discovered that the luggage was missing, she promptly
accomplished and filed a Property Irregularity Report. She
followed up her claim on 14 September 1987, and filed, on the
following day, a formal letter-complaint with petitioner. She
felt relieved when, on 23 October 1987, she was advised that
her luggage had finally been found, with its contents intact
when examined, and that she could expect it to arrive on 27
October 1987. She then waited anxiously only to be told later
that her luggage had been lost for the second time. Thus, the
appellate court, given all the facts before it, sustained the trial
court in finding petitioner ultimately guilty of "gross
negligence" in the handling of private respondent's luggage.
The "loss of said baggage not only once but twice, said the
appellate court, "underscores the wanton negligence and lack
of care" on the part of the carrier.
Under domestic law and jurisprudence (the Philippines being
the country of destination), the attendance of gross negligence
(given the equivalent of fraud or bad faith) holds the common
carrier liable for all damages which can be reasonably
attributed, although unforeseen, to the non-performance of
the obligation,9 including moral and exemplary damages.
NORTHWEST AIRLINES, INC vs. COURT OF APPEALS
G.R. No. 120334 JANUARY 20, 1998
FACTS:
Torres, on a special mission to purchase firearms for the
Philippine Senate, purchased a round trip ticket from
defendant Northwest for his travel to Chicago and back to
Manila.
Upon arrival in Manila, Torres was not able to claim one of his
baggages. He was informed by NORTHWEST's representative
that his baggage containing firearms was recalled back to
Chicago by NORTHWEST for US Customs verification. Upon
arrival of his other baggage, plaintiff claimed and opened the
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
baggage in the presence of NORTHWEST's representative and
found out that the firearms were missing. A Personal Property
Missing Damage Report was issued by defendant to plaintiff.
On account of continuous refusal of defendant to settle
amicably, plaintiff then prayed before the trial court that
defendant be ordered to pay actual damages, moral damages,
temperate damages, exemplary damages and attorney's.
NORTHWEST moved for the "dismissal of the complaint in so
far as it prays for moral, exemplary and temperate damages
and attorney's fees" and further moved for "summary
judgment to be rendered awarding the plaintiff $640.00 as
actual damages." arguing that the Warsaw Convention and the
contract of carriage limited its liability to US$640 and that the
evidence presented by TORRES did not entitle him to moral,
exemplary, and temperate damages and attorney's fees.
Both Trial and Court of Appeals decided that TORRES was
entitled to actual damages, since NORTHWEST had, in effect,
admitted the loss of the firearms when it insisted that its
liability was limited to $9.07 per pound or $20 per kilo. The
appellate court then concluded that NORTHWEST's guessing of
which luggage contained the firearms amounted to willful
misconduct under Section 25(1) of the Warsaw Convention
which entitled TORRES to claim actual damages in excess of the
limitation provided for under Section 22(2) of said Convention.
ISSUE:
Is NORTHWEST entitled to limitation of liability espoused
under the WARSAW CONVENTION?
RULING:
NO. NORTHWEST's liability for actual damages may not be
limited to that prescribed in Section 22(2) of the Warsaw
Convention. In Alitalia v. Intermediate Appellate Court, 15 we
held:
The Warsaw Convention does not operate as an exclusive
enumeration of the instances of an airline's liability, or as an
absolute limit of the extent of that liability. Such a proposition
is not borne out by the language of the Convention, as this
Court has now, and at an earlier time, pointed out. Moreover,
slight reflection readily leads to the conclusion that it should
be deemed a limit of liability only in those cases where the
cause of the death or injury to person, or destruction, loss or
damage to property or delay in its transport is not attributable
to or attended by any willful misconduct, bad faith,
recklessness, or otherwise improper conduct on the part of
any official or employee for which the carrier is responsible,
and there is otherwise no special or extraordinary form of
resulting injury. The Convention's provisions, in short, do not
"regulate or exclude liability for other breaches of contract by
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the carrier" or misconduct of its officers and employees, or for
some particular or exceptional type of damage.
JAPAN AIRLINES vs. THE COURT OF APPEALS, ENRIQUE
AGANA., MARIA ANGELA NINA AGANA, ADALIA B.
FRANCISCO and JOSE MIRANDA
G.R. No. 118664 AUGUST 7, 1998
FACTS:
On June 13, 1991, Jose Miranda boarded JAL flight No. JL 001
in San Francisco, California bound for Manila. Likewise, on the
same day Enrique Agana, Maria Angela Nina Agana and Adelia
Francisco left Los Angeles, California for Manila via JAL flight
No. JL 061. As an incentive for travelling on the said airline,
both flights were to make an overnight stopover at Narita,
Japan, at the airlines' expense, thereafter proceeding to
Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private
respondents were billeted at Hotel Nikko Narita for the night.
The next day, private respondents, on the final leg of their
journey, went to the airport to take their flight to Manila.
However, due to the Mt. Pinatubo eruption, unrelenting
ashfall blanketed Ninoy Aquino International Airport (NAIA),
rendering it inaccessible to airline traffic. Hence, private
respondents' trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL
rebooked all the Manila-bound passengers on flight No. 741
due to depart on June 16, 1991 and also paid for the hotel
expenses for their unexpected overnight stay. On June 16,
1991, much to the dismay of the private respondents, their
long anticipated flight to Manila was again cancelled due to
NAIA's indefinite closure. At this point, JAL informed the
private respondents that it would no longer defray their hotel
and accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22,
1991, private respondents were forced to pay for their
accommodations and meal expenses from their personal funds
from June 16 to June 21, 1991. Their unexpected stay in Narita
ended on June 22, 1991 when they arrived in Manila on board
JL flight No. 741.
Obviously, still reeling from the experience, private
respondents, on July 25, 1991, commenced an action for
damages against JAL before the Regional Trial Court of Quezon
City. To support their claim, private respondents asserted that
JAL failed to live up to its duty to provide care and comfort to
its stranded passengers when it refused to pay for their hotel
and accommodation expenses from June 16 to 21, 1991 at
Narita, Japan. In other words, they insisted that JAL was
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
obligated to shoulder their expenses as long as they were still
stranded in Narita. On the other hand, JAL denied this
allegation and averred that airline passengers have no vested
right to these amenities in case a flight is cancelled due to
"force majeure."
ISSUE:
Whether JAL has the obligation to shoulder the hotel and meal
expenses of its stranded passengers until they have reached
their final destination, even if the delay were caused by "force
majeure."
HELD:
NO. Failure on the part of the common carrier to live up to the
exacting standards of care and diligence renders it liable for
any damages that may be sustained by its passengers.
However, this is not to say that common carriers are absolutely
responsible for all injuries or damages even if the same were
caused by a fortuitous event. To rule otherwise would render
the defense of "force majeure," as an exception from any
liability, illusory and ineffective.
Accordingly, there is no question that when a party is unable
to fulfill his obligation because of "force majeure," the general
rule is that he cannot be held liable for damages for non-
performance. Corollary, when JAL was prevented from
resuming its flight to Manila due to the effects of Mt. Pinatubo
eruption, whatever losses or damages in the form of hotel and
meal expenses the stranded passengers incurred, cannot be
charged to JAL. Yet it is undeniable that JAL assumed the hotel
expenses of respondents for their unexpected overnight stay
on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land
was an exasperating experience for the private respondents.
To be sure, they underwent distress and anxiety during their
unanticipated stay in Narita, but their predicament was not
due to the fault or negligence of JAL but the closure of NAIA to
international flights. Indeed, to hold JAL, in the absence of bad
faith or negligence, liable for the amenities of its stranded
passengers by reason of a fortuitous event is too much of a
burden to assume.
Furthermore, it has been held that airline passengers must
take such risks incident to the mode of travel. In this regard,
adverse weather conditions or extreme climatic changes are
some of the perils involved in air travel, the consequences of
which the passenger must assume or expect. After all,
common carriers are not the insurer of all risks.
Paradoxically, the Court of Appeals, despite the presence of
"force majeure," still ruled against JAL relying in our decision
in PAL v. Court of Appeals. However, the reliance is misplaced.
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The factual background of the PAL case is different from the
instant petition. In that case there was indeed a fortuitous
event resulting in the diversion of the PAL flight. However, the
unforeseen diversion was worsened when "private
respondents (passenger) was left at the airport and could not
even hitch a ride in a Ford Fiera loaded with PAL personnel,"
not to mention the apparent apathy of the PAL station
manager as to the predicament of the stranded passengers. In
light of these circumstances, we held that if the fortuitous
event was accompanied by neglect and malfeasance by the
carrier's employees, an action for damages against the carrier
is permissible. Unfortunately, for private respondents, none of
these conditions are present in the instant petition.
We are not oblivious to the fact that the cancellation of JAL
flights to Manila from June 15 to June 21, 1991 caused
considerable disruption in passenger booking and reservation.
In fact, it would be unreasonable to expect, considering NAIA's
closure, that JAL flight operations would be normal on the days
affected. Nevertheless, this does not excuse JAL from its
obligation to make the necessary arrangements to transport
private respondents on its first available flight to Manila. After
all, it had a contract to transport private respondents from the
United States to Manila as their final destination.
Consequently, the award of nominal damages is in order.
Nominal damages are adjudicated in order that a right of a
plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized and not for the purpose of
indemnifying any loss suffered by him. The court may award
nominal damages in every obligation arising from any source
enumerated in article 1157, or in every case where any
property right has been invaded.
UNITED AIRLINES vs. WILLIE J. UY
G.R. No. 127768, November 19, 1999
FACTS:
Willie Uy is a passenger of petitioner United Airlines, bound
from San Francisco to Manila. While in San Francisco, it was
found that one piece of his luggage was over the maximum
weight allowance of 70 kg. per bag. A United Airlines employee
rebuked him and in a loud voice, in front of the milling crowd,
ordered him to repack his things accordingly. Wishing not to
create a scene, Willie did as asked. Unfortunately, his luggage
was still overweight so the airline billed him overweight
charges. Willie offered to pay the charges with a Miscellaneous
Charge Order (MCO) or an airline pre-paid credit but the same
employee, and an airline supervisor, refused to honor it,
contending that there were discrepancies in the figures. Thus,
Willie was forced to pay the charges with his American Express
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
credit card. Upon arrival in Manila, Willie discovered that one
of his bags had been slashed and its contents.
Willie filed a complaint for damages before the Philippine
courts. He had two causes of action: (1) the shabby and
humiliating treatment he received from petitioner’s
employees at the San Francisco Airport which caused him
extreme embarrassment and social humiliation; and (2) the
slashing of his luggage and the loss of personal effects.
For its part, United Airlines moved to dismiss the complaint on
the ground that it was filed out of time. Under Art. 29 of the
Warsaw Convention, the right to damages shall be
extinguished if an action is not brought within 2 years.
However, the second paragraph of the said provision stated
that the method of calculating the period of limitation shall be
determined by the law of the court to which the case is
submitted. It is Willie’s position that our rules on interruption
of prescriptive period should apply. When he sent his letters of
demand, the 2-year period was tolled, giving him ample time
to file his complaint.
ISSUE:
Whether or not the action for damages is barred by the lapse
of the 2-year prescriptive period under Art. 29 of the Warsaw
Convention
RULING:
Supreme Court held that although the 2-year prescriptive
period under the Warsaw Convention has lapsed, it did not
preclude the application of other pertinent provisions of the
Civil Code. Thus, the action for damages could still be filed
based on tort which can be filed within 4 years from the time
cause of action accrued. As for the action pertaining to the loss
of the contents of the luggage, while it was well within the
bounds of the Warsaw Convention, the Supreme Court found
that there was an exception to the applicability of the 2-year
prescriptive period – that is when the airline employed
delaying tactics and gave the passenger the run-around.
Applicability of the Warsaw Convention: Courts have
discretion whether to apply them or not
Within our jurisdiction we have held that the Warsaw
Convention can be applied, or ignored, depending on the
peculiar facts presented by each case. Thus, we have ruled that
the Convention's provisions do not regulate or exclude liability
for other breaches of contract by the carrier or misconduct of
its officers and employees, or for some particular or
exceptional type of damage. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of
damage resulting to a passenger and preclude recovery
therefor beyond the limits set by said Convention. Likewise, we
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have held that the Convention does not preclude the
operation of the Civil Code and other pertinent laws. It does
not regulate, much less exempt, the carrier from liability for
damages for violating the rights of its passengers under the
contract of carriage, especially if willful misconduct on the part
of the carrier's employees is found or established.
CRIMES
a. Theories on Extraterritorial Competence
b. English Rule vs French Rule
CASES:
SPOUSES ZALAMEA and LIANA ZALAMEA vs. CA and
TRANSWORLD AIRLINES, INC.
G.R. No. 104235 November 18, 1993
FACTS:
Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and
their daughter, Liana purchased 3 airline tickets from the
Manila agent of respondent TransWorld Airlines, Inc. for a
flight to New York to Los Angeles. The tickets of petitioners-
spouses were purchased at a discount of 75% while that of
their daughter was a full fare ticket. All three tickets
represented confirmed reservations.
As petitioners checked in but were placed on the wait-list
because the number of passengers who had checked in before
them had already taken all the seats available on the flight. Out
of the 42 names on the wait list, the first 22 names were
eventually allowed to board the flight to Los Angeles, including
petitioner Cesar Zalamea. The two others were not able to fly.
Those holding full-fare tickets were given first priority among
the wait-listed passengers. Mr. Zalamea, who was holding the
full-fare ticket of his daughter, was allowed to board the plane;
while his wife and daughter, who presented the discounted
tickets were denied boarding.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and
her daughter, could not be accommodated because it was also
fully booked. Thus, they were constrained to book in another
flight and purchased two tickets from American Airlines.
Upon their arrival in the Philippines, petitioners filed an action
for damages based on breach of contract of air carriage before
the RTC- Makati. The lower court ruled in favor of petitioners.
However the CA held that moral damages are recoverable in a
damage suit predicated upon a breach of contract of carriage
only where there is fraud or bad faith. Since it is a matter of
record that overbooking of flights is a common and accepted
practice of airlines in the United States and is specifically
allowed under the Code of Federal Regulations by the Civil
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
Aeronautics Board, no fraud nor bad faith could be imputed on
respondent TransWorld Airlines. Thus petitioners raised the
case on petition for review on certiorari.
ISSUE:
Whether or not the CA erred in accepting the finding that
overbooking is specifically allowed by the US Code of federal
regulations and in holding that there was no fraud or bad faith
on the part of TWA?
RULING:
The U.S. law or regulation allegedly authorizing overbooking
has never been proved. Foreign laws do not prove themselves
nor can the courts take judicial notice of them. Like any other
fact, they must be alleged and proved. Written law may be
evidenced by an official publication thereof or by a copy
attested by the officer having the legal custody of the record,
or by his deputy, and accompanied with a certificate that such
officer has custody. The certificate may be made by a secretary
of an embassy or legation, consul general, consul, vice-consul,
or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record
is kept, and authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms.
Gwendolyn Lather, its customer service agent, in her
deposition that the Code of Federal Regulations of the Civil
Aeronautics Board allows overbooking. No official publication
of said code was presented as evidence. Thus, respondent
court’s finding that overbooking is specifically allowed by the
US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist,
the same is not applicable to the case at bar in accordance with
the principle of lex loci contractus which require that the law
of the place where the airline ticket was issued should be
applied by the court where the passengers are residents and
nationals of the forum and the ticket is issued in such State by
the defendant airline. Since the tickets were sold and issued in
the Philippines, the applicable law in this case would be
Philippine law.
Existing jurisprudence explicitly states that overbooking
amounts to bad faith, entitling the passengers concerned to an
award of moral damages. In Alitalia Airways v. Court of
Appeals, where passengers with confirmed bookings were
refused carriage on the last minute, this Court held that when
an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises,
and the passenger has every right to expect that he would fly
on that flight and on that date. If he does not, then the carrier
opens itself to a suit for breach of contract of carriage. Where
an airline had deliberately overbooked, it took the risk of
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having to deprive some passengers of their seats in case all of
them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last
minute, said passenger is entitled to an award of moral
damages.
For a contract of carriage generates a relation attended with
public duty — a duty to provide public service and convenience
to its passengers which must be paramount to self-interest or
enrichment.
Respondent TWA is still guilty of bad faith in not informing its
passengers beforehand that it could breach the contract of
carriage even if they have confirmed tickets if there was
overbooking. Respondent TWA should have incorporated
stipulations on overbooking on the tickets issued or to
properly inform its passengers about these policies so that the
latter would be prepared for such eventuality or would have
the choice to ride with another airline.
Respondent TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to
discounted tickets. Neither did it present any argument of
substance to show that petitioners were duly apprised of the
overbooked condition of the flight or that there is a hierarchy
of boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of
respondent TWA, thru its agent in Manila, then in New York,
that their tickets represented confirmed seats without any
qualification. The failure of respondent TWA to so inform them
when it could easily have done so thereby enabling respondent
to hold on to them as passengers up to the last minute
amounts to bad faith. Evidently, respondent TWA placed its
self-interest over the rights of petitioners under their contracts
of carriage. Such conscious disregard of petitioners’ rights
makes respondent TWA liable for moral damages. To deter
breach of contracts by respondent TWA in similar fashion in
the future, we adjudge respondent TWA liable for exemplary
damages, as well.
In the case of Alitalia Airways v. Court of Appeals, this Court
explicitly held that a passenger is entitled to be reimbursed for
the cost of the tickets he had to buy for a flight to another
airline. Thus, instead of simply being refunded for the cost of
the unused TWA tickets, petitioners should be awarded the
actual cost of their flight from New York to Los Angeles.
ASAALI VS COMMISSIONER OF CUSTOMS
G.R. NO. L-24170 DECEMBER 16, 1978
FACTS:
On September 10, 1950, a customs patrol team on board
Patrol Boat ST-23 intercepted the five (5) sailing vessels in
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
question on the high seas, between British North Borneo and
Sulu while they were heading towards Tawi-tawi, Sulu. After
ordering the vessels to stop, the customs officers boarded and
found on board, 181 cases of ‘Herald’ cigarettes, 9 cases of
‘Camel’ cigarettes, and some pieces of rattan chairs. The sailing
vessels are all of Philippine registry, owned and manned by
Filipino residents of Sulu, and of less than thirty (30) tons
burden. They came from Sandakan, British North Borneo, but
did not possess any permit from the Commissioner of Customs
to engage in the importation of merchandise into any port of
the Sulu sea, as required by Section 1363(a) of the Revised
Administrative Code. Their cargoes were not covered by the
required import license under Republic Act No. 426, otherwise
known as the Import Control Law.
Respondent Commissioner of Customs affirmed the decision
rendered by the Collector of Customs of Jolo, who found cause
for forfeiture under the law of the vessels and the cargo
contained therein.
Petitioners claim that the interception and seizure of the items
were illegal because they were intercepted on the high seas,
hence outside the territory of the Philippines.
ISSUE:
WON the interception and seizure by customs officials on the
high seas was valid since the seizure was effected outside our
territorial waters (YES)
HELD:
Yes. It is unquestioned that all vessels seized are of Philippine
registry. The Revised Penal Code leaves no doubt as to its
applicability and enforceability not only within the Philippines,
its interior waters and maritime zone, but also outside of its
jurisdiction against those committing offense while on a
Philippine ship.
A state has the right to protect itself and its revenues, a right
not limited to its own territory but extending to the high seas.
In the language of Chief Justice Marshall: 'The authority of a
nation within its own territory is absolute and exclusive. The
seizure of a vessel within the range of its cannon by a foreign
force is an invasion of that territory, and is a hostile act which
it is its duty to repel. But its power to secure itself from injury
may certainly be exercised beyond the limits of its territory.
(Church vs. Hubbart)
Section 1141 of the Revised Administrative Code insofar as
pertinent provides: "For the due and effective exercise of the
powers conferred by law in the Bureau of Customs, and to the
extent requisite therefor, said Bureau shall have the right of
supervision and police authority over all seas within the
jurisdiction of the Government of the Republic of the
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Philippines and over all coasts, ports, harbors, bays, rivers, and under such circumstances are in general triable in the courts
inland waters navigable from the sea. of the country within territory they were committed.

Hence, the question asked as to whether the seizure of the
vessels in question and the cargoes on the high seas was legal
must be answered in the affirmative.
PEOPLE V. WONG CHENG
G.R. NO. L-18924 OCTOBER 19, 1922
FACTS:
The appellant, in representation of the Attorney General, filed
an appeal that urges the revocation of a demurrer sustained
by the Court of First Instance of Manila presented by the
defendant. The defendant, accused of having illegally smoked
opium aboard the merchant vessel Changsa of English
nationality while the said vessel was anchored in Manila Bay,
two and a half miles from the shores of the city. In the said
demurrer, the defendant contended the lack of jurisdiction of
the lower court of the said crime, which resulted to the
dismissal of the case.
As to whether the United States has ever consented by treaty
or otherwise to renouncing such jurisdiction or a part thereof,
we find nothing to this effect so far as England is concerned, to
which nation the ship where the crime in question was
committed belongs.
Mere possession of opium aboard a foreign vessel in transit
was held by this court not triable by or courts, because it being
the primary object of our Opium Law to protect the inhabitants
of the Philippines against the disastrous effects entailed by the
use of this drug, its mere possession in such a ship, without
being used in our territory, does not being about in the said
territory those effects that our statute contemplates avoiding.
Hence such a mere possession is not considered a disturbance
of the public order.

ISSUE:

Whether or not the Philippine courts have jurisdiction over the

crime committed aboard merchant vessels anchored in our
jurisdictional waters.

RULING:

YES. The crime in the case at bar was committed in our internal
waters thus the Philippine courts have a right of jurisdiction
over the said offense. The Court said that having the opium
smoked within our territorial waters even though aboard a
foreign merchant ship is a breach of the public order because
it causes such drugs to produce pernicious effects within our
territory.

Two fundamental rules on this particular matter in connection

with International Law

1. French rule- According to which crimes committed aboard a

foreign merchant vessels should not be prosecuted in the
courts of the country within whose territorial jurisdiction they
were committed

UNLESS: their commission affects the peace and security of the

territory

2. English rule- based on the territorial principle and followed

in the United States; according to which crimes perpetrated

DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN 23
CASE DIGESTS ON CONFLICT OF LAWS – WEEK 17 & 18