SAUDI ARABIAN AIRLINES, petitioner, On January 14, 1992, just when plaintiff thought that the
vs. Jakarta incident was already behind her, her superiors
COURT OF APPEALS, MILAGROS P. MORADA and HON.
RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
Branch 89, Regional Trial Court of Quezon City,
respondents.
This petition for certiorari pursuant to Rule 45 of the Rules of
Court seeks to annul and set aside the Resolution1 dated
September 27, 1995 and the Decision2 dated April 10, 1996
of the Court of Appeals3 in CA-G.R. SP No. 36533,4 and the
Orders5 dated August 29, 1994 6 and February 2, 19957 that
were issued by the trial court in Civil Case No. Q-93-18394.8
The pertinent antecedent facts which gave rise to the instant
petition, as stated in the questioned Decision9, are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a
Flight Attendant for its airlines based in Jeddah, Saudi
Arabia. . . .
On April 27, 1990, while on a lay-over in Jakarta, Indonesia,
plaintiff went to a disco dance with fellow crew members
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. When they were in te (sic) room, Allah left
on some pretext. Shortly after he did, Thamer attempted to
rape plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-
Gazzawi, the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several
SAUDIA officials interrogated her about the Jakarta incident.
They then requested her to go back to Jakarta to help
arrange the release of Thamer and Allah. In Jakarta, SAUDIA
Legal Officer Sirah Akkad and base manager Baharini
negotiated with the police for the immediate release of the
detained crew members but did not succeed because plaintiff
refused to cooperate. She was afraid that she might be
tricked into something she did not want because of her
inability to understand the local dialect. She also declined to
sign a blank paper and a document written in the local
dialect. Eventually, SAUDIA allowed plaintiff to return to
Jeddah but barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi
Arabian government, the Indonesian authorities agreed to
deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant SAUDI
(sic). In September 1990, defendant SAUDIA transferred
plaintiff to Manila.
Page 1 of 11
requested her to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
passport and questioned her about the Jakarta incident.
Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and
Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of
Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to
Manila, plaintiff was not allowed to board the plane and
instead ordered to take a later flight to Jeddah to see Mr.
Miniewy, the Chief Legal Officer of SAUDIA. 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. They told her that this was necessary 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.
Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27,
1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manager, Aslam Saleemi,
that the investigation was routinary and that it posed no
danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the
same Saudi court on June 27, 1993. Nothing happened then
but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however,
just as her plane was about to take off, a SAUDIA officer told
her that the airline had forbidden her to take flight. At the
Inflight Service Office where she was told to go, the secretary
of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
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, translated to her in English,
sentencing her to five months imprisonment and to 286
lashes. Only then did she realize that the Saudi court had
tried her, together with Thamer and Allah, for what happened
in Jakarta. The court found 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. 10
Facing conviction, private respondent sought the help of her
employer, petitioner SAUDIA. Unfortunately, she was denied
any assistance. She then asked the Philippine Embassy in
Jeddah to help her while her case is on appeal. Meanwhile, to
pay for her upkeep, she worked on the domestic flight of
SAUDIA, while Thamer and Allah continued to serve in the
international
flights. 11
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, 12 she was
terminated from the service by SAUDIA, without her being
informed of the cause.
On November 23, 1993, Morada filed a Complaint 13 for
damages against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"),
its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To
Dismiss 14 which raised the following grounds, to wit: (1) that
the Complaint states no cause of action against Saudia; (2)
that defendant Al-Balawi is not a real party in interest; (3) that
the claim or demand set forth in the Complaint has been
waived, abandoned or otherwise extinguished; and (4) that
the trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To
Motion to Dismiss) 15. Saudia filed a reply 16 thereto on
March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17
wherein Al-Balawi was dropped as party defendant. On
August 11, 1994, Saudia filed its Manifestation and Motion to
Dismiss Amended Complaint 18.
The trial court issued an Order 19 dated August 29, 1994
denying the Motion to Dismiss Amended Complaint filed by
Saudia.
From the Order of respondent Judge 20 denying the Motion
to Dismiss, SAUDIA filed on September 20, 1994, its Motion
for Reconsideration 21 of the Order dated August 29, 1994. It
alleged that the trial court has no jurisdiction to hear and try
the case on the basis of Article 21 of the Civil Code, since the
proper law applicable is the law of the Kingdom of Saudi
Arabia. On October 14, 1994, Morada filed her Opposition 22
(To Defendant's Motion for Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994,
SAUDIA alleged that since its Motion for Reconsideration
raised lack of jurisdiction as its cause of action, the Omnibus
Motion Rule does not apply, even if that ground is raised for
the first time on appeal. Additionally, SAUDIA alleged that the
Page 2 of 11
Philippines does not have any substantial interest in the
prosecution of the instant case, and hence, without
jurisdiction to adjudicate the same.
Respondent Judge subsequently issued another Order 24
dated February 2, 1995, denying SAUDIA's Motion for
Reconsideration. The pertinent portion of the assailed Order
reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi
Arabian Airlines filed, thru counsel, on September 20, 1994,
and the Opposition thereto of the plaintiff filed, thru counsel,
on October 14, 1994, as well as the Reply therewith of
defendant Saudi Arabian Airlines filed, thru counsel, on
October 24, 1994, considering that a perusal of the plaintiffs
Amended Complaint, which is one for the recovery of actual,
moral and exemplary damages plus attorney's fees, upon the
basis of the applicable Philippine law, Article 21 of the New
Civil Code of the Philippines, is, clearly, within the jurisdiction
of this Court as regards the subject matter, and there being
nothing new of substance which might cause the reversal or
modification of the order sought to be reconsidered, the
motion for reconsideration of the defendant, is DENIED.
SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition
for Certiorari and Prohibition with Prayer for Issuance of Writ
of Preliminary Injunction and/or Temporary Restraining Order
26 with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with
Temporary Restraining Order 27 dated February 23, 1995,
prohibiting the respondent Judge from further conducting
any proceeding, unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27,
1995, now assailed, the appellate court denied SAUDIA's
Petition for the Issuance of a Writ of Preliminary Injunction
dated February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary
Injunction is hereby DENIED, after considering the Answer,
with Prayer to Deny Writ of Preliminary Injunction (Rollo, p.
135) the Reply and Rejoinder, it appearing that herein
petitioner is not clearly entitled thereto (Unciano Paramedical
College, et. Al., v. Court of Appeals, et. Al., 100335, April 7,
1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court
the instant Petition 29 for Review with Prayer for Temporary
Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition,
respondent Court of Appeals rendered the Decision 30 dated
April 10, 1996, now also assailed. It 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. It further held that certiorari is not the
proper remedy in a denial of a Motion to Dismiss, inasmuch
as the petitioner should have proceeded to trial, and in case
of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for
Review with Prayer for Temporary Restraining Order 31 dated
April 30, 1996, given due course by this Court. After both
parties submitted their Memoranda, 32 the instant case is
now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I respondent's claim for alleged abuse of rights occurred in the
The trial court has no jurisdiction to hear and try Civil Case
No. Q-93-18394 based on Article 21 of the New Civil Code
since the proper law applicable is the law of the Kingdom of
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.
II
Leave of court before filing a supplemental pleading is not a
jurisdictional requirement. Besides, the matter as to absence
of leave of court is now moot and academic when this
Honorable Court required the respondents to comment on
petitioner's April 30, 1996 Supplemental Petition For Review
With Prayer For A Temporary Restraining Order Within Ten
(10) Days From Notice Thereof. Further, the Revised Rules of
Court should be construed with liberality pursuant to Section
2, Rule 1 thereof.
III
Petitioner received on April 22, 1996 the April 10, 1996
decision in CA-G.R. SP NO. 36533 entitled "Saudi Arabian
Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30,
1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or
within the 15-day reglementary period as provided for under
Section 1, Rule 45 of the Revised Rules of Court. Therefore,
the decision in CA-G.R. SP NO. 36533 has not yet become
final and executory and this Honorable Court can take
cognizance of this case. 33
Page 3 of 11
From the foregoing factual and procedural antecedents, the
following issues emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON
CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO.
Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI
ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD
GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws
that must be settled at the outset. It maintains that private
Kingdom of Saudi Arabia. It alleges that 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 delicti commissi rule. 34
On the other hand, private respondent contends that since
her Amended Complaint is based on Articles 19 35 and 21 36
of the Civil Code, then the instant case is properly a matter of
domestic law. 37
Under the factual antecedents obtaining in this case, there is
no dispute that the interplay of events occurred in two states,
the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint
38 dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a
foreign airlines corporation doing business in the Philippines.
It may be served with summons and other court processes at
Travel Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar
Building, 114 Valero St., Salcedo Village, Makati, Metro
Manila.
xxx xxx xxx
6. Plaintiff learned that, through the intercession of the Saudi
Arabian government, the Indonesian authorities agreed to
deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant
SAUDIA. In September 1990, defendant SAUDIA transferred
plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the
Jakarta incident was already behind her, her superiors
reauested her to see MR. Ali Meniewy, Chief Legal Officer of
SAUDIA in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
passport and questioned her about the Jakarta incident.
Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and
Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of
Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh,
Saudi Arabia, a few minutes before the departure of her flight
to Manila, plaintiff was not allowed to board the plane and
instead ordered to take a later flight to Jeddah to see Mr.
Meniewy, the Chief Legal Officer of SAUDIA. When she did, a
certain Khalid of the SAUDIA office brought her to a Saudi
court where she was asked to sigh a document written in
Arabic. They told her that this was necessary 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.
Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff
to report to Jeddah once again and see Miniewy on June 27,
1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manger, Aslam Saleemi, that
the investigation was routinary and that it posed no danger
to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the
same Saudi court on June 27, 1993. Nothing happened then
but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however,
just as her plane was about to take off, a SAUDIA officer told
her that the airline had forbidden her to take that flight. At
the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and
told her to remain in Jeddah, at the crew quarters, until
further orders.
11. 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, translated to
her in English, sentencing her to five months imprisonment
and to 286 lashes. Only then did she realize that the Saudi
court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing, and listening to the
music in violation of Islamic laws; (3) socializing with the male
crew, in contravention of Islamic tradition.
Page 4 of 11
12. Because SAUDIA refused to lend her a hand in the case,
plaintiff sought the help of the Philippines Embassy in Jeddah.
The latter helped her pursue an appeal from the decision of
the court. To pay for her upkeep, she worked on the domestic
flights of defendant SAUDIA while, ironically, Thamer and
Allah freely served the international flights. 39
Where the factual antecedents satisfactorily establish the
existence of a foreign element, we agree with petitioner that
the problem herein could present a "conflicts" case.
A factual situation that cuts across territorial lines and is
affected by the diverse laws of two or more states is said to
contain a "foreign element". The presence of a foreign
element is inevitable since social and economic affairs of
individuals and associations are rarely confined to the
geographic limits of their birth or conception. 40
The forms in which this foreign element may appear are
many. 41 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. 42
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.
We thus find private respondent's assertion that the case is
purely domestic, imprecise. A conflicts problem presents itself
here, and the question of jurisdiction 43 confronts the court a
quo.
After a careful study of the private respondent's Amended
Complaint, 44 and the Comment thereon, we note that she
aptly predicated her cause of action on Articles 19 and 21 of
the New Civil Code.
On one hand, Article 19 of the New Civil Code provides:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice give everyone
his due and observe honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,
45 this Court held that:
The aforecited provisions on human relations were intended
to expand the concept of torts in this jurisdiction by granting
adequate legal remedy for the untold number of moral
wrongs which is impossible for human foresight to specifically
provide in the statutes.
Although Article 19 merely declares a principle of law, Article
21 gives flesh to its provisions. Thus, we agree with private
respondent's assertion that violations of Articles 19 and 21
are actionable, with judicially enforceable remedies in the
municipal forum.
Based on the allegations 46 in the Amended Complaint, read
in the light of the Rules of Court on jurisdiction 47 we find
that the Regional Trial Court (RTC) of Quezon City possesses
jurisdiction over the subject matter of the suit. 48 Its authority
to try and hear the case is provided for under Section 1 of
Republic Act No. 7691, to wit:
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise
known as the "Judiciary Reorganization Act of 1980", is
hereby amended to read as follows:
Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts
shall exercise exclusive jurisdiction:
xxx xxx xxx
(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)
xxx xxx xxx
And following Section 2 (b), Rule 4 of the Revised Rules of
Court — the venue, Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. — [Now Regional
Trial Court]
(a) xxx xxx xxx
Page 5 of 11
(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. Plaintiff may not, by choice of an
inconvenient forum, "vex", "harass", or "oppress" the
defendant, e.g. by inflicting upon him needless expense or
disturbance. But unless the balance is strongly in favor of the
defendant, the plaintiffs choice of forum should rarely be
disturbed. 49
Weighing the relative claims of the parties, the court a quo
found it best to hear the case in the Philippines. Had it
refused to take cognizance of the case, it would be forcing
plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
longer maintains substantial connections. That would have
caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no
unnecessary difficulties and inconvenience have been shown
by either of the parties. The choice of forum of the plaintiff
(now private respondent) should be upheld.
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, private respondent
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 also filed an Answer In Ex Abundante
Cautelam dated February 20, 1995. What is very patent and
explicit from the motions filed, is that 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.
As held by this Court in Republic vs. Ker and Company, Ltd.:
51
We observe that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower court's jurisdiction over
defendant's person, prayed for dismissal of the complaint on
the ground that plaintiff's cause of action has prescribed. By
interposing such second ground in its motion to dismiss, Ker
and Co., Ltd. availed of an affirmative defense on the basis of
which it prayed the court to resolve controversy in its favor.
For the court to validly decide the said plea of defendant Ker
& Co., Ltd., it necessarily had to acquire jurisdiction upon the
latter's person, who, being the proponent of the affirmative
defense, should be deemed to have abandoned its special
appearance and voluntarily submitted itself to the jurisdiction
of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose of
objecting to the jurisdiction of the court over the person, it
must be for the sole and separate purpose of objecting to the
jurisdiction of the court. If his motion is for any other purpose
than to object to the jurisdiction of the court over his person,
he thereby submits himself to the jurisdiction of the court. A
special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will
be held to be a general appearance, if the party in said
motion should, for example, ask for a dismissal of the action
upon the further ground that the court had no jurisdiction
over the subject matter. 52
Clearly, petitioner had submitted to the jurisdiction of the
Regional Trial Court of Quezon City. Thus, we find that the
trial court has jurisdiction over the case and that its exercise
thereof, justified.
As to the choice of applicable law, we note that choice-of-law
problems seek to answer two important questions: (1) What
legal system should control a given situation where some of
the significant facts occurred in two or more states; and (2) to
what extent should the chosen legal system regulate the
situation. 53
Several theories have been propounded in order to identify
the legal system that should ultimately control. Although
ideally, all choice-of-law theories should intrinsically advance
both notions of justice and predictability, they do not always
do so. The forum is then faced with the problem of deciding
which of these two important values should be stressed. 54
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." 55 The purpose of
"characterization" is to enable the forum to select the proper
law. 56
Our starting point of analysis here is not a legal relation, but a
factual situation, event, or operative fact. 57 An essential
Page 6 of 11
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
Note that one or more circumstances may be present to serve
as the possible test for the determination of the applicable
law. 59 These "test factors" or "points of contact" or
"connecting factors" could be any of the following:
(1) The nationality of a person, his domicile, his residence, his
place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a
corporation;
(3) the situs of a thing, that is, the place where a thing is, or is
deemed to be situated. In particular, the lex situs is decisive
when real rights are involved;
(4) the place where an act has been done, the locus actus,
such as the place where a contract has been made, a
marriage celebrated, a will signed or a tort committed. The
lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect,
e.g., the place of performance of contractual duties, or the
place where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that
should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are
instituted or done. The lex fori — the law of the forum — is
particularly important because, as we have seen earlier,
matters of "procedure" not going to the substance of the
claim involved are governed by it; and because the lex fori
applies whenever the content of the otherwise applicable
foreign law is excluded from application in a given case for
the reason that it falls under one of the exceptions to the
applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of
practically all legal relationships of the ship and of its master
or owner as such. It also covers contractual relationships
particularly contracts of affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including
allegations in the Amended Complaint deemed admitted for
purposes of the motion to dismiss, we are convinced that
there is reasonable basis for private respondent's assertion
that although she was already working in Manila, petitioner
brought her to Jeddah on the pretense that she would merely
testify in an investigation of the charges she made against the
two SAUDIA crew members for the attack on her person while
they were in Jakarta. 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.
There is likewise logical basis on record for the claim that the
"handing over" or "turning over" of the person of private
respondent to Jeddah officials, petitioner may have acted
beyond its duties as employer. Petitioner's purported act
contributed to and amplified or even proximately caused
additional humiliation, misery and suffering of private
respondent. Petitioner thereby allegedly facilitated the arrest,
detention and prosecution of private respondent under the
guise of petitioner's authority as employer, taking advantage
of the trust, confidence and faith she reposed upon it. As
purportedly found by the Prince of Makkah, the alleged
conviction and imprisonment of private respondent was
wrongful. But these capped the injury or harm allegedly
inflicted upon her person and reputation, for which petitioner
could be liable as claimed, to provide compensation or
redress for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one
involving torts, the "connecting factor" or "point of contact"
could be the place or places where the tortious conduct or lex
loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a
situs of the tort (the place where the alleged tortious conduct
took place). This is because it is in the Philippines where
petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had
honestly believed that petitioner would, in the exercise of its
rights and in the performance of its duties, "act with justice,
give her due and observe honesty and good faith." Instead,
petitioner failed to protect her, she claimed. That certain acts
or parts of the injury allegedly occurred in another country is
of no moment. For in our view what is important here is the
place where the over-all harm or the totality of the alleged
injury to the person, reputation, social standing and human
rights of complainant, had lodged, according to the plaintiff
below (herein private respondent). All told, it is not without
basis to identify the Philippines as the situs of the alleged
tort.
Moreover, with the widespread criticism of the traditional rule
of lex loci delicti commissi, modern theories and rules on tort
liability 61 have been advanced to offer fresh judicial
approaches to arrive at just results. In keeping abreast with
the modern theories on tort liability, we find here an occasion
to apply the "State of the most significant relationship" rule,
which in our view should be appropriate to apply now, given
the factual context of this case.
Page 7 of 11
In applying said principle to determine the State which has
the most significant relationship, the following contacts are to
be taken into account and evaluated according to their
relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the
conduct causing the injury occurred; (c) the domicile,
residence, nationality, place of incorporation and place of
business of the parties, and (d) the place where the
relationship, if any, between the parties is centered. 62
As already discussed, there is basis for the claim that over-all
injury occurred and lodged in the Philippines. There is
likewise no question that private respondent is a resident
Filipina national, working with petitioner, a resident foreign
corporation engaged here in the business of international air
carriage. Thus, the "relationship" between the parties was
centered here, although it should be stressed that this suit is
not based on mere labor law violations. From the record, the
claim that the Philippines has the most significant contact
with the matter in this dispute, 63 raised by private
respondent as plaintiff below against defendant (herein
petitioner), in our view, has been properly established.
Prescinding from this premise that the Philippines is the situs
of the tort complained of and the place "having the most
interest in the problem", we find, by way of recapitulation,
that the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case. Further, we hold that the respondent
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.
Moreover, we find untenable petitioner's insistence that
"[s]ince private respondent instituted this suit, she has the
burden of pleading and proving the applicable Saudi law on
the matter." 64 As aptly said by private respondent, she 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. In her Amended
Complaint and subsequent pleadings, she never alleged that
Saudi law should govern this case. 65 And as correctly held by
the respondent appellate court, "considering that it was the
petitioner who was invoking the applicability of the law of
Saudi Arabia, then the burden was on it [petitioner] to plead
and to establish what the law of Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate
court in upholding the trial court's denial of defendant's
(herein petitioner's) motion to dismiss the case. Not only was
jurisdiction in order and venue properly laid, but appeal after
trial was obviously available, and expeditious trial itself
indicated by the nature of the case at hand. Indubitably, the
Philippines is the state intimately concerned with the ultimate
outcome of the case below, not just for the benefit of all the
litigants, but also for the vindication of the country's system
of law and justice in a transnational setting. With these
guidelines in mind, the trial court must proceed to try and
adjudge the case in the light of relevant Philippine law, with
due consideration of the foreign element or elements
involved. Nothing said herein, of course, should be construed
as prejudging the results of the case in any manner
whatsoever.
WHEREFORE, the instant petition for certiorari is hereby
DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P.
Morada vs. Saudi Arabia Airlines" is hereby REMANDED to
Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
KAZUHIRO HASEGAWA and NIPPON ENGINEERING
CONSULTANTS CO., LTD., Petitioners,
vs.
MINORU KITAMURA, Respondent.
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court assailing the April 18, 2001
Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.
60827, and the July 25, 2001 Resolution2 denying the motion
for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering
Consultants Co., Ltd. (Nippon), a Japanese consultancy firm
providing technical and management support in the
infrastructure projects of foreign governments,3 entered into
an Independent Contractor Agreement (ICA) with respondent
Minoru Kitamura, a Japanese national permanently residing in
the Philippines.4 The agreement provides that respondent
was to extend professional services to Nippon for a year
starting on April 1, 1999.5 Nippon then assigned respondent
to work as the project manager of the Southern Tagalog
Access Road (STAR) Project in the Philippines, following the
company's consultancy contract with the Philippine
Government.6
When the STAR Project was near completion, the Department
of Public Works and Highways (DPWH) engaged the
consultancy services of Nippon, on January 28, 2000, this time
for the detailed engineering and construction supervision of
the Bongabon-Baler Road Improvement (BBRI) Project.7
Respondent was named as the project manager in the
contract's Appendix 3.1.8
On February 28, 2000, petitioner Kazuhiro Hasegawa,
Nippon's general manager for its International Division,
informed respondent that the company had no more
Page 8 of 11
intention of automatically renewing his ICA. His services
would be engaged by the company only up to the substantial
completion of the STAR Project on March 31, 2000, just in
time for the ICA's expiry.9
Threatened with impending unemployment, respondent,
through his lawyer, requested a negotiation conference and
demanded that he be assigned to the BBRI project. Nippon
insisted that respondent’s contract was for a fixed term that
had already expired, and refused to negotiate for the renewal
of the ICA.10
As he was not able to generate a positive response from the
petitioners, respondent consequently initiated on June 1,
2000 Civil Case No. 00-0264 for specific performance and
damages with the Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA had been
perfected in Japan and executed by and between Japanese
nationals, moved to dismiss the complaint for lack of
jurisdiction. They asserted that the claim for improper pre-
termination of respondent's ICA could only be heard and
ventilated in the proper courts of Japan following the
principles of lex loci celebrationis and lex contractus.12
In the meantime, on June 20, 2000, the DPWH approved
Nippon's request for the replacement of Kitamura by a
certain Y. Kotake as project manager of the BBRI Project.13
On June 29, 2000, the RTC, invoking our ruling in Insular
Government v. Frank14 that matters connected with the
performance of contracts are regulated by the law prevailing
at the place of performance,15 denied the motion to
dismiss.16 The trial court subsequently denied petitioners'
motion for reconsideration,17 prompting them to file with the
appellate court, on August 14, 2000, their first Petition for
Certiorari under Rule 65 [docketed as CA-G.R. SP No.
60205].18 On August 23, 2000, the CA resolved to dismiss the
petition on procedural grounds—for lack of statement of
material dates and for insufficient verification and certification
against forum shopping.19 An Entry of Judgment was later
issued by the appellate court on September 20, 2000.20
Aggrieved by this development, petitioners filed with the CA,
on September 19, 2000, still within the reglementary period, a
second Petition for Certiorari under Rule 65 already stating
therein the material dates and attaching thereto the proper
verification and certification. This second petition, which
substantially raised the same issues as those in the first, was
docketed as CA-G.R. SP No. 60827.21
Ruling on the merits of the second petition, the appellate
court rendered the assailed April 18, 2001 Decision22 finding
no grave abuse of discretion in the trial court's denial of the
motion to dismiss. The CA ruled, among others, that the
principle of lex loci celebrationis was not applicable to the
case, because nowhere in the pleadings was the validity of
the written agreement put in issue. The CA thus declared that
the trial court was correct in applying instead the principle of
lex loci solutionis.23
Petitioners' motion for reconsideration was subsequently
denied by the CA in the assailed July 25, 2001 Resolution.24
Remaining steadfast in their stance despite the series of
denials, petitioners instituted the instant Petition for Review
on Certiorari25 imputing the following errors to the appellate
court:
A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE TRIAL COURT VALIDLY EXERCISED
JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE
THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND
BETWEEN TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN
THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO,
JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO
THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF
RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL
LAWS.26
The pivotal question that this Court is called upon to resolve
is whether the subject matter jurisdiction of Philippine courts
in civil cases for specific performance and damages involving
contracts executed outside the country by foreign nationals
may be assailed on the principles of lex loci celebrationis, lex
contractus, the "state of the most significant relationship
rule," or forum non conveniens.
However, before ruling on this issue, we must first dispose of
the procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's
decision in CA-G.R. SP No. 60205 has already barred the filing
of the second petition docketed as CA-G.R. SP No. 60827
(fundamentally raising the same issues as those in the first
one) and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No.
60205 on account of the petition's defective certification of
non-forum shopping, it was a dismissal without prejudice.27
The same holds true in the CA's dismissal of the said case due
to defects in the formal requirement of verification28 and in
the other requirement in Rule 46 of the Rules of Court on the
statement of the material dates.29 The dismissal being
Page 9 of 11
without prejudice, petitioners can re-file the petition, or file a
second petition attaching thereto the appropriate verification
and certification—as they, in fact did—and stating therein the
material dates, within the prescribed period30 in Section 4,
Rule 65 of the said Rules.31
The dismissal of a case without prejudice signifies the
absence of a decision on the merits and leaves the parties
free to litigate the matter in a subsequent action as though
the dismissed action had not been commenced. In other
words, the termination of a case not on the merits does not
bar another action involving the same parties, on the same
subject matter and theory.32
Necessarily, because the said dismissal is without prejudice
and has no res judicata effect, and even if petitioners still
indicated in the verification and certification of the second
certiorari petition that the first had already been dismissed on
procedural grounds,33 petitioners are no longer required by
the Rules to indicate in their certification of non-forum
shopping in the instant petition for review of the second
certiorari petition, the status of the aforesaid first petition
before the CA. In any case, an omission in the certificate of
non-forum shopping about any event that will not constitute
res judicata and litis pendentia, as in the present case, is not a
fatal defect. It will not warrant the dismissal and nullification
of the entire proceedings, considering that the evils sought to
be prevented by the said certificate are no longer present.34
The Court also finds no merit in respondent's contention that
petitioner Hasegawa is only authorized to verify and certify,
on behalf of Nippon, the certiorari petition filed with the CA
and not the instant petition. True, the Authorization35 dated
September 4, 2000, which is attached to the second certiorari
petition and which is also attached to the instant petition for
review, is limited in scope—its wordings indicate that
Hasegawa is given the authority to sign for and act on behalf
of the company only in the petition filed with the appellate
court, and that authority cannot extend to the instant petition
for review.36 In a plethora of cases, however, this Court has
liberally applied the Rules or even suspended its application
whenever a satisfactory explanation and a subsequent
fulfillment of the requirements have been made.37 Given that
petitioners herein sufficiently explained their misgivings on
this point and appended to their Reply38 an updated
Authorization39 for Hasegawa to act on behalf of the
company in the instant petition, the Court finds the same as
sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment
to the defect in the verification and certification. As
respondent pointed out, and to which we agree, Hasegawa is
truly not authorized to act on behalf of Nippon in this case.
The aforesaid September 4, 2000 Authorization and even the
subsequent August 17, 2001 Authorization were issued only
by Nippon's president and chief executive officer, not by the
company's board of directors. In not a few cases, we have
ruled that corporate powers are exercised by the board of
directors; thus, no person, not even its officers, can bind the
corporation, in the absence of authority from the board.40
Considering that Hasegawa verified and certified the petition
only on his behalf and not on behalf of the other petitioner,
the petition has to be denied pursuant to Loquias v. Office of
the Ombudsman.41 Substantial compliance will not suffice in
a matter that demands strict observance of the Rules.42
While technical rules of procedure are designed not to
frustrate the ends of justice, nonetheless, they are intended to
effect the proper and orderly disposition of cases and
effectively prevent the clogging of court dockets.43
Further, the Court has observed that petitioners incorrectly
filed a Rule 65 petition to question the trial court's denial of
their motion to dismiss. It is a well-established rule that an
order denying a motion to dismiss is interlocutory, and
cannot be the subject of the extraordinary petition for
certiorari or mandamus. The appropriate recourse is to file an
answer and to interpose as defenses the objections raised in
the motion, to proceed to trial, and, in case of an adverse
decision, to elevate the entire case by appeal in due course.44
While there are recognized exceptions to this rule,45
petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the
case.
Asserting that the RTC of Lipa City is an inconvenient forum,
petitioners question its jurisdiction to hear and resolve the
civil case for specific performance and damages filed by the
respondent. The ICA subject of the litigation was entered into
and perfected in Tokyo, Japan, by Japanese nationals, and
written wholly in the Japanese language. Thus, petitioners
posit that local courts have no substantial relationship to the
parties46 following the [state of the] most significant
relationship rule in Private International Law.47
The Court notes that petitioners adopted an additional but
different theory when they elevated the case to the appellate
court. In the Motion to Dismiss48 filed with the trial court,
petitioners never contended that the RTC is an inconvenient
forum. They merely argued that the applicable law which will
determine the validity or invalidity of respondent's claim is
that of Japan, following the principles of lex loci celebrationis
and lex contractus.49 While not abandoning this stance in
their petition before the appellate court, petitioners on
certiorari significantly invoked the defense of forum non
conveniens.50 On petition for review before this Court,
petitioners dropped their other arguments, maintained the
forum non conveniens defense, and introduced their new
Page 10 of 11
argument that the applicable principle is the [state of the]
most significant relationship rule.51
Be that as it may, this Court is not inclined to deny this
petition merely on the basis of the change in theory, as
explained in Philippine Ports Authority v. City of Iloilo.52 We
only pointed out petitioners' inconstancy in their arguments
to emphasize their incorrect assertion of conflict of laws
principles.
To elucidate, in the judicial resolution of conflicts problems,
three consecutive phases are involved: jurisdiction, choice of
law, and recognition and enforcement of judgments.
Corresponding to these phases are the following questions:
(1) Where can or should litigation be initiated? (2) Which law
will the court apply? and (3) Where can the resulting
judgment be enforced?53
Analytically, jurisdiction and choice of law are two distinct
concepts.54 Jurisdiction considers whether it is fair to cause a
defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law which
will determine the merits of the case is fair to both parties.
The power to exercise jurisdiction does not automatically give
a state constitutional authority to apply forum law. While
jurisdiction and the choice of the lex fori will often coincide,
the "minimum contacts" for one do not always provide the
necessary "significant contacts" for the other.55 The question
of whether the law of a state can be applied to a transaction
is different from the question of whether the courts of that
state have jurisdiction to enter a judgment.56
In this case, only the first phase is at issue—
jurisdiction.1âwphi1 Jurisdiction, however, has various
aspects. For a court to validly exercise its power to adjudicate
a controversy, it must have jurisdiction over the plaintiff or
the petitioner, over the defendant or the respondent, over the
subject matter, over the issues of the case and, in cases
involving property, over the res or the thing which is the
subject of the litigation.57 In assailing the trial court's
jurisdiction herein, petitioners are actually referring to subject
matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is
conferred by the sovereign authority which establishes and
organizes the court. It is given only by law and in the manner
prescribed by law.58 It is further determined by the
allegations of the complaint irrespective of whether the
plaintiff is entitled to all or some of the claims asserted
therein.59 To succeed in its motion for the dismissal of an
action for lack of jurisdiction over the subject matter of the
claim,60 the movant must show that the court or tribunal
cannot act on the matter submitted to it because no law
grants it the power to adjudicate the claims.61

In the instant case, petitioners, in their motion to dismiss, do
not claim that the trial court is not properly vested by law
with jurisdiction to hear the subject controversy for, indeed,
Civil Case No. 00-0264 for specific performance and damages
is one not capable of pecuniary estimation and is properly
cognizable by the RTC of Lipa City.62 What they rather raise
as grounds to question subject matter jurisdiction are the
principles of lex loci celebrationis and lex contractus, and the
"state of the most significant relationship rule."
jurisdiction or refusal to assume jurisdiction over the case; (2)
assume jurisdiction over the case and apply the internal law
of the forum; or (3) assume jurisdiction over the case and take
into account or apply the law of some other State or States.74
The court’s power to hear cases and controversies is derived
from the Constitution and the laws. While it may choose to
recognize laws of foreign nations, the court is not limited by
foreign sovereign law short of treaties or other formal
agreements, even in matters regarding rights provided by
foreign sovereigns.75

The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the
ceremony"63 or the law of the place where a contract is
made.64 The doctrine of lex contractus or lex loci contractus
means the "law of the place where a contract is executed or
to be performed."65 It controls the nature, construction, and
validity of the contract66 and it may pertain to the law
voluntarily agreed upon by the parties or the law intended by
them either expressly or implicitly.67 Under the "state of the
most significant relationship rule," to ascertain what state law
to apply to a dispute, the court should determine which state
has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should
consider where the contract was made, was negotiated, was
to be performed, and the domicile, place of business, or place
of incorporation of the parties.68 This rule takes into account
several contacts and evaluates them according to their
relative importance with respect to the particular issue to be
resolved.69
Since these three principles in conflict of laws make reference
to the law applicable to a dispute, they are rules proper for
the second phase, the choice of law.70 They determine which
state's law is to be applied in resolving the substantive issues
of a conflicts problem.71 Necessarily, as the only issue in this
case is that of jurisdiction, choice-of-law rules are not only
inapplicable but also not yet called for.
Neither can the other ground raised, forum non
conveniens,76 be used to deprive the trial court of its
jurisdiction herein. First, it is not a proper basis for a motion
to dismiss because Section 1, Rule 16 of the Rules of Court
does not include it as a ground.77 Second, whether a suit
should be entertained or dismissed on the basis of the said
doctrine depends largely upon the facts of the particular case
and is addressed to the sound discretion of the trial court.78
In this case, the RTC decided to assume jurisdiction. Third, the
propriety of dismissing a case based on this principle requires
a factual determination; hence, this conflicts principle is more
properly considered a matter of defense.79
Accordingly, since the RTC is vested by law with the power to
entertain and hear the civil case filed by respondent and the
grounds raised by petitioners to assail that jurisdiction are
inappropriate, the trial and appellate courts correctly denied
the petitioners’ motion to dismiss.
WHEREFORE, premises considered, the petition for review on
certiorari is DENIED

Further, petitioners' premature invocation of choice-of-law

rules is exposed by the fact that they have not yet pointed
out any conflict between the laws of Japan and ours. Before
determining which law should apply, first there should exist a
conflict of laws situation requiring the application of the
conflict of laws rules.72 Also, when the law of a foreign
country is invoked to provide the proper rules for the solution
of a case, the existence of such law must be pleaded and
proved.73

It should be noted that when a conflicts case, one involving a

foreign element, is brought before a court or administrative
agency, there are three alternatives open to the latter in
disposing of it: (1) dismiss the case, either because of lack of

Page 11 of 11