Cadalin vs.

POEA administrator (238 SCRA 721 (1994)

FACTS:

This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the Supreme

Court for Certiorari.

On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and on behalf of
728 other OCWs instituted a class suit by filing an “Amended Complaint” with the
POEA for money claims arising from their recruitment by ASIA INTERNATIONAL
BUILDERS CORPORATION (AIBC) and employment by BROWN & ROOT
INTERNATIONAL, INC (BRI) which is a foreign corporation with headquarters in
Houston, Texas, and is engaged in construction; while AIBC is a domestic
corporation licensed as a service contractor to recruit, mobilize and deploy Filipino
workers for overseas employment on behalf of its foreign principals.

The amended complaint sought the payment of the unexpired portion of the
employment contracts, which was terminated prematurely, and secondarily, the
payment of the interest of the earnings of the Travel and Reserved Fund; interest on
all the unpaid benefits; area wage and salary differential pay; fringe benefits;
reimbursement of SSS and premium not remitted to the SSS; refund of withholding
tax not remitted to the BIR; penalties for committing prohibited practices; as well as
the suspension of the license of AIBC and the accreditation of BRII

On October 2, 1984, the POEA Administrator denied the “Motion to Strike Out of the
Records” filed by AIBC but required the claimants to correct the deficiencies in the
complaint pointed out.

AIB and BRII kept on filing Motion for Extension of Time to file their answer. The
POEA kept on granting such motions.

On November 14, 1984, claimants filed an opposition to the motions for extension of
time and asked that AIBC and BRII declared in default for failure to file their
answers.

On December 27, 1984, the POEA Administrator issued an order directing AIBC and
BRII to file their answers within ten days from receipt of the order.

(at madami pang motions ang na-file, new complainants joined the case, ang daming
inavail na remedies ng both parties)
On June 19, 1987, AIBC finally submitted its answer to the complaint. At the same
hearing, the parties were given a period of 15 days from said date within which to
submit their respective position papers. On February 24, 1988, AIBC and BRII
submitted position paper. On October 27, 1988, AIBC and BRII filed a “Consolidated
Reply,” POEA Adminitartor rendered his decision which awarded the amount of
$824, 652.44 in favor of only 324 complainants. Claimants submitted their “Appeal
Memorandum For Partial Appeal” from the decision of the POEA. AIBC also filed its
MR and/or appeal in addition to the “Notice of Appeal” filed earlier.

NLRC promulgated its Resolution, modifying the decision of the POEA. The
resolution removed some of the benefits awarded in favor of the claimants. NLRC
denied all the MRs. Hence, these petitions filed by the claimants and by AlBC and
BRII.

The case rooted from the Labor Law enacted by Bahrain where most of the
complainants were deployed. His Majesty Ise Bin Selman Al Kaifa, Amir of Bahrain,
issued his Amiri Decree No. 23 on June 16, 1176, otherwise known re the Labour
Law for the Private Sector. Some of the provision of Amiri Decree No. 23 that are
relevant to the claims of the complainants-appellants are as follows:

“Art. 79: x x x A worker shall receive payment for each extra hour equivalent to his
wage entitlement increased by a minimum of twenty-rive per centurn thereof for
hours worked during the day; and by a minimum off fifty per centurn thereof for
hours worked during the night which shall be deemed to being from seven o’clock in
the evening until seven o’clock in the morning .”

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
If employee worked, 150% of his normal wage shall be paid to him x x x.”

Art. 81; x x x When conditions of work require the worker to work on any official
holiday, he shall be paid an additional sum equivalent to 150% of his normal wage.”

Art. 84: Every worker who has completed one year’s continuous service with his
employer shall be entitled to Laos on full pay for a period of not less than 21 days for
each year increased to a period not less than 28 days after five continuous years of
service.”

A worker shall be entitled to such leave upon a quantum meruit in respect of the
proportion of his service in that year.”

Art. 107: A contract of employment made for a period of indefinite duration may be
terminated by either party thereto after giving the other party prior notice before such
termination, in writing, in respect of monthly paid workers and fifteen days’ notice in
respect of other workers. The party terminating a contract without the required notice
shall pay to the other party compensation equivalent to the amount of wages payable
to the worker for the period of such notice or the unexpired portion thereof.”

Art. Ill: x x x the employer concerned shall pay to such worker, upon termination of
employment, a leaving indemnity for the period of his employment calculated on the
basis of fifteen days’ wages for each year of the first three years of service and of one
month’s wages for each year of service thereafter. Such worker shall be entitled to
payment of leaving indemnity upon a quantum meruit in proportion to the period of
his service completed within a year.”

ISSUE:

1. WON the foreign law should govern or the contract of the parties.(WON the
complainants who have worked in Bahrain are entitled to the above-mentioned
benefits provided by Amiri Decree No. 23 of Bahrain).

2. WON the Bahrain Law should apply in the case. (Assuming it is applicable WON
complainants’ claim for the benefits provided therein have prescribed.)

3. Whether or not the instant cases qualify as; a class suit (siningit ko nalang)
(the rest of the issues in the full text of the case refer to Labor Law)

RULING:

1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence
governing the pleading and proof of a foreign law and admitted in evidence a simple
copy of the Bahrain’s Amiri Decree No. 23 of 1976 (Labour Law for the Private
Sector).

NLRC applied the Amiri Deere, No. 23 of 1976, which provides for greater benefits
than those stipulated in the overseas-employment contracts of the claimants. It was of
the belief that where the laws of the host country are more favorable and beneficial to
the workers, then the laws of the host country shall form part of the overseas
employment contract. It approved the observation of the POEA Administrator that in
labor proceedings, all doubts in the implementation of the provisions of the Labor
Code and its implementing regulations shall be resolved in favor of labor.

The overseas-employment contracts, which were prepared by AIBC and BRII

themselves, provided that the laws of the host country became applicable to said
contracts if they offer terms and conditions more favorable than those stipulated
therein. However there was a part of the employment contract which provides that the
compensation of the employee may be “adjusted downward so that the total
computation plus the non-waivable benefits shall be equivalent to the compensation”
therein agree,’ another part of the same provision categorically states “that total
remuneration and benefits do not fall below that of the host country regulation and
custom.”

Any ambiguity in the overseas-employment contracts should be interpreted against

AIBC and BRII, the parties that drafted it. Article 1377 of the Civil Code of the
Philippines provides:
‘The interpretation of obscure words or stipulations in a contract shall not favor the
party who caused the obscurity.”
Said rule of interpretation is applicable to contracts of adhesion where there is already
a prepared form containing the stipulations of the employment contract and the
employees merely “take it or leave it.” The presumption is that there was an
imposition by one party against the other and that the employees signed the contracts
out of necessity that reduced their bargaining power.
We read the overseas employment contracts in question as adopting the provisions of
the Amiri Decree No. 23 of 1976 as part and parcel thereof. The parties to a contract
may select the law by which it is to be governed. In such a case, the foreign law is
adopted as a “system” to regulate the relations of the parties, including questions of
their capacity to enter into the contract, the formalities to be observed by them,
matters of performance, and so forth. Instead of adopting the entire mass of the
foreign law, the parties may just agree that specific provisions of a foreign statute
shall be deemed incorporated into their contract “as a set of terms.” By such reference
to the provisions of the foreign law, the contract does not become a foreign contract to
be governed by the foreign law. The said law does not operate as a statute but as a set
of contractual terms deemed written in the contract.

A basic policy of contract is to protect the expectation of the parties. Such party
expectation is protected by giving effect to the parties’ own choice of the applicable
law. The choice of law must, however, bear some relationship the parties or their
transaction. There is no question that the contracts sought to be enforced by claimants
have a direct connection with the Bahrain law because the services were rendered in
that country.

2. NLRC ruled that the prescriptive period for the filing of the claims of the
complainants was 3 years, as provided in Article 291 of the Labor Code of the
Philippines, and not ten years as provided in Article 1144 of the Civil Code of the
Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.

Article 156 of the Amiri Decree No. 23 of 1976 provides:

“A claim arising out of a contract of employment shall not actionable after the lapse
of one year from the date of the expiry of the Contract”.

As a general rule, a foreign procedural law will not be applied in the forum (local
court), Procedural matters, such as service of process, joinder of actions, period and
requisites for appeal, and so forth, are governed by the laws of the forum. This is true
even if the action is based upon a foreign substantive law.

A law on prescription of actions is sui generis in Conflict of Laws in the sense that it
may be viewed either as procedural or substantive, depending on the characterization
given such a law. In Bournias v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir.
[1955]), where the issue was the applicability of the Panama Labor Code in a case
filed in the State of New York for claims arising from said Code, the claims would
have prescribed under the Panamanian Law but not under the Statute of Limitations of
New York. The U.S. Circuit Court of Appeals held that the Panamanian Law was
procedural as it was not “specifically intended to be substantive,” hence, the
prescriptive period provided in the law of the forum should apply. The Court
observed: “. . . we are dealing with a statute of limitations of a foreign country, and it
is not clear on the face of the statute that its purpose was to limit the enforceability,
outside as well as within the foreign country concerned, of the substantive rights to
which the statute pertains. We think that as a yardstick for determining whether that
was the purpose, this test is the most satisfactory one.

The Court further noted: “Applying that test here it appears to us that the libellant is
entitled to succeed, for the respondents have failed to satisfy us that the Panamanian
period of limitation in question was specifically aimed against the particular rights
which the libellant seeks to enforce. The Panama Labor Code is a statute having broad
objectives.” The American court applied the statute of limitations of New York,
instead of the Panamanian law, after finding that there was no showing that the
Panamanian law on prescription was intended to be substantive. Being considered
merely a procedural law even in Panama, it has to give way to the law of the forum
(local Court) on prescription of actions.

However the characterization of a statute into a procedural or substantive law

becomes irrelevant when the country of the forum (local Court) has a “borrowing
statute.” Said statute has the practical effect of treating the foreign statute of limitation
as one of substance. A “borrowing statute” directs the state of the forum (local Court)
to apply the foreign statute of limitations to the pending claims based on a foreign
law. While there are several kinds of “borrowing statutes,” one form provides that an
action barred by the laws of the place where it accrued will not be enforced in the
forum even though the local statute was not run against it.

Section 48 of Code of Civil Procedure is of this kind. It provides: “If by the laws of
the state or country where the cause of action arose, the action is barred, it is also
barred in the Philippine Islands.”

Section 48 has not been repealed or amended by the Civil Code of the Philippines. In
the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio
vigore insofar as it ordains the application in this jurisdiction of Section 156 of the
Amiri Decree No. 23 of 1976.

The courts of the forum (local Court) will not enforce any foreign claim obnoxious to
the forum’s public policy. To enforce the one-year prescriptive period of the Amiri
Decree No. 23 of 1976 as regards the claims in question would contravene the public
policy on the protection to labor.

In the Declaration of Principles and State Policies, the 1987 Constitution emphasized
that:“The state shall promote social justice in all phases of national development”
(Sec. 10).
‘The state affirms labor as a primary social economic force. It shall protect the rights
of workers and promote their welfare” (Sec. 18).

In Article XIII on Social Justice and Human Rights, the 1987 Constitution provides:
“Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all.”

Thus, the applicable law on prescription is the Philippine law.

The next question is whether the prescriptive period governing the filing of the claims
is 3 years, as provided by the Labor Code or 10 years, as provided by the Civil Code
of the Philippines.

Article 1144 of the Civil Code of the Philippines provides:

“The following actions must be brought within ten years from the time the right of
action accross:

(1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a
judgment”
In this case, the claim for pay differentials is primarily anchored on the written
contracts between the litigants, the ten-year prescriptive period provided by Art.
1144(l) of the New Civil Code should govern.

3. NO. A class suit is proper where the subject matter of the controversy is one of
common or general interest to many and the parties are so numerous that it is
impracticable to bring them all before the court. When all the claims are for benefits
granted under the Bahrain law many of the claimants worked outside Bahrain. Some
of the claimants were deployed in Indonesia under different terms and condition of
employment.

Inasmuch as the First requirement of a class suit is not present (common or general
interest based on the Amiri Decree of the State of Bahrain), it is only logical that only
those who worked in Bahrain shall be entitled to rile their claims in a class suit.

While there are common defendants (AIBC and BRII) and the nature of the claims is
the same (for employee’s benefits), there is no common question of law or fact. While
some claims are based on the Amiri Law of Bahrain, many of the claimants never
worked in that country, but were deployed elsewhere. Thus, each claimant is
interested only in his own demand and not in the claims of the other employees of
defendants. A claimant has no concern in protecting the interests of the other
claimants as shown by the fact, that hundreds of them have abandoned their co-
claimants and have entered into separate compromise settlements of their respective
claims. The claimants who worked in Bahrain can not be allowed to sue in a class suit
in a judicial proceeding.

WHEREFORE, all the three petitioners are DISMISSED.

LWV CONS. CORP. vs Marcelo Dupo (G.R. No.172342 (1994)

FACTS:
Petitioner, a domestic corporation which recruits Filipino workers, hired respondent
as Civil Structural Superintendent to work in Saudi Arabia for its principal,
Mohammad Al-Mojil Group/Establishment (MMG). On February 26, 1992,
respondent signed his first overseas employment contract, renewable after one year. It
was renewed five times on the following dates: May 10, 1993, November 16, 1994,
January 22, 1996, April 14, 1997, and March 26, 1998. All were fixed-period
contracts for one year. The sixth and last contract stated that respondent's employment
starts upon reporting to work and ends when he leaves the work site. Respondent left
Saudi Arabia on April 30, 1999 and arrived in the Philippines on May 1, 1999.
On May 28, 1999, respondent informed MMG, through the petitioner, that he needs to
extend his vacation because his son was hospitalized. He also sought a promotion
with salary adjustment.[3] In reply, MMG informed respondent that his promotion is
subject to management's review; that his services are still needed; that he was issued a
plane ticket for his return flight to Saudi Arabia on May 31, 1999; and that his
decision regarding his employment must be made within seven days, otherwise,
MMG "will be compelled to cancel [his] slot." On July 6, 1999, respondent resigned.
Under the Law of Saudi Arabia, an employee who rendered at least five (5) years in a
company within the jurisdiction of Saudi Arabia, is entitled to the so-called long
service award which is known to others as longevity pay of at least one half month
pay for every year of service. In excess of five years an employee is entitled to one
month pay for every year of service. In both cases inclusive of all benefits and
allowances.
ISSUE:
Conflict of Laws

Article 87

Where the term of a labor contract concluded for a specified period comes to an
end or where the employer cancels a contract of unspecified period, the employer
shall pay to the workman an award for the period of his service to be computed on the
basis of half a month's pay for each of the first five years and one month's pay for
each of the subsequent years. The last rate of pay shall be taken as basis for the
computation of the award. For fractions of a year, the workman shall be entitled to an
award which is proportionate to his service period during that year. Furthermore, the
workman shall be entitled to the service award provided for at the beginning of this
article in the following cases:

A. If he is called to military service.

B. If a workman resigns because of marriage or childbirth.

C. If the workman is leaving the work as a result of a force majeure beyond his
control.(Emphasis supplied.)
On the matter of prescription, however, we cannot agree with petitioner that
respondent's action has prescribed under Article 13 of the Saudi Labor Law. What
applies is Article 291 of our Labor Code which reads:

ART. 291. Money claims. -- All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued; otherwise they shall be forever
barred.

xxxx

In Cadalin v. POEA's Administrator, we held that Article 291 covers all money
claims from employer-employee relationship and is broader in scope than claims
arising from a specific law. It is not limited to money claims recoverable under the
Labor Code, but applies also to claims of overseas contract workers.

Thus, in our considered view, respondent's complaint was filed well within the three-
year prescriptive period under Article 291 of our Labor Code. This point, however,
has already been mooted by our finding that respondent's service award had been
paid, albeit the payroll termed such payment as severance pay.
Aznar vs Garcia (117 Phil 106, & SCRA 95 (1963)

FACTS: EDWARD Christensen died testate. The estate was distributed by

Executioner Aznar according to the will, which provides that: Php 3,600 be given to
HELEN Christensen as her legacy, and the rest of his estate to his daughter LUCY
Christensen, as pronounced by CFI Davao.

Opposition to the approval of the project of partition was filed by Helen, insofar as it
deprives her of her legitime as an acknowledged natural child, she having been
declared by Us an acknowledged natural child of the deceased Edward in an earlier
case.

As to his citizenship, we find that the citizenship that he acquired in California when
he resided in Sacramento from 1904 to 1913, was never lost by his stay in the
Philippines, and the deceased appears to have considered himself as a citizen of
California by the fact that when he executed his will he declared that he was a citizen
of that State; so that he appears never to have intended to abandon his California
citizenship by acquiring another. But at the time of his death, he was domiciled in the
Philippines.

ISSUE: what law on succession should apply, the Philippine law or the California
law?

HELD: WHEREFORE, the decision appealed from is hereby reversed and the case
returned to the lower court with instructions that the partition be made as the
Philippine law on succession provides.

The law that governs the validity of his testamentary dispositions is defined in Article
16 of the Civil Code of the Philippines, which is as follows:

ART. 16. Real property as well as personal property is subject to the law of the
country where it is situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country where said property may be found.

The application of this article in the case at bar requires the determination of the
meaning of the term “national law” is used therein.

The next question is: What is the law in California governing the disposition of
personal property?
The decision of CFI Davao, sustains the contention of the executor-appellee that
under the California Probate Code, a testator may dispose of his property by will in
the form and manner he desires. But HELEN invokes the provisions of Article 946 of
the Civil Code of California, which is as follows:

If there is no law to the contrary, in the place where personal property is situated, it is
deemed to follow the person of its owner, and is governed by the law of his domicile.

It is argued on executor’s behalf that as the deceased Christensen was a citizen of the
State of California, the internal law thereof, which is that given in the Kaufman case,
should govern the determination of the validity of the testamentary provisions of
Christensen’s will, such law being in force in the State of California of which
Christensen was a citizen. Appellant, on the other hand, insists that Article 946 should
be applicable, and in accordance therewith and following the doctrine of the renvoi,
the question of the validity of the testamentary provision in question should be
referred back to the law of the decedent’s domicile, which is the Philippines.

We note that Article 946 of the California Civil Code is its conflict of laws rule, while
the rule applied in In re Kaufman, its internal law. If the law on succ ession and the
conflict of laws rules of California are to be enforced jointly, each in its own intended
and appropriate sphere, the principle cited In re Kaufman should apply to citizens
living in the State, but Article 946 should apply to such of its citizens as are not
domiciled in California but in other jurisdictions. The rule laid down of resorting to
the law of the domicile in the determination of matters with foreign element involved
is in accord with the general principle of American law that the domiciliary law
should govern in most matters or rights which follow the person of the owner.

Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out
as the national law is the internal law of California. But as above explained the laws
of California have prescribed two sets of laws for its citizens, one for residents therein
and another for those domiciled in other jurisdictions.

It is argued on appellees’ (Aznar and LUCY) behalf that the clause “if there is no law
to the contrary in the place where the property is situated” in Sec. 946 of the
California Civil Code refers to Article 16 of the Civil Code of the Philippines and that
the law to the contrary in the Philippines is the provision in said Article 16 that the
national law of the deceased should govern. This contention can not be sustained.

As explained in the various authorities cited above, the national law mentioned in
Article 16 of our Civil Code is the law on conflict of laws in the California Civil
Code, i.e., Article 946, which authorizes the reference or return of the question to the
law of the testator’s domicile. The conflict of laws rule in California, Article 946,
Civil Code, precisely refers back the case, when a decedent is not domiciled in
California, to the law of his domicile, the Philippines in the case at bar. The court of
the domicile can not and should not refer the case back to California; such action
would leave the issue incapable of determination because the case will then be like a
football, tossed back and forth between the two states, between the country of which
the decedent was a citizen and the country of his domicile. The Philippine court must
apply its own law as directed in the conflict of laws rule of the state of the decedent, if
the question has to be decided, especially as the application of the internal law of
California provides no legitime for children while the Philippine law, Arts. 887(4) and
894, Civil Code of the Philippines, makes natural children legally acknowledged
forced heirs of the parent recognizing them.

We therefore find that as the domicile of the deceased Edward, a citizen of California,
is the Philippines, the validity of the provisions of his will depriving his
acknowledged natural child, the appellant HELEN, should be governed by the
Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of California, not
by the internal law of California..

NOTES: There is no single American law governing the validity of testamentary

provisions in the United States, each state of the Union having its own private law
applicable to its citizens only and in force only within the state. The “national law”
indicated in Article 16 of the Civil Code above quoted can not, therefore, possibly
mean or apply to any general American law. So it can refer to no other than the
private law of the State of California.
Testate Estate of amos bellis, ET. AL. vs. Edward A. Bellis, G.R. No. L-23678, 6
Junes 1967

FACTS:
Amos Bellis, born in Texas, was a citizen of the State of Texas and of the United
States. He had 5 legitimate children with his wife, Mary Mallen, whom he had
divorced, 3 legitimate children with his 2nd wife, Violet Kennedy and finally, 3
illegitimate children.

Prior to his death, Amos Bellis executed a will in the Philippines in which his
distributable estate should be divided in trust in the following order and manner:

a. $240,000 to his 1st wife Mary Mallen;

b. P120,000 to his 3 illegitimate children at P40,000 each;
c. The remainder shall go to his surviving children by his 1st and 2nd wives, in equal
shares.

Subsequently, Amos Bellis died a resident of San Antonio, Texas, USA. His will was
admitted to probate in the Philippines. The People’s Bank and Trust Company, an
executor of the will, paid the entire bequest therein.

Preparatory to closing its administration, the executor submitted and filed its
“Executor’s Final Account, Report of Administration and Project of Partition” where
it reported, inter alia, the satisfaction of the legacy of Mary Mallen by the shares of
stock amounting to $240,000 delivered to her, and the legacies of the 3 illegitimate
children in the amount of P40,000 each or a total of P120,000. In the project partition,
the executor divided the residuary estate into 7 equal portions
for the benefit of the testator’s 7 legitimate children by his 1st and 2nd marriages.

Among the 3 illegitimate children, Mari Cristina and Miriam Palma Bellis filed their
respective opposition to the project partition on the ground that they were deprived of
their legitimates as illegitimate children.

The lower court denied their respective motions for reconsideration.

ISSUE:
Whether Texan Law of Philippine Law must apply.

RULING:
It is not disputed that the decedent was both a national of Texas and a domicile
thereof at the time of his death. So that even assuming Texan has a conflict of law rule
providing that the same would not result in a reference back (renvoi) to Philippine
Law, but would still refer to Texas Law.

Nonetheless, if Texas has conflict rule adopting the situs theory (lex rei sitae) calling
for the application of the law of the place where the properties are situated, renvoi
would arise, since the properties here involved are found in the Philippines. In the
absence, however of proofs as to the conflict of law rule of Texas, it should not be
presumed different from our appellants, position is therefore not rested on the doctrine
of renvoi.

The parties admit that the decedent, Amos Bellis, was a citizen of the State of Texas,
USA and that under the Laws of Texas, there are no forced heirs or legitimates.
Accordingly, since the intrinsic validity of the provision of the will and the amount of
successional rights has to be determined under Texas Law, the Philippine Law on
legitimates can not be applied to the testate of Amos Bellis.
Herbert Brownell, Jr. vs. SUN LIFE Assurance Co., Inc., G.R. No. L-5731

Facts:

This is a petition instituted in the Court of the First Instance of Manila under the
provisions of the Philippine Property Act of the United States against the Sun Life
Assurance Company of Canada, to compel the latter to comply with the demand of
the former to pay him the sum of P310.10, which represents one-half of the proceeds
of an endowment policy (No. 757199) which matured on August 20, 1946, and which
is payable to one Naogiro Aihara, a Japanese national. Under the policy Aihara and
his wife, Filomena Gayapan, were insured jointly for the sum of P1,000, and upon its
maturity the proceeds thereof were payable to said insured, share and share alike, or
P310.10 each.

Issue:
Conflict of laws

Held:

There is no question that a foreign law may have extraterritorial effect in a country
other than the country of origin, provided the latter, in which it is sought to be made
operative, gives its consent thereto. This principle is supported by the unquestioned
authority.

The jurisdiction of the nation within its territory is necessarily

exclusive and absolute. It is susceptible of no limitation not imposed
by itself. Any restriction upon it, deriving validity from an external
source, would imply a diminution of its sovereignty to the extent of the
restriction, and an investment of that sovereignty to the same extent in
that power in which would impose such restriction. All exceptions,
therefore, to the full and complete power of a nation within its own
territories, must be traced up to the consent of the nation itself. They
can flow from no other legitimate source. This consent may be either
express or implied. (Philippine Political Law by Sinco, pp. 27-28,
citing Chief Justice Marshall's statement in the Exchange, 7 Cranch
116)

In the course of his dissenting opinion in the case of S. S. Lotus, decided by the
Permanent Court of International Justice, John Bassett Moore said:

1. It is an admitted principle of International Law that a nation

possesses and exercises within its own territory an absolute and
exclusive jurisdiction, and that any exception to this right must be
traced to the consent of the nation, either express or implied (Schooner
Exchange vs. McFadden [812], 7 Cranch 116, 136). The benefit of this
principle equally enures to all independent and sovereign States, and is
attended with a corresponding responsibility for what takes place
 within the national territory. (Digest of International Law, by
Backworth, Vol. II, pp. 1-2)

The above principle is not denied by respondent-appellant. But its argument on this
appeal is that while the acts enacted by the Philippine Congress impliedly accept the
benefits of the operation of the United States law (Philippine Property Act of 1946),
no provision in the said acts of the Philippine Congress makes said United States law
expressly applicable. In answer to this contention, it must be stated that the consent of
a Senate to the operation of a foreign law within its territory does not need to be
express; it is enough that said consent be implied from its conduct or from that of its
authorized officers.

515. No rule of International Law exists which prescribe a necessary

form of ratification. - Ratification can, therefore, be given tacitly as
well as expressly. Tacit ratification takes place when a State begins the
execution of a treaty without expressly ratifying it. It is usual for
ratification to take the form of a document duly signed by the Heads of
the States concerned and their Secretaries for Foreign Affairs. It is
usual to draft as many documents as there are parties to the
Convention, and to exchange these documents between the parties.
Occasionally the whole of the treaty is recited verbatim in the ratifying
documents, but sometimes only the title, preamble, and date of the
treaty, and the names of the signatory representatives are cited. As
ratification is only the confirmation of an already existing treaty, the
essential requirements in a ratifying document is merely that it should
refer clearly and unmistakably to the treaty to be ratified. The citation
of title, preamble, date, and names of the representatives is, therefore
quite sufficient to satisfy that requirements. (Oppenheim, pp. 818-819;
emphasis ours.)chanrobles virtual law library

International Law does not require that agreements between nations

must be concluded in any particular form or style. The law of nations is
much more interested in the faithful performance of international
obligations than in prescribing procedural requirements. (Treaties and
Executive Agreements, by Myers S. McDougal and Asher Lands, Yale
Law Journal, Vol. 54, pp. 318-319)

In the case at bar, our ratification of or concurrence to the agreement for the extension
of the Philippine Property Act of 1946 is clearly implied from the acts of the President
of the Philippines and of the Secretary of Foreign Affairs, as well as by the enactment
of Republic Acts Nos. 7, 8, and 477.chanroblesvirtualawlibrary chanrobles virtual law
library
Bank of America vs. American Realty Corp., G.R. No. 133876 / 321 SCRA 659, 29
December 1999

Facts:

Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged a

property located in the Philippines owned by herein respondent ARC. ARC is a third
party mortgagor who pledged its own property in favor of the 3 debtor-foreign
corporations.

The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to
enforce the loan. Subsequently, it filed a petition in the Sheriff to extra-judicially
foreclose the said mortgage, which was granted.

On 12 February 1993, private respondent filed before the Pasig RTC, Branch 159, an
action for damages against the petitioner, for the latter’s act of foreclosing extra-
judicially the real estate mortgages despite the pendency of civil suits before foreign
courts for the collection of the principal loan.

Issue:

WON petitioner’s act of filing a collection suit against the principal debtors for the
recovery of the loan before foreign courts constituted a waiver of the remedy of
foreclosure.

Held: Yes.

1. Loan; Mortgage; remedies:

In the absence of express statutory provisions, a mortgage creditor may institute

against the mortgage debtor either a personal action or debt or a real action to
foreclose the mortgage. In other words, he may pursue either of the two remedies, but
not both. By such election, his cause of action can by no means be impaired, for each
of the two remedies is complete in itself.

In our jurisdiction, the remedies available to the mortgage creditor are deemed
alternative and not cumulative. Notably, an election of one remedy operates as a
waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of
the suit for collection or upon the filing of the complaint in an action for foreclosure
of mortgage. As to extrajudicial foreclosure, such remedy is deemed elected by the
mortgage creditor upon filing of the petition not with any court of justice but with the
Office of the Sheriff of the province where the sale is to be made.

In the case at bar, petitioner only has one cause of action which is non-payment of the
debt. Nevertheless, alternative remedies are available for its enjoyment and exercise.
Petitioner then may opt to exercise only one of two remedies so as not to violate the
rule against splitting a cause of action.

Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency
of filing four civil suits before foreign courts, necessarily abandoned the remedy to
foreclose the real estate mortgages constituted over the properties of third-party
mortgagor and herein private respondent ARC. Moreover, by filing the four civil
actions and by eventually foreclosing extra-judicially the mortgages, petitioner in
effect transgressed the rules against splitting a cause of action well-enshrined in
jurisprudence and our statute books.

2. Conflicts of Law

Incidentally, petitioner alleges that under English Law, which according to petitioner
is the governing law with regard to the principal agreements, the mortgagee does not
lose its security interest by simply filing civil actions for sums of money.

We rule in the negative.

In a long line of decisions, this Court adopted the well-imbedded principle in our
jurisdiction that there is no judicial notice of any foreign law. A foreign law must be
properly pleaded and proved as a fact. Thus, if the foreign law involved is not
properly pleaded and proved, our courts will presume that the foreign law is the same
as our local or domestic or internal
law. This is what we refer to as the doctrine of processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were
properly pleaded and proved in said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and
established public policy of the forum, the said foreign law, judgment or order shall
not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good customs shall not be
rendered ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country. The public policy sought to be
protected in the instant case is the principle imbedded in our jurisdiction proscribing
the splitting up of a single cause of action. Moreover, foreign law should not be
applied when its application would work undeniable injustice to the citizens or
residents of the forum. To give justice is the most important function of law; hence, a
law, or judgment or contract that is obviously unjust negates the fundamental
principles of Conflict of Laws.

Clearly then, English Law is not applicable.

J.A. Sison vs. BOARD OF ACCOUNTANCY, G.R. No. L-2529 / 85 Phil. 276, 31
December 1949

Facts:

In his petition for certiorari against the Board of Accountancy and Robert Orr
Ferguson, J. A. Sison prays that this Court render judgment "ordering the respondent
Board of Accountancy to revoke the certificate issued to Robert Orr Ferguson, a
British subject admitted without examination because there does not exist any
reciprocity between the Philippines and the United Kingdom regarding the practice of
accountancy."cralaw

Issue:
Conflict of laws

Held:
Section 12 of Act No. 3105, as amended, reads:jgc:chanrobles.com.ph

"SEC. 12. Any person who has been engaged in the professional accountancy work in
the Philippine Islands for a period of five years or more prior to the date of his
application, and who holds certificates as certified public accountant, or as chartered
accountant, or other similar certificates or degrees in the country of his nationality,
shall be entitled to registration as certified public accountant and to receive a
certificate of registration as such certified public accountant from the Board, Provided
such country or state does not restrict the right of Filipino certified public accountants
to practice therein or grants reciprocal rights to Filipinos, and provided that
application for their registration shall be filed with the Board not later than December
31, 1938."cralaw virtua1aw library

In the case at bar, while the profession of certified public accountant is not controlled
or regulated by the Government of Great Britain, the country of origin of respondent
Robert Orr Ferguson, according to the record, said respondent had been admitted in
this country to the practice of his profession as certified public accountant on the
strength of his membership of the Institute of Accountants and Actuaries in Glasgow
(England), incorporated by Royal Charter, 1855. The question of his entitlement to
admission to the practice of his profession in this jurisdiction, does not, therefore,
come under reciprocity, as this principle is known in International Law, but is
included in the meaning of comity, as expressed in the alternative condition of the
proviso of the abovequoted section 12 which says: such country or state does not
restrict the right of Filipino certified public accountants to practice therein.

"Mutuality, reciprocity, and comity as bases or elements. — International Law is

founded largely upon mutuality, reciprocity, and the principle of comity of nations.
Comity, in this connection, is neither a matter of absolute obligation on the one hand,
nor of mere courtesy and good will on the other; it is the recognition which one nation
allows within its territory to the acts of foreign governments and their tribunals,
having due regard both to international duty and convenience and to the rights of its
own citizens or of other persons who are under the protection of its laws. The fact of
reciprocity does not necessarily influence the application of the doctrine of comity,
although it may do so and has been given consideration in some instances." (30 Am.
Jur., 178; Hilton v. Guyot, 159 U.S., 113, 40 Law. ed., 95; 16 S. Ct., 139.)

In Hilton v. Guyot (supra), the highest court of the United States said that comity "is
the recognition which one nation allows within its territory to the legislative,
executive, or judicial acts of another nation, having due regard both to international
duty and convenience, and to the rights of its own citizens or of other persons who are
under the protection of its laws." Again, in Bank of Augusta v. Earle, 38 U.S., 13 Pet.
519, 589, Chief Justice Taney, speaking for the court while Mr. Justice Story — well-
known author of the treatise on Conflict of Laws — was a member of it, and largely
adopting his words, said:jgc:chanrobles.com.ph

". . . It is needless to enumerate here the instances in which by the general practice of
civilized countries, the laws of the one will, by the comity of nations, be recognized
and executed in another, where the rights of individuals are concerned . . . The comity
thus extended to other nations is no impeachment of sovereignty. It is the voluntary
act of the nation by which it is offered, and is inadmissible when contrary to its
policy, or prejudicial to its interest. But it contributes so largely to promote justice
between individuals, and to produce a friendly intercourse between the sovereignties
to which they belong, that courts of justice have continually acted upon it, as a part of
the voluntary law of nations . . . It is not the comity of the courts, but the comity of the
nation, which is administered and ascertained in the same way, and guided by the
same reasoning, by which all other principles of municipal law are ascertained and
guided."cralaw virtua1aw library

We are bound to take notice of the fact that the Philippines and the United Kingdom,
are bound by a treaty of friendship and commerce, and each nation is represented in
the other by the corresponding diplomatic envoy. There is no reason whatsoever to
doubt the statement and assurance made by the diplomatic representative of the
British Government in the Philippines, regarding the practice of the accountancy
profession in the United Kingdom and the fact that Filipino certified public
accountants will be admitted to practice their profession in the United Kingdom
should they choose to do so.

Under such circumstances, and without necessarily construing that such attitude of the
British Government in the premises, as represented by the British Minister, amounts
to reciprocity, we may at least state that it comes within the realm of comity, as
contemplated in our law.

It appearing that the record fails to show that the suspension of this respondent is . . .
based on any of the causes provided by the Accountancy Law, we find no reason why
Robert Orr Ferguson, who had previously been registered as certified public
accountant and issued the corresponding certificate which authorizes him to practice
his profession as certified public accountant in the Philippine Islands, should be
suspended from the practice of his profession in these Islands.

The petition is denied, with costs.

Paula T. Llorente vs. Court of Appeals, G.R. No. 124371, 23 November 2000

Facts:

The case raises a conflict of laws issue.

What is before us is an appeal from the decision of the Court of Appeals 1 modifying
that of the Regional Trial Court, Camarines Sur, Branch 35, Iriga City 2 declaring
respondent Alicia F. Llorente (herinafter referred to as "Alicia"), as co-owners of
whatever property she and the deceased Lorenzo N. Llorente (hereinafter referred to
as "Lorenzo") may have acquired during the twenty-five (25) years that they lived
together as husband and wife.

Issue:
Conflict of laws

Held:

The Civil Code clearly provides:

"Art. 15. Laws relating to family rights and duties, or to the status, condition and legal
capacity of persons are binding upon citizens of the Philippines, even though living
abroad.

"Art. 16. Real property as well as personal property is subject to the law of the
country where it is situated.

"However, intestate and testamentary succession, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found."

First, there is no such thing as one American law.1ªwph!1 The "national law"
indicated in Article 16 of the Civil Code cannot possibly apply to general American
law. There is no such law governing the validity of testamentary provisions in the
United States. Each State of the union has its own law applicable to its citizens and in
force only within the State. It can therefore refer to no other than the law of the State
of which the decedent was a resident. Second, there is no showing that the application
of the renvoi doctrine is called for or required by New York State law.

The trial court held that the will was intrinsically invalid since it contained
dispositions in favor of Alice, who in the trial court’s opinion was a mere paramour.
The trial court threw the will out, leaving Alice, and her two children, Raul and Luz,
with nothing.

The Court of Appeals also disregarded the will. It declared Alice entitled to one half
(1/2) of whatever property she and Lorenzo acquired during their cohabitation,
applying Article 144 of the Civil Code of the Philippines.

The hasty application of Philippine law and the complete disregard of the will, already
probated as duly executed in accordance with the formalities of Philippine law, is
fatal, especially in light of the factual and legal circumstances here obtaining.

Validity of the Foreign Divorce

In Van Dorn v. Romillo, Jr. we held that owing to the nationality principle embodied
in Article 15 of the Civil Code, only Philippine nationals are covered by the policy
against absolute divorces, the same being considered contrary to our concept of public
policy and morality. In the same case, the Court ruled that aliens may obtain divorces
abroad, provided they are valid according to their national law.

Citing this landmark case, the Court held in Quita v. Court of Appeals, that once
proven that respondent was no longer a Filipino citizen when he obtained the divorce
from petitioner, the ruling in Van Dorn would become applicable and petitioner could
"very well lose her right to inherit" from him.

In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the respondent in

his country, the Federal Republic of Germany. There, we stated that divorce and its
legal effects may be recognized in the Philippines insofar as respondent is concerned
in view of the nationality principle in our civil law on the status of persons.

For failing to apply these doctrines, the decision of the Court of Appeals must be
reversed. We hold that the divorce obtained by Lorenzo H. Llorente from his first
wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now,
the effects of this divorce (as to the succession to the estate of the decedent) are
matters best left to the determination of the trial court.

Validity of the Will

The Civil Code provides:

"Art. 17. The forms and solemnities of contracts, wills, and other public instruments
shall be governed by the laws of the country in which they are executed.

"When the acts referred to are executed before the diplomatic or consular officials of
the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution." (underscoring ours)

The clear intent of Lorenzo to bequeath his property to his second wife and children
by her is glaringly shown in the will he executed. We do not wish to frustrate his
wishes, since he was a foreigner, not covered by our laws on "family rights and
duties, status, condition and legal capacity."
Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues
best proved by foreign law which must be pleaded and proved. Whether the will was
executed in accordance with the formalities required is answered by referring to
Philippine law. In fact, the will was duly probated.

As a guide however, the trial court should note that whatever public policy or good
customs may be involved in our system of legitimes, Congress did not intend to
extend the same to the succession of foreign nationals. Congress specifically left the
amount of successional rights to the decedent's national law.

Having thus ruled, we find it unnecessary to pass upon the other issues raised.

The Fallo

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in

CA-G. R. SP No. 17446 promulgated on July 31, 1995 is SET ASIDE.

In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and
RECOGNIZES as VALID the decree of divorce granted in favor of the deceased
Lorenzo N. Llorente by the Superior Court of the State of California in and for the
County of San Diego, made final on December 4, 1952.

Further, the Court REMANDS the cases to the court of origin for determination of the
intrinsic validity of Lorenzo N. Llorente’s will and determination of the parties’
successional rights allowing proof of foreign law with instructions that the trial court
shall proceed with all deliberate dispatch to settle the estate of the deceased within the
framework of the Rules of Court.

No costs.

SO ORDERED.
First Philippine International Bank vs. Court of appeals, G.R. No. 115849, 24 January
1996

Facts:
In the course of its banking operations, the defendant Producer Bank of the
Philippines acquired six parcels of land with a total area of 101 hectares located at
Don Jose, Sta. Rose, Laguna, and covered by Transfer Certificates of Title Nos. T-
106932 to T-106937. The property used to be owned by BYME Investment and
Development Corporation which had them mortgaged with the bank as collateral for a
loan. The original plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to
purchase the property and thus initiated negotiations for that purpose.
On July 11, 1992, during the pendency of the proceedings in the Court of Appeals,
Henry Co and several other stockholders of the Bank, through counsel Angara Abello
Concepcion Regala and Cruz, filed an action (hereafter, the "Second Case") —
purportedly a "derivative suit" — with the Regional Trial Court of Makati, Branch
134, docketed as Civil Case No. 92-1606, against Encarnacion, Demetria and Janolo
"to declare any perfected sale of the property as unenforceable and to stop Ejercito
from enforcing or implementing the sale" In his answer, Janolo argued that the
Second Case was barred by litis pendentia by virtue of the case then pending in the
Court of Appeals. During the pre-trial conference in the Second Case, plaintiffs filed a
Motion for Leave of Court to Dismiss the Case Without Prejudice. "Private
respondent opposed this motion on the ground, among others, that plaintiff's act of
forum shopping justifies the dismissal of both cases, with prejudice." Private
respondent, in his memorandum, averred that this motion is still pending in the
Makati RTC.

Issue:
Conflict of laws

Held:
Principle of forum non conveniens

In summary, there are two procedural issues involved forum-shopping and the raising
of issues for the first time on appeal [viz., the extinguishment of the Bank's offer of
P5.5 million and the conservator's powers to repudiate contracts entered into by the
Bank's officers] — which per se could justify the dismissal of the present case. We
did not limit ourselves thereto, but delved as well into the substantive issues — the
perfection of the contract of sale and its enforceability, which required the
determination of questions of fact. While the Supreme Court is not a trier of facts and
as a rule we are not required to look into the factual bases of respondent Court's
decisions and resolutions, we did so just the same, if only to find out whether there is
reason to disturb any of its factual findings, for we are only too aware of the depth,
magnitude and vigor by which the parties through their respective eloquent counsel,
argued their positions before this Court.
We are not unmindful of the tenacious plea that the petitioner Bank is operating
abnormally under a government-appointed conservator and "there is need to
rehabilitate the Bank in order to get it back on its feet . . . as many people depend on
(it) for investments, deposits and well as employment. As of June 1987, the Bank's
overdraft with the Central Bank had already reached P1.023 billion . . . and there were
(other) offers to buy the subject properties for a substantial amount of money." 53

While we do not deny our sympathy for this distressed bank, at the same time, the
Court cannot emotionally close its eyes to overriding considerations of substantive
and procedural law, like respect for perfected contracts, non-impairment of
obligations and sanctions against forum-shopping, which must be upheld under the
rule of law and blind justice.

WHEREFORE, finding no reversible error in the questioned Decision and Resolution,

the Court hereby DENIES the petition. The assailed Decision is AFFIRMED.
Moreover, petitioner Bank is REPRIMANDED for engaging in forum-shopping and
WARNED that a repetition of the same or similar acts will be dealt with more
severely. Costs against petitioners.

SO ORDERED.
Gil miguel T. Puyat vs. Ron Zabarte, G.R. No. 141536, 26 February 2001

Facts:

On January 24, 1994, Ron Zabarte commenced to enforce the money judgment
rendered by the Superior Court for the State of California on petitioner. On 18 March
1994, petitioner said that the said court had no jurisdiction over the people involved.
Respondent on the other hand said that petitioner’s appeal is not material. Petitioner
maintained that that said Judgment on Stipulations for Entry in Judgment was
obtained without the assistance of counsel and without sufficient notice to him and
therefore, was rendered in violation of his constitutional rights to substantial and
procedural due process.

Respondent said that petitioner can no longer question the judgment of the said court
because he failed to raise the issue of jurisdiction in his answer. The RTC rendered
judgment in favor of Zabarte. The claim for moral damages, not having been
substantiated, is denied. Petitioner said that the RTC should have dismissed the action
for the enforcement of a foreign judgment, on the ground of forum non conveniens. It
reasoned out that the recognition of the foreign judgment was based on comity,
reciprocity and res judicata. The CA denied this appeal, hence this case.

Issue:
Conflict of laws

Held:
Forum Non Conveniens

Petitioner argues that the RTC should have refused to entertain the Complaint for
enforcement of the foreign judgment on the principle of forum non conveniens. He
claims that the trial court had no jurisdiction, because the case involved partnership
interest, and there was difficulty in ascertaining the applicable law in California. All
the aspects of the transaction took place in a foreign country, and respondent is not
even Filipino.

We disagree. Under the principle of forum non conveniens, even if the exercise of
jurisdiction is authorized by law, courts may nonetheless refuse to entertain a case for
any of the following practical reasons:jgc:chanrobles.com.ph

"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."

None of the aforementioned reasons barred the RTC from exercising its jurisdiction.
In the present action, there was no more need for material witnesses, no forum
shopping or harassment of petitioner, no inadequacy in the local machinery to enforce
the foreign judgment, and no question raised as to the application of any foreign law.

Authorities agree that the issue of whether a suit should be entertained or dismissed
on the basis of the above-mentioned principle depends largely upon the facts of each
case and on the sound discretion of the trial court. 28 Since the present action lodged
in the RTC was for the enforcement of a foreign judgment, there was no need to
ascertain the rights and the obligations of the parties based on foreign laws or
contracts. The parties needed only to perform their obligations under the Compromise
Agreement they had entered into.

Under Section 48, Rule 39 of the 1997 Rules of Civil Procedure, a judgment in an
action in personam rendered by a foreign tribunal clothed with jurisdiction is
presumptive evidence of a right as between the parties and their successors-in-interest
by a subsequent title.

Also, under Section 5(n) of Rule 131, a court — whether in the Philippines or
elsewhere — enjoys the presumption that it is acting in the lawful exercise of its
jurisdiction, and that it is regularly performing its official duty. 30 Its judgment may,
however, be assailed if there is evidence of want of jurisdiction, want of notice to the
party, collusion, fraud or clear mistake of law or fact. But precisely, this possibility
signals the need for a local trial court to exercise jurisdiction. Clearly, the application
of forum non conveniens is not called for.chanrob1es virtua1 1aw 1ibrary

The grounds relied upon by petitioner are contradictory. On the one hand, he insists
that the RTC take jurisdiction over the enforcement case in order to invalidate the
foreign judgment; yet, he avers that the trial court should not exercise jurisdiction
over the same case on the basis of forum non coveniens. Not only do these defenses
weaken each other, but they bolster the finding of the lower courts that he was merely
maneuvering to avoid or delay payment of his obligation.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and
Resolution AFFIRMED. Double costs against petitioner.

SO ORDERED.
Pioneer Concrete Philippines Inc. Vs. Antonio T. Todaro, G.R. No. 154830 / 524
SCRA 153, 8 June 2007

Facts:
Pioneer International Limited (PIL), an Australian company engaged in the ready-mix
concrete business, established herein petitioner PCPI to undertake its business in the
Philippines. PIL contacted respondent Todaro and asked if the latter is available to
join them in their intention to establish plant operations in the country to which the
latter agreed. Subsequently, PIL and Todaro came to an agreement wherein the former
consented to engage the services of the latter as consultant for 2-3 months, after which
he would be employed as manager of concrete operations should PIL decide to invest
in the Philippines. PIL started its operation however it refused to comply with its
undertaking to employ Todaro on a permanent basis. Respondent thus filed a
complaint for sum of money and damages against petitioner. Petitioner meanwhile
contends that the case should fall with the NLRC as the damages arose from an
alleged breach of employment contract. Both the trial court and CA ruled in favor of
respondent.

Issue:
Conflict of laws

Held:

As to the question of jurisdiction, this Court has consistently held that where no
employer-employee relationship exists between the parties and no issue is involved
which may be resolved by reference to the Labor Code, other labor statutes or any
collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In
the present case, no employer-employee relationship exists between petitioners and
respondent. In fact, in his complaint, private respondent is not seeking any relief
under the Labor Code, but seeks payment of damages on account of petitioners'
alleged breach of their obligation under their agreement to employ him. It is settled
that an action for breach of contractual obligation is intrinsically a civil dispute. In the
alternative, respondent seeks redress on the basis of the provisions of Articles 19 and
21 of the Civil Code. Hence, it is clear that the present action is within the realm of
civil law, and jurisdiction over it belongs to the regular courts.

With respect to the applicability of the principle of forum non conveniens in the
present case, this Court's ruling in Bank of America NT & SA v. Court of Appeals is
instructive, to wit:

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

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

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

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

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

In the present case, the factual circumstances cited by petitioners which would
allegedly justify the application of the doctrine of forum non conveniens are matters
of defense, the merits of which should properly be threshed out during trial.

WHEREFORE, the instant petition is DENIED and the assailed Decision and
Resolution of the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.
Wing On Co. Vs. SYYAP, 64 O.G. 8311 (1964)

Facts:

Wing On Company incorporated in NY

-Syyap Co., Inc. incorporated in RP
-contract entered in NY:
for the purchase of clothing material, w/ verbal agreement that Syyap would pay
Wing On the value of the clothing material, then after the sale, the profits would be
divided between them
-clothing materials worth $22,246.04 shipped from NY to RP
-only $3,530.04 paid. Syyap failed to settle debt and account for profits.
-Wing On Company sued Syyap

Issue:
Conflict of laws

Held:
On Forum non Conveniens
WHEN COURT WOULD DECLINE JURISDICTION BASED ON FOUM NON
CONVENIENS
-Unless the balance is strongly in favor of the defendant, the plaintiff's choice of
forum should rarely be disturbed
-Consideration of inadequacy to enforce the judgment
HERE: Defendant in the Philippines. So for the court to assume jurisdiction over the
person of the defendant, RP Court is the convenient forum.
-the present suit is a PERSONAL ACTION, the case may be commenced and tried
where the defendant resides or may be found, or where the plaintiff resides, at the
election of the plaintiff.
Summary: should consider both public and private interests
Private interests:
*relative ease of access to source of proof
*Availability of compulsory process for attendance of unwilling witnesses
*cost of obtaining and attendance off willing witnesses
*possibility of viewing the premises if appropriate
*all other practical problems that make trial of a case easy, expeditious, and
inexpensive
Public Interest
*administrative difficulties encountered when courts are congested
*jury duty: burden on community
*appropriateness of having the trial in a court that is familiar with the applicable state
law rather than getting another forum enmeshed in a complicated conflict-of-laws
problem
WHEN CAN'T REFUSE TO EXERCISE JURISDICTION:
*when the forum is the only state where jurisdiction over defendant can be obtained
*when the forum provides procedural remedies not available in another state
ASSUME JURISDICTION
GR: apply law of the forum
A specific law of the forum decrees that internal law should apply
Civil Code
Article 16: makes real and personal proerty subject to the law of the country where
they are situated
Intestate and testamentary succession: governed by lex nationale of the person whose
succession is under consideration
Article 829: makes revocation done outside the Philippines valid according to the law
of the place where the will was made or lex domicilli
Article 819: prohibits Filipinos from making joint wills even if valid in the country
where they were executed
The proper foreign law was not properly pleaded and proved
-no Judicial notice of foreign law
Relevant rules of evidence:
To prove written foreign law: follow requirements in Sec 24-25, Rule 132
May be subject of judicial admission
Processual presumption - no proof nor admission, foreign law presumed to be the
same as that in the Philippines
Rule 132
Section 19 - CLASSES OF DOCUMENTS
For the purpose of their presentation evidence,
documents are either public or private.
PUBLIC DOCUMENTS are:
The written official acts, or records of the official acts of the sovereign authority,
official bodies and tribunals, and public officers, whether of the Philippines, or of a
foreign country;
Documents acknowledge before a notary public except last wills and testaments; and
Public records, kept in the Philippines, of private documents required by law to the
entered therein.
All other writings are PRIVATE.
Section 24 - PROOF OF OFFICIAL RECORD
The record of public documents referred to in paragraph (a) of Section 19,
when admissible for any purpose,
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, if the record is not kept in the Philippines,
with a certificate that such officer has the custody.
If the office in which the record is kept is in foreign country,
the certificate may be made by a secretary of the 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.
Section 25 - WHAT ATTESTATION OF COPY MUST STATE
Whenever a copy of a document or record is attested
for the purpose of evidence,
the attestation must state, in substance,
that the copy is a correct copy of the original,
or a specific part thereof, as the case may be.
The attestation must be
under the official seal of the attesting officer, if there be any, or
if he be the clerk of a court having a seal, under the seal of such court.
…
To prove unwritten foreign law – Sec 46, Rule 130
Section 46 - LEARNED TREATISES
A published treatise, periodical or pamphlet on a subject of history, law, science, or
art is admissible as tending to prove the truth of a matter stated therein if the court
takes judicial notice, or a witness expert in the subject testifies, that the writer of the
statement in the treatise, periodical or pamphlet is recognized in his profession or
calling as expert in the subject.
Requisites:
The court takes judicial notice thereof
The same is testified to by a witness expert in the subject
CA took judicial notice of the Ballantyne Scale of Values[1]
Legal treatises also included
Piper Aircraft Co. Vs. REYNO, 454 US 235, 8 December 1981

Facts:

Respondent, as representative of the estates of several citizens and residents of

Scotland who were killed in an airplane crash in Scotland during a charter flight,
instituted wrongful death litigation in a California state court against petitioners,
which are the company that manufactured the plane in Pennsylvania and the company
that manufactured the plane's propellers in Ohio. At the time of the crash, the plane
was registered in Great Britain and was owned and operated by companies organized
in the United Kingdom. The pilot and all of the decedents' heirs and next of kin were
Scottish subjects and citizens, and the investigation of the accident was conducted by
British authorities. Respondent sought to recover from petitioners on the basis of
negligence or strict liability (not recognized by Scottish law), and admitted that the
action was filed in the United States because its laws regarding liability, capacity to
sue, and damages are more favorable to respondent's position than those of Scotland.
On petitioners' motion, the action was removed to a Federal District Court in
California and was then transferred to the United States District Court for the Middle
District of Pennsylvania, pursuant to 28 U.S.C. § 1404(a). The District Court granted
petitioners' motion to dismiss the action on the ground offorum non
conveniens. Relying on the test set forth in Gulf Oil Corp. v. Gilbert, 330 U. S. 501,
and analyzing the "private interest factors" affecting the litigants' convenience and the
"public interest factors" affecting the forum's convenience, as set forth in Gilbert, the
District Court concluded that Scotland was the appropriate forum. However, the Court
of Appeals reversed, holding that the District Court had abused its discretion in
conducting the Gilbert analysis and that, in any event, dismissal is automatically
barred where

Issue:
Conflict of laws

Held:

1. Plaintiffs may not defeat a motion to dismiss on the ground of forum non
conveniens merely by showing that the substantive law that would be applied in the
alternative forum is less favorable to the plaintiffs than that of the chosen forum. The
possibility of a change in substantive law should ordinarily not be given conclusive or
even substantial weight in the forum non conveniens inquiry. Canada Malting Co. v.
Paterson Steamships, Ltd., 285 U. S. 413. Pp. 454 U. S. 247-255.

(a) Under Gilbert, supra, dismissal will ordinarily be appropriate where trial in the
plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and
where the plaintiff is unable to offer any specific reasons of convenience supporting
his choice. If substantial weight were given to the possibility of an unfavorable
change in law, however, dismissal might be barred even where trial in the chosen
forum was plainly inconvenient, and the forum non conveniens doctrine would
become virtually useless. Such an approach not only would be inconsistent with the
purpose of the forum non conveniens doctrine, but also would pose substantial
practical problems, requiring that trial courts determine complex problems in conflict
of laws and comparative law, and increasing the flow into American courts of
litigation by foreign plaintiffs against American manufacturers. Pp. 454 U. S. 248-
252.

(b) Nor may an analogy be drawn between forum non conveniens dismissals and
transfers between federal courts pursuant to 28 U.S.C. § 1404(a), which was
construed in Van Dusen v. Barrack, 376 U. S. 612, as precluding a transfer if it
resulted in a change in the applicable law. The statute was enacted to permit change of
venue between federal courts, and although it was drafted in accordance with the
doctrine of forum non conveniens, it was intended to be a revision, rather than a
codification of the common law. District courts were given more discretion to transfer
under § 1404(a) than they had to dismiss on grounds of forum non conveniens. Van
Dusen v. Barrack, supra, distinguished. Pp. 454 U. S. 253-254.

2. The District Court properly decided that the presumption in favor of the plaintiff's
forum choice applied with less than maximum force when the plaintiff or (as here) the
real parties in interest are foreign. When the plaintiff has chosen the home forum, it is
reasonable to assume that the choice is convenient; but when the plaintiff or real
parties in interest are foreign, this assumption is much less reasonable, and the
plaintiff's choice deserves less deference. Pp. 454 U. S. 255-256.

Page 454 U. S. 237

3. The forum non conveniens determination is committed to the trial court's sound
discretion, and may be reversed only when there has been a clear abuse of discretion.
Here, the District Court did not abuse its discretion in weighing the private and public
interests under the Gilbert analysis, and thereby determining that the trial should be
held in Scotland.

(a) In analyzing the private interest factors, the District Court did not act unreasonably
in concluding that fewer evidentiary problems would be posed if the trial were held in
Scotland, a large proportion of the relevant evidence being located there. The District
Court also correctly concluded that the problems posed by the petitioners' inability to
implead potential Scottish third-party defendants -- the pilot's estate, the plane's
owners, and the charter company -- supported holding the trial in Scotland.

(b) The District Court's review of the factors relating to the public interest was also
reasonable. Even aside from the question whether Scottish law might be applicable in
part, all other public interest factors favor trial in Scotland, which has a very strong
interest in this litigation. The accident occurred there, all of the decedents were
Scottish, and apart from petitioners, all potential parties are either Scottish or English.
As to respondent's argument that American citizens have an interest in ensuring that
American manufacturers are deterred from producing defective products and that
additional deterrence might be obtained by trial in the United States where they could
be sued on the basis of both negligence and strict liability, any incremental deterrence
from trial in an American court is likely to be insignificant and is not sufficient to
justify the enormous commitment of judicial time and resources that would be
required.
Klaus Lueck vs. Sundstrand Corporation, No. 99-15961, 8 January 2001

Facts:
Plaintiffs appeal the district court's dismissal of their suit on the basis of forum non
conveniens. Plaintiffs, citizens of New Zealand, are victims of an airplane crash in
New Zealand, on a New Zealand carrier. Plaintiffs allege that the radio altimeter of
the Ground Proximity Warning System (“GPWS”) malfunctioned during flight and
was a causal factor of the accident. Defendants, the Canadian manufacturer of the
aircraft and the American manufacturers of the GPWS and the radio altimeter, argued
that New Zealand was an adequate alternative forum and that the public and private
factors weighed in favor of dismissal. The district court agreed with Defendants.
We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

Issue:
Conflict of laws

Held:

This court has held that “[b]efore dismissing a case for forum non conveniens, a
district court must first make a choice of law determination.” Zipfel v. Halliburton
Co., 832 F.2d 1477, 1482 (9th Cir.1987), amended on other grounds by 861 F.2d 565
(9th Cir.1988). However, the choice of law analysis is only determinative when the
case involves a United States statute requiring venue in the United States, such as the
Jones Act or the Federal Employers' Liability Act. See Creative Tech., 61 F.3d at 700.
The Jones Act, 46 U.S.C.App. § 688(a), and the Federal Employers' Liability Act,
45 U.S.C. § 56, “contain special provisions mandating venue in the United States
district courts.” Creative Tech., 61 F.3d at 700. The purpose of a choice of law
inquiry in a forum non conveniens analysis is to determine if one of these statutes
would apply. See id.5

Where no such law is implicated, the choice of law determination is given much
less deference on a forum non conveniens inquiry. Because “there is no arguably
applicable law that would end the forum non conveniens inquiry [in this case], ․ no
potentially dispositive choice of law determination need have been made.” Lockman
Found., 930 F.2d at 771; see also Gemini Capital, 150 F.3d at 1092 (“This case does
not implicate any United States law which mandates venue in the United States
district courts. Consequently, the applicability of United States law to the various
causes of action ‘should ordinarily not be given conclusive or even substantive
weight.’ ”) (quoting Piper Aircraft, 454 U.S. at 247, 102 S.Ct. 252).6

Accordingly, because New Zealand provides an adequate alternative forum and based
on the balance of public and private factors, we find that the district court did not
abuse its discretion in dismissing this suit on forum non conveniens grounds. The
dismissal of this action is AFFIRMED.
Yan Carlos R. Monegro vs. Luis Rosa, No. 98-16846, 3 May 2000

Facts:
BRIGHT,1PREGERSON and W. FLETCHER, Circuit Judges. David Becht and
Daniel Fuchs, Adams Nye Sinuni Walker, San Francisco, California, for the
plaintiffs-appellants. Nancy E. Pritikin, Philip L. Ross, and Tram Anh-Frank, Littler
Mendelson, San Francisco, California, for defendants-appellees Jack Hiatt and San
Francisco Baseball Associates, L.P.

Plaintiffs brought suit in the United States District Court for the Northern District of
California against the San Francisco Baseball Associates (“the Giants”), the Giants'
Latin America scout, Luis Rosa, and the Giants' Minor League Coordinator, Jack
Hiatt, for violations of federal and state law including sexual harassment, sexual
battery, wrongful termination, fraud and conversion. The district court dismissed
plaintiffs' action on the ground of forum non conveniens, concluding that the
Dominican Republic was the better forum for the suit.

Issue:
Conflict of laws

Held:

In Cheng v. Boeing Co., 708 F.2d 1406 (9th Cir.1983), this court noted that “the
standard to be applied [to a motion for dismissal on the ground of forum non
conveniens] is whether ․ defendants have made a clear showing of facts which ․
establish such oppression and vexation of a defendant as to be out of proportion to
plaintiff's convenience, which may be shown to be slight or nonexistent ․” Id. at
1410. The record in this case indicates the district court misunderstood this
standard: rather than treating forum non conveniens as an exceptional tool to be
employed sparingly, the district court perceived it as a doctrine that compels plaintiffs
to choose the optimal forum for their claim. We recognize that the Supreme Court in
Piper held that “a foreign plaintiff's [forum] choice deserves less deference” than the
forum choice of a domestic plaintiff. But less deference is not the same thing as no
deference. See Lony v. E.I DuPont de Nemours & Co., 886 F.2d 628, 633 (3d
Cir.1989). We hold that it was an abuse of discretion for the district court to deny
plaintiffs their choice of federal district court in San Francisco as their forum.

The decision of the district court is therefore REVERSED, and the case is
REMANDED for further proceedings consistent with this opinion.
Erie Railroad Co. Vs. Tompkins, 304 US 64, 58 S. CT. 817, 82 L.ED. 1188 (1938)

Facts:
Tompkins (Plaintiff) was walking along a path next to railroad tracks in Pennsylvania
when an object protruding from a train struck him. Plaintiff sued Erie Railroad
Company (Defendant), the owner of the property, for negligence in federal court.
Defendant is based in New York. Under Pennsylvania law, Plaintiff was a trespasser
and Defendant only owed a duty to avoid wanton negligence. The majority rule,
however, is that a railroad owes a duty of ordinary care to a traveler on a footpath.
The District Court applied the general law and found for Plaintiff. The Court of
Appeals affirmed.

Issue:

Conflict of laws

Held:

[Swift v. Tyson, 41 U.S. (16 Pet.) 1, 10 L.Ed. 865 (1842)], is overruled. The doctrine
irrationally favored state statutory law over state common law. Thus, Swift favored
out-of-state litigants over in-state litigants because the out-of-state litigant could
ensure that a case would be heard in federal court if it did not like the common law
applicable in state court.

Federal courts are courts of limited jurisdiction and thus cannot “supervise” the
decisions of the state courts unless such authority is specifically delegated to them in
the constitution. Thus, there is no federal common law. State common law and
statutes should be given equal force in the federal courts deciding state law.

Section 34 is not unconstitutional, just the doctrine of Swift v. Tyson.

Dissent. Justice Butler: The Court considered a question that was not raised.
Furthermore, the case cited as grounds for overruling Swift v. Tyson was a single
dissent authored 50 years after the Tyson decision was announced. The Court does
find Section 34 unconstitutional, and it did not give counsel a chance to argue the
constitutional question. Finally, the constitutionality of Section 34 need not have been
considered because the evidence shows that Plaintiff was guilty of contributory
negligence. Therefore, the judgment should be reversed.
Concurrence. Justice Reed: The rule in Swift was not unconstitutional, it was just
erroneous. The Court’s opinion here implies that the federal courts must follow state
decisions involving substantive law, whether Congress legislates or not, because to
not follow state decisions would violate the constitutional autonomy of the states.
This implication is questionable, because under Article III and the necessary and
proper clause, Congress can restrict federal courts’ adherence to state common law.

Discussion. This case articulates what is known as the “Erie doctrine”: a federal court
sitting in diversity applies substantive state law. Erie expanded the definition of
Section 34 of the Judiciary Act of 1789 to include state court decisions. The two
policies emphasized in Erie: uniformity of state court decisions and prevention of
discrimination between residents and non-residents, are mentioned frequently in
subsequent decisions that support and refine Erie.
Only the concurring opinion of Justice Reed explicitly states that a federal court
should apply state substantive law and federal procedural law.
J.K. Shell Sekiyu Osaka Hatsubaisho and Fu Hing Oil., LTD. Vs. Court of Appeals,
G.R. No. 90306-07, 30 July 1990

Facts:

Ordinarily, the Court will not disturb the factual findings of the Court of Appeals,
these being considered final and conclusive. However, when its factual conclusions
are manifestly mistaken, the Court will step in to correct the misapprehension [De la
Cruz v. Sosing, 94 Phil. 26 (1953); Castillo v. Court of Appeals, G.R. No. L-48290,
September 29, 1983, 124 SCRA 808.] This case is one such instance calling for the
Court's review of the facts.

Issue:
Conflict of laws

Held:

K.K. Shell counters this argument by invoking its right as maritime lienholder. It cites
Presidential Decree No. 1521, the Ship Mortgage Decree of 1978, which provides:

SEC. 21. Maritime Lien for Necessaries; person entitled to such lien-Any person
furnishing repairs, supplies, to wage, use of dry dock or marine railway, or other
necessaries, to any vessel, whether foreign or domestic, upon the order of the owner
of such vessel, or of a person authorized by the owner, shall have a maritime lien on
the vessel, which may be enforced by suit in rem, and it shall be necessary to allege or
prove that credit was given to the vessel.

Private respondents on the other hand argue that even if P.D. No. 1521 is applicable,
K.K. Shell cannot rely on the maritime lien because the fuel was provided not
exclusively for the benefit of the MV Estella, but for the benefit of Crestamonte in
general. Under the law it must be established that the credit was extended to the vessel
itself. Now, this is a defense that calls precisely for a factual determination by the trial
court of who benefitted from the delivery of the fuel. Hence, again, the necessity for
the reception of evidence before the trial court.

In other words, considering the dearth of evidence due to the fact that the private
respondents have yet to file their answer in the proceedings below and trial on the
merits is still to be conducted, whether or not petitioners are indeed maritime
lienholders and as such may enforce the lien against the MV Estella are matters that
still have to be established.

Neither are we ready to rule on the private respondents' invocation of the doctrine
of forum non conveniens, as the exact nature of the relationship of the parties is still to
be established. We leave this matter to the sound discretion of the trial court judge
who is in the best position, after some vital facts are established, to determine whether
special circumstances require that his court desist from assuming jurisdiction over the
suit.
It was clearly reversible error on the. part of the Court of Appeals to annul the trial
court's orders, insofar as K.K. Shell is concerned, and order the trial court to cease and
desist from proceeding with Civil Case No. 87-38930. There are still numerous
material facts to be established in order to arrive at a conclusion as to the true nature
of the relationship between Crestamonte and K.K. Shell and between NSS and K.K.
Shell. The best recourse would have been to allow the trial court to proceed with Civil
Case No. 87-38930 and consider whatever defenses may be raised by private
respondents after they have filed their answer and evidence to support their
conflicting claims has been presented. The Court of Appeals, however, substituted its
judgment for that of the trial court and decided the merits of the case, even in the
absence of evidence, on the pretext of reviewing an interlocutory order.

WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals is
REVERSED in CA-G.R. SP No. 12999, insofar as it annulled the order of the August
11, 1987 and directed the trial court to cease and desist from proceeding with Civil
Case No. 87-38930.

SO ORDERED.
Macshannon vs. Rockware Glass LTD {1987} A.C. 819

Facts:
Peter Mckinley MacShannon, and Kenneth Duncan Fyfe were both resident in
scotland. Macshannons action stemmed from minor injury, in the nature of severe
bruising of the back muscles, which he received while employed in the defendants
factory in scotland. Similarly, Fyfe claimed damages for injuries sustained when he
tripped over an obstruction during inspection of an oil production platform. Advised
respectively by solicitors for a large trade union and a professional association
Macshannon and Fyfe served proceeding on the companies’ registered offices in
England

Issue:
Conflict of laws

Held:

It should again be emphasized that the concept of a natural forum is in itself, not
necessarily the same as the concept of forum convenience. The court might
distinguish those aspects which are characterized by nationality, from those which are
policy considerations. It has been claimed that there can be no doctrine of forum non
convenience while “oppression” and “vexation” remain the focus. At the present stage
we should leave this argument. Macshannon’s case is likely for appeal and the court
can but hope for clarification, and perhaps, for change. Discussion of the “general
doctrine” of forum non convenience has been plagued by lack of definition. This has
allowed lnglis for examples, to claim the existence of forum non convenience where
courts have spoken in terms of abuse of process of the court. One suspects it has
allowed the House of Lords to express preference for supposed advantage of an
English “system” over a “doctrine” of form non convenience without nothing the
feared losses of incorporating a foreign doctrine. It appears that England has been
“isolated” by the debate which has grown.” There has been a conspicuous lack of
mention of the uncertainty and dissent which has followed the doctrine in both
Scotland and the United States. It is of interest, for example, that the description of the
plea by Mr. Justice Frankfurter as a” manifestation of a civilized judicial system
firmly embedded in their law was in a dissenting judgement five years earlier than the
leading American judgement of Gulf Oil Corporation v. Gilbert.

Communication Materials and Design, Inc. Vs. Court of Appeals, G.R. No. 102223,
22 August 1996

FACTS: Petitioners COMMUNICATION MATERIALS AND DESIGN, INC.,

(CMDI) and ASPAC MULTI-TRADE INC., (ASPAC) are both domestic
corporations.. Private Respondents ITEC, INC. and/or ITEC, INTERNATIONAL,
INC. (ITEC) are corporations duly organized and existing under the laws of the State
of Alabama, USA. There is no dispute that ITEC is a foreign corporation not licensed
to do business in the Philippines.

ITEC entered into a contract with ASPAC referred to as “Representative Agreement”.

Pursuant to the contract, ITEC engaged ASPAC as its “exclusive representative” in
the Philippines for the sale of ITEC’s products, in consideration of which, ASPAC
was paid a stipulated commission. Through a “License Agreement” entered into by
the same parties later on, ASPAC was able to incorporate and use the name “ITEC” in
its own name. Thus , ASPAC Multi-Trade, Inc. became legally and publicly known as
ASPAC-ITEC (Philippines).
One year into the second term of the parties’ Representative Agreement, ITEC
decided to terminate the same, because petitioner ASPAC allegedly violated its
contractual commitment as stipulated in their agreements. ITEC charges the
petitioners and another Philippine Corporation, DIGITAL BASE
COMMUNICATIONS, INC. (DIGITAL), the President of which is likewise
petitioner Aguirre, of using knowledge and information of ITEC’s products
specifications to develop their own line of equipment and product support, which are
similar, if not identical to ITEC’s own, and offering them to ITEC’s former customer.

The complaint was filed with the RTC-Makati by ITEC, INC. Defendants filed a
MTD the complaint on the following grounds: (1) That plaintiff has no legal capacity
to sue as it is a foreign corporation doing business in the Philippines without the
required BOI authority and SEC license, and (2) that plaintiff is simply engaged in
forum shopping which justifies the application against it of the principle of “forum
non conveniens”. The MTD was denied.

Petitioners elevated the case to the respondent CA on a Petition for Certiorari and
Prohibition under Rule 65 of the Revised ROC. It was dismissed as well. MR denied,
hence this Petition for Review on Certiorari under Rule 45.

ISSUE:
1. Did the Philippine court acquire jurisdiction over the person of the petitioner corp,
despite allegations of lack of capacity to sue because of non-registration?
2. Can the Philippine court give due course to the suit or dismiss it, on the principle of
forum non convenience?

HELD: petition dismissed.

1. YES; We are persuaded to conclude that ITEC had been “engaged in” or “doing
business” in the Philippines for some time now. This is the inevitable result after a
scrutiny of the different contracts and agreements entered into by ITEC with its
various business contacts in the country. Its arrangements, with these entities indicate
convincingly that ITEC is actively engaging in business in the country.

A foreign corporation doing business in the Philippines may sue in Philippine Courts
although not authorized to do business here against a Philippine citizen or entity who
had contracted with and benefited by said corporation. To put it in another way, a
party is estopped to challenge the personality of a corporation after having
acknowledged the same by entering into a contract with it. And the doctrine of
estoppel to deny corporate existence applies to a foreign as well as to domestic
corporations. One who has dealt with a corporation of foreign origin as a corporate
entity is estopped to deny its corporate existence and capacity.

In Antam Consolidated Inc. vs. CA et al. we expressed our chagrin over this
commonly used scheme of defaulting local companies which are being sued by
unlicensed foreign companies not engaged in business in the Philippines to invoke the
lack of capacity to sue of such foreign companies. Obviously, the same ploy is
resorted to by ASPAC to prevent the injunctive action filed by ITEC to enjoin
petitioner from using knowledge possibly acquired in violation of fiduciary
arrangements between the parties.

2. YES; Petitioner’s insistence on the dismissal of this action due to the application, or
non application, of the private international law rule of forum non conveniens defies
well-settled rules of fair play. According to petitioner, the Philippine Court has no
venue to apply its discretion whether to give cognizance or not to the present action,
because it has not acquired jurisdiction over the person of the plaintiff in the case, the
latter allegedly having no personality to sue before Philippine Courts. This argument
is misplaced because the court has already acquired jurisdiction over the plaintiff in
the suit, by virtue of his filing the original complaint. And as we have already
observed, petitioner is not at liberty to question plaintiff’s standing to sue, having
already acceded to the same by virtue of its entry into the Representative Agreement
referred to earlier.

Thus, having acquired jurisdiction, it is now for the Philippine Court, based on the
facts of the case, whether to give due course to the suit or dismiss it, on the principle
of forum non convenience. Hence, the Philippine Court may refuse to assume
jurisdiction in spite of its having acquired jurisdiction. Conversely, the court may
assume jurisdiction over the case if it chooses to do so; provided, that the following
requisites are met:

1) That the Philippine Court is one to which the parties may conveniently resort to;
2) That the Philippine Court is in a position to make an intelligent decision as to the
law and the facts; and,
3) That the Philippine Court has or is likely to have power to enforce its decision.
The aforesaid requirements having been met, and in view of the court’s disposition to
give due course to the questioned action, the matter of the present forum not being the
“most convenient” as a ground for the suit’s dismissal, deserves scant consideration.
Bank of America NT&SA ET. Al. Vs. Court of Appeals, May

Facts:

A "fiasco," involving an irrevocable letter of credit, has found the distressed parties
coming to court as adversaries in seeking a definition of their respective rights or
liabilities thereunder.

On 05 March 1981, petitioner Bank of America, NT & SA, Manila, received by

registered mail an Irrevocable Letter of Credit No. 20272/81 purportedly issued by
Bank of Ayudhya, Samyaek Branch, for the account of General Chemicals, Ltd., of
Thailand in the amount of US$2,782,000.00 to cover the sale of plastic ropes and
"agricultural files," with the petitioner as advising bank and private respondent Inter-
Resin Industrial Corporation as beneficiary.

Issue:
Conflict of laws

Held:

In FEATI Bank and Trust Company v. Court of Appeals, we have accepted, to the
extent of their pertinency, the application in our jurisdiction of this international
commercial credit regulatory set of rules. In Bank of Phil. Islands v. De Nery, we
have said that the observances of the U.C.P. is justified by Article 2 of the Code of
Commerce which expresses that, in the absence of any particular provision in the
Code of Commerce, commercial transactions shall be governed by usages and
customs generally observed. We have further observed that there being no specific
provisions which govern the legal complexities arising from transactions involving
letters of credit not only between or among banks themselves but also between banks
and the seller or the buyer, as the case may be, the applicability of the U.C.P. is
undeniable.

The first issue raised with the petitioner, i.e., that it has in this instance merely been
advising bank, is outrightly rejected by Inter-Resin and is thus sought to be discarded
for having been raised only on appeal. We cannot agree. The crucial point of dispute
in this case is whether under the "letter of credit," Bank of America has incurred any
liability to the "beneficiary" thereof, an issue that largely is dependent on the bank's
participation in that transaction; as a mere advising or notifying bank, it would not be
liable, but as a confirming bank, had this been the case, it could be considered as
having incurred that liability.

In Insular Life Assurance Co. Ltd. Employees Association — Natu vs. Insular Life
Assurance Co., Ltd., the Court said: Where the issues already raised also rest on other
issues not specifically presented, as long as the latter issues bear relevance and close
relation to the former and as long as they arise from the matters on record, the court
has the authority to include them in its discussion of the controversy and to pass upon
them just as well. In brief, in those cases where questions not particularly raised by
the parties surface as necessary for the complete adjudication of the rights and
obligations of the parties, the interests of justice dictate that the court should consider
and resolve them. The rule that only issues or theories raised in the initial proceedings
may be taken up by a party thereto on appeal should only refer to independent, not
concomitant matters, to support or oppose the cause of action or defense. The evil that
is sought to be avoided, i.e., surprise to the adverse party, is in reality not existent on
matters that are properly litigated in the lower court and appear on record.

First, given the factual findings of the courts below, we conclude that petitioner Bank
of America has acted merely as a notifying bank and did not assume the responsibility
of a confirming bank; and

Second, petitioner bank, as a negotiating bank, is entitled to recover on Inter-Resin's

partial availment as beneficiary of the letter of credit which has been disowned by the
alleged issuer bank.

No judgment of civil liability against the other defendants, Francisco Trajano and
other unidentified parties, can be made, in this instance, there being no sufficient
evidence to warrant any such finding.

WHEREFORE, the assailed decision is SET ASIDE, and respondent Inter-Resin

Industrial Corporation is ordered to refund to petitioner Bank of America NT & SA
the amount of P10,219,093.20 with legal interest from the filing of the complaint until
fully paid.

No costs.

SO ORDERED.
Board of Commissioners vs. Hon. Joselito De La Rosa, G.R. No 95122-23 / 197
SCRA 858, 31 May 1991

Facts:

On July 12, 1960, Santiago Gatchalian, grandfather of William Gatchalian, was

recognized by the Bureau of Immigration as a native born Filipino citizen following
the citizenship of his natural born mother, Marciana Gatchalian.

On June 27, 1961, William Gatchalian, then a twelve-year old minor, arrived in
Manila from Hongkong together with Gloria, Francisco and Johnson Gatchalian. They
had with them Certificate of Registration and Identity issued by the Philippine
Consulate in Hongkong based on a cablegram bearing the signature of the then
Secretary of Foreign Affairs, Felixberto Serrano, and sought admission as Filipino
citizens. After investigation, the Board of Special Inquiry No. 1 rendered
a decision dated July 5, 1961, admitting William Gatchalian and his companions as
Filipino citizens and was issued Identification Certificates.

On January 24, 1962, the then Secretary of Justice issued Memorandum No. 9 setting
aside all decisions purporting to have been rendered by the Board of Commissioners
on appeal or on review motu proprio of decisions of the Board of Special Inquiry. The
same memorandum directed the Board of Commissioners to review all cases where
entry was allowed on the ground that the entrant was a Philippine citizen. Among
those cases was that of William and others.On July 6, 1962, the new Board of
Commissioners, reversed the decision of the Board of Special Inquiry and ordered the
exclusion of, among others, respondent Gatchalian.
Sometime in 1973, respondent Gatchalian, as well as the others covered by the July 6,
1961 warrant of exclusion, filed a motion for re-hearing with the Board of Special
Inquiry where the deportation case against them was assigned.

On March 15, 1973, Acting Commissioner Nituda issued an order reaffirming the July
6, 1961 decision of the Board of Special Inquiry thereby admitting respondent
Gatchalian as a Filipino citizen and recalled the warrant of arrest issued against him.
On June 7, 1990, the acting director of the National Bureau of Investigation wrote the
Secretary of Justice recommending that the respondent Gatchalian along with the
other applicants covered by the warrant of exclusion be charged with violation against
the Immigration Act of 1940.

On August 1, 1990, the Secretary of Justice indorsed the recommendation of the NBI
to the Commissioner of Immigration for investigation and immediate action.
On August 15, 1990, petitioner Domingo of the Commission of Immigration and
Deportation issued a mission order commanding the arrest of respondent William
Gatchalian. The latter appeared before Commissioner Domingo on August 20, 1990
and was released on the same day upon posting P200,000.00 cash bond.

On August 29, 1990, William Gatchalian filed a petition for certiorari and prohibition
with injunction before the Regional Trial Court of Manila, presided by respondent
Judge dela Rosa. On September 4, 1990, petitioners filed a motion to dismiss the case
alleging that respondent judge has no jurisdiction over the Board of Commissioners
and/or the Board of Special Inquiry.

On September 6, 1990, respondent’s wife and minor children filed before the
Regional Trial Court of Valenzuela for injunction with writ of preliminary injunction.
That petitioners acted without or in excess of jurisdiction in the institution of
deportation proceedings against William. Respondent Capulong issued the questioned
temporary restraining order restraining petitioners from continuing with the
deportation proceedings against William Gatchalian.

Issue:
Conflict of laws

Held:

The very basis of the Board of Commissioners in reversing the decision of the Board
of Special Inquiry was due to a forged cablegram by the then Secretary of Foreign
Affairs, which was dispatched to the Philippine Consulate in Hong Kong authorizing
the registration of applicants as P.I. citizens.

In matters of implementing the Immigration Act insofar as deportation of aliens

are concerned, the Commissioner of Immigration may issue warrants of arrest only
after a determination by the Board of Commissioners of the existence of the ground
for deportation as charged against the alien. A warrant of arrest issued by the
Commissioner of Immigration for the purpose of investigation only, as in the case at
bar, is null and void for being unconstitutional.

Philippine law, following lex loci celebrationis, adheres to the rule that a marriage
formally valid where celebrated is valid everywhere. Having declared the assailed
marriages as valid, respondent William Gatchalian follows the citizenship of his
father Francisco, a Filipino, as a legitimate child of the latter. Francisco, in turn, is
likewise a Filipino being the legitimate child of Santiago Gatchalian who is
admittedly a Filipino citizen whose Philippine citizenship was recognized by the
Bureau of Immigration in an order dated July 12, 1960.

Finally, respondent William Gatchalian belongs to the class of Filipino citizens

contemplated under Section 1, Article IV of the Consititution.
In Re: Union Carbide Corporation Gas Plant Disaster In BHOPAL, India in
December 1984, Supra

Facts:

On the night of December 2-3, 1984 the most tragic industrial disaster in history
occurred in the city of Bhopal, state of Madhya Pradesh, Union of India. Located
there was a chemical plant owned and operated by Union Carbide India Limited
("UCIL"). The plant, situated in the northern sector of the city, had numerous
hutments adjacent to it on its southern side which were occupied by impoverished
squatters. UCIL manufactured the pesticides Sevin and Temik at the Bhopal plant at
the request of, and with the approval of, the Government of India. (Affidavit of John
MacDonald ("MacDonald Aff.") at 2). UCIL was incorporated under Indian law in
1934. 50.9% of its stock is owned by the defendant, Union Carbide Corporation, a
New York corporation. (MacDonald Aff. at 1). Methyl isocyanate (MIC), a highly
toxic gas, is an ingredient in the production of both Sevin and Temik. On the night of
the tragedy MIC leaked from the plant in substantial quantities for reasons not yet
determined.

The prevailing winds on the early morning of December 3, 1984 were from Northwest
to Southeast. They blew the deadly gas into the overpopulated hutments adjacent to
the plant and into the most densely occupied parts of the city. The results were
horrendous. Estimates of deaths directly attributable to the leak range as high as
2,100. No one is sure exactly how many perished. Over 200,000 people suffered
injuriessome serious and permanent some mild and temporary. Livestock were killed
and crops damaged. Businesses were interrupted.

Issue:
Conflict of laws

Held:

The doctrine of forum non conveniens allows a court to decline jurisdiction, even
when jurisdiction is authorized by a general venue statute. In support of its position
that the consolidated action before the Court should be transferred to a more
convenient forum within the Union of India pursuant to this doctrine, Union Carbide
relies on the United States Supreme Court's decisions in Gulf Oil Corp. v. Gilbert, 330
U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947) and Piper Aircraft Co. v. Reyno, 454
U.S. 235, 102 S. Ct. 252, 70 L. Ed. 2d 419 (1981). The plaintiffs cite numerous other
lower United States federal court cases in their briefs and seek to distinguish the
Supreme Court's decisions from this case. Of course, Gilbert and Piper are the
touchstones in sorting out and examining the contentions of both sides to this motion
on the various factors bearing on convenience.
Piper teaches a straightforward formulation of the doctrine of forum non
conveniens. A district court is advised to determine first whether the proposed
alternative forum is "adequate." This inquiry should proceed in the order followed
below. Then, as a matter within its "sound discretion," Piper at 257, 102 S. Ct. at 266,
the district court should consider relevant public and private interest factors, and
reasonably balance those factors, in order to determine whether dismissal is favored.
This Court will approach the various concerns in the same direct manner in
which Piper and Gilbert set them out.

At this juncture, it would be appropriate to discuss the presumptions on a forum non

conveniens motion. In Piper, the Court discussed its earlier finding in Koster v.
Lumbermens Mutual Casualty Co., 330 U.S. 518, 67 S. Ct. 828, 91 L. Ed. 1067
(1947), which suggested that a plaintiff's choice of forum was entitled to great
deference when the forum chosen was the home of the plaintiff. This presumption was
based on the fact that the choice of the home forum indicated a reasonable assumption
that the choice was convenient. Koster at 524, 67 S. Ct. at 831. Conversely,
the Piper Court found:

When the plaintiff is foreign, however, this assumption is much less

reasonable. Because the central purpose of any forum non
conveniens inquiry is to ensure that the trial is convenient, a foreign
plaintiff's choice deserves less deference.

Piper 454 U.S. at 256, 102 S. Ct. at 266 (footnote omitted).

In the case now before the Court, in which the plaintiffs, including the Union of India,
are foreign, and share a home forum which is not the instant forum, the assumption
that this forum is convenient is not completely reasonable. The foreign plaintiffs'
choice of the United States forum "deserves less deference" than would be accorded a
United States citizen's choice. This Court will apply the presumption in favor of
plaintiffs' choice of forum with "less than maximum force."
Tirso Dacanay vs. Pedro v. Florendo, G.R. No. L-2071, 19 September 1950

Facts:
This is a special proceeding commenced in the Court of First Instance of La Union to
probate a joint and reciprocal will executed by the spouses Isabel V. Florendo and
Tirso Dacanay on October 20, 1940. Isabel V. Florendo having died, her surviving
spouse Tirso Dacanay is seeking to probate said joint and reciprocal will, which
provides in substance that whoever of the spouses, joint testators, shall survive the
other, shall inherit all the properties of the latter, with an agreement as to how the
surviving spouse shall dispose of the properties in case of his or her demise.

Issue:
Conflict of laws

Held:
Article 669 of the Civil Code reads as follows:jgc:chanrobles.com.ph

"ART. 669. Two or more persons cannot make a will conjointly or in the same
instrument, either for their reciprocal benefit or for the benefit of a third
person."cralaw virtua1aw library

We agree with appellant’s view, supported by eminent commentators, that the

prohibition of article 669 of the Civil Code is directed against the execution of a joint
will, or the expression by two or more testators of their wills in a single document and
by one act, rather than against mutual or reciprocal wills, which may be separately
executed. Upon this premise, however, appellant argues that article 669 of the Civil
Code has been repealed by Act No. 190, which he claims provides for and regulates
the extrinsic formalities of wills, contending that whether two wills should be
executed conjointly or separately is but a matter of extrinsic formality.

The question now raised by appellant has recently been decided by this court
adversely to him in In re Will of Victor Bilbao, supra" p. 144. It appears in that case
that on October 6, 1931, the spouses Victor Bilbao and Ramona M. Navarro executed
a will conjointly, whereby they directed that "all of our respective private properties
both real and personal, and all of our conjugal properties, and any other property
belonging to either or both of us, be given and transmitted to anyone or either of us,
who may survive the other, or who may remain the surviving spouse of the other."
That will was denied probate by the Court of First Instance of Negros Oriental on the
ground that it was prohibited by article 669 of the Civil Code. The surviving spouse as
proponent of the joint will also contended that said article of the Civil Code has been
repealed by sections 614 and 618 of the Code of Civil Procedure, Act No. 190. In
deciding that question this court, speaking through Mr. Justice Montemayor,
said:jgc:chanrobles.com.ph

"We cannot agree to the contention of the appellant that the provisions of the Code of
Civil Procedure on wills have completely superseded Chapter I, Title III of the Civil
Code on the same subject matter, resulting in the complete repeal of said Civil Code
provisions. In the study we have made of this subject, we have found a number of
cases decided by this court wherein several articles of the Civil Code regarding wills
have not only been referred to but have also been applied side by side with the
provisions of the Code of Civil Procedure.

"Considering the wisdom of the provisions of this article 669 and the fact that it has
not been repealed, at least not expressly, as well as the consideration that its
provisions are not incompatible with those of the Code of Civil Procedure on the
subject of wills, we believe and rule that said article 669 of the Civil Code is still in
force. And we are not alone in this opinion. Mr. Justice Willard as shown by his Notes
on the Civil Code, on page 48 believes that this article 669 is still in force. Sinco and
Capistrano in their work on the Civil Code, Vol. II, page 33, favorably cite Justice
Willard’s opinion that this article is still in force. Judge Camus in his book on the
Civil Code does not include this article among those he considers repealed. Lastly, we
find that this article 669 has been reproduced word for word in article 818 of the New
Civil Code (Republic Act No. 386). The implication is that the Philippine Legislature
that passed this Act and approved the New Civil Code, including the members of the
Code Commission who prepared it, are of the opinion that the provisions of article
669 of the old Civil Code are not incompatible with those of the Code of Civil
Procedure."cralaw virtua1aw library

In view of the foregoing, the order appealed from is affirmed, with costs against
the Appellant.
Yao Kee vs. Aida Sy-Gonzales, G.R.No. L-55960, 24 November 1988

Facts:

Sy Kiat, a Chinese national, died on January 17, 1977 in Caloocan City where he was
then residing, leaving behind real and personal properties here in the Philippines
worth P300,000.00 more or less.

Thereafter, Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo Sy filed
a petition alleging among others that:

a) They are the children of the deceased with Asuncion Gillego;

b) To their knowledge Sy Kiat died intestate;
c) They do not recognize Sy Kiat’s marriage to Yao Kee nor the filiation of her
children to him; and
d) They nominate Aida Sy-Gonzales for appointment as administratriz of the intestate
estate of the deceased.

The petition was opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy Yun Chen
who alleged that:

a) Yao Kee is the lawful wife of Sy Kiat who he married on January 19, 1931
in China;
b) The other oppositors are the legitimate children of the deceased Yao Kee; and
c) Sze Sook Wah is the eldest among them and is competent, willing and desirous to
become the administratrix of the estate of Sy Kiat.

Yao Kee testified that she was married to Sy Kiat on January 19, 1931 in
Fookien, China; that she does not have a marriage certificate because the practice
during that time was for elders to agree upon the bethrotal of their children, and in her
case, her elder brother was the one who contracted or entered into an agreement with
the parents of her husband; that she and her husband have been living in
Fookien, China before he went to the Philippines; that in China, the custom is that
there is a go-between, a sort of marriage broker who is known to both parties who
would talk to the parents of the bride-to-be agree to have the groom-to-be their son-in-
law, then they agree on a date as an engagement day; that on the wedding day, the
document would be signed by the parents of both parties but there is no solemnizing
officer as is known in the Philippines; that the parties do not sign the document
themselves; and that she and Sy Kiat were married for 46 years already and the
document was left in China and she doubt if that document can still be found now.

The testimony of Gan Ching, the younger brother of Yao Kee, that he attended the
marriage of his sister with Sy Kiat and that no marriage certificate is issued by
the Chinese government, a document signed by the parents and elders of the parties
being sufficient. Statements were made by Asuncion Gillego when she testified that a)
Sy Kiat was married to Yao Kee according to a Chinese custom.
Issue:
Conflict of laws

Held:

The law requires that a custom must be proved as a fact, according to the rules of
evidence. A local custom as a source of right cannot be considered by a court of
justice unless such custom is properly established by competent evidence like any
other fact.

Article 71 of the Civil Code states that: “All marriages performed outside the
Philippines in accordance with the laws in force in the country where they were
performed, and valid there as such, shall also be valid in this country, except
bigamous, polygamous or incestuous marriages as determined by Philippine law.

The testimonies of Yao Kee and Gan Ching cannot be considered as proof of
China’s law or custom on marriage not only because they are self-serving evidence,
but more importantly, there is no showing that they are competent to testify on
the subject matter. The marriage of Yao Kee and Sy Kiat cannot be recognized in this
jurisdiction. Philippine courts cannot take judicial notice of foreign laws. They must
be alleged and proved as any other fact.

As petitioners failed to establish the marriage of Yao Kee with Sy Kiat according to
the laws of China, they cannot be accorded the status of legitimate children but only
of acknowledged natural children.
Renato D. Tayag vs. Benguet Consolidated, Inc. G.R. No. 23145, 29 November 1968

Facts:
Idonah Slade Perkins died domiciled in New York on March 27, 1960; because she
has properties both in New York and in the Philippines, a domiciliary administrator
was appointed in New York by the New York courts, and an ancillary administrator
was appointed in the Philippines by the Philippine courts. Now then, to satisfy the
legitimate claims of local creditors, the Philippine ancillary administrator asked the
New York administrator to surrender to the former two stock certificates owned by
the deceased in a Philippine corporation, the Benguet Consolidated, Inc. Although
said New York administrator had the stock certificates, he refused to surrender them
despite the order of the Philippine court, prompting the court to consider said
certificates as LOST for all purposes in connection with the administration of the
deceased’s Philippine estate. The court then ordered the Benguet Consolidated, Inc. to
cancel said certificates and to issue new certificates deliverable either to the ancillary
administrator or to the Philippine probate court. The company refused to issue the
new certificates on the ground firstly, that after all, the old certificates still really exist,
although in the possession of the New York administrator; and secondly, that in the
future, the Company may be held liable for damages because of the presence of
conflicting certificates.

Issue:
Conflict of laws

Held:

1. Appellant Benguet Consolidated, Inc. did not dispute the power of the appellee
ancillary administrator to gain control and possession of all assets of the decedent
within the jurisdiction of the Philippines. Nor could it. Such a power is inherent in his
duty to settle her estate and satisfy the claims of local creditors. 5 As Justice Tuason
speaking for this Court made clear, it is a "general rule universally recognized" that
administration, whether principal or ancillary, certainly "extends to the assets of a
decedent found within the state or country where it was granted," the corollary being
"that an administrator appointed in one state or country has no power over property in
another state or country." 6

It is to be noted that the scope of the power of the ancillary administrator was, in an
earlier case, set forth by Justice Malcolm. Thus: "It is often necessary to have more
than one administration of an estate. When a person dies intestate owning property in
the country of his domicile as well as in a foreign country, administration is had in
both countries. That which is granted in the jurisdiction of decedent’s last domicile is
termed the principal administration, while any other administration is termed the
ancillary administration. The reason for the latter is because a grant of administration
does not ex proprio vigore have any effect beyond the limits of the country in which it
is granted. Hence, an administrator appointed in a foreign state has no authority in the
[Philippines]. The ancillary administration is proper, whenever a person dies, leaving
in a country other than that of his last domicile, property to be administered in the
nature of assets of the deceased liable for his individual debts or to be distributed
among his heirs." 7

It would follow then that the authority of the probate court to require that ancillary
administrator’s right to "the stock certificates covering the 33,002 shares .. standing in
her name in the books of [appellant] Benguet Consolidated, Inc.." be respected is
equally beyond question. For appellant is a Philippine corporation owing full
allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of
stock cannot therefore be considered in any wise as immune from lawful court orders.

Our holding in Wells Fargo Bank and Union v. Collector of Internal Revenue 8 finds
application. "In the instant case, the actual situs of the shares of stock is in the
Philippines, the corporation being domiciled [here]." To the force of the above
undeniable proposition, not even appellant is insensible. It does not dispute it. Nor
could it successfully do so even if it were so minded.

2. In the face of such incontrovertible doctrines that argue in a rather conclusive

fashion for the legality of the challenged order, how does appellant Benguet
Consolidated, Inc. propose to carry the extremely heavy burden of persuasion of
precisely demonstrating the contrary? It would assign as the basic error allegedly
committed by the lower court its "considering as lost the stock certificates covering
33,002 shares of Benguet belonging to the deceased Idonah Slade Perkins, . . ." 9
More specifically, appellant would stress that the "lower court could not `consider as
lost’ the stock certificates in question when, as a matter of fact, his Honor the trial
Judge knew, and does know, and it is admitted by the appellee, that the said stock
certificates are in existence and are today in the possession of the domiciliary
administrator in New York." 10

There may be an element of fiction in the above view of the lower court. That
certainly does not suffice to call for the reversal of the appealed order. Since there is a
refusal, persistently adhered to by the domiciliary administrator in New York, to
deliver the shares of stocks of appellant corporation owned by the decedent to the
ancillary administrator in the Philippines, there was nothing unreasonable or arbitrary
in considering them as lost and requiring the appellant to issue new certificates in lieu
thereof. Thereby, the task incumbent under the law on the ancillary administrator
could be discharged and his responsibility fulfilled.

Any other view would result in the compliance to a valid judicial order being made to
depend on the uncontrolled discretion of the party or entity, in this case domiciled
abroad, which thus far has shown the utmost persistence in refusing to yield
obedience. Certainly, appellant would not be heard to contend in all seriousness that a
judicial decree could be treated as a mere scrap of paper, the court issuing it being
powerless to remedy its flagrant disregard.

It may be admitted of course that such alleged loss as found by the lower court did not
correspond exactly with the facts. To be more blunt, the quality of truth may be
lacking in such a conclusion arrived at. It is to be remembered however, again to
borrow from Frankfurter, "that fictions which the law may rely upon in the pursuit of
legitimate ends have played an important part in its development." 11
Speaking of the common law in its earlier period, Cardozo could state that fictions
"were devices to advance the ends of justice, [even if] clumsy and at times offensive."
12 Some of them have persisted even to the present, that eminent jurist, noting "the
quasi contract, the adopted child, the constructive trust, all of flourishing vitality, to
attest the empire of `as if’ today." 13 He likewise noted "a class of fictions of another
order, the fiction which is a working tool of thought, but which at times hides itself
from view till reflection and analysis have brought it to the light." 14

What cannot be disputed, therefore, is the at times indispensable role that fictions as
such played in the law. There should be then on the part of the appellant a further
refinement in the catholicity of its condemnation of such judicial technique. If ever an
occasion did call for the employment of a legal fiction to put an end to the anomalous
situation of a valid judicial order being disregarded with apparent impunity, this is it.
What is thus most obvious is that this particular alleged error does not carry
persuasion.

3. Appellant Benguet Consolidated, Inc. would seek to bolster the above contention
by its invoking one of the provisions of its by-laws which would set forth the
procedure to be followed in case of a lost, stolen or destroyed stock certificate; it
would stress that in the event of a contest or the pendency of an action regarding
ownership of such certificate or certificates of stock allegedly lost, stolen or
destroyed, the issuance of a new certificate or certificates would await the "final
decision by [a] court regarding the ownership [thereof]." 15

Such reliance is misplaced. In the first place, there is no such occasion to apply such a
by-law. It is admitted that the foreign domiciliary administrator did not appeal from
the order now in question. Moreover, there is likewise the express admission of
appellant that as far as it is concerned, "it is immaterial . . . who is entitled to the
possession of the stock certificates . . ." Even if such were not the case, it would be a
legal absurdity to impart to such a provision conclusiveness and finality. Assuming
that a contrariety exists between the above by-law and the command of a court decree,
the latter is to be followed.

It is understandable, as Cardozo pointed out, that the Constitution overrides a statute,

to which, however, the judiciary must yield deference, when appropriately invoked
and deemed applicable. It would be most highly unorthodox, however, if a corporate
by-law would be accorded such a high estate in the jural order that a court must not
only take note of it but yield to its alleged controlling force.

The fear of appellant of a contingent liability with which it could be saddled unless
the appealed order be set aside for its inconsistency with one of its by-laws does not
impress us. Its obedience to a lawful court order certainly constitutes a valid defense,
assuming that such apprehension of a possible court action against it could possibly
materialize. Thus far, nothing in the circumstances as they have developed gives
substance to such a fear. Gossamer possibilities of a future prejudice to appellant do
not suffice to nullify the lawful exercise of judicial authority.

4. What is more the view adopted by appellant Benguet Consolidated, Inc. is fraught
with implications at war with the basic postulates of corporate theory.
We start with the undeniable premise that, "a corporation is an artificial being created
by operation of law . . ." 16 It owes its life to the state, its birth being purely
dependent on its will. As Berle so aptly stated: "Classically, a corporation was
conceived as an artificial person, owing its existence through creation by a sovereign
power. 17 As a matter of fact, the statutory language employed owes much to Chief
Justice Marshall, who in the Dartmouth College decision, defined a corporation
precisely as "an artificial being invisible, intangible, and existing only in
contemplation of law." 18

The well-known authority Fletcher could summarize the matter thus: "A corporation
is not in fact and in reality a person, but the law treats it as though it were a person by
process of fiction, or by regarding it as an artificial person distinct and separate from
its individual stockholders.. It owes its existence to law. It is an artificial person
created by law for certain specific purposes, the extent of whose existence, powers
and liberties is fixed by its charter." 19 Dean Pound’s terse summary, a juristic
person, resulting from an association of human beings granted legal personality by the
state, puts the matter neatly. 20

There is thus a rejection of Gierke’s genosssenchaft theory, the basic theme of which
to quote from Friedmann, "is the reality of the group as a social and legal entity,
independent of state recognition and concession." 21 A corporation as known to
Philippine jurisprudence is a creature without any existence until it has received the
imprimatur of the state acting according to law. It is logically inconceivable therefore
that it will have rights and privileges of a higher priority than that of its creator. More
than that, it cannot legitimately refuse to yield obedience to acts of its state organs,
certainly not excluding the judiciary, whenever called upon to do so.

As a matter of fact, a corporation once it comes into being, following American law
still of persuasive authority in our jurisdiction, comes more often within the ken of the
judiciary than the other two coordinate branches. It institutes the appropriate Court
Action to enforce its rights. Correlatively, it is not immune from judicial control in
those instances, where a duty under the law as ascertained in an appropriate legal
proceeding is cast upon it.

To assert that it can choose which court order to follow and which to disregard is to
confer upon it not autonomy which may be conceded but license which cannot be
tolerated. It is to argue that it may, when so minded, overrule the state, the source of
its very existence; it is to contend that what any of its governmental organs may
lawfully require could be ignored at will. So extravagant a claim cannot possibly
merit approval.

5. One last point. In Viloria v. Administrator of Veterans Affairs, 22 it was shown that
in a guardianship proceeding then pending in a lower court, the United States
Veterans Administration filed a motion for the refund of a certain sum of money paid
to the minor under guardianship, alleging that the lower court had previously granted
its petition to consider the deceased father as not entitled to guerilla benefits
according to a determination arrived at by its main office in the United States. The
motion was denied. In seeking a reconsideration of such order, the Administrator
relied on an American federal statute making his decisions "final and conclusive on
all questions of law or fact" precluding any other American official to examine the
matter anew, "except a judge or judges of the United States court." 23
Reconsideration was denied, and the Administrator appealed.

In an opinion by Justice J.B.L. Reyes, we sustained the lower court. Thus: "We are of
the opinion that the appeal should be rejected. The provisions of the U.S. Code,
invoked by the appellant, make the decisions of U.S. Veteran Administrator final and
conclusive when made on claims properly submitted to him for resolution; but they
are not applicable to the present case, where the Administrator is not acting as a judge
but as a litigant. There is a great difference between actions against the Administrator
(which must be filed strictly in accordance with the conditions that are imposed by the
Veterans’ Act, including the exclusive review by United States courts), and those
actions where the Veterans’ Administrator seeks a remedy from our courts and
submits to their jurisdiction by filing actions therein. Our attention has not been called
to any law or treaty that would make the findings of the Veterans’ Administrator, in
actions where he is a party, conclusive on our courts. That, in effect, would deprive
our tribunals of judicial discretion and render them mere subordinate instrumentalities
of the Veterans’ Administrator."cralaw virtua1aw library

It is bad enough as the Viloria decision made patent for our judiciary to accept as final
and conclusive, determinations made by foreign governmental agencies. It is infinitely
worse if through the absence of any coercive power by our courts over juridical
persons within our jurisdiction, the force and effectivity of their orders could be made
to depend on the whim or caprice of alien entities. It is difficult to imagine of a
situation more offensive to the dignity of the bench or the honor of the country.

Yet that would be the effect, even if unintended, of the proposition to which appellant
Benguet Consolidated seems to be firmly committed as shown by its failure to accept
the validity of the order complained of; it seeks its reversal. Certainly we must at all
pains see to it that it does not succeed. The deplorable consequences attendant on
appellant prevailing attest to the necessity of a negative response from us. That is
what appellant will get.

That is all then that this case presents. It is obvious why the appeal cannot succeed. It
is always easy to conjure extreme and even oppressive possibilities. That is not
decisive. It does not settle the issue. What carries weight and conviction is the result
arrived at, the just solution obtained, grounded in the soundest of legal doctrines and
distinguished by its correspondence with what a sense of realism requires. For
through the appealed order, the imperative requirement of justice according to law is
satisfied and national dignity and honor maintained.

WHEREFORE, the appealed order of the Honorable Arsenio Santos, the Judge of the
Court of First Instance, dated May 18, 1964, is affirmed. With costs against oppositor-
appellant Benguet Consolidated, Inc.
United Airlines Inc. vs. Court of Appeals, G.R. No. 124110, 20 April 2001

Facts:
Aniceto Fontanilla bought from United Airlines,through the Philippine Travel Bureau in Manila,
three “Visit the U.S.A.” tickets from himself, his wife and his minors on, Mychal, to
visit the cities of Washington DC, Chicago and Los Angeles.All flights had been
confirmed previously by United Airlines.
Having used the first coupon to DC and while at the Washington Dulles Airport,
Anice to changed their itinerary, paid the penalty for rewriting their tickets and was
issued tickets with corresponding boarding passes with the words: “Check-in-
required.” They were then set to leave but were denied boarding because the flight
was overbooked. The CA ruled that private respondents’ failure to comply with the check-in
requirement will not defeat his claim as the denied boarding rules were not complied with applying the
laws of the USA, relying on the Code of Federal Regulation Part on Over sales of the USA

Issue:
Conflict of laws

Held:
According to the doctrine of “lex loci contractus”, the law of the place where a contract is made or entered
into governs with respect to its nature and validity, obligation and interpretation shall govern. 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. Hence, the court should apply the law of the place where the airline ticket was issued,
where the passengers are residents and nationals of the forum and the ticket is issued in such State by the
defendant airline. Therefore, 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
D.C.,however, such fact did not change the nature of the original contract of carriage entered Into by the
parties in Manila.
Pakistan International Airlines vs. OPLE, G.R. No. 61594 / 190 SCRA 90, September
1990

Facts:

On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration of
the contracts of employment, PIA through Mr. Oscar Benares, counsel for and official
of the local branch of PIA, sent separate letters both dated 1 August 1980 to private
respondents Farrales and Mamasig advising both that their services as flight
stewardesses would be terminated "effective 1 September 1980, conformably to
clause 6 (b) of the employment agreement [they had) executed with [PIA]."

On 9 September 1980, private respondents Farrales and Mamasig jointly instituted a

complaint, docketed as NCR-STF-95151-80, for illegal dismissal and non-payment of
company benefits and bonuses, against PIA with the then Ministry of Labor and
Employment ("MOLE"). After several unfruitful attempts at conciliation, the MOLE
hearing officer Atty. Jose M. Pascual ordered the parties to submit their position
papers and evidence supporting their respective positions. The PIA submitted its
position paper, 3 but no evidence, and there claimed that both private respondents
were habitual absentees; that both were in the habit of bringing in from abroad
sizeable quantities of "personal effects"; and that PIA personnel at the Manila
International Airport had been discreetly warned by customs officials to advise
private respondents to discontinue that practice. PIA further claimed that the services
of both private respondents were terminated pursuant to the provisions of the
employment contract.

In his Order dated 22 January 1981, Regional Director Francisco L. Estrella ordered
the reinstatement of private respondents with full backwages or, in the alternative, the
payment to them of the amounts equivalent to their salaries for the remainder of the
fixed three-year period of their employment contracts; the payment to private
respondent Mamasig of an amount equivalent to the value of a round trip ticket
Manila-USA Manila; and payment of a bonus to each of the private respondents
equivalent to their one-month salary. 4 The Order stated that private respondents had
attained the status of regular employees after they had rendered more than a year of
continued service; that the stipulation limiting the period of the employment contract
to three (3) years was null and void as violative of the provisions of the Labor Code
and its implementing rules and regulations on regular and casual employment; and
that the dismissal, having been carried out without the requisite clearance from the
MOLE, was illegal and entitled private respondents to reinstatement with full
backwages.

Issue:
Conflict of laws

Held:
the Labor Arbiter and the Deputy Minister, MOLE, in effect held that paragraph 5 of
that employment contract was inconsistent with Articles 280 and 281 of the Labor
Code as they existed at the time the contract of employment was entered into, and
hence refused to give effect to said paragraph 5. These Articles read as follows:

Art. 280. Security of Tenure. — In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when authorized
by this Title An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and to his backwages computed from the
time his compensation was withheld from him up to the time his reinstatement.

Art. 281. Regular and Casual Employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreements of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists. (Emphasis supplied)

In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., the Court had occasion to
examine in detail the question of whether employment for a fixed term has been
outlawed under the above quoted provisions of the Labor Code. After an extensive
examination of the history and development of Articles 280 and 281, the Court
reached the conclusion that a contract providing for employment with a fixed period
was not necessarily unlawful:

There can of course be no quarrel with the proposition that where from the
circumstances it is apparent that periods have been imposed to preclude acquisition
of tenurial security by the employee, they should be struck down or disregarded as
contrary to public policy, morals, etc. But where no such intent to circumvent the law
is shown, or stated otherwise, where the reason for the law does not exist e.g. where it
is indeed the employee himself who insists upon a period or where the nature of the
engagement is such that, without being seasonal or for a specific project, a definite
date of termination is a sine qua non would an agreement fixing a period be
essentially evil or illicit, therefore anathema Would such an agreement come within
the scope of Article 280 which admittedly was enacted "to prevent the circumvention
of the right of the employee to be secured in . . . (his) employment?"

As it is evident from even only the three examples already given that Article 280 of
the Labor Code, under a narrow and literal interpretation, not only fails to exhaust
the gamut of employment contracts to which the lack of a fixed period would be an
anomaly, but would also appear to restrict, without reasonable distinctions, the right
of an employee to freely stipulate with his employer the duration of his engagement, it
logically follows that such a literal interpretation should be eschewed or avoided. The
law must be given reasonable interpretation, to preclude absurdity in its application.
Outlawing the whole concept of term employment and subverting to boot the
principle of freedom of contract to remedy the evil of employers" using it as a means
to prevent their employees from obtaining security of tenure is like cutting off the
nose to spite the face or, more relevantly, curing a headache by lopping off the head.

xxx xxx xxx

Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to have been,
as already observed, to prevent circumvention of the employee's right to be secure in
his tenure, the clause in said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of regular employment as
defined therein should be construed to refer to the substantive evil that the Code itself
has singled out: agreements entered into precisely to circumvent security of tenure. It
should have no application to instances where a fixed period of employment was
agreed upon knowingly and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent, or where it satisfactorily appears that the
employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter. Unless thus
limited in its purview, the law would be made to apply to purposes other than those
explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended consequences. (emphasis supplied)

It is apparent from Brent School that the critical consideration is the presence or
absence of a substantial indication that the period specified in an employment
agreement was designed to circumvent the security of tenure of regular employees
which is provided for in Articles 280 and 281 of the Labor Code. This indication must
ordinarily rest upon some aspect of the agreement other than the mere specification of
a fixed term of the ernployment agreement, or upon evidence aliunde of the intent to
evade.
Huntington vs. Attrill, 146 US 657, 12 December 1892

Facts:
This was a bill in equity, filed March 21, 1888, in the circuit court of Baltimore city,
by Collis P. Huntington, a resident of New York, against the Equitable Gaslight
Company of Baltimore, a corporation of Maryland, and against Henry Y. Attrill, his
wife and three daughters, all residents of Canada, to set aside a transfer of stock in
that company made by him for their benefit and in fraud of his creditors, and to
charge that stock with the payment of a judgment recovered by the plaintiff against
him in the state of New York, upon his liability as a director in a New York
corporation, under the statute of New York of 1875, (chapter 611,) the material
provisions of which are copied in the margin.

Issue:
Conflict of laws

Held:

As plaintiff had no judgment in Maryland, and had not sought to recover one, the
pleader, in order to make out the alleged fraud as perpetrated in 1882, went into the
original cause of action at large, and invited the attention of the court to its nature.
The question at once arose whether the courts of Maryland were constrained to
enforce such a cause of action, although record evidence of its maintenance in New
York existed in the form of a judgment there. The court held that the liability was not
one arising upon contract, but one imposed [146 U.S. 657, 688] upon Attrill as a
wrongdoer; that under the statute no inquiry was to be made whether the creditor had
been deceived and induced by deception to lend his money or to give credit, or
whether he had incurred loss to any extent by the inability of the corporation to pay,
nor was the recevery limited to the amount of the loss sustained; that all that it was
necessary to show was that the act had been committed, and thereupon any creditor
was entitled to recover the full amount of his debt. See Torbett v. Eaton, 113 N. Y.
623, 20 N. E. Rep. 876; Id., 49 Hun, 209, 1 N. Y. Supp. 614; Huntington v. Attrill,
118 N. Y. 365, 23 N. E. Rep. 544. Hence the court concluded that the liability was in
the nature of a penalty, within the rule theretofore laid down by the courts of New
York, (Bank v. Bliss, 35 N. Y. 412; Wiles v. Suydam, 64 N. Y. 173; Stokes v.
Stickney, 96 N. Y. 323; Chase v. Curtis, 113 U.S. 452 , 5 Sup. Ct. Rep. 554; Flash v.
Conn, 109 U.S. 371 , 3 Sup. Ct. Rep. Price, 33 Md. 487; Norris v. Wrenschall, 34
Price, 33 Md. 487; Norris v. Wreschall, 34 Md. 492.) Its enforcement was therefore
declined, and the bill dismissed.

It was for the Maryland court to determine whether such enforcement would either
directly or indirectly involve the execution of the penal laws of another state; and,
although it might have been mistaken in the conclusion arrived at, such error does not
give this court jurisdiction to review its judgment. State courts do not adjudicate in the
matter of the enforceability of statutory delicts at their peril.
Sps. Cesar and Suthira Zalamea vs. Court of Appeals, Supra

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.

On the appointed date, however, 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 . 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 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;
WON TWZ acted with bad faith and would entitle Zalameas to Moral and Examplary
damages.

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 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.

WHEREFORE, the petition is hereby GRANTED and the decision of the respondent
Court of Appeals is hereby MODIFIED

Grace J. Garcia-Recio Recio vs. Rederick A Recio, G.R. No. 138322, 2 October 2001
Facts:

Respondent Rederick Recio, a Filipino, was married to Editha Samson, an

Australian citizen, in Malabon, Rizal, on March 1, 1987. They lived together as
husband and wife in Australia. On May 18, 1989, a decree of divorce, purportedly
dissolving the marriage, was issued by an Australian family court. On June 26, 1992,
respondent became an Australian citizen and was married again to petitioner Grace
Garcia-Recio, a Filipina on January 12, 1994 in Cabanatuan City. In their application
for a marriage license, respondent was declared as “single” and “Filipino.”

Starting October 22, 1995, petitioner and respondent lived separately without prior
judicial dissolution of their marriage.

On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of Marriage

on the ground of bigamy. Respondent allegedly had a prior subsisting marriage at the
time he married her. On his Answer, Rederick contended that his first marriage was
validly dissolved; thus, he was legally capacitated to marry Grace.

On July 7, 1998 or about five years after the couple’s wedding and while the suit for
the declaration of nullity was pending , respondent was able to secure a divorce
decree from a family court in Sydney, Australia because the “marriage had
irretrievably broken down.”

The Regional Trial Court declared the marriage of Rederick and Grace Recio
dissolved on the ground that the Australian divorce had ended the marriage of the
couple thus there was no more marital union to nullify or annul.

Issue:
Conflict of laws

Held:

1st issue:

The Supreme Court ruled that the mere presentation of the divorce decree of
respondent’s marriage to Samson is insufficient. Before a foreign divorce decree can
be recognized by our courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it. Furthermore, the divorce
decree between respondent and Editha Samson appears to be an authentic one issued
by an Australian family court. However, appearance is not sufficient; compliance with
the aforementioned rules on evidence must be demonstrated.

2nd issue:
Australian divorce decree contains a restriction that reads:
“1. A party to a marriage who marries again before this decree becomes absolute
(unless the other party has died) commits the offence of bigamy.”
This quotation bolsters our contention that the divorrecce obtained by respondent may
have been restricted. It did not absolutely establish his legal capacity to remarry
according to his national law. Hence, the Court find no basis for the ruling of the trial
court, which erroneously assumed that the Australian divorce ipso facto restored
respondent’s capacity to remarry despite the paucity of evidence on this matter.

The Supreme Court remanded the case to the court a quo for the purpose of receiving
evidence. The Court mentioned that they cannot grant petitioner’s prayer to declare
her marriage to respondent null and void because of the question on latter’s legal
capacity to marry.
Asiavest Merchant Bankers (M) Berhad vs. Court of Appeals, G.R. No. 110263 / 361
SCRA 489, 20 July 2001

Facts: Petitioner Asiavest Merchant Bankers (M) Berhad is a corporation organized

under the laws of Malaysia while private respondent Philippine National Construction
Corporation is a corporation duly incorporated and existing under Philippine laws.

Petitioner initiated a suit for collection against private respondent, then known as
Construction and Development Corporation of the Philippines, before the High Court
of Malaya in Kuala Lumpur entitled “Asiavest Merchant Bankers (M) Berhad v.
Asiavest CDCP Sdn. Bhd. and Construction and Development Corporation of the
Philippines.”

Petitioner sought to recover the indemnity of the performance bond it had put up in
favor of private respondent to guarantee the completion of the Felda Project and the
nonpayment of the loan it extended to Asiavest-CDCP Sdn. Bhd. for the completion
of Paloh Hanai and Kuantan By Pass; Project.

The High Court of Malaya (Commercial Division) rendered judgment in favor of the
petitioner and against the private respondent. Following unsuccessful attempts to
secure payment from private respondent under the judgment, petitioner initiated the
complaint before RTC of Pasig, Metro Manila, to enforce the judgment of the High
Court of Malaya.

Private respondent sought the dismissal of the case via a Motion to Dismiss,
contending that the alleged judgment of the High Court of Malaya should be denied
recognition or enforcement since on in face, it is tainted with want of jurisdiction,
want of notice to private respondent, collusion and/or fraud, and there is a clear
mistake of law or fact. Dismissal was, however, denied by the trial court considering
that the grounds relied upon are not the proper grounds in a motion to dismiss under
Rule 16 of the Revised Rules of Court.

Subsequently, private respondent filed its Answer with Compulsory Counter claim’s
and therein raised the grounds it brought up in its motion to dismiss. In its Reply filed,
the petitioner contended that the High Court of Malaya acquired jurisdiction over the
person of private respondent by its voluntary submission the court’s jurisdiction
through its appointed counsel. Furthermore, private respondent’s counsel waived any
and all objections to the High Court’s jurisdiction in a pleading filed before the court.

In due time, the trial court rendered its decision dismissing petitioner’s complaint.
Petitioner interposed an appeal with the Court of Appeals, but the appellate court
dismissed the same and affirmed the decision of the trial court.

Issue: Whether or not the CA erred in denying recognition and enforcement to the
Malaysian Court judgment.
Ruling: Yes.

Generally, in the absence of a special compact, no sovereign is bound to give effect

within its dominion to a judgment rendered by a tribunal of another country; however,
the rules of comity, utility and convenience of nations have established a usage among
civilized states by which final judgments of foreign courts of competent jurisdiction
are reciprocally respected and rendered efficacious under certain conditions that may
vary in different countries.

In this jurisdiction, a valid judgment rendered by a foreign tribunal may be recognized

insofar as the immediate parties and the underlying cause of action are concerned so
long as it is convincingly shown that there has been an opportunity for a full and fair
hearing before a court of competent jurisdiction; that the trial upon regular
proceedings has been conducted, following due citation or voluntary appearance of
the defendant and under a system of jurisprudence likely to secure an impartial
administration of justice; and that there is nothing to indicate either a prejudice in
court and in the system of laws under which it is sitting or fraud in procuring the
judgment.

A foreign judgment is presumed to be valid and binding in the country from which it
comes, until a contrary showing, on the basis of a presumption of regularity of
proceedings and the giving of due notice in the foreign forum Under Section 50(b),
Rule 39 of the Revised Rules of Court, which was the governing law at the time the
instant case was decided by the trial court and respondent appellate court, a judgment,
against a person, of a tribunal of a foreign country having jurisdiction to pronounce
the same is presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title. The judgment may, however, be assailed
by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact. In addition, under Section 3(n), Rule 131 of the Revised
Rules of Court, a court, whether in the Philippines or elsewhere, enjoys the
presumption that it was acting in the lawful exercise of its jurisdiction. Hence, once
the authenticity of the foreign judgment is proved, the party attacking a foreign
judgment, is tasked with the burden of overcoming its presumptive validity.

In the instant case, petitioner sufficiently established the existence of the money
judgment of the High Court of Malaya by the evidence it offered. Petitioner’s sole
witness, testified to the effect that he is in active practice of the law profession in
Malaysia; that he was connected with Skrine and Company as Legal Assistant up to
1981; that private respondent, then known as Construction and Development
Corporation of the Philippines, was sued by his client, Asiavest Merchant Bankers
(M) Berhad, in Kuala Lumpur; that the writ of summons were served on March 17,
1983 at the registered office of private respondent and on March 21, 1983 on Cora S.
Deala, a financial planning officer of private respondent for Southeast Asia
operations; that upon the filing of the case, Messrs. Allen and Gledhill, Advocates and
Solicitors, with address at 24th Floor, UMBC Building, Jalan Sulaiman, Kuala
Lumpur, entered their conditional appearance for private respondent questioning the
regularity of the service of the writ of summons but subsequently withdrew the same
when it realized that the writ was properly served; that because private respondent
failed to file a statement of defense within two (2) weeks, petitioner filed an
application for summary judgment and submitted affidavits and documentary
evidence in support of its claim; that the matter was then heard before the High Court
of Kuala Lumpur in a series of dates where private respondent was represented by
counsel; and that the end result of all these proceedings is the judgment sought to be
enforced.

In addition to the said testimonial evidence, petitioner also offered the documentary
evidence to support their claim.

Having thus proven, through the foregoing evidence, the existence and authenticity of
the foreign judgment, said foreign judgment enjoys presumptive validity and the
burden then fell upon the party who disputes its validity, herein private respondent, to
prove otherwise. However, private respondent failed to sufficiently discharge the
burden that fell upon it – to prove by clear and convincing evidence the grounds
which it relied upon to prevent enforcement of the Malaysian High Court judgment.
Intercontinental Hotels Corporation vs. Jack Golden, 15 NY 2D 9, 19 November 1964

Facts:

On this appeal by the plaintiff from a judgment dismissing the complaint, the only
issue is whether the courts of this State must deny access to a party seeking to enforce
obligations validly entered into in the Commonwealth of Puerto Rico and enforcible
under Puerto Rican law.
Plaintiff, the owner and operator of a government-licensed gambling casino in Puerto
Rico, seeks to recover the sum of $12,000 evidenced by defendant's check and
I.O.U.s given in payment of gambling debts incurred in Puerto Rico.
Once again we are faced with the question of when our courts may refuse to enforce a
foreign right, though valid where acquired, on the ground that its "enforcement is
contrary to [the public] policy of the forum"

Issue:
Conflict of laws

Held:
In the case of Mertz v. Mertz ( 271 N.Y. 466) Judge LEHMAN, writing for the court,
said that "a disability to sue attached by our law to the person of a wife becomes an
anomaly if another State can confer upon a wife, even though residing here, capacity
to sue in our courts upon a cause of action arising there" (p. 474; emphasis added). As
distinguished from the present case, in Mertz the court was faced with this State's
interest in the marital status situated here. As a practical matter, all the significant
contacts of the case were with New York and the language of the opinion indicates
that the court was in reality there making a choice of law decision of the kind that this
court today follows under the nominal heading of the "contacts" doctrine.
In Flegenheimer v. Brogan ( 284 N.Y. 268) the court nominally invoked the public
policy doctrine, but was only concerned with the operation of the liquor control laws
in this State. The court did not find the policy of other States so unjust or antisocial as
to oblige the courts of our State to deny access to litigants seeking to enforce rights
validly created there.
This court refused to enforce a tax claim asserted here by the plaintiff municipality
in City of Philadelphia [ Pa.] v. Cohen ( 11 N.Y.2d 401, cert. den. 371 U.S. 934) but
in doing so relied heavily upon the specific terms of our statute which calls for the
enforcement of such tax claims arising in other States if such other State will
reciprocate on a New York tax claim. Pennsylvania, unlike most States, has no such
reciprocity provision. Watts v. Malatesta ( 262 N.Y. 80) was concerned with a New
York statute and a situation involving betting in this State that was clearly unlawful
under the statute.
Since a gambling debt is unenforcible when made in Nevada, courts in other States
have no public policy issue to pass upon, and refusals elsewhere to enforce these
claims are a mere application of Nevada law. ( Hamilton v. Abadjian, 30 Cal.2d
49 and the Nevada cases cited therein.) Nevada courts refuse to enforce gambling
debts since the statutes of that State, while specifically authorizing licensed gambling
casinos (as an exception to the policy there that gambling generally is illegal), make
no provision for their enforcement. ( West Indies v. First Nat. Bank of Nevada, 67
Nev. 13.) In Puerto Rico the situation is different. There is specific statutory
provision for the enforcement of legal gambling debts there (Laws of Puerto Rico
Ann., tit. 31, § 4774) and the Supreme Court of Puerto Rico has upheld the
enforcement of such claims. ( United Hotels of Puerto Rico v. Willig, Puerto Rico Bar
Assn., No. 172 [Oct. 9, 1963], supra.) The refusal of courts to enforce Nevada
gambling debts has no application to the case before us.
We think, therefore, that this case falls within the consistent practice of enforcing
rights validly created by the laws of a sister State which do not tend to disturb our
local laws or corrupt the public.
Accordingly, the judgment of the Appellate Division should be reversed and the
judgment of the Supreme Court, New York County, reinstated, with costs in this court
and in the Appellate Division.