1
CONFLICT OF LAWS – 1st SET DIGEST
SAUDI ARABIAN AIRLINES vs. CA (1998) - "State of
the most significant relationship" rule
FACTS: defendant SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in Jeddah, Saudi Arabia.
While on a lay-over in Jakarta, Indonesia, plaintiff went
to a disco dance with fellow crew members Thamer Al-
Gazzawi and Allah Al-Gazzawi, both Saudi nationals.
Because it was almost morning when they returned to
their hotels, they agreed to have breakfast together at
the room of Thamer. When they were in te (sic) room,
Allah left on some pretext. Shortly after he did, Thamer
attempted to rape plaintiff. Fortunately, a roomboy and
several security personnel heard her cries for help and
rescued her. Later, the Indonesian police came and
arrested Thamer and Allah Al-Gazzawi, the latter as an
accomplice.
In Jakarta, SAUDIA Legal Officer Sirah Akkad and base
manager Baharini negotiated with the police for the
immediate release of the detained crew members but
did not succeed because plaintiff refused to cooperate.
She was afraid that she might be tricked into something
she did not want because of her inability to understand
the local dialect. She also declined to sign a blank
paper and a document written in the local dialect.
SAUDIA allowed plaintiff to return to Jeddah but barred
her from the Jakarta flights. The Indonesian authorities
agreed to deport Thamer and Allah after two weeks of
detention. Eventually, they were again put in service by
defendant SAUDI. Defendant SAUDIA transferred
plaintiff to Manila. Just when plaintiff thought that the
Jakarta incident was already behind her, her superiors
requested her to see Mr. Ali Meniewy, Chief Legal
Officer of SAUDIA, in Jeddah, Saudi Arabia. When she
saw him, he brought her to the police station where the
police took her passport and questioned her about the
Jakarta incident. One year and a half later, in Riyadh,
Saudi Arabia, a few minutes before the departure of her
flight to Manila, plaintiff was not allowed to board the
plane and instead ordered to take a later flight to
Jeddah to see Mr. Miniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was
asked to sign a document written in Arabic. They told
her that this was necessary to close the case against
Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court. Plaintiff then
returned to Manila. Defendant SAUDIA summoned
plaintiff to report to Jeddah once again and see Miniewy
for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manager, Aslam
Saleemi, that the investigation was routinary and that it
posed no danger to her. A Saudi judge interrogated
plaintiff through an interpreter about the Jakarta
incident. After one hour of interrogation, they let her go.
At the airport, however, just as her plane was about to
take off, a SAUDIA officer told her that the airline had
forbidden her to take flight. To her astonishment and
shock, the court rendered a decision, translated to her
in English, sentencing her to 5 months imprisonment
and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and
Allah, for what happened in Jakarta. The court found
plaintiff guilty of (1) adultery; (2) going to a disco,
dancing and listening to the music in violation of Islamic
laws; and (3) socializing with the male crew, in
contravention of Islamic tradition.
Private respondent sought the help of her employer,
petitioner SAUDIA. Unfortunately, she was denied any
assistance. Because she was wrongfully convicted, the
Prince of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. She was terminated
from the service by SAUDIA, without her being
informed of the cause. Morada filed a Complaint for
damages against SAUDIA, and Khaled Al-Balawi ("Al-
Balawi"), its country manager. SAUDIA alleged that the
trial court has no jurisdiction to hear and try the case on
the basis of Article 21 of the Civil Code, since the
proper law applicable is the law of the Kingdom of
Saudi Arabia.
HELD: Petitioner SAUDIA claims that before us is a
conflict of laws that must be settled at the outset. It
maintains that private respondent's claim for alleged
abuse of rights occurred in the Kingdom of Saudi
Arabia. It alleges that the existence of a foreign element
qualifies the instant case for the application of the law
of the Kingdom of Saudi Arabia, by virtue of the lex loci
delicti commissi rule. 34 Private respondent contends
that since her Amended Complaint is based on Articles
19 35 and 21 36 of the Civil Code, then the instant case is
properly a matter of domestic law. Where the factual
antecedents satisfactorily establish the existence of a
foreign element, we agree with petitioner that the
problem herein could present a "conflicts" case. A
factual situation that cuts across territorial lines and is

affected by the diverse laws of two or more states is
said to contain a "foreign element". The foreign element
may simply consist in the fact that one of the parties to
a contract is an alien or has a foreign domicile, or that a
contract between nationals of one State involves
properties situated in another State. In other cases, the
foreign element may assume a complex form. 42In the
instant case, the foreign element consisted in the fact
that private respondent Morada is a resident Philippine
national, and that petitioner SAUDIA is a resident
foreign corporation. A conflicts problem presents itself
here, and the question of jurisdiction 43 confronts the
court a quo.
Article 19 of the New Civil Code provides: Every person
must, in the exercise of his rights and in the
performance of his duties, act with justice give
everyone his due and observe honesty and good faith.
Article 21 of the New Civil Code provides: Any person
who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or
public policy shall compensate the latter for damages.
(RTC) of Quezon City possesses jurisdiction over the
subject matter of the suit. 48 Its authority to try and hear
the case is provided for under Section 1 of Republic Act
No. 7691, to wit: Sec. 1. Section 19 of Batas Pambansa
Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980", is hereby amended to
read as follows: Jurisdiction in Civil Cases. — Regional
Trial Courts shall exercise exclusive jurisdiction: (8) In
all other cases in which demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation
expenses, and cots or the value of the property in
controversy exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the above-mentioned
items exceeds Two hundred Thousand pesos
(P200,000.00). (Emphasis ours)
And following Section 2 (b), Rule 4 of the Revised
Rules of Court — the venue, Quezon City, is
appropriate: Venue in Courts of First Instance. — [Now
Regional Trial Court] (b) Personal actions. — All other
actions may be commenced and tried where the
defendant or any of the defendants resides or may be
found, or where the plaintiff
2
Pragmatic considerations, including the convenience of
the parties, also weigh heavily in favor of the RTC
Quezon City assuming jurisdiction. Paramount Plaintiff
may not, by choice of an inconvenient forum, "vex",
"harass", or "oppress" the defendant, e.g. by inflicting
upon him needless expense or disturbance. But unless
the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed. 49
By hearing the case in the Philippines no unnecessary
difficulties and inconvenience have been shown by
either of the parties. The choice of forum of the plaintiff
(now private respondent) should be upheld. The trial
court also possesses jurisdiction over the persons of
the parties herein. By filing her Complaint and
Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the
jurisdiction of the court. Petitioner SAUDIA has
effectively submitted to the trial court's jurisdiction by
praying for the dismissal of the Amended Complaint on
grounds other than lack of jurisdiction. If his motion is
for any other purpose than to object to the jurisdiction of
the court over his person, he thereby submits himself to
the jurisdiction of the court.
Clearly, petitioner had submitted to the jurisdiction of
the Regional Trial Court of Quezon City. Thus, we find
that the trial court has jurisdiction over the case and
that its exercise thereof, justified.
As to the choice of applicable law, we note that choice-
of-law problems seek to answer two important
questions: (1) What legal system should control a given
situation where some of the significant facts occurred in
two or more states; and (2) to what extent should the
chosen legal system regulate the situation. 53
Before a choice can be made, it is necessary for us to
determine under what category a certain set of facts or
rules fall. This process is known as "characterization",
or the "doctrine of qualification". It is the "process of
deciding whether or not the facts relate to the kind of
question specified in a conflicts rule." 55 The purpose of
"characterization" is to enable the forum to select the
proper law. An essential element of conflict rules is the
indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract
claim) and a connecting factor or point of contact, such

as the situs of the res, the place of celebration, the
place of performance, or the place of wrongdoing.
There is reasonable basis for private respondent's
assertion that although she was already working in
Manila, petitioner brought her to Jeddah on the
pretense that she would merely testify in an
investigation of the charges she made against the two
SAUDIA crew members for the attack on her person
while they were in Jakarta. There is likewise logical
basis on record for the claim that the "handing over" or
"turning over" of the person of private respondent to
Jeddah officials, petitioner may have acted beyond its
duties as employer. Petitioner's purported act
contributed to and amplified or even proximately
caused additional humiliation, misery and suffering of
private respondent.
Considering that the complaint in the court a quo is one
involving torts, the "connecting factor" or "point of
contact" could be the place or places where the tortious
conduct or lex loci actus occurred. And applying the
torts principle in a conflicts case, we find that the
Philippines could be said as a situs of the tort (the place
where the alleged tortious conduct took place). This is
because it is in the Philippines where petitioner
allegedly deceived private respondent, a Filipina
residing and working here. That certain acts or parts of
the injury allegedly occurred in another country is of no
moment. What is important here is the place where the
over-all harm or the totality of the alleged injury to the
person, reputation, social standing and human rights of
complainant, had lodged, according to the plaintiff
below (herein private respondent). All told, it is not
without basis to identify the Philippines as the situs of
the alleged tort.
"State of the most significant relationship" rule (ICDR) -
In applying said principle to determine the State which
has the most significant relationship, the following
contacts are to be taken into account and evaluated
according to their relative importance with respect to
the particular issue: (a) the place where the injury
occurred; (b) the place where the conduct causing the
injury occurred; (c) the domicile, residence, nationality,
place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any,
between the parties is centered.
3
There is basis for the claim that over-all injury occurred
and lodged in the Philippines. There is likewise no
question that private respondent is a resident Filipina
national, working with petitioner, a resident foreign
corporation engaged here in the business of
international air carriage. Thus, the "relationship"
between the parties was centered here, that the
Philippines is the situs of the tort complained of and the
place "having the most interest in the problem", the
Philippine law on tort liability should have paramount
application to and control in the resolution of the legal
issues arising out of this case. The respondent
Regional Trial Court has jurisdiction over the parties
and the subject matter of the complaint; the appropriate
venue is in Quezon City, which could properly apply
Philippine law. the Philippines is the state intimately
concerned with the ultimate outcome of the case below,
not just for the benefit of all the litigants, but also for the
vindication of the country's system of law and justice in
a transnational setting. Milagros P. Morada vs. Saudi
Arabia Airlines" is hereby REMANDED to Regional Trial
Court of Quezon City,
CHRISTENSEN vs. AZNAR (1963) – California,
international football, renvoi
FACTS: Edward S. Christensen, though born in New
York, migrated to California where he resided and
consequently was considered a California Citizen for a
period of nine years to 1913. He came to the
Philippines where he became a domiciliary until the
time of his death. However, during the entire period of
his residence in this country, he had always considered
himself as a citizen of California. In his will, executed on
March 5, 1951, he instituted an acknowledged natural
daughter, Maria Lucy Christensen as his only heir but
left a legacy of some money in favor of Helen
Christensen Garcia who, in a decision rendered by the
Supreme Court had been declared as an acknowledged
natural daughter of his. Counsel of Helen claims that
under Art. 16 (2) of the civil code, California law should
be applied, the matter is returned back to the law of
domicile, that Philippine law is ultimately applicable,
that the share of Helen must be increased in view of
successional rights of illegitimate children under
Philippine laws. On the other hand, counsel for
daughter Maria , in as much that it is clear under Art, 16
(2) of the Mew Civil Code, the national of the deceased
must apply, our courts must apply internal law of
California on the matter. Under California law, there are

no compulsory heirs and consequently a testator should
dispose any property possessed by him in absolute
dominion. Whether Philippine Law or California Law
should apply.
HELD: The Supreme Court deciding to grant more
successional rights to Helen Christensen Garcia said in
effect that there be two rules in California on the matter.
1. The conflict rule which should apply to Californian’s
outside the California, and 2. The internal Law which
should apply to California domiciles in califronia.
The California conflict rule, found on Art. 946 of the
California Civil code States that “if there is no law to the
contrary in the place where personal property is
situated, it is deemed to follow the decree of its owner
and is governed by the law of the domicile.”
Christensen being domiciled outside california, the law
of his domicile, the Philippines is ought to be followed.
Wherefore, the decision appealed is reversed and case
is remanded to the lower court with instructions that
partition be made as that of the Philippine law provides
It is argued on appellees' 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
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Philippines, makes natural children legally
acknowledged forced heirs of the parent recognizing
them.
GIBBS vs. THE GOVERNMENT OF THE PHILIPPINE
ISLANDS (1933) – California, inheritance tax
FACTS: Allison D. Gibbs has been continuously, since
the year 1902, a citizen of the State of California and
domiciled therein. He and Eva Johnson Gibbs were
married at Columbus, Ohio, in July 1906. There was no
antenuptial marriage contract between the parties.
During the existence of said marriage the spouses
acquired lands in the Philippine Islands as conjugal
property. Eva Johnson Gibbs later died intestate in Palo
Alto, California, on November 28, 1929. At the time of
her death she and her husband were citizens of the
State of California and domiciled therein. Allison D.
Gibbs was appointed administrator of the estate of his
said deceased wife. Allison D. Gibbs filed an ex parte
petition in which he alleged that his wife, a citizen and
resident of California, died on November 28,1929; that
in accordance with the law of California, the community
property of spouses who are citizens of California, upon
the death of the wife previous to that of the husband,
belongs absolutely to the surviving husband without
administration; that the conjugal partnership of Allison
D. Gibbs and Eva Johnson Gibbs, deceased, has no
obligations or debts and no one will be prejudiced by
adjucating said parcels of land to the absolute property
of the said Allison D. Gibbs as sole owner. The court
granted said petition and entered a decree adjucating
Allison D. Gibbs to be the sole and absolute owner of
said lands, applying section 1401 of the Civil Code of
California. Gibbs presented this decree to the register
of deeds of Manila and demanded that the latter issue
to him a "transfer certificate of title".
Section 1547 of Article XI of Chapter 40 of the
Administrative Code provides in part that: Registers of
deeds shall not register in the registry of property any
document transferring real property or real rights
therein or any chattel mortgage, by way of gifts mortis
causa, legacy or inheritance, unless the payment of the
tax fixed in this article and actually due thereon shall be
shown. And they shall immediately notify the Collector
of Internal Revenue or the corresponding provincial
treasurer of the non payment of the tax discovered by

them. . . . Acting upon the authority of said section, the
register of deeds of the City of Manila, declined to
accept as binding said decree of court and refused to
register the transfer of title of the said conjugal property
to Allison D. Gibbs, on the ground that the
corresponding inheritance tax had not been paid.
Allison D. Gibbs filed in the said court a petition for an
order requiring the said register of deeds "to issue the
corresponding titles" to the petitioner without requiring
previous payment of any inheritance tax. After due
hearing of the parties, the court reaffirmed said order.
Supreme court remanded the case to the court of origin
for new trial upon additional evidence in regard to the
pertinent law of California in force at the time of the
death of Mrs. Gibbs, also authorizing the introduction of
evidence with reference to the dates of the acquisition
of the property involved in this suit and with reference to
the California law in force at the time of such
acquisition. The case is now before us with the
supplementary evidence. Article XI of Chapter 40 of the
Administrative Code entitled "Tax on inheritances,
legacies and other acquisitions mortis causa" provides
in section 1536 that "Every transmission by virtue of
inheritance ... of real property ... shall be subject to the
following tax."
Issue: Was Eva Johnson Gibbs at the time of her death
the owner of a descendible interest in the Philippine
lands above-mentioned?
Contention of the Appellee: The appellee contends that
the law of California should determine the nature and
extent of the title, if any, that vested in Eva Johnson
Gibbs under the three certificates of title Nos. 20880,
28336 and 28331 above referred to, citing article 9 of
the Civil Code. But that, even if the nature and extent of
her title under said certificates be governed by the law
of the Philippine Islands, the laws of California govern
the succession to such title, citing the second
paragraph of article 10 of the Civil Code.
Appellant's chief argument and the sole basis of the
lower court's decision rests upon the second paragraph
of article 10 of the Civil Code which is as follows:
Nevertheless, legal and testamentary successions, in
respect to the order of succession as well as to the
amount of the successional rights and the intrinsic
validity of their provisions, shall be regulated by the
national law of the person whose succession is in
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question, whatever may be the nature of the property or
the country in which it may be situated.
Decision: The trial court found that under the law of
California, upon the death of the wife, the entire
community property without administration belongs to
the surviving husband; that he is the absolute owner of
all the community property from the moment of the
death of his wife, not by virtue of succession or by
virtue of her death, but by virtue of the fact that when
the death of the wife precedes that of the husband he
acquires the community property, not as an heir or as
the beneficiary of his deceased wife, but because she
never had more than an inchoate interest or
expentancy which is extinguished upon her death. The
argument of the appellee apparently leads to this
dilemma: If he takes nothing by succession from his
deceased wife, how can the second paragraph of article
10 be invoked? Can the appellee be heard to say that
there is a legal succession under the law of the
Philippine Islands and no legal succession under the
law of California?
It seems clear that the second paragraph of article 10
applies only when a legal or testamentary succession
has taken place in the Philippines and in accordance
with the law of the Philippine Islands; and the foreign
law is consulted only in regard to the order of
succession or the extent of the successional rights. The
second paragraph of article 10 can be invoked only
when the deceased was vested with a descendible
interest in property within the jurisdiction of the
Philippine Islands. In the case of Clarke vs. Clarke the
court said: It is principle firmly established that to the
law of the state in which the land is situated we must
look for the rules which govern its descent, alienation,
and transfer, and for the effect and construction of wills
and other conveyances. This fundamental principle is
stated in the first paragraph of article 10 of our Civil
Code as follows: "Personal property is subject to the
laws of the nation of the owner thereof; real property to
the laws of the country in which it is situated. It is stated
in 5 Cal. Jur., 478: In accord with the rule that real
property is subject to the lex rei sitae, the respective
rights of husband and wife in such property, in the
absence of an antenuptial contract, are determined by
the law of the place where the property is situated,
irrespective of the domicile of the parties or to the place
where the marriage was celebrated. Under this broad
principle, the nature and extent of the title which vested

in Mrs. Gibbs at the time of the acquisition of the
community lands here in question must be determined
in accordance with the lex rei sitae.
It is admitted that the Philippine lands here in question
were acquired as community property of the conjugal
partnership of the appellee and his wife. Under the law
of the Philippine Islands, she was vested of a title equal
to that of her husband. Article 1407 of the Civil Code
provides: All the property of the spouses shall be
deemed partnership property in the absence of proof
that it belongs exclusively to the husband or to the wife.
Article 1395 provides:
"The conjugal partnership shall be governed by the
rules of law applicable to the contract of partnership in
all matters in which such rules do not conflict with the
express provisions of this chapter." Article 1414
provides that "the husband may dispose by will of his
half only of the property of the conjugal partnership."
Article 1426 provides that upon dissolution of the
conjugal partnership and after inventory and liquidation,
"the net remainder of the partnership property shall be
divided share and share alike between the husband
and wife, or their respective heirs." Under the provisions
of the Civil Code and the jurisprudence prevailing here,
the wife, upon the acquisition of any conjugal property,
becomes immediately vested with an interest and title
therein equal to that of her husband, subject to the
power of management and disposition which the law
vests in the husband. Immediately upon her death, if
there are no obligations of the decedent, as is true in
the present case, her share in the conjugal property is
transmitted to her heirs by succession. It results that the
wife of the appellee was, by the law of the Philippine
Islands, vested of a descendible interest, equal to that
of her husband, in the Philippine lands covered by
certificates of title Nos. 20880, 28336 and 28331, from
the date of their acquisition to the date of her death.
That appellee himself believed that his wife was vested
of such a title and interest in manifest from the second
of said certificates, No. 28336, dated May 14, 1927,
introduced by him in evidence, in which it is certified
that "the spouses Allison D. Gibbs and Eva Johnson
Gibbs are the owners in fee simple of the conjugal
lands therein described."
The descendible interest of Eva Johnson Gibbs in the
lands aforesaid was transmitted to her heirs by virtue of
inheritance and this transmission plainly falls within the
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language of section 1536 of Article XI of Chapter 40 of
the Administrative Code which levies a tax on
inheritances. The record does not show what the proper
amount of the inheritance tax in this case would be nor
that the appellee (petitioner below) in any way
challenged the power of the Government to levy an
inheritance tax or the validity of the statute under which
the register of deeds refused to issue a certificate of
transfer reciting that the appellee is the exclusive owner
of the Philippine lands included in the three certificates
of title here involved.
CADALIN, vs. POEA (1994) - amiri decree, bahrain
FACTS: In 1984, Bienvenido M.. Cadalin, et.al, in their
own behalf and on behalf of 728 other overseas
contract workers (OCWs) instituted a class suit by filing
an "Amended Complaint" with the (POEA) for money
claims arising from their recruitment by AIBC and
employment by BRII. It appears that the complainants-
appellants allege that they were recruited by
respondent-appellant AIBC for its accredited foreign
principal, Brown & Root, on various dates from 1975 to
1983. They were all deployed at various projects
undertaken by Brown & Root in several countries in the
Middle East, such as Saudi Arabia, Libya, United Arab
Emirates and Bahrain, as well as in Southeast Asia, in
Indonesia and Malaysia BRII 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 complaint principally
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; refund 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
In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin
Salman Al Kaifa, Amir of Bahrain, issued his Amiri
Decree No. 23 on June 16, 1976, otherwise known as

the Labour Law for the Private Sector (Records, Vol.
18). This decree took effect on August 16, 1976. Some
of the provisions of Amiri Decree No. 23 that are
relevant to the claims of the complainants-appellants.
On January 30, 1989, the POEA Administrator
rendered his decision in POEA Case No. L-84-06-555
and the other consolidated cases, which awarded the
amount of $824,652.44 in favor of only 324
complainants. AIBC and BRII appealed the decision to
the NLRC. NLRC affirmed the decision of the POEA
with modifications. It held that the Amiri Decree No. 23
applied only to the claimants, who worked in Bahrain,
and set aside awards of the POEA Administrator in
favor of the claimants, who worked elsewhere. It ruled
that the prescriptive period for the filing of the claims of
the complainants was three 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.
ISSUE: 1. whether it is the Bahrain law on prescription
of action based on the Amiri Decree No. 23 of 1976 or
a Philippine law on prescription that shall be the
governing law 2. Whether the claimants are entitled to
the benefits provided by Amiri Decree No. 23
HELD:
Article 156 of the Amiri Decree No. 23 of 1976
provides: A claim arising out of a contract of
employment shall not be actionable after the lapse of
one year from the date of the expiry of the contract.
(G.R. Nos. 105029-31, Rollo, p. 226). As a general rule,
a foreign procedural law will not be applied in the
forum. 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 (Restatement of the Conflict of Laws,
Sec. 685; Salonga, Private International Law, 131
[1979]). 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. Thus in Bournias v.
Atlantic Maritime Company, supra, 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
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procedural law even in Panama, it has to give way to
the law of the forum on prescription of actions.
However, the characterization of a statute into a
procedural or substantive law becomes irrelevant when
the country of the forum has a "borrowing statute." Said
statute has the practical effect of treating the foreign
statute of limitation as one of substance (Goodrich,
Conflict of Laws 152-153 [1938]). A "borrowing statute"
directs the state of the forum to apply the foreign
statute of limitations to the pending claims based on a
foreign law (Siegel, Conflicts, 183 [1975]). 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 has not run against it (Goodrich
and Scoles, Conflict of Laws, 152-153 [1938]). Section
48 of our Code of Civil Procedure is of this kind. Said
Section 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 Philippines Islands. Section 48 has
not been repealed or amended by the Civil Code of the
Philippines. Article 2270 of said Code repealed only
those provisions of the Code of Civil Procedures as to
which were inconsistent with it. There is no provision in
the Civil Code of the Philippines, which is inconsistent
with or contradictory to Section 48 of the Code of Civil
Procedure (Paras, Philippine Conflict of Laws 104 [7th
ed.]). In the light of the 1987 Constitution, however,
Section 48 cannot be enforced ex proprio vigore(By its
own inherent force.) 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 will not enforce
any foreign claim obnoxious to the forum's public policy
(Canadian Northern Railway Co. v. Eggen, 252 U.S.
553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). 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.
NLRC applied the Amiri Decree 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 quoted with approval 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" ( Rollo,
pp. 90-94). AIBC and BRII claim that NLRC acted
capriciously and whimsically when it refused to enforce
the overseas-employment contracts, which became the
law of the parties. They contend that the principle that a
law is deemed to be a part of a contract applies only to
provisions of Philippine law in relation to contracts
executed in the Philippines.
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 that those stipulated therein. While a part
thereof provides that the compensation to the employee
may be "adjusted downward so that the total
computation (thereunder) plus the non-waivable
benefits shall be equivalent to the compensation"
therein agreed, 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 (Eastern Shipping Lines, Inc. v.
Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
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
8
that reduced their bargaining power (Fieldmen's
Insurance Co., Inc. v. Songco, 25 SCRA 70 [1968]).
Applying the said legal precepts, 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.
VAN DORN vs. ROMILLO (1985) – divorce, Nevada,
accounting & management of business as conjugal
property, no standing to sue as husband after divorce
FACTS: Alice Van Dorn is a citizen of the Philippines
while Richard Upton is a citizen of the United States.
They were married in Hongkong in 1972 and they
established their residence in the Philippines. Alice and
Richard had two children. But then the parties were
divorced in Nevada, United States, in 1982. Alice Van
Dorn has re-married also in Nevada, this time to
Theodore Van Dorn. Upton filed suit against petitioner
in Civil Case No. 1075-P of the Regional Trial Court, in
Pasay City, stating that petitioner's business in Ermita,
Manila, (the Galleon Shop), is conjugal property of the
parties, and asking that petitioner be ordered to render
an accounting of that business, and that private
respondent be declared with right to manage the
conjugal property. Van Dorn moved to dismiss the case
on the ground that the cause of action is barred by
previous judgment in the divorce proceedings before
the Nevada Court wherein Upton had acknowledged
that he and petitioner had "no community property" as
of June 11, 1982. The Court below denied the Motion to
Dismiss in the mentioned case on the ground that the
property involved is located in the Philippines so that
the Divorce Decree has no bearing in the case.
Issue: Whether or not the divorce obtain by the parties
in Nevada is valid
Ruling: Yes, the divorce obtain in Nevada is valid. The
Nevada District Court, which decreed the divorce, had
obtained jurisdiction over petitioner who appeared in
person before the Court during the trial of the case. It
also obtained jurisdiction over private respondent who,
giving his address as No. 381 Bush Street, San
Francisco, California, authorized his attorneys in the
divorce case, Karp & Gradt Ltd., to agree to the divorce
on the ground of incompatibility in the understanding
that there were neither community property nor
community obligations. There can be no question as to
the validity of that Nevada divorce in any of the States

of the United States. The decree is binding on private
respondent as an American citizen. For instance,
private respondent cannot sue petitioner, as her
husband, in any State of the Union.
Issue: whether or not the divorce is valid and binding in
this jurisdiction, the same being contrary to local law
and public policy.
Ruling: Yes, it is valid in the Philippines. It is true 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 police and
morality. However, aliens may obtain divorces abroad,
which may be recognized in the Philippines, provided
they are valid according to their national law. In this
case, the divorce in Nevada released private
respondent from the marriage from the standards of
American law, under which divorce dissolves the
marriage. Pursuant to his national law, private
respondent is no longer the husband of petitioner. He
would have no standing to sue in the case below as
petitioner's husband entitled to exercise control over
conjugal assets. As he is bound by the Decision of his
own country's Court, which validly exercised jurisdiction
over him, and whose decision he does not repudiate,
he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal
property. To maintain, as private respondent does,
that, under our laws, petitioner has to be considered still
married to private respondent and still subject to a
wife's obligations under Article 109, et. seq. of the Civil
Code cannot be just. The Respondent should not
continue to be one of her heirs with possible rights to
conjugal property. She should not be discriminated
against in her own country if the ends of justice are to
be served.
PILAPIL vs. IBAY-SOMERA (1989) – no legal standing
to sue for adultery after divorce, capacity determined at
TIME OF FILING COMPLAINT
FACTS: In 1979, petitioner Imelda Manalaysay Pilapil,
a Filipino citizen, and private respondent Erich
Ekkehard Geiling, a German national, were married
before the Registrar of Births, Marriages and Deaths at
Friedensweiler in the Federal Republic of Germany. On
January 15, 1986, Division 20 of the Schoneberg Local
Court, Federal Republic of Germany, promulgated a
decree of divorce on the ground of failure of marriage of
9
the spouses. The records show that under German law
said court was locally and internationally competent for
the divorce proceeding and that the dissolution of said
marriage was legally founded on and authorized by the
applicable law of that foreign jurisdiction. 4 On January
27, 1986, private respondent filed two complaints for
adultery before CFI of Manila, alleging that while still
married to him, petitioner had affairs with two other
men. The petition is anchored on the main ground that
the court is without jurisdiction to try and decide the
charge of adultery which is a private offense that cannot
be prosecuted de oficio since the purported
complainant, a foreigner, does not qualify as an
offended spouse having obtained a final decree of
divorce under his national law prior to the filing of the
criminal complaint.
Is the divorce obtained by private respondent valid here
in the Philippines?
Does the private respondent have the legal standing to
sue for adultery?
HELD:
I. YES. The fact that private respondent obtained a
valid divorce in the Federal Republic of Germany is
admitted. Said divorce and its legal effects may be
recognized here in the Philippines insofar as private
respondent is concerned following the nationality
principle in our civil law on the matter of status of
persons. It is true 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. However, aliens
may obtain divorces abroad, which may be recognized
in the Philippines, provided they are valid according to
their national law. Thus, pursuant to his national law,
private respondent is no longer the husband of
petitioner.
II. NO. The status of the complainant vis-à-vis the
accused must be determined as of the time the
complainant was filed. Thus, the person who initiates
the adultery case must be the offended spouse, and by
this is meant that he is still married to the accused
spouse; at the time of the filing of the complaint. The
allegation of private respondent that he could not have
brought this case before the decree of divorce for lack
of knowledge, even if true, is of no legal significance or
consequence in this case. When said respondent

initiated the divorce proceeding, he obviously knew that
there would no longer be a family nor marriage vows to
protect once a dissolution of the marriage is decreed.
Therefore, it is indispensable that the status and
capacity of the complainant to commence the action be
definitely established and, as already demonstrated,
such status or capacity must indubitably exist as of the
time he initiates the action. It would be absurd if his
capacity to bring the action would be determined by his
status before or subsequent to the commencement
thereof, where such capacity or status existed prior to
but ceased before, or was acquired subsequent to but
did not exist at the time of, the institution of the case.
We would thereby have the anomalous spectacle of a
party bringing suit at the very time when he is without
the legal capacity to do so.
LLORENTE vs. CA – divorce, will, new york, renvoi,
intrinsic validity of wills governed by foreign law
(national law of testator), extrinsic validity by phil. Law
(place of execution)
FACTS: Lorenzo N. Llorente, an enlisted serviceman of
the United States and husband of Paula Llorente was
admitted to United States citizenship. When Lorenzo
visited the Philippines, he discovered that his wife
Paula was pregnant and was “living in” and having an
adulterous relationship with his brother, Ceferino
Llorente.
Lorenzo refused to forgive Paula and live with her. In
fact, the couple drew a written agreement to the effect
that (1) all the family allowances allotted by the United
States Navy as part of Lorenzo’s salary and all other
obligations for Paula’s daily maintenance and support
would be suspended; (2) they would dissolve their
marital union in accordance with judicial proceedings;
(3) they would make a separate agreement regarding
their conjugal property acquired during their marital life;
and (4) Lorenzo would not prosecute Paula for her
adulterous act since she voluntarily admitted her fault
and agreed to separate from Lorenzo peacefully. The
agreement was signed by both Lorenzo and Paula and
was witnessed by Paula’s father and stepmother. The
agreement was notarized. Lorenzo returned to the
United States and filed for divorce. The Superior Court
of the State of California, for the County of San Diego
found all factual allegations to be true and issued an
10
interlocutory judgment of divorce. One year after, the
divorce decree became final.
In 1958, Lorenzo married Alicia F. Llorente in Manila.
Their (25) year union produced three children, Raul,
Luz and Beverly, all surnamed Llorente. In 1981,
Lorenzo executed a Last Will and Testament. In the
will, Lorenzo bequeathed all his property to Alicia and
their three children. In 1983, Lorenzo filed a petition for
the probate and allowance of his last will and testament
wherein Lorenzo moved that Alicia be appointed
Special Administratrix of his estate. Finding that the will
was duly executed, the trial court admitted the will to
probate. But before the proceedings could be
terminated, Lorenzo died. Paula filed with the same
court a petition for letters of administration over
Lorenzo’s estate in her favor. Paula contended (1) that
she was Lorenzo’s surviving spouse, (2) that the
various property were acquired during their marriage,
(3) that Lorenzo’s will disposed of all his property in
favor of Alicia and her children, encroaching on her
legitime and 1/2 share in the conjugal property. Alicia
filed in the testate proceeding, a petition for the
issuance of letters testamentary. Without terminating
the testate proceedings, the trial court gave due course
to Paula’s petition.
The Regional Trial Court decided that the divorce
decree granted to the late Lorenzo Llorente is void and
inapplicable in the Philippines, therefore the marriage
he contracted with Alicia Fortunato is likewise void.
This being so the petition of Alicia F. Llorente for the
issuance of letters testamentary was denied. She was
not entitled to receive any share from the estate even if
the will especially said so her relationship with Lorenzo
having gained the status of paramour which is under
Art. 739 (1). Also, the court declared the intrinsic
disposition of the will of Lorenzo Llorente as void and
declared Paula entitled as conjugal partner and entitled
to one-half of their conjugal properties, and as primary
compulsory heir, also entitled to one-third of the estate
and then one-third should go to the illegitimate children,
Raul, Luz and Beverly, all surname (sic) Llorente, for
them to partition in equal shares and also entitled to the
remaining free portion in equal shares. Alicia Llorente
appealed to the Court of Appeals, which affirmed the
lower court’s decision with modification that Alicia is
declared as co-owner of whatever properties she and
the deceased may have acquired during the (25) years
of cohabitation.

Issue: Was the divorce valid?
Ruling: Yes. The fact that the late Lorenzo N. Llorente
became an American citizen long before and at the time
of: (1) his divorce from Paula; (2) marriage to Alicia; (3)
execution of his will; and (4) death, is duly established,
admitted and undisputed. Thus, as a rule, issues arising
from these incidents are necessarily governed by
foreign law.
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.” (emphasis ours)
True, foreign laws do not prove themselves in our
jurisdiction and our courts are not authorized to take
judicial notice of them. Like any other fact, they must
be alleged and proved. While the substance of the
foreign law was pleaded, the Court of Appeals did not
admit the foreign law. The Court of Appeals and the
trial court called to the fore the renvoi doctrine, where
the case was “referred back” to the law of the
decedent’s domicile, in this case, Philippine law. We
note that while the trial court stated that the law of New
York was not sufficiently proven, in the same breath it
made the categorical, albeit equally unproven
statement that “American law follows the ‘domiciliary
theory’ hence, Philippine law applies when determining
the validity of Lorenzo’s will.
First, there is no such thing as one American law. 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
11
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. 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.
GARCIA vs. RECIO (2001) – Australia divorce, party
pleading foreign divorce decree, must prove: (1) the
foreign law allowing absolute divorce and (2) the
alleged divorce decree itself, absolute divorce vs limited
divorce, bigamy
FACTS: Respondent Recio (Filipino citizen at that time)
was married to Samson (Australian citizen) in Malabon
in 1987. They lived together as husband and wife in
Australia. In 1989, a decree of divorce was issued by
an Australian family court. In 1992, respondent became
an Australian citizen. Petitioner Garcia (Filipina) and
respondent were married in 1994 in Cabanatuan
12
City. In their application for a marriage license,
respondent was declared as "single" and "Filipino."
Starting 1995, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage. In 1998, petitioner filed a Complaint for
Declaration of Nullity of Marriage in the court a quo, on
the ground of bigamy – respondent allegedly had a
prior subsisting marriage at the time he married her in
1994. She claimed that she learned of respondent's
marriage to Samson only in 1997. Respondent averred
that, as far back as 1993, he had revealed to petitioner
his prior marriage and its subsequent dissolution. He
contended that his first marriage to an Australian citizen
had been validly dissolved by a divorce decree
obtained in Australian in 1989; thus, he was legally
capacitated to marry petitioner in 1994. In 1998 (while
the suit for declaration of nullity was pending)
respondent was able to secure a divorce decree from a
family court in Australia.
The trial court declared the marriage dissolved on the
ground that the divorce issued in Australia was valid
and recognized in the Philippines. Hence, this Petition.
HELD: A divorce obtained abroad by an alien may be
recognized in our jurisdiction, provided such decree is
valid according to the national law of the foreigner.
However, the divorce decree and the governing
personal law of the alien spouse who obtained the
divorce must be proven. Our courts do not take judicial
notice of foreign laws and judgment; hence, like any
other facts, both the divorce decree and the national
law of the alien must be alleged and proven according
to our law on evidence. Philippine law does not provide
for absolute divorce; hence, our courts cannot grant
it. A marriage between two Filipinos cannot be
dissolved even by a divorce obtained abroad, because
of Articles 15 and 17 of the Civil Code. In mixed
marriages involving a Filipino and a foreigner, Article
26 of the Family Code allows the former to contract a
subsequent marriage in case the divorce is "validly
obtained abroad by the alien spouse capacitating him
or her to remarry." A divorce obtained abroad by a
couple, who are both aliens, may be recognized in the
Philippines, provided it is consistent with their
respective national laws. Before a foreign divorce
decree can be recognized by our courts, the party
pleading it must prove: (1) the foreign law allowing

absolute divorce and (2) the alleged divorce decree
itself.
Divorce as a Question of Fact
Before a foreign judgment is given presumptive
evidentiary value (authenticity and due execution), the
document (divorce decree) must first be presented and
admitted in evidence.30 A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best
evidence of a judgment is the judgment itself.
Under Sections 24 and 25 of Rule 132, on the other
hand, a writing or document may be proven as a public
or official record of a foreign country by either (1) an
official publication or (2) a copy thereof attested by the
officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be
(a) accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the
record is kept and (b) authenticated by the seal of his
office. Compliance with the aforementioned rules on
evidence must be demonstrated.
Fortunately for respondent, when the 1989 divorce
decree was submitted in evidence, counsel for
petitioner objected, not to its admissibility, but only to
the fact that it had not been registered in the Local Civil
Registry (as required by Art. 52 of the Family
Code). Petitioner's failure to object properly rendered
the divorce decree admissible as a written act of the
Family Court of Australia.
Compliance with Articles 11, 13 and 52 (registration
requirements) of the Family Code (as contended by
petitioner) is not necessary; respondent was no longer
bound by Philippine personal laws after he acquired
Australian citizenship in 1992. By becoming an
Australian (naturalization), respondent severed his
allegiance to the Philippines and the vinculum juris that
had tied him to Philippine personal laws. Since the
divorce was a defense (in action for Declaration of
Nullity of Marriage on the ground of bigamy) raised by
respondent, the burden of proving the pertinent
Australian law validating it falls squarely upon him. Our
courts cannot take judicial notice of foreign laws. Like
any other facts, they must be alleged and proved.
Respondent's Legal Capacity to Remarry
13
Divorces are of different types. The two basic ones are
(1) absolute divorce or a vinculo matrimonii and (2)
limited divorce or a mensa et thoro. The first kind
terminates the marriage, while the second suspends it
and leaves the bond in full force. There is no showing in
the case at bar which type of divorce was procured by
respondent. Respondent presented a decree nisi or an
interlocutory decree – a conditional or provisional
judgment of divorce. It is in effect the same as a
separation from bed and board, although an absolute
divorce may follow after the lapse of the prescribed
period during which no reconciliation is effected. On its
face, the herein 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 divorce
obtained by respondent may have been restricted. It did
not absolutely establish his legal capacity to remarry
according to his national law. Hence, we 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.
Significance of the Certificate of Legal Capacity (as
required by Article 21 of the Family Code)
The legal capacity to contract marriage is determined
by the national law of the party concerned. The
certificate mentioned in Article 21 of the Family Code
would have been sufficient to establish the legal
capacity of respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is
prima facie evidence of legal capacity to marry on the
part of the alien applicant for a marriage license.
There is absolutely no evidence that proves
respondent's legal capacity to marry petitioner. We
cannot conclude that respondent, who was then a
naturalized Australian citizen, was legally capacitated to
marry petitioner in 1994. Court a quo erred in finding
that the divorce decree ipso facto clothed respondent
with the legal capacity to remarry without requiring him
to adduce sufficient evidence to show the Australian
personal law governing his status; or at the very least,
to prove his legal capacity to contract the second
marriage.

Neither can we grant petitioner's prayer to declare her
marriage to respondent null and void on the ground of
bigamy. After all, it may turn out that under Australian
law, he was really capacitated to marry petitioner as a
direct result of the divorce decree. Hence, we believe
that the most judicious course is to REMAND this case
to the trial court to receive evidence, if any, which show
petitioner's legal capacity to marry petitioner. Failing in
that, then the court a quo may declare a nullity of the
parties' marriage on the ground of bigamy, there being
already in evidence two existing marriage certificates,
which were both obtained in the Philippines, one in
Malabon, Metro Manila dated 1987 and the other, in
Cabanatuan City dated 1994.
REPUBLIC vs. IYOY (2005) - Fely herself admitted in
her Answer filed before the RTC: obtained divorce in
1984, she married her American husband in 1985,
American citizen ONLY since 1988. At the time she
filed for divorce, Fely was still a Filipino citizen,
pursuant to the nationality principle embodied in Article
15 of the Civil Code, she was still bound by Philippine
laws
FACTS: The proceedings before the RTC commenced
with the filing of a Complaint for declaration of nullity of
marriage by respondent Crasus in 1997. According to
the said Complaint, respondent Crasus married Fely in
1961 in Cebu City. In 1984, Fely left the Philippines for
the United States, leaving all of their five children, to the
care of respondent Crasus. Sometime in 1985,
respondent Crasus learned, through the letters sent by
Fely to their children, that Fely got married to an
American, with whom she eventually had a child. At the
time the Complaint was filed, it had been 13 years since
Fely left and abandoned respondent Crasus, and there
was no more possibility of reconciliation between them.
Respondent Crasus finally alleged in his Complaint that
Fely’s acts brought danger and dishonor to the family,
and clearly demonstrated her psychological incapacity
to perform the essential obligations of marriage. Such
incapacity, being incurable and continuing, constitutes a
ground for declaration of nullity of marriage under
Article 36, in relation to Articles 68, 70, and 72, of the
Family Code. Not long after, RTC promulgated its
Judgment declaring the marriage of respondent Crasus
and Fely null and void ab initio.
The RTC rendered the decision rationating, to wit:
Article 26 of the Family Code provides: “Art. 26. All
14
marriages solemnized outside the Philippines in
accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited
under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
“WHERE A MARRIAGE BETWEEN A FILIPINO
CITIZEN AND A FOREIGNER IS VALIDLY
CELEBRATED AND A DIVORCE IS THEREAFTER
VALIDLY OBTAINED ABROAD BY THE ALIEN
SPOUSE CAPACITATING HIM OR HER TO
REMARRY, THE FILIPINO SPOUSE SHALL
LIKEWISE HAVE CAPACITY TO REMARRY UNDER
PHILIPPINE LAW.” The rationale behind the second
paragraph of the above-quoted provision is to avoid the
absurd and unjust situation of a Filipino citizen still
being married to his or her alien spouse, although the
latter is no longer married to the Filipino spouse
because he or she has obtained a divorce abroad. In
the case at bench, the defendant has undoubtedly
acquired her American husband’s citizenship and thus
has become an alien as well. This Court cannot see
why the benefits of Art. 26 aforequoted can not be
extended to a Filipino citizen whose spouse eventually
embraces another citizenship and thus becomes herself
an alien. CA affirmed the decision of the RTC.
Issue: Whether or not par. 2 of Art. 26 of the Family
Code is finds application to the case at bar.
HELD: As it is worded, Article 26, paragraph 2, refers to
a special situation wherein one of the couple getting
married is a Filipino citizen and the other a foreigner at
the time the marriage was celebrated. By its plain and
literal interpretation, the said provision cannot be
applied to the case of respondent Crasus and his wife
Fely because at the time Fely obtained her divorce, she
was still a Filipino citizen. Although the exact date was
not established, Fely herself admitted in her Answer
filed before the RTC that she obtained a divorce from
respondent Crasus sometime after she left for the
United States in 1984, after which she married her
American husband in 1985. In the same Answer, she
alleged that she had been an American citizen since
1988. At the time she filed for divorce, Fely was still a
Filipino citizen, and pursuant to the nationality principle
embodied in Article 15 of the Civil Code of the
Philippines, she was still bound by Philippine laws on
family rights and duties, status, condition, and legal
capacity, even when she was already living abroad.
Philippine laws, then and even until now, do not allow

and recognize divorce between Filipino spouses. Thus,
Fely could not have validly obtained a divorce from
respondent Crasus.
REPUBLIC vs. ORBECIDO - Paragraph 2 of Article 26
should be interpreted to include cases involving parties
who, at the time of the celebration of the marriage were
Filipino citizens, but later on, one of them becomes
naturalized as a foreign citizen and obtains a divorce
decree. The Filipino spouse should likewise be allowed
to remarry as if the other party were a foreigner at the
time of the solemnization of the marriage.
FACTS: In 1981, Cipriano Orbecido III married Lady
Myros M. Villanueva in Ozamis City. In 1986,
Cipriano’s wife left for the United States. A few years
later, Cipriano discovered that his wife had been
naturalized as an American citizen. Sometime in 2000,
Cipriano learned from his son that his wife had obtained
a divorce decree and then married a certain Innocent
Stanley. Cipriano thereafter filed with the trial court a
petition for authority to remarry invoking Paragraph 2 of
Article 26 of the Family Code. No opposition was filed.
Finding merit in the petition, the court granted the
same. The Republic, herein petitioner, through the
(OSG), sought reconsideration but it was denied. The
OSG contends that Paragraph 2 of Article 26 of the
Family Code is not applicable to the instant case
because it only applies to a valid mixed marriage; that
is, a marriage celebrated between a Filipino citizen and
an alien. Furthermore, the OSG argues there is no law
that governs respondent’s situation. The OSG posits
that this is a matter of legislation and not of judicial
determination. This case concerns the applicability of
Paragraph 2 of Article 26 to a marriage between two
Filipino citizens where one later acquired alien
citizenship, obtained a divorce decree, and remarried
while in the U.S.A. The interests of the parties are also
adverse, as petitioner representing the State asserts its
duty to protect the institution of marriage while
respondent, a private citizen, insists on a declaration of
his capacity to remarry.
Issue: Does Paragraph 2 of Article 26 of the Family
Code apply to the case of respondent? Pero ang issue
nga related sa atong subject kay murag related sa how
can a foreign divorce decree be recognized in our
courts? Para conflict2x of laws kunuhay. Given a valid
marriage between two Filipino citizens, where one party
is later naturalized as a foreign citizen and obtains a
valid divorce decree capacitating him or her to remarry,
15
can the Filipino spouse likewise remarry under
Philippine law?
HELD: ART. 26. All marriages solemnized outside the
Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as
such, shall also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and (6), 36, 37
and 38. Where a marriage between a Filipino citizen
and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law.
(Emphasis supplied)
The instant case is one where at the time the marriage
was solemnized, the parties were two Filipino citizens,
but later on, the wife was naturalized as an American
citizen and subsequently obtained a divorce granting
her capacity to remarry, and indeed she remarried an
American citizen while residing in the U.S.A. Records of
the proceedings of the Family Code deliberations
showed that the intent of Paragraph 2 of Article 26,
according to Judge Sempio-Dy, is to avoid the absurd
situation where the Filipino spouse remains married to
the alien spouse who, after obtaining a divorce, is no
longer married to the Filipino spouse. We hold that
Paragraph 2 of Article 26 should be interpreted to
include cases involving parties who, at the time of the
celebration of the marriage were Filipino citizens, but
later on, one of them becomes naturalized as a foreign
citizen and obtains a divorce decree. The Filipino
spouse should likewise be allowed to remarry as if the
other party were a foreigner at the time of the
solemnization of the marriage. To rule otherwise would
be to sanction absurdity and injustice. Where the
interpretation of a statute according to its exact and
literal import would lead to mischievous results or
contravene the clear purpose of the legislature, it
should be construed according to its spirit and reason,
disregarding as far as necessary the letter of the law. A
statute may therefore be extended to cases not within
the literal meaning of its terms, so long as they come
within its spirit or intent.
In view of the foregoing, we state the twin elements for
the application of Paragraph 2 of Article 26 as follows:
1. There is a valid marriage that has been
celebrated between a Filipino citizen and a
foreigner; and

2. A valid divorce is obtained abroad by the
alien spouse capacitating him or her to
remarry.
The reckoning point is not the citizenship of the parties at
the time of the celebration of the marriage, but their
citizenship at the time a valid divorce is obtained abroad
by the alien spouse capacitating the latter to remarry. In
this case, when Cipriano’s wife was naturalized as an
American citizen, there was still a valid marriage that
has been celebrated between her and Cipriano. As fate
would have it, the naturalized alien wife subsequently
obtained a valid divorce capacitating her to remarry.
Clearly, the twin requisites for the application of
Paragraph 2 of Article 26 are both present in this case.
Thus Cipriano, the “divorced” Filipino spouse, should be
allowed to remarry.
However, we note that the records are bereft of
competent evidence duly submitted by respondent
concerning the divorce decree and the naturalization of
respondent’s wife. It is settled rule that one who
alleges a fact has the burden of proving it and mere
allegation is not evidence. Accordingly, for his plea to
prosper, respondent herein must prove his allegation
that his wife was naturalized as an American citizen.
Likewise, before a foreign divorce decree can be
recognized by our own courts, the party pleading it
must prove the divorce as a fact and demonstrate its
conformity to the foreign law allowing it. Such foreign
law must also be proved as our courts cannot take
judicial notice of foreign laws. Like any other fact, such
laws must be alleged and proved. Furthermore,
respondent must also show that the divorce decree
allows his former wife to remarry as specifically
required in Article 26. Otherwise, there would be no
evidence sufficient to declare that he is capacitated to
enter into another marriage.
PERKINS vs. DIZON (1939)
FACTS: On July 6, 1938, respondent, Eugene Arthur
Perkins, instituted an action in the Court of First
Instance of Manila against the Benguet Consolidated
Mining Company for dividends amounting to
P71,379.90 on 52,874 shares of stock registered in his
name, payment of which was being withheld by the
company; and, for the recognition of his right to the
control and disposal of said shares, to the exclusion of
all others. To the complaint, the company filed its
answer alleging, by way of defense, that the withholding
16
of such dividends and the non-recognition of plaintiff's
right to the disposal and control of the shares were due
to certain demands made with respect to said shares by
the petitioner herein, Idonah Slade Perkins, and by one
George H. Engelhard. The answer prays that the
adverse claimants be made parties to the action and
served with notice thereof by publication, and that
thereafter all such parties be required to interplead and
settle the rights among themselves. On September 5,
1938, the trial court ordered respondent Eugene Arthur
Perkins to include in his complaint as parties defendant
petitioner, Idonah Slade Perkins, and George H.
Engelhard. The complaint was accordingly amended
and in addition to the relief prayed for in the original
complaint, respondent Perkins prayed that petitioner
Idonah Slade Perkins and George Engelhard be
adjudged without interest in the shares of stock in
question and excluded from any claim they assert
thereon. Thereafter, summons by publication were
served upon the non-resident defendants, Idonah Slade
Perkins and George H. Engelhard, pursuant to the
order of the trial court. On December 9, 1938,
Engelhard filed his answer to the amended complaint,
and on December 10, 1938, petitioner Idonah Slade
Perkins, through counsel, filed her pleading entitled
"objection to venue, motion to quash, and demurrer to
jurisdiction" wherein she challenged the jurisdiction of
the lower court over her person. Petitioner's objection,
motion and demurrer having been overruled as well as
her motion for reconsideration of the order of denial,
she now brought the present petition for certiorari,
praying that the summons by publication issued against
her be declared null and void, and that, with respect to
her, respondent Judge be permanently prohibited from
taking any action on the
case.chanroblesvirtuallawlibrary chanrobles virtual law
library
The controlling issue here involved is whether or not the
Court of First Instance of Manila has acquired
jurisdiction over the person of the present petitioner as
a non-resident defendant, or, notwithstanding the want
of such jurisdiction, whether or not said court may
validly try the case. The parties have filed lengthy
memorandums relying on numerous authorities, but the
principles governing the question are well settled in this
jurisdiction.chanroblesvirtuallawlibrary chanrobles
virtual law library
HELD: Section 398 of our Code of Civil Procedure
provides that when a non-resident defendant is sued in

the Philippine courts and it appears, by the complaint or
by affidavits, that the action relates to real or personal
property within the Philippines in which said defendant
has or claims a lien or interest, actual or contingent, or
in which the relief demanded consists, wholly or in part,
in excluding such person from any interest therein,
service of summons maybe made by
publication.chanroblesvirtuallawlibrary chanrobles
virtual law library
We have fully explained the meaning of this provision in
El Banco Español Filipino vs. Palanca, 37 Phil., 921,
wherein we laid down the following rules:
(1) In order that the court may validly try a
case, it must have jurisdiction over the subject-
matter and over the persons of the parties.
Jurisdiction over the subject-matter is acquired
by concession of the sovereign authority which
organizes a court and determines the nature
and extent of its powers in general and thus
fixes its jurisdiction with reference to actions
which it may entertain and the relief it may
grant. Jurisdiction over the persons of the
parties is acquired by their voluntary
appearance in court and their submission to its
authority, or by the coercive power of legal
process exerted over their
persons.chanroblesvirtuallawlibrary chanrobles
virtual law library
(2) When the defendant is a non-resident and
refuses to appear voluntary, the court cannot
acquire jurisdiction over his person even if the
summons be served by publication, for he is
beyond the reach of judicial process. No
tribunal established by one State can extend its
process beyond its territory so as to subject to
its decisions either persons or property located
in another State. "There are many expressions
in the American reports from which it might be
inferred that the court acquires personal
jurisdiction over the person of the defendant by
publication and notice; but such is not the case.
In truth, the proposition that jurisdiction over the
person of a non-resident cannot be acquired by
publication and notice was never clearly
understood even in the American courts until
after the decision had been rendered by the
Supreme Court of the United States in the
leading case of Pennoyer v. Neff (95 U.S., 714;
24 Law. ed., 565). In the light of that decisions
which have subsequently been rendered in that
17
and other courts, the proposition that
jurisdiction over the person cannot be thus
acquired by publication and notice is no longer
open to question; and it is now fully established
that a personal judgment upon constructive or
substituted service against a non-resident who
does not appear is wholly invalid. This doctrine
applies to all kinds of constructive or
substituted process, including service by
publication and personal service outside of the
jurisdiction in which the judgment is rendered;
and the only exception seems to be found in
the case where the non-resident defendant has
expressly or impliedly consented to the mode
of service. (Note to Raher vs. Raher, 35 L. R.
A. [N. S.], 292; see also L.R.A. 585; 35 L.R.A.
[N.S.], 312.) chanrobles virtual law library
(3) The general rule, therefore, is that a suit
against a non-resident cannot be entertained
by a Philippine court. Where, however, the
action is in rem or quasi in rem in connection
with property located in the Philippines, the
court acquires jurisdiction over the res, and its
jurisdiction over the person of the non-resident
is non-essential. In order that the court may
exercise power over the res, it is not necessary
that the court should take actual custody of the
property, potential custody thereof being
sufficient. There is potential custody when,
from the nature of the action brought, the
power of the court over the property is impliedly
recognized by law. "An illustration of what we
term potential jurisdiction over the res, is found
in the proceeding to register the title of land
under our system for the registration of land.
Here the court, without taking actual physical
control over the property , assumes, at the
instance of some person claiming to be owner,
to exercise a jurisdiction in rem over the
property and to adjudicate the title in favor of
the petitioner against all the world." chanrobles
virtual law library
(4) As before stated, in an action in rem or
quasi in rem against a non-resident defendant,
jurisdiction over his person is non-essential,
and if the law requires in such case that the
summons upon the defendant be served by
publication, it is merely to satisfy the
constitutional requirement of due process. If
any be said, in this connection, that "may

reported cases can be cited in which it is
assumed that the question of the sufficiency of
publication or notice in the case of this kind is a
question affecting the jurisdiction of the court,
and the court is sometimes said to acquire
jurisdiction by virtue of the publication. This
phraseology was undoubtedly originally
adopted by the court because of the analogy
between service by publication and personal
service of process upon the defendant; and, as
has already been suggested, prior to the
decision of Pennoyer v. Neff (supra), the
difference between the legal effects of the two
forms of service was obscure. It is accordingly
not surprising that the modes of expression
which had already been moulded into legal
tradition before that case was decided have
been brought down to the present day. But it is
clear that the legal principle here involved is not
affected by the peculiar languages in which the
courts have expounded their ideas."
The reason for the rule that Philippine courts cannot
acquire jurisdiction over the person of a non-resident,
as laid down by the Supreme Court of the United States
in Pennoyer v. Neff, supra, may be found in a
recognized principle of public law to the effect that "no
State can exercise direct jurisdiction and authority over
persons or property without its territory. Story, Confl. L.,
ch. 2; Wheat, Int. L., pt. 2, ch. 2. The several States are
of equal dignity and authority, and the independence of
one implies the exclusion of power from all others. And
so it is laid down by jurists, as an elementary principle,
that the laws of one State have no operation outside of
its territory, except so far as is allowed by comity; and
that no tribunal established by it can extend its process
beyond that territory so as to subject either persons or
property to its decisions. "Any exertion of authority of
this sort beyond this limit," says Story, "is a mere nullity,
and incapable of binding such persons or property in
any other tribunals." Story, Confl. L., sec. 539."
(Pennoyer v. Neff, 95 U.S., 714; 24 Law. ed., 565, 568-
569.).chanroblesvirtuallawlibrary chanrobles virtual law
library
When, however, the action relates to property located in
the Philippines, the Philippine courts may validly try the
case, upon the principle that a "State, through its
tribunals, may subject property situated within its limits
owned by non-residents to the payment of the demand
of its own citizens against them; and the exercise of this
jurisdiction in no respect infringes upon the sovereignty
18
of the State where the owners are domiciled. Every
State owes protection to its citizens; and, when non-
residents deal with them, it is a legitimate and just
exercise of authority to hold and appropriate any
property owned by such non-residents to satisfy the
claims of its citizens. It is in virtue of the State's
jurisdiction over the property of the non-resident
situated within its limits that its tribunals can inquire into
the non-resident's obligations to its own citizens, and
the inquiry can then be carried only to the extent
necessary to control the disposition of the property. If
the non-resident has no property in the State, there is
nothing upon which the tribunals can adjudicate."
(Pennoyer v. Neff, supra.) chanrobles virtual law library
In the instant case, there can be no question that the
action brought by Eugene Arthur Perkins in his
amended complaint against the petitioner, Idonah Slade
Perkins, seeks to exclude her from any interest in a
property located in the Philippines. That property
consists in certain shares of stocks of the Benguet
Consolidated Mining Company, a sociedad anonima,
organized in the Philippines under the provisions of the
Spanish Code of Commerce, with its principal office in
the City of Manila and which conducts its mining
activities therein. The situs of the shares is in the
jurisdiction where the corporation is created, whether
the certificated evidencing the ownership of those
shares are within or without that jurisdiction. (Fletcher
Cyclopedia Corporations, Permanent ed. Vol. 11, p.
95). Under these circumstances, we hold that the action
thus brought is quasi in rem, for while the judgement
that may be rendered therein is not strictly a judgment
in rem, "it fixes and settles the title to the property in
controversy and to that extent partakes of the nature of
the judgment in rem." (50 C.J., p 503). As held by the
Supreme Court of the United States in Pennoyer v. Neff
(supra);
It is true that, in a strict sense, a proceeding in
rem is one taken directly against property, and
has for its object the disposition of the property,
without reference to the title of individual
claimants; but , in a large and more general
sense, the terms are applied to actions
between parties, where the direct object is to
reach and dispose of property owned by them,
or of some interest therein.
The action being in quasi in rem, The Court of First
Instance of Manila has jurisdiction over the person of
the non-resident. In order to satisfy the constitutional
requirement of due process, summons has been served

upon her by publication. There is no question as to the
adequacy of publication made nor as to the mailing of
the order of publication to the petitioner's last known
place of residence in the United States. But, of course,
the action being quasi in rem and notice having be
made by publication, the relief that may be granted by
the Philippine court must be confined to the res, it
having no jurisdiction to render a personal judgment
against the non-resident. In the amended complaint
filed by Eugene Arthur Perkins, no money judgment or
other relief in personam is prayed for against the
petitioner. The only relief sought therein is that she be
declared to be without any interest in the shares in
controversy and that she be excluded from any claim
thereto.chanroblesvirtuallawlibrary chanrobles virtual
law library
Petitioner contends that the proceeding instituted
against her is one of interpleading and is therefore an
action in personam. Section 120 of our Code of Civil
Procedure provides that whenever conflicting claims
are or may be made upon a person for or relating to
personal property, or the performance of an obligation
or any portion thereof, so that he may be made subject
to several actions by different persons, such person
may bring an action against the conflicting claimants,
disclaiming personal interest in the controversy, and the
court may order them to interplead with one another
and litigate their several claims among themselves,
there upon proceed to determine their several claims.
Here, The Benguet Consolidated Mining Company, in
its answer to the complaint filed by Eugene Arthur
Perkins, averred that in connection with the shares of
stock in question, conflicting claims were being made
upon it by said plaintiff, Eugene Arthur Perkins, his wife
Idonah Slade Perkins, and one named George H.
Engelhard, and prayed that these last two be made
parties to the action and served with summons by
publication, so that the three claimants may litigate their
conflicting claims and settle their rights among
themselves. The court has not issued an order
compelling the conflicting claimants to interplead with
one another and litigate their several claims among
themselves, but instead ordered the plaintiff to amend
his complaint including the other two claimants as
parties defendant. The plaintiff did so, praying that the
new defendants thus joined be excluded fro any interest
in the shares in question, and it is upon this amended
complaint that the court ordered the service of the
summons by publication. It is therefore, clear that the
publication of the summons was ordered not in virtue of
19
an interpleading, but upon the filing of the amended
complaint wherein an action quasi in rem is
alleged.chanroblesvirtuallawlibrary chanrobles virtual
law library
Had not the complaint been amended, including the
herein petitioner as an additional defendant, and had
the court, upon the filing of the answer of the Benguet
Consolidated Mining Company, issued an order under
section 120 of the Code of Civil Procedure, calling the
conflicting claimants into court and compelling them to
interplead with one another, such order could not
perhaps have validly been served by publication or
otherwise, upon the non-resident Idonah Slade Perkins,
for then the proceeding would be purely one of
interpleading. Such proceeding is a personal action, for
it merely seeks to call conflicting claimants into court so
that they may interplead and litigate their several claims
among themselves, and no specific relief is prayed for
against them, as the interpleader have appeared in
court, one of them pleads ownership of the personal
property located in the Philippines and seeks to exclude
a non-resident claimant from any interest therein, is a
question which we do not decide not. Suffice it to say
that here the service of the summons by publication
was ordered by the lower court by virtue of an action
quasi in rem against the non-resident
defendant.chanroblesvirtuallawlibrary chanrobles virtual
law library
Respondents contend that, as the petitioner in the lower
court has pleaded over the subject-matter, she has
submitted herself to its jurisdiction. We have noticed,
however, that these pleas have been made not as
independent grounds for relief, but merely as additional
arguments in support of her contention that the lower
court had no jurisdiction over the person. In other
words, she claimed that the lower court had no
jurisdiction over her person not only because she is a
non-resident, but also because the court had no
jurisdiction over the subject-matter of the action and
that the issues therein involved have already been
decided by the New York court and are being relitigated
in the California court. Although this argument is
obviously erroneous, as neither jurisdiction over the
subject-matter nor res adjudicata nor lis pendens has
anything to do with the question of jurisdiction over her
person, we believe and so hold that the petitioner has
not, by such erroneous argument, submitted herself to
the jurisdiction of the court. Voluntary appearance
cannot be implied from either a mistaken or superflous
reasoning but from the nature of the relief prayed for.

PHILSEC INVESTMENT CORP. vs. CA (1997) - effect
of a judgment of a tribunal of a foreign country: (a) In
case of a judgment upon a specific thing, the judgment
is conclusive upon the title to the thing; (b) In case of a
judgment against a person, the judgment is
presumptive evidence of a right as between the parties
and their successors in interest by a subsequent title;
but the judgment may be repelled by evidence of a
want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact;
extraterritorial service provides that service of summons
on a non-resident defendant may be effected out of the
Philippines by leave of Court where, among others, “the
property of the defendant has been attached within the
Philippines
FACTS: In order to facilitate the payment of the loans
which the original debtor Ventura Ducat obtained from
AYALA and Philsec, private respondent 1488, Inc.
assumed Ducat’s obligation under an Agreement, dated
1983, whereby 1488, Inc. (assumed Ducat’s obligation)
executed a Warranty Deed with Vendor’s Lien by which
it sold to petitioner Athona Holdings a parcel of land in
Harris County, Texas, U.S.A., for US$2,807,209.02,
while PHILSEC and AYALA extended a loan to
ATHONA in the amount of US$2,500,000.00 as initial
payment of the purchase price. The balance of
US$307,209.02 was to be paid by means of a
promissory note executed by ATHONA in favor of 1488,
Inc. As ATHONA failed to pay the interest on the
balance of US$307,209.02, the entire amount covered
by the note became due and demandable. Accordingly,
in 1985, private respondent 1488, Inc. sued petitioners
PHILSEC, AYALA, and ATHONA in the United States
for payment of the balance of US$307,209.02 and for
damages for breach of contract and for fraud allegedly
perpetrated by petitioners in misrepresenting the
marketability of the shares of stock delivered to 1488,
Inc. under the Agreement. The case was docketed as
Case No. 85-57746.
ATHONA filed an answer with counterclaim, impleading
private respondents herein as counterdefendants, for
allegedly conspiring in selling the property at a price
over its market value. ATHONA sought the recovery of
damages and excess payment allegedly made to 1488,
Inc. and, in the alternative, the rescission of sale of the
20
property. For their part, PHILSEC and AYALA filed a
motion to dismiss on the ground of lack of jurisdiction
over their person, but, as their motion was denied.
In 1987, while Civil Case No. H-86-440 was pending in
the United States, petitioners PHILSEC and ATHONA
filed a complaint “For Sum of Money with Damages and
Writ of Preliminary Attachment” against private
respondents in the Regional Trial Court of Makati,
where it was docketed as Civil Case No. 16563. The
complaint reiterated the allegation of petitioners in their
respective counterclaims in Civil Action No. H-86-440 of
the United States District Court of Southern Texas that
private respondents committed fraud by selling the
property at a price 400 percent more than its true value
of US$800,000.00. Petitioners claimed that, as a result
of private respondents’ fraudulent misrepresentations,
ATHONA, PHILSEC, and AYALA were induced to enter
into the Agreement and to purchase the Houston
property. Petitioners prayed that private respondents be
ordered to return to ATHONA the excess payment of
US$1,700,000.00 and to pay damages. On April 20,
1987, the trial court issued a writ of preliminary
attachment against the real and personal properties of
private respondents.
Private respondent Ducat moved to dismiss Civil Case
No. 16563 on the grounds of (1) litis pendentia, vis-a-
vis Civil Action No. H-86-440 filed by 1488, Inc. and
Daic in the U.S., (2) forum non conveniens. On the
other hand, private respondents 1488, Inc. and its
president Daic filed a joint “Special Appearance and
Qualified Motion to Dismiss,” contending that the action
being in personam, extraterritorial service of summons
by publication was ineffectual and did not vest the court
with jurisdiction over 1488, Inc., which is a non-resident
foreign corporation, and Daic, who is a non-resident
alien.
trial court granted Ducat’s motion to dismiss, stating
that “the evidentiary requirements of the controversy
may be more suitably tried before the forum of the litis
pendentia in the U.S., under the principle in private
international law of forum non conveniens,” even as it
noted that Ducat was not a party in the U.S. case. The
trial court also held itself without jurisdiction over 1488,
Inc. and Daic because they were non-residents and the
action was not an action in rem or quasi in rem, so that
extraterritorial service of summons was ineffective. The
trial court subsequently lifted the writ of attachment it
had earlier issued against the shares of stocks of 1488,
 21

Inc. and Daic. Court of Appeals affirmed the dismissal to the contrary. Rule 39, §50 provides:
of Civil Case No. 16563 against Ducat, 1488, Inc., and
SEC. 50. Effect of foreign judgments. - The effect of a
Daic on the ground of litis pendentia.
judgment of a tribunal of a foreign country, having
Issues: jurisdiction to pronounce the judgment is as follows:
1. Whether or not the doctrine of pendency of (a) In case of a judgment upon a specific thing, the
another action between the same parties for the judgment is conclusive upon the title to the thing;
same cause (litis pendentia) relied upon by the
(b) In case of a judgment against a person, the
court of appeals in affirming the trial court’s
judgment is presumptive evidence of a right as between
dismissal of the civil action is applicable.
the parties and their successors in interest by a
2. Whether or not the principle of forum non subsequent title; but the judgment may be repelled by
conveniens also relied upon by the court of evidence of a want of jurisdiction, want of notice to the
appeals in affirming the dismissal by the trial court party, collusion, fraud, or clear mistake of law or fact.
of the civil action is likewise applicable.
Thus, in the case of General Corporation of the
Philippines v. Union Insurance Society of Canton,
Ltd.,which private respondents invoke for claiming
HELD: While the present case was pending in the
conclusive effect for the foreign judgment in their favor,
Court of Appeals, the United States District Court
the foreign judgment was considered res judicata
for the Southern District of Texas rendered
because this Court found “from the evidence as well as
judgment in the case before it. The judgment,
from appellant’s own pleadings” that the foreign court
which was in favor of private respondents, was
did not make a “clear mistake of law or fact” or that its
affirmed on appeal by the Circuit Court of Appeals.
judgment was void for want of jurisdiction or because of
Thus, the principal issue to be resolved in this
fraud or collusion by the defendants. Trial had been
case is whether Civil Case No. 16536 is barred by
previously held in the lower court and only afterward
the judgment of the U.S. court. Private
was a decision rendered, declaring the judgment of the
respondents contend that for a foreign judgment to
Supreme Court of the State of Washington to have the
be pleaded as res judicata, a judgment admitting
effect of res judicata in the case before the lower court.
the foreign decision is not necessary. On the
In the same vein, in Philippine International Shipping
other hand, petitioners argue that the foreign
Corp. v. Court of Appeals, this Court held that the
judgment cannot be given the effect of res judicata
foreign judgment was valid and enforceable in the
without giving them an opportunity to impeach it on
Philippines there being no showing that it was vitiated
grounds stated in Rule 39, §50 of the Rules of
by want of notice to the party, collusion, fraud or clear
Court, to wit: “want of jurisdiction, want of notice to
mistake of law or fact. The prima facie presumption
the party, collusion, fraud, or clear mistake of law
under the Rule had not been rebutted.
or fact.”
In the case at bar, it cannot be said that petitioners
Petitioners’ contention is meritorious. While this Court
were given the opportunity to challenge the judgment of
has given the effect of res judicata to foreign judgments
the U.S. court as basis for declaring it res judicata or
in several cases, it was after the parties opposed to the
conclusive of the rights of private respondents. The
judgment had been given ample opportunity to repel
proceedings in the trial court were summary. Neither
them on grounds allowed under the law. It is not
the trial court nor the appellate court was even
necessary for this purpose to initiate a separate action
furnished copies of the pleadings in the U.S. court or
or proceeding for enforcement of the foreign judgment.
apprised of the evidence presented thereat, to assure a
What is essential is that there is opportunity to
proper determination of whether the issues then being
challenge the foreign judgment, in order for the court to
litigated in the U.S. court were exactly the issues raised
properly determine its efficacy. This is because in this
in this case such that the judgment that might be
jurisdiction, with respect to actions in personam, as
rendered would constitute res judicata. As the trial
distinguished from actions in rem, a foreign judgment
court stated in its disputed order dated March 9, 1988:
merely constitutes prima facie evidence of the justness
of the claim of a party and, as such, is subject to proof On the plaintiff’s claim in its Opposition that the
 22

causes of action of this case and the pending petitioners should have the burden of impeaching the
case in the United States are not identical, foreign judgment and only in the event they succeed in
precisely the Order of January 26, 1988 never doing so may they proceed with their action against
found that the causes of action of this case and private respondents.
the case pending before the USA Court, were
Second. Nor is the trial court’s refusal to take
identical. (emphasis added) It was error
cognizance of the case justifiable under the principle of
therefore for the Court of Appeals to summarily
forum non conveniens. First, a motion to dismiss is
rule that petitioners’ action is barred by the
limited to the grounds under Rule 16, §1, which does
principle of res judicata. Petitioners in fact
not include forum non conveniens.i[16] The propriety of
questioned the jurisdiction of the U.S. court
dismissing a case based on this principle requires a
over their persons, but their claim was brushed
factual determination, hence, it is more properly
aside by both the trial court and the Court of
considered a matter of defense. Second, while it is
Appeals.
within the discretion of the trial court to abstain from
Moreover, the Court notes that on April 22, 1992, 1488, assuming jurisdiction on this ground, it should do so
Inc. and Daic filed a petition for the enforcement of only after “vital facts are established, to determine
judgment in the Regional Trial Court of Makati, where it whether special circumstances” require the court’s
was docketed as Civil Case No. 92-1070 and assigned desistance. In this case, the trial court abstained from
to Branch 134, although the proceedings were taking jurisdiction solely on the basis of the pleadings
suspended because of the pendency of this case. To filed by private respondents in connection with the
sustain the appellate court’s ruling that the foreign motion to dismiss. It failed to consider that one of the
judgment constitutes res judicata and is a bar to the plaintiffs (PHILSEC) is a domestic corporation and one
claim of petitioners would effectively preclude of the defendants (Ventura Ducat) is a Filipino, and that
petitioners from repelling the judgment in the case for it was the extinguishment of the latter’s debt which was
enforcement. An absurdity could then arise: a foreign the object of the transaction under litigation. The trial
judgment is not subject to challenge by the plaintiff court arbitrarily dismissed the case even after finding
against whom it is invoked, if it is pleaded to resist a that Ducat was not a party in the U.S. case.
claim as in this case, but it may be opposed by the
Third. It was error we think for the Court of Appeals
defendant if the foreign judgment is sought to be
and the trial court to hold that jurisdiction over 1488,
enforced against him in a separate proceeding. This is
Inc. and Daic could not be obtained because this is an
plainly untenable. It has been held therefore that: [A]
action in personam and summons were served by
foreign judgment may not be enforced if it is not
extraterritorial service. Rule 14, §17 on extraterritorial
recognized in the jurisdiction where affirmative relief is
service provides that service of summons on a non-
being sought. Hence, in the interest of justice, the
resident defendant may be effected out of the
complaint should be considered as a petition for the
Philippines by leave of Court where, among others, “the
recognition of the Hongkong judgment under Section
property of the defendant has been attached within the
50 (b), Rule 39 of the Rules of Court in order that the
Philippines.”ii[18] It is not disputed that the properties,
defendant, private respondent herein, may present
real and personal, of the private respondents had been
evidence of lack of jurisdiction, notice, collusion, fraud
attached prior to service of summons under the Order
or clear mistake of fact and law, if applicable.
of the trial court. WHEREFORE, the decision of the
Accordingly, to insure the orderly administration of
Court of Appeals is REVERSED and Civil Case No.
justice, this case and Civil Case No. 92-1070 (petition
16563 (Sum of Money with Damages and Writ of
for the enforcement of judgment) should be
Preliminary Attachment - 1987) is REMANDED to the
consolidated. After all, the two have been filed in the
Regional Trial Court of Makati for consolidation with
Regional Trial Court of Makati, albeit in different salas,
Civil Case No. 92-1070 and for further proceedings in
this case being assigned to Branch 56 (Judge
accordance with this decision.
Gorospe), while Civil Case No. 92-1070 is pending in
Branch 134 of Judge Capulong. In such proceedings,
i
ii

RAYTHEON INTERNATIONAL vs. ROUZIE (2008) -
where the court has jurisdiction over the subject matter,
the parties and the res, it may or can proceed to try the
case even if the rules of conflict-of-laws or the
convenience of the parties point to a foreign forum;
That the subject contract included a stipulation that the
same shall be governed by the laws of the State of
Connecticut does not suggest that the Philippine courts,
or any other foreign tribunal for that matter, are
precluded from hearing the civil action. Jurisdiction and
choice of law are two distinct concepts
FACTS: Sometime in 1990, Brand Marine Services, Inc.
(BMSI), a corporation duly organized and existing under
the laws of the State of Connecticut, United States of
America, and respondent Stockton W. Rouzie, Jr., an
American citizen, entered into a contract whereby BMSI
hired respondent as its representative to negotiate the
sale of services in several government projects in the
Philippines for an agreed remuneration of 10% of the
gross receipts. In 1992, respondent secured a service
contract with the Republic of the Philippines on behalf
of BMSI for the dredging of rivers affected by the Mt.
Pinatubo eruption and mudflows. In 1994, respondent
filed before the NLRC a suit against BMSI and Rust
International, Inc. (RUST), Rodney C. Gilbert and
Walter G. Browning for alleged nonpayment of
commissions, illegal termination and breach of
employment contract. In 1995, Labor Arbiter Pablo C.
Espiritu, Jr. rendered judgment ordering BMSI and
RUST to pay respondent’s money claims. NLRC
reversed the decision of the Labor Arbiter and
dismissed respondent’s complaint on the ground of lack
of jurisdiction. Respondent elevated the case to this
Court but was dismissed. The Resolution became final
and executory in 1998.
In 1999, respondent, then a resident of La Union,
instituted an action for damages before the (RTC). The
Complaint, docketed as Civil Case No. 1192-BG,
named as defendants herein petitioner Raytheon
International, Inc. as well as BMSI and RUST, the two
corporations impleaded in the earlier labor case. The
complaint essentially reiterated the allegations in the
labor case that BMSI verbally employed respondent to
negotiate the sale of services in government projects
and that respondent was not paid the commissions due
him from the Pinatubo dredging project which he
secured on behalf of BMSI. The complaint also averred
23
that BMSI and RUST as well as petitioner itself had
combined and functioned as one company.
In its Answer, petitioner alleged that contrary to
respondent’s claim, it was a foreign corporation duly
licensed to do business in the Philippines and denied
entering into any arrangement with respondent or
paying the latter any sum of money. Petitioner also
denied combining with BMSI and RUST for the purpose
of assuming the alleged obligation of the said
companies. Petitioner also referred to the NLRC
decision which disclosed that per the written agreement
between respondent and BMSI and RUST,
denominated as “Special Sales Representative
Agreement,” the rights and obligations of the parties
shall be governed by the laws of the State of
Connecticut. Petitioner sought the dismissal of the
complaint on grounds of failure to state a cause of
action and forum non conveniens and prayed for
damages by way of compulsory counterclaim.
WHETHER OR NOT THE COURT OF APPEALS
ERRED IN REFUSING TO DISMISS THE COMPLAINT
ON THE GROUND OF FORUM NON CONVENIENS.
HELD: The instant petition lacks merit. Petitioner mainly
asserts that the written contract between respondent
and BMSI included a valid choice of law clause, that is,
that the contract shall be governed by the laws of the
State of Connecticut. It also mentions the presence of
foreign elements in the dispute – namely, the parties
and witnesses involved are American corporations and
citizens and the evidence to be presented is located
outside the Philippines – that renders our local courts
inconvenient forums. Petitioner theorizes that the
foreign elements of the dispute necessitate the
immediate application of the doctrine of forum non
conveniens.
Recently in Hasegawa v. Kitamura, the Court outlined
three consecutive phases involved in judicial resolution
of conflicts-of-laws problems, namely: jurisdiction,
choice of law, and recognition and enforcement of
judgments. Thus, in the instances where the Court held
that the local judicial machinery was adequate to
resolve controversies with a foreign element, the
following requisites had to be proved: (1) that the
Philippine Court is one to which the parties may
conveniently resort; (2) that the Philippine Court is in a
position to make an intelligent decision as to the law

and the facts; and (3) that the Philippine Court has or is
likely to have the power to enforce its decision.
On the matter of jurisdiction over a conflicts-of-laws
problem where the case is filed in a Philippine court and
where the court has jurisdiction over the subject matter,
the parties and the res, it may or can proceed to try the
case even if the rules of conflict-of-laws or the
convenience of the parties point to a foreign forum. This
is an exercise of sovereign prerogative of the country
where the case is filed. Jurisdiction over the nature and
subject matter of an action is conferred by the
Constitution and the law and by the material allegations
in the complaint, irrespective of whether or not the
plaintiff is entitled to recover all or some of the claims or
reliefs sought therein. Civil Case No. 1192-BG is an
action for damages arising from an alleged breach of
contract. Undoubtedly, the nature of the action and the
amount of damages prayed are within the jurisdiction of
the RTC.
That the subject contract included a stipulation that the
same shall be governed by the laws of the State of
Connecticut does not suggest that the Philippine courts,
or any other foreign tribunal for that matter, are
precluded from hearing the civil action. Jurisdiction and
choice of law are two distinct concepts. Jurisdiction
considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further
question whether the application of a substantive law
which will determine the merits of the case is fair to
both parties. The choice of law stipulation will become
relevant only when the substantive issues of the instant
case develop, that is, after hearing on the merits
proceeds before the trial court. Moreover, the propriety
of dismissing a case based on the principle of forum
non conveniens requires a factual determination;
hence, it is more properly considered as a matter of
defense. While it is within the discretion of the trial court
to abstain from assuming jurisdiction on this ground, it
should do so only after vital facts are established, to
determine whether special circumstances require the
court’s desistance.
MANILA HOTEL CORP. vs. NLRC (2000) - Under the
rule of forum non conveniens, a Philippine court or
agency may assume jurisdiction over the case if it
chooses to do so provided: (1) that the Philippine court
is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an
24
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.37
FACTS: Private respondent Marcelo Santos was an
overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently, he
was directly hired by the Palace Hotel, Beijing, People's
Republic of China and later terminated due to
retrenchment. Petitioners are the Manila Hotel Corp.
(MHC) and the Manila Hotel International Co. Ltd.
(MHICL). MHICL is a corporation duly organized and
existing under the laws of Hong Kong. MHC is an
"incorporator" of MHICL, owning 50% of its capital
stock. By virtue of a "management agreement"9 with the
Palace Hotel (Wang Fu Company Limited), MHICL10
trained the personnel and staff of the Palace Hotel at
Beijing, China. During his employment with the Mazoon
Printing Press in the Sultanate of Oman, respondent
Santos received a letter from Mr. Shmidt, General
Manager, Palace Hotel, Beijing, China. Mr. Schmidt
informed respondent Santos that he was recommended
by one Nestor Buenio, a friend of his. Mr. Shmidt
offered respondent Santos the same position as printer,
but with a higher monthly salary and increased benefits.
Respondent Santos wrote to Mr. Shmidt and signified
his acceptance of the offer. Respondent Santos left for
Beijing, China. He started to work at the Palace Hotel.
On August 10, 1989, the Palace Hotel informed
respondent Santos by letter signed by Mr. Shmidt that
his employment at the Palace Hotel print shop would be
terminated due to business reverses brought about by
the political upheaval in China.
Respondent Santos filed a complaint for illegal
dismissal with the NLRC. NLRC ruled in favor of
Santos.
HELD: The NLRC was a seriously inconvenient forum.
We note that the main aspects of the case transpired in
two foreign jurisdictions and the case involves purely
foreign elements. The only link that the Philippines has
with the case is that respondent Santos is a Filipino
citizen. The Palace Hotel and MHICL are foreign
corporations. Not all cases involving our citizens can be
tried here.
The employment contract. — Respondent Santos was
hired directly by the Palace Hotel, a foreign employer,
through correspondence sent to the Sultanate of Oman,
where respondent Santos was then employed. He was
hired without the intervention of the POEA or any
authorized recruitment agency of the government.36

Under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case
if it chooses to do so provided: (1) that the Philippine
court is one to which the parties may conveniently
resort to; (2) that the Philippine court is in a position to
make an intelligent decision as to the law and the facts;
and (3) that the Philippine court has or is likely to have
power to enforce its decision.37 The conditions are
unavailing in the case at bar.
Not Convenient. — We fail to see how the NLRC is a
convenient forum given that all the incidents of the case
— from the time of recruitment, to employment to
dismissal occurred outside the Philippines. The
inconvenience is compounded by the fact that the
proper defendants, the Palace Hotel and MHICL are not
nationals of the Philippines. Neither .are they "doing
business in the Philippines." Likewise, the main
witnesses, Mr. Shmidt and Mr. Henk are non-residents
of the Philippines.
No power to determine applicable law. — Neither can
an intelligent decision be made as to the law governing
the employment contract as such was perfected in
foreign soil. This calls to fore the application of the
principle of lex loci contractus (the law of the place
where the contract was made). The employment
contract was not perfected in the Philippines.
Respondent Santos signified his acceptance by writing
a letter while he was in the Republic of Oman. This
letter was sent to the Palace Hotel in the People's
Republic of China.
No power to determine the facts. — Neither can the
NLRC determine the facts surrounding the alleged
illegal dismissal as all acts complained of took place in
Beijing, People's Republic of China. The NLRC was not
in a position to determine whether the Tiannamen
Square incident truly adversely affected operations of
the Palace Hotel as to justify respondent Santos'
retrenchment.
Principle of effectiveness, no power to execute
decision. — Even assuming that a proper decision
could be reached by the NLRC, such would not have
any binding effect against the employer, the Palace
Hotel. The Palace Hotel is a corporation incorporated
under the laws of China and was not even served with
summons. Jurisdiction over its person was not
acquired.
BANK OF AMERICA vs. AMERICAN REALTY CORP.
(1999) – English law, mortgage, doctrine of processual
presumption, when the foreign law, judgment or
25
contract is contrary to a sound and established public
policy of the forum, the said foreign law, judgment or
order shall not be applied.
FACTS: Petitioner Bank of America (BANTSA) is an
international banking and financing institution duly
licensed to do business in the Philippines, organized
and existing under and by virtue of the laws of the State
of California, United States of America while private
respondent American Realty Corporation (ARC) is a
domestic corporation. Bank of America International
Limited (BAIL), on the other hand, is a limited liability
company organized and existing under the laws of
England.
BANTSA and BAIL on several occasions granted three
major multi-million United States (US) Dollar loans to
the following corporate borrowers: (1) Liberian
Transport Navigation; (2) El Challenger and (3) Eshley
Compania Naviera (borrowers), all of which are existing
under and by virtue of the laws of the Republic of
Panama and are foreign affiliates of private respondent.
Due to the default in the payment of the loan
amortizations, BANTSA and the corporate borrowers
signed and entered into restructuring agreements. As
additional security for the restructured loans, private
respondent ARC as third party mortgagor executed two
real estate mortgages. The corporate borrowers
defaulted in the payment of the restructured loans
prompting petitioner BANTSA to file civil actions before
foreign courts for the collection of the principal loan.
In the civil suits instituted before the foreign courts,
private respondent ARC, being a third party mortgagor,
was private not impleaded as party-defendant. In 1992,
petitioner BANTSA filed before the Office of the
Provincial Sheriff of Bulacan, Philippines an application
for extrajudicial foreclosure of real estate mortgage. In
1993, after due publication and notice, the mortgaged
real properties were sold at public auction in an
extrajudicial foreclosure sale, with Integrated Credit and
Corporation Services Co (ICCS) as the highest bidder
for the sum of (P24M).
In 1993, private respondent filed before the Pasig
Regional Trial Court, an action for damages against the
petitioner, for the latter's act of foreclosing
extrajudicially the real estate mortgages despite the
pendency of civil suits before foreign courts for the
collection of the principal loan. In its answer petitioner

alleged that the rule prohibiting the mortgagee from
foreclosing the mortgage after an ordinary suit for
collection has been filed, is not applicable in the present
case, claiming that: a) The plaintiff, being a mere third
party mortgagor and not a party to the principal
restructuring agreements, was never made a party
defendant in the civil cases filed in Hongkong and
England; b) There is actually no civil suit for sum of
money filed in the Philippines since the civil actions
were filed in Hongkong and England. As such, any
decisions (sic) which may be rendered in the
abovementioned courts are not (sic) enforceable in the
Philippines unless a separate action to enforce the
foreign judgments is first filed in the Philippines,
pursuant to Rule 39, Section 50 of the Revised Rules of
Court. c) Under English Law, which is the governing law
under the principal agreements, the mortgagee does
not lose its security interest by filing civil actions for
sums of money.
ISSUE: Whether or not the 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: 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, pursuant to the provision of
Rule 68 of the of the 1997 Rules of Civil Procedure. 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 accordance with the provisions of Act No.
3135, as amended by Act No. 4118. 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.
26
BANTSA 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. This argument
shows desperation on the part of petitioner to rivet its
crumbling cause. In the case at bench, Philippine law
shall apply notwithstanding the evidence presented by
petitioner to prove the English law on the matter. 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
accordance with Section 24, Rule 132 of the Rules of
Court and the jurisprudence laid down in Yao Kee, et al.
vs.
Sy-Gonzales, 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.
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.
YAO KEE vs. SY-GONZALES (1988) - In the absence
of proof of the Chinese law on marriage, it should be
presumed that it is the same as ours. Since Yao Kee
admitted in her testimony that there was no solemnizing
officer as is known here in the Philippines when her
alleged marriage to Sy Mat was celebrated it therefore

follows that her marriage to Sy Kiat, even if true, cannot
be recognized in this jurisdiction.
FACTS: Sy Kiat, a Chinese national died 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 for the grant of letters of
administration alleging among others that (a) they are
the children of the deceased with Asuncion Gillego; (b)
to their knowledge Sy Mat 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 administratrix 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 whom he married on January 19,
1931 in China; (b) the other oppositors are the
legitimate children of the deceased with 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.
After hearing, the probate court held in favor of the
oppositors and appointed Sze Sook Wah as the
administratrix of the intestate estate of the deceased .
On appeal the Court of Appeals rendered a decision
modifying that of the probate court, declaring oppositors
Sze Sook Wah, Sze Lai Chu and Sze Chun Yen, the
acknowledged natural children of the deceased Sy Kiat
with his Chinese wife Yao Kee, also known as Yui Yip,
since the legality of the alleged marriage of Sy Mat to
Yao Kee in China had not been proven to be valid to
the laws of the Chinese People's Republic of China.
Hence, this petition.
ISSUE: Whether or not Yao Kee has conclusively
proven her marriage to Sy Kiat to be in accordance with
Chinese law and custom and thus recognized in this
jurisdiction.
HELD: No, she has not conclusively proven her
marriage to Sy Kiat to be in accordance with Chinese
law and custom and therefore not recognized in this
jurisdiction. The evidence that Yao Kee has presented
may very well prove the fact of marriage between Yao
Kee and Sy Kiat. However, the same do not suffice to
27
establish the validity of said marriage in accordance
with Chinese law or custom. Custom is defined as "a
rule of conduct formed by repetition of acts, uniformly
observed (practiced) as a social rule, legally binding
and obligatory" The law requires that "a custom must
be proved as a fact, according to the rules of evidence"
[Article 12, Civil Code.] On this score the Court had
occasion to state that "a local custom as a source of
right can not be considered by a court of justice unless
such custom is properly established by competent
evidence like any other fact" The same evidence, if not
one of a higher degree, should be required of a foreign
custom.
The law on foreign marriages is provided by Article 71
of the Civil Code which states that: Art. 71. 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. (Emphasis supplied.) *** Construing this provision
of law the Court has held that to establish a valid
foreign marriage two things must be proven, namely:
(1) the existence of the foreign law as a question of
fact; and (2) the alleged foreign marriage by convincing
evidence
In proving a foreign law the procedure is provided in the
Rules of Court. With respect to an unwritten foreign law,
Rule 130 section 45 states that: SEC. 45. Unwritten
law.—The oral testimony of witnesses, skilled therein, is
admissible as evidence of the unwritten law of a foreign
country, as are also printed and published books of
reports of decisions of the courts of the foreign country,
if proved to be commonly admitted in such courts.
Proof of a written foreign law, on the other hand, is
provided for under Rule 132 section 25, thus: SEC. 25.
Proof of public or official record.—An official record or
an entry therein, 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 a foreign country, the certificate
may be made by a secretary of 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. The
Court has interpreted section 25 to include competent
evidence like the testimony of a witness to prove the
existence of a written foreign law.
In the case at bar petitioners did not present any
competent evidence relative to the law and custom of
China on marriage. The testimonies of Yao 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. For failure to prove the foreign law or
custom, and consequently, the validity of the marriage
in accordance with said law or custom, the marriage
between Yao Kee and Sy Kiat cannot be recognized in
this jurisdiction. Well-established in this jurisdiction is
the principle that Philippine courts cannot take judicial
notice of foreign laws. They must be alleged and
proved as any other fact In the absence of proof of the
Chinese law on marriage, it should be presumed that it
is the same as ours. Since Yao Kee admitted in her
testimony that there was no solemnizing officer as is
known here in the Philippines when her alleged
marriage to Sy Mat was celebrated it therefore follows
that her marriage to Sy Kiat, even if true, cannot be
recognized in this jurisdiction.
RECTO vs. HARDEN (1956) – attorney’s fees,
FACTS: Sometime in July, 1941, Appellant, Mrs.
Harden, and Appellee, Claro M. Recto, executed a
contract of professional service whereby Mrs. Harden
will file against her husband, Fred M. Harden, for the
purpose of securing an increase in the amount of
support being received by her from the conjugal
partnership of herself and said Fred M. Harden, and for
the purpose likewise of protecting and preserving her
rights in the properties of the said conjugal partnership,
in contemplation of the divorce suit which she intent to
file against him in the competent Court of California and
of the liquidation of the conjugal partnership between
them. One of the condition in the said contract states
“3. That as full and complete satisfaction of the fees of
Attorney Claro M. Recto in connection with the case
above referred to, I hereby agree to pay said Attorney
Claro M. Recto (20%) per cent of the value of the share
and participation which I may receive in the funds and
properties of the said conjugal partnership.” In
compliance therewith, on July 12, 1941, the Appellee,
28
as counsel for Mrs. Harden, commenced Civil Case No.
59634 of the Court of First Instance of Manila, entitled
“Esperanza P. de Harden vs. Fred M. Harden and Jose
Salumbides.”
Subsequently, the Philippines was invaded by the
Japanese and placed under military occupation. Then
came the liberation, in the course of which the records
of this case were destroyed. On October 23, 1946, said
records were reconstituted at the instance of Appellee
herein. Thereafter, the proceedings were resumed and,
in due course, the Court of First Instance of Manila
rendered in favour of Mrs. Harden. The Defendants
appealed from said decision to this Court. While the
appeal was thus pending before us, herein Appellee
filed a manifestation and a motion stating that Mrs.
Harden had instructed him, by letter, to “discontinue all
proceedings relative to” said case, “vacate all orders
and judgments rendered therein, and abandon and
nullify all her claims to the conjugal partnership existing
between her and Mr. Harden, and executed without the
knowledge, advise and consent of said Appellee, as
counsel for Mrs. Harden. It was further asserted, in
Appellee’s “manifestation”, that the purpose of the said
instruments, executed by Mr. and Mrs. Harden, was to
defeat the claim of the former for attorney’s fees.
Validity of the above-quoted contract of services, which
the Appellants assail as void, mainly, upon the ground:
(1) that Mrs. Harden cannot bind the conjugal
partnership without her husband’s consent; (2) that
Article 1491 of the Civil Code of the Philippines in effect
prohibits contingent fees (3) that the contract in
question has for its purpose to secure a decree of
divorce, allegedly in violation of Articles 1305, 1352 and
1409 of the Civil Code of the Philippines; and (4) that
the terms of said contract are harsh, inequitable and
oppressive.
HELD: The third objection is not borne out, either by the
language of the contract between them, or by the intent
of the parties thereto. Its purpose was not to secure a
divorce, or to facilitate or promote the procurement of a
divorce. It merely sought to protect the interest of Mrs.
Harden in the conjugal partnership, during the
pendency of a divorce suit she intended to file in the
United States. What is more, inasmuch as Mr. and Mrs.
Harden are admittedly citizens of the United States,
their status and the dissolution thereof are governed —
pursuant to Article 9 of the Civil Code of Spain (which
 29

was in force in the Philippines at the time of the

execution of the contract in question) and Article 15 of
the Civil Code of the Philippines — by the laws of the
United States, which sanction divorce. In short, the
contract of services, between Mrs. Harden and herein
Appellee, is not contrary to law, morals, good customs,
public order or public policy.