BORTHWICK VS BARTOLOME (152 SCRA 229)

Borthwick vs Castro- Bartolome

152 SCRA 229 [GR No. L-57338 July 23, 1987]

Facts:
In an action commenced in the Circuit Court of Hawaii, U.S.A., Joseph E. Scallon
sought to Compel payment by William B. Borthwick on four (4) promissory notes,
plus stipulated interest. Scallon’s complaint alleged, that Borthwick, an American
citizen living in the Philippines, owned real property interests in Hawaii where he
last resided and transacted business therein; that business dealings which
transpired in Honolulu, Hawaii had given rise to the promissory notes sued upon,
and Borthwick had failed to pay the sums therein.

Attached to the complaint were the promissory notes, which all specified the city
of Palos Verdes, Los Angeles, California as the place of payment. It was also
provided that if the payment was not made in full on or before the maturity date,
the payee may select Manila or Honolulu as additional places for payment and any
courty in those places which has jurisdiction over the subject matter, shall be a
proper Court for the trial of any action brought to enforce the payment of the
note.

Borthwick being then in Monterey, California, summons was served upon him
personally in that place, pursuant to Hawaiian law, allowing service of process on a
person outside the territorial confines of the State, if he had otherwise submitted
himself to the jurisdiction of its courts as to causes of action arising from, among
others, the act of transacting any business within Hawaii — alleged to consist as to
Borthwick in the negotiation and dealings regarding the promissory notes.

Borthwick ignored the summons. Default was entered against him, and in due
course a default judgment was rendered.

However, Scallon’s attempts to have the judgment executed in Hawaii and

California failed, because no assets of Borthwick could be found in those states.

Scallon and his wife, Jewell, then came to the Philippines and on March 15, 1980
brought suit against Borthwick in the Court of First Instance of Makati, seeking
enforcement of the default judgment of the Hawaii Court.

The sheriff's initial efforts to serve summons on Borthwick personally at his address
at Mandaluyong, Metro Manila having been unsuccessful — because Borthwick
was "always out on official business" — the sheriff effected substituted service by
leaving a copy of the summons and the complaint with Borthwick's "house
caretaker,", Fred Daniel.11

Borthwick did not file any answer to the complaint of Scallon, hence he was again
declared in default and the court rendered judgment enforcing the Hawaii Court’s
judgment be enforced in the Philippines.
Motion for a New Trial
 Borthwick filed a motion for a new trial, claiming improper service of
summons and lack of jurisdiction by the Hawaii court.
 The trial court denied the motion, finding that Daniel was a responsible
person and that Borthwick had failed to establish any proper ground for a
new trial.

Appeal to the Supreme Court

 Borthwick then appealed to the Supreme Court, raising issues of law.

Issue: Whether or not foreign judgment against a person rendered without

jurisdiction over the cause of action enforceable in the Philippines?

Held: The Supreme Court held that a foreign judgment is merely presumptive
evidence of a right between the parties and rejection thereof may be justified,
among others, by “evidence of a want of jurisdiction” of the issuing authority,
under Rule 39 of the Rules of Court.

In the case at bar, the jurisdiction of the Circuit Court of Hawaii hinged entirely on
the existence of either of two facts in accordance with its State laws, that is, either
Borthwick owned real property in Hawaii, or the promissory notes sued upon
resulted from his business transactions therein. Scallon’s complaint clearly alleged
both facts. Borthwick was accorded the opportunity to answer the complaint and
impugn those facts, but he failed to appear and was in consequence declared in
default. There thus exists no evidence in the record of the Hawaii case upon which
to lay a conclusion of lack of jurisdiction, as Borthwick now urges.

The opportunity to negate the foreign court’s competence by proving the non-
existence of said jurisdictional facts established in the original action, was again
afforded to Borthwick in the Court of First Instance of Makati, where enforcement
of the Hawaii judgment was sought. This time it was the summons of the domestic
court which Borthwick chose to ignore, but with the same result: he was declared
in default. And in the default judgment subsequently promulgated, the Court a quo
decreed enforcement of the judgment affirming among others the jurisdictional
facts, that Borthwick owned real property in Hawaii and transacted business
therein.

**However, such a rejection was not warranted in the present case. In this appeal,
Borthwick is attempting to challenge the foreign court's jurisdiction for the third
time. He needs to provide evidence that the default declaration was false in order
to accomplish that. However, this is not what Borthwick did. Both the Hawaii court
and the Makati Court of First Instance offered Borthwick the chance to submit his
answer, but he chose not to do so.
Issue: is the decision enforceable in the Philippines? – Yes.

In the case at bar, the jurisdiction of the Circuit Court of Hawaii hinged entirely on
theexistence of either of two facts in accordance with its State laws,either

Borthwick owned real property in Hawaii, or

the promissory notes sued upon resulted from his business transactions therein.

Scallon's complaint clearly alleged both facts.

Borthwick was accorded opportunity to answer the complaint and impugn those
facts, but he failed to appear and was in consequence declared in default.

There thus exists no evidence in the record of the Hawaii case upon which to lay a
conclusion of lack of jurisdiction, as Borthwick now urges.

He was afforded another opportunity to allege these facts with the CFI – Makati
but he failed to do so.

It is not for this Court to disturb the express finding of the Court of First
Instance that Daniel was Borthwick's resident domestic houseboy, and of sufficient
age and discretionto accept substituted service of summons for Borthwick.

In any case, a review of the records shows that the Trial Court was correct in
refusing tobelieve Borthwick's representation that "Daniel gardens at the residence
of Borthwick,then goes home to La Union after gardening itinerantly.