CHOICE OF FORUM SWEET LINES, INC. VS. TEVES G.R. No.

L-37750, May 19, 1978 FACTS Private respondents Atty. Tandog and Tiro, a contractors bought tickets for Voyage at the branch office of petitioner, a shipping company transporting inter-island passengers and cargoes, at Cagayan de Oro City. espondents !ere to board petitioner"s vessel bound for Tagbilaran City via the port of Cebu. #pon learning that the vessel !as not proceeding to $ohol, since many passengers !ere bound for %urigao, private respondents per advice, !ent to the branch office for proper relocation to another vessel. $ecause the said vessel !as already filled to capacity, they !ere forced to agree &to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard.& Private respondents alleged that they !ere, during the trip,& &e'posed to the scorching heat of the sun and the dust coming from the ship"s cargo of corn grits,& and that the tickets they bought at Cagayan de Oro City for Tagbilaran !ere not honored and they !ere constrained to pay for other tickets. (n vie! thereof, private respondents sued petitioner for damages and for breach of contract of carriage before Court of )irst (nstance of *isamis Oriental. Petitioner moved to dismiss the complaint on the ground of improper venue. This motion !as premised on the condition printed at the back of the tickets, Condition +o. ,-, !hich reads. /(t is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of !here it is issued, shall be filed in the competent courts in the City of Cebu.0 The motion !as denied hence the instant petition. ISSUE 1hether or not Condition +o. ,- printed at the back of the petitioner"s passage tickets purchased by private respondents, !hich limits the venue of actions arising from the contract of carriage to theCourt of )irst (nstance of Cebu is valid and enforceable2 HEL! +o. Considered in the light of circumstances prevailing in the interisland shipping industry in the country today, 1e find and hold that Condition +o. ,- printed at the back of the passage tickets should be held as void and unenforceable for the follo!ing reasons first, under circumstances obligation in the inter-island shipping industry, it is not 3ust and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets, on !hich Condition +o. ,- is Printed in fine letters, and second, Condition +o. ,subverts the public policy on transfer of venue of proceedings of this nature, since the same !ill pre3udice rights and interests of innumerable passengers located in different places of the country !ho, under Condition +o. ,-, !ill have to file suits against petitioner only in the City of Cebu. Considering the e'pense and trouble a passenger residing outside of Cebu City !ould incur to prosecute a claim in the City of Cebu, he !ould most probably decide not to file the action at all. The condition !ill thus defeat, instead of enhance, the

ends of 3ustice. #pon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. 4ence, the filing of the suit in the C)( of *isamis Oriental, as !as done in the instant case, !ill not cause inconvenience to, much less pre3udice, petitioner.

HS"C #$. SHERMAN G.R. No. 7%&9& A'('$) 11, 1989 Choice-of-forum clause, Jurisdiction and Venue Parties can stipulate as to their choice of venue. But if the stipulation is not restrictive, itshall be treated as merely permissive and will not bar the other party from airing the casein a different forum which has jurisdiction over the subject matter. FACTS %ometime in ,56,, 7astern $ook %upply PT7, 8td. 9Company:, a company incorporated n %ingapore, applied !ith and !as granted by the %ingapore $ranch of 4%$C an over draft facility. To secure the overdraft facility, private respondents !ho !ere directors of the Company e'ecuted a ;oint and %everal <uarantee in favour of 4%$C, !hich provides that. /This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance !ith the la!s of the epublic of %ingapore. 1e hereby agree that the Courts of %ingapore shall have 3urisdiction over all disputes arising under this guarantee ' ' '.0 4o!ever, !hen the Company failed to pay its obligation, 4%$C filed this action !ith the Philippine courts. (n a *otion to =ismiss, the private respondents raised the abovementioned provision of the ;oint and %everal <uarantee. The trial court affirmed the plaintiffs but CA reversed, citing said provision as basis. ISSUE 1hether or not Philippine courts have 3urisdiction over the suit HEL! The %upreme Court held that the clause in >uestion did not operate to divest the Philippine courts of 3urisdiction. 1hile it is true that /the transaction took place in %ingaporean setting0 and that the ;oint and %everal <uarantee contains a choice-of-forum clause, the very essence of due process dictates that the stipulation that /?t@his guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance !ith the la!s of the epublic of %ingapore. 1e hereby agree that the Courts in %ingapore shall have 3urisdiction over all disputes arising under this guarantee0 be liberally construed. One basic principle underlies all rules of 3urisdiction in (nternational 8a!. a %tate does not have 3urisdiction in the absence of some reasonable basis for e'ercising it, !hether the proceedings are in rem,>uasi in rem, or in personam. To be reasonable, the 3urisdiction must be based on some minimum contacts that !ill not offend traditional notions of fair play and substantial 3ustice. (ndeed, as pointed-out by petitioner $A+A at the outset, the instant case presents a very odd situation. (n the ordinary habits of life, anyone !ould be disinclined to litigate before a foreign tribunal, !ith more reason as a defendant. 4o!ever, in this case, private

respondents are Philippine residents 9a fact !hich !as not disputed by them: !ho !ould rather face a complaint against them before a foreign court and in the process incur considerable e'penses, not to mention inconvenience, than to have a Philippine court try and resolve the case. Private respondents" stance is hardly comprehensible, unless their ultimate intent is to evade, or at least delay, the payment of a 3ust obligation. The defense of private respondents that the complaint should have been filed in %ingapore is based merely on technicality. They did not even claim, much less prove, that the filing of the action here !ill cause them any unnecessary trouble, damage, or e'pense. On the other hand, there is no sho!ing that petitioner $A+A filed the action here 3ust to harass private respondents. The parties did not thereby stipulate that only the courts of %ingapore, to the e'clusion of all the rest, has 3urisdiction. +either did the clause in >uestion operate to divest Philippine courts of 3urisdiction. (n (nternational 8a!, 3urisdiction is often defined as the light of a %tate to e'ercise authority over persons and things !ithin its boundaries sub3ect to certain e'ceptions. Thus, a %tate does not assume 3urisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other %tates, and foreign military units stationed in or marching through %tate territory !ith the permission of the latter"s authorities. This authority, !hich finds its source in the concept of sovereignty, is e'clusive !ithin and throughout the domain of the %tate. A %tate is competent to take hold of any 3udicial matter it sees fit by making its courts and agencies assume 3urisdiction over all kinds of cases brought before them.

CHOICE OF LAW "ELLIS VS. "ELLIS G.R. No. L-%3*78, +',- *, 19*7 FACTS Amos <. $ellis !as a citiBen of the %tate of Te'as and of the #nited %tates. 4e had five legitimate children !ith his first !ife 9!hom he divorced:, three legitimate children !ith his second !ife 9!ho survived him: and, finally, three illegitimate children. C years prior Amos $ellisD death, he e'ecuted t!o9E: !ills, apportioning the remainder of his estate and properties to his seven surviving children. The appellants filed their oppositions to the pro3ect of partition claiming that they have been deprived of their legitimes to !hich they !ere entitled according to the Philippine la!. Appellants argued that the deceased !anted his Philippine estate to be governed by the Philippine la!, thus the creation of t!o separate !ills. ISSUE 1hether or not the Philippine la! be applied in the case in the determination of the illegitimate childrenDs successional rights RULING Court ruled that provision in a foreignerDs !ill to the effect that his properties shall be distributed in accordance !ith Philippine la! and not !ith his national la!, is illegal and void, for his national la! cannot be ignored in vie! of those matters that Article ,F G no! Article ,C G of the Civil Code states said national la! should govern. 1here the testator !as a citiBen of Te'as and domiciled in Te'as, the intrinsic validity of his !ill should be governed by his national la!. %ince Te'as la! does not re>uire legitimes, then his !ill, !hich deprived his illegitimate children of the legitimes, is valid. The %upreme Court held that the illegitimate children are not entitled to the legitimes under the Te'as la!, !hich is the national la! of the deceased.

Taya( #$. "-,('-) Co,$o./0a)-0 Fa1)$ (donah %lade Perkins, an American citiBen, residing in the #.%.A., died in +e! Hork leaving II,FFE shares of stock in $enguet Consolidated, (nc. 4er domicillary administrator is County Trust Company of +e! Hork. 4er ancillary administrator in the Philippines is enato =. Tayag. The ancillary administrator petitioned the trial court to order $enguet Consolidated, (nc. to surrender the Certificates of %tock to the ancillary administrator for the settlement of the deceased"s estate and to satisfy the claims of local creditors against the estate of *s. Perkins. $C( refused to surrender the certificates, claiming that CTC is in possession of the same. ISSUE 1hether or not the Courts in the Philippines have control over property o!ned by a non-citiBen2 H-.0 Hes. Philippine courts have control. (t is indisputable - the po!er of the ancillary administrator to gain control and possession of all assets of the decedent !ithin the 3urisdiction of the Philippines. %uch a po!er is inherent in his duty to settle her estate and satisfy the claims of local creditors. (t is a general rule universally recogniBed that administration, !hether principal or ancillary, certainly e'tends to the assets of a decedent found !ithin the state or country !here it !as granted the corollary being that an administrator appointed in one state or country has no po!er over property in another state or country. ;ustice *alcolm. it is often necessary to have more than one administration of an estate. 1hen a person dies intestate o!ning property in the country of his domicile as !ell as in a foreign country, administration is had in both countries. That !hich is granted in the 3urisdiction of decedents last domicile is termed the principal administration, !hile any other administration is termed the ancillary administration. The reason for the latter is because a grant of administration does not e' proprio vigore have any effect beyond the limits of the country in !hich it is granted. 4ence, an administrator appointed in a foreign state has no authority in the ?Philippines@. The ancillary administration is proper, !henever a person dies, leaving in a country other than that of his last domicile, property to be administered in the nature of assets of the deceased liable for his individual debts or to be distributed among his heirs

2a3/$)a, I,)-4,a)/o,a. A/4./,-$ #$. O5.190 SCRA, S-5)-67-4 %8, 1990 FACTS Pakistan (nternational Airlines Corporation 9P(A:, a foreign corporation licensed to do business in the Philippines, e'ecuted in *anila E separate contracts of employment, !ith private respondents )arrales and *amasig. The contracts provide that P(A reserves the right to terminate the agreement at anytime by giving the employee notice in !riting one month in advance. There is a provision in the said contracts that it shall be construed and governed under the la!s of Pakistan and only courts in Aarachi shall have the 3urisdiction to consider any matter arising out of or under the agreement. espondents commenced training in Pakistan and began discharging their 3ob function as flight attendants. After roughly , year and - months after the e'ecution of the contract the respondents received separate letters advising them that they !ould be terminated after a month. Private respondents filed a complaint for illegal dismissal !ith the *inister of 8abor and 7mployment. P(A claimed that respondents !ere habitual absenteesJ that both !ere in the habit of bringing in from abroad siBeable >uantities of &personal effects&J and that P(A personnel at the *anila (nternational Airport had been discreetly !arned to advise respondents to discontinue that practice. P(A further claimed that the services of respondents !ere terminated pursuant to the employment contract. = 7strella ruled in favor of the respondents. The Order stated that private respondents had attained the status of regular employees after they had rendered more than a year of continued service and that the dismissal, having been carried out !ithout the re>uisite clearance from the *inistry, !as illegal and entitled private respondents to reinstatement !ith full back!ages. On appeal, =eputy *inister of the *inistry adopted the findings and facts of the =. P(A filed a petition for certiorari and one of the contentions is that pursuant to the contract agreement, the la!s of Pakistan shall be applicable and that the courts of Aarachi shall have the 3urisdiction over the said matter. I$$'1hether or not the *inistry of 8abor and 7mployment have 3urisdiction over the said matter. R'./,( P(A cannot take refuge in its employment agreement !hich specifies, firstly, the la! of Pakistan as the applicable la! of the agreement and, secondly, lays the venue for settlement of any dispute arising out of or in connection !ith the agreement &only ?in@ courts of Aarachi, Pakistan&. The first clause cannot be invoked to prevent the application of Philippine labor la!s and regulations to the sub3ect matter of this case, i.e., the employer-employee

relationship bet!een petitioner P(A and private respondents. 1e have already pointed out that relationship is much affected !ith public interest and that the other!ise applicable Philippine la!s and regulations cannot be rendered illusory by the parties agreeing upon some other la! to govern their relationship. +either may petitioner invoke the second clause specifying the Aarachi courts as the sole venue for the settlement of disputes bet!een the contracting parties. 7ven a cursory scrutiny of the relevant circumstances of this case !ill sho! the multiple and substantive contacts bet!een Philippine la! and Philippine courts, on the one hand, and the relationship bet!een the parties, upon the other. the contract !as not only e'ecuted in the Philippines, it !as also performed here, at least partiallyJ private respondents are Philippine citiBens and residents, !hile petitioner, although a foreign corporation, is licensed to do business 9and actually doing business: and hence resident in the PhilippinesJ lastly, private respondents !ere based in the Philippines in bet!een their assigned flights to the *iddle 7ast and 7urope. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes bet!een the parties. #nder these circumstances, f the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the 3urisdiction vested upon them by Philippine la!. )inally, and in any event, the petitioner P(A did not undertake to plead and prove the contents of Pakistan la! on the matterJ it must therefore be presumed that the applicable provisions of the la! of Pakistan are the same as the applicable provisions of Philippine la!.

8a.a6-a #$ Co'4) o9 A55-a.$ a,0 T4a,$:o4.0 A/4./,-$ I,1. No#-67-4 18, 1993 Fa1)$ The spouses Cesar and Kuthira Kalamea together !ith their daughter 8iana purchased I tickets in *anila through the agent of Trans!orld Airlines for a flight from +e! Hork to 8os Angeles. The tickets of the spouses !ere bought at a discount of LMN !hile that of their daughter !as a full fare. Their tickets !ere all confirmed reservations. On the date of their flight, the family !as put on !ait-listed despite having able to check in !ithin an hour before their flight and their tickets reconfirmed. The airlines said that all the seats !ere already taken by earlier passengers. 8iana !as put no. ,I in the !ait-listed list !hile the spouses !ere on no. I- sho!ing0 a party of t!o0. Only the first EE passengers in the !ait listed list !ere allo!ed to board and take the flight. As a result, CeBar !as allo!ed to board because he !as holding his daughterDs ticket !hile the other t!o Balameas !ere left behind in +e! Hork. (t !as later found out that those !ho paid the full fare tickets !ere given priority !hile those discounted !ere put on !ait-listed despite their reconfirmed status. #pon their arrival in the Philippines they filed in the TC of *akati an action for breach of contract of air carriage. The TC ruled in favor of the plaintiffs. 4o!ever on appeal in the Court of Appeals, the decision of the TC !as reversed citing that damages is only allo!ed !hen there is fraud or bad faith on the part of the airline company. The CA further reasoned that overbooking is a common and accepted practice of airlines in the #nited %tates and is specifically allo!ed under the Code of )ederal egulations by the Civil Aeronautics $oard. 4ence there !as no bad faith or fraud on the part of the airlines. 4ence this petition for revie! on certiorari to the %upreme court. I$$'-$ 1hether it !as proper for the CA to take 3udicial notice the Code of )ederal egulations by the Civil Aeronautics $oard !ithout the respondent alleging and proving such code as provided in the ules of Court2 +o. 1hether the Philippine or the #% la! should govern. Philippine la!2

R'./,( +o. The respondents should still allege and prove such code by the civil aeronautics board of #nited %tates in order for the court to take 3udicial notice. They cannot merely rely on statement of the customer service agent of the airlines in her deposition. As a rule, foreign la!s do not prove themselves nor can the courts take 3udicial notice of them. 8ike any other fact,

they must be alleged and proved. The Philippine la! should apply in the case at bar because of the principle of le' loci contractus. The principle provides that it is the la! of the state !here the airline ticket !as bought that shall be applied by the courts in case of actions against the foreign airline companies. (n this case the Philippine la! shall apply and the e'isting 3urisprudence provides that overbooking amounts to bad faith on the part of the airline company. 4ence damages are in order. Ca0a./, v. 2OEA A06/,/$)4a)o4 G.R. No. L-10&77* Fa1)$ Cadalin et al. are )ilipino !orkers recruited by Asia (ntDl $uilders Co. 9A($C:, a domestic recruitment corporation, for employment in $ahrain to !ork for $ro!n O oot (ntDl (nc. 9$ ((: !hich is a foreign corporation !ith head>uarters in Te'as. Plaintiff instituted a class suit !ith the PO7A for money claims arising from the une'pired portion of their employment contract, !hich !as prematurely terminated. They !orked in $ahrain for $ (( and they filed the suit after , yr. from the termination of their employment contract. As provided by Article ,MC of the Amiri =ecree aka as the 8abor 8a! of the Private %ector of $ahrain. /a claim arising out of a contract of employment shall not be actionable after the lapse of , year from the date of the e'piry of the contract,0 it appears that their suit has prescribed. Plaintiff contends that the prescription period should be ,Fyears as provided by Article ,,-- of the Civil Code as their claim arise from a violation of a contract. The PO7A Administrator holds that the ,F year period of prescription should be applied but the +8 C provides a different vie! asserting that Art E5, of the 8abor Code of the Phil. !ith a I years prescription period should be applied. The %olicitor <eneral e'pressed his personal point of vie! that the , yr period provided by the Amiri =ecree should be applied. I$$'1hether it is the $ahrain la! on prescription of action based on the Amiri =ecree +o. EI of ,5LC or a Philippine la! on prescription that shall be the governing la!2 H-.0 As a general rule, a foreign procedural la! !ill not be applied in the forum. Procedural matters, such as service of process, 3oinder of actions, period and re>uisites for appeal, and so forth, are governed by the la!s of the forum. This is true even if the action is based upon a foreign substantive la!.

10

A la! on prescription of actions is sui generis in Conflict of 8a!s in the sense that it may be vie!ed either as procedural or substantive, depending on the characteriBation given such a la!. 4o!ever, the characteriBation of a statute into a procedural or substantive la! becomes irrelevant !hen the country of the forum has a /borro!ing statute.0 %aid statute has the practical effect of treating the foreign statute of limitation as one of substance. A /borro!ing statute0 directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign la!. 1hile there are several kinds of /borro!ing statutes,0 one form provides that an action barred by the la!s of the place !here it accrued, !ill not be enforced in the forum even though the local statute has not run against it. %ection -6 of our Code of Civil Procedure is of this kind. %aid %ection provides. /(f by the la!s of the state or country !here the cause of action arose, the action is barred, it is also barred in the Philippine (slands.0 (n the light of the ,56L Constitution, ho!ever, %ection -6 cannot be enforced e' propio vigore insofar as it ordains the application in this 3urisdiction of %ection ,MC of the Amiri =ecree +o. EI of ,5LC. The courts of the forum !ill not enforce any foreign claims obno'ious to the forumDs public policy. To enforce the one-year prescriptive period of the Amiri =ecree +o. EI of ,5LC as regards the claims in >uestion !ould contravene the public policy on the protection to labor. The court ruled that the prescription period applicable to the case should be Art E5, of the 8abor Code of the Phil. !ith a I years prescription period since the claim arose from labor employment.

11

U,/)-0 A/4./,-$ I,1. v. Co'4) o9 A55-a.$ G.R. No. 1%&110 Fa1)$ Aniceto )ontanilla bought from #nited Airlines, through the Philippine Travel $ureau in *anila, three /Visit the #.%.A.0 tickets from himself, his !ife and his minor son, *ychal, to visit the cities of 1ashington =C, Chicago and 8os Angeles. All All flights had been confirmed previously by #nited Airlines. 4aving used the first coupon to =C and !hile at the 1ashington =ulles Airport, Aniceto changed their itinerary, paid the penalty for re!riting their tickets and !as issued tickets !ith corresponding boarding passes !ith the !ords. /Check-in-re>uired.0 They !ere then set to leave but !ere denied boarding because the flight !as overbooked. The CA ruled that private respondentsD failure to comply !ith the check-in re>uirement !ill not defeat his claim as the denied boarding rules !ere not complied !ith applying the la!s of the #%A, relying on the Code of )ederal egulation Part on Oversales of the #%A. I$$'1hether or not the CA is correct in applying the la!s of #%A2 H-.0 +o. According to the doctrine of /le' loci contractus0, the la! of the place !here a contract is made or entered into governs !ith respect to its nature and validity, obligation and interpretation shall govern. This has been said to be the rule even though the place !here the contract !as made is different from the place !here it is to be performed. 4ence, the court should apply the la! of the place !here the airline ticket !as issued, !here the passengers are residents and nationals of the forum and the ticket is issued in such %tate by the defendant airline. Therefore, although, the contract of carriage !as to be performed in the #nited %tates, the tickets !ere purchased through petitionerDs agent in *anila. (t is true that the tickets !ere &re!ritten& in =.C., ho!ever, such fact did not change the nature of the original contract of carriage entered into by the parties in *anila.

12

ASIAVEST MERCHANT "AN;ERS <M= "ERHA! #$. CA a,0 2NCC G.R. No. 110%*3, +'.y %0, %001 Fa1)$ Petitioner Asiavest *erchant $ankers 9*: $erhad is a corporation organiBed under the la!s of *alaysia !hile private respondent Philippine +ational Construction Corporation is a corporation duly incorporated and e'isting under Philippine la!s. Petitioner initiated a suit for collection against private respondent, then kno!n as Construction and =evelopment Corporation of the Philippines, before the 4igh Court of *alaya in Auala 8umpur entitled /Asiavest *erchant $ankers 9*: $erhad v. Asiavest C=CP %dn. $hd. and Construction and =evelopment Corporation of the Philippines.0 Petitioner sought to recover the indemnity of the performance bond it had put up in favor of private respondent to guarantee the completion of the )elda Pro3ect and the nonpayment of the loan it e'tended to Asiavest-C=CP %dn. $hd. for the completion of Paloh 4anai and Auantan $y PassJ Pro3ect. The 4igh Court of *alaya 9Commercial =ivision: rendered 3udgment in favor of the petitioner and against the private respondent. )ollo!ing unsuccessful attempts to secure payment from private respondent under the 3udgment, petitioner initiated the complaint before TC of Pasig, *etro *anila, to enforce the 3udgment of the 4igh Court of *alaya. Private respondent sought the dismissal of the case via a *otion to =ismiss, contending that the alleged 3udgment of the 4igh Court of *alaya should be denied recognition or enforcement since on in face, it is tainted !ith !ant of 3urisdiction, !ant of notice to private respondent, collusion andPor fraud, and there is a clear mistake of la! or fact. =ismissal !as, ho!ever, denied by the trial court considering that the grounds relied upon are not the proper grounds in a motion to dismiss under ule ,C of the evised ules of Court. %ubse>uently, private respondent filed its Ans!er !ith Compulsory Counter claimDs and therein raised the grounds it brought up in its motion to dismiss. (n its eply filed, the petitioner contended that the 4igh Court of *alaya ac>uired 3urisdiction over the person of private respondent by its voluntary submission the courtDs 3urisdiction through its appointed counsel. )urthermore, private respondentDs counsel !aived any and all ob3ections to the 4igh CourtDs 3urisdiction in a pleading filed before the court. (n due time, the trial court rendered its decision dismissing petitionerDs complaint. Petitioner interposed an appeal !ith the Court of Appeals, but the appellate court dismissed the same and affirmed the decision of the trial court. I$$'1hether or not the CA erred in denying recognition and enforcement to the *alaysian Court 3udgment2

13

R'./,( H7%. <enerally, in the absence of a special compact, no sovereign is bound to give effect !ithin its dominion to a 3udgment rendered by a tribunal of another countryJ ho!ever, the rules of comity, utility and convenience of nations have established a usage among civiliBed states by !hich final 3udgments of foreign courts of competent 3urisdiction are reciprocally respected and rendered efficacious under certain conditions that may vary in different countries. (n this 3urisdiction, a valid 3udgment rendered by a foreign tribunal may be recogniBed insofar as the immediate parties and the underlying cause of action are concerned so long as it is convincingly sho!n that there has been an opportunity for a full and fair hearing before a court of competent 3urisdictionJ that the trial upon regular proceedings has been conducted, follo!ing due citation or voluntary appearance of the defendant and under a system of 3urisprudence likely to secure an impartial administration of 3usticeJ and that there is nothing to indicate either a pre3udice in court and in the system of la!s under !hich it is sitting or fraud in procuring the 3udgment. A foreign 3udgment is presumed to be valid and binding in the country from !hich it comes, until a contrary sho!ing, on the basis of a presumption of regularity of proceedings and the giving of due notice in the foreign forum #nder %ection MF9b:, ule I5 of the evised ules of Court, !hich !as the governing la! at the time the instant case !as decided by the trial court and respondent appellate court, a 3udgment, against a person, of a tribunal of a foreign country having 3urisdiction to pronounce the same is presumptive evidence of a right as bet!een the parties and their successors in interest by a subse>uent title. The 3udgment may, ho!ever, be assailed by evidence of !ant of 3urisdiction, !ant of notice to the party, collusion, fraud, or clear mistake of la! or fact. (n addition, under %ection I9n:, ule ,I, of the evised ules of Court, a court, !hether in the Philippines or else!here, en3oys the presumption that it !as acting in the la!ful e'ercise of its 3urisdiction. 4ence, once the authenticity of the foreign 3udgment is proved, the party attacking a foreign 3udgment, is tasked !ith the burden of overcoming its presumptive validity. (n the instant case, petitioner sufficiently established the e'istence of the money 3udgment of the 4igh Court of *alaya by the evidence it offered. PetitionerDs sole !itness, testified to the effect that he is in active practice of the la! profession in *alaysiaJ that he !as connected !ith %krine and Company as 8egal Assistant up to ,56,J that private respondent, then kno!n as Construction and =evelopment Corporation of the Philippines, !as sued by his client, Asiavest *erchant $ankers 9*: $erhad, in Auala 8umpurJ that the !rit of summons !ere served on *arch ,L, ,56I at the registered office of private respondent and on *arch E,, ,56I on Cora %. =eala, a financial planning officer of private respondent for %outheast Asia operationsJ that upon the filing of the case, *essrs. Allen and <ledhill, Advocates and %olicitors, !ith address at E-th )loor, #*$C $uilding, ;alan %ulaiman, Auala 8umpur, entered their conditional appearance for private respondent >uestioning the regularity of the service of the !rit of summons but subse>uently !ithdre! the

14

same !hen it realiBed that the !rit !as properly servedJ that because private respondent failed to file a statement of defense !ithin t!o 9E: !eeks, petitioner filed an application for summary 3udgment and submitted affidavits and documentary evidence in support of its claimJ that the matter !as then heard before the 4igh Court of Auala 8umpur in a series of dates !here private respondent !as represented by counselJ and that the end result of all these proceedings is the 3udgment sought to be enforced. (n addition to the said testimonial evidence, petitioner also offered the documentary evidence to support their claim. 4aving thus proven, through the foregoing evidence, the e'istence and authenticity of the foreign 3udgment, said foreign 3udgment en3oys presumptive validity and the burden then fell upon the party !ho disputes its validity, herein private respondent, to prove other!ise. 4o!ever, private respondent failed to sufficiently discharge the burden that fell upon it Q to prove by clear and convincing evidence the grounds !hich it relied upon to prevent enforcement of the *alaysian 4igh Court 3udgment.

15

G4a1- Ga41/a a3a G4a1- Ga41/a-R-1/o #$ R-0-4/13 R-1/o GR No. 1383%% O1)o7-4 %, %001 Fa1)$ ederick A. ecio, a )ilipino, !as married to 7ditha %amson, an Australian citiBen, in *alabon, iBal, on *arch ,, ,56L. They lived together as husband and !ife in Australia. On *ay ,6, ,565,a decree of divorce, purportedly dissolving the marriage, !as issued by an Australian family court. espondent became an Australian citiBen. Petitioner -- a )ilipina -- and respondent !ere married on ;anuary ,E, ,55- in Our 8ady of Perpetual 4elp Church in Cabanatuan City. (n their application for a marriage license, respondent !as declared as /single0 and /)ilipino.0 Petitioner and respondent lived separately !ithout prior 3udicial dissolution of their marriage. 1hile the t!o !ere still in Australia, their con3ugal assets !ere divided on *ay ,C, ,55C, in accordance !ith their %tatutory =eclarations secured in Australia. On *arch I, ,556, petitioner filed a Complaint for =eclaration of +ullity of *arriagein the court a uo, on the ground of bigamy -- respondent allegedly had a prior subsisting marriage at the time he married her on ;anuary ,E, ,55-. %he claimed that she learned of respondentDs marriage to 7ditha %amson only in +ovember, ,55L. (n his Ans!er, respondent averred that, he had revealed to petitioner his prior marriage and its subse>uent dissolution. 4e contended that his first marriage to an Australian citiBen had been validly dissolved by a divorce decree obtained in Australia in ,565J thus, he !as legally capacitated to marry petitioner in ,55-. About five years after the coupleDs !edding and !hile the suit for the declaration of nullity !as pending -- respondent !as able to secure a divorce decree from a family court in %ydney, Australia because the /marriage ha?d@ irretrievably broken do!n.0 espondent prayed in his Ans!er that the Complaint be dismissed on the ground that it stated no cause of action. The trial court declared the marriage dissolved on the ground that the divorce issued in Australia !as valid and recogniBed in the Philippines. (t deemed the marriage ended, but not on the basis of any defect in an essential element of the marriageJ that is, respondentDs alleged lack of legal capacity to remarry. ather, it based its =ecision on the divorce decree obtained by respondent. The Australian divorce had ended the marriageJ thus, there !as no more marital union to nullify or annul. I$$'1hether the divorce bet!een respondent and 7ditha %amson !as

16

proven andJ 1hether respondent !as proven to be legally capacitated to marry petitioner. R'./,( The divorce decree bet!een respondent and 7ditha %amson appeared to be an authentic one issued by an Australian family court. 4o!ever, appearance is not sufficientJ compliance !ith the aforementioned rules on evidence must be demonstrated. )ortunately for respondentDs cause, !hen the divorce decree of *ay ,6, ,565 !as submitted in evidence, counsel for petitioner ob3ected, not to its admissibility, but only to the fact that it had not been registered in the 8ocal Civil egistry of Cabanatuan City. The trial court ruled that it !as admissible, sub3ect to petitionerDs >ualification. 4ence, it !as admitted in evidence and accorded !eight by the 3udge. (ndeed, petitionerDs failure to ob3ect properly rendered the divorce decree admissible as a !ritten act of the )amily Court of %ydney, Australia. Compliance !ith the >uoted articles 9,,, ,I and ME: of the )amily Code is not necessaryJ respondent !as no longer bound by Philippine personal la!s after he ac>uired Australian citiBenship in ,55E. $y becoming an Australian, respondent severed his allegiance to the Philippines and the vinculum juris that had tied him to Philippine personal la!s. The burden of proof lies !ith /the party !ho alleges the e'istence of a fact or thing necessary in the prosecution or defense of an action. %ince the divorce !as a defense raised by respondent, the burden of proving the pertinent Australian la! validating it falls s>uarely upon him. (t is !ell settled in our 3urisdiction that our courts cannot take 3udicial notice of foreign la!s. 8ike any other facts, they must be alleged and proved. Australian marital la!s are not among those matters that 3udges are supposed to kno! by reason of their 3udicial function. The po!er of 3udicial notice must be e'ercised !ith caution, and every reasonable doubt upon the sub3ect should be resolved in the negative. The Court could not conclude that respondent, !ho !as then a naturaliBed Australian citiBen, !as legally capacitated to marry petitioner on ;anuary ,E, ,55-. +either did it grant petitionerDs prayer to declare her marriage to respondent null and void on the ground of bigamy. After all, it may turn out that under Australian la!, he !as really capacitated to marry petitioner as a direct result of the divorce decree. 4ence, the Court ruled that the most 3udicious course !as to remand this case to the trial court to receive evidence, if any, !hich sho! petitionerDs legal capacity to marry petitioner. )ailing in that, then the court a uo may declare a nullity of the partiesD marriage on the ground of bigamy, there being already in evidence t!o e'isting marriage certificates, !hich !ere both obtained in the Philippines, one in *alabon, *etro *anila dated *arch ,, ,56L and the other, in Cabanatuan City dated ;anuary ,E, ,55-.

17

18

COR2U8 #$. STO. TOMAS a,0 T>- SOLICITOR GENERAL G.R. No. 18*571 A'('$) 11, %010 FACTS. This is a petition for revie! on certiorari seeking a direct appeal from the decision of the egional Trial Court of 8aoag City. Petitioner <erbert . Corpus is a naturaliBed Canadian citiBen !ho married respondent =aisylyn Tirol %to. Tomas but subse>uently left for Canada due to !ork and other professional commitments. 1hen he returned to the Philippines, he discovered that %to. Tomas !as already romantically involved !ith another man. This brought about the filing of a petition for divorce by CorpuB in Canada !hich !as eventually granted by the Court ;ustice of 1indsor, Ontario, Canada. A month later, the divorce decree took effect. T!o years later, CorpuB has fallen in love !ith another )ilipina and !ished to marry her. 4e !ent to Civil egistry Office of Pasig City to register the Canadian divorce decree of his marriage certificate !ith %to. Tomas. 4o!ever, despite the registration, an official of +ational %tatistics Office informed CorpuB that the former marriage still subsists under the Philippine la! until there has been a 3udicial recognition of the Canadian divorce by a competent 3udicial court in vie! of +%O Circular +o. -, series of ,56E. Conse>uently, he filed a petition for 3udicial recognition of foreign divorce andPor declaration of dissolution of marriage !ith the TC. 4o!ever, the TC denied the petition reasoning out that CorpuB cannot institute the action for 3udicial recognition of the foreign divorce decree because he is a naturaliBed Canadian citiBen. (t !as provided further that %to. Tomas !as the proper party !ho can institute an action under the principle of Article EC of the )amily Code !hich capacitates a )ilipino citiBen to remarry in case the alien spouse obtains a foreign divorce decree. ISSUE 1hether or not the second paragraph of Article EC of the )amily Code grants aliens like CorpuB the right to institute a petition for 3udicial recognition of a foreign divorce decree HEL! Petition !as < A+T7=. TC =ecision !as 7V7 %7=. The foreign divorce decree is presumptive evidence of a right that clothes the party !ith legal interest to petition for its recognition in this 3urisdiction 1e >ualify our above conclusion Q i.e., that the second paragraph of Article EC of the )amily Code besto!s no rights in favor of aliens Q !ith the complementary statement that this conclusion is not sufficient basis to dismiss <erbertDs petition before the TC.(n other !ords, the unavailability of the second paragraph of Article EC of the )amily Code to aliens does not necessarily strip <erbert of legal interest to petition the TC for the recognition of his foreign divorce decree. The foreign divorce decree itself, after its authenticity and conformity !ith the alienDs national la! have been

19

duly proven according to our rules of evidence, serves as a presumptive evidence of right in favor of <erbert, pursuant to %ection -6, ule I5 of the ules of Court !hich provides for the effect of foreign 3udgments. A remand, at the same time, !ill allo! other interested parties to oppose the foreign 3udgment and overcome a petitionerDs presumptive evidence of a right by proving !ant of 3urisdiction, !ant of notice to a party, collusion, fraud, or clear mistake of la! or fact. +eedless to state, every precaution must be taken to ensure conformity !ith our la!s before a recognition is made, as the foreign 3udgment, once recogniBed, shall have the effect of res 3udicata bet!een the parties, as provided in %ection -6, ule I5 of the ules of Court.

20

Ray)>-o, /,)-4,a)/o,a. #$ Ro'?/Fa1)$ $rand *arine %ervices, (nc. 9$*%(:, a corporation duly organiBed and e'isting under the la!s of the %tate of Connecticut, #nited %tates of America, and respondent %tockton 1. ouBie, ;r., an American citiBen, entered into a contract !hereby $*%( hired respondent as its representative to negotiate the sale of services in several government pro3ects in the Philippines for an agreed remuneration of ,FN of the gross receipts. ouBie secured a service contract !ith the Philippines for the dredging of rivers affected by the *t. Pinatubo eruption and mudflo!s. ouBie filed a suit before the Arbitration $ranch of the +8 C against $*%( and ust (nternational, (nc. 9 #%T:, for alleged nonpayment of commissions, illegal termination and breach of employment contract. The 8abor Arbiter rendered 3udgment in favor of ouBie. #pon appeal by $*%(, the +8 C reversed the decision of the 8abor Arbiter and dismissed ouBieDs complaint on the ground of lack of 3urisdiction. ouBie instituted an action for damages before the egional Trial Court. (n its Ans!er, petitioner alleged that it !as a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement !ith respondent or paying the latter any sum of money. Petitioner also disclosed that per the !ritten agreement bet!een ouBie and $*%( and #%T, is only a &%pecial %ales epresentative Agreement,& !ere the rights and obligations of the parties shall be governed by the la!s of the %tate 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 !ay of compulsory counterclaim. Petitioner filed an Omnibus *otion for Preliminary 4earing $ased on Affirmative =efenses and for %ummary ;udgment seeking the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. The TC denied petitionerDs omnibus motion. The principle of forum non conveniens !as inapplicable because the trial court could enforce 3udgment on petitioner, it being a foreign corporation licensed to do business in the Philippines. Petitioner filed petition for certiorari !ith the Court of Appeals ho!ever it !as denied. 4ence this petition for certiorari. I$$'1hether or not the CA erred in refusing to dismiss the complaint on the ground of forum non conveniens2 R'./,( +o, the court ruled that the on the matter of 3urisdiction over a conflictsof-la!s problem !here the case is filed in a Philippine court and !here the court has 3urisdiction over the sub3ect matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-la!s or the convenience of the parties point to a foreign forum. This is an e'ercise of sovereign prerogative of the country !here the case is filed. Petitioner mainly asserts that the !ritten contract bet!een respondent and $*%( included a valid choice of la! clause, that is, that the contract shall be governed by the la!s of the %tate of Connecticut. (t also mentions the presence of foreign

21

elements in the dispute Q namely, the parties and !itnesses involved are American corporations and citiBens and the evidence to be presented is located outside the Philippines Q that renders our local courts inconvenient forums. Petitioner theoriBes that the foreign elements of the dispute necessitate the immediate application of the doctrine of forum non convenien That the sub3ect contract included a stipulation that the same shall be governed by the la!s of the %tate of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. ;urisdiction and choice of la! are t!o distinct concepts. ;urisdiction considers !hether it is fair to cause a defendant to travel to this stateJ choice of la! asks the further >uestion !hether the application of a substantive la! !hich !ill determine the merits of the case is fair to both parties.The choice of la! stipulation !ill become relevant only !hen the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court #nder the doctrine of forum non conveniens, a court, in conflicts-of-la!s cases, may refuse impositions on its 3urisdiction !here it is not the most &convenient& or available forum and the parties are not precluded from seeking remedies else!here. PetitionerDs averments of the foreign elements in the instant case are not sufficient to oust the trial court of its 3urisdiction over and the parties involved. *oreover, the propriety of dismissing a case based on the principle of forum non conveniens re>uires a factual determinationJ hence, it is more properly considered as a matter of defense. 1hile it is !ithin the discretion of the trial court to abstain from assuming 3urisdiction on this ground, it should do so only after vital facts are established, to determine !hether special circumstances re>uire the courtDs desistance.

22

MINIMUM CONTRACT HS"C #$. SHERMAN G.R. No. 7%&9& A'('$) 11, 1989 Ho,(3o,( a,0 S>a,(>a/ "a,3/,( Co45o4a)/o, V$. S>-46a, FACTS 7astern $ook %upply %ervice PT7 8td. 9referred as CO*PA+H:, a company incorporated in %ingapore applied and !as granted by the %ingapore branch of 4%$C an overdraft facility in the ma'imum amount of EFF,FFF %ingaporean dollars, !hich !as increased to ILM,FFF %ingaporean dollars !ith interest of IN over 4%$CDs prime rate. Payable monthly on amount due under said overdraft facility. The directors 9%herman and 8o!e among others: of the CO*PA+H e'ecuted a 3oint and several guarantee, !herein the directors agreed to pay 3ointly and severally on demand all sums o!ed by the CO*PA+H to 4%$C under the overdraft facility, in favor of 4%$C as security for the repayment of the CO*PA+H of the sums advanced by 4%$C. (t is stated under the 3oint and several guarantee that all rights, obligation and liabilities that may arise under the guarantee may be construed and determined under or in accordance !ith the la! of %ingapore. /..Courts of %ingapore !ill have 3urisdiction over all dispute arising from this guarantee../. The CO*PA+H failed to pay its obligations. Thus, 4%$C demanded payment from the directors in conformity !ith the 3oint and several guarantee. The directors failed to pay, 4%$C filed a complaint in accordance !ith the guarantee before the TC of RueBon City. The directors filed a motion to dismiss on grounds that the court has no 3urisdiction over the sub3ect matter and over the person of the defendant, but it !as denied by the TC. The directors filed a petition for prohibition and preliminary in3unction andPor prayer for a restraining order !hich the CA granted. ISSUE 1hether or not Philippine courts have 3urisdiction over the suit2 HEL! Philippine courts have 3urisdiction. 1hile it is true that &the transaction took place in %ingaporean setting& and that the ;oint and %everal <uarantee contains a choice-of-forum clause, the very essence of due process dictates that the stipulation that &?t@his guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance !ith the la!s of the epublic of %ingapore. 1e hereby agree that the Courts in %ingapore shall have 3urisdiction over all disputes arising under this guarantee& be liberally construed. One basic principle underlies all rules of 3urisdiction in (nternational 8a!. a %tate does not have 3urisdiction in the absence of some reasonable basis for e'ercising it, !hether the proceedings are in rem uasi in rem or in personam. To be

23

reasonable, the 3urisdiction must be based on some minimum contacts that !ill not offend traditional notions of fair play and substantial 3ustice 9;. %alonga, Private (nternational 8a!, ,56,, p. -C:. (ndeed, as pointed-out by petitioner $A+A at the outset, the instant case presents a very odd situation. (n the ordinary habits of life, anyone !ould be disinclined to litigate before a foreign tribunal, !ith more reason as a defendant. 4o!ever, in this case, private respondents are Philippine residents 9a fact !hich !as not disputed by them: !ho !ould rather face a complaint against them before a foreign court and in the process incur considerable e'penses, not to mention inconvenience, than to have a Philippine court try and resolve the case. Private respondents" stance is hardly comprehensible, unless their ultimate intent is to evade, or at least delay, the payment of a 3ust obligation. The defense of private respondents that the complaint should have been filed in %ingapore is based merely on technicality. They did not even claim, much less prove, that the filing of the action here !ill cause them any unnecessary trouble, damage, or e'pense. On the other hand, there is no sho!ing that petitioner $A+A filed the action here 3ust to harass private respondents. 4o!ever, !hether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court.

24

Sa'0/ A4a7/a, A/4./,-$ V$. Co'4) o9 A55-a.$ FACTS %A#=(A hired *ilagros *orada as a flight attendant for its airline based in ;eddah, %audi Arabia. 1hile in a lay-over in (ndonesia, *orada !ent !ith t!o other fello! cre! members, Allah and Thamer, to a disco dance. $ecause it !as almost morning !hen they !ent back to their hotel, they agreed to have breakfast in ThamerDs room. #pon arriving, Allah left, and Thamer attempted to rape *orada. )ortunately, a roomboy heard *oradaDs cries for help and rescued her. The (ndonesian police arrested Thamer and Allah. 1hen *orada !ent back to ;eddah, %A#=(A officials interrogated her about the incident. They re>uested her to go back to (ndonesia to help arrange the release of Thamer and Allah, but she refused to cooperate. %A#=(A barred *orada from its ;akarta flights. 7ventually, through the intercession of %audi Arabian government, (ndonesian authorities agreed to deport Thamer and Allah. They !ere again put to service by %A#=(A. %A#=(A transferred *orada to *anila thereafter. T!o years later, thinking that the ;akarta incident !as already behind her, %A#=(A re>uested *orada to see *r. *enie!y, chief legal officer of %A#=(A, in ;eddah. #pon meeting him, she !as brought to the police station !here the police took her passport and >uestioned her about the ;akarta incident. *enie!y simply stood by as the police officer put pressure on her to make a statement to drop the case against Thamer and Allah. +ot until she agreed to do so did the police returned her passport and allo!ed her to catch the afternoon flight out of ;eddah. One and a half year later, *orada !as once again summoned to ;eddah to see *r. *enie!y. 1hen she did, a certain khalid of %A#=(A bought her to %audi court !here she !as asked to sign a document in Arabic, as this !as necessary to close the case against Thamer and Allah. $ut instead, it !as a notice to appear before the court. *orada then !ent back to *anila. %hortly after!ards, %A#=(A asked *orada to report to ;eddah and see *enie!y, *orada !ent after receiving assurance from %A#=(ADs *anila manager that such investigation !as routinary and posted no danger to her. %he !as taken to the same court !herein she !as interrogated by a %audi 3udge about the ;akarta (ncident. After one hour, they let her go. 1hen *orada !as about to take the plane to *anila, she !as stopped by a %A#=(A officer, he took a!ay her passport and ordered her to stay in ;eddah until further notice. %he !as taken back to the same court and to her astonishment, the 3udge rendered a decision against her for M months imprisonment and E6C lashes as she !as found guilty of adultery, going to disco, dancing and listening to music in violation of (slamic la!s and socialiBing !ith male cre!s. %he seeked helped from %A#=(A but !as denied assistance. The prince of *akkah dismissed the case against her and allo!ed her to leave %audi Arabia. #pon her return to *anila, %A#=(A terminated her from service !ithout her being informed of the cause. *orada filed a case for damages against %A#=(A and its country manager. %A#=(A filed an omnibus motion to dismiss stating among others that the trial court has no 3urisdiction to try the

25

case and the claim or demand has been !aived, abandoned or other!ise e'tinguished. The Trial court and the Court of appeals rendered a decision in favor of *orada.

ISSUE 1hether the Courts of the Philippines has 3urisdiction to try the case !hich involves a foreign element2 HEL! Hes, !eighing the relative claims of the parties, the court a uo found it best to hear the case in the Philippines. 4ad it refused to take cogniBance of the case, it !ould be forcing plaintiff 9private respondent no!: to seek remedial action else!here, i.e. in the Aingdom of %audi Arabia !here she no longer maintains substantial connections. That !ould have caused a fundamental unfairness to her. *oreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been sho!n by either of the parties. The choice of forum of the plaintiff 9no! private respondent: should be upheld. %imilarly, the trial court also possesses 3urisdiction over the persons of the parties herein. $y filing her Complaint and Amended Complaint !ith the trial court, private respondent has voluntary submitted herself to the 3urisdiction of the court. The records sho! that petitioner %A#=(A has filed several motions praying for the dismissal of *oradaDs Amended Complaint. %A#=(A also filed an Ans!er (n !" #bundante Cautelam dated )ebruary EF, ,55M. 1hat is very patent and e'plicit from the motions filed, is that %A#=(A prayed for other reliefs under the premises. #ndeniably, petitioner %A#=(A has effectively submitted to the trial courtDs 3urisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of 3urisdiction. As to the Choice of la! applicable to the case !here a foreign element is involved, it is important to note that one of the circumstance for the determination of applicable la! is the place !here an act has been done, the locus actus, such as the place !here a contract has been made, a marriage celebrated, a !ill signed or a tort committed. The le" loci actus is particularly important in contracts and torts. Considering that the complaint in the court a uo is one involving torts, the /connecting factor0 or /point of contact0 could be the place or places !here the tortious conduct or le" loci actus occurred. And applying the torts principle in a conflicts case, !e find that the Philippines could be said as a situs of the tort 9the place !here the alleged tortious conduct took place:. This is because it is in the Philippines !here petitioner allegedly deceived private respondent, a )ilipina residing and !orking here. According to her, she had honestly believed that petitioner

26

!ould, in the e'ercise of its rights and in the performance of its duties, /act !ith 3ustice, give her her due and observe honesty and good faith.0 (nstead, petitioner failed to protect her, she claimed. That certain acts or parts of the in3ury allegedly occurred in another country is of no moment. )or in our vie! !hat is important here is the place !here the over-all harm or the fatality of the alleged in3ury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff belo! 9herein private respondent:. All told, it is not !ithout basis to identify the Philippines as the situs of the alleged tort.

27

;A8UHIRO HASEGAWA a,0 NI22ON ENGINEERING CONSULTANTS CO., LT!., #$ MINORU ;ITAMURA G.R. No. 1&9177, No#-67-4 %3, %007 FACTS +ippon 7ngineering Consultants 9+ippon:, a ;apanese consultancy firm providing technical and management support in the infrastructure pro3ects national permanently residing in the Philippines. The agreement provides that Aitamaru !as to e'tend professional services to +ippon for a year. +ippon assigned Aitamaru to !ork as the pro3ect manager of the %outhern Tagalog Access oad 9%TA : pro3ect. 1hen the %TA pro3ect !as near completion, =P14 engaged the consultancy services of +ippon, this time for the detailed engineering O construction supervision of the $ongabon-$aler oad (mprovement 9$$ (: Pro3ect. Aitamaru !as named as the pro3ect manger in the contract. 4asega!a, +ipponDs general manager for its (nternational =ivision, informed Aitamaru that the company had no more intention of automatically rene!ing his (CA. 4is services !ould be engaged by the company only up to the substantial completion of the %TA Pro3ect. Aitamaru demanded that he be assigned to the $$ ( pro3ect. +ippon insisted that AitamaruDs contract !as for a fi'ed term that had e'pired. Aitamaru then filed for specific performance O damages !P the TC of 8ipa City. +ippon filed a *T=. +ipponDs contention. The (CA had been perfected in ;apan O e'ecuted by O bet!een ;apanese nationals. Thus, the TC of 8ipa City has no 3urisdiction. The claim for improper pre-termination of AitamaruDs (CA could only be heard O ventilated in the proper courts of ;apan follo!ing the principles of le' loci celebrationis O le' contractus. The TC denied the motion to dismiss. The CA ruled hat the principle of le' loci celebrationis !as not applicable to the case, because no!here in the pleadings !as the validity of the !ritten agreement put in issue. (t held that the TC !as correct in applying the principle of le' loci solutionis. ISSUE 1hether or not the sub3ect matter 3urisdiction of Philippine courts in civil cases for specific performance O damages involving contracts e'ecuted outside the country by foreign nationals may be assailed on the principles of le' loci celebrationis, le' contractus, /the state of the most significant relationship rule,0 or forum non conveniens. HEL! +O. (n the 3udicial resolution of conflicts problems, I consecutive phases are involved. 3urisdiction, choice of la!, and recognition and enforcement of 3udgments. ;urisdiction O choice of la! are E distinct concepts. ;urisdiction considers !hether it is fair to cause a defendant to

28

travel to this stateJ choice of la! asks the further >uestion !hether the application of a substantive la! !Pc !ill determine the merits of the case is fair to both parties. The po!er to e'ercise 3urisdiction does not automatically give a state constitutional authority to apply forum la!. 1hile 3urisdiction and the choice of the le" fori !ill often coincide, the /minimum contacts0 for one do not al!ays provide the necessary /significant contacts0 for the other. The >uestion of !hether the la! of a state can be applied to a transaction is different from the >uestion of !hether the courts of that state have 3urisdiction to enter a 3udgment. (n this case, only the ,st phase is at issueG3urisdiction. ;urisdiction, ho!ever, has various aspects. )or a court to validly e'ercise its po!er to ad3udicate a controversy, it must have 3urisdiction over the plaintiffPpetitioner, over the defendantPrespondent, over the sub3ect matter, over the issues of the case and, in cases involving property, over the res or the thing !Pc is the sub3ect of the litigation. (n assailing the trial court"s 3urisdiction herein, +ippon is actually referring to sub3ect matter 3urisdiction. ;urisdiction over the subject matter in a 3udicial proceeding is conferred by the sovereign authority !Pc establishes and organiBes the court. (t is given only by la! and in the manner prescribed by la!. (t is further determined by the allegations of the complaint irrespective of !hether the plaintiff is entitled to all or some of the claims asserted therein. To succeed in its motion for the dismissal of an action for lack of 3urisdiction over the sub3ect matter of the claim, the movant must sho! that the court or tribunal cannot act on the matter submitted to it because no la! grants it the po!er to ad3udicate the claims. (n the instant case, +ippon, in its *T=, does not claim that the TC is not properly vested by la! !P 3urisdiction to hear the sub3ect controversy for a civil case for specific performance O damages is one not capable of pecuniary estimation O is properly cogniBable by the TC of 8ipa City. 1hat they rather raise as grounds to >uestion sub3ect matter 3urisdiction are the principles of le" loci celebrationis and le" contractus, and the /state of the most significant relationship rule.0 The Court finds the invocation of these grounds unsound. $e" loci celebrationis relates to the /la! of the place of the ceremony0 or the la! of the place !here a contract is made. The doctrine of le" contractus or le" loci contractus means the /la! of the place !here a contract is e'ecuted or to be performed.0 (t controls the nature, construction, and validity of the contract and it may pertain to the la! voluntarily agreed upon by the parties or the la! intended by them either e'pressly or implicitly. #nder the /state of the most significant relationship rule,0 to ascertain !hat state la! to apply to a dispute, the court should determine !hich state has the most substantial connection to the occurrence and the parties. (n a case involving a contract, the court should consider !here the contract !as made, !as negotiated, !as to be performed, and the domicile, place of business, or place of incorporation of the parties. This rule takes into account several contacts and evaluates them according to their relative importance !ith respect to the particular issue to be resolved.

29

%ince these I principles in conflict of la!s make reference to the la! applicable to a dispute, they are rules proper for the E nd phase, the choice of la!. They determine !hich state"s la! is to be applied in resolving the substantive issues of a conflicts problem. +ecessarily, as the only issue in this case is that of 3urisdiction, choice-of-la! rules are not only inapplicable but also not yet called for. )urther, +ipponDs premature invocation of choice-of-la! rules is e'posed by the fact that they have not yet pointed out any conflict bet!een the la!s of ;apan and ours. $efore determining !hich la! should apply, , st there should e'ist a conflict of la!s situation re>uiring the application of the conflict of la!s rules. Also, !hen the la! of a foreign country is invoked to provide the proper rules for the solution of a case, the e'istence of such la! must be pleaded and proved. (t should be noted that !hen a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are I alternatives open to the latter in disposing of it. 9,: dismiss the case, either because of lack of 3urisdiction or refusal to assume 3urisdiction over the caseJ 9E: assume 3urisdiction over the case and apply the internal la! of the forumJ or 9I: assume 3urisdiction over the case and take into account or apply the la! of some other %tate or %tates. The courtDs po!er to hear cases and controversies is derived from the Constitution and the la!s. 1hile it may choose to recogniBe la!s of foreign nations, the court is not limited by foreign sovereign la! short of treaties or other formal agreements, even in matters regarding rights provided by foreign sovereigns. +either can the other ground raised, forum non conveniens, be used to deprive the TC of its 3urisdiction. ,st, it is not a proper basis for a motion to dismiss because %ec. ,, ule ,C of the ules of Court does not include it as a ground. End, !hether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the TC. (n this case, the TC decided to assume 3urisdiction. Ird, the propriety of dismissing a case based on this principle re>uires a factual determinationJ hence, this conflicts principle is more properly considered a matter of defense.

30

31

+URIS!ICTION OVER 2ERSON 2HILSEC INVESTMENT -) a. #$. CA -) a.. G.R. No. 103&93+',- 19, 1997 FACTS. Private respondent =ucat obtained separate loans from petitioners Ayala (nternational )inance 8imited 9AHA8A: and Philsec (nvestment Corp 9P4(8%7C:, secured by shares of stock o!ned by =ucat. (n order to facilitate the payment of the loans, private respondent ,-66, (nc., through its president, private respondent =aic, assumed =ucatDs obligation under an Agreement, !hereby ,-66, (nc. e'ecuted a 1arranty =eed !ith VendorDs 8ien by !hich it sold to petitioner Athona 4oldings, +.V. 9AT4O+A: a parcel of land in Te'as, #.%.A., !hile P4(8%7C and AHA8A e'tended a loan to AT4O+A as initial payment of the purchase price. The balance !as to be paid by means of a promissory note e'ecuted by AT4O+A in favor of ,-66, (nc. %ubse>uently, upon their receipt of the money from ,-66, (nc., P4(8%7C and AHA8A released =ucat from his indebtedness and delivered to ,-66, (nc. all the shares of stock in their possession belonging to =ucat. As AT4O+A failed to pay the interest on the balance, the entire amount covered by the note became due and demandable. Accordingly, private respondent ,-66, (nc. sued petitioners P4(8%7C, AHA8A, and AT4O+A in the #nited %tates for payment of the balance 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 ,-66, (nc. under the Agreement. 1hile the Civil Case !as pending in the #nited %tates, petitioners filed a complaint /)or %um of *oney !ith =amages and 1rit of Preliminary Attachment0 against private respondents in the TC *akati. The complaint reiterated the allegation of petitioners in their respective counterclaims in the Civil Action in the #nited %tates =istrict Court of %outhern Te'as that private respondents committed fraud by selling the property at a price -FF percent more than its true value. =ucat moved to dismiss the Civil Case in the TC-*akati on the grounds of 9,: litis pendentia, vis-a-vis the Civil Action in the #.%., 9E: forum non conveniens, and 9I: failure of petitioners P4(8%7C and $P(-()8 to state a cause of action. The trial court granted =ucatDs *T=, stating that /the evidentiary re>uirements of the controversy may be more suitably tried before the forum of the litis pendentia in the #.%., under the principle in private international la! of forum non conveniens,0 even as it noted that =ucat !as not a party in the #.%. case. Petitioners appealed to the CA, arguing that the trial court erred in applying the principle of litis pendentia and forum non conveniens. The CA affirmed the dismissal of Civil Case against =ucat, ,-66, (nc., and

32

=aic on the ground of litis pendentia. ISSUE. 1hether or not the Civil Case in the 3udgment of the #.%. court2 TC-*akati barred by the

HEL!. CA reversed. Case remanded to TC-*akati NO 1hile this Court has given the effect of res 3udicata to foreign 3udgments in several cases, it !as after the parties opposed to the 3udgment had been given ample opportunity to repel them on grounds allo!ed under the la!. This is because in this 3urisdiction, !ith respect to actions in personam, as distinguished from actions in rem, a foreign 3udgment merely constitutes prima facie evidence of the 3ustness of the claim of a party and, as such, is sub3ect to proof to the contrary. ule I5, SMF provides. %ec. MF. 7ffect of foreign 3udgments. G The effect of a 3udgment of a tribunal of a foreign country, having 3urisdiction to pronounce the 3udgment is as follo!s. 9a: (n case of a 3udgment upon a specific thing, the 3udgment is conclusive upon the title to the thingJ9b: (n case of a 3udgment against a person, the 3udgment is presumptive evidence of a right as bet!een the parties and their successors in interest by a subse>uent titleJ but the 3udgment may be repelled by evidence of a !ant of 3urisdiction, !ant of notice to the party, collusion, fraud, or clear mistake of la! or fact. (n the case at bar, it cannot be said that petitioners !ere given the opportunity to challenge the 3udgment of the #.%. court as basis for declaring it res 3udicata or conclusive of the rights of private respondents. The proceedings in the trial court !ere summary. +either the trial court nor the appellate court !as even furnished copies of the pleadings in the #.%. court or apprised of the evidence presented thereat, to assure a proper determination of !hether the issues then being litigated in the #.%. court !ere e'actly the issues raised in this case such that the 3udgment that might be rendered !ould constitute res 3udicata. %econd. +or is the trial courtDs refusal to take cogniBance of the case 3ustifiable under the principle of forum non conveniens. )irst, a *T= is limited to the grounds under ule ,C, sec.,, !hich does not include forum non conveniens. The propriety of dismissing a case based on this principle re>uires a factual determination, hence, it is more properly considered a matter of defense.%econd, !hile it is !ithin the discretion of the trial court to abstain from assuming 3urisdiction on this ground, it should do so only after /vital facts are established, to determine !hether special circumstances0 re>uire the courtDs desistance.

33

VICENTA 2ANTALEON #$. HONORATO ASUNCION G.R. No. L-131&1, May %%, 1959 FACTS This is an appeal, taken by defendant 4onorato Asuncion from an order denying a petition for relief from an order declaring him in default and a 3udgment by default. On ;une ,E, ,5MI, plaintiff, Vicenta Pantaleon, instituted this action, in the Court of )irst (nstance of +ueva 7ci3a, to recover from said Asuncion, the sum of PE,FFF.FF, !ith interest thereon, in addition to attorneyDs fees. The summons originally issued !as returned by the sheriff of +ueva 7ci3a unserved, !ith the statement that, according to reliable information, Asuncion !as residing in $-E- Tala 7state, Caloocan, iBal. An alias summons !as issued, therefore, for service in the place last mentioned. 4o!ever, the provincial sheriff of iBal returned it unserved, !ith information that Asuncion had left the Tala 7state since )ebruary ,6, ,5ME, and that diligent efforts to locate him proved to no avail. On plaintiffDs motion, the court ordered, on *arch 5, ,5MM, that defendant be summoned by publication, and the summons !as published on *arch E, and E6, and April -, ,5MM, in the /7'aminer0, said to be a ne!spaper of general circulation in +ueva 7ci3a. 4aving failed to appear or ans!er the complaint !ithin the period stated in the summons, defendant !as, by an order dated ;uly ,E, ,5MM, declared in default. %ubse>uently, or on %eptember 6, ,5MM, after a hearing held in the absence of the defendant and !ithout notice to him, the court rendered 3udgment for the plaintiff and against said defendant, for the sum of PE,IFF.FF, !ith interest thereon at the legal rate, from October E6, ,5-6, and costs. About forty-si' 9-C: days later, or on October E-, ,5MM, the defendant filed a petition for relief from said order of ;uly ,E, ,5MM, and from said 3udgment, dated %eptember 6, ,5MM, and upon the ground of mistake and e'cusable negligence. Anne'ed to said petition !ere defendantDs affidavit and his verified ans!er. (n the affidavit, Asuncion stated that, on %eptember EC, ,5MM, at I- Pitimine %treet, %an )rancisco del %onte RueBon City, !hich is his residence, he received notice of a registered letter at the Post Office in %an ;ose, +ueva 7ci3a, his old family residenceJ that he proceeded immediately to the latter municipality to claim said letter, !hich he received on %eptember E6, ,5MMJ that the letter contained copy of said order of ;uly ,E, ,5MM, and of the 3udgment of %eptember 6, ,5MM, much to his surprise, for he had not been summoned or notified of the hearing of this caseJ that had copy of the summons and of the order for its publication been sent to him by mail, as provided in ule L, section E,, of the ules of Court said summons and order !ould have reached him, /as the 3udgment herein had0J and that his failure to appear before the court is e'cusable it being due to the mistake of the authorities concerned in not complying !ith the provisions of said section. #pon denial of said petition for relief, defendant perfected his present appeal, !hich is predicated upon the theory that the aforementioned summons by publication had not been made in conformity !ith the ules of Court.

34

Plaintiff alleges, ho!ever, that the provision applicable to the case at bar is not this section E,, but section ,C, of ule L, of the ules of Court, !hich provides. 1henever the defendant is designated as an unkno!n o!ner, or the like, or !henever the address of a defendant is unkno!n and cannot be ascertained by diligent in>uiry, service may, by leave of court, be effect upon him by publication in such places and for such times as the court may order. ISSUE 1hether or not the service of summons by publication is valid HEL! +o. (t is urged by the plaintiff that the re>uirement, in said section E,, of an affidavit sho!ing that copy of the summons and of the order for its publication had been sent by mail to defendantDs last kno!n address, refers to the e'traterritorial service of summons, provided for in section ,L of said ule L, pursuant to !hich. 1hen the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the sub3ect of !hich is, property !ithin the Philippines, in !hich the defendant has or claims a lien or interest, actual or contingent, or in !hich the relief demanded consists, !holly or in part, in e'cluding the defendant from any interest therein, or the property of the defendant has been attached !ithin the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section LJ or by registered mailJ or by publication in such places and for such time as the court may order, in !hich case a copy of the summons and order of the court shall be sent by ordinary mail to the last kno!n address of the defendantJ or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, !hich shall not be less than si'ty 9CF: days after notice, !ithin !hich the defendant must ans!er. %aid section E,, ho!ever, is un>ualified. (t prescribes the /proof of service by publication0, regardless of !hether the defendant is a resident of the Philippines or not. %ection ,C must be read in relation to section E,, !hich complements it. Then, too, !e conceive of no reason, and plaintiff has suggested none, !hy copy of the summons and of the order for its publication should be mailed to non-resident defendants, but not to resident defendants. 1e can not even say that defendant herein, !ho, according to the return of the %heriff of +ueva 7ci3a, !as reportedly residing in iBal Q !here he, in fact 9%an )rancisco del %onte and RueBon City used to be part of iBal:, !as residing Q could reasonably be e'pected to read the summons published in a ne!spaper said to be a general circulation in +ueva 7ci3a. Considering that strict compliance !ith the terms of the statute is necessary to confer 3urisdiction through service by publication, the conclusion is inescapable that the lo!er court had no authority !hatsoever to issue the order of ;uly ,E, ,5MM, declaring the defendant in default and to render the decision of %eptember 6, ,5MM, and that both are null and void ad initio. Apart from the foregoing, it is a !ell-settled principle of Constitutional

35

8a! that, in an action strictly in personam, like the one at bar, personal service of summons, !ithin the forum, is essential to the ac>uisition of 3urisdiction over the person of the defendant, !ho does not voluntarily submit himself to the authority of the court. (n other !ords, summons by publication cannot Q consistently !ith the due process clause in the $ill of ights Q confer upon the court 3urisdiction over said defendant. =ue process of la! re>uires personal service to support a personal 3udgment, and, !hen the proceeding is strictly in personam brought to determine the personal rights and obligations of the parties, personal service !ithin the state or a voluntary appearance in the case is essential to the ac>uisition of 3urisdiction so as to constitute compliance !ith the constitutional re>uirement of due process. 8astly, from the vie!point of substantial 3ustice and e>uity, !e are of the opinion that defendantDs petition for relief should have been granted. To begin !ith, it !as filed !ell !ithin the periods provided in the ules of Court. %econdly, and, this is more important, defendantDs verified ans!er, !hich !as attached to said petition, contains allegations !hich, if true, constitute a good defense.

36

Sa,)o$ #$. 2NOC E@5.o4a)/o, Co45o4a)/o, G.R. No. 1709&3A S-5)-67-4 %3, %008 FACTS espondent P+OC 7'ploration Corporation filed a complaint for a sum of money against petitioner Pedro %antos ;r. in the TC of Pasig. The amount sought to be collected !as the petitionerDs unpaid balance of the car loan advanced to him by respondent !hen he !as still a member of its board of directors. Personal service of summons !ere made to petitioner but failed because the latter cannot be located in his last kno!n address despite earnest efforts to do so. %ubse>uently, on respondentDs motion, the trial court allo!ed service of summons by publication. espondent caused the publication of the summons in emate, a ne!spaper of general circulation in the Philippines. Thereafter, respondent submitted the affidavit of publication and the affidavit of service of respondentDs employee to the effect that he sent a copy of the summons by registered mail to petitionerDs last kno!n address. Petitioner still failed to ans!er !ithin the prescribed period despite the publication of summons. 4ence, respondent filed a motion for the reception of its evidence e' parte. Trial court granted said motion and proceeded !ith the e' parte presentation and formal offer of its evidence. Petitioner filed an Omnibus *otion for econsideration and to Admit Attached Ans!er, alleging that the affidavit of service submitted by respondent failed to comply !ith %ection ,5, ule ,- of the ules of Court as it !as not e'ecuted by the clerk of court. Trial court denied the said motion and held that the rules did not re>uire such e'ecution !ith the clerk of court. (t also denied the motion to admit petitionerDs ans!er because the same !as filed !ay beyond the reglementary period. Petitioner appeals to the CA via a petition for certiorari but failed and even sustained the trial courts decision and ordered the former to pay the amount plus legal interest and cost of suit. 4ence, this petition. ISSUES 9,: 1hether or not there is lack of 3urisdiction over the petitioner due to improper service of summons. 9E: 1hether or not the rule on service by publication under %ection ,-, ule ,- of the ules of Court applies only to actions in rem, not actions in personam. 9I: 1hether or not the affidavit of service of the copy of the summons should have been prepared by the clerk of court and not respondentDs messenger. HEL! 9,: %ection ,-, ule ,- provides that in any action !here the defendant is designated as an unkno!n o!ner or the like or !hen his

37

!hereabouts are unkno!n and cannot be ascertained by diligent in>uiry, service may, by leave of court, be effected upon him by publication in a ne!spaper of general circulation and in such places and for such times as the court may order. %ince petitioner could not be personally served !ith summons despite diligent efforts to locate his !hereabouts, respondent sought and !as granted leave of court to effect the service of summons upon him by publication in a ne!spaper of general circulation. Thus, petitioner !as proper served !ith summons by publication and that there is 3urisdiction over his person. 9E: Petitioner invokes the distinction bet!een an action in rem and an action in personam and claims that substituted service may be availed of only in an action in rem. Petitioner is !rong. The in remPin personam distinction !as significant under the old rule because it !as silent as to the kind of action to !hich the rule !as applicable but this has been changed, it no! applies to any action. The present rule e'pressly states that it applies /in any action !here the defendant is designated as an unkno!n o!ner, or the like, or !henever his !hereabouts are unkno!n and cannot be ascertained by diligent in>uiry. 4ence, the petitionerDs contention that the complaint filed against him is not covered by the said rule because the action for recovery of sum of money is an action in personam is not applicable anymore. 9I: The service of summons by publication is complemented by service of summons by registered mail to defendantDs last kno!n address. This complementary service is evidenced by an affidavit/sho!ing the deposit of a copy of the summons and order for publication in the post office, postage for prepaid, directed to the defendant by registered mail to his last kno!n address0. The rules, ho!ever, do not re>uire that the affidavit of complementary service be e'ecuted by the clerk of court. 1hile the trial court ordinarily does the mailing of copies of its orders and processes, the duty to make the complementary service by registered mail is imposed on the party !ho resorts to service by publication.

38

+URIS!ICTION OVER RES "a,1o E$5a,o.-F/./5/,o #$. 2a.a,1a G.R. No. L-11390, Ma41> %*, 1918 FACTS 7ngracio Palanca Tan>uinyeng y 8im>uingco mortgaged various parcels of real property in *anila to 7l $anco 7spanol-)ilipino. After!ards, 7ngracio returned to China and there he died on ;anuary E5, ,6,F !ithout returning again to the Philippines. The mortgagor then instituted foreclosure proceeding but since defendant is a non-resident, it !as necessary to give notice by publication. The Clerk of Court !as also directed to send copy of the summons to the defendantDs last kno!n address, !hich is in Amoy, China. (t is not sho!n !hether the Clerk complied !ith this re>uirement. +evertheless, after publication in a ne!spaper of the City of *anila, the cause proceeded and 3udgment by default !as rendered. The decision !as like!ise published and after!ards sale by public auction !as held !ith the bank as the highest bidder. On August L, ,5F6, this sale !as confirmed by the court. 4o!ever, about seven years after the confirmation of this sale, a motion !as made by Vicente Palanca, as administrator of the estate of the original defendant, !herein the applicant re>uested the court to set aside the order of default and the 3udgment, and to vacate all the proceedings subse>uent thereto. The basis of this application !as that the order of default and the 3udgment rendered thereon !ere void because the court had never ac>uired 3urisdiction over the defendant or over the sub3ect of the action. ISSUE 1hether or not the lo!er court ac>uired 3urisdiction over the defendant and the sub3ect matter of the action RULING The !ord /3urisdiction0 is used in several different, though related, senses since it may have reference 9,: to the authority of the court to entertain a particular kind of action or to administer a particular kind of relief, or it may refer to the po!er of the court over the parties, or 9E: over the property !hich is the sub3ect to the litigation. The sovereign authority !hich organiBes a court determines the nature and e'tent of its po!ers in general and thus fi'es its competency or 3urisdiction !ith reference to the actions !hich it may entertain and the relief it may grant. ;urisdiction over the person is ac>uired by the voluntary appearance of a party in court and his submission to its authority, or it is ac>uired by the coercive po!er of legal process e'erted over the person. ;urisdiction over the property !hich is the sub3ect of the litigation may result either from a seiBure of the property under legal process, !hereby it is brought into the actual custody of the la!, or it may result from the institution

39

of legal proceedings !herein, under special provisions of la!, the po!er of the court over the property is recogniBed and made effective. (n the latter case the property, though at all times !ithin the potential po!er of the court, may never be taken into actual custody at all. An illustration of the 3urisdiction ac>uired by actual seiBure is found in attachment proceedings, !here the property is seiBed at the beginning of the action, or some subse>uent stage of its progress, and held to abide the final event of the litigation. An illustration of !hat !e term potential 3urisdiction over the res, is found in the proceeding to register the title of land under our system for the registration of land. 4ere the court, !ithout taking actual physical control over the property assumes, at the instance of some person claiming to be o!ner, to e'ercise a 3urisdiction in rem over the property and to ad3udicate the title in favor of the petitioner against all the !orld. (n the terminology of American la! the action to foreclose a mortgage is said to be a proceeding >uasi in rem, by !hich is e'pressed the idea that !hile it is not strictly speaking an action in rem yet it partakes of that nature and is substantially such. The e'pression &action in rem& is, in its narro! application, used only !ith reference to certain proceedings in courts of admiralty !herein the property alone is treated as responsible for the claim or obligation upon !hich the proceedings are based. The action >uasi rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant, and the purpose of the proceeding is to sub3ect his interest therein to the obligation or lien burdening the property. All proceedings having for their sole ob3ect the sale or other disposition of the property of the defendant, !hether by attachment, foreclosure, or other form of remedy, are in a general !ay thus designated. The 3udgment entered in these proceedings is conclusive only bet!een the parties. (t is true that in proceedings of this character, if the defendant for !hom publication is made appears, the action becomes as to him a personal action and is conducted as such. This, ho!ever, does not affect the proposition that !here the defendant fails to appear the action is >uasi in remJ and it should therefore be considered !ith reference to the principles governing actions in rem.

40

I!ONAH SLA!E 2ER;INS, #$. ARSENIO 2. !I8ON, +'0(- o9 F/4$) I,$)a,1- o9 Ma,/.a, EUGENE ARTHUR 2ER;INS, a,0 "ENGUET CONSOLI!ATE! MINING COM2ANB, G.R. No. &**31 No#-67-4 1*, 1939 FACTS espondent 7ugene Arthur Perkins instituted an action in the Court of )irst (nstance of *anila against the $enguet Consolidated *ining Company for payment of dividends on shares of stock registered in his name and for recognition of his right to control and dispose of his shares to the e'clusion of others. The company alleged in its ans!er that the !ithholding of the payment of the dividends and the non-recognition of espondentDs right for control and disposal of the shares !as due to claims made by Petitioner (donah %lade Perkins and one <eorge 4. 7ngelhard. 4ence, the trial court ordered that the complaint be amended to include (donah %lade Perkins and <eorge 4. 7ngelhard, and that they be impleaded in the case. #pon order of the court, summons by publication !ere thereafter served upon (donah Perkins and 7ngelhard, both of !hom are non-residents. Petitioner (donah Perkins, through counsel, challenged the 3urisdiction of the lo!er court over her person but said petition !as denied. 4ence, she brought the present action for certiorari. ISSUE 1P+ the Court of )irst (nstance of *anila ac>uired 3urisdiction over her person. HEL! The Court held that the Court of )irst (nstance of *anila ac>uired 3urisdiction over the person of (donah %lade Perkins. The Code of Civil Procedure provides that service of summons may be made by publication !hen a non-resident defendant is sued in the Philippine courts and it appears that the action relates to real or personal property !ithin the Philippines in !hich said defendant claims a lien or an interestJ service of summons by publication is also an option !hen the relief demanded consists in e'cluding such person from any interest in the property 9>uasi in rem:. (n the present case, the action brought by 7ugene Arthur Perkins against Petitioner seeks to e'clude her from any interest in certain shares of stocks of $enguet Consolidated *ining Company, a company organiBed in the Philippines !ith its principal office in the City of *anila. The situs of the shares is in the 3urisdiction !here the corporation is created. #nder the said circumstances, the action brought by 7ugene Arthur Perkins against said persons is >uasi in rem. 4ence, the Court of )irst (nstance ac>uired 3urisdiction over the person of Petitioner (donah Perkins through the service of summons by publication.

41

ASSUM2TION OF +URIS!ICTION #$. FORUM NON-CONVENIENS ;.;. SHELL SE;IBU OSA;A HATSU"AISHO a,0 FU HING OIL CO., LT!. #$. THE HONORA"LE COURT OF A22EALS, ATLANTIC VENUS CO., S.A., a,0 THE VESSEL MCV DESTELLAE G.R. No$. 9030*-07 +'.y 30, 1990 FACTS Aumagai, a corporation formed and e'isting under the la!s of ;apan, filed a complaint for the collection of a sum of money !ith preliminary attachment before TC *anila against Atlantic, a corporation registered in Panama, the vessel *V 7stella and Crestamonte %hipping, a Philippine corporation. Atlantic is the o!ner of the *V 7stella. The complaint alleged that Crestamonte, as bareboat charterer and operator of the *V 7stella, appointed +.%. %hipping, a ;apanese corporation, as its general agent in ;apan. The appointment !as formaliBed in an Agency Agreement. +%% in turn appointed Aumagai as its local agent in Osaka, ;apan. Aumagai supplied the *V 7stella !ith supplies and services but despite repeated demands Crestamonte failed to pay the amounts due. +%% and Aeihin +arasaki Corporation filed complaints-in-intervention. )u 4ing Oil Co., a corporation organiBed in 4ong Aong and not doing business in the Philippines, filed a motion for leave to intervene !ith an attached complaint-in-intervention, alleging that )u 4ing supplied marine diesel fuel to *V 7stella and incurred e'penses for T,ME,-,E.MC but it !as not paid despite demand. %ame !as done by A.A. %hell, a corporation organiBed in ;apan and not doing business in the Philippines, !ho like!ise filed a motion to intervene !ith an attached complaint-in-intervention, alleging that upon re>uest of +%%, Crestamonte"s the company provided and supplied fuel to 7stella at the ports of ;apan and but despite demands it failed to pay the amounts of #%T,C,55C.5C and H,,FFF,FFF.FF. $oth company stated that their claims constitute a maritime lien and both prayed for issuance of a !rit of attachment. The trial court allo!ed the intervention of both corporation, !rits of preliminary attachment !ere issued and upon the posting of the counterbonds, !rits of attachment !ere discharged. Atlantic and *V 7stella moved to dismiss the complaints and filed a petition in the Court of Appeals against the trial court 3udge, Aumagai, +%% and Aeihin seeking the annulment of the orders of the trial court. Court of Appeals annulled the orders of the trial court and directed it to desist from proceeding !ith the case stating that )u 4ing and A.A. %hell !ere not suppliers but sub-agents of +%%, hence they !ere bound by the Agency Agreement bet!een Crestamonte and +%% and that the trial court should have disallo!ed their motions to intervene. ISSUE ,. 1Pn )u 4ing and A.A. %hell should be allo!ed to intervene. E. 1Pn the doctrine of forum non conveniens may be invoked.

42

RULING A$ )o )>- 9/4$) /$$'+o e'press reference to the contracting of sub-agents or the applicability of the terms of the agreement, particularly the choice-of-forum clause, to sub-agents is made in the te't of the agreement. 1hat the contract clearly states are +%%" principal duties. *oreover, the complaint-inintervention filed by A.A. %hell merely alleges that it supplied *V 7stella !ith fuel, upon re>uest of +%% !ho !as acting for and as duly appointed agent of Crestamonte. There is no basis for the CA to state that A.A. %hell admitted in its intervention that it !as appointed as sub-agent or representatives by +%% by virtue of said Agency Agreement. The CA !as erroneously referring to another case involving another ship in another court. Thus, additional evidence must be given to establish such allegation. A$ )o )>- $-1o,0 /$$'Atlantic and *V 7stella are invoking the doctrine of forum non conveniens to be a valid ground for the dismissal of A.A. %hellsDs complaintin-intervention. A.A. %hell, in turn, argued by invoking its right as maritime lienholder. To invoke this, it must be established that the credit !as e'tended to the vessel itself. %ince private respondents have yet to file their ans!er in the proceeding and trial on the merits is still to be conducted, !hether or not petitioners are indeed maritime lienholders and as such may enforce the lien against the *V 7stella, then there are matters that are still to be established. The Court also stated there can be no ruling yet !ith regards to private respondents" invocation of the doctrine of forum non conveniens, since the relationship of the parties is still to be established and remanded it back to the trial court 3udge for decision. (t !as an error for the CA to annul the trial court"s order, insofar as A.A. %hell is concerned since there are still material facts to be established to determine the true nature of the relationship bet!een the parties. The best recourse !ould have been to allo! the trial court to proceed !ith the case and consider the defenses raised by private respondents after they have filed their ans!er and the evidence to support their conflicting claims. The CA, ho!ever, substituted its 3udgment for that of the trial court and decided the merits of the case, even in the absence of evidence, on the prete't of revie!ing an interlocutory order.

43

COMMUNICATION MATERIALS AN! !ESIGN, INC -) a. #$.CA -) a.. G.R. No. 10%%%3 A'('$) %%, 199* FACTS. Petitioners CO**#+(CAT(O+ *AT7 (A8% A+= =7%(<+, (+C., 9C*=(: and A%PAC *#8T(-T A=7 (+C., 9A%PAC: are both domestic corporations.. Private espondents (T7C, (+C. andPor (T7C, (+T7 +AT(O+A8, (+C. 9(T7C: are corporations duly organiBed and e'isting under the la!s of the %tate of Alabama, #%A. There is no dispute that (T7C is a foreign corporation not licensed to do business in the Philippines. (T7C entered into a contract !ith A%PAC referred to as / epresentative Agreement0. Pursuant to the contract, (T7C engaged A%PAC as its /e'clusive representative0 in the Philippines for the sale of (T7CDs products, in consideration of !hich, A%PAC !as paid a stipulated commission. Through a /8icense Agreement0 entered into by the same parties later on, A%PAC !as able to incorporate and use the name /(T7C0 in its o!n name. Thus , A%PAC *ulti-Trade, (nc. became legally and publicly kno!n as A%PAC-(T7C 9Philippines:. One year into the second term of the partiesD epresentative Agreement, (T7C decided to terminate the same, because petitioner A%PAC allegedly violated its contractual commitment as stipulated in their agreements. (T7C charges the petitioners and another Philippine Corporation, =(<(TA8 $A%7 CO**#+(CAT(O+%, (+C. 9=(<(TA8:, the President of !hich is like!ise petitioner Aguirre, of using kno!ledge and information of (T7CDs products specifications to develop their o!n line of e>uipment and product support, !hich are similar, if not identical to (T7CDs o!n, and offering them to (T7CDs former customer. The complaint !as filed !ith the TC-*akati by (T7C, (+C. =efendants filed a *T= the complaint on the follo!ing grounds. 9,: That plaintiff has no legal capacity to sue as it is a foreign corporation doing business in the Philippines !ithout the re>uired $O( authority and %7C license, and 9E: that plaintiff is simply engaged in forum shopping !hich 3ustifies the application against it of the principle of /forum non conveniens0. The *T= !as denied. Petitioners elevated the case to the respondent CA on a Petition for Certiorari and Prohibition under ule CM of the evised OC. (t !as dismissed as !ell. * denied, hence this Petition for evie! on Certiorari under ule -M. ISSUE. ,. =id the Philippine court ac>uire 3urisdiction over the person of the petitioner corp, despite allegations of lack of capacity to sue because of nonregistration2 E. Can the Philippine court give due course to the suit or dismiss it, on the principle of forum non convenience2

44

HEL!. Petition dismissed. ,. H7%J 1e are persuaded to conclude that (T7C had been /engaged in0 or /doing business0 in the Philippines for some time no!. This is the inevitable result after a scrutiny of the different contracts and agreements entered into by (T7C !ith its various business contacts in the country. (ts arrangements, !ith these entities indicate convincingly that (T7C is actively engaging in business in the country. A foreign corporation doing business in the Philippines may sue in Philippine Courts although not authoriBed to do business here against a Philippine citiBen or entity !ho had contracted !ith and benefited by said corporation. To put it in another !ay, a party is estopped to challenge the personality of a corporation after having ackno!ledged the same by entering into a contract !ith it. And the doctrine of estoppel to deny corporate e'istence applies to a foreign as !ell as to domestic corporations. One !ho has dealt !ith a corporation of foreign origin as a corporate entity is estopped to deny its corporate e'istence and capacity. (n Antam Consolidated (nc. vs. CA et al. !e e'pressed our chagrin over this commonly used scheme of defaulting local companies !hich are being sued by unlicensed foreign companies not engaged in business in the Philippines to invoke the lack of capacity to sue of such foreign companies. Obviously, the same ploy is resorted to by A%PAC to prevent the in3unctive action filed by (T7C to en3oin petitioner from using kno!ledge possibly ac>uired in violation of fiduciary arrangements bet!een the parties. E. H7%J PetitionerDs insistence on the dismissal of this action due to the application, or non application, of the private international la! rule of forum non conveniens defies !ell-settled rules of fair play. According to petitioner, the Philippine Court has no venue to apply its discretion !hether to give cogniBance or not to the present action, because it has not ac>uired 3urisdiction over the person of the plaintiff in the case, the latter allegedly having no personality to sue before Philippine Courts. This argument is misplaced because the court has already ac>uired 3urisdiction over the plaintiff in the suit, by virtue of his filing the original complaint. And as !e have already observed, petitioner is not at liberty to >uestion plaintiffDs standing to sue, having already acceded to the same by virtue of its entry into the epresentative Agreement referred to earlier. Thus, having ac>uired 3urisdiction, it is no! for the Philippine Court, based on the facts of the case, !hether to give due course to the suit or dismiss it, on the principle of forum non convenience. 4ence, the Philippine Court may refuse to assume 3urisdiction in spite of its having ac>uired 3urisdiction. Conversely, the court may assume 3urisdiction over the case if it chooses to do soJ provided, that the follo!ing re>uisites are met. That the Philippine Court is one to !hich the parties may conveniently resort toJ That the Philippine Court is in a position to make an intelligent decision

45

as to the la! and the factsJ and, That the Philippine Court has or is likely to have po!er to enforce its decision. The aforesaid re>uirements having been met, and in vie! of the courtDs disposition to give due course to the >uestioned action, the matter of the present forum not being the /most convenient0 as a ground for the suitDs dismissal, deserves scant consideration.

46

F/4$) 2>/./55/,- I,)-4,a)/o,a. "a,3 #. CA G.R. No. 1158&9A +a,'a4y %&, 199* Fa1)$ )irst Philippine (nternational $ank 9)P($: ac>uired si' parcels of land in %ta. osa 8aguna from $H*7 (nvestment and =evelopment Corporation as collaterals of a mortgage. %ometime in ,56L, =emetria and ;ose ;anolo 9%ps. ;anolo: !anted to purchase the property and negotiated for that purpose !ith *arcurio ivera, *anager of the Property *anagement =epartment of )P($. T!o days after a meeting !ith the %enior Vice-President of the bank !hich !as also attended by ivera, spouses ;anolo sent a letter accepting the bankDs offer to purchase the lands for a total price of M,MFF,FFFphp. On October ,E, ,56L the conservator of the bank 9as the bank has been placed under conservatorship since ,56-: !as replaced. =emands !ere made by spouses ;anolo. The bank, through acting conservator 7ncarnacion repudiated the authority of ivera and claimed that his dealings !ith spouses ;anolo are unauthoriBed or illegal. %pouses ;anolo filed a suit for specific performance !ith damages against the bank, its manager ivera and acting conservator 7ncarnacion. The basis of the suit !as that the transaction had !ith the bank resulted in a perfected contract of sale. The trial court rendered 3udgment in favor of plaintiff and ordered that a deed of sale be e'ecuted. 4enry Co filed a motion to intervene, alleging that as the o!ner of 6FN of the bankDs outstanding shares of stock, he had substantial interest in the complaint. Trial court denied his motion on the ground that it !as filed after the trial has been concluded. *otion for reconsideration !as like!ise denied. The bank, ivera and 7ncarnacion appealed to the Court of Appeals !hile 4enry Co did not appeal the denial of his motion for (ntervention. (n the course of the proceedings, Carlos 73ercito substituted in place of spouses ;anolo in vie! of an assignment of the latterDs rights in litigation. =uring the pendency of the proceedings in the CA, 4enry Co and several stockholders of the bank filed an action purportedly a /derivative suit0 !ith the TC of *akati against sps ;anolo to declare the sale of property unenforceable and stop 73ercito from enforcing the sale. ;anolo argued that the second case !as barred by litis pendentia by virtue of the case then pending in the CA and that the second case be dismissed !ith pre3udice. The CA affirmed the ruling of the trial court !ith modification the said 3udgment hence, this appeal. I$$'1hether or not there !as forum-shopping on the part of petitioner bank H-.0 Hes, because there e'ists identity of the parties or interest represented, identity of rights or causes, and identity of reliefs sought. (n the %econd Case, the ma3ority stockholders, in representation of the $ank, are seeking to accomplish !hat the $ank itself failed to do in the original case in the trial court. (n brief, the ob3ective or the relief being sought, though !orded differently, is the same, namely, to enable the petitioner $ank to escape from

47

the obligation to sell the property to respondent. There is also identity of parties, or at least, of interests represented. Although the plaintiffs in the %econd Case 94enry 8. Co. et al.: are not name parties in the )irst Case, they represent the same interest and entity, namely, petitioner $ank because, they are not suing in their personal capacities and petitioners claim to have brought suit /for and in behalf of the bank. The %C in this case discussed the origin of forum shopping. )orumshopping originated as a concept in private international la!, !here nonresident litigants are given the option to choose the forum or place !herein to bring their suit for various reasons or e'cuses, including to secure procedural advantages, to annoy and harass the defendant, to avoid overcro!ded dockets, or to select a more friendly venue. To combat these less than honorable e'cuses, the principle of forum non conveniens !as developed !hereby a court, in conflicts of la! cases, may refuse impositions on its 3urisdiction !here it is not the most &convenient& or available forum and the parties are not precluded from seeking remedies else!here. (n the Philippines, forum shopping has ac>uired a connotation encompassing not only a choice of venues, as it !as originally understood in conflicts of la!s, but also to a choice of remedies. 7ventually, ho!ever, instead of actually making a choice of the forum of their actions, litigants, through the encouragement of their la!yers, file their actions in all available courts, or invoke all relevant remedies simultaneously. This practice had not only resulted to conflicting ad3udications among different courts and conse>uent confusion inimical to an orderly administration of 3ustice. (t had created e'treme inconvenience to some of the parties to the action. Thus, &forum shopping& had ac>uired a different concept G !hich is unethical professional legal practice. And this necessitated or had given rise to the formulation of rules and canons discouraging or altogether prohibiting the practice.

48

MANILA HOTEL COR2ORATION #. NLRC G.R. No. 1%0077 O1)o7-4 13, %000 FACTS Private espondent *arcelo %antos !as an overseas !orker employed as a printer at the *aBoon Printing Press, %ultanate of Oman. =uring his employment !ith the *aBoon Printing Press he received a letter dated *ay E, ,566 from *r. %hmidt, general manager of Palace 4otel $ei3ing, China and informed the %antos that he !as recommended by one +estor $uenio, a friend of his. *r. %hmidt offered repondent %antos same position as printer but !ith higher salary and increased benefits. On *ay 6, ,566, %antos !rote to *r. %hmidt and signified his acceptance of the offer. Thereafter, the Palace 4otel *anager *r. 4ans 4enk mailed a ready to sign employment contract to %antos. *r. 4enk advised %antos that if the contract !as acceptable he must return the same to him together !ith his passport and pictures. %antos resigned from the *aBoon Printing press effective ;une IF, ,566 under the prete't that he needed at home to help his familyDs poultry and piggery business. +ovember M, ,566 he started to !ork at the Palace 4otel. %ubse>uently he signed an amended employment contract !ith the Palace 4otel. %antos reassumed his post after his vacation leave in the Philippines. On August ,F, ,566 a letter signed by *r. %hmidt informed respondent %antos that his employment at the Palace 4otel print shop !ould be terminated due to business reverses brought about by political upheaval in China. On %eptember M, ,565, the Palace terminated the employment of the respondent and paid all the benefits including his plane ticket back to *anila. On )ebruary EF, ,55F %antos filed a complaint for illegal dismissal !ith +ational 8abor elations Commission. The complaint named *anila 4otel Corporation, *4(C8, Palace 4otel and *r. %hmidt as respondents. The Palace 4otel and *r. %hmidt !ere not served summons. The 8abor Arbiter ruled against the petitioner, hence, he appealed to the +8 C arguing that PO7A has the 3urisdiction over the case and not +8 C. The +8 C ruled in favor of the private respondent that %antos !as illegally dismissed from employment. Petitioners filed a motion for reconsideration but !ere denied. %antos filed his comment and so as the +8 C. ISSUE 1hether or not +8 C has 3urisdiction over the case2 NO. 1hether or not the rule of forum non conveniens may be applied2 NO. RULING The +8 C !as seriously inconvenient forum. The %upreme Court noted that the main aspects of the case transpired in t!o foreign 3urisdictions and involves purely foreign elements. The only link that the Philippines have !ith this case is that respondent %antos is a )ilipino citiBen. The Palace 4otel and *4(C8 are foreign corporations. +ot all cases involving our citiBens can

49

be tried here. espondent %antos !as hired directly by the Palace 4otel, a foreign employer and not through the intervention of PO7A. #nder the rule of forum non conveniens, a Philippine court or agency may assume 3urisdiction over the case if it chooses to do so provided. 9,: that the Philippine court is one to !hich the parties may conveniently resort toJ 9E: that the Philippine court is in a position to make an intelligent decision as to the la! and the factsJ and 9I: that the Philippine court has or is likely to have po!er to enforce its decision. The conditions are unavailing in the case at bar. There !as inconvenience in the case, !hich !as compounded by the fact that the proper defendants, the Palace 4otel and *4(C8 are not nationals of the Philippines. +either are they /doing business in the Philippines. No 5o:-4 )o 0-)-46/,- a55./1a7.- .a: F +either can an intelligent decision be made as to the la! governing the employment contract as such !as perfected in foreign soil. This calls to fore the application of the principle of le" loci contractus 9the la! of the place !here the contract !as made:. The employment contract !as not perfected in the Philippines. espondent %antos signified his acceptance by !riting a letter !hile he !as in the epublic of Oman. This letter !as sent to the Palace 4otel in the PeopleDs epublic of China. No 5o:-4 )o 0-)-46/,- )>- 9a1)$ Q +either can the +8 C determine the facts surrounding the alleged illegal dismissal as all acts complained of took place in $ei3ing, PeopleDs epublic of China. The +8 C !as not in a position to determine !hether the Tiannamen %>uare incident truly adversely affected operations of the Palace 4otel as to 3ustify respondent %antosD retrenchment. 24/,1/5.- o9 -99-1)/#-,-$$, ,o 5o:-4 )o -@-1')- 0-1/$/o, F 7ven assuming that a proper decision could be reached by the +8 C, such !ould not have any binding effect against the employer, the Palace 4otel. The Palace 4otel is a corporation incorporated under the la!s of China and !as not even served !ith summons. ;urisdiction over its person !as not ac>uired. This is not to say that Philippine courts and agencies have no po!er to solve controversies involving foreign employers. +either are !e saying that !e do not have po!er over an employment contract e'ecuted in a foreign country. I9 Sa,)o$ :-4- a, Go#-4$-a$ 1o,)4a1) :o43-4E, a 2>/./55/,- 9o4'6, $5-1/9/1a..y )>- 2OEA, ,o) )>- NLRC, :o'.0 54o)-1) >/6. 4e is not an /overseas contract !orker0 a fact !hich he admits !ith conviction.

50

2ACIFIC CONSULTANTS INTERNATIONAL ASIA, INC. AN! +ENS 2ETER HENRICHSEN, 2ETITIONERS, VS. ;LAUS ;. SCHONFEL!, RES2ON!ENT. HG.R. No. 1**9%0, F-74'a4y 19, %007I FACTS espondent is a Canadian citiBen and !as a resident of +e! 1estminster, $ritish Columbia, Canada. 4e had been a consultant in the field of environmental engineering and !ater supply and sanitation. Pacicon Philippines, (nc. 9PP(: is a corporation duly established and incorporated in accordance !ith the la!s of the Philippines. The primary purpose of PP( !as to engage in the business of providing specialty and technical services both in and out of the Philippines. (t is a subsidiary of Pacific Consultants (nternational of ;apan 9PC(;:. The president of PP(, ;ens Peter 4enrichsen, !ho !as also the director of PC(;, !as based in Tokyo, ;apan. On ;anuary L, ,556, 4enrichsen transmitted a letter of employment to respondent in Canada, re>uesting him to accept the same and affi' his conformity thereto. espondent made some revisions in the letter of employment and signed the contract. 4e then sent a copy to 4enrichsen. The letter of employment contains among others a stipulation !hich states. /Any >uestion of interpretation, understanding or fulfillment of the conditions of employment, as !ell as any >uestion arising bet!een the 7mployee and the Company !hich is in conse>uence of or connected !ith his employment !ith the Company and !hich cannot be settled amicably, is to be finally settled, binding to both parties through !ritten submissions, by the Court of Arbitration in 8ondon.0 espondent arrived in the Philippines and assumed his position as PP( %ector *anager. 4e !as accorded the status of a resident alien. As re>uired by uleon 7mployment of Aliens of the Omnibus ules (mplementing the 8abor Code, PP( applied for an Alien 7mployment Permit 9Permit: for respondent before the =epartment of 8abor and 7mployment 9=O87:. On *ay M, ,555, %chonfeld received a letter from 4enrichsen informing him that his employment had been terminated effective August -, ,555 for the reason that PC(; and PP( had not been successful in the !ater and sanitation sector in the Philippines. 4o!ever, on ;uly E-, ,555, 4enrichsen, by electronic mail, re>uested respondent to stay put in his 3ob after August M, ,555, until such time that he !ould be able to report on certain pro3ects and discuss all the opportunities he had developed. espondent continued his !ork !ith PP( until the end of business hours on October ,, ,555. espondent filed !ith PP( several money claims, including unpaid salary, leave pay, air fare from *anila to Canada, and cost of shipment of goods to Canada. PP( partially settled some of his claims 9#%TM,CIM.55:, but refused to pay the rest.

51

%chonfeld filed a Complaint for (llegal =ismissal against petitioners PP( and 4enrichsen !ith the 8abor Arbiter. (n his Complaint, respondent alleged that he !as illegally dismissedJ PP( had not notified the =O87 of its decision to close one of its departments, !hich resulted in his dismissalJ and they failed to notify him that his employment !as terminated after August -, ,555. espondent also claimed for separation pay and other unpaid benefits. 4e alleged that the company acted in bad faith and disregarded his rights. Petitioners filed a *otion to =ismiss the complaint on the follo!ing grounds. 9,: the 8abor Arbiter had no 3urisdiction over the sub3ect matterJ and 9E: venue !as improperly laid. (t averred that respondent !as a Canadian citiBen, a transient e'patriate !ho had left the Philippines. 4e !as employed and dismissed by PC(;, a foreign corporation !ith principal office in Tokyo, ;apan. %ince respondentDs cause of action !as based on his letter of employment e'ecuted in Tokyo, ;apan dated ;anuary L, ,556, under the principle of le' loci contractus, the complaint should have been filed in Tokyo, ;apan. Petitioners claimed that respondent did not offer any 3ustification for filing his complaint against PP( before the +8 C in the Philippines. *oreover, under %ection ,E of the <eneral Conditions of 7mployment appended to the letter of employment dated ;anuary L, ,556, complainant and PC(; had agreed that any employment-related dispute should be brought before the 8ondon Court of Arbitration. %ince even the %upreme Court had already ruled that such an agreement on venue is valid, Philippine courts have no 3urisdiction. The 8abor Arbiter rendered a decision granting petitionersD *otion to =ismiss. The 8abor Arbiter found, among others, that the ;anuary L, ,556 contract of employment bet!een respondent and PC(; !as controllingJ the Philippines !as only the /duty station0 !here %chonfeld !as re>uired to !ork under the <eneral Conditions of 7mployment. PC(; remained respondentDs employer despite his having been sent to the Philippines. %ince the parties had agreed that any differences regarding employer-employee relationship should be submitted to the 3urisdiction of the court of arbitration in 8ondon, this agreement is controlling. On appeal, the +8 C agreed !ith the 8abor Arbiter and affirmed the latterDs decision in toto. espondent then filed a petition for certiorari under ule CM !ith the CA. The CA found the petition meritorious. On the issue of venue, the appellate court declared that, even under the ;anuary L, ,556 contract of employment, the parties !ere not precluded from bringing a case related thereto in other venues. 1hile there !as, indeed, an agreement that issues bet!een the parties !ere to be resolved in the 8ondon Court of Arbitration, the venue is not e'clusive, since there is no stipulation that the complaint cannot be filed in any other forum other than in the Philippines. (t ordered the remand of the case to the 8abor Arbiter for disposition of the merits of the case.

52

ISSUE 1hether or not the Philippine 8abor Arbiter can take cogniBance over the case not!ithstanding !hat !as stated in the 7mployment Contract. 1hether or not the principle of forum non conveniens may be applied. RULING Hes. The settled rule on stipulations regarding venue, is that !hile they are considered valid and enforceable, venue stipulations in a contract do not, as a rule, supersede the general rule set forth in ule - of the evised ules of Court in the absence of >ualifying or restrictive !ords. They should be considered merely as an agreement or additional forum, not as limiting venue to the specified place. They are not e'clusive but, rather permissive. (f the intention of the parties !ere to restrict venue, there must be accompanying language clearly and categorically e'pressing their purpose and design that actions bet!een them be litigated only at the place named by them. (n the instant case, no restrictive !ords like /only,0 /solely,0 /e'clusively in this court,0 /in no other court save G,0 /particularly,0 /no!here else butPe'cept G,0 or !ords of e>ual import !ere stated in the contract. (t cannot be said that the court of arbitration in 8ondon is an e'clusive venue to bring forth any complaint arising out of the employment contract. Petitioners contend that respondent should have filed his Complaint in his place of permanent residence, or !here the PC(; holds its principal office, at the place !here the contract of employment !as signed, in 8ondon as stated in their contract. $y enumerating possible venues !here respondent could have filed his complaint, ho!ever, petitioners themselves admitted that the provision on venue in the employment contract is indeed merely permissive. +o. PetitionersD insistence on the application of the principle of forum non conveniens must be re3ected. The fact that respondent is a Canadian citiBen and !as a repatriate does not !arrant the application of the principle for the follo!ing reasons. )irst. The 8abor Code of the Philippines does not include forum non conveniens as a ground for the dismissal of the complaint. %econd. The propriety of dismissing a case based on this principle re>uires a factual determinationJ hence, it is properly considered as defense. Third. (n $ank of America, +TO%A, $ank of America (nternational, 8td. v. Court of Appeals, this Court held that. ' ' ' ?a@ Philippine Court may assume 3urisdiction over the case if it chooses to do soJ provided, that the follo!ing re>uisites are met. 9,: that the Philippine Court is one to !hich the parties may conveniently resort toJ 9E: that the Philippine Court is in a position to make an intelligent decision as to the la! and the factsJ and, 9I: that the Philippine Court has or is likely to have po!er to enforce its decision. ' ' '

53

WHICH o4 WHAT LAW THE ASSUMING COURT WILL A22LB A8NAR #$. GARCIA +a,'a4y 31, 19*3 FACTS 7=1A = Christensen died testate. The estate !as distributed by 7'ecutioner ABnar according to the !ill, !hich provides that. Php I,CFF be given to 4787+ Christensen as her legacy, and the rest of his estate to his daughter 8#CH Christensen, as pronounced by C)( =avao. Opposition to the approval of the pro3ect of partition !as filed by 4elen, insofar as it deprives her of her legitime as an ackno!ledged natural child, she having been declared by #s an ackno!ledged natural child of the deceased 7d!ard in an earlier case. As to his citiBenship, !e find that the citiBenship that he ac>uired in California !hen he resided in %acramento from ,5F- to ,5,I, !as never lost by his stay in the Philippines, and the deceased appears to have considered himself as a citiBen of California by the fact that !hen he e'ecuted his !ill he declared that he !as a citiBen of that %tateJ so that he appears never to have intended to abandon his California citiBenship by ac>uiring another. $ut at the time of his death, he !as domiciled in the Philippines. ISSUE 1hat la! on succession should apply, the Philippine la! or the California la!2 HEL! Philippine 8a! shall govern, the decision appealed from is hereby reversed and the case returned to the lo!er court !ith instructions that the partition be made as the Philippine la! on succession provides. The la! that governs the validity of his testamentary dispositions is defined in Article ,C of the Civil Code of the Philippines, !hich is as follo!s. /A T. ,C. eal property as !ell as personal property is sub3ect to the la! of the country !here it is situated 4o!ever, intestate and testamentary successions, both !ith 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 la! of the person !hose succession is under consideration, !hatever may be the nature of the property and regardless of the country !here said property may be found.0 The application of this article in the case at bar re>uires the determination of the meaning of the term /national la!0 is used therein. The ne't >uestion is. 1hat is the la! in California governing the disposition of personal property2 The decision of C)( =avao, sustains the

54

contention of the e'ecutor-appellee that under the California Probate Code, a testator may dispose of his property by !ill in the form and manner he desires. $ut 4787+ invokes the provisions of Article 5-C of the Civil Code of California, !hich is as follo!s. (f there is no la! to the contrary, in the place !here personal property is situated, it is deemed to follo! the person of its o!ner, and is governed by the la! of his domicile. (t is argued on e'ecutorDs behalf that as the deceased Christensen !as a citiBen of the %tate of California, the internal la! thereof, !hich is that given in the Aaufman case, should govern the determination of the validity of the testamentary provisions of ChristensenDs !ill, such la! being in force in the %tate of California of !hich Christensen !as a citiBen. Appellant, on the other hand, insists that Article 5-C should be applicable, and in accordance there!ith and follo!ing the doctrine of the renvoi, the >uestion of the validity of the testamentary provision in >uestion should be referred back to the la! of the decedentDs domicile, !hich is the Philippines. 1e note that Article 5-C of the California Civil Code is its conflict of la!s rule, !hile the rule applied in (n re Aaufman, its internal la!. (f the la! on succ ession and the conflict of la!s rules of California are to be enforced 3ointly, each in its o!n intended and appropriate sphere, the principle cited (n re Aaufman should apply to citiBens living in the %tate, but Article 5-C should apply to such of its citiBens as are not domiciled in California but in other 3urisdictions. The rule laid do!n of resorting to the la! of the domicile in the determination of matters !ith foreign element involved is in accord !ith the general principle of American la! that the domiciliary la! should govern in most matters or rights !hich follo! the person of the o!ner. Appellees argue that !hat Article ,C of the Civil Code of the Philippines pointed out as the national la! is the internal la! of California. $ut as above e'plained the la!s of California have prescribed t!o sets of la!s for its citiBens, one for residents therein and another for those domiciled in other 3urisdictions. (t is argued on appelleesD 9ABnar and 8#CH: behalf that the clause /if there is no la! to the contrary in the place !here the property is situated0 in %ec. 5-C of the California Civil Code refers to Article ,C of the Civil Code of the Philippines and that the la! to the contrary in the Philippines is the provision in said Article ,C that the national la! of the deceased should govern. This contention can not be sustained. As e'plained in the various authorities cited above, the national la! mentioned in Article ,C of our Civil Code is the la! on conflict of la!s in the California Civil Code, i.e., Article 5-C, !hich authoriBes the reference or return of the >uestion to the la! of the testatorDs domicile. The conflict of la!s rule in California, Article 5-C, Civil Code, precisely refers back the case, !hen a decedent is not domiciled in California, to the la! 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 CaliforniaJ such action !ould leave the issue incapable of determination because the case !ill then be like a football,

55

tossed back and forth bet!een the t!o states, bet!een the country of !hich the decedent !as a citiBen and the country of his domicile. The Philippine court must apply its o!n la! as directed in the conflict of la!s rule of the state of the decedent, if the >uestion has to be decided, especially as the application of the internal la! of California provides no legitime for children !hile the Philippine la!, Arts. 66L9-: and 65-, Civil Code of the Philippines, makes natural children legally ackno!ledged forced heirs of the parent recogniBing them. 1e therefore find that as the domicile of the deceased 7d!ard, a citiBen of California, is the Philippines, the validity of the provisions of his !ill depriving his ackno!ledged natural child, the appellant 4787+, should be governed by the Philippine 8a!, the domicile, pursuant to Art. 5-C of the Civil Code of California, not by the internal la! of California.

56

CA!ALIN #$. 2OEA FACTS This is a consolidation of I cases of %P7C(A8 C(V(8 ACT(O+% in the %upreme Court for Certiorari. On ;une C, ,56-, Cadalin, Amul and 7vangelista, in their o!n behalf and on behalf of LE6 other OC1s instituted a class suit by filing an /Amended Complaint0 !ith the PO7A for money claims arising from their recruitment by A%(A (+T7 +AT(O+A8 $#(8=7 % CO PO AT(O+ 9A($C: and employment by $ O1+ O OOT (+T7 +AT(O+A8, (+C 9$ (: !hich is a foreign corporation !ith head>uarters in 4ouston, Te'as, and is engaged in constructionJ !hile A($C is a domestic corporation licensed as a service contractor to recruit, mobiliBe and deploy )ilipino !orkers for overseas employment on behalf of its foreign principals. The amended complaint sought the payment of the une'pired portion of the employment contracts, !hich !as terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and eserved )undJ interest on all the unpaid benefitsJ area !age and salary differential payJ fringe benefitsJ reimbursement of %%% and premium not remitted to the %%%J refund of !ithholding ta' not remitted to the $( J penalties for committing prohibited practicesJ as !ell as the suspension of the license of A($C and the accreditation of $ (( On October E, ,56-, the PO7A Administrator denied the /*otion to %trike Out of the ecords0 filed by A($C but re>uired the claimants to correct the deficiencies in the complaint pointed out. A($ and $ (( kept on filing *otion for 7'tension of Time to file their ans!er. The PO7A kept on granting such motions. On +ovember ,-, ,56-, claimants filed an opposition to the motions for e'tension of time and asked that A($C and $ (( declared in default for failure to file their ans!ers. On =ecember EL, ,56-, the PO7A Administrator issued an order directing A($C and $ (( to file their ans!ers !ithin ten days from receipt of the order. On ;une ,5, ,56L, A($C finally submitted its ans!er to the complaint. At the same hearing, the parties !ere given a period of ,M days from said date !ithin !hich to submit their respective position papers. On )ebruary E-, ,566, A($C and $ (( submitted position paper. On October EL, ,566, A($C and $ (( filed a /Consolidated eply,0 PO7A Administrator rendered his decision !hich a!arded the amount of T6E-, CME.-- in favor of only IEcomplainants. Claimants submitted their /Appeal *emorandum )or Partial Appeal0 from the decision of the PO7A. A($C also filed its * andPor appeal in addition to the /+otice of Appeal0 filed earlier. +8 C promulgated its esolution, modifying the decision of the PO7A.

57

The resolution removed some of the benefits a!arded in favor of the claimants. +8 C denied all the * s. 4ence, these petitions filed by the claimants and by Al$C and $ ((. The case rooted from the 8abor 8a! enacted by $ahrain !here most of the complainants !ere deployed. 4is *a3esty (se $in %elman Al Aaifa, Amir of $ahrain, issued his Amiri =ecree +o. EI on ;une ,C, ,,LC, other!ise kno!n re the 8abour 8a! for the Private %ector. %ome of the provision of Amiri =ecree +o. EI that are relevant to the claims of the complainants-appellants are as follo!s. /Art. L5. ' ' ' A !orker shall receive payment for each e'tra hour e>uivalent to his !age entitlement increased by a minimum of t!entyrive per centurn thereof for hours !orked during the dayJ and by a minimum off fifty per centurn thereof for hours !orked during the night !hich shall be deemed to being from seven oDclock in the evening until seven oDclock in the morning .0 Art. 6F. )riday shall be deemed to be a !eekly day of rest on full pay. (f employee !orked, ,MFN of his normal !age shall be paid to him ' ' '.0 Art. 6,J ' ' ' 1hen conditions of !ork re>uire the !orker to !ork on any official holiday, he shall be paid an additional sum e>uivalent to ,MFN of his normal !age.0 Art. 6-. 7very !orker !ho has completed one yearDs continuous service !ith his employer shall be entitled to 8aos on full pay for a period of not less than E, days for each year increased to a period not less than E6 days after five continuous years of service.0 A !orker shall be entitled to such leave upon a >uantum meruit in respect of the proportion of his service in that year.0 Art. ,FL. A contract of employment made for a period of indefinite duration may be terminated by either party thereto after giving the other party prior notice before such termination, in !riting, in respect of monthly paid !orkers and fifteen daysD notice in respect of other !orkers. The party terminating a contract !ithout the re>uired notice shall pay to the other party compensation e>uivalent to the amount of !ages payable to the !orker for the period of such notice or the une'pired portion thereof.0 Art. (ll. ' ' ' the employer concerned shall pay to such !orker, upon termination of employment, a leaving indemnity for the period of his employment calculated on the basis of fifteen daysD !ages for each year of the first three years of service and of one monthDs !ages for each year of service thereafter. %uch !orker shall be entitled to payment of leaving indemnity upon a >uantum meruit in proportion to the period of his service completed !ithin a year.0 ISSUE ,. 1O+ the foreign la! should govern or the contract of the parties.91O+ the complainants !ho have !orked in $ahrain are entitled to the abovementioned benefits provided by Amiri =ecree +o. EI of $ahrain:. E. 1O+ the $ahrain 8a! should apply in the case. 9Assuming it is applicable 1O+ complainantsD claim for the benefits provided therein have prescribed.: RULING

58

,. +8 C set aside %ection ,, ule ,E5 of the ,565 evised ules on 7vidence governing the pleading and proof of a foreign la! and admitted in evidence a simple copy of the $ahrainDs Amiri =ecree +o. EI of ,5LC 98abour 8a! for the Private %ector:. +8 C applied the Amiri =eere, +o. EI of ,5LC, !hich provides for greater benefits than those stipulated in the overseas-employment contracts of the claimants. The overseas-employment contracts, !hich !ere prepared by A($C and $ (( themselves, provided that the la!s of the host country became applicable to said contracts if they offer terms and conditions more favorable than those stipulated therein. 4o!ever there !as a part of the employment contract !hich provides that the compensation of the employee may be /ad3usted do!n!ard so that the total computation plus the non-!aivable benefits shall be e>uivalent to the compensation0 therein agree,D another part of the same provision categorically states /that total remuneration and benefits do not fall belo! that of the host country regulation and custom.0 Any ambiguity in the overseas-employment contracts should be interpreted against A($C and $ ((, the parties that drafted it. Article ,ILL of the Civil Code of the Philippines provides. UThe interpretation of obscure !ords or stipulations in a contract shall not favor the party !ho caused the obscurity.0 1e read the overseas employment contracts in >uestion as adopting the provisions of the Amiri =ecree +o. EI of ,5LC as part and parcel thereof. The parties to a contract may select the la! by !hich it is to be governed. (n such a case, the foreign la! is adopted as a /system0 to regulate the relations of the parties, including >uestions of their capacity to enter into the contract, the formalities to be observed by them, matters of performance, and so forth. (nstead of adopting the entire mass of the foreign la!, the parties may 3ust agree that specific provisions of a foreign statute shall be deemed incorporated into their contract /as a set of terms.0 $y such reference to the provisions of the foreign la!, the contract does not become a foreign contract to be governed by the foreign la!. The said la! does not operate as a statute but as a set of contractual terms deemed !ritten in the contract. A basic policy of contract is to protect the e'pectation of the parties. %uch party e'pectation is protected by giving effect to the partiesD o!n choice of the applicable la!. The choice of la! must, ho!ever, bear some relationship the parties or their transaction. There is no >uestion that the contracts sought to be enforced by claimants have a direct connection !ith the $ahrain la! because the services !ere rendered in that country. E. +8 C ruled that the prescriptive period for the filing of the claims of the complainants !as I years, as provided in Article E5, of the 8abor Code of the Philippines, and not ten years as provided in Article ,,-- of the Civil Code of the Philippines nor one year as provided in the Amiri =ecree +o. EI of ,5LC. Article ,MC of the Amiri =ecree +o. EI of ,5LC provides. /A claim arising out of a contract of employment shall not actionable after the lapse of one year from the date of the e'piry of the Contract0. As a general rule, a foreign procedural la! !ill not be applied in the forum 9local court:, Procedural matters, such as service of process, 3oinder of actions, period and re>uisites for appeal, and so forth, are governed by the

59

la!s of the forum. This is true even if the action is based upon a foreign substantive la!. A la! on prescription of actions is sui generis in Conflict of 8a!s in the sense that it may be vie!ed either as procedural or substantive, depending on the characteriBation given such a la!. (n $ournias v. Atlantic *aritime Company 9EEF ). Ed. ,ME, Ed Cir. ?,5MM@:, !here the issue !as the applicability of the Panama 8abor Code in a case filed in the %tate of +e! Hork for claims arising from said Code, the claims !ould have prescribed under the Panamanian 8a! but not under the %tatute of 8imitations of +e! Hork. The #.%. Circuit Court of Appeals held that the Panamanian 8a! !as procedural as it !as not /specifically intended to be substantive,0 hence, the prescriptive period provided in the la! of the forum should apply. The Court observed. /. . . !e are dealing !ith a statute of limitations of a foreign country, and it is not clear on the face of the statute that its purpose !as to limit the enforceability, outside as !ell as !ithin the foreign country concerned, of the substantive rights to !hich the statute pertains. 1e think that as a yardstick for determining !hether that !as the purpose, this test is the most satisfactory one. The Court further noted. /Applying that test here it appears to us that the libellant is entitled to succeed, for the respondents have failed to satisfy us that the Panamanian period of limitation in >uestion !as specifically aimed against the particular rights !hich the libellant seeks to enforce. The Panama 8abor Code is a statute having broad ob3ectives.0 The American court applied the statute of limitations of +e! Hork, instead of the Panamanian la!, after finding that there !as no sho!ing that the Panamanian la! on prescription !as intended to be substantive. $eing considered merely a procedural la! even in Panama, it has to give !ay to the la! of the forum 9local Court: on prescription of actions. 4o!ever the characteriBation of a statute into a procedural or substantive la! becomes irrelevant !hen the country of the forum 9local Court: has a /borro!ing statute.0 %aid statute has the practical effect of treating the foreign statute of limitation as one of substance. A /borro!ing statute0 directs the state of the forum 9local Court: to apply the foreign statute of limitations to the pending claims based on a foreign la!. 1hile there are several kinds of /borro!ing statutes,0 one form provides that an action barred by the la!s of the place !here it accrued !ill not be enforced in the forum even though the local statute !as not run against it. %ection -6 of Code of Civil Procedure is of this kind. (t provides. /(f by the la!s of the state or country !here the cause of action arose, the action is barred, it is also barred in the Philippine (slands.0 %ection -6 has not been repealed or amended by the Civil Code of the Philippines. (n the light of the ,56L Constitution, ho!ever, %ection -6 cannot be enforced e' proprio vigore insofar as it ordains the application in this 3urisdiction of %ection ,MC of the Amiri =ecree +o. EI of ,5LC. The courts of the forum 9local Court: !ill not enforce any foreign claim obno'ious to the forumDs public policy. To enforce the one-year prescriptive period of the Amiri =ecree +o. EI of ,5LC as regards the claims in >uestion

60

!ould contravene the public policy on the protection to labor. (n the =eclaration of Principles and %tate Policies, the ,56L Constitution emphasiBed that./The state shall promote social 3ustice in all phases of national development0 9%ec. ,F:. U The state affirms labor as a primary social economic force. (t shall protect the rights of !orkers and promote their !elfare0 9%ec. ,6:. (n Article V((( on %ocial ;ustice and 4uman ights, the ,56L Constitution provides. /%ec. I. The %tate shall afford full protection to labor, local and overseas, organiBed and unorganiBed, and promote full employment and e>uality of employment opportunities for all.0 Thus, the applicable la! on prescription is the Philippine la!. The ne't >uestion is !hether the prescriptive period governing the filing of the claims is I years, as provided by the 8abor Code or ,F years, as provided by the Civil Code of the Philippines. Article ,,-- of the Civil Code of the Philippines provides. /The follo!ing actions must be brought !ithin ten years from the time the right of action accross. 9,: #pon a !ritten contractJ 9E: #pon an obligation created by la!J 9I: #pon a 3udgment0 (n this case, the claim for pay differentials is primarily anchored on the !ritten contracts bet!een the litigants, the ten-year prescriptive period provided by Art. ,,--9l: of the +e! Civil Code should govern.

61