1

`CONFLICT OF LAWS 1st SET DIGEST

SAUDI ARABIAN AIRLINES vs. CA (1998) - "State
of the most significant relationship" rule
FACTS: defendant SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in Jeddah, Saudi
Arabia. While on a lay-over in Jakarta, Indonesia,
plaintiff went to a disco dance with fellow crew
members Thamer Al-Gazzawi and Allah Al-Gazzawi,
both Saudi nationals. Because it was almost morning
when they returned to their hotels, they agreed to
have breakfast together at the room of Thamer. When
they were in te (sic) room, Allah left on some pretext.
Shortly after he did, Thamer attempted to rape
plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her.
Later, the Indonesian police came and arrested
Thamer and Allah Al-Gazzawi, the latter as an
accomplice.
In Jakarta, SAUDIA Legal Officer Sirah Akkad and base
manager Baharini negotiated with the police for the
immediate release of the detained crew members but
did not succeed because plaintiff refused to cooperate.
She was afraid that she might be tricked into
something she did not want because of her inability to
understand the local dialect. She also declined to sign
a blank paper and a document written in the local
dialect. SAUDIA allowed plaintiff to return to Jeddah
but barred her from the Jakarta flights. The
Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they
were again put in service by defendant SAUDI.
Defendant SAUDIA transferred plaintiff to Manila. Just
when plaintiff thought that the Jakarta incident was
already behind her, her superiors requested her to see
Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in
Jeddah, Saudi Arabia. When she saw him, he brought
her to the police station where the police took her
passport and questioned her about the Jakarta
incident. One year and a half later, in Riyadh, Saudi
Arabia, a few minutes before the departure of her
flight to Manila, plaintiff was not allowed to board the
plane and instead ordered to take a later flight to
Jeddah to see Mr. Miniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was
asked to sign a document written in Arabic. They told
her that this was necessary to close the case against
Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court. Plaintiff then
returned to Manila. Defendant SAUDIA summoned
plaintiff to report to Jeddah once again and see
Miniewy for further investigation. Plaintiff did so
after receiving assurance from SAUDIA's Manila
manager, Aslam Saleemi, that the investigation
was routinary and that it posed no danger to her.
A Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour
of interrogation, they let her go. At the airport,
however, just as her plane was about to take off, a
SAUDIA officer told her that the airline had forbidden
her to take flight. To her astonishment and shock, the
court rendered a decision, translated to her in English,
sentencing her to 5 months imprisonment and to 286
lashes. Only then did she realize that the Saudi court
had tried her, together with Thamer and Allah, for
what happened in Jakarta. The court found plaintiff
guilty of (1) adultery; (2) going to a disco, dancing
and listening to the music in violation of Islamic laws;
and (3) socializing with the male crew, in
contravention of Islamic tradition.

Private respondent sought the help of her employer,

petitioner SAUDIA. Unfortunately, she was denied any
assistance. Because she was wrongfully convicted, the
Prince of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. She was terminated
from the service by SAUDIA, without her being
informed of the cause. Morada filed a Complaint for
damages against SAUDIA, and Khaled Al-Balawi ("AlBalawi"), its country manager. SAUDIA alleged that the
trial court has no jurisdiction to hear and try the case
on the basis of Article 21 of the Civil Code, since the
proper law applicable is the law of the Kingdom of
Saudi Arabia.
HELD: Petitioner SAUDIA claims that before us is a
conflict of laws that must be settled at the outset. It
maintains that private respondent's claim for alleged
abuse of rights occurred in the Kingdom of Saudi
Arabia. It alleges that the existence of a foreign
element qualifies the instant case for the application of
the law of the Kingdom of Saudi Arabia, by virtue of
the lex loci delicti commissi rule. 34 Private respondent
contends that since her Amended Complaint is based
on Articles 19 35 and 21 36 of the Civil Code, then the
instant case is properly a matter of domestic law.
Where the factual antecedents satisfactorily establish
the existence of a foreign element, we agree with
petitioner that the problem herein could present a
"conflicts" case. A factual situation that cuts across
territorial lines and is affected by the diverse laws of
two or more states is said to contain a "foreign
element". The foreign element may simply consist in
the fact that one of the parties to a contract is an alien
or has a foreign domicile, or that a contract between
nationals of one State involves properties situated in
another State. In other cases, the foreign element
may assume a complex form. 42In the instant case, the
foreign element consisted in the fact that private
respondent Morada is a resident Philippine national,
and that petitioner SAUDIA is a resident foreign
corporation. A conflicts problem presents itself here,
and the question of jurisdiction 43 confronts the court a
quo.
Article 19 of the New Civil Code provides: Every
person must, in the exercise of his rights and in the
performance of his duties, act with justice give
everyone his due and observe honesty and good faith.
Article 21 of the New Civil Code provides: Any person
who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or
public policy shall compensate the latter for damages.
(RTC) of Quezon City possesses jurisdiction over the
subject matter of the suit. 48 Its authority to try and
hear the case is provided for under Section 1 of
Republic Act No. 7691, to wit: Sec. 1. Section 19 of
Batas Pambansa Blg. 129, otherwise known as the
"Judiciary Reorganization Act of 1980", is hereby
amended to read as follows: Jurisdiction in Civil Cases.
Regional Trial Courts shall exercise exclusive
jurisdiction: (8) In all other cases in which demand,
exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and cots or the
value of the property in controversy exceeds One
hundred thousand pesos (P100,000.00) or, in such
other cases in Metro Manila, where the demand,
exclusive of the above-mentioned items exceeds Two
hundred Thousand pesos (P200,000.00). (Emphasis
ours)
And following Section 2 (b), Rule 4 of the Revised
Rules of Court the venue, Quezon City, is
appropriate: Venue in Courts of First Instance. [Now

2
Regional Trial Court] (b) Personal actions. All other
actions may be commenced and tried where the
defendant or any of the defendants resides or may be
found, or where the plaintiff
Pragmatic considerations, including the convenience of
the parties, also weigh heavily in favor of the RTC
Quezon City assuming jurisdiction. Paramount Plaintiff
may not, by choice of an inconvenient forum, "vex",
"harass", or "oppress" the defendant, e.g. by inflicting
upon him needless expense or disturbance. But unless
the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed. 49
By hearing the case in the Philippines no unnecessary
difficulties and inconvenience have been shown by
either of the parties. The choice of forum of the
plaintiff (now private respondent) should be upheld.
The trial court also possesses jurisdiction over the
persons of the parties herein. By filing her Complaint
and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the
jurisdiction of the court. Petitioner SAUDIA has
effectively submitted to the trial court's jurisdiction by
praying for the dismissal of the Amended Complaint on
grounds other than lack of jurisdiction. If his motion is
for any other purpose than to object to the jurisdiction
of the court over his person, he thereby submits
himself to the jurisdiction of the court.
Clearly, petitioner had submitted to the jurisdiction of
the Regional Trial Court of Quezon City. Thus, we find
that the trial court has jurisdiction over the case and
that its exercise thereof, justified.
As to the choice of applicable law, we note that choiceof-law problems seek to answer two important
questions: (1) What legal system should control a
given situation where some of the significant facts
occurred in two or more states; and (2) to what extent
should the chosen legal system regulate the situation.
53

Before a choice can be made, it is necessary for us to

determine under what category a certain set of facts
or
rules
fall.
This
process
is
known
as
"characterization", or the "doctrine of qualification". It
is the "process of deciding whether or not the facts
relate to the kind of question specified in a conflicts
rule." 55 The purpose of "characterization" is to enable
the forum to select the proper law. An essential
element of conflict rules is the indication of a "test" or
"connecting factor" or "point of contact". Choice-of-law
rules invariably consist of a factual relationship (such
as property right, contract claim) and a connecting
factor or point of contact, such as the situs of the res,
the place of celebration, the place of performance, or
the place of wrongdoing.
There is reasonable basis for private respondent's
assertion that although she was already working in
Manila, petitioner brought her to Jeddah on the
pretense that she would merely testify in an
investigation of the charges she made against the two
SAUDIA crew members for the attack on her person
while they were in Jakarta. There is likewise logical
basis on record for the claim that the "handing over"
or "turning over" of the person of private respondent
to Jeddah officials, petitioner may have acted beyond
its duties as employer. Petitioner's purported act
contributed to and amplified or even proximately
caused additional humiliation, misery and suffering of
private respondent.

Considering that the complaint in the court a quo is

one involving torts, the "connecting factor" or
"point of contact" could be the place or places
where the tortious conduct or lex loci actus
occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be
said as a situs of the tort (the place where the alleged
tortious conduct took place). This is because it is in
the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing
and working here. That certain acts or parts of
the injury allegedly occurred in another country
is of no moment. What is important here is the
place where the over-all harm or the totality of
the alleged injury to the person, reputation, social
standing and human rights of complainant, had
lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify
the Philippines as the situs of the alleged tort.
"State of the most significant relationship" rule
(ICDR) - In applying said principle to determine the
State which has the most significant relationship, the
following contacts are to be taken into account and
evaluated according to their relative importance with
respect to the particular issue: (a) the place where
the injury occurred; (b) the place where the
conduct causing the injury occurred; (c) the
domicile,
residence,
nationality,
place
of
incorporation and place of business of the
parties, and (d) the place where the relationship,
if any, between the parties is centered.
There is basis for the claim that over-all injury
occurred and lodged in the Philippines. There is
likewise no question that private respondent is a
resident
Filipina
national,
working
with
petitioner,
a
resident
foreign
corporation
engaged here in the business of international air
carriage. Thus, the "relationship" between the
parties was centered here, that the Philippines is
the situs of the tort complained of and the place
"having the most interest in the problem", the
Philippine law on tort liability should have paramount
application to and control in the resolution of the legal
issues arising out of this case. The respondent
Regional Trial Court has jurisdiction over the parties
and the subject matter of the complaint; the
appropriate venue is in Quezon City, which could
properly apply Philippine law. the Philippines is the
state intimately concerned with the ultimate outcome
of the case below, not just for the benefit of all the
litigants, but also for the vindication of the country's
system of law and justice in a transnational setting.
Milagros P. Morada vs. Saudi Arabia Airlines" is hereby
REMANDED to Regional Trial Court of Quezon City,
CHRISTENSEN vs. AZNAR (1963) California,
international football, renvoi
FACTS: Edward S. Christensen, though born in New
York, migrated to California where he resided and
consequently was considered a California Citizen for a
period of nine years to 1913. He came to the
Philippines where he became a domiciliary until the
time of his death. However, during the entire period of
his residence in this country, he had always considered
himself as a citizen of California. In his will, executed
on March 5, 1951, he instituted an acknowledged
natural daughter, Maria Lucy Christensen as his only
heir but left a legacy of some money in favor of Helen
Christensen Garcia who, in a decision rendered by
the Supreme Court had been declared as an
acknowledged natural daughter of his. Counsel of
Helen claims that under Art. 16 (2) of the civil code,

3
California law should be applied, the matter is returned
back to the law of domicile, that Philippine law is
ultimately applicable, that the share of Helen must be
increased in view of successional rights of illegitimate
children under Philippine laws. On the other hand,
counsel for daughter Maria , in as much that it is clear
under Art, 16 (2) of the Mew Civil Code, the national
of the deceased must apply, our courts must apply
internal law of California on the matter. Under
California law, there are no compulsory heirs and
consequently a testator should dispose any property
possessed by him in absolute dominion. Whether
Philippine Law or California Law should apply.
HELD: The Supreme Court deciding to grant more
successional rights to Helen Christensen Garcia said in
effect that there be two rules in California on the
matter. 1. The conflict rule which should apply to
Californians outside the California, and 2. The internal
Law which should apply to California domiciles in
califronia.
The California conflict rule, found on Art. 946 of the
California Civil code States that if there is no law to
the contrary in the place where personal property is
situated, it is deemed to follow the decree of its owner
and is governed by the law of the domicile.
Christensen being domiciled outside california, the law
of his domicile, the Philippines is ought to be followed.
Wherefore, the decision appealed is reversed and case
is remanded to the lower court with instructions that
partition be made as that of the Philippine law provides
It is argued on appellees' behalf that the clause "if
there is no law to the contrary in the place where the
property is situated" in Sec. 946 of the California Civil
Code refers to Article 16 of the Civil Code of the
Philippines and that the law to the contrary in the
Philippines is the provision in said Article 16 that
the national law of the deceased should govern. This
contention can not be sustained. As explained in the
various authorities cited above the national law
mentioned in Article 16 of our Civil Code is the law on
conflict of laws in the California Civil Code, i.e., Article
946, which authorizes the reference or return of the
question to the law of the testator's domicile. The
conflict of laws rule in California, Article 946, Civil
Code, precisely refers back the case, when a decedent
is not domiciled in California, to the law of his
domicile, the Philippines in the case at bar. The court
of the domicile can not and should not refer the
case back to California; such action would leave
the issue incapable of determination because the
case will then be like a football, tossed back and
forth between the two states, between the country
of which the decedent was a citizen and the country of
his domicile. The Philippine court must apply its
own law as directed in the conflict of laws rule of
the state of the decedent, if the question has to
be decided, especially as the application of the
internal law of California provides no legitime for
children while the Philippine law, Arts. 887(4)
and 894, Civil Code of the Philippines, makes
natural children legally acknowledged forced
heirs of the parent recognizing them.

During the existence of said marriage the spouses

acquired lands in the Philippine Islands as conjugal
property. Eva Johnson Gibbs later died intestate in Palo
Alto, California, on November 28, 1929. At the time of
her death she and her husband were citizens of the
State of California and domiciled therein. Allison D.
Gibbs was appointed administrator of the estate of his
said deceased wife. Allison D. Gibbs filed an ex parte
petition in which he alleged that his wife, a citizen and
resident of California, died on November 28,1929; that
in accordance with the law of California, the
community property of spouses who are citizens of
California, upon the death of the wife previous to that
of the husband, belongs absolutely to the surviving
husband without administration; that the conjugal
partnership of Allison D. Gibbs and Eva Johnson Gibbs,
deceased, has no obligations or debts and no one will
be prejudiced by adjucating said parcels of land to the
absolute property of the said Allison D. Gibbs as sole
owner. The court granted said petition and entered a
decree adjucating Allison D. Gibbs to be the sole and
absolute owner of said lands, applying section 1401 of
the Civil Code of California. Gibbs presented this
decree to the register of deeds of Manila and
demanded that the latter issue to him a "transfer
certificate of title".
Section 1547 of Article XI of Chapter 40 of the
Administrative Code provides in part that: Registers of
deeds shall not register in the registry of property any
document transferring real property or real rights
therein or any chattel mortgage, by way of gifts mortis
causa, legacy or inheritance, unless the payment of
the tax fixed in this article and actually due thereon
shall be shown. And they shall immediately notify the
Collector of Internal Revenue or the corresponding
provincial treasurer of the non payment of the tax
discovered by them. . . . Acting upon the authority of
said section, the register of deeds of the City of
Manila, declined to accept as binding said decree of
court and refused to register the transfer of title of the
said conjugal property to Allison D. Gibbs, on the
ground that the corresponding inheritance tax had not
been paid.
Allison D. Gibbs filed in the said court a petition for an
order requiring the said register of deeds "to issue the
corresponding titles" to the petitioner without requiring
previous payment of any inheritance tax. After due
hearing of the parties, the court reaffirmed said order.
Supreme court remanded the case to the court of
origin for new trial upon additional evidence in regard
to the pertinent law of California in force at the time of
the death of Mrs. Gibbs, also authorizing the
introduction of evidence with reference to the dates of
the acquisition of the property involved in this suit and
with reference to the California law in force at the time
of such acquisition. The case is now before us with the
supplementary evidence. Article XI of Chapter 40 of
the Administrative Code entitled "Tax on inheritances,
legacies and other acquisitions mortis causa" provides
in section 1536 that "Every transmission by virtue of
inheritance ... of real property ... shall be subject to
the following tax."

GIBBS vs. THE GOVERNMENT OF THE PHILIPPINE

ISLANDS (1933) California, inheritance tax

Issue: Was Eva Johnson Gibbs at the time of her

death the owner of a descendible interest in the
Philippine lands above-mentioned?

FACTS: Allison D. Gibbs has been continuously, since

the year 1902, a citizen of the State of California and
domiciled therein. He and Eva Johnson Gibbs were
married at Columbus, Ohio, in July 1906. There was no
antenuptial marriage contract between the parties.

Contention of the Appellee: The appellee contends

that the law of California should determine the nature
and extent of the title, if any, that vested in Eva
Johnson Gibbs under the three certificates of title Nos.
20880, 28336 and 28331 above referred to, citing
article 9 of the Civil Code. But that, even if the nature

4
and extent of her title under said certificates be
governed by the law of the Philippine Islands, the laws
of California govern the succession to such title, citing
the second paragraph of article 10 of the Civil Code.
Appellant's chief argument and the sole basis of the
lower court's decision rests upon the second paragraph
of article 10 of the Civil Code which is as follows:
Nevertheless, legal and testamentary successions, in
respect to the order of succession as well as to the
amount of the successional rights and the intrinsic
validity of their provisions, shall be regulated by the
national law of the person whose succession is in
question, whatever may be the nature of the property
or the country in which it may be situated.
Decision: The trial court found that under the law of
California, upon the death of the wife, the entire
community property without administration
belongs to the surviving husband; that he is the
absolute owner of all the community property
from the moment of the death of his wife, not by
virtue of succession or by virtue of her death, but
by virtue of the fact that when the death of the
wife precedes that of the husband he acquires
the community property, not as an heir or as the
beneficiary of his deceased wife, but because she
never had more than an inchoate interest or
expentancy which is extinguished upon her
death. The argument of the appellee apparently leads
to this dilemma: If he takes nothing by succession
from his deceased wife, how can the second paragraph
of article 10 be invoked? Can the appellee be heard to
say that there is a legal succession under the law of
the Philippine Islands and no legal succession under
the law of California?
It seems clear that the second paragraph of article 10
applies only when a legal or testamentary succession
has taken place in the Philippines and in accordance
with the law of the Philippine Islands; and the foreign
law is consulted only in regard to the order of
succession or the extent of the successional rights.
The second paragraph of article 10 can be invoked
only when the deceased was vested with a descendible
interest in property within the jurisdiction of the
Philippine Islands. In the case of Clarke vs. Clarke the
court said: It is principle firmly established that to the
law of the state in which the land is situated we must
look for the rules which govern its descent, alienation,
and transfer, and for the effect and construction of
wills and other conveyances. This fundamental
principle is stated in the first paragraph of article
10 of our Civil Code as follows: "Personal
property is subject to the laws of the nation of
the owner thereof; real property to the laws of
the country in which it is situated. It is stated in 5
Cal. Jur., 478: In accord with the rule that real
property is subject to the lex rei sitae, the
respective rights of husband and wife in such
property, in the absence of an antenuptial
contract, are determined by the law of the place
where the property is situated, irrespective of
the domicile of the parties or to the place where
the marriage was celebrated. Under this broad
principle, the nature and extent of the title which
vested in Mrs. Gibbs at the time of the
acquisition of the community lands here in
question must be determined in accordance with
the lex rei sitae.
It is admitted that the Philippine lands here in
question were acquired as community property
of the conjugal partnership of the appellee and
his wife. Under the law of the Philippine Islands,

she was vested of a title equal to

husband. Article 1407 of the Civil Code
the property of the spouses shall
partnership property in the absence of
belongs exclusively to the husband or
Article 1395 provides:

that of her
provides: All
be deemed
proof that it
to the wife.

"The conjugal partnership shall be governed by the

rules of law applicable to the contract of partnership in
all matters in which such rules do not conflict with the
express provisions of this chapter." Article 1414
provides that "the husband may dispose by will of his
half only of the property of the conjugal partnership."
Article 1426 provides that upon dissolution of the
conjugal partnership and after inventory and
liquidation, "the net remainder of the partnership
property shall be divided share and share alike
between the husband and wife, or their respective
heirs." Under the provisions of the Civil Code and the
jurisprudence prevailing here, the wife, upon the
acquisition of any conjugal property, becomes
immediately vested with an interest and title
therein equal to that of her husband, subject to
the power of management and disposition which
the law vests in the husband. Immediately upon
her death, if there are no obligations of the
decedent, as is true in the present case, her
share in the conjugal property is transmitted to
her heirs by succession. It results that the wife
of the appellee was, by the law of the Philippine
Islands, vested of a descendible interest, equal
to that of her husband, in the Philippine lands
covered by certificates of title Nos. 20880, 28336 and
28331, from the date of their acquisition to the date of
her death. That appellee himself believed that his wife
was vested of such a title and interest in manifest from
the second of said certificates, No. 28336, dated May
14, 1927, introduced by him in evidence, in which it is
certified that "the spouses Allison D. Gibbs and Eva
Johnson Gibbs are the owners in fee simple of the
conjugal lands therein described."
The descendible interest of Eva Johnson Gibbs in
the lands aforesaid was transmitted to her heirs
by virtue of inheritance and this transmission
plainly falls within the language of section 1536
of Article XI of Chapter 40 of the Administrative
Code which levies a tax on inheritances. The
record does not show what the proper amount of the
inheritance tax in this case would be nor that the
appellee (petitioner below) in any way challenged the
power of the Government to levy an inheritance tax or
the validity of the statute under which the register of
deeds refused to issue a certificate of transfer reciting
that the appellee is the exclusive owner of the
Philippine lands included in the three certificates of
title here involved.
CADALIN, vs. POEA (1994) - amiri decree,
bahrain
FACTS: In 1984, Bienvenido M.. Cadalin, et.al, in their
own behalf and on behalf of 728 other overseas
contract workers (OCWs) instituted a class suit by
filing an "Amended Complaint" with the (POEA) for
money claims arising from their recruitment by AIBC
and employment by BRII. It appears that the
complainants-appellants allege that they were
recruited by respondent-appellant AIBC for its
accredited foreign principal, Brown & Root, on various
dates from 1975 to 1983. They were all deployed at
various projects undertaken by Brown & Root in
several countries in the Middle East, such as Saudi
Arabia, Libya, United Arab Emirates and Bahrain, as
well as in Southeast Asia, in Indonesia and Malaysia

5
BRII is a foreign corporation with headquarters in
Houston, Texas, and is engaged in construction; while
AIBC is a domestic corporation licensed as a service
contractor to recruit, mobilize and deploy Filipino
workers for overseas employment on behalf of its
foreign principals. The complaint principally sought the
payment of the unexpired portion of the employment
contracts, which was terminated prematurely, and
secondarily, the payment of the interest of the
earnings of the Travel and Reserved Fund, interest on
all the unpaid benefits; area wage and salary
differential pay; fringe benefits; refund of SSS and
premium not remitted to the SSS; refund of
withholding tax not remitted to the BIR; penalties for
committing prohibited practices; as well as the
suspension of the license of AIBC and the accreditation
of BRII
In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin
Salman Al Kaifa, Amir of Bahrain, issued his Amiri
Decree No. 23 on June 16, 1976, otherwise known as
the Labour Law for the Private Sector (Records, Vol.
18). This decree took effect on August 16, 1976. Some
of the provisions of Amiri Decree No. 23 that are
relevant to the claims of the complainants-appellants.
On January 30, 1989, the POEA Administrator
rendered his decision in POEA Case No. L-84-06-555
and the other consolidated cases, which awarded the
amount of $824,652.44 in favor of only 324
complainants. AIBC and BRII appealed the decision to
the NLRC. NLRC affirmed the decision of the POEA
with modifications. It held that the Amiri Decree No.
23 applied only to the claimants, who worked in
Bahrain, and set aside awards of the POEA
Administrator in favor of the claimants, who worked
elsewhere. It ruled that the prescriptive period for the
filing of the claims of the complainants was three
years, as provided in Article 291 of the Labor Code of
the Philippines, and not ten years as provided in
Article 1144 of the Civil Code of the Philippines nor
one year as provided in the Amiri Decree No. 23 of
1976.
ISSUE: 1.
prescription
23 of 1976
shall be the
are entitled
No. 23

whether it is the Bahrain law on

of action based on the Amiri Decree No.
or a Philippine law on prescription that
governing law 2. Whether the claimants
to the benefits provided by Amiri Decree

HELD:
Article 156 of the Amiri Decree No. 23 of 1976
provides: A claim arising out of a contract of
employment shall not be actionable after the lapse of
one year from the date of the expiry of the contract.
(G.R. Nos. 105029-31, Rollo, p. 226). As a general
rule, a foreign procedural law will not be applied in the
forum. Procedural matters, such as service of process,
joinder of actions, period and requisites for appeal,
and so forth, are governed by the laws of the forum.
This is true even if the action is based upon a foreign
substantive law (Restatement of the Conflict of Laws,
Sec. 685; Salonga, Private International Law, 131
[1979]). A law on prescription of actions is sui
generis in Conflict of Laws in the sense that it
may be viewed either as procedural or
substantive, depending on the characterization
given such a law. Thus in Bournias v. Atlantic
Maritime Company, supra, the American court applied
the statute of limitations of New York, instead of the
Panamanian law, after finding that there was no
showing that the Panamanian law on prescription was
intended to be substantive. Being considered merely a

procedural law even in Panama, it has to give way to

the law of the forum on prescription of actions.
However, the characterization of a statute into a
procedural
or
substantive
law
becomes
irrelevant when the country of the forum has a
"borrowing statute." Said statute has the
practical effect of treating the foreign statute of
limitation as one of substance (Goodrich, Conflict
of Laws 152-153 [1938]). A "borrowing statute"
directs the state of the forum to apply the
foreign statute of limitations to the pending
claims based on a foreign law (Siegel, Conflicts,
183 [1975]). While there are several kinds of
"borrowing statutes," one form provides that an
action barred by the laws of the place where it
accrued, will not be enforced in the forum even
though the local statute has not run against it
(Goodrich and Scoles, Conflict of Laws, 152-153
[1938]). Section 48 of our Code of Civil Procedure
is of this kind. Said Section provides: If by the laws
of the state or country where the cause of action
arose, the action is barred, it is also barred in
the Philippines Islands. Section 48 has not been
repealed or amended by the Civil Code of the
Philippines. Article 2270 of said Code repealed only
those provisions of the Code of Civil Procedures as to
which were inconsistent with it. There is no provision
in the Civil Code of the Philippines, which is
inconsistent with or contradictory to Section 48 of the
Code of Civil Procedure (Paras, Philippine Conflict of
Laws 104 [7th ed.]). In the light of the 1987
Constitution, however, Section 48 cannot be
enforced ex proprio vigore(By its own inherent
force.) insofar as it ordains the application in this
jurisdiction of Section 156 of the Amiri Decree No. 23
of 1976. The courts of the forum will not enforce any
foreign claim obnoxious to the forum's public policy
(Canadian Northern Railway Co. v. Eggen, 252 U.S.
553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce
the one-year prescriptive period of the Amiri
Decree No. 23 of 1976 as regards the claims in
question would contravene the public policy on
the protection to labor.
In the Declaration of Principles and State
Policies, the 1987 Constitution emphasized
that: The state shall promote social justice in
all phases of national development. (Sec. 10).
The state affirms labor as a primary social
economic force. It shall protect the rights of
workers and promote their welfare (Sec. 18).
In article XIII on Social Justice and Human
Rights, the 1987 Constitution provides: Sec. 3.
The State shall afford full protection to labor,
local
and
overseas,
organized
and
unorganized, and promote full employment
and equality of employment opportunities for
all.
NLRC applied the Amiri Decree No. 23 of 1976, which
provides for greater benefits than those stipulated in
the overseas-employment contracts of the claimants.
It was of the belief that "where the laws of the host
country are more favorable and beneficial to the
workers, then the laws of the host country shall form
part of the overseas employment contract." It quoted
with approval the observation of the POEA
Administrator that ". . . in labor proceedings, all
doubts in the implementation of the provisions of the
Labor Code and its implementing regulations shall be
resolved in favor of labor" (Rollo, pp. 90-94). AIBC
and BRII claim that NLRC acted capriciously and
whimsically when it refused to enforce the overseasemployment contracts, which became the law of the
parties. They contend that the principle that a law is
deemed to be a part of a contract applies only to

6
provisions of Philippine law in relation to contracts
executed in the Philippines.
The overseas-employment contracts, which were
prepared by AIBC and BRII themselves, provided that
the laws of the host country became applicable to said
contracts if they offer terms and conditions more
favorable that those stipulated therein. While a part
thereof provides that the compensation to the
employee may be "adjusted downward so that the
total computation (thereunder) plus the non-waivable
benefits shall be equivalent to the compensation"
therein agreed, another part of the same provision
categorically states "that total remuneration and
benefits do not fall below that of the host country
regulation and custom."
Any ambiguity in the overseas-employment contracts
should be interpreted against AIBC and BRII, the
parties that drafted it (Eastern Shipping Lines, Inc. v.
Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
Article 1377 of the Civil Code of the Philippines
provides: The interpretation of obscure words or
stipulations in a contract shall not favor the party who
caused the obscurity. Said rule of interpretation is
applicable to contracts of adhesion where there is
already a prepared form containing the stipulations of
the employment contract and the employees merely
"take it or leave it." The presumption is that there was
an imposition by one party against the other and that
the employees signed the contracts out of necessity
that reduced their bargaining power (Fieldmen's
Insurance Co., Inc. v. Songco, 25 SCRA 70 [1968]).
Applying the said legal precepts, we read the
overseas-employment contracts in question as
adopting the provisions of the Amiri Decree No. 23 of
1976 as part and parcel thereof.
VAN DORN vs. ROMILLO (1985) divorce,
Nevada, accounting & management of business
as conjugal property, no standing to sue as
husband after divorce
FACTS: Alice Van Dorn is a citizen of the Philippines
while Richard Upton is a citizen of the United States.
They were married in Hongkong in 1972 and they
established their residence in the Philippines. Alice and
Richard had two children. But then the parties were
divorced in Nevada, United States, in 1982. Alice Van
Dorn has re-married also in Nevada, this time to
Theodore Van Dorn. Upton filed suit against petitioner
in Civil Case No. 1075-P of the Regional Trial Court, in
Pasay City, stating that petitioner's business in Ermita,
Manila, (the Galleon Shop), is conjugal property of the
parties, and asking that petitioner be ordered to
render an accounting of that business, and that private
respondent be declared with right to manage the
conjugal property. Van Dorn moved to dismiss the case
on the ground that the cause of action is barred by
previous judgment in the divorce proceedings before
the Nevada Court wherein Upton had acknowledged
that he and petitioner had "no community property" as
of June 11, 1982. The Court below denied the Motion
to Dismiss in the mentioned case on the ground that
the property involved is located in the Philippines so
that the Divorce Decree has no bearing in the case.
Issue: Whether or not the divorce obtain by the
parties in Nevada is valid
Ruling: Yes, the divorce obtain in Nevada is valid. The
Nevada District Court, which decreed the divorce, had
obtained jurisdiction over petitioner who appeared in
person before the Court during the trial of the case. It
also obtained jurisdiction over private respondent who,

giving his address as No. 381 Bush Street, San

Francisco, California, authorized his attorneys in the
divorce case, Karp & Gradt Ltd., to agree to the
divorce on the ground of incompatibility in the
understanding that there were neither community
property nor community obligations. There can be no
question as to the validity of that Nevada divorce in
any of the States of the United States. The decree is
binding on private respondent as an American citizen.
For instance, private respondent cannot sue petitioner,
as her husband, in any State of the Union.
Issue: whether or not the divorce is valid and binding
in this jurisdiction, the same being contrary to local
law and public policy.
Ruling: Yes, it is valid in the Philippines. It is true that
owing to the nationality principle embodied in Article
15 of the Civil Code, only Philippine nationals are
covered by the policy against absolute divorces the
same being considered contrary to our concept of
public police and morality. However, aliens may
obtain divorces abroad, which may be recognized
in the Philippines, provided they are valid
according to their national law. In this case, the
divorce in Nevada released private respondent from
the marriage from the standards of American law,
under which
divorce
dissolves
the marriage.
Pursuant to his national law, private respondent
is no longer the husband of petitioner. He would
have no standing to sue in the case below as
petitioner's husband entitled to exercise control
over conjugal assets. As he is bound by the Decision
of his own country's Court, which validly exercised
jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation
before said Court from asserting his right over the
alleged conjugal property. To maintain, as private
respondent does, that, under our laws, petitioner has
to be considered still married to private respondent
and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. The
Respondent should not continue to be one of her heirs
with possible rights to conjugal property. She should
not be discriminated against in her own country if the
ends of justice are to be served.
PILAPIL vs. IBAY-SOMERA (1989) no legal
standing to sue for adultery after divorce,
capacity determined at TIME OF FILING
COMPLAINT
FACTS: In 1979, petitioner Imelda Manalaysay Pilapil,
a Filipino citizen, and private respondent Erich
Ekkehard Geiling, a German national, were married
before the Registrar of Births, Marriages and Deaths at
Friedensweiler in the Federal Republic of Germany. On
January 15, 1986, Division 20 of the Schoneberg Local
Court, Federal Republic of Germany, promulgated a
decree of divorce on the ground of failure of marriage
of the spouses. The records show that under German
law said court was locally and internationally
competent for the divorce proceeding and that the
dissolution of said marriage was legally founded on
and authorized by the applicable law of that foreign
jurisdiction. 4
On January 27, 1986, private
respondent filed two complaints for adultery before
CFI of Manila, alleging that while still married to him,
petitioner had affairs with two other men. The petition
is anchored on the main ground that the court is
without jurisdiction to try and decide the charge of
adultery which is a private offense that cannot be
prosecuted de oficio since the purported complainant,
a foreigner, does not qualify as an offended spouse
having obtained a final decree of divorce under his
national law prior to the filing of the criminal
complaint.

7
Is the divorce obtained by private respondent valid
here in the Philippines?
Does the private respondent have the legal standing to
sue for adultery?
HELD:
I. YES. The fact that private respondent obtained a
valid divorce in the Federal Republic of Germany is
admitted. Said divorce and its legal effects may be
recognized here in the Philippines insofar as private
respondent is concerned following the nationality
principle in our civil law on the matter of status of
persons. It is true that owing to the nationality
principle embodied in Article 15 of the Civil Code, only
Philippine nationals are covered by the policy against
absolute divorces the same being considered contrary
to our concept of public policy and morality. However,
aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid
according to their national law. Thus, pursuant to his
national law, private respondent is no longer the
husband of petitioner.
II.
NO. The status of the complainant vis-vis the accused must be determined as of the
time the complainant was filed. Thus, the person
who initiates the adultery case must be the
offended spouse, and by this is meant that he is
still married to the accused spouse; at the time of
the filing of the complaint. The allegation of private
respondent that he could not have brought this case
before the decree of divorce for lack of knowledge,
even if true, is of no legal significance or consequence
in this case. When said respondent initiated the
divorce proceeding, he obviously knew that there
would no longer be a family nor marriage vows to
protect once a dissolution of the marriage is decreed.
Therefore, it is indispensable that the status and
capacity of the complainant to commence the action
be
definitely
established
and,
as
already
demonstrated,
such status
or capacity
must
indubitably exist as of the time he initiates the action.
It would be absurd if his capacity to bring the action
would be determined by his status before or
subsequent to the commencement thereof, where such
capacity or status existed prior to but ceased before,
or was acquired subsequent to but did not exist at the
time of, the institution of the case. We would thereby
have the anomalous spectacle of a party bringing suit
at the very time when he is without the legal capacity
to do so.

LLORENTE vs. CA divorce, will, new york,

renvoi, intrinsic validity of wills governed by
foreign law (national law of testator), extrinsic
validity by phil. Law (place of execution)
FACTS: Lorenzo N. Llorente, an enlisted serviceman
of the United States and husband of Paula Llorente
was admitted to United States citizenship. When
Lorenzo visited the Philippines, he discovered that his
wife Paula was pregnant and was living in and having
an adulterous relationship with his brother, Ceferino
Llorente.
Lorenzo refused to forgive Paula and live with her. In
fact, the couple drew a written agreement to the effect
that (1) all the family allowances allotted by the United
States Navy as part of Lorenzos salary and all other
obligations for Paulas daily maintenance and support
would be suspended; (2) they would dissolve their
marital union in accordance with judicial proceedings;
(3) they would make a separate agreement regarding

their conjugal property acquired during their marital

life; and (4) Lorenzo would not prosecute Paula for her
adulterous act since she voluntarily admitted her fault
and agreed to separate from Lorenzo peacefully. The
agreement was signed by both Lorenzo and Paula and
was witnessed by Paulas father and stepmother. The
agreement was notarized. Lorenzo returned to the
United States and filed for divorce. The Superior Court
of the State of California, for the County of San Diego
found all factual allegations to be true and issued an
interlocutory judgment of divorce. One year after, the
divorce decree became final.
In 1958, Lorenzo married Alicia F. Llorente in Manila.
Their (25) year union produced three children, Raul,
Luz and Beverly, all surnamed Llorente. In 1981,
Lorenzo executed a Last Will and Testament. In the
will, Lorenzo bequeathed all his property to Alicia and
their three children. In 1983, Lorenzo filed a petition
for the probate and allowance of his last will and
testament wherein Lorenzo moved that Alicia be
appointed Special Administratrix of his estate. Finding
that the will was duly executed, the trial court
admitted the will to probate. But before the
proceedings could be terminated, Lorenzo died. Paula
filed with the same court a petition for letters of
administration over Lorenzos estate in her favor.
Paula contended (1) that she was Lorenzos surviving
spouse, (2) that the various property were acquired
during their marriage, (3) that Lorenzos will disposed
of all his property in favor of Alicia and her children,
encroaching on her legitime and 1/2 share in the
conjugal property. Alicia filed in the testate
proceeding, a petition for the issuance of letters
testamentary. Without
terminating
the
testate
proceedings, the trial court gave due course to Paulas
petition.
The Regional Trial Court decided that the divorce
decree granted to the late Lorenzo Llorente is void and
inapplicable in the Philippines, therefore the marriage
he contracted with Alicia Fortunato is likewise void.
This being so the petition of Alicia F. Llorente for the
issuance of letters testamentary was denied. She was
not entitled to receive any share from the estate even
if the will especially said so her relationship with
Lorenzo having gained the status of paramour which is
under Art. 739 (1). Also, the court declared the
intrinsic disposition of the will of Lorenzo Llorente as
void and declared Paula entitled as conjugal partner
and entitled to one-half of their conjugal properties,
and as primary compulsory heir, also entitled to onethird of the estate and then one-third should go to the
illegitimate children, Raul, Luz and Beverly, all
surname (sic) Llorente, for them to partition in equal
shares and also entitled to the remaining free portion
in equal shares. Alicia Llorente appealed to the Court
of Appeals, which affirmed the lower courts decision
with modification that Alicia is declared as co-owner of
whatever properties she and the deceased may have
acquired during the (25) years of cohabitation.
Issue: Was the divorce valid?
Ruling:
Yes. The fact that the late Lorenzo N.
Llorente became an American citizen long before and
at the time of: (1) his divorce from Paula; (2)
marriage to Alicia; (3) execution of his will; and (4)
death, is duly established, admitted and undisputed.
Thus, as a rule, issues arising from these incidents are
necessarily governed by foreign law.
The Civil Code clearly provides:
Art. 15. Laws relating to family rights and duties, or
to the status, condition and legal capacity of persons

8
are binding upon citizens of the Philippines, even
though living abroad.
Art. 16. Real property as well as personal property is
subject to the law of the country where it is situated.
However, intestate and testamentary succession, both
with respect to the order of succession and to the
amount of successional rights and to the intrinsic
validity of testamentary provisions, shall be
regulated by the national law of the person
whose succession is under consideration,
whatever may be the nature of the property and
regardless of the country wherein said property may
be found. (emphasis ours)

divorce obtained by the respondent in his country, the

Federal Republic of Germany. There, we stated that
divorce and its legal effects may be recognized in the
Philippines insofar as respondent is concerned in view
of the nationality principle in our civil law on the status
of persons. For failing to apply these doctrines, the
decision of the Court of Appeals must be reversed. We
hold that the divorce obtained by Lorenzo H. Llorente
from his first wife Paula was valid and recognized in
this jurisdiction as a matter of comity. Now, the
effects of this divorce (as to the succession to the
estate of the decedent) are matters best left to the
determination of the trial court.

True, foreign laws do not prove themselves in our

jurisdiction and our courts are not authorized to take
judicial notice of them. Like any other fact, they must
be alleged and proved. While the substance of the
foreign law was pleaded, the Court of Appeals did not
admit the foreign law. The Court of Appeals and the
trial court called to the fore the renvoi doctrine,
where the case was referred back to the law of the
decedents domicile, in this case, Philippine law. We
note that while the trial court stated that the law of
New York was not sufficiently proven, in the same
breath it made the categorical, albeit equally
unproven statement that American law follows
the domiciliary theory hence, Philippine law
applies when determining the validity of
Lorenzos will.

Validity of the Will

First, there is no such thing as one American

law. The "national law" indicated in Article 16 of
the Civil Code cannot possibly apply to general
American law. There is no such law governing
the validity of testamentary provisions in the
United States. Each State of the union has its
own law applicable to its citizens and in force
only within the State. It can therefore refer to no
other than the law of the State of which the decedent
was a resident. Second, there is no showing that
the application of the renvoi doctrine is called for
or required by New York State law.
The trial court held that the will was intrinsically invalid
since it contained dispositions in favor of Alice, who in
the trial courts opinion was a mere paramour. The
trial court threw the will out, leaving Alice, and her two
children, Raul and Luz, with nothing. The Court of
Appeals also disregarded the will. It declared Alice
entitled to one half (1/2) of whatever property she and
Lorenzo acquired during their cohabitation, applying
Article 144 of the Civil Code of the Philippines. The
hasty application of Philippine law and the complete
disregard of the will, already probated as duly
executed in accordance with the formalities of
Philippine law, is fatal, especially in light of the
factual and legal circumstances here obtaining.
Validity of the Foreign Divorce
In Van Dorn v. Romillo, Jr. we held that owing to the
nationality principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered by the
policy against absolute divorces, the same being
considered contrary to our concept of public policy and
morality. In the same case, the Court ruled that aliens
may obtain divorces abroad, provided they are valid
according to their national law. Citing this landmark
case, the Court held in Quita v. Court of Appeals, that
once proven that respondent was no longer a Filipino
citizen when he obtained the divorce from petitioner,
the ruling in Van Dorn would become applicable and
petitioner could very well lose her right to inherit
from him. In Pilapil v. Ibay-Somera, we recognized the

The Civil Code provides:

Art. 17. The forms and solemnities of contracts,
wills, and other public instruments shall be governed
by the laws of the country in which they are
executed. When the acts referred to are executed
before the diplomatic or consular officials of the
Republic of the Philippines in a foreign country, the
solemnities established by Philippine laws shall be
observed in their execution. (underscoring ours)
The clear intent of Lorenzo to bequeath his property to
his second wife and children by her is glaringly shown
in the will he executed. We do not wish to frustrate
his wishes, since he was a foreigner, not covered by
our laws on family rights and duties, status, condition
and legal capacity. Whether the will is intrinsically
valid and who shall inherit from Lorenzo are
issues best proved by foreign law which must be
pleaded and proved. Whether the will was
executed in accordance with the formalities
required is answered by referring to Philippine
law. In fact, the will was duly probated. As a guide
however, the trial court should note that whatever
public policy or good customs may be involved in our
system of legitimes, Congress did not intend to extend
the same to the succession of foreign nationals.
Congress specifically left the amount of successional
rights to the decedent's national law. Court REMANDS
the cases to the court of origin for determination of
the intrinsic validity of Lorenzo N. Llorentes will and
determination of the parties successional rights
allowing proof of foreign law with instructions that the
trial court shall proceed with all deliberate dispatch to
settle the estate of the deceased within the framework
of the Rules of Court.
GARCIA vs. RECIO (2001) Australia divorce,
party pleading foreign divorce decree, must
prove: (1) the foreign law allowing absolute
divorce and (2) the alleged divorce decree itself,
absolute divorce vs limited divorce, bigamy
FACTS: Respondent Recio (Filipino citizen at that time)
was married to Samson (Australian citizen) in Malabon
in 1987. They lived together as husband and wife in
Australia. In 1989, a decree of divorce was issued by
an Australian family court. In 1992, respondent
became an Australian citizen. Petitioner Garcia
(Filipina) and respondent were married in 1994 in
Cabanatuan City. In their application for a marriage
license, respondent was declared as "single" and
"Filipino."
Starting 1995, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage. In 1998, petitioner filed a Complaint for
Declaration of Nullity of Marriage in the court a quo, on
the ground of bigamy respondent allegedly had a

9
prior subsisting marriage at the time he married her in
1994. She claimed that she learned of respondent's
marriage to Samson only in 1997. Respondent averred
that, as far back as 1993, he had revealed to
petitioner his prior marriage and its subsequent
dissolution. He contended that his first marriage to an
Australian citizen had been validly dissolved by a
divorce decree obtained in Australian in 1989; thus, he
was legally capacitated to marry petitioner in 1994. In
1998 (while the suit for declaration of nullity was
pending) respondent was able to secure a divorce
decree from a family court in Australia.
The trial court declared the marriage dissolved on the
ground that the divorce issued in Australia was valid
and recognized in the Philippines. Hence, this Petition.
HELD: A divorce obtained abroad by an alien may be
recognized in our jurisdiction, provided such decree is
valid according to the national law of the foreigner.
However, the divorce decree and the governing
personal law of the alien spouse who obtained the
divorce must be proven. Our courts do not take
judicial notice of foreign laws and judgment; hence,
like any other facts, both the divorce decree and the
national law of the alien must be alleged and proven
according to our law on evidence. Philippine law does
not provide for absolute divorce; hence, our courts
cannot grant it. A marriage between two Filipinos
cannot be dissolved even by a divorce obtained
abroad, because of Articles 15 and 17 of the Civil
Code. In mixed marriages involving a Filipino and a
foreigner, Article 26 of the Family Code allows the
former to contract a subsequent marriage in case the
divorce is "validly obtained abroad by the alien spouse
capacitating him or her to remarry." A divorce obtained
abroad by a couple, who are both aliens, may be
recognized in the Philippines, provided it is consistent
with their respective national laws. Before a foreign
divorce decree can be recognized by our courts, the
party pleading it must prove: (1) the foreign law
allowing absolute divorce and (2) the alleged
divorce decree itself.
Divorce as a Question of Fact
Before a foreign judgment is given presumptive
evidentiary value (authenticity and due execution), the
document (divorce decree) must first be presented
and admitted in evidence.30 A divorce obtained abroad
is proven by the divorce decree itself. Indeed the best
evidence of a judgment is the judgment itself.
Under Sections 24 and 25 of Rule 132, on the other
hand, a writing or document may be proven as a
public or official record of a foreign country by
either (1) an official publication or (2) a copy
thereof attested by the officer having legal
custody of the document. If the record is not kept in
the
Philippines,
such
copy
must
be
(a)
accompanied by a certificate issued by the
proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign
country in which the record is kept and (b)
authenticated by the seal of his office. Compliance
with the aforementioned rules on evidence must be
demonstrated.
Fortunately for respondent, when the 1989 divorce
decree was submitted in evidence, counsel for
petitioner objected, not to its admissibility, but only to
the fact that it had not been registered in the Local
Civil Registry (as required by Art. 52 of the Family
Code). Petitioner's failure to object properly rendered

the divorce decree admissible as a written act of the

Family Court of Australia.
Compliance with Articles 11, 13 and 52 (registration
requirements) of the Family Code (as contended by
petitioner) is not necessary; respondent was no longer
bound by Philippine personal laws after he acquired
Australian citizenship in 1992. By becoming an
Australian (naturalization), respondent severed his
allegiance to the Philippines and the vinculum
juris that had tied him to Philippine personal laws.
Since the divorce was a defense (in action for
Declaration of Nullity of Marriage on the ground of
bigamy) raised by respondent, the burden of proving
the pertinent Australian law validating it falls squarely
upon him. Our courts cannot take judicial notice of
foreign laws. Like any other facts, they must be
alleged and proved.
Respondent's Legal Capacity to Remarry
Divorces are of different types. The two basic ones are
(1) absolute divorce or a vinculo matrimonii and (2)
limited divorce or a mensa et thoro. The first kind
terminates the marriage, while the second
suspends it and leaves the bond in full
force. There is no showing in the case at bar which
type of divorce was procured by respondent.
Respondent presented a decree nisi or an interlocutory
decree a conditional or provisional judgment of
divorce. It is in effect the same as a separation from
bed and board, although an absolute divorce may
follow after the lapse of the prescribed period during
which no reconciliation is effected. On its face, the
herein Australian divorce decree contains a
restriction that reads: "1. A party to a marriage
who marries again before this decree becomes
absolute (unless the other party has died)
commits the offence of bigamy."
This quotation bolsters our contention that the
divorce obtained by respondent may have been
restricted. It did not absolutely establish his
legal capacity to remarry according to his
national law. Hence, we find no basis for the ruling of
the trial court, which erroneously assumed that the
Australian divorce ipso facto restored respondent's
capacity to remarry despite the paucity of evidence on
this matter.
Significance of the Certificate of Legal Capacity
(as required by Article 21 of the Family Code)
The legal capacity to contract marriage is determined
by the national law of the party concerned. The
certificate mentioned in Article 21 of the Family Code
would have been sufficient to establish the legal
capacity of respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is
prima facie evidence of legal capacity to marry on the
part of the alien applicant for a marriage license.
There is absolutely no evidence that proves
respondent's legal capacity to marry petitioner. We
cannot conclude that respondent, who was then a
naturalized Australian citizen, was legally capacitated
to marry petitioner in 1994. Court a quo erred in
finding that the divorce decree ipso facto clothed
respondent with the legal capacity to remarry without
requiring him to adduce sufficient evidence to show
the Australian personal law governing his status; or at
the very least, to prove his legal capacity to contract
the second marriage.

10
Neither can we grant petitioner's prayer to declare her
marriage to respondent null and void on the ground of
bigamy. After all, it may turn out that under Australian
law, he was really capacitated to marry petitioner as a
direct result of the divorce decree. Hence, we believe
that the most judicious course is to REMAND this case
to the trial court to receive evidence, if any, which
show petitioner's legal capacity to marry petitioner.
Failing in that, then the court a quo may declare a
nullity of the parties' marriage on the ground of
bigamy, there being already in evidence two existing
marriage certificates, which were both obtained in the
Philippines, one in Malabon, Metro Manila dated 1987
and the other, in Cabanatuan City dated 1994.
REPUBLIC vs. IYOY (2005) - Fely herself
admitted in her Answer filed before the RTC:
obtained divorce in 1984, she married her
American husband in 1985, American citizen
ONLY since 1988. At the time she filed for
divorce, Fely was still a Filipino citizen, pursuant
to the nationality principle embodied in Article
15 of the Civil Code, she was still bound by
Philippine laws
FACTS: The proceedings before the RTC commenced
with the filing of a Complaint for declaration of nullity
of marriage by respondent Crasus in 1997. According
to the said Complaint, respondent Crasus married Fely
in 1961 in Cebu City. In 1984, Fely left the Philippines
for the United States, leaving all of their five children,
to the care of respondent Crasus. Sometime in 1985,
respondent Crasus learned, through the letters sent by
Fely to their children, that Fely got married to an
American, with whom she eventually had a child. At
the time the Complaint was filed, it had been 13 years
since Fely left and abandoned respondent Crasus, and
there was no more possibility of reconciliation between
them. Respondent Crasus finally alleged in his
Complaint that Felys acts brought danger and
dishonor to the family, and clearly demonstrated her
psychological incapacity to perform the essential
obligations of marriage.
Such incapacity, being
incurable and continuing, constitutes a ground for
declaration of nullity of marriage under Article 36, in
relation to Articles 68, 70, and 72, of the Family Code.
Not long after, RTC promulgated its Judgment
declaring the marriage of respondent Crasus and Fely
null and void ab initio.
The RTC rendered the decision rationating, to wit:
Article 26 of the Family Code provides: Art. 26. All
marriages solemnized outside the Philippines in
accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited
under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
WHERE A MARRIAGE BETWEEN A FILIPINO CITIZEN
AND A FOREIGNER IS VALIDLY CELEBRATED AND A
DIVORCE IS THEREAFTER VALIDLY OBTAINED ABROAD
BY THE ALIEN SPOUSE CAPACITATING HIM OR HER TO
REMARRY, THE FILIPINO SPOUSE SHALL LIKEWISE
HAVE CAPACITY TO REMARRY UNDER PHILIPPINE
LAW. The rationale behind the second paragraph of
the above-quoted provision is to avoid the absurd and
unjust situation of a Filipino citizen still being married
to his or her alien spouse, although the latter is no
longer married to the Filipino spouse because he or
she has obtained a divorce abroad. In the case at
bench, the defendant has undoubtedly acquired her
American husbands citizenship and thus has become
an alien as well. This Court cannot see why the
benefits of Art. 26 aforequoted can not be extended to
a Filipino citizen whose spouse eventually embraces
another citizenship and thus becomes herself an alien.
CA affirmed the decision of the RTC.

Issue: Whether or not par. 2 of Art. 26 of the Family

Code is finds application to the case at bar.
HELD: As it is worded, Article 26, paragraph 2, refers
to a special situation wherein one of the couple getting
married is a Filipino citizen and the other a foreigner at
the time the marriage was celebrated. By its plain
and literal interpretation, the said provision
cannot be applied to the case of respondent
Crasus and his wife Fely because at the time Fely
obtained her divorce, she was still a Filipino
citizen. Although the exact date was not established,
Fely herself admitted in her Answer filed before
the RTC that she obtained a divorce from
respondent Crasus sometime after she left for
the United States in 1984, after which she
married her American husband in 1985. In the
same Answer, she alleged that she had been an
American citizen since 1988. At the time she
filed for divorce, Fely was still a Filipino citizen,
and pursuant to the nationality principle
embodied in Article 15 of the Civil Code of the
Philippines, she was still bound by Philippine
laws on family rights and duties, status, condition,
and legal capacity, even when she was already
living abroad. Philippine laws, then and even until
now, do not allow and recognize divorce between
Filipino spouses. Thus, Fely could not have validly
obtained a divorce from respondent Crasus.
REPUBLIC vs. ORBECIDO - Paragraph 2 of Article
26 should be interpreted to include cases
involving parties who, at the time of the
celebration of the marriage were Filipino
citizens, but later on, one of them becomes
naturalized as a foreign citizen and obtains a
divorce decree. The Filipino spouse should
likewise be allowed to remarry as if the other
party were a foreigner at the time of the
solemnization of the marriage.
FACTS: In 1981, Cipriano Orbecido III married Lady
Myros M. Villanueva in Ozamis City. In 1986,
Ciprianos wife left for the United States. A few years
later, Cipriano discovered that his wife had been
naturalized as an American citizen. Sometime in
2000, Cipriano learned from his son that his wife had
obtained a divorce decree and then married a certain
Innocent Stanley. Cipriano thereafter filed with the
trial court a petition for authority to remarry invoking
Paragraph 2 of Article 26 of the Family Code. No
opposition was filed. Finding merit in the petition, the
court granted the same. The Republic, herein
petitioner, through the (OSG), sought reconsideration
but it was denied. The OSG contends that Paragraph 2
of Article 26 of the Family Code is not applicable to the
instant case because it only applies to a valid mixed
marriage; that is, a marriage celebrated between a
Filipino citizen and an alien. Furthermore, the OSG
argues there is no law that governs respondents
situation. The OSG posits that this is a matter of
legislation and not of judicial determination. This case
concerns the applicability of Paragraph 2 of Article 26
to a marriage between two Filipino citizens where one
later acquired alien citizenship, obtained a divorce
decree, and remarried while in the U.S.A. The
interests of the parties are also adverse, as petitioner
representing the State asserts its duty to protect the
institution of marriage while respondent, a private
citizen, insists on a declaration of his capacity to
remarry.
Issue: Does Paragraph 2 of Article 26 of the Family
Code apply to the case of respondent? Pero ang issue
nga related sa atong subject kay murag related sa how
can a foreign divorce decree be recognized in our

11
courts? Para conflict2x of laws kunuhay. Given a valid
marriage between two Filipino citizens, where one
party is later naturalized as a foreign citizen and
obtains a valid divorce decree capacitating him or her
to remarry, can the Filipino spouse likewise remarry
under Philippine law?
HELD: ART. 26. All marriages solemnized outside the
Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there
as such, shall also be valid in this country, except
those prohibited under Articles 35(1), (4), (5) and (6),
36, 37 and 38. Where a marriage between a Filipino
citizen and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad by the
alien spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry under
Philippine law. (Emphasis supplied)
The instant case is one where at the time the
marriage was solemnized, the parties were two
Filipino citizens, but later on, the wife was
naturalized as an American citizen and
subsequently obtained a divorce granting her
capacity to remarry, and indeed she remarried
an American citizen while residing in the U.S.A.
Records of the proceedings of the Family Code
deliberations showed that the intent of Paragraph 2
of Article 26, according to Judge Sempio-Dy, is to
avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who,
after obtaining a divorce, is no longer married to
the Filipino spouse. We hold that Paragraph 2 of
Article 26 should be interpreted to include cases
involving parties who, at the time of the
celebration of the marriage were Filipino
citizens, but later on, one of them becomes
naturalized as a foreign citizen and obtains a
divorce decree. The Filipino spouse should
likewise be allowed to remarry as if the other
party were a foreigner at the time of the
solemnization of the marriage. To rule otherwise
would be to sanction absurdity and injustice. Where
the interpretation of a statute according to its exact
and literal import would lead to mischievous results or
contravene the clear purpose of the legislature, it
should be construed according to its spirit and reason,
disregarding as far as necessary the letter of the law.
A statute may therefore be extended to cases not
within the literal meaning of its terms, so long as they
come within its spirit or intent.
In view of the foregoing, we state the twin elements
for the application of Paragraph 2 of Article 26 as
follows:
1. There is a valid marriage that has been
celebrated between a Filipino citizen and
a foreigner; and
2. A valid divorce is obtained abroad by
the alien spouse capacitating him or her
to remarry.
The reckoning point is not the citizenship of the
parties at the time of the celebration of the
marriage, but their citizenship at the time a valid
divorce is obtained abroad by the alien spouse
capacitating the latter to remarry. In this case,
when Ciprianos wife was naturalized as an American
citizen, there was still a valid marriage that has been
celebrated between her and Cipriano. As fate would
have it, the naturalized alien wife subsequently
obtained a valid divorce capacitating her to remarry.
Clearly, the twin requisites for the application of
Paragraph 2 of Article 26 are both present in this
case. Thus Cipriano, the divorced Filipino spouse,
should be allowed to remarry.

However, we note that the records are bereft of

competent evidence duly submitted by respondent
concerning the divorce decree and the naturalization of
respondents wife. It is settled rule that one who
alleges a fact has the burden of proving it and mere
allegation is not evidence. Accordingly, for his plea
to prosper, respondent herein must prove his
allegation that his wife was naturalized as an
American citizen. Likewise, before a foreign
divorce decree can be recognized by our own
courts, the party pleading it must prove the
divorce as a fact and demonstrate its conformity
to the foreign law allowing it. Such foreign law
must also be proved as our courts cannot take
judicial notice of foreign laws. Like any other
fact, such laws must be alleged and proved.
Furthermore, respondent must also show that
the divorce decree allows his former wife to
remarry as specifically required in Article 26.
Otherwise, there would be no evidence sufficient
to declare that he is capacitated to enter into
another marriage.
PERKINS vs. DIZON (1939)
FACTS: On July 6, 1938, respondent, Eugene Arthur
Perkins, instituted an action in the Court of First
Instance of Manila against the Benguet Consolidated
Mining Company for dividends amounting to
P71,379.90 on 52,874 shares of stock registered in his
name, payment of which was being withheld by the
company; and, for the recognition of his right to the
control and disposal of said shares, to the exclusion of
all others. To the complaint, the company filed its
answer alleging, by way of defense, that the
withholding of such dividends and the non-recognition
of plaintiff's right to the disposal and control of the
shares were due to certain demands made with
respect to said shares by the petitioner herein, Idonah
Slade Perkins, and by one George H. Engelhard. The
answer prays that the adverse claimants be made
parties to the action and served with notice thereof by
publication, and that thereafter all such parties be
required to interplead and settle the rights among
themselves. On September 5, 1938, the trial court
ordered respondent Eugene Arthur Perkins to include
in his complaint as parties defendant petitioner, Idonah
Slade Perkins, and George H. Engelhard. The
complaint was accordingly amended and in addition to
the relief prayed for in the original complaint,
respondent Perkins prayed that petitioner Idonah
Slade Perkins and George Engelhard be adjudged
without interest in the shares of stock in question and
excluded from any claim they assert thereon.
Thereafter, summons by publication were served upon
the non-resident defendants, Idonah Slade Perkins and
George H. Engelhard, pursuant to the order of the trial
court. On December 9, 1938, Engelhard filed his
answer to the amended complaint, and on December
10, 1938, petitioner Idonah Slade Perkins, through
counsel, filed her pleading entitled "objection to venue,
motion to quash, and demurrer to jurisdiction" wherein
she challenged the jurisdiction of the lower court over
her person. Petitioner's objection, motion and
demurrer having been overruled as well as her motion
for reconsideration of the order of denial, she now
brought the present petition for certiorari, praying that
the summons by publication issued against her be
declared null and void, and that, with respect to her,
respondent Judge be permanently prohibited from
taking any action on the
case.chanroblesvirtuallawlibrary chanrobles virtual law
library
The controlling issue here involved is whether or not
the Court of First Instance of Manila has acquired
jurisdiction over the person of the present petitioner
as a non-resident defendant, or, notwithstanding the
want of such jurisdiction, whether or not said court

12
may validly try the case. The parties have filed lengthy
memorandums relying on numerous authorities, but
the principles governing the question are well settled
in this jurisdiction.chanroblesvirtuallawlibrary
chanrobles virtual law library
HELD: Section 398 of our Code of Civil Procedure
provides that when a non-resident defendant is sued
in the Philippine courts and it appears, by the
complaint or by affidavits, that the action relates to
real or personal property within the Philippines in
which said defendant has or claims a lien or interest,
actual or contingent, or in which the relief demanded
consists, wholly or in part, in excluding such person
from any interest therein, service of summons maybe
made by publication.chanroblesvirtuallawlibrary
chanrobles virtual law library
We have fully explained the meaning of this provision
in El Banco Espaol Filipino vs. Palanca, 37 Phil., 921,
wherein we laid down the following rules:
(1) In order that the court may validly try a
case, it must have jurisdiction over the
subject-matter and over the persons of the
parties. Jurisdiction over the subject-matter is
acquired by concession of the sovereign
authority which organizes a court and
determines the nature and extent of its powers
in general and thus fixes its jurisdiction with
reference to actions which it may entertain and
the relief it may grant. Jurisdiction over the
persons of the parties is acquired by their
voluntary appearance in court and their
submission to its authority, or by the coercive
power of legal process exerted over their
persons.chanroblesvirtuallawlibrary chanrobles
virtual law library
(2) When the defendant is a non-resident and
refuses to appear voluntary, the court cannot
acquire jurisdiction over his person even if the
summons be served by publication, for he is
beyond the reach of judicial process. No
tribunal established by one State can extend
its process beyond its territory so as to subject
to its decisions either persons or property
located in another State. "There are many
expressions in the American reports from
which it might be inferred that the court
acquires personal jurisdiction over the person
of the defendant by publication and notice; but
such is not the case. In truth, the proposition
that jurisdiction over the person of a nonresident cannot be acquired by publication and
notice was never clearly understood even in
the American courts until after the decision
had been rendered by the Supreme Court of
the United States in the leading case of
Pennoyer v. Neff (95 U.S., 714; 24 Law. ed.,
565). In the light of that decisions which have
subsequently been rendered in that and other
courts, the proposition that jurisdiction over
the person cannot be thus acquired by
publication and notice is no longer open to
question; and it is now fully established that a
personal judgment upon constructive or
substituted service against a non-resident who
does not appear is wholly invalid. This doctrine
applies to all kinds of constructive or
substituted process, including service by
publication and personal service outside of the
jurisdiction in which the judgment is rendered;
and the only exception seems to be found in
the case where the non-resident defendant has
expressly or impliedly consented to the mode
of service. (Note to Raher vs. Raher, 35 L. R.
A. [N. S.], 292; see also L.R.A. 585; 35 L.R.A.
[N.S.], 312.) chanrobles virtual law library

(3) The general rule, therefore, is that a suit

against a non-resident cannot be entertained
by a Philippine court. Where, however, the
action is in rem or quasi in rem in connection
with property located in the Philippines, the
court acquires jurisdiction over the res, and its
jurisdiction over the person of the non-resident
is non-essential. In order that the court may
exercise power over the res, it is not necessary
that the court should take actual custody of
the property, potential custody thereof being
sufficient. There is potential custody when,
from the nature of the action brought, the
power of the court over the property is
impliedly recognized by law. "An illustration of
what we term potential jurisdiction over the
res, is found in the proceeding to register the
title of land under our system for the
registration of land. Here the court, without
taking actual physical control over the property
, assumes, at the instance of some person
claiming to be owner, to exercise a jurisdiction
in rem over the property and to adjudicate the
title in favor of the petitioner against all the
world." chanrobles virtual law library
(4) As before stated, in an action in rem or
quasi in rem against a non-resident defendant,
jurisdiction over his person is non-essential,
and if the law requires in such case that the
summons upon the defendant be served by
publication, it is merely to satisfy the
constitutional requirement of due process. If
any be said, in this connection, that "may
reported cases can be cited in which it is
assumed that the question of the sufficiency of
publication or notice in the case of this kind is
a question affecting the jurisdiction of the
court, and the court is sometimes said to
acquire jurisdiction by virtue of the publication.
This phraseology was undoubtedly originally
adopted by the court because of the analogy
between service by publication and personal
service of process upon the defendant; and, as
has already been suggested, prior to the
decision of Pennoyer v. Neff (supra), the
difference between the legal effects of the two
forms of service was obscure. It is accordingly
not surprising that the modes of expression
which had already been moulded into legal
tradition before that case was decided have
been brought down to the present day. But it
is clear that the legal principle here involved is
not affected by the peculiar languages in which
the courts have expounded their ideas."
The reason for the rule that Philippine courts cannot
acquire jurisdiction over the person of a non-resident,
as laid down by the Supreme Court of the United
States in Pennoyer v. Neff, supra, may be found in a
recognized principle of public law to the effect that "no
State can exercise direct jurisdiction and authority
over persons or property without its territory. Story,
Confl. L., ch. 2; Wheat, Int. L., pt. 2, ch. 2. The
several States are of equal dignity and authority, and
the independence of one implies the exclusion of
power from all others. And so it is laid down by jurists,
as an elementary principle, that the laws of one State
have no operation outside of its territory, except so far
as is allowed by comity; and that no tribunal
established by it can extend its process beyond that
territory so as to subject either persons or property to
its decisions. "Any exertion of authority of this sort
beyond this limit," says Story, "is a mere nullity, and
incapable of binding such persons or property in any
other tribunals." Story, Confl. L., sec. 539." (Pennoyer
v. Neff, 95 U.S., 714; 24 Law. ed., 565, 568569.).chanroblesvirtuallawlibrary chanrobles virtual
law library

13
When, however, the action relates to property located
in the Philippines, the Philippine courts may validly try
the case, upon the principle that a "State, through its
tribunals, may subject property situated within its
limits owned by non-residents to the payment of the
demand of its own citizens against them; and the
exercise of this jurisdiction in no respect infringes upon
the sovereignty of the State where the owners are
domiciled. Every State owes protection to its citizens;
and, when non-residents deal with them, it is a
legitimate and just exercise of authority to hold and
appropriate any property owned by such non-residents
to satisfy the claims of its citizens. It is in virtue of the
State's jurisdiction over the property of the nonresident situated within its limits that its tribunals can
inquire into the non-resident's obligations to its own
citizens, and the inquiry can then be carried only to
the extent necessary to control the disposition of the
property. If the non-resident has no property in the
State, there is nothing upon which the tribunals can
adjudicate." (Pennoyer v. Neff, supra.) chanrobles
virtual law library
In the instant case, there can be no question that the
action brought by Eugene Arthur Perkins in his
amended complaint against the petitioner, Idonah
Slade Perkins, seeks to exclude her from any interest
in a property located in the Philippines. That property
consists in certain shares of stocks of the Benguet
Consolidated Mining Company, a sociedad anonima,
organized in the Philippines under the provisions of the
Spanish Code of Commerce, with its principal office in
the City of Manila and which conducts its mining
activities therein. The situs of the shares is in the
jurisdiction where the corporation is created, whether
the certificated evidencing the ownership of those
shares are within or without that jurisdiction. (Fletcher
Cyclopedia Corporations, Permanent ed. Vol. 11, p.
95). Under these circumstances, we hold that the
action thus brought is quasi in rem, for while the
judgement that may be rendered therein is not strictly
a judgment in rem, "it fixes and settles the title to the
property in controversy and to that extent partakes of
the nature of the judgment in rem." (50 C.J., p 503).
As held by the Supreme Court of the United States in
Pennoyer v. Neff (supra);
It is true that, in a strict sense, a proceeding in
rem is one taken directly against property, and
has for its object the disposition of the
property, without reference to the title of
individual claimants; but , in a large and more
general sense, the terms are applied to actions
between parties, where the direct object is to
reach and dispose of property owned by them,
or of some interest therein.
The action being in quasi in rem, The Court of First
Instance of Manila has jurisdiction over the person of
the non-resident. In order to satisfy the constitutional
requirement of due process, summons has been
served upon her by publication. There is no question
as to the adequacy of publication made nor as to the
mailing of the order of publication to the petitioner's
last known place of residence in the United States.
But, of course, the action being quasi in rem and
notice having be made by publication, the relief that
may be granted by the Philippine court must be
confined to the res, it having no jurisdiction to render
a personal judgment against the non-resident. In the
amended complaint filed by Eugene Arthur Perkins, no
money judgment or other relief in personam is prayed
for against the petitioner. The only relief sought
therein is that she be declared to be without any
interest in the shares in controversy and that she be
excluded from any claim
thereto.chanroblesvirtuallawlibrary chanrobles virtual
law library
Petitioner contends that the proceeding instituted
against her is one of interpleading and is therefore an

action in personam. Section 120 of our Code of Civil

Procedure provides that whenever conflicting claims
are or may be made upon a person for or relating to
personal property, or the performance of an obligation
or any portion thereof, so that he may be made
subject to several actions by different persons, such
person may bring an action against the conflicting
claimants, disclaiming personal interest in the
controversy, and the court may order them to
interplead with one another and litigate their several
claims among themselves, there upon proceed to
determine their several claims. Here, The Benguet
Consolidated Mining Company, in its answer to the
complaint filed by Eugene Arthur Perkins, averred that
in connection with the shares of stock in question,
conflicting claims were being made upon it by said
plaintiff, Eugene Arthur Perkins, his wife Idonah Slade
Perkins, and one named George H. Engelhard, and
prayed that these last two be made parties to the
action and served with summons by publication, so
that the three claimants may litigate their conflicting
claims and settle their rights among themselves. The
court has not issued an order compelling the
conflicting claimants to interplead with one another
and litigate their several claims among themselves,
but instead ordered the plaintiff to amend his
complaint including the other two claimants as parties
defendant. The plaintiff did so, praying that the new
defendants thus joined be excluded fro any interest in
the shares in question, and it is upon this amended
complaint that the court ordered the service of the
summons by publication. It is therefore, clear that the
publication of the summons was ordered not in virtue
of an interpleading, but upon the filing of the amended
complaint wherein an action quasi in rem is
alleged.chanroblesvirtuallawlibrary chanrobles virtual
law library
Had not the complaint been amended, including the
herein petitioner as an additional defendant, and had
the court, upon the filing of the answer of the Benguet
Consolidated Mining Company, issued an order under
section 120 of the Code of Civil Procedure, calling the
conflicting claimants into court and compelling them to
interplead with one another, such order could not
perhaps have validly been served by publication or
otherwise, upon the non-resident Idonah Slade
Perkins, for then the proceeding would be purely one
of interpleading. Such proceeding is a personal action,
for it merely seeks to call conflicting claimants into
court so that they may interplead and litigate their
several claims among themselves, and no specific
relief is prayed for against them, as the interpleader
have appeared in court, one of them pleads ownership
of the personal property located in the Philippines and
seeks to exclude a non-resident claimant from any
interest therein, is a question which we do not decide
not. Suffice it to say that here the service of the
summons by publication was ordered by the lower
court by virtue of an action quasi in rem against the
non-resident defendant.chanroblesvirtuallawlibrary
chanrobles virtual law library
Respondents contend that, as the petitioner in the
lower court has pleaded over the subject-matter, she
has submitted herself to its jurisdiction. We have
noticed, however, that these pleas have been made
not as independent grounds for relief, but merely as
additional arguments in support of her contention that
the lower court had no jurisdiction over the person. In
other words, she claimed that the lower court had no
jurisdiction over her person not only because she is a
non-resident, but also because the court had no
jurisdiction over the subject-matter of the action and
that the issues therein involved have already been
decided by the New York court and are being
relitigated in the California court. Although this
argument is obviously erroneous, as neither
jurisdiction over the subject-matter nor res adjudicata

14
nor lis pendens has anything to do with the question of
jurisdiction over her person, we believe and so hold
that the petitioner has not, by such erroneous
argument, submitted herself to the jurisdiction of the
court. Voluntary appearance cannot be implied from
either a mistaken or superflous reasoning but from the
nature of the relief prayed for.
PHILSEC INVESTMENT CORP. vs. CA (1997) effect of a judgment of a tribunal of a foreign
country: (a) In case of a judgment upon a specific
thing, the judgment is conclusive upon the title
to the thing; (b) In case of a judgment against a
person, the judgment is presumptive evidence of
a right as between the parties and their
successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a
want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact;
extraterritorial service provides that service of
summons on a non-resident defendant may be
effected out of the Philippines by leave of Court
where, among others, the property of the
defendant has been attached within the
Philippines

FACTS: In order to facilitate the payment of the loans

which the original debtor Ventura Ducat obtained from
AYALA and Philsec, private respondent 1488, Inc.
assumed Ducats obligation under an Agreement,
dated 1983, whereby 1488, Inc. (assumed Ducats
obligation) executed a Warranty Deed with Vendors
Lien by which it sold to petitioner Athona Holdings a
parcel of land in Harris County, Texas, U.S.A., for
US$2,807,209.02, while PHILSEC and AYALA extended
a loan to ATHONA in the amount of US$2,500,000.00
as initial payment of the purchase price. The balance
of US$307,209.02 was to be paid by means of a
promissory note executed by ATHONA in favor of
1488, Inc. As ATHONA failed to pay the interest on the
balance of US$307,209.02, the entire amount covered
by the note became due and demandable.
Accordingly, in 1985, private respondent 1488, Inc.
sued petitioners PHILSEC, AYALA, and ATHONA
in the United States for payment of the balance
of US$307,209.02 and for damages for breach of
contract and for fraud allegedly perpetrated by
petitioners in misrepresenting the marketability of the
shares of stock delivered to 1488, Inc. under the
Agreement. The case was docketed as Case No. 8557746.
ATHONA filed an answer with counterclaim, impleading
private respondents herein as counterdefendants, for
allegedly conspiring in selling the property at a price
over its market value. ATHONA sought the recovery of
damages and excess payment allegedly made to 1488,
Inc. and, in the alternative, the rescission of sale of
the property. For their part, PHILSEC and AYALA filed
a motion to dismiss on the ground of lack of
jurisdiction over their person, but, as their motion was
denied.
In 1987, while Civil Case No. H-86-440 was
pending in the United States, petitioners PHILSEC
and ATHONA filed a complaint For Sum of
Money with Damages and Writ of Preliminary
Attachment against private respondents in the
Regional Trial Court of Makati, where it was
docketed as Civil Case No. 16563. The complaint
reiterated the allegation of petitioners in their
respective counterclaims in Civil Action No. H-86-440
of the United States District Court of Southern Texas
that private respondents committed fraud by selling

the property at a price 400 percent more than its true

value of US$800,000.00. Petitioners claimed that, as a
result
of
private
respondents
fraudulent
misrepresentations, ATHONA, PHILSEC, and AYALA
were induced to enter into the Agreement and to
purchase the Houston property. Petitioners prayed that
private respondents be ordered to return to ATHONA
the excess payment of US$1,700,000.00 and to pay
damages. On April 20, 1987, the trial court issued a
writ of preliminary attachment against the real and
personal properties of private respondents.
Private respondent Ducat moved to dismiss Civil Case
No. 16563 on the grounds of (1) litis pendentia, vis-avis Civil Action No. H-86-440 filed by 1488, Inc. and
Daic in the U.S., (2) forum non conveniens. On the
other hand, private respondents 1488, Inc. and its
president Daic filed a joint Special Appearance and
Qualified Motion to Dismiss, contending that the
action being in personam, extraterritorial service of
summons by publication was ineffectual and did not
vest the court with jurisdiction over 1488, Inc., which
is a non-resident foreign corporation, and Daic, who is
a non-resident alien.
trial court granted Ducats motion to dismiss, stating
that the evidentiary requirements of the controversy
may be more suitably tried before the forum of the litis
pendentia in the U.S., under the principle in private
international law of forum non conveniens, even as it
noted that Ducat was not a party in the U.S. case. The
trial court also held itself without jurisdiction over
1488, Inc. and Daic because they were non-residents
and the action was not an action in rem or quasi in
rem, so that extraterritorial service of summons was
ineffective. The trial court subsequently lifted the writ
of attachment it had earlier issued against the shares
of stocks of 1488, Inc. and Daic. Court of Appeals
affirmed the dismissal of Civil Case No. 16563 against
Ducat, 1488, Inc., and Daic on the ground of litis
pendentia.
Issues:
1. Whether or not the doctrine of pendency of
another action between the same parties for the
same cause (litis pendentia) relied upon by the
court of appeals in affirming the trial courts
dismissal of the civil action is applicable.
2. Whether or not the principle of forum non
conveniens also relied upon by the court of
appeals in affirming the dismissal by the trial
court of the civil action is likewise applicable.

HELD: While the present case was pending in the

Court of Appeals, the United States District Court
for the Southern District of Texas rendered
judgment in the case before it. The judgment,
which was in favor of private respondents, was
affirmed on appeal by the Circuit Court of
Appeals. Thus, the principal issue to be resolved
in this case is whether Civil Case No. 16536 is
barred by the judgment of the U.S. court. Private
respondents contend that for a foreign judgment
to be pleaded as res judicata, a judgment
admitting the foreign decision is not necessary.
On the other hand, petitioners argue that the
foreign judgment cannot be given the effect of res
judicata without giving them an opportunity to
impeach it on grounds stated in Rule 39, 50 of
the Rules of Court, to wit: want of jurisdiction,
want of notice to the party, collusion, fraud, or
clear mistake of law or fact.
Petitioners contention is meritorious.
While this
Court has given the effect of res judicata to

15
foreign judgments in several cases, it was after
the parties opposed to the judgment had been
given ample opportunity to repel them on grounds
allowed under the law. It is not necessary for this
purpose to initiate a separate action or proceeding for
enforcement of the foreign judgment. What is
essential is that there is opportunity to challenge
the foreign judgment, in order for the court to
properly determine its efficacy. This is because in this
jurisdiction, with respect to actions in personam, as
distinguished from actions in rem, a foreign judgment
merely constitutes prima facie evidence of the justness
of the claim of a party and, as such, is subject to proof
to the contrary. Rule 39, 50 provides:
SEC. 50. Effect of foreign judgments. - The effect of a
judgment of a tribunal of a foreign country,
having jurisdiction to pronounce the judgment is
as follows:
(a) In case of a judgment upon a specific
thing, the judgment is conclusive upon the title
to the thing;
(b) In case of a judgment against a person,
the judgment is presumptive evidence of a right
as between the parties and their successors in
interest by a subsequent title; but the judgment
may be repelled by evidence of a want of
jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact.
Thus, in the case of General Corporation of the
Philippines v. Union Insurance Society of Canton,
Ltd.,which private respondents invoke for claiming
conclusive effect for the foreign judgment in their
favor, the foreign judgment was considered res
judicata because this Court found from the evidence
as well as from appellants own pleadings that the
foreign court did not make a clear mistake of law or
fact or that its judgment was void for want of
jurisdiction or because of fraud or collusion by the
defendants. Trial had been previously held in the
lower court and only afterward was a decision
rendered, declaring the judgment of the Supreme
Court of the State of Washington to have the effect of
res judicata in the case before the lower court. In the
same vein, in Philippine International Shipping Corp. v.
Court of Appeals, this Court held that the foreign
judgment was valid and enforceable in the Philippines
there being no showing that it was vitiated by want of
notice to the party, collusion, fraud or clear mistake of
law or fact. The prima facie presumption under the
Rule had not been rebutted.
In the case at bar, it cannot be said that
petitioners were given the opportunity to
challenge the judgment of the U.S. court as basis
for declaring it res judicata or conclusive of the
rights of private respondents. The proceedings
in the trial court were summary. Neither the
trial court nor the appellate court was even
furnished copies of the pleadings in the U.S.
court or apprised of the evidence presented
thereat, to assure a proper determination of
whether the issues then being litigated in the
U.S. court were exactly the issues raised in this
case such that the judgment that might be
rendered would constitute res judicata. As the
trial court stated in its disputed order dated March 9,
1988:
On the plaintiffs claim in its Opposition that
the causes of action of this case and the
pending case in the United States are not
identical, precisely the Order of January 26,
1988 never found that the causes of action of
this case and the case pending before the USA
Court, were identical. (emphasis added) It was

error therefore for the Court of Appeals to

summarily rule that petitioners action is
barred by the principle of res judicata.
Petitioners in fact questioned the jurisdiction of
the U.S. court over their persons, but their
claim was brushed aside by both the trial court
and the Court of Appeals.
Moreover, the Court notes that on April 22, 1992,
1488, Inc. and Daic filed a petition for the
enforcement of judgment in the Regional Trial Court of
Makati, where it was docketed as Civil Case No. 921070 and assigned to Branch 134, although the
proceedings were suspended because of the pendency
of this case. To sustain the appellate courts ruling
that the foreign judgment constitutes res judicata and
is a bar to the claim of petitioners would effectively
preclude petitioners from repelling the judgment in the
case for enforcement. An absurdity could then arise:
a foreign judgment is not subject to challenge by the
plaintiff against whom it is invoked, if it is pleaded to
resist a claim as in this case, but it may be opposed by
the defendant if the foreign judgment is sought to be
enforced against him in a separate proceeding. This is
plainly untenable. It has been held therefore that: [A]
foreign judgment may not be enforced if it is not
recognized in the jurisdiction where affirmative
relief is being sought. Hence, in the interest of
justice, the complaint should be considered as a
petition for the recognition of the Hongkong
judgment under Section 50 (b), Rule 39 of the Rules
of Court in order that the defendant, private
respondent herein, may present evidence of lack
of jurisdiction, notice, collusion, fraud or clear
mistake of fact and law, if applicable. Accordingly,
to insure the orderly administration of justice, this
case and Civil Case No. 92-1070 (petition for the
enforcement of judgment) should be consolidated.
After all, the two have been filed in the Regional Trial
Court of Makati, albeit in different salas, this case
being assigned to Branch 56 (Judge Gorospe), while
Civil Case No. 92-1070 is pending in Branch 134 of
Judge Capulong.
In such proceedings, petitioners
should have the burden of impeaching the foreign
judgment and only in the event they succeed in doing
so may they proceed with their action against private
respondents.
Second. Nor is the trial courts refusal to take
cognizance of the case justifiable under the
principle of forum non conveniens.
First, a
motion to dismiss is limited to the grounds under
Rule 16, 1, which does not include forum non
conveniens.i[16] The propriety of dismissing a
case based on this principle requires a factual
determination,
hence,
it
is
more
properly
considered a matter of defense. Second, while it
is within the discretion of the trial court to abstain
from assuming jurisdiction on this ground, it should
do so only after vital facts are established, to
determine
whether
special
circumstances
require the courts desistance. In this case, the
trial court abstained from taking jurisdiction
solely on the basis of the pleadings filed by
private respondents in connection with the
motion to dismiss. It failed to consider that one
of the plaintiffs (PHILSEC) is a domestic
corporation and one of the defendants (Ventura
Ducat) is a Filipino, and that it was the
extinguishment of the latters debt which was the
object of the transaction under litigation. The trial
court arbitrarily dismissed the case even after
finding that Ducat was not a party in the U.S. case.
Third. It was error we think for the Court of
Appeals and the trial court to hold that
jurisdiction over 1488, Inc. and Daic could not be
obtained because this is an action in personam

16
and summons were served by extraterritorial
service. Rule 14, 17 on extraterritorial service
provides that service of summons on a nonresident defendant may be effected out of the
Philippines by leave of Court where, among
others, the property of the defendant has been
attached within the Philippines.ii[18] It is not
disputed that the properties, real and personal, of the
private respondents had been attached prior to service
of summons under the Order of the trial court.
WHEREFORE, the decision of the Court of Appeals is
REVERSED and Civil Case No. 16563 (Sum of Money
with Damages and Writ of Preliminary Attachment 1987) is REMANDED to the Regional Trial Court of
Makati for consolidation with Civil Case No. 92-1070
and for further proceedings in accordance with this
decision.
RAYTHEON INTERNATIONAL vs. ROUZIE (2008) where the court has jurisdiction over the subject
matter, the parties and the res, it may or can
proceed to try the case even if the rules of
conflict-of-laws or the convenience of the parties
point to a foreign forum; That the subject
contract included a stipulation that the same
shall be governed by the laws of the State of
Connecticut does not suggest that the Philippine
courts, or any other foreign tribunal for that
matter, are precluded from hearing the civil
action. Jurisdiction and choice of law are two
distinct concepts
FACTS: Sometime in 1990, Brand Marine Services,
Inc. (BMSI), a corporation duly organized and existing
under the laws of the State of Connecticut, United
States of America, and respondent Stockton W.
Rouzie, Jr., an American citizen, entered into a contract
whereby BMSI hired respondent as its representative
to negotiate the sale of services in several government
projects in the Philippines for an agreed remuneration
of 10% of the gross receipts. In 1992, respondent
secured a service contract with the Republic of the
Philippines on behalf of BMSI for the dredging of rivers
affected by the Mt. Pinatubo eruption and mudflows.
In 1994, respondent filed before the NLRC a suit
against BMSI and Rust International, Inc. (RUST),
Rodney C. Gilbert and Walter G. Browning for alleged
nonpayment of commissions, illegal termination and
breach of employment contract. In 1995, Labor Arbiter
Pablo C. Espiritu, Jr. rendered judgment ordering BMSI
and RUST to pay respondents money claims. NLRC
reversed the decision of the Labor Arbiter and
dismissed respondents complaint on the ground of
lack of jurisdiction. Respondent elevated the case to
this Court but was dismissed. The Resolution became
final and executory in 1998.
In 1999, respondent, then a resident of La Union,
instituted an action for damages before the (RTC). The
Complaint, docketed as Civil Case No. 1192-BG,
named as defendants herein petitioner Raytheon
International, Inc. as well as BMSI and RUST, the two
corporations impleaded in the earlier labor case. The
complaint essentially reiterated the allegations in the
labor case that BMSI verbally employed respondent to
negotiate the sale of services in government projects
and that respondent was not paid the commissions
due him from the Pinatubo dredging project which he
secured on behalf of BMSI. The complaint also averred
that BMSI and RUST as well as petitioner itself had
combined and functioned as one company.
In its Answer, petitioner alleged that contrary to
respondents claim, it was a foreign corporation duly
licensed to do business in the Philippines and denied

entering into any arrangement with respondent or

paying the latter any sum of money. Petitioner also
denied combining with BMSI and RUST for the purpose
of assuming the alleged obligation of the said
companies. Petitioner also referred to the NLRC
decision which disclosed that per the written
agreement between respondent and BMSI and RUST,
denominated as
Special
Sales
Representative
Agreement, the rights and obligations of the parties
shall be governed by the laws of the State of
Connecticut. Petitioner sought the dismissal of the
complaint on grounds of failure to state a cause of
action and forum non conveniens and prayed for
damages by way of compulsory counterclaim.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
REFUSING TO DISMISS THE COMPLAINT ON THE
GROUND OF FORUM NON CONVENIENS.
HELD: The instant petition lacks merit. Petitioner
mainly asserts that the written contract between
respondent and BMSI included a valid choice of law
clause, that is, that the contract shall be governed by
the laws of the State of Connecticut. It also mentions
the presence of foreign elements in the dispute
namely, the parties and witnesses involved are
American corporations and citizens and the evidence
to be presented is located outside the Philippines
that renders our local courts inconvenient forums.
Petitioner theorizes that the foreign elements of the
dispute necessitate the immediate application of the
doctrine of forum non conveniens.
Recently in Hasegawa v. Kitamura, the Court outlined
three consecutive phases involved in judicial resolution
of conflicts-of-laws problems, namely: jurisdiction,
choice of law, and recognition and enforcement of
judgments. Thus, in the instances where the Court
held that the local judicial machinery was adequate to
resolve controversies with a foreign element, the
following requisites had to be proved: (1) that the
Philippine Court is one to which the parties may
conveniently resort; (2) that the Philippine Court is in
a position to make an intelligent decision as to the law
and the facts; and (3) that the Philippine Court has or
is likely to have the power to enforce its decision.
On the matter of jurisdiction over a conflicts-oflaws problem where the case is filed in a
Philippine court and where the court has
jurisdiction over the subject matter, the parties
and the res, it may or can proceed to try the case
even if the rules of conflict-of-laws or the
convenience of the parties point to a foreign
forum. This is an exercise of sovereign
prerogative of the country where the case is
filed. Jurisdiction over the nature and subject
matter of an action is conferred by the
Constitution and the law and by the material
allegations in the complaint, irrespective of
whether or not the plaintiff is entitled to recover all or
some of the claims or reliefs sought therein. Civil
Case No. 1192-BG is an action for damages
arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the
amount of damages prayed are within the
jurisdiction of the RTC.
That the subject contract included a stipulation
that the same shall be governed by the laws of
the State of Connecticut does not suggest that
the Philippine courts, or any other foreign
tribunal for that matter, are precluded from
hearing the civil action. Jurisdiction and choice
of law are two distinct concepts. Jurisdiction

17
considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further
question whether the application of a substantive law
which will determine the merits of the case is fair to
both parties. The choice of law stipulation will
become relevant only when the substantive
issues of the instant case develop, that is, after
hearing on the merits proceeds before the trial
court. Moreover, the propriety of dismissing a
case based on the principle of forum non
conveniens requires a factual determination;
hence, it is more properly considered as a matter
of defense. While it is within the discretion of the trial
court to abstain from assuming jurisdiction on this
ground, it should do so only after vital facts are
established,
to
determine
whether
special
circumstances require the courts desistance.
MANILA HOTEL CORP. vs. NLRC (2000) - Under
the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the
case if it chooses to do so provided: (1) that the
Philippine court is one to which the parties may
conveniently resort to; (2) that the Philippine
court is in a position to make an intelligent
decision as to the law and the facts; and (3) that
the Philippine court has or is likely to have power
to enforce its decision.37
FACTS: Private respondent Marcelo Santos was an
overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently, he
was directly hired by the Palace Hotel, Beijing, People's
Republic of China and later terminated due to
retrenchment. Petitioners are the Manila Hotel Corp.
(MHC) and the Manila Hotel International Co. Ltd.
(MHICL). MHICL is a corporation duly organized and
existing under the laws of Hong Kong. MHC is an
"incorporator" of MHICL, owning 50% of its capital
stock. By virtue of a "management agreement" 9 with
the Palace Hotel (Wang Fu Company Limited), MHICL 10
trained the personnel and staff of the Palace Hotel at
Beijing, China. During his employment with the
Mazoon Printing Press in the Sultanate of Oman,
respondent Santos received a letter from Mr. Shmidt,
General Manager, Palace Hotel, Beijing, China. Mr.
Schmidt informed respondent Santos that he was
recommended by one Nestor Buenio, a friend of his.
Mr. Shmidt offered respondent Santos the same
position as printer, but with a higher monthly salary
and increased benefits. Respondent Santos wrote to
Mr. Shmidt and signified his acceptance of the offer.
Respondent Santos left for Beijing, China. He started
to work at the Palace Hotel. On August 10, 1989, the
Palace Hotel informed respondent Santos by letter
signed by Mr. Shmidt that his employment at the
Palace Hotel print shop would be terminated due to
business reverses brought about by the political
upheaval in China.
Respondent Santos filed a complaint for illegal
dismissal with the NLRC. NLRC ruled in favor of
Santos.
HELD: The NLRC was a seriously inconvenient forum.
We note that the main aspects of the case
transpired in two foreign jurisdictions and the
case involves purely foreign elements. The only
link that the Philippines has with the case is that
respondent Santos is a Filipino citizen. The
Palace Hotel and MHICL are foreign corporations.
Not all cases involving our citizens can be tried here.
The employment contract. Respondent Santos was
hired directly by the Palace Hotel, a foreign employer,
through correspondence sent to the Sultanate of
Oman, where respondent Santos was then employed.
He was hired without the intervention of the POEA or

any
authorized
recruitment
agency
of
the
government.36
Under the rule of forum non conveniens, a
Philippine
court or
agency
may
assume
jurisdiction over the case if it chooses to do so
provided: (1) that the Philippine court is one to
which the parties may conveniently resort to; (2)
that the Philippine court is in a position to make
an intelligent decision as to the law and the
facts; and (3) that the Philippine court has or is
likely to have power to enforce its decision.37 The
conditions are unavailing in the case at bar.
Not Convenient. We fail to see how the NLRC is a
convenient forum given that all the incidents of the
case from the time of recruitment, to
employment to dismissal occurred outside the
Philippines. The inconvenience is compounded by the
fact that the proper defendants, the Palace Hotel
and MHICL are not nationals of the Philippines.
Neither .are they "doing business in the
Philippines." Likewise, the main witnesses, Mr.
Shmidt and Mr. Henk are non-residents of the
Philippines.
No power to determine applicable law. Neither can
an intelligent decision be made as to the law
governing the employment contract as such was
perfected in foreign soil. This calls to fore the
application of the principle of lex loci contractus
(the law of the place where the contract was
made). The employment contract was not
perfected in the Philippines. Respondent Santos
signified his acceptance by writing a letter while
he was in the Republic of Oman. This letter was
sent to the Palace Hotel in the People's Republic
of China.
No power to determine the facts. Neither can the
NLRC determine the facts surrounding the
alleged illegal dismissal as all acts complained of
took place in Beijing, People's Republic of China.
The NLRC was not in a position to determine
whether the Tiannamen Square incident truly
adversely affected operations of the Palace Hotel
as to justify respondent Santos' retrenchment.
Principle of effectiveness, no power to execute
decision. Even assuming that a proper decision
could be reached by the NLRC, such would not
have any binding effect against the employer, the
Palace Hotel. The Palace Hotel is a corporation
incorporated under the laws of China and was
not even served with summons. Jurisdiction over
its person was not acquired.
BANK OF AMERICA vs. AMERICAN REALTY CORP.
(1999) English law, mortgage, doctrine of
processual presumption, when the foreign law,
judgment or contract is contrary to a sound and
established public policy of the forum, the said foreign
law, judgment or order shall not be applied.
FACTS: Petitioner Bank of America (BANTSA) is an
international banking and financing institution duly
licensed to do business in the Philippines, organized
and existing under and by virtue of the laws of the
State of California, United States of America while
private respondent American Realty Corporation (ARC)
is a domestic corporation. Bank of America
International Limited (BAIL), on the other hand, is a
limited liability company organized and existing under
the laws of England.
BANTSA and BAIL on several occasions granted three
major multi-million United States (US) Dollar loans to
the following corporate borrowers: (1) Liberian
Transport Navigation; (2) El Challenger and (3) Eshley
Compania Naviera (borrowers), all of which are
existing under and by virtue of the laws of the

18
Republic of Panama and are foreign affiliates of private
respondent. Due to the default in the payment of the
loan amortizations, BANTSA and the corporate
borrowers signed and entered into restructuring
agreements. As additional security for the restructured
loans, private respondent ARC as third party
mortgagor executed two real estate mortgages. The
corporate borrowers defaulted in the payment of the
restructured loans prompting petitioner BANTSA to file
civil actions before foreign courts for the collection of
the principal loan.
In the civil suits instituted before the foreign courts,
private respondent ARC, being a third party mortgagor,
was private not impleaded as party-defendant. In
1992, petitioner BANTSA filed before the Office of the
Provincial Sheriff of Bulacan, Philippines an application
for extrajudicial foreclosure of real estate mortgage. In
1993, after due publication and notice, the mortgaged
real properties were sold at public auction in an
extrajudicial foreclosure sale, with Integrated Credit
and Corporation Services Co (ICCS) as the highest
bidder for the sum of (P24M).
In 1993, private respondent filed before the Pasig
Regional Trial Court, an action for damages against the
petitioner, for the latter's act of foreclosing
extrajudicially the real estate mortgages despite the
pendency of civil suits before foreign courts for the
collection of the principal loan. In its answer petitioner
alleged that the rule prohibiting the mortgagee from
foreclosing the mortgage after an ordinary suit for
collection has been filed, is not applicable in the
present case, claiming that: a) The plaintiff, being a
mere third party mortgagor and not a party to the
principal restructuring agreements, was never made a
party defendant in the civil cases filed in Hongkong
and England; b) There is actually no civil suit for sum
of money filed in the Philippines since the civil actions
were filed in Hongkong and England. As such, any
decisions (sic) which may be rendered in the
abovementioned courts are not (sic) enforceable in the
Philippines unless a separate action to enforce the
foreign judgments is first filed in the Philippines,
pursuant to Rule 39, Section 50 of the Revised Rules
of Court. c) Under English Law, which is the governing
law under the principal agreements, the mortgagee
does not lose its security interest by filing civil actions
for sums of money.
ISSUE: Whether or not the petitioner's act of filing a
collection suit against the principal debtors for the
recovery of the loan before foreign courts constituted a
waiver of the remedy of foreclosure.
HELD: In our jurisdiction, the remedies available to
the mortgage creditor are deemed alternative
and not cumulative. Notably, an election of one
remedy operates as a waiver of the other. For this
purpose, a remedy is deemed chosen upon the filing of
the suit for collection or upon the filing of the
complaint in an action for foreclosure of mortgage,
pursuant to the provision of Rule 68 of the of the 1997
Rules of Civil Procedure. As to extrajudicial
foreclosure, such remedy is deemed elected by the
mortgage creditor upon filing of the petition not with
any court of justice but with the Office of the Sheriff of
the province where the sale is to be made, in
accordance with the provisions of Act No. 3135, as
amended by Act No. 4118. Accordingly, applying the
foregoing rules, we hold that petitioner, by the
expediency of filing four civil suits before foreign
courts, necessarily abandoned the remedy to
foreclose the real estate mortgages constituted
over the properties of third-party mortgagor and

herein private respondent ARC. Moreover, by filing the

four civil actions and by eventually foreclosing extrajudicially
the
mortgages,
petitioner
in
effect
transgressed the rules against splitting a cause of
action well-enshrined in jurisprudence and our statute
books.
BANTSA alleges that under English Law, which
according to petitioner is the governing law with
regard to the principal agreements, the
mortgagee does not lose its security interest by
simply filing civil actions for sums of money. We
rule in the negative. This argument shows desperation
on the part of petitioner to rivet its crumbling cause.
In the case at bench, Philippine law shall apply
notwithstanding the evidence presented by
petitioner to prove the English law on the
matter. In a long line of decisions, this Court adopted
the well-imbedded principle in our jurisdiction that
there is no judicial notice of any foreign law. A foreign
law must be properly pleaded and proved as a
fact. Thus, if the foreign law involved is not
properly pleaded and proved, our courts will
presume that the foreign law is the same as our
local or domestic or internal law. This is what we
refer
to
as
the
doctrine
of
processual
presumption.
In the instant case, assuming arguendo that the
English Law on the matter were properly pleaded and
proved in accordance with Section 24, Rule 132 of the
Rules of Court and the jurisprudence laid down in Yao
Kee,
et
al.
vs.
Sy-Gonzales, said foreign law would still not find
applicability. Thus, when the foreign law, judgment
or contract is contrary to a sound and
established public policy of the forum, the said
foreign law, judgment or order shall not be
applied. Additionally, prohibitive laws concerning
persons, their acts or property, and those which have
for their object public order, public policy and good
customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.
Moreover, foreign law should not be applied when
its application would work undeniable injustice
to the citizens or residents of the forum. To give
justice is the most important function of law; hence, a
law, or judgment or contract that is obviously unjust
negates the fundamental principles of Conflict of Laws.
Clearly then, English Law is not applicable.

YAO KEE vs. SY-GONZALES (1988) - In the

absence of proof of the Chinese law on marriage,
it should be presumed that it is the same as ours.
Since Yao Kee admitted in her testimony that
there was no solemnizing officer as is known
here in the Philippines
when her alleged
marriage to Sy Mat was celebrated it therefore
follows that her marriage to Sy Kiat, even if true,
cannot be recognized in this jurisdiction.
FACTS: Sy Kiat, a Chinese national died in Caloocan
City where he was then residing, leaving behind real
and personal properties here in the Philippines worth
P300,000.00 more or less.
Thereafter, Aida SyGonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo
Sy filed a petition for the grant of letters of
administration alleging among others that (a) they are
the children of the deceased with Asuncion Gillego; (b)
to their knowledge Sy Mat died intestate; (c) they do
not recognize Sy Kiat's marriage to Yao Kee nor the
filiation of her children to him; and, (d) they nominate

19
Aida Sy-Gonzales for appointment as administratrix of
the intestate estate of the deceased. The petition was
opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and
Sy Yun Chen who alleged that: (a) Yao Kee is the
lawful wife of Sy Kiat whom he married on January 19,
1931 in China; (b) the other oppositors are the
legitimate children of the deceased with Yao Kee; and,
(c) Sze Sook Wah is the eldest among them and is
competent, willing and desirous to become the
administratrix of the estate of Sy Kiat.
After hearing, the probate court held in favor of the
oppositors and appointed Sze Sook Wah as the
administratrix of the intestate estate of the deceased .
On appeal the Court of Appeals rendered a decision
modifying that of the probate court, declaring
oppositors Sze Sook Wah, Sze Lai Chu and Sze Chun
Yen, the acknowledged natural children of the
deceased Sy Kiat with his Chinese wife Yao Kee, also
known as Yui Yip, since the legality of the alleged
marriage of Sy Mat to Yao Kee in China had not been
proven to be valid to the laws of the Chinese People's
Republic of China.
Hence, this petition.
ISSUE: Whether or not Yao Kee has conclusively
proven her marriage to Sy Kiat to be in accordance
with Chinese law and custom and thus recognized in
this jurisdiction.
HELD: No, she has not conclusively proven her
marriage to Sy Kiat to be in accordance with Chinese
law and custom and therefore not recognized in this
jurisdiction. The evidence that Yao Kee has presented
may very well prove the fact of marriage between Yao
Kee and Sy Kiat. However, the same do not suffice to
establish the validity of said marriage in accordance
with Chinese law or custom. Custom is defined as "a
rule of conduct formed by repetition of acts, uniformly
observed (practiced) as a social rule, legally binding
and obligatory" The law requires that "a custom must
be proved as a fact, according to the rules of
evidence" [Article 12, Civil Code.] On this score the
Court had occasion to state that "a local custom as a
source of right can not be considered by a court of
justice unless such custom is properly established by
competent evidence like any other fact" The same
evidence, if not one of a higher degree, should be
required of a foreign custom.
The law on foreign marriages is provided by Article 71
of the Civil Code which states that:
Art. 71. All
marriages performed outside the Philippines in
accordance with the laws in force in the country
where they were performed and valid there as
such, shall also be valid in this country, except
bigamous, Polygamous, or incestuous marriages,
as determined by Philippine law. (Emphasis
supplied.) *** Construing this provision of law the
Court has held that to establish a valid foreign
marriage two things must be proven, namely: (1)
the existence of the foreign law as a question of
fact; and (2) the alleged foreign marriage by
convincing evidence
In proving a foreign law the procedure is provided in
the Rules of Court. With respect to an unwritten
foreign law, Rule 130 section 45 states that: SEC. 45.
Unwritten law.The oral testimony of witnesses,
skilled therein, is admissible as evidence of the
unwritten law of a foreign country, as are also printed
and published books of reports of decisions of the
courts of the foreign country, if proved to be
commonly admitted in such courts. Proof of a written

foreign law, on the other hand, is provided for under

Rule 132 section 25, thus: SEC. 25. Proof of public or
official record.An official record or an entry therein,
when admissible for any purpose, may be evidenced
by an official publication thereof or by a copy attested
by the officer having the legal custody of the record,
or by his deputy, and accompanied, if the record is not
kept in the Philippines, with a certificate that such
officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate
may be made by a secretary of embassy or legation,
consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the
Philippines stationed in the foreign country in which
the record is kept and authenticated by the seal of his
office. The Court has interpreted section 25 to include
competent evidence like the testimony of a witness to
prove the existence of a written foreign law.
In the case at bar petitioners did not present any
competent evidence relative to the law and
custom of China on marriage. The testimonies of
Yao and Gan Ching cannot be considered as proof
of China's law or custom on marriage not only
because they are self-serving evidence, but more
importantly, there is no showing that they are
competent to testify on the subject matter. For failure
to prove the foreign law or custom, and
consequently, the validity of the marriage in
accordance with said law or custom, the
marriage between Yao Kee and Sy Kiat cannot be
recognized in this jurisdiction. Well-established
in this jurisdiction is the principle that Philippine
courts cannot take judicial notice of foreign laws.
They must be alleged and proved as any other fact In
the absence of proof of the Chinese law on
marriage, it should be presumed that it is the
same as ours. Since Yao Kee admitted in her
testimony that there was no solemnizing officer
as is known here in the Philippines when her
alleged marriage to Sy Mat was celebrated it
therefore follows that her marriage to Sy Kiat,
even if true, cannot be recognized in this
jurisdiction.
RECTO vs. HARDEN (1956) attorneys fees,
FACTS: Sometime in July, 1941, Appellant, Mrs.
Harden, and Appellee, Claro M. Recto, executed a
contract of professional service whereby Mrs. Harden
will file against her husband, Fred M. Harden, for the
purpose of securing an increase in the amount of
support being received by her from the conjugal
partnership of herself and said Fred M. Harden, and for
the purpose likewise of protecting and preserving her
rights in the properties of the said conjugal
partnership, in contemplation of the divorce suit which
she intent to file against him in the competent Court of
California and of the liquidation of the conjugal
partnership between them. One of the condition in the
said contract states 3. That as full and complete
satisfaction of the fees of Attorney Claro M. Recto in
connection with the case above referred to, I hereby
agree to pay said Attorney Claro M. Recto (20%) per
cent of the value of the share and participation which I
may receive in the funds and properties of the said
conjugal partnership. In compliance therewith, on July
12, 1941, the Appellee, as counsel for Mrs. Harden,
commenced Civil Case No. 59634 of the Court of First
Instance of Manila, entitled Esperanza P. de Harden
vs. Fred M. Harden and Jose Salumbides.
Subsequently, the Philippines was invaded by the
Japanese and placed under military occupation. Then
came the liberation, in the course of which the records
of this case were destroyed. On October 23, 1946,

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said records were reconstituted at the instance of
Appellee herein. Thereafter, the proceedings were
resumed and, in due course, the Court of First
Instance of Manila rendered in favour of Mrs. Harden.
The Defendants appealed from said decision to this
Court. While the appeal was thus pending before us,
herein Appellee filed a manifestation and a motion
stating that Mrs. Harden had instructed him, by letter,
to discontinue all proceedings relative to said case,
vacate all orders and judgments rendered therein,
and abandon and nullify all her claims to the conjugal
partnership existing between her and Mr. Harden, and
executed without the knowledge, advise and consent
of said Appellee, as counsel for Mrs. Harden. It was
further asserted, in Appellees manifestation, that the
purpose of the said instruments, executed by Mr. and
Mrs. Harden, was to defeat the claim of the former for
attorneys fees.
Validity of the above-quoted contract of services,
which the Appellants assail as void, mainly, upon the
ground: (1) that Mrs. Harden cannot bind the conjugal
partnership without her husbands consent; (2) that
Article 1491 of the Civil Code of the Philippines in
effect prohibits contingent fees (3) that the contract in
question has for its purpose to secure a decree of
divorce, allegedly in violation of Articles 1305, 1352
and 1409 of the Civil Code of the Philippines; and (4)
that the terms of said contract are harsh, inequitable
and oppressive.
HELD: The third objection is not borne out, either by
the language of the contract between them, or by the
intent of the parties thereto. Its purpose was not to
secure a divorce, or to facilitate or promote the
procurement of a divorce. It merely sought to
protect the interest of Mrs. Harden in the
conjugal partnership, during the pendency of a
divorce suit she intended to file in the United
States. What is more, inasmuch as Mr. and Mrs.
Harden are admittedly citizens of the United
States, their status and the dissolution thereof
are governed pursuant to Article 9 of the Civil
Code of Spain (which was in force in the Philippines at
the time of the execution of the contract in question)
and Article 15 of the Civil Code of the Philippines by
the laws of the United States, which sanction
divorce. In short, the contract of services,
between Mrs. Harden and herein Appellee, is not
contrary to law, morals, good customs, public
order or public policy.

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