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G.R. No. 103493 June 19, 1997 Agreement. Originally instituted in the United States District Court of Texas,
165th Judicial District, where it was docketed as Case No. 85-57746, the
PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL venue of the action was later transferred to the United States District Court
FINANCE LIMITED, and ATHONA HOLDINGS, N.V., petitioners, for the Southern District of Texas, where 1488, Inc. filed an amended
vs. complaint, reiterating its allegations in the original complaint. ATHONA filed
THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO DAIC, an answer with counterclaim, impleading private respondents herein as
VENTURA O. DUCAT, PRECIOSO R. PERLAS, and WILLIAM H. CRAIG, counterdefendants, for allegedly conspiring in selling the property at a price
respondents. over its market value. Private respondent Perlas, who had allegedly
appraised the property, was later dropped as counterdefendant. ATHONA
MENDOZA, J.: 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
This case presents for determination the conclusiveness of a foreign their part, PHILSEC and AYALA filed a motion to dismiss on the ground of
judgment upon the rights of the parties under the same cause of action lack of jurisdiction over their person, but, as their motion was denied, they
asserted in a case in our local court. Petitioners brought this case in the later filed a joint answer with counterclaim against private respondents and
Regional Trial Court of Makati, Branch 56, which, in view of the pendency at Edgardo V. Guevarra, PHILSEC's own former president, for the rescission of
the time of the foreign action, dismissed Civil Case No. 16563 on the the sale on the ground that the property had been overvalued. On March
ground of litis pendentia, in addition to forum non conveniens. On appeal, 13, 1990, the United States District Court for the Southern District of Texas
the Court of Appeals affirmed. Hence this petition for review on certiorari. dismissed the counterclaim against Edgardo V. Guevarra on the ground that
it was "frivolous and [was] brought against him simply to humiliate and
The facts are as follows: embarrass him." For this reason, the U.S. court imposed so-called Rule 11
sanctions on PHILSEC and AYALA and ordered them to pay damages to
On January 15, 1983, private respondent Ventura O. Ducat obtained Guevarra.
separate loans from petitioners Ayala International Finance Limited
(hereafter called AYALA) 1 and Philsec Investment Corporation (hereafter On April 10, 1987, while Civil Case No. H-86-440 was pending in the United
called PHILSEC) in the sum of US$2,500,000.00, secured by shares of stock States, petitioners filed a complaint "For Sum of Money with Damages and
owned by Ducat with a market value of P14,088,995.00. In order to Writ of Preliminary Attachment" against private respondents in the Regional
facilitate the payment of the loans, private respondent 1488, Inc., through Trial Court of Makati, where it was docketed as Civil Case No. 16563. The
its president, private respondent Drago Daic, assumed Ducat's obligation complaint reiterated the allegation of petitioners in their respective
under an Agreement, dated January 27, 1983, whereby 1488, Inc. counterclaims in Civil Action No. H-86-440 of the United States District
executed a Warranty Deed with Vendor's Lien by which it sold to petitioner Court of Southern Texas that private respondents committed fraud by
Athona Holdings, N.V. (hereafter called ATHONA) a parcel of land in Harris selling the property at a price 400 percent more than its true value of
County, Texas, U.S.A., for US$2,807,209.02, while PHILSEC and AYALA US$800,000.00. Petitioners claimed that, as a result of private respondents'
extended a loan to ATHONA in the amount of US$2,500,000.00 as initial fraudulent misrepresentations, ATHONA, PHILSEC, and AYALA were induced
payment of the purchase price. The balance of US$307,209.02 was to be to enter into the Agreement and to purchase the Houston property.
paid by means of a promissory note executed by ATHONA in favor of 1488, Petitioners prayed that private respondents be ordered to return to ATHONA
Inc. Subsequently, upon their receipt of the US$2,500,000.00 from 1488, the excess payment of US$1,700,000.00 and to pay damages. On April 20,
Inc., PHILSEC and AYALA released Ducat from his indebtedness and 1987, the trial court issued a writ of preliminary attachment against the
delivered to 1488, Inc. all the shares of stock in their possession belonging real and personal properties of private respondents. 2
to Ducat.
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the
As ATHONA failed to pay the interest on the balance of US$307,209.02, the grounds of (1) litis pendentia, vis-a-vis Civil Action No. H-86-440 filed by
entire amount covered by the note became due and demandable. 1488, Inc. and Daic in the U.S., (2) forum non conveniens, and (3) failure
Accordingly, on October 17, 1985, private respondent 1488, Inc. sued of petitioners PHILSEC and BPI-IFL to state a cause of action. Ducat
petitioners PHILSEC, AYALA, and ATHONA in the United States for payment contended that the alleged overpricing of the property prejudiced only
of the balance of US$307,209.02 and for damages for breach of contract petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which were not
and for fraud allegedly perpetrated by petitioners in misrepresenting the parties to the sale and whose only participation was to extend financial
marketability of the shares of stock delivered to 1488, Inc. under the accommodation to ATHONA under a separate loan agreement. On the other

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hand, private respondents 1488, Inc. and its president Daic filed a joint Warranty Deed executed by and between Athona Holdings and 1488 Inc. In
"Special Appearance and Qualified Motion to Dismiss," contending that the the U.S. case, breach of contract and the promissory note are sued upon by
action being in personam, extraterritorial service of summons by publication 1488 Inc., which likewise alleges fraud employed by herein appellants, on
was ineffectual and did not vest the court with jurisdiction over 1488, Inc., the marketability of Ducat's securities given in exchange for the Texas
which is a non-resident foreign corporation, and Daic, who is a non-resident property. The recovery of a sum of money and damages, for fraud
alien. purportedly committed by appellees, in overpricing the Texas land,
constitute the action before the Philippine court, which likewise stems from
On January 26, 1988, the trial court granted Ducat's motion to dismiss, the same Warranty Deed.
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 The Court of Appeals also held that Civil Case No. 16563 was an action in
principle in private international law of forum non conveniens," even as it personam for the recovery of a sum of money for alleged tortious acts, so
noted that Ducat was not a party in the U.S. case. that service of summons by publication did not vest the trial court with
jurisdiction over 1488, Inc. and Drago Daic. The dismissal of Civil Case No.
A separate hearing was held with regard to 1488, Inc. and Daic's motion to 16563 on the ground of forum non conveniens was likewise affirmed by the
dismiss. On March 9, 1988, the trial court 3 granted the motion to dismiss Court of Appeals on the ground that the case can be better tried and
filed by 1488, Inc. and Daic on the ground of litis pendentia considering decided by the U.S. court:
that
The U.S. case and the case at bar arose from only one main transaction,
the "main factual element" of the cause of action in this case which is the and involve foreign elements, to wit: 1) the property subject matter of the
validity of the sale of real property in the United States between defendant sale is situated in Texas, U.S.A.; 2) the seller, 1488 Inc. is a non-resident
1488 and plaintiff ATHONA is the subject matter of the pending case in the foreign corporation; 3) although the buyer, Athona Holdings, a foreign
United States District Court which, under the doctrine of forum non corporation which does not claim to be doing business in the Philippines, is
conveniens, is the better (if not exclusive) forum to litigate matters needed wholly owned by Philsec, a domestic corporation, Athona Holdings is also
to determine the assessment and/or fluctuations of the fair market value of owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was
real estate situated in Houston, Texas, U.S.A. from the date of the executed in Texas, U.S.A.
transaction in 1983 up to the present and verily, . . . (emphasis by trial
court) In their present appeal, petitioners contend that:

The trial court also held itself without jurisdiction over 1488, Inc. and Daic 1. THE DOCTRINE OF PENDENCY OF ANOTHER ACTION BETWEEN THE
because they were non-residents and the action was not an action in rem or SAME PARTIES FOR THE SAME CAUSE (LITIS PENDENTIA) RELIED UPON BY
quasi in rem, so that extraterritorial service of summons was ineffective. THE COURT OF APPEALS IN AFFIRMING THE TRIAL COURT'S DISMISSAL OF
The trial court subsequently lifted the writ of attachment it had earlier THE CIVIL ACTION IS NOT APPLICABLE.
issued against the shares of stocks of 1488, Inc. and Daic.
2. THE PRINCIPLE OF FORUM NON CONVENIENS ALSO RELIED UPON
Petitioners appealed to the Court of Appeals, arguing that the trial court BY THE COURT OF APPEALS IN AFFIRMING THE DISMISSAL BY THE TRIAL
erred in applying the principle of litis pendentia and forum non conveniens COURT OF THE CIVIL ACTION IS LIKEWISE NOT APPLICABLE.
and in ruling that it had no jurisdiction over the defendants, despite the
previous attachment of shares of stocks belonging to 1488, Inc. and Daic. 3. AS A COROLLARY TO THE FIRST TWO GROUNDS, THE COURT OF
APPEALS ERRED IN NOT HOLDING THAT PHILIPPINE PUBLIC POLICY
On January 6, 1992, the Court of Appeals 4 affirmed the dismissal of Civil REQUIRED THE ASSUMPTION, NOT THE RELINQUISHMENT, BY THE TRIAL
Case No. 16563 against Ducat, 1488, Inc., and Daic on the ground of litis COURT OF ITS RIGHTFUL JURISDICTION IN THE CIVIL ACTION FOR THERE
pendentia, thus: IS EVERY REASON TO PROTECT AND VINDICATE PETITIONERS' RIGHTS
FOR TORTIOUS OR WRONGFUL ACTS OR CONDUCT PRIVATE
The plaintiffs in the U.S. court are 1488 Inc. and/or Drago Daic, while the RESPONDENTS (WHO ARE MOSTLY NON-RESIDENT ALIENS) INFLICTED
defendants are Philsec, the Ayala International Finance Ltd. (BPI-IFL's UPON THEM HERE IN THE PHILIPPINES.
former name) and the Athona Holdings, NV. The case at bar involves the
same parties. The transaction sued upon by the parties, in both cases is the We will deal with these contentions in the order in which they are made.

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evidence as well as from appellant's own pleadings" 11 that the foreign
First. It is important to note in connection with the first point that while court did not make a "clear mistake of law or fact" or that its judgment was
the present case was pending in the Court of Appeals, the United States void for want of jurisdiction or because of fraud or collusion by the
District Court for the Southern District of Texas rendered judgment 5 in the defendants. Trial had been previously held in the lower court and only
case before it. The judgment, which was in favor of private respondents, afterward was a decision rendered, declaring the judgment of the Supreme
was affirmed on appeal by the Circuit Court of Appeals. 6 Thus, the Court of the State of Washington to have the effect of res judicata in the
principal issue to be resolved in this case is whether Civil Case No. 16536 is case before the lower court. In the same vein, in Philippines International
barred by the judgment of the U.S. court. Shipping Corp. v. Court of Appeals, 12 this Court held that the foreign
judgment was valid and enforceable in the Philippines there being no
Private respondents contend that for a foreign judgment to be pleaded as showing that it was vitiated by want of notice to the party, collusion, fraud
res judicata, a judgment admitting the foreign decision is not necessary. On or clear mistake of law or fact. The prima facie presumption under the Rule
the other hand, petitioners argue that the foreign judgment cannot be given had not been rebutted.
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 In the case at bar, it cannot be said that petitioners were given the
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of opportunity to challenge the judgment of the U.S. court as basis for
law or fact." 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
Petitioners' contention is meritorious. While this Court has given the effect the appellate court was even furnished copies of the pleadings in the U.S.
of res judicata to foreign judgments in several cases, 7 it was after the court or apprised of the evidence presented thereat, to assure a proper
parties opposed to the judgment had been given ample opportunity to repel determination of whether the issues then being litigated in the U.S. court
them on grounds allowed under the law. 8 It is not necessary for this were exactly the issues raised in this case such that the judgment that
purpose to initiate a separate action or proceeding for enforcement of the might be rendered would constitute res judicata. As the trial court stated in
foreign judgment. What is essential is that there is opportunity to challenge its disputed order dated March 9, 1988.
the foreign judgment, in order for the court to properly determine its
efficacy. This is because in this jurisdiction, with respect to actions in On the plaintiff's claim in its Opposition that the causes of action of this
personam, as distinguished from actions in rem, a foreign judgment merely case and the pending case in the United States are not identical, precisely
constitutes prima facie evidence of the Order of January 26, 1988 never found that the causes of action of this
the justness of the claim of a party and, as such, is subject to proof to the case and the case pending before the USA Court, were identical. (emphasis
contrary. 9 Rule 39, §50 provides: added)

Sec. 50. Effect of foreign judgments. — The effect of a judgment of a It was error therefore for the Court of Appeals to summarily rule that
tribunal of a foreign country, having jurisdiction to pronounce the judgment petitioners' action is barred by the principle of res judicata. Petitioners in
is as follows: 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
(a) In case of a judgment upon a specific thing, the judgment is Appeals. 13
conclusive upon the title to the thing;
Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed
(b) In case of a judgment against a person, the judgment is a petition for the enforcement of judgment in the Regional Trial Court of
presumptive evidence of a right as between the parties and their successors Makati, where it was docketed as Civil Case No. 92-1070 and assigned to
in interest by a subsequent title; but the judgment may be repelled by Branch 134, although the proceedings were suspended because of the
evidence of a want of jurisdiction, want of notice to the party, collusion, pendency of this case. To sustain the appellate court's ruling that the
fraud, or clear mistake of law or fact. foreign judgment constitutes res judicata and is a bar to the claim of
petitioners would effectively preclude petitioners from repelling the
Thus, in the case of General Corporation of the Philippines v. Union judgment in the case for enforcement. An absurdity could then arise: a
Insurance Society of Canton, Ltd., 10 which private respondents invoke for foreign judgment is not subject to challenge by the plaintiff against whom it
claiming conclusive effect for the foreign judgment in their favor, the foreign is invoked, if it is pleaded to resist a claim as in this case, but it may be
judgment was considered res judicata because this Court found "from the opposed by the defendant if the foreign judgment is sought to be enforced

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against him in a separate proceeding. This is plainly untenable. It has been attached prior to service of summons under the Order of the trial court
held therefore that: dated April 20, 1987. 19

[A] foreign judgment may not be enforced if it is not recognized in the Fourth. As for the temporary restraining order issued by the Court on June
jurisdiction where affirmative relief is being sought. Hence, in the interest of 29, 1994, to suspend the proceedings in Civil Case No. 92-1445 filed by
justice, the complaint should be considered as a petition for the recognition Edgardo V. Guevarra to enforce so-called Rule 11 sanctions imposed on the
of the Hongkong judgment under Section 50 (b), Rule 39 of the Rules of petitioners by the U.S. court, the Court finds that the judgment sought to
Court in order that the defendant, private respondent herein, may present be enforced is severable from the main judgment under consideration in
evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of Civil Case No. 16563. The separability of Guevara's claim is not only
fact and law, if applicable. 14 admitted by petitioners, 20 it appears from the pleadings that petitioners
only belatedly impleaded Guevarra as defendant in Civil Case No. 16563. 21
Accordingly, to insure the orderly administration of justice, this case and Hence, the TRO should be lifted and Civil Case No. 92-1445 allowed to
Civil Case No. 92-1070 should be consolidated. 15 After all, the two have proceed.
been filed in the Regional Trial Court of Makati, albeit in different salas, this
case being assigned to Branch 56 (Judge Fernando V. Gorospe), while Civil WHEREFORE, the decision of the Court of Appeals is REVERSED and Civil
Case No. 92-1070 is pending in Branch 134 of Judge Ignacio Capulong. In Case No. 16563 is REMANDED to the Regional Trial Court of Makati for
such proceedings, petitioners should have the burden of impeaching the consolidation with Civil Case No. 92-1070 and for further proceedings in
foreign judgment and only in the event they succeed in doing so may they accordance with this decision. The temporary restraining order issued on
proceed with their action against private respondents. June 29, 1994 is hereby LIFTED.

Second. Nor is the trial court's refusal to take cognizance of the case SO ORDERED.
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. 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 court's desistance. 17

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 latter's 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 and summons were served by
extraterritorial service. Rule 14, §17 on 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." 18 It is not disputed
that the properties, real and personal, of the private respondents had been

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G.R. No. L-24170 December 16, 1968 Collector of Customs illegal or null and void; in other words, it could not
have the effect of annulling or setting aside the decision of the Collector of
ILLUH ASAALI, HATIB ABDURASID, INGKOH BANTALA, BASOK Customs which was rendered while the law was in force and which should
INGKIN, and MOHAMMAD BANTALLA, petitioners, stand until it is revoked by the appellate tribunal.
vs.
THE COMMISSIONER OF CUSTOMS, respondent. 4. CONSTITUTIONAL LAW; BILL OF RIGHTS; SEIZURE IN INSTANT CASE
DOES NOT CONSTITUTE DENIAL OF DUE PROCESS — There could be no
denial of due process. There was nothing arbitrary about the manner in
SYLLABUS which such seizure and forfeiture were effected. The right to a hearing of
petitioners-appellants was respected. They could not have been unaware of
what they were doing. It would be an affront to reason if under the
1. COURTS; COURT OF TAX APPEALS; APPEAL FROM DECISIONS THEREOF circumstances they could be allowed to raise in all seriousness a due
TO SUPREME COURT; FINDINGS OF FACT BY SUBSTANTIAL EVIDENCE, process question. Such a conditional guaranty, basic and fundamental,
BINDING — There is no plausible reason not to accept in its entirety the certainly should not be allowed to lend itself as an instrument for escaping
conclusion reached by the Court of Tax Appeals. Nor even if the persuasive a liability arising from one’s own nefarious acts.
element therein were not so overwhelming, could we alter the decisive facts
as found by it. For it is now beyond question that its finding, if supported by FERNANDO, J.:
substantial evidence, binds us, only questions of law being for us to resolve.
Where the issue raised belongs to the former category, we lack the power The policy relentlessly adhered to and unhesitatingly pursued to minimize,
to review. if not to do away entirely, with the evil and corruption that smuggling brings
in its wake would be frustrated and set at naught if the action taken by
2. TAXATION; SEIZURE AND FORFEITURE OF VESSELS AND CARGO FOR respondent Commissioner of Customs in this case, as affirmed by the Court
SMUGGLING; JURISDICTION OF THE COMMISSIONER OF CUSTOMS IN of Tax Appeals, were to be set aside and this appeal from the decision of
RELATION THERETO — From the apprehension and seizure of the vessel in the latter were to succeed. Fortunately, the controlling principles of law do
question on the high seas beyond the territorial waters of the Philippines, not call for a contrary conclusion. It cannot be otherwise if the legitimate
the absence of jurisdiction of Commissioner of Customs is predicated. Such authority vested in the government were not to be reduced to futility and
contention of petitioners-appellants is without merit. It is unquestioned that impotence in the face of an admittedly serious malady, that at times has
all vessels seized are of Philippine registry. The Revised Penal Code leaves assumed epidemic proportions.
no doubt as to its applicability and enforceability not only within the
Philippines, its interior waters and maritime zone, but also outside of its The principal question raised by petitioners, owners of five sailing vessels
jurisdiction against those committing offense while on a Philippine and the cargo loaded therein declared forfeited by respondent
ship . . . . The principle of law that sustains the validity of such a provision Commissioner of Customs for smuggling, is the validity of their interception
equally supplies a firm foundation for the seizure of the five sailing vessels and seizure by customs officials on the high seas, the contention being
found thereafter to have violated the applicable provisions of the Revised raised that importation had not yet begun and that the seizure was effected
Administrative Code. outside our territorial waters..

3. ID.; ID.; ID.; EXPIRATION OF R.A. 650 DID NOT DIVEST THE Why such a plea could not be given the least credence without doing
COMMISSIONER OF CUSTOMS OF JURISDICTION — Despite the expiration violence to common sense and placing the law in disrepute would be
of Republic Act 650 the Commissioner of Customs retained his jurisdiction apparent from a statement of the case and the findings of facts as set forth
over the case and could continue to take cognizance thereof until its final in the decision now under review, of the Court of Tax Appeals, dated
determination, for the main question brought in by the appeal from the November 19, 1964, the opinion being penned by the late Associate Judge
decision of the Collector of Customs was the legality or illegality of the Augusto M. Luciano.
decision of the Collector of Customs and that question could not have been
abated by the mere expiration of R.A. No. 650. We firmly believe that the His opinion starts thus: "This is an appeal from the decision of the Acting
expiration of R.A. 650 could not have produced the effect: (1) of declaring Commissioner of Customs in Customs Case No. 113, dated September 26,
legal the importation of the cotton counterpanes which were illegally 1961, (Jolo Seizure Identification Cases Nos. 38, 39, 40, 41 & 42)
imported, and (2) of declaring the seizure and forfeiture ordered by the decreeing the forfeiture of five (5) sailing vessels (kumpits) named 'Iroc-

We thus could rest our decision affirming that of the Court of Tax Appeals Such a contention was advanced by petitioners before the Court of Tax on the above consideration. whether a port or place of entry or not. . He the above view were not so overwhelming. 426."5 Respondent Commissioner of Customs.' and 'Business. It has been established that the five vessels came from Sandakan. and come a long way back laden with highly taxable goods only to required import license under Republic Act No. After ordering the vessels to was more than eager to accomplish its mission. they were about to cross our aquatic boundary question on the high seas. if supported by Hence this petition for review. the bar. liability of forfeiture under Section 1363(a) of the Revised Administrative there has been an abuse or improvident exercise of its authority. discussed jointly 1363(a) of the Revised Administrative Code should be applied to the case at by petitioners-appellants. we feel extreme reluctance to justify their stand thus: "In the light of the fact that the vessels involved substitute our own discretion for that of the Court of Tax Appeals in its with the articles laden therein were apprehended and seized on the high appreciation of the relevant facts and its appraisal of their significance. They even for a moment the thought that these vessels were probably not bound came from Sandakan. they were heading towards Tawi-tawi. the customs officers boarded and found on board. as required by Section 1363(a) Philippine vessels to sneak out of the Philippines and go to British North of the Revised Administrative Code."7 Code. As seas. 426 in relation with Section 1363(f) of the Revised required by Republic Act No. Thus: "We perfectly see the point of the petitioners but considering the circumstances surrounding It might not be amiss however to devote some degree of attention to the the apprehension of the vessels in question. As a matter of fact. Laden with violation of Section 1363(a) of the Revised Administrative Code and Section foreign manufactured cigarettes. from all appearances. only questions of law being for us to resolve. a foreign port. 1950. sustained by the Court of Tax Appeals. CONFLICTS | 03Dec | 6 Iroc. owned and manned Luciano in rejecting such a plea deserve to be quoted. as found by it. 181 cases of 'Herald' cigarettes. we believe that Section legal points raised in the above two assignment of errors. could we alter the decisive facts was. even if the persuasive element in forfeiture under the law of the vessels and the cargo contained therein. Thus: "To entertain by Filipino residents of Sulu. British North Borneo. whether a port or principle is it advisable for this Court to set aside the conclusion reached by place of entry or not. but did not possess any permit for a Philippine port would be too much a concession even for a simpleton from the Commissioner of Customs to engage in the importation of or a perennial optimist. The sailing vessels are all of Philippine registry."3 2."4 stop. deprivation of property without due process of law and the abatement of . affirmed the 1. dedicated exclusively to the study and consideration of tax port or place. the said vessels could not have been an agency such as the Court of Tax Appeals which is. consequently. Their course announced loudly their intention not merely to skirt The facts according to the above opinion "are not controverted. nor did they carry a permit from the Administrative Code. beyond the territorial waters of the Philippines. as also already made known. Nor..6 the Bureau of Customs to institute seizure proceedings and thereafter to declare the forfeiture of the vessels in question and their cargo. substantial evidence. Appeals. Their cargoes were not covered by the Borneo. Sulu. and when intercepted. at about noon time. They would Moreover. and of less than thirty (30) tons burden. a domestic port within the Sulu sea. and some pieces of rattan The sense of realism and the vigorous language employed by the late Judge chairs.' 'Liberal Wing III.' 'Sulu Area Command. 9 cases of 'Camel' cigarettes. It met the repudiation that it deserved. a customs patrol limits and land somewhere in Tawi-tawi towards which their prows were team on board Patrol Boat ST-23 intercepted the five (5) sailing vessels in pointed.' 'Lahat-lahat. as noted at the outset. alleging the absence of jurisdiction. for understandable reasons. It is quite irrational for Filipino sailors manning five merchandise into any port of the Sulu sea. we lack the power The first two errors assigned by petitioners would impugn the jurisdiction of of review."2 another foreign port. Where the issue raised belongs to the former category. by the very nature of engaged in the importation of the articles laden therein into any Philippine its function. otherwise known as the turn about upon reaching the brink of our territorial waters and head for Import Control Law. between British North Borneo and Sulu while but for the intervention of a customs patrol which. binds us."1 Commissioner of Customs to engage in importation into any port in the Sulu sea. all of them were with their respective cargoes of blue seal cigarettes and rattan chairs for heading towards Tawi-tawi. For it is now beyond question that its finding. they did not possess the import license 20 of Republic Act No..' British North Borneo. to have incurred the problems and has necessarily developed an expertise on the subject. the said vessels could we had occasion to state in a relatively recent decision: "Nor as a matter of not have touched any place or port in the Philippines.. We find no plausible reason not to accept in its entirety such a conclusion decision rendered by the Collector of Customs of Jolo." Thus: "It along the territorial boundary of the Philippines but to come within our appears that on September 10. 426. who found cause for reached by the Court of Tax Appeals.

a right not correctly held devoid of any persuasive force. "Property subject to forfeiture under customs laws. On those facts the liability of the vessels and merchandise under From the apprehension and seizure of the vessels in question on the high the above terms of the statute would appear to be undeniable. even if the facts presented a most clearly that the due process question raised is insubstantial.10 an 1804 decision. The It is unquestioned that all vessels seized are of Philippine registry. the facts on which the seizure was based were not unknown to petitioners- appellants. the importation which were illegally imported. the absence of taken then by the Commissioner of Customs was in accordance with law. 426 abated whatever liability could have been incurred Chief Justice Marshall's opinion in Church v. Subsection (f) the effect (1) of declaring legal the importation of the cotton counterpanes speaks of any merchandise of any prohibited importation. 650 the Commissioner of Customs retained his such forfeiture and seizure." The first been abated by the mere expiration of Republic Act No. The right to a hearing of petitioners-appellants was respected. How could there be a denial of due process? There was nothing arbitrary about the manner in which such seizure and forfeiture were effected. and we hold the view that once the Commissioner of Customs has thus beyond the territorial waters of the Philippines was legal must be acquired jurisdiction over the case. It would be an affront to not only within the Philippines. we are The question asked in the brief of petitioners-appellants as to whether the concerned with the effect of the expiration of a law. we believe that despite the expiration 4. Such a constitutional guaranty. jurisdiction of Commissioner of Customs is predicated. 650 will not divest him of his jurisdiction thereon duly acquired while said law was still in force. We firmly subsection thereof." . for the main question brought in by the appeal fact that the alleged offense imputed to petitioners-appellants is a violation from the decision of the Collector of Customs was the legality or illegality of of Section 1363(a) and not Section 1363(f). Philippine ship . This argument raised before the Court of Tax Appeals was that a state has the right to protect itself and its revenues. CONFLICTS | 03Dec | 7 liability consequent upon the repeal of Republic Act No. The title of Section 1363 is the decision of the Collector of Customs. situation less conclusive against the pretension of petitioners-appellants. Certainly. and (2) of declaring the seizure and forfeiture of which is effected or attempted contrary to law and all other merchandise ordered by the Collector of Customs illegal or null and void. it is a well settled doctrine of International Law that goes back to Republic Act No. thereunder.. They could not Revised Penal Code leaves no doubt as to its applicability and enforceability have been unaware of what they were doing.9 5. But its power to secure itself from injury may of Customs illegal or null and void. The seizure of a vessel within the range of its the effect of declaring legal the importation of goods which were illegally cannon by a foreign force is an invasion of that territory. but reason if under the above circumstances they could be allowed to raise in also outside of its jurisdiction against those committing offense while on a all seriousness a due process question." certainly be exercised beyond the limits of its territory. not with the abrogation seizure of the vessels in question and the cargoes on the high seas and of a law. Not one of the principles of law relied upon suffices to call for reversal of the action taken From the above recital of the legal provisions relied upon. 426. Such contention of petitioners-appellants is without merit." Roxas v. the mere expiration of Republic Act No. (a) cover any vessel including cargo unlawfully engaged believe that the expiration of Republic Act No. In the language cited our opinion in Golay-Buchel & Cie v. and that question could not have clear. Hubbart. The action seas beyond the territorial waters of the Philippines. 650 could not have produced in the importation of merchandise except a port of entry..8 The principle of law that sustains the validity of such a basic and fundamental. it would appear by the respondent Commissioner of Customs. answered in the affirmative. certainly should not be allowed to lend itself as an provision equally supplies a firm foundation for the seizure of the five instrument for escaping a liability arising from one's own nefarious acts. which should stand until it is revoked by the appellate tribunal. The decision under review limited to its own territory but extending to the high seas. sailing vessels found thereafter to have violated the applicable provisions of the Revised Administrative Code. 650. In other words. in other words which in the opinion of the Collector of Customs have been used are or it could not have the effect of annulling or setting aside the decision of the were intended to be used as instrument in the importation or exportation of Collector of Customs which was rendered while the law was in force and the former. Petitioners-appellants would further assail the validity of the action taken by the respondent Commissioner of Customs by the plea that the repeal of Moreover. Commissioner of Customs11 to of Chief Justice Marshall: "The authority of a nation within its own territory the effect that the expiration of the Import Control Law "did not produce is absolute and exclusive. The next question raised is the alleged denial of due process arising from of Republic Act No. The argument on the alleged lack of validity of jurisdiction over the case and could continue to take cognizance thereof the action taken by the Commissioner of Customs is made to rest on the until its final determination. and is a hostile act imported and the seizure and forfeiture thereof as ordered by the Collector which it is its duty to repel. Thus: "Herein. its interior waters and maritime zone. Sayoc 12 announced that principle earlier.

in Bombay Dept. . It would be a reproach and a reflection on the law if on the facts as they had been shown to exist. Commissioner of Customs. 1964. 650 "did not have the effect of depriving the Commissioner of Customs of the jurisdiction.." It is thus most evident that the Court of Tax Appeals had not in any wise refused to adhere faithfully to controlling legal principles when it sustained the action taken by respondent Commissioner of Customs. speaking for the Court. The vigor of the war against smuggling must not be hampered by a misreading of international law concepts and a misplaced reliance on a constitutional guaranty that has not in any wise been infringed. Store v. which are in the nature of proceeding in rem. stating that such expiration of the period of effectivity of Republic Act No. With costs against petitioners-appellants. that would be an undeserved reflection and an unwarranted reproach. acquired by him prior thereto. as had been made clear above. WHEREFORE. the present Chief Justice.. to act on cases of forfeiture pending before him. the seizure and forfeiture of the vessels and cargo in question were to be characterized as outside the legal competence of our government and violative of the constitutional rights of petitioners-appellants. Fortunately. CONFLICTS | 03Dec | 8 As late as 1965..13 we had occasion to reaffirm the doctrine in the above two decisions. the decision of respondent Court of Tax Appeals of November 19. is affirmed.

in the Court of First Instance And. The sack referred to as Exhibit A contained 49 cans of opium. the warden of the jail. at three pesos for each lot of four cans of opium. it says. for the purpose of investigation at the trial. that on the department of the port of Cebu testified that they were found in the part of 15th the vessel arrived at Cebu. it ordered that the fiscal should separated one charge from the other and file a complaint On motion by the defense. Moreover. The WITNESS. The first complaint filed against the defendant. a vessel of English nationality. he ordered two other Chinamen to keep the sack. first in a cabin near the saloon. on board the vessel" be stricken out.000 pesos worth prepared opium. to First Instance of Cebu. finally. another sack The defense moved that this testimony be rejected. for the unlawful possession of opium. kept. respectively. 96 kilogrammes of opium. contained opium and were found on in Exhibit B and found in the cabin. freely and voluntarily. foreign vessels. designated as English). m. and the court only ordered that the part thereof and the other. that the opium seized in Exhibits A and B. that he had bought these sacks of true that the defendant stated that these sacks of opium were his and that opium. wit: The facts of the case are contained in the following finding of the trial court: FISCAL. because the firemen and crew of LOOK CHAW (alias LUK CHIU). among them party brought him a sample of opium and that the same party knew that Messrs. stated to him. as his hold had already been searched several times for opium. and. another can of opium. stated that he "carried. 375. another the vessel had been bought by him in Hongkong. the larger sack. The said defendant board the steamship Erroll. went abroad the steamship vessel be searched. with respect to this answer. that . in the Court of the chief of the department of customs had already given this testimony. and the agent asked that the internal-revenue agent of Cebu. the fiscal did. According to the testimony of the internal-revenue agent. for the accused had opium in his possession to sell. CONFLICTS | 03Dec | 9 G. chief of the department of the port of Cebu and there was more opium on board the steamer. who moreover. Mexico or Vera Cruz. Erroll to inspect and search its cargo. the unlawful sale of opium. in the presence of the provincial fiscal. It is a can opium which was bought from the defendant by a demurrer was sustained. same substance. being hearsay evidence. and found. in which the sack mentioned in Exhibit B was found. L-5887 December 16. marked. possessed and had in his possession and important as evidence in this cause. With regard to this the internal- and control. as contraband. and as No. 1909). in Hongkong with the intention of selling them as contraband in he had them in his possession. and that it was also stated. the court ruled that this answer might be for each violation.vs. pursuant to the instructions he had from the Manila custom-house. to abbreviate proceedings." and that "he had been surprised in revenue agent testified as follows:itc-alf the act of selling 1. and on the same day he sold opium. as well as the other referred to mentioned as Exhibits A. shows that between 11 and 12 o'clock a. as Exhibit C. one sack (Exhibit A) and afterwards in the hold. and the other. and that. The hold. was the subject matter of round can and five pesos for each one of the others. defendant-appellant." FISCAL. always ARELLANO. were permitted to retain certain amounts of opium. 5887 on the general docket of this court. because the defendant spoke It is to be taken into account that the two sacks of opium. this. was under the defendant's control. What is it? The defense presented a demurrer based on two grounds. C. freely and of his The defense. plaintiff-appellee. admitted that the receptacles own will and accord admitted that this sack. several persons. and this cause concerns only the stricken out "because it refers to a sale. No. belonged to him. and C. vessel should have left the Philippines.R. on the WITNESS. It is registered as No. of a Chinese interpreter (who afterwards was not needed. J. Exhibit B. and with respect to which the chief of the selling it. as the court found that the complaint contained secret-service agent and taken to the office of the governor to prove that two charges. marked "Exhibit D. the defendant Exhibit A. in Mexico and Puerto de Vera Cruz. on the ground of its (Exhibit B). also contained several cans of the "that there was more opium." is also corpus delicti of Cebu. B. The internal-revenue agent came to my office and said that a present month (stated as August 19. the second of which was the more than one crime was charged in the complaint. consequence of that ruling. one. Who asked you to search the vessel? The evidence. unlawful possession of opium.: provided it should not be taken shore." But. 1910 the ship where the firemen habitually sleep. Jacks and Milliron. and four guards. properly constitute the corpus delicti. and that they were delivered to the first officer of the ship to be returned to the said firemen after the THE UNITED STATES.

000. constitute a crime triable by the courts of this country. that he had a contract to sell an appear that. with the costs of this instance against the appellant. though not to exceed one third of the principal penalty. on account of such vessel being considered as an extension of its own nationality. it is found: That. together with the allegations made therein by the parties. So 49.net The appeal having been heard. as a general rule. the defendant be not released from custody. in view of the considerable amount of opium seized. which had Therefore. in the absence of an agreement under an international treaty. thus committing an open violation of the laws of the land. of the exhibits presented in the case. the same rule does not apply when the article. in favor of the Insular Government. on the grounds that the court had no jurisdiction to try the same and the facts concerned therein did not constitute a crime. respectively. via the call ports of Manila and Cebu. From this judgment. it does not . 129. the defendant appealed to this court. CONFLICTS | 03Dec | 10 he had tried to sell opium for P16 a can. that the opium found in the room of the subject. inasmuch as the crime had been committed within its district. and that he had left it in their stateroom to avoid its being found in his room. reducing the imprisonment and the fine imposed to six months already been searched many times. but turned over to the customs authorities for the purpose of the fulfillment of the existing laws on immigration. as it is a violation of the penal law in force at the place of the commission of the crime. in the present case a can of opium. whose use is prohibited within the Philippine Islands. 1922 the subject matter of the present case. and P1. was considerable. in the event of an appeal being taken or a bond given. does not. the two penalties fixed by the law on the amount of the value of about P500. appealed from. G. and the total number. on such account. It further ordered the confiscation. and of the small one. and that it was bound for Mexico. L-18924 October 19. and that. other two Chinamen prosecuted in another cause. was his. according to the defendant. we affirm in all other respects the judgment the contents of the large sack was 80 cans of opium. No. ordered. The court sentenced the defendant to five years' imprisonment. with respect to which.R. The defense moved for a dismissal of the case. asked that the maximum penalty of the law be imposed upon the defendant. in any of their ports. and to the payment of the costs.lawphi1. is landed from the vessel upon Philippine soil. even admitting that the quantity of the drug seized. with additional subsidiary imprisonment in case of insolvency. on the wharf of Cebu. and that. or when the sentenced should have been served. should be imposed in the maximum degree. only the court established in that said place itself had competent jurisdiction. It was established that the steamship Erroll was of English nationality. It is also found: That. The fiscal. to pay a fine of P10. although the mere possession of a thing of prohibited use in these Islands. that it came from Hongkong.000. The court ruled that it did not lack jurisdiction. at the conclusion of his argument. aboard a foreign vessel in transit.

. but all must concede that felonious There are two fundamental rules on this particular matter in connection homicide is a subject for the local jurisdiction. p. is prohibited in the Islands. 7). and it will or will not be erroneous according as disturb only the peace of the ship or those on board are to be dealt with said court has or has no jurisdiction over said offense. . 1awph!l. . . Manila Bay two and a half miles from the shores of the city. because at present the theories and Islands.. exclusively by the sovereignty of the home of the ship. plaintiff-appellant. the same rule does not apply when the article. we find nothing to this were not amenable to the jurisdiction of the country. it is the last one that not.. . 116).. no court other than that established in the said place has jurisdiction of the offense. . In this appeal the Attorney-General urges the revocation of the order of the International Law [Dana ed. and that if the proper with International Law.) The ship and her crew were then defendant to the information that initiated this case and in which the subject to the jurisdiction of the territorial sovereign subject to such appellee is accused of having illegally smoked opium. in his work "Treaties.. 573). . (Wheaton. in the absence of an agreement . this court held: Conventions. secs. as it is a violation of the penal law in force at the place of [U. said that: The question that presents itself for our consideration is whether such . . It may not be over crime." volume 1. . . and Wildenhus vs. J. CONFLICTS | 03Dec | 11 THE PEOPLE OF THE PHILIPPINE ISLANDS. crimes perpetrated under Although the mere possession of an article of prohibited use in the such circumstances are in general triable in the courts of the country within Philippine Islands. crime committed on the high seas or within the territorial waters of any other country. she was within territorial waters. Court of First Instance of Manila. Keeper of the Common Jail (120 U. note 105. 1). does territory they were committed. as a general rule. the use of which the Philippines which is now a territory of the United States. it would be under an international treaty. to which nation the ship where the crime in question was committed belongs. such vessels being considered as an extension of its own jurisprudence prevailing in the United States on this matter are authority in nationality. committed aboard merchant easy at all times to determine which of the two jurisdictions a particular act vessels anchored in our jurisdiction waters. defendant-appellee. etc. M'Faddon and Others (7 Cranch respect to which. which embrace the entrance to Manila Bay. La Mer Ter. constitute a crime triable by the courts of the obtains in this jurisdiction. .]. and the government to degradation. Chief Justice Marshall said: the commission of the crime. Le Droit Int. No court of the Philippine Islands had jurisdiction over an offense or WONG CHENG (alias WONG CHUN). Latour. Look Chaw (18 Phil. and the English rule. Much will undoubtedly depend on the attending circumstances of the particular case. It is true that in certain cases the comity of nations is observed. in such a case an open violation of the laws of the land is committed with In the cases of The Schooner Exchange vs. obviously inconvenient and dangerous to society. if need be. the French rule. Malloy says the following: . Of this two rules. according to which crimes authorities are proceeding with the case in the regular way the consul has committed aboard a foreign merchant vessels should not be prosecuted in no right to interfere to prevent it. When merchant vessels enter for the purposes of trade. as in Mali The demurrer alleged lack of jurisdiction on the part of the lower court. but those which disturb the public peace may be suppressed. like the one herein involved. if such As to whether the United States has ever consented by treaty or otherwise individuals or merchants did not owe temporary and local allegiance. S. wherein it was which so held and dismissed the case. . the courts of the country within whose territorial jurisdiction they were committed. and to renouncing such jurisdiction or a part thereof. Besides.. aboard a foreign vessel in transit in any local port. vs..: the headlands. ch. the offenders The point at issue is whether the courts of the Philippines have jurisdiction punished by the proper authorities of the local jurisdiction.. Bull (15 Phil. 1. and. sustaining the demurrer presented by the 490 et seq. . page 625. is landed from the vessels upon Philippine soil. and would subject the laws to continual infraction. unless their commission affects the peace and security of the Hence in United States vs. this court held that: territory. based on the territorial principle and followed in the United States. according to which. aboard the merchant limitations as have been conceded by that sovereignty through the proper vessel Changsa of English nationality while said vessel was anchored in political agency. effect so far as England is concerned. 255. . to wit.]. but when she came within three miles of a line drawn from ROMUALDEZ.net of disorder belongs. In United States vs. The principle which governs the whole matter is this: Disorder which ruling is erroneous or not. Bonfils. and a new set of principles became applicable.

who are impotent to lay hands on him. respectively. and. CONFLICTS | 03Dec | 12 There shall be between the territories of the United States of America. the merchants and traders of each nation respectively shall enjoy the most complete protection and security for their commerce. a reciprocal liberty of commerce. respectively. It seriously contravenes the purpose that our Legislature has in mind in enacting the aforesaid repressive statute. G. respectively. . as the Attorney-General aptly observes: . because it being the primary object of our Opium Law to protect the inhabitants of the Philippines against the disastrous effects entailed by the use of this drug. to which other foreigners are permitted to come. So ordered. its mere possession in such a ship. shall have liberty freely and securely to come with their ships and cargoes to all such places. The idea of a person smoking opium securely on board a foreign vessel at anchor in the port of Manila in open defiance of the local authorities. because it causes such drug to produce its pernicious effects within our territory. Commerce and Navigation Convention. and to remain and reside in any parts of the said territories. The order appealed from is revoked and the cause ordered remanded to the court of origin for further proceedings in accordance with law. Moreover. No. in the territories aforesaid. ports and rivers. generally. 120135 March 31. Hence such a mere possession is not considered a disturbance of the public order. is simply subversive of public order. . to enter into the same. and all the territories of His Britanic Majesty in Europe. 2003 . is certainly a breach of the public order here established.) We have seen that the mere possession of opium aboard a foreign vessel in transit was held by this court not triable by or courts. The inhabitants of the two countries. 1. (Art. also to hire and occupy houses and warehouses for the purposes of their commerce. without special findings as to costs. without being used in our territory. even though aboard a foreign merchant ship.R. It requires no unusual stretch of the imagination to conceive that a foreign ship may come into the port of Manila and allow or solicit Chinese residents to smoke opium on board. does not being about in the said territory those effects that our statute contemplates avoiding. but subject always to the laws and statutes of the two countries. But to smoke opium within our territorial limits.

DISMISSAL OF THE and/or the persons designated by them in the operation of private COMPLAINT ON THE GROUND OF FORUM NON-CONVENIENS IS MORE respondents' six vessels.11 The Litonjuas prayed for the accounting of the revenues derived LTD. given a period of ten (10) days to file its Answer to the complaint. RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THE FACT the names of their corporations. JR.. BEYOND ANY DOUBT. the operation and the funds derived THAT THE SEPARATE PERSONALITIES OF THE PRIVATE RESPONDENTS therefrom were placed under the complete and exclusive control and (MERE STOCKHOLDERS) AND THE FOREIGN CORPORATIONS (THE REAL disposition of the petitioners. (c) El Challenger6. On May 10. UNDER THE the breach of their fiduciary duties and/or negligence of the petitioners CIRCUMSTANCES SURROUNDING THE INSTANT CASE. HON. thus: April 28. SOME GUIDELINES TO FOLLOW IN DETERMINING well as of the proceeds of the subsequent foreclosure sale. the loans acquired for the purchase of the four additional vessels then matured and remained unpaid. THERE an account of all the income derived from the operation of the vessels as ARE. EDUARDO trust. by them (defendant banks). THE RESPONDENT they (Litonjuas) lost sizeable amounts of their own personal funds COURT OF APPEALS FAILED TO CONSIDER THE FACT THAT PRIVATE equivalent to ten percent (10%) of the acquisition cost of the four vessels RESPONDENTS ARE GUILTY OF FORUM SHOPPING.12 LITONJUA. the foreclosure proceedings instituted by petitioners. IN FACT. petitioners. MANUEL PADOLINA. the revenues derived from the operation of all the APPROPRIATE AND PROPER. BANK OF AMERICA INTERNATIONAL. the Motion to The factual background of the case is as follows: Dismiss is hereby DENIED. SR. the defendant banks acquired. The defendant is therefore.. 1993. HOWEVER. LITONJUA. (b) El General5. and Aurelio J. Ltd. Sr. for brevity) filed a Complaint2 before the Regional Trial Court of "SO ORDERED. damages for breach of COURT OF APPEALS. including the two vessels originally owned IN THE PHILIPPINES. respondents. through their wholly-owned corporations. offering them easy loans to acquire said vessels. herein petition anchored on the following grounds: (Litonjuas') corporations as the borrowers: (a) El Carrier4. and (d) El Conqueror7. They assailed the above- revenues from said business together with other funds with the branches of quoted order as well as the subsequent denial of their Motion for said banks in the United Kingdom and Hongkong up to 1979. THE PRINCIPLE OF RES JUDICATA IS NOT LIMITED TO FINAL JUDGMENT banks to have all the six vessels. J.8 and the possession the vessels was also BORROWERS) CLEARLY SUPPORT. CONFLICTS | 03Dec | 13 BANK OF AMERICA NT & SA. through their Hence. THE PROPOSITION placed by defendant banks in the hands of persons selected and designated THAT THE PRIVATE RESPONDENTS HAVE NO PERSONALITIES TO SUE.3 thereafter. and in view of the foregoing consideration. (defendant banks for brevity) alleging that: they were Instead of filing an answer the defendant banks went to the Court of engaged in the shipping business.10 because of WHETHER THE CHOICE OF FORUM SHOULD BE DISTURBED. "WHEREFORE. 1995 resolution denying petitioners' motion for reconsideration. Litonjua (Litonjuas. exemplary damages and attorney's fees. COROLLARY TO THIS. Litonjua. and AURELIO K.17 number of their ships in operation. with their Reconsideration. they owned two vessels: Don Aurelio and Appeals on a "Petition for Review on Certiorari"15 which was aptly treated El Champion. they deposited their by the appellate court as a petition for certiorari. the defendant banks induced them to increase the petitioners' Motion for Reconsideration.. Defendant banks filed a Motion to Dismiss on grounds of forum non AUSTRIA-MARTINEZ. 1994 decision of the Court of Appeals1 and the Dismiss.9 "2. foreclosed and sold at public auction to answer BE THE LEGAL BASIS FOR THE DISMISSAL OF THE COMPLAINT FILED BY for the obligations incurred for and in behalf of the operation of the vessels."14 Pasig against the Bank of America NT&SA and Bank of America International. in the operation of the six vessels and of the proceeds of the sale thereof at vs. vessels declined drastically." 18 and were left with the unpaid balance of their loans with defendant . banks. the vessels were registered in "1. THE PENDENCY OF FOREIGN ACTION MAY by the private respondents.16 The appellate court dismissed the petition and denied business doing well. THE RESPONDENT COURT OF APPEALS FAILED TO REALIZE THAT WHILE The Litonjuas claimed that defendant banks as trustees did not fully render THE PRINCIPLE OF FORUM NON CONVENIENS IS NOT MANDATORY. 1993. prompting defendant "3.: conveniens and lack of cause of action against them. Eduardo K. the trial court issued an Order denying the Motion to assailing the November 29.13 This is a petition for review on certiorari under Rule 45 of the Rules of Court On December 3. THE PRIVATE RESPONDENT.

petitioners maintain that these foreign England. vs. (b) ESHLEY COMPANIA NAVIERA SA. transaction but also to the local court. 2098) against (a) LIBERIAN Complaint. the evidence and TRANSPORT NAVIGATION. performed. (e) PACIFIC NAVIGATOS CORP. and England. Furthermore. or (d) the unfairness of burdening citizens in an unrelated Finally. SA. Queen's Bench "i) The Bank of America Branches involved. LITONJUA & (h) AURELIO K."24 Court. satisfied. vs.22 to wit: expressly provided that they will be governed by the laws of England. Petitioners insist that the expeditious and inexpensive. consummated and partially paid outside the Philippines. SA. are based in Hongkong and England. (c) the cost of obtaining attendance of willing unnecessary expense and burden not only upon the parties to the witnesses. the Division. 2245) against (a) EL mortgaged vessels were part of an offshore fleet. "vii) The revenues of the vessels and the proceeds of the sales of these their 10% however represents their investments as stockholders in the vessels were ALL deposited to the Accounts of the foreign CORPORATIONS foreign corporations. as clearly mentioned in the Division Commercial Court (1992-Folio No. (c) the its dismissal on the ground of forum non conveniens. and that the revenues derived from the operations of all the vessels are deposited in the "v) The Restructuring Agreements were ALL governed by the laws of accounts of the corporations. and Anent the second assigned error. petitioners claim that private respondents have already waived their forum with jury duty. "ii) The loan transactions were obtained. (d) ESPRIONA SHIPPING CO. Reyno. Hence. LITONJUA. (b) the local foreign transaction in a case pending in the Philippines may be avoided by interest in having localized controversies decided at home. petitioners posit that while the application "viii) Bank of America International Ltd. As such. (g) EDUARDO K. Queen's Bench "iii) The monies were advanced outside the Philippines.. (c) EDUARDO Philippines. that it would then be imposing a significant and unwilling witnesses. private respondents Litonjuas who are mere stockholders. (f) EDDIE NAVIGATION CORP. being mere "vi) The subsequent sales of the mortgaged vessels and the application of shareholders.A. . CHALLENGER SA. SA. have no claim on the vessels as owners since they merely the sales proceeds occurred and transpired outside the Philippines. (b) ESPRIONA SHIPPING COMPANY S. Gilbert21 and and all subsequent restructuring agreements uniformly. (c) EL the witnesses are not readily available in the Philippines. unconditionally and Piper Aircraft Co. 26 avoidance of unnecessary problems in conflict of laws or in the application of foreign law. that private respondents.A. "2.) Civil action in England in its High Court of Justice. is not licensed nor engaged in trade of the principle of forum non conveniens is discretionary on the part of the or business in the Philippines. or (d) all other practical problems that make trial of a case easy. corporations are the legal entities that have the personalities to sue and not herein private respondents. CONFLICTS | 03Dec | 14 As to the first assigned error: Petitioners argue that the borrowers and the "iv) All the loans involved were granted to the Private Respondents' foreign registered owners of the vessels are the foreign corporations and not CORPORATIONS. as elucidated in Gulf Oil Corp.25 that Philippine Courts would then have to apply English law in resolving "Private interest factors include: (a) the relative ease of access to sources whatever issues may be presented to it in the event it recognizes and of proof. security documentation forum should be disturbed.) Civil action in England in its High Court of Justice. said discretion is limited by the guidelines pertaining to the private as well as public interest factors in determining whether plaintiffs' choice of Petitioners argue further that the loan agreements.. Public interest factors include: (a) the inconvenience and difficulty of applying English law with respect to a wholly administrative difficulties flowing from court congestion. to wit: petitioners allege the following: "1."23 alleged causes of action in the case at bar for their refusal to contest the foreign civil cases earlier filed by the petitioners against them in Hongkong In support of their claim that the local court is not the proper forum.. Commercial Court (1992-Folio No. and the have an inchoate right to whatever may remain upon the dissolution of the deliveries of the sold mortgaged vessels were likewise made outside the said foreign corporations and after all creditors have been fully paid and Philippines. not based in the CHALLENGER S. (b) the availability of compulsory process for the attendance of accepts herein case. KATIPUNAN LITONJUA and (d) AURELIO KATIPUNAN LITONJUA. SA..19 and that while private respondents may have allegedly spent amounts equal to 10% of the acquisition costs of the vessels in question. perfected.20 abroad.

A. to dismiss the complaint on the ground that plaintiffs have no cause of they have interests of their own in the vessels. or (c) appeal would not prove to be a NAVIGATORS CORPORATION (e) EDDIE NAVIGATION CORPORATION S. and (3) the act or omission of the defendant in violation of said legal right.. i.A. (c) ESPRIONA SHIPPING COMPANY S. 4039 of 1992). If these elements are absent.30 that as upheld by the Court of Appeals. proceed to trial.33 the correlative obligation of the defendant. 4040 of 1992). The NAVIGATORS CORPORATION (e) EDDIE NAVIGATION CORPORATION S. private respondents contend that certain material facts the assailed Order denying petitioners' motion to dismiss.A. private ground for a Motion to Dismiss based on the fact that the complaint. in case of an adverse decision.37 To emphasize.. (g) AURELIO KATIPUNAN defenses the objections raised in his motion to dismiss.A. We deny the petition for lack of merit."34 the pendency of another action or by litis pendentia as shown above. INC. vs. aside from the said corporate borrowers being but their alter-egos. not prove to be a speedy and security of the foreign loans were mortgages on a 39-hectare piece of real adequate remedy? We will resolve said questions in conjunction with the estate located in the Philippines. (2) foreign courts..35 In San Lorenzo Village judicata also applies to foreign judgment is merely an opinion advanced by Association. against (a) ESHLEY COMPANIA NAVIERA S. (b) EL without or in excess of jurisdiction.36 this Court clarified that a them and not based on a categorical ruling of this Court. evidently states no cause of action. and adequate remedy in the ordinary course of law from the Order No.28 that while the complaint was filed only issues raised by the parties. (d) PACIFIC subject of the extraordinary petition for certiorari or mandamus.. Lack of personality to sue can be used as a conveniens is in the lawful exercise of its discretion.29 Private respondents also action against defendants since plaintiffs are merely stockholders of the argue that the dismissal by the Court of Appeals of the petition for certiorari corporations which are the registered owners of the vessels and the was justified because there was neither allegation nor any showing borrowers of petitioners? whatsoever by the petitioners that they had no appeal. the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action.. A case is Answer to the complaint....A. Inc. and (h) EDUARDO KATIPUNAN LITONJUA. proceed to trial and await judgment before to state a cause of action" refers to the insufficiency of allegation in the making an appeal. JR. on the respondents aver that the statement of petitioners that the doctrine of res face thereof." maintaining the plaintiff's baseless action and compelling the defendant needlessly to go through a protracted trial and clogging the court dockets and that private respondents' alleged cause of action is already barred by by another futile case. against (a) ESHLEY COMPANIA NAVIERA S. is untenable. As repeatedly held by this Court: pleading. (b) where there is patent grave abuse CHALLENGER S. speedy. Petitioners' argument that private respondents.32 and that herein complaint states a cause of action where it contains three essential private respondents did not actually participate in the proceedings in the elements of a cause of action. that the remedy available stockholders of the foreign corporations. nor any plain. remedy of the aggrieved party is to file an answer and to interpose as (f) LITONJUA CHARTERING (EDYSHIP) CO. the dismissible for lack of personality to sue upon proof that the plaintiff is not decision of the trial court in not applying the principle of forum non the real party-in-interest.27 Records show that the trial court acted within its jurisdiction when it issued On the other hand. INC. the complaint should be dismissed. namely: (1) the legal right of the plaintiff.) Civil action in the Supreme Court of Hongkong High Court (Action No. Did the trial court commit grave abuse of discretion in refusing laws. to elevate the entire case by appeal in due course. have no personalities to sue. Petitioners should have filed an but rather the fact that the complaint states no cause of action... RJ.. Court of Appeals. (g) AURELIO KATIPUNAN relieve a defendant from the injurious effects of the patently mistaken order LITONJUA..... (a) when the trial court issued the order No.A.A. Does the denial and pleadings are omitted and/or misrepresented in the present petition for of the motion to dismiss constitute a patent grave abuse of discretion? certiorari. the latter are wholly-owned by the private respondents who are Filipinos and therefore under Philippine First issue. unlike "lack of cause of action" which refers to the insufficiency of . CONFLICTS | 03Dec | 15 "3. (b) EL "An order denying a motion to dismiss is interlocutory and cannot be the CHALLENGER S. speedy and adequate remedy as when an appeal would not promptly (f) LITONJUA CHARTERING (EDYSHIP) CO. being mere of the trial judge denying their Motion to Dismiss.31 Finally. that the prefatory statement failed to state that part of the Would appeal. (d) PACIFIC of discretion by the trial court. it is not the lack or It is a well-settled rule that the order denying the motion to dismiss cannot absence of cause of action that is a ground for dismissal of the complaint be the subject of petition for certiorari. and to the petitioners after their Motion to Dismiss was denied was to file an therefore. under the circumstances.A. and (h) EDUARDO KATIPUNAN LITONJUA.38 "Failure answer to the complaint. (c) ESPRIONA SHIPPING COMPANY S. by the stockholders of the corporate borrowers. xxx Under certain situations.e.) A civil action in the Supreme Court of Hong Kong High Court (Action considered appropriate. recourse to certiorari or mandamus is "4. and LITONJUA.

43 questions of fact have been resolved on the basis of stipulations. Should the complaint be dismissed on the ground of forum which may be rendered in one would. 1. and that the propriety of dismissing a case based on "xxx assuming that the allegation of facts constituting plaintiffs' cause of this principle of forum non conveniens requires a factual determination. not all the requirements for litis pendentia are present. for litis pendentia to be a ground for the complaint would obviously be indecisive and would not end the controversy. such a course. any hence it is more properly considered a matter of defense. all these Petitioners insist that they do not have any obligation to the private requisites are present in the instant case.47 that the doctrine of forum non conveniens should not corporations are wholly owned by them and prior to the incorporation of be used as a ground for a motion to dismiss because Sec. respondents as they are mere stockholders of the corporation. they were clients of petitioners which induced them to acquire Rules of Court does not include said doctrine as a ground.41 asserted and relief prayed for. Rule 16 of the such entities.39 Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is In the case at bar. in conflicts of law cases. This Court loans from said petitioners to invest on the additional ships. a court. regardless of which party is non-conveniens? successful. to annoy and harass the were not shown by petitioner. to avoid overcrowded dockets.51 as well as the reversal in positions of plaintiffs and choosing the forum or place wherein to bring their suit for malicious defendants52. Forum shopping exists where the elements of litis pendentia are definitive determination and termination of the dispute. to determine whether special circumstances require the court's desistance. Private respondents maintain that the Court of Appeals. or to select a more friendly filed in Hongkong and England without however showing the identity of venue. that the following requisites are met: the parties involving the vessels in question. CONFLICTS | 03Dec | 16 factual basis for the action. to render such an accounting. as Court held that "xxx [a Philippine Court may assume jurisdiction over the trustees by reason of the fiduciary relationship that was created between case if it chooses to do so. emerged in private international law to deter the practice of there may be identity of parties. as trustees.45 this right to demand for an accounting from defendants (herein petitioners). it should do so only after vital We agree with private respondents. As held in the San Lorenzo case. and (3) petitioners resort to. vs. and.40 facts are established. action is not as clear and categorical as would otherwise be desired. such as to secure procedural advantages. literally meaning 'the forum is In case at bar. (2) that the Philippine Court is in a position to make an intelligent failed to do the same. the complaint contains the three elements of a cause of addressed to the sound discretion of the trial court. decision as to the law and the facts. Are private respondents guilty of forum shopping because of the pendency of foreign action? As this Court has explained in the San Lorenzo case. herein private respondents. It merely mentioned that civil cases were defendant. Inc. While inconvenient'. and (c) the identity in the two cases should be such that the judgment Second Issue." Third issue. It alleges that: (1) plaintiffs. this Court enunciated in Philsec. Investment Corporation vs. To do otherwise. dismissal of an action there must be: (a) identity of the parties or at least since the institution of another action upon a revised complaint would not such as to represent the same interest in both actions.48 uncertainty thereby arising should be so resolved as to enable a full inquiry into the merits of the action. amount to res judicata in the other. to abort the action on account of the alleged fatal flaws of the in the other."46 Evidently. the relief being founded on the same acts.50 No. would preclude multiplicity of suits which the law abhors. provided. notwithstanding the presence of other global forum shopping. while "lack of cause of action" may be raised any time after the elsewhere. (2) petitioners have the (1) that the Philippine Court is one to which the parties may conveniently obligation. "Failure to state a cause of action" may be impositions on its jurisdiction where it is not the most "convenient" or raised at the earliest stages of an action through a motion to dismiss the available forum and the parties are not precluded from seeking remedies complaint. that the corporate entities have juridical personalities separate and distinct from Moreover. may refuse . still the other requirements necessary for litis pendentia reasons. have the Communication Materials and Design. Court of Appeals.42 that is to prevent non-resident litigants from respondents. (b) identity of rights be foreclosed. and conduce to the No.44 In the case of action. those of the private respondents. (3) that the Philippine Court has or is likely to have power to enforce its decision. further ruled that while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground. Under this doctrine. admissions or evidence presented. The doctrine of forum non-conveniens.49 Parenthetically. present and where a final judgment in one case will amount to res judicata that is.

72). 'D' and 'E'". after enumerating the various civil actions instituted abroad. SO ORDERED. LTD. 120077 October 13. As the Court of Appeals aptly observed: "xxx [T]he petitioners.. the petition is DENIED for lack of merit. did aver that "Copies of the foreign judgments are hereto attached and made integral parts hereof as Annexes 'B'. p. AND MANILA HOTEL INTL. both courts correctly denied the dismissal of herein subject complaint. G.R. How then could We have been expected to rule on this issue even if We were to hold that foreign judgments could be the basis for the application of the aforementioned principle of res judicata?"53 Consequently. 2000 THE MANILA HOTEL CORP. WHEREFORE. petitioners. wittingly or inadvertently. to include a single foreign judgment in their pleadings submitted to this Court as annexes to their petition. . they failed. by simply enumerating the civil actions instituted abroad involving the parties herein xxx. No. Costs against petitioners. failed to provide this Court with relevant and clear specifications that would show the presence of the above-quoted elements or requisites for res judicata. CONFLICTS | 03Dec | 17 rights asserted and the reliefs sought for as well as the presence of the elements of res judicata should one of the cases be adjudged. While it is true that the petitioners in their motion for reconsideration (CA Rollo. 'C'.

00) as extra four On May 19. Limited (hereinafter would commence September 1. MHC was still a government-owned and controlled corporation duly organized and existing under the laws of the On June 30. Subsequently. 1988. In May. but with referred to as "POEA"). By virtue of a "management agreement"9 with the Palace Hotel (Wang Fu DIOSANA AND MARCELO G. he was signed copies of the employment contract (dated June 4.: Now the facts.600. MHICL is a corporation duly organized and existing under the laws of Hong On July 1.00) or its peso to Mr. SANTOS. award.800. 1988.3 Reversing and setting aside its earlier Nestor Buenio. respondent Santos was deemed resigned from the Philippines. respondent Santos resigned from the Mazoon Printing (3) Order of March 30. Petitioners are the Manila Hotel Corporation (hereinafter referred to as The employment contract of June 4. China.13 When the case was filed in 1990. Beijing. Company Limited).8 . 1988. 1988 for a period of two years. had jurisdiction over private respondent's a higher monthly salary and increased benefits.5 Directing petitioners to jointly and On May 8.12 It referred to as "MHICL"). The position was slated to complaint. Shmidt offered respondent Santos the same position as printer. Mazoon Printing Press. under the pretext that he was needed at the petitioners. not the Philippine Overseas Employment Administration (hereinafter Mr. respondent Santos wrote to Mr. provided for a monthly salary of nine hundred dollars (US$900. Mr.4 The questioned order declared that the NLRC. General Manager. open on October 1. three thousand six hundred dollars (US$3. (US$ 12. to return the same nineteen thousand and eight hundred dollars (US$19. 1994. resolution of August 28. 1995. Schmidt informed respondent Santos that he was recommended by one (1) Order of May 31. three thousand ready to sign employment contract to respondent Santos. 1993. ARBITER CEFERINA J. 1988. 1988 from Mr. CONFLICTS | 03Dec | 18 vs. Mr. Hans J.600. private respondent Marcelo Santos (hereinafter referred to as On June 4. owning 50% of its capital stock. The case before the Court is a petition for certiorari1 to annul the following orders of the National Labor Relations Commission (hereinafter referred to During his employment with the Mazoon Printing Press in the Sultanate of as "NLRC") for having been issued without or with excess jurisdiction and Oman. Shmidt. Henk mailed a months salary for the two (2) year period of his contract. Henk advised six hundred dollars (US$3.00) net of taxes. Kong. the Palace Hotel Manager. Mr. Respondent Santos enclosed four (4) Printing Press. NATIONAL LABOR RELATIONS COMMISSION. J. 1992. Henk in Manila. Henk's letter. Shmidt and signified his severally pay private respondent twelve thousand and six hundred dollars acceptance of the offer. 1988. in June 1988.6 Denying the motion for reconsideration of Press. respondent Santos arrived in Manila.11 (2) Decision of December 15. with grave abuse of discretion:2 Gerhard R. 1988. 1988. 1988. MHICL10 trained the personnel and staff of the Palace Hotel at Beijing. respondents. China. effective June 30. 1988.00) representing salaries for the unexpired portion of his contract.7 MHC is an "incorporator" of MHICL. Sultanate of Oman.00) as "14th month pay" or a total of respondent Santos that if the contract was acceptable. 1988 stated that his employment "MHC") and the Manila Hotel International Company. respondent Santos wrote the Palace Hotel and "Santos") was an overseas worker employed as a printer at the Mazoon acknowledged Mr. a friend of his. Beijing. 1988. payable fourteen (14) times a year. respondent Santos received a letter dated May 2. People's Republic of China and them that he was going to arrive in Manila during the first week of July later terminated due to retrenchment. home to help with the family's piggery and poultry business. Palace Hotel. and On May 30. together with his passport and two additional pictures equivalent and attorney's fees amounting to ten percent (10%) of the total for his visa to China.600. 1988) and notified directly hired by the Palace Hotel. PARDO.

decided the case against petitioners. To reduce expenses. 1988. The Vice President operational and with a low business outlook. please also be advised vacation leave. retrenchment in various (Operations and Development) of petitioner MHICL Miguel D. Subsequently. Shmidt as respondents. he hardly showed suggested in a handwritten note that respondent Santos be given one (1) up for work but still enjoyed free accommodation/laundry/meals up to the month notice of his release from employment. respondent Santos left for Beijing.000.18 assured this does in no way reflect your past performance which we found up to our expectations. Mr. Santos received all benefits due him. Santos received the letter of notice. He started His service with the Palace Hotel. Atty.923. the Palace Hotel terminated the employment of "1. Shmidt's Executive Secretary. The Palace Hotel and Mr. we will not open/operate printshop for the time being." On August 10. but rest neither participated in the proceedings before the Labor Arbiter. 1988. Shmidt were not served with summons and "We sincerely regret that a decision like this has to be made. He returned to China and reassumed his post on July 17. thus:19 "Should a turnaround in the business happen. the Palace Hotel informed respondent Santos by letter On February 20. Shmidt. MHICL.820 US dollars or its equivalent in Philippine currency as unearned salaries. respondent Santos. including his plane fare back to the Philippines. directing all the respondents to pay complainant jointly and severally. He prayed for an award of nineteen upheaval in China.00 as moral damages.14 we followed the one-month notice clause and Mr. In the "For your information the Print Shop at the Palace Hotel is still not contract. Mr. doing his job now shows a better approach. National would be terminated due to business reverses brought about by the political Labor Relations Commission (NLRC). 1989." .00 as exemplary damages. The complaint to Tiannamen Square incidents). respondent Santos signed an amended "employment agreement" with the Palace Hotel. respondent Santos filed a complaint for illegal signed by Mr. respondent Santos was in the Philippines on "When going through the latest performance ratings. On October 3. through his lawyer. respondent Santos was repatriated to the Philippines. practice to control costs. to wit:17 "SO ORDERED. Mr.00) as actual damages. 1989. On October 24. forty thousand pesos (P40. "d) Ten (10) percent of the total award as attorney's fees. "a) $20. From June 8 to 29. demanding full compensation pursuant to the "c) P40. 1989. Shmidt that his employment at the Palace Hotel print shop dismissal with the Arbitration Branch. 1990. 1989. our business has been severely affected. Ednave wrote Mr. 1989. On July 22. Labor Arbiter Ceferina J." "WHEREFORE. 1991. Cergueda departments of the hotel is going on which is a normal management signed the employment agreement under the word "noted". Shmidt represented the Palace Hotel. Shmidt replied. Diosana. effective November 5. named MHC.15 We quote the letter:16 thousand nine hundred and twenty three dollars (US$19.000.000. Beijing was not abruptly terminated but to work at the Palace Hotel. CONFLICTS | 03Dec | 19 On November 5. a certain Joanna "In closing. we will contact you directly and give you priority on future assignment. 1989. National Capital Region. that his performance was below average and a Chinese National who is 1989. day of his departure. respondent Santos and paid all benefits due him." On June 27. On November 11. and employment agreement. when Mr. the Palace Hotel and Mr.00) as exemplary damages and "After the unfortunate happenings in China and especially Beijing (referring attorney's fees equivalent to 20% of the damages prayed for. "b) P50. China. judgment is hereby rendered: On September 5. 1989.

34 Labor Arbiter Jose G."21 On November 20. Labor Arbiter Tumanon was re-assigned as trial Arbiter of the National Capital Region. 1997.29 and void for want of jurisdiction.28 "WHEREFORE. finding that the report and recommendations of Arbiter de The NLRC was a seriously inconvenient forum. He was "SO ORDERED. CONFLICTS | 03Dec | 20 On July 23. petitioners appealed to the NLRC. 1996.35 found that respondent Santos was illegally dismissed from employment and recommended that he be paid actual damages equivalent to his salaries for On January 7. Palace Hotel. 1992.31 the POEA as he was not an "overseas contract worker.600. The Palace Hotel and MHICL are foreign corporations.32 question of whether private respondent was retrenched or dismissed.1996. 1995. the Court denied petitioner's urgent motion. the NLRC granted the motion and reversed itself. (2) US$3. Vera are supported by substantial evidence. Not all cases contract. through correspondence sent to the Sultanate of Oman. 1992. Forum Non-Conveniens "WHEREFORE. The Court required respondents to file their respective comments. petitioners filed a motion for reconsideration arguing that Labor Arbiter de Vera's recommendation had no basis in law and in On August 28. directing the respondents to jointly and severally pay complainant the We note that the main aspects of the case transpired in two foreign following computed contractual benefits: (1) US$12. (3) US$3. 1995. the NLRC denied the motion for reconsideration.600. Complainant is hereby enjoined to file his complaint with the POEA." . as it is hereby. and the case was transferred to On April 30. 1994." On October 9.25 He General and required the NLRC to file its own comment to the petition. 1995.23 The Solicitor General prayed that he be excused from filing a comment on behalf of the NLRC33 Subsequently. this petition. the NLRC ruled in favor of private respondent. the Court granted the manifestation of the Solicitor On November 25.00 as salaries for jurisdictions and the case involves purely foreign elements. to wit:27 I. years contract stipulated by the parties or a total of US$19.24 On June 26. judgment is hereby rendered. arguing that the POEA. respondent Santos moved for reconsideration of injunction and a motion for the annulment of the entry of judgment of the the afore-quoted resolution. Arbitration Branch.00 as "14th month pay" for the aforesaid two (2) involving our citizens can be tried here. they can not defend and based on the testimonial and documentary evidence presented to and sustain the position taken by the NLRC in its assailed decision and orders. without NLRC directed Labor Arbiter Emerson Tumanon to hear the case on the giving due course to the petition. 1993. 1995.26 The petition is meritorious. the Solicitor General filed a manifestation stating that On January 13. let the appealed Decision be.30 "SO ORDERED. de Vera. a foreign employer. petitioners filed with this Court an urgent motion for the issuance of a temporary restraining order and/or writ of preliminary On September 18. Labor Arbiter de Vera submitted his report. plus (4) attorney's fees of 10% of complainant's total The employment contract. private respondent Santos filed his comment. Labor Arbiter Tumanon completed the proceedings after going over the petition and its annexes. the NLRC filed its comment. 1994.00 as extra that the Philippines has with the case is that respondent Santos is a Filipino four (4) months salary for the two (2) years period (sic) of the parties' citizen. heard by him. where respondent Santos was then employed. not the NLRC had jurisdiction over the case. On December 15. 1991. stating:20 fact. — Respondent Santos was hired directly by the award. The only link the unexpired portion of the parties' contract. On February 2. 1996.600.800. The On May 31.22 On March 8. declared null On March 30. 1994. 1995. the NLRC promulgated a resolution. the unexpired portion of his contract. He argued that the case was not cognizable by NLRC dated July 31.00 or its peso equivalent. Hence.

The capital stock. veil of corporate fiction. — We fail to see how the NLRC is a convenient forum given that all the incidents of the case — from the time of recruitment. the affected operations of the Palace Hotel as to justify respondent Santos' aforesaid control or breach of duty must be the proximate cause of the retrenchment. Henk are non-residents of the Philippines. This letter was sent to the Palace Hotel in the People's Republic of China. Jurisdiction over its person was not acquired.39 He is not an agency of the government. Second." Likewise. to True. Mr. no power to execute decision." Republic of Oman. assume jurisdiction over the case if it chooses to do so provided: (1) that the NLRC's decision cannot be sustained. still MHC. a Philippine court or agency may Even assuming that the NLRC was the proper forum. case. People's Republic of China.38 In Traders Royal Bank v. this is not enough to pierce the veil of corporate inconvenience is compounded by the fact that the proper defendants. This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign employers. MHC is an incorporator of MHICL and owns fifty percent (50%) of its employment to dismissal occurred outside the Philippines. 41 It is done only when a No power to determine applicable law. protect fraud or defend a crime. Piercing the veil of corporate entity is an equitable remedy. There must be proof that the other corporation had no place in Beijing. CONFLICTS | 03Dec | 21 hired without the intervention of the POEA or any authorized recruitment specifically the POEA. MHC Not Liable as to the law and the facts. The Palace Hotel those composing it as well as from that of any other legal entity to which it is a corporation incorporated under the laws of China and was not even may be related. such would not have It is basic that a corporation has a personality separate and distinct from any binding effect against the employer. MHICL not Liable we do not have power over an employment contract executed in a foreign country. It is resorted to Shmidt and Mr.42 we held that "the mere ownership by a single stockholder or by another corporation of all or nearly The employment contract was not perfected in the Philippines. If Santos were an "overseas contract worker". Respondent all of the capital stock of a corporation is not of itself a sufficient reason for Santos signified his acceptance by writing a letter while he was in the disregarding the fiction of separate corporate personalities. policy and business practices with regard to the facts surrounding the alleged illegal dismissal as all acts complained of took transaction attacked. and (2) that MHICL was liable for Santos' retrenchment. (2) that the Philippine court is in a position to make an intelligent decision II. to determine whether the Tiannamen Square incident truly adversely control must be used by the defendant to commit fraud or wrong. the defendant must have control or complete domination of the other No power to determine the facts. Neither are we saying that III.36 "overseas contract worker" a fact which he admits with conviction.37 The conditions are unavailing in the Even if we assume two things: (1) that the NLRC had jurisdiction over the case at bar. the Philippine court is one to which the parties may conveniently resort to.44 Clear and convincing evidence is needed to pierce the served with summons. even on the merits. Court of Appeals. the fiction between MHICL and MHC.45 In this case. and (3) that the Philippine court has or is likely to have power to enforce its decision. perfected in foreign soil. — Even assuming that a proper decision could be reached by the NLRC.40 Under the rule of forum non conveniens. injury or loss complained of. we find no evidence to show that MHICL and MHC are one and the same entity. not the NLRC. when the corporate fiction is used to defeat public convenience. as a separate and distinct juridical entity cannot be held liable. Third. However. The tests in determining whether the corporate veil may be pierced are: First.43 Principle of effectiveness. Palace Hotel and MHICL are not nationals of the Philippines. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made). The NLRC was not in a position separate mind. the Palace Hotel. Neither . would protect him. will or existence with respect the act complained of. justify wrong. The absence of any of the elements prevents the piercing of the corporate veil. the main witnesses. Not Convenient. a Philippine forum. .are they "doing business in the Philippines. — Neither can the NLRC determine the corporation's finances. — Neither can an intelligent decision corporation is a mere alter ego or business conduit of a person or another be made as to the law governing the employment contract as such was corporation.

the Palace Hotel and not MHICL.47 the Court recognized that the term "noted" means that the person so noting has merely taken cognizance of the existence of an act or Considering that the NLRC was forum non-conveniens and considering declaration. Labor Arbiter Ceferina J. Second. "5. He merely signed under the word "noted". personally sees or perceives a thing. an employer-employee relationship is an indispensable Santos. and questions involving legality of strikes and lockouts. including "(3) the power to dismiss. If accompanied with a claim for reinstatement. 00-02- Mr. it was the The jurisdiction of labor arbiters and the NLRC under Article 217 of the Palace Hotel. "(1) the selection and engagement of the employee. or other labor statutes. decision on the matter. Except claims for Employees Compensation. Medicare and maternity benefits. Diosana clearly had no jurisdiction over respondent's claim in NLRC NCR Case No. "(2) the payment of wages.54 ."48 As opposed to a party to a following:53 contract. The 01058-90. Board of Commissioners of IV. those cases that workers relationship between Santos and MHICL. after the parties (emphasis ours). or even referred him for employment to the Palace Hotel. Nestor Buenio. a beholder.00) regardless was referred to the Palace Hotel by his friend. and more importantly. "notes" something just makes a "brief written statement"50 a memorandum or observation. "4. Social Security. It did not select respondent Santos as an employee for the Palace Hotel. "2. the following elements are considered:51 conditions of employment. one is not expressing his agreement or approval. Miguel D." "6. The terms of employment were negotiated and finalized through correspondence between respondent In all these cases. there was no existing employer-employee "3."52 There is no proof that MHICL "supplied" respondent Santos persuade us. hours of work and other terms and employer-employee relationship. all other claims. and "(4) the power to control employee's conduct. In determining the existence of an may file involving wages. "Manila Hotel Group" is not enough to pierce the corporate veil between MHICL and the Palace Hotel. a spectator. He involving an amount exceeding five thousand pesos (P5. moral. "in a deed or other formal instrument is that part which comes after the recitals. Cergueda merely signed the "witnessing part" of the document. we note that the Vice President (Operations and Development) of Likewise. Grave Abuse of Discretion Immigration. "witnessing part" of the document is that which. When one "notes" a contract. Claims for actual. Unfair labor practice cases. arising from employer-employee MHICL did not have and did not exercise any of the aforementioned powers.000. CONFLICTS | 03Dec | 22 Respondent Santos predicates MHICL's liability on the fact that MHICL Neither is there evidence to suggest that MHICL was a "labor-only "signed" his employment contract with the Palace Hotel. Neither did respondent Santos adduce any proof that MHICL had the power to control his conduct.46 In Sichangco v. MHC and respondent Santos. Finally. through Mr. or eyewitness. Cergueda signed the employment contract as a mere one and the same entity. Cases arising from any violation of Article 264 of this Code. or where there are Labor Arbiters have exclusive and original jurisdiction only over the no recitals. MHICL did not of whether accompanied with a claim for reinstatement. Schmidt and not MHICL that terminated Labor Code is limited to disputes arising from an employer-employee respondent Santos' services. rates of pay. without exercising a judicious deliberation or rendering a further that no employer-employee relationship existed between MHICL. exemplary and other forms of damages arising from employer-employee relations. Mr. Schmidt and Mr. a witness is simply one who. This fact fails to contractor. including those of persons in domestic or household service. Termination disputes. as a party would. Henk. relationship which can be resolved by reference to the Labor Code. relations. or their collective bargaining agreements. who were officers and representatives of jurisdictional requirement. The fact that the Palace Hotel is a member of the witness. "being present. First. there is no evidence to show that the Palace Hotel and MHICL are MHICL."49 One who "1." engage respondent Santos to work.

the Court hereby GRANTS the petition for certiorari and ANNULS the orders and resolutions of the National Labor Relations Commission dated May 31. The Fallo WHEREFORE. we rely on the sound judicial principle that jurisdiction over the subject matter is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. 1994 and March 30. No costs. 00-02-01058-90). 1995 in NLRC NCR CA No. SO ORDERED. His failure to dismiss the case amounts to grave abuse of discretion. CONFLICTS | 03Dec | 23 "To determine which body has jurisdiction over the present controversy.56 V. December 15. 1993."55 The lack of jurisdiction of the Labor Arbiter was obvious from the allegations of the complaint. . 002101-91 (NLRC NCR Case No.

the charterer and operator of the MV Estella. No.K. the choice of forum complaint-in-intervention. Ltd. ATLANTIC VENUS CO. and/or differences arising between the parties hereto that the claim constitutes a maritime lien. 1983.1987. jurisdiction of the District Courts of Japan. SP No. petitioners.R.K. a corporation organized in Japan K. as bareboat trial court dated April 30. Crestamonte's general agent in Japan. 1987. Nos. The complaint. September 29. which provides: oil/fuel to the MV Estella and incurred barge expenses for the total sum of One Hundred Fifty-two Thousand Four Hundred Twelve Dollars and Fifty-Six 12. petitioner K. Fu Hing and K. Shell intervened in CA-G. The complaint-in-intervention sought the issuance of a writ Appeals. The appointment was formalized in an Agency intervene. 12999 Agreement. SP No. The trial court allowed the intervention of Fu Hing and K. the writs of attachment were discharged On January 7. intervene with an attached complaint-in-intervention. 8738930 of the Regional as CA-G. NSS and Keihin. Shell provided THE HONORABLE COURT OF APPEALS. 90306-07 July 30.K. SHELL SEKIYU OSAKA HATSUBAISHO and FU HING OIL CO.K. a Japanese corporation.000. 1987 denied the motion to reconsider the Corporation (hereinafter referred to as "NSS"). "Atlantic"). 12999.] 19.A. Upon the posting of counterbonds.. Shell intervened.S. the Court will not disturb the factual findings of the Court of the MV Estella. respectively. On May 19. request of NSS.000.56) but such has remained unpaid despite demand and matters. likewise filed a motion to LTD. Sosing. (hereinafter referred to as on September 3. hence they were bound by the Agency the Philippines. 12341). Branch XIV. SP No. NSS in turn appointed Kumagai as its local agent in Osaka.412. Manila alleged that Crestamonte. and not doing business in the Philippines.. the Court of Appeals annulled the orders NSS and Keihin Narasaki Corporation (hereinafter referred to a Keihin filed of the trial court and directed it to cease and desist from proceeding with complaints-in-intervention.. 124 SCRA 808. which sought the annulment of the orders of the Trial Court. S.96) and One Million Yen (Y1. However. Castillo v. and Mutsure in Japan and that despite previous demands Crestamonte has failed to pay the amounts of Sixteen Thousand Nine Hundred Ninety-Six CORTES. 94 Phil. a Philippine corporation. docketed Estella. was consolidated with another case (CA-G. K.K. L-48290. Kumagai).. these being considered final and conclusive. the vessel MV Estella and Crestamonte Shipping Corporation (hereinafter referred to as In the meantime.. 1987 upon posting of the appropriate bonds.1987 and August 11. filed a motion for leave to intervene with an attached Agreement between Crestamonte and NSS. a corporation registered in Panama.R.1987. a corporation formed and existing under the laws of Japan.R. Shell Sekiyu Osaka Hatsubaisho (hereinafter referred to as K.K. as order allowing Fu Hing's intervention and granted K. the Court will step in to correct the misapprehension [De la Cruz v. docketed as Civil Case No. The issuance of a writ of concerned regarding this Agreement shall be subject exclusively to the attachment was also prayed for.R. CA-G. In a decision dated June 14. when its of preliminary attachment. Kumagai supplied the MV Estella with supplies and services but K.00) and that K.A. Fu Hing and Japan. Shell").0-That this Agreement shall be governed by the Laws of Japan.K.R. J: Dollars and Ninety.K. particularly. 1989. SP No. Kumagai. CONFLICTS | 03Dec | 24 G. 1987. respondents. Ltd. and supplied marine diesel oil/fuel to the W Estella at the ports of Tokyo and THE VESSEL M/V "ESTELLA". the case. disputes. Shell on June Court of Appeals. Shipping omnibus order dated August 11. alleging that Fu Hing supplied marine diesel clause. G. alleging that upon vs. 1990 On July 16. 12999. .K. factual conclusions are manifestly mistaken. appointed N. (hereinafter referred to as intervention filed by Fu Hing and K. 26 (1953). filed a complaint for the collection of a sum of money with preliminary Atlantic and the MV Estella moved to dismiss the complaints-in- attachment against Atlantic Venus Co. Shell. S. Shell's motion to its general agent in Japan. a corporation organized in Hong Kong and not doing business in suppliers but sub-agents of NSS. were issued on August 25. petitioner Fu Hing Oil Co. despite repeated demands Crestamonte failed to pay the amounts due. Atlantic is the owner of the MV of Appeals against the trial court judge.996. 1987. Shell's claim constitutes a maritime lien on Ordinarily.Six Cents (US$16. Among others. Kumagai Kaiun Kaisha. (hereinafter referred to as According to the Court of Appeals. 1987.K.R.K. Again Fu Hing and K.. Shell were not Fu Hing"). Atlantic and the AWU Estella filed a petition in the Court "Crestamonte"). 1987 and August 11. Writs of preliminary attachment This case is one such instance calling for the Court's review of the facts. Any Cents (US$152.

That the Agent shall be responsible for fixing south-bound cargoes with revenues sufficient to cover ordinary liner operation expenses such as 9. The Agent shall settle. before the trial court and ordered the latter to cease and desist from proceeding with the case. in case of export. A motion for reconsideration was filed by Fu Hing and K. harbour 1.0. prior approval and consent of the Owners. lubricating oil. Fu Hing Oil Co.0 . The liner service per year. as well as customs house charges. 1990. The Agent shall be also Lading to Shippers in the form prescribed by the Owners. CONFLICTS | 03Dec | 25 Thus. on the cheapest possible the mode of operations of the vessels in Japan and that all cargo bookings. 1990. cargo handling charges by the Agent to the Owner promptly after the departure of each vessel but in no case later than 60 days thereafter. running repairs.That the Agent shall provide for the necessary services required for payment to the Owner of all outward freight prepaid for cargo without delay the husbanding of the Owner's vessels in all Japan Ports and issue Bill(s) of upon the sailing of each vessel from the port. all outstanding payments for After considering the pleadings filed by the parties and the arguments the operation costs on Owner's liner service carried forward from the raised therein. drydocking itemized for each service and/or supply for each vessel. Shell but this The Agent expressly agrees that the Owner's cash flow in Japan shall be was denied by the Court of Appeals. subject to approval of Owner's Representative in Appeals in so far.0 — The account statements supported by vouchers in two copies bunkers. 5. crew (excluding crew provisions).0 . etc. the Agent will abide by the Owner's decisions regarding dues. essentially the Agent's responsibility.0 — That the Agent shall be responsible for the due collection of and due 2. therefore.K. the Agent shall provide credit to the extent of the vessels' insofar as it relate to the intervention of K. in the case of imports into the territory of Japan. 1. bound by the agreement. alleging that Owner committing at least forty-eight (48) mailings of Japan/Philippines an amicable settlement had been reached with private respondents. additives. and should the revenue for south- bound cargoes as above-mentioned be insufficient to cover the aforesaid In this case. requirements. shall be forwarded expenses. we shall review the decision of the Court of Appeals only expenses. from the time such The body of the Agency Agreement entered into by and between cargo has left the ship's tackles.0 — That the Agent shall exert best efforts to recommend to Owners terms and conditions: stevedoring and other expenses incurred in connection with work on board the Owner's vessels. Ltd.0 — That the remuneration of the Agent from the Owner shall be as WITNESSETH follows: That the OWNER has appointed and by these presents hereby appoints the xxx xxx xxx AGENT as its General Agents for all Japan in connection with the Owner's vessels and/or providing suitable vessels for Japan Ports under the following 7. cables. Shell. as it disallowed petitioners' intervention in the case Japan in regard to amount and nature thereof. shall always be subject to the described herein. upon Crestamonte (referred to in the agreement as "Owner") and NSS ("Agent") completion of loading. usual port disbursement accounts. Court granted the motion on March 19.0 — That the responsibilities of the Agent in regard to the cargo shall begin. in behalf of the Owner. . 8. A reading of the Agency Agreement fails to support the conclusion within the premises of the Agent's office. etc. the trial court should have disallowed including stevedorage. free of charge. provided however that said obligation shall be secured by the filed a motion to withdraw as co-petitioner on March 7.K. water. that K. concluded the Court of Appeals. the Court finds reversible error on the part of the Court of present Owner's agent. Owners shall decide and may appoint through the Agent the services vessel's fixtures/charters. terms. which are for Owner's account. and shall cease. Hence this petition. pilotage. responsible for the due collection of all inward freight payable at the port against delivery unless otherwise instructed by the Owner to the contrary. 3.In general..0 . provisions and ship's stores and cash advance to their motions to intervene. by the Agent. Shell is a sub-agent of NSS and is.K.That the agent shall furnish office space of approximately thirty (30) square meters for the exclusive use of the Owner and its representatives. 4. provides: 6.

the Ship Mortgage Decree states are NSS' principal duties. disputes. 7. or other necessaries. that "the sub-agents admitted in their pleadings that Private respondents on the other hand argue that even if P. It is therefore surprising how the Court of and trial on the merits is still to be conducted. K. 33. Hence. pp. additional evidence would also still have to be presented to establish remain in force unless terminated by either party upon 60 days notice. Rollo. but for the benefit Court of Appeals could have been referring to was K.0). 6. as regards K. Under the law it must be established that the Motion for Leave to Intervene dated February 24. would still have discretion of the trial court judge who is in the best position. Shell cannot rely on the maritime lien because the fuel was virtue of said Agency Agreement" [Decision. p. considering the dearth of evidence due to the fact that the However. to wage. jurisdiction of the District Courts of Japan. 1521 is they were appointed as local agent/sub-agent or representatives by NSS by applicable. as the exact nature of the relationship of In view of the inconclusiveness of the Agency Agreement and the pleadings the parties is still to be established. shall have a maritime lien on the vessel..] Neither are we ready to rule on the private respondents' invocation of the doctrine of forum non conveniens.K.K. the necessity for the reception the representatives of NS Shipping Corporation for the supply of bunker oil.K Shell in relation to its intervention in Civil Case No. 274. which provides: services required for the husbanding of Crestamonte's vessels in Japanese ports (section 2." [Comment. 1987 in another case credit was extended to the vessel itself. In the same vein. the pp. and it shall be necessary to allege or prove that credit was Crestamonte [Rollo.] doctrine of forum non conveniens would be a valid ground to cause the dismissal of K.K.K. to sub. and/or differences arising between the parties hereto 2. K." [Decision. that "Crestamonte is the MV Estella are matters that still have to be established..K. this defense. provisions and other necessaries to vessels of which NS Shipping Corporation was the general agent. that it shall provide for the necessary of 1978. Fu Hing and K. particularly the choice-of-forum clause. this is a defense that calls (Civil Case No.0 — That this Agreement takes effect as of April 15. Rollo. the owner. 87-38930. i. K. Rollo.e.i•t•c-aüsl person furnishing repairs. as the choice-of-forum clause in the agreement (paragraph 12. Shell's Urgent of Crestamonte in general. Rollo. whether or not petitioners Appeals could have come to the conclusion. p. paid to the Owner after deducting the total amount of disbursements incurred in Japan. p. Shell is "one of from the delivery of the fuel. 21.K.] There is thus no basis for the Court of given to the vessel. p. 116117. to any vessel.K.D. person entitled to such lien-Any with revenues sufficient to cover ordinary expenses (section 3. Appeal's finding. supplies. just on the basis of the Agency are indeed maritime lienholders and as such may enforce the lien against Agreement and the pleadings filed in the trial court. 1983 and shall Shell. What the contract clearly lienholder. 100-104. fuel oil. Shell is a sub-agent of 10. Now. 32.K. 17. of evidence before the trial court. No. No express reference to the contracting of sub-agents or the applicability of the terms of the agreement. Shell counters this argument by invoking its right as maritime agents is made in the text of the agreement. Shell merely alleges upon the order of the owner of such vessel.K. Any matters. 86-38704) in another court and involving other vessels (NW precisely for a factual determination by the trial court of who benefitted Ofelia and MV Christina C). 11.] What the provided not exclusively for the benefit of the MV Estella. CONFLICTS | 03Dec | 26 to be presented to establish the allegation that K. and thus they fall back on the argument that even if this were so.K Shell are the sub- agents. p. Moreover.. use of dry dock or marine railway. or of a person authorized by that it provided and supplied the MV Estella with marine diesel oil/fuel. additional evidence. We leave this matter to the sound filed in the trial court. again. this allegation does not conclusively establish a sub-agency private respondents have yet to file their answer in the proceedings below between NSS and K. the principal. where it was alleged that K. 1521. as of yet.0 — That this Agreement shall be governed by the Laws of Japan.0) and shall be responsible for fixing southbound cargoes SEC.0) has not been conclusively shown to be binding upon K. Shell is expressly bound by the Agency Agreement. p. It cites Presidential Decree No.0 — That the freightage to be collected by the Agent in Japan shall be NSS. 12. whether foreign or domestic. the complaint-in-intervention filed by K.K. which may be enforced upon request of NSS who was acting for and as duly appointed agent of by suit in rem. if there be any.] In other words. NSS is the agent and . Shell cannot therefore. Shell.K. be barred from instituting an action in the Philippines. Maritime Lien for Necessaries. after some . [Annex "G" of the Petition. Shell's complaint-in-intervention. Private respondents have anticipated the possibility that the courts concerned regarding this reement shall be subject exclusively to the will not find that K.

The best recourse would have been to allow the trial court to proceed with Civil Case No. . however.K. 87-38930. Shell. on the pretext of reviewing an interlocutory order. CONFLICTS | 03Dec | 27 vital facts are established. WHEREFORE. There are still numerous material facts to be established in order to arrive at a conclusion as to the true nature of the relationship between Crestamonte and K. even in the absence of evidence. part of the Court of Appeals to annul the trial court's orders. to determine whether special circumstances require that his court desist from assuming jurisdiction over the suit. Shell and between NSS and K. 12999. insofar as K. insofar as it annulled the order of the August 11. the petition is GRANTED and the decision of the Court of Appeals is REVERSED in CA-G. The Court of Appeals. 1987 and directed the trial court to cease and desist from proceeding with Civil Case No.K.K. SO ORDERED.R. 87- 38930. substituted its judgment for that of the trial court and decided the merits of the case. SP No. and order the trial court to cease and desist from proceeding with Civil Case No. 87-38930 and consider whatever defenses may be raised by private respondents after they have filed their answer and evidence to support their conflicting claims has been presented. It was clearly reversible error on the. Shell is concerned.

the agreement authority and SEC license. INC. Private Respondents ITEC. On January 31. issuance of a writ of preliminary injunction. to their sole customer. (ASPAC. INC. unwelcomed in these ITEC decided to terminate the same. exported by FRANCISCO S.. for brevity) are corporations duly manufactured "in like manner. (DIGITAL. to cease and desist States of America. INTERNATIONAL. the Philippine Long Distance Telephone vs.R. 2 The said agreement was initially for a term of corporation doing business in the Philippines without the required BOI twenty-four months. ASPAC was paid a following grounds: stipulated commission. in consideration of which. denying the petitioners' Motion to Dismiss. United and equipment of plaintiff. petitioners. 1991. while petitioner Francisco S. CMDI. Plaintiff Petitioners COMMUNICATION MATERIALS AND DESIGN. internationally known as ITEC. ASPAC MULTI- TRADE. ITEC charges the petitioners and another Philippine Corporation.. defendants filed a motion to dismiss 7 the complaint on the sale of ITEC's products. Through a "License Agreement" 3 entered into by the same parties on November 10.. INC. BASE COMMUNICATIONS. Company. and the recovery from defendants in solidum. and ITEC. 1991. sign boards and licensed to do business in the Philippines. envelopes. Aguirre is their business associates. INC. and (2) that plaintiff is simply engaged in forum was renewed for another twenty-four months. 8 . INC. according to Lord Coke. AGUIRRE. presidents of ITEC and ASPAC respectively. in "souless forms" in quest for profits albeit at times. ITEC entered into a contract with petitioner ASPAC attorney's fees and litigation expenses. INC. (ITEC. The agreement was signed by G. for brevity). 91-294. and its companion Resolution of October 9. the complaint was amended by virtue of which ITEC INTERNATIONAL. was filed with the Regional Trial Court of Makati. 1991. Clark and Francisco S. Aguirre. (PLDT. if not identical to ITEC's own. business dealings." and (2) defendant ASPAC. dealing under its new appellation. 1 Pursuant to the contract. 1991. and directing the offering them to ITEC's former customer. (formerly ASPAC-ITEC PHILIPPINES. and Francisco Aguirre and their agents and domestic corporations. first. ITEC INTERNATIONAL." They do business peddling goods. Business Corporations. of using knowledge and information of Contested in this petition for review on Certiorari is the Decision of the ITEC's products specifications to develop their own line of equipment and Court of Appeals on June 7. and/or PLDT and to any other party.. DIGITAL This is one of the issues in the case at bar. INC. denying the petitioners' Motion for Reconsideration. INC. COMMUNICATION MATERIALS AND DESIGN. ASPAC. similar or identical to the products. J. Inc. Thus . INC. letter heads. respondents. for sought to enjoin. and PLDT executed a document entitled "PLDT-ASPAC/ITEC PROTOCOL" 4 TORRES. which are similar. (1) brevity) and ASPAC MULTI-TRADE INC. damages of at least P500. No. to cease and desist from selling or attempting to sell to President and majority stockholder.000. after trial. the risk of dealing with violated its contractual commitment as stipulated in their agreements. for brevity). CONFLICTS | 03Dec | 28 G. JR. INC. "have no souls. (CMDI. the complaint 6 in Civil Case No. Branch 134 by ITEC. was substituted as plaintiff instead of ITEC. 102223 August 22. 1987. products which have been copied or ITEC. referred to as "Representative Agreement".) and By virtue of said contracts. for brevity) are both defendants DIGITAL. plaintiff's trademark. preliminarily and then. and 22. shopping which justifies the application against it of the principle of "forum non conveniens"..:p which defined the project details for the supply of ITEC's Interface Equipment in connection with the Fifth Expansion Program of PLDT. wares organized and existing under the laws of the State of Alabama. wares or even services across national boundaries One year into the second term of the parties' Representative Agreement. sustaining the RTC Order dated February product support. INC. ITEC. 1988. 1991. INC. There is no dispute that ITEC is a foreign corporation not from using in its corporate name. because petitioner ASPAC allegedly strange lands venturing into uncertain markets and..00. 5 wily competitors. After the lapse of the agreed period. for and in (1) That plaintiff has no legal capacity to sue as it is a foreign behalf of their companies. To facilitate their transactions. the President of which is likewise petitioner Aguirre. ASPAC Multi-Trade. permanently. ASPAC sold electronic products. ASPAC was able to incorporate and use the name On February 8. 1996 "ITEC" in its own name.A.. became legally and publicly known as ASPAC-ITEC (Philippines). On August 14. THE COURT OF APPEALS. ITEC engaged ASPAC as its "exclusive representative" in the Philippines for the In due time.

0 Terms and Conditions of Sales.A. The provisions in point are: SO ORDERED. issued its Order: 10 (1) denying the motion to in the agreements which confronted the Court in the case of Top-Weld dismiss for being devoid of legal merit with a rejection of both grounds Manufacturing. All orders from hereby. xxx xxx xxx SO ORDERED. A reading of the ascribed thereto by the petitioners. is hereby dismissed. but also of other with the (lower court's) ruling. The respondents could be exempted from the requirements of Republic Act 5455 if the petitioner is an independent entity which buys and We find no reason whether in law or from the facts of record. 9 defendants took note of the corporations actually doing business in the Philippines without the requisite amendment of the complaint and asked the court to consider in toto their authority and license from the Board of Investments and the Securities and motion to dismiss and their supplemental motion as their answer to the Exchange Commission. restrictive" by this Court. petitioners elevated the case to the respondent business in the Philippines because when the respondents entered into the Court of Appeals on a Petition for Certiorari and Prohibition 11 under Rule disputed contracts with the petitioner. the motion to have customers are subject to formal acceptance by ITEC at its Huntsville. It is their contention that the provisions of the Representative Agreement. the court respondent ITEC. facility. import charges or taxes into or within the Territory. REPRESENTATIVE SHALL: . and (2) directing to a mere conduit or extension of private respondents in the Philippines.. In that case.A. 1991. 14 3.S. the motion for reconsideration set for oral argument likewise should be and Alabama U. the present petition should be. as the respondents' conduct indicate that they established within our country a continuous business. We therefore are unable to find in manufacturers or transacts business in its name and for its account and not respondent Judge's issuance of said writ the grave abuse of discretion in the name or for the account of the foreign principal. to disagree distributes products not only of the petitioner. CONFLICTS | 03Dec | 29 It is the petitioners' submission that private respondents are foreign In their Supplemental Motion to Dismiss. thus: character. from time to time. Unless otherwise expressly agreed to in writing by ITEC the purchase price is net to ITEC and does not include any transportation WHEREFORE. The terms and conditions of the contracts as well by the Regional Trial Court. is hereby denied. which was 2. 12 2. Inc. 1991. as it is charges. action in our courts. are similarly "highly restrictive" in nature as those found a quo on February 22. It is alleged that certain provisions of the "Representative Agreement" executed by the parties are similar to those found in the License Agreement WHEREFORE..e. agreements between the petitioner and the respondents shows that they are highly restrictive in nature. disqualified from instituting the present amended complaint. et al. we ruled that respondent foreign corporations are doing From the foregoing order. i.0 Duties of Representative Petitioners are now before us via Petition for Review on Certiorari 15 under Rule 45 of the Revised Rules of Court. vs. thus making the petitioner a mere conduit In fine. Petitioners filed a motion for reconsideration 13 on June 7. to manufacture and market welding the setting aside of the Order and the Writ of Preliminary Injunction issued products and equipment. ECED S. the petition does not deserve to be given due course. the present motion for reconsideration should be. denied for lack of merit. lies in the present case and therefore. petitioner ASPAC executed with private After conducting hearings on the prayer for preliminary injunction. denied due of the parties in the Top-Weld case which were considered as "highly course and accordingly.1 Sale of ITEC products shall be at the purchase price set by ITEC likewise denied by the respondent court. 3. and thus. Costs against the petitioners. For the same reason. the issuance of a writ of preliminary injunction on the same day. as it is hereby. We find that the petition prima facie does not show that Certiorari or extension of the respondents. 16 as to reduce petitioner ASPAC relied upon by the defendants in their motion to dismiss. they were carrying out the purposes 65 of the Revised Rules of Court.1. assailing and seeking the nullification and for which they were created. and not merely one of a temporary The respondent appellate court stated.

Feb. tsn. installation and with the Petitioners will show that although ASPAC was named as maintenance of the ITEC equipment sold under said Contract No. if any. xxx xxx xxx Petitioners likewise argue that since private respondents have no capacity to bring suit here.2. issued in its letter head. as its . to PLDT. 20. such that in insisting to assume and exercise jurisdiction over the case specific customers and on terms and conditions expressly authorized by below. The Sales Goal for additional twelve month periods. commercial bookers commercial merchants. Feb.1. private 3. 1991). When acting under this Agreement REPRESENTATIVE is authorized because the trial court is devoid of any power to enforce its orders issued or to solicit sales within the Territory on ITEC's behalf but is authorized to bind decisions rendered in a case that could not have been commenced to begin ITEC only in its capacity as Representative and no other.1.1. such b. Clarence Long. the trial court had gravely abused its discretion and even actually ITEC in writing. 1 (Exhibit for Petitioners) which covered these sales as indebtors. it solicited from and closed several sales for and on following: behalf of private respondents as to their products only and no other. sole witness. requests for bids. Actively solicit all potential customers within the Territory in a respondent ITEC. and identified by private respondents' sole witness. 25-27. Inform ITEC of all request for proposals. 17 exceeded its jurisdiction. "The hereto. et al. 20 c. shall be unrebutted evidence on record below for the petitioners likewise reveal the sent to the Sales Agent by ITEC at the beginning of each period. d. and then only to with. Rafael T . (p. Mr. These continuous character of doing business in the Philippines by private Sales Goals shall be incorporated into this Agreement and made a part respondents based on the standards laid down by this Court in Wang hereof. Representative as Independent Contractor discretion amounting to an excess of jurisdiction of said courts. dated November 13. 18. CONFLICTS | 03Dec | 30 3. worth no less than US $ 15 Million (p. Attain the Annual Sales Goal for the Territory established by ITEC. both of which were identified by private respondent's invitations to bid and the like within the Territory. Petitioners contend that the above acts or activities belie the supposed The Sales Goals for the first 24 months is set forth on Attachment two (2) independence of petitioner ASPAC from private respondents. (1) A foreign firm is deemed not engaged in business in the Philippines if it transacts business through middlemen. 1991). To evidence receipt of the purchase price of US $ 15 Million. 1989 and its Invoice dated November 22. petitioners point out the following As against petitioner's insistence that private respondent is "doing matters of record.1. 18. 1991).3. 19 and again in TOP- WELD. Aside from the abovestated provisions. Laboratories. Mendoza. Feb. tsn. the Philippines is not the "most convenient forum" 6. Not represent or offer for sale within the Territory any product very title indicates. the latter maintains that it is not. Mr. 18 3. (supra)" It thus appears that as the respondent Court of Appeals xxx xxx xxx and the trial court's failure to give credence on the grounds relied upon in support of their Motion to Dismiss that petitioners ascribe grave abuse of 6. but in the (2) A foreign corporation is deemed not "doing business" if its name of private respondent ITEC.1. 20. activities within the Philippines in pursuit of their business dealings: We can discern from a reading of Section 1 (f) (1) and 1 (f) (2) of the Rules a. 1989 (Annexes 1 and 2 of the Motion to Dismiss and marked as Exhibits 2 and 3 3. INC. tsn. Clarence Long (pp. in the names jointly of the petitioner ASPAC and private which competes with an existing ITEC product or any product which ITEC respondents. is not in the name of petitioner ASPAC as such representative. has under active development. the for three (3) years. The document denominated as "PLDT-ASPAC/ITEC PROTOCOL (Annex C of the original and amended complaints) which defined the Private respondent argues that a scrutiny of its Representative Agreement responsibilities of the parties thereto as to the supply. Contract No. vs. for the petitioners).4. Inc. Hon. While petitioner ASPAC was the authorized exclusive representative and Regulations Implementing the Omnibus Investments Code of 1987.2.0. representative domiciled in the Philippines has an independent status in that it transacts business in its name and for its account. a Confirmation of payment systematic and business like manner. 1 is. which allegedly bear witness to the respondents' business" in the Philippines. Inc. acting in their own names. 18.

private respondent charges ASPAC of admitting its independence from ITEC by entering and ascribing to provision No.. such case must be judged unlicensed corporation doing business in the Philippines. and if it is. As complete consideration and payment for acting as representative business in this country. When performing any of its duties under this Agreement. and any stamp of a corporation is confined within the territory of the state under whose tax fees imposed on ITEC.1. REPRESENTATIVE shall act as an independent contractor and not as an The purpose of the law in requiring that foreign corporations doing business employee. Indeed. whether the foreign corporation is continuing the body or substance of the business or enterprise for which it was organized.0 Representative as Independent Contractor foreign corporation doing business in the Philippines without a licensed from gaining access to Philippine Courts. 29 to dismiss does not appear to be indubitable. 23 There is no exact rule or governing principle as to what constitutes "doing" The issues before us now are whether or not private respondent ITEC is an or "engaging" or "transacting" business. the state of Alabama and the Philippines to the jurisdiction of its courts. or conditions may be imposed on the exercise of such privileges. it must first obtain a license to transact business in under this Agreement. 6 of the In a long line of decisions. 27 6. laws it was incorporated and organized. Such foreign corporation may be excluded by any other state xxx xxx xxx from doing business within its limits. 28 The which both support and belie the independence of ASPAC. REPRESENTATIVE shall receive a sales commission the Philippines. all import expediting or which it is foreign. suit or proceeding in any court or administrative . worker." 24 3. The object is not to prevent the Territory. but such corporation may be sued or proceeded own account. to permit persons to when it found that the ground relied upon by the petitioners in their motion avoid their contracts made with such foreign corporations. provides Article 44 of the Omnibus Investments Code of 1987 defines the phrase to that "No foreign corporation. partner. corporation not licensed to do business in the Philippines from suing or maintaining an action in Philippine Courts. This proceeds from the principle that juridical existence handling charges and expenses imposed on ITEC products. service of process is to subject the foreign corporation doing business in the including the jurisdiction of the United States. it shall not customers within the territory as a direct result of REPRESENTATIVE's sales be permitted to maintain or intervene in any action.1. and a certificate from the appropriate government agency. The true test. in effect. decrees or the like of any jurisdiction.7. and it has no legal status beyond such territory. or proceeding in efforts. In the event that REPRESENTATIVE imports directly from ITEC. Section 133 of the Corporation Code. The following provisions are particularly mentioned: against before Philippine Courts or administrative tribunals on any valid cause of action recognized under Philippine laws. joint venturer of ITEC as these terms in the Philippines be licensed to do so and that they appoint an agent for are defined by the laws. in the light of its peculiar circumstances.1. upon its peculiar facts and upon whether or not this fact bars it from invoking the injunctive authority of our the language of the statute applicable. What it seeks to prevent is a 6. 22 foreign corporation from performing single acts. 21 any court or administrative agency of the Philippines. suit. 30 Considering the above. REPRESENTATIVE will pay for its own account. it is necessary to state what is meant by "doing business" in the Philippines. and thus. private implication of the law is that it was never the purpose of the legislature to respondent echoes the respondent court's finding that the lower court did exclude a foreign corporation which happens to obtain an isolated order for not commit grave abuse of discretion nor acted in excess of jurisdiction business from the Philippines. however.1. CONFLICTS | 03Dec | 31 representative of ITEC. laborer. regulations. or its successors or assigns. 26 More importantly. shall be permitted to maintain or intervene in any action. but it may be sued on any valid cause of action recognized under Philippine laws. equivalent to a per centum of the FOB value of all ITEC equipment sold to If it transacts business in the Philippines without such a license. all customs duties and Generally. seems to be courts. 25 Before a foreign corporation can transact 4. ASPAC actually acted in its own name and for its agency of the Philippines. a "foreign corporation" has no legal existence within the state in import fees imposed on any ITEC products. but to prevent it from acquiring a domicile for the purpose of business without taking steps Although it admits that the Representative Agreement contains provisions necessary to render it amenable to suit in the local courts. this Court has not altogether prohibited foreign Representative Agreement. transacting business in the Philippines without include: a license.

incidental. in Merill distributors who are domiciled in the Philippines or who in any calendar Lynch Futures. Inc. supervision or court's ruling. The latter is a local Thus. we are persuaded to conclude dealings or arrangements and contemplate to that extent the performance that private respondent had been "engaged in" or "doing business" in the of acts or works. and any other act or acts that imply a continuity or commercial With the abovestated precedents in mind. Inc. 33 and a foreign corporation engaged in the In its Master Service Agreement 39 with TESSI. (TESSI. 36 for in such case. and all calls being recorded and forwarded to In Georg Grotjahn GMBH and Co. REPRESENTATIVE is authorized to solicit sales within the contractual agreements entered into by it with other entities in the the Territory on ITEC's behalf but is authorized to bind ITEC only in its country. various business contacts in the country. and to Philippines. and allowed its registered logo and trademark to be used and correspond only on ITEC. Its 31 and a foreign corporation which had been collecting premiums on arrangements. the foreign shows that there are provisions which are highly restrictive in nature. letterhead. the materials and components needed to replace stock consumed in the warranty repairs of the prior month. and that ITEC is actively engaging in The same rule was observed relating to a foreign corporation with an business in the country. reference may be made to under this Agreement. Where a single act or transaction. appointing representatives or Tribunal as corporations doing business in the country. private respondent required business of manufacturing and selling computers worldwide. such corporation is deemed not engaged in business in the Philippines. which do not A perusal of the agreements between petitioner ASPAC and the respondents come within the meaning of the law. particularly ASPAC and Telephone Equipment Sales and Services. and in progressive prosecution of. however. etc. as to reduce petitioner ASPAC to a mere extension or instrument of the private respondent. 37 or offer for sale within the Territory any product which competes with an existing ITEC product or any product which ITEC has under active In determining whether a corporation does business in the Philippines or development. These foregoing instances should be distinguished from a single or isolated transaction or occasional. aside from their activities within the forum. "exclusive distributing agent" in the Philippines. 35 it was held that the ITEC on a weekly basis. a foreign corporation with a settling agent in the Philippines which electronics firm engaged by ITEC to be its local technical representative. purchases.". the foreign corporation's capacity as Representative and no other. opening offices. service contracts. Inc. Likewise. or casual transactions. control of any domestic business firm. participating in the management. issued twelve marine policies covering different shipments to the Philippines and to create a service center for ITEC products sold locally. vs. entity or corporation in the Philippines. for brevity). said single act or transaction constitutes "doing" or between ITEC and ASPAC provides: "The Representative shall not represent "engaging in" or "transacting" business in the Philippines. and then only to specific LICENSE AND TECHNICAL AGREEMENT and DISTRIBUTOR AGREEMENT with . qualifies such corporation as one doing business in the detailing the failure and repair of ITEC products. in the Top-Weld case (supra). such 34 telephone being listed in the telephone book under the heading of ITEC Technical Assistance Center. Thus. CONFLICTS | 03Dec | 32 soliciting orders. TESSI was obliged to provide ITEC with a monthly report home office. with these entities indicate convincingly ITEC's purpose to outstanding policies 32 were regarded as doing business here. Court of Appeals. and had its local technical representative to provide the employees of the technical installed at least 26 different products in several corporations in the and service center with ITEC identification cards and business cards. 38 the FUTURES CONTRACT year stay in the Philippines for a period or periods totalling one hundred entered into by the petitioner foreign corporation weighed heavily in the eighty (180) days or more. answer the telephone with "ITEC Technical Assistance Center. commercial gain or of the purpose of the different contracts and agreements entered into by ITEC with its and object of the business organization. whether their local contacts were made the basis of their being regarded by this called "liaison" offices or branches. is not merely incidental or casual but indicates the foreign corporation's intention to do other business The "No Competing Product" provision of the Representative Agreement in the Philippines. and which has been selling its products here since 1929. bring about the situation among its customers and the general public that they are dealing directly with ITEC. Isnani. and to requisition monthly country. uninterrupted performance by a foreign corporation of acts pursuant to its primary purposes and functions as a regional area headquarters for its What is more. TESSI personnel are instructed to made it known that there exists a designated distributor in the Philippines. This is the inevitable result after a scrutiny to. vs. or the exercise of some of the functions normally incident Philippines for some time now.." Likewise pertinent is the following provision: "When acting not.

This conclusion country a continuous business. This is a norm which should be observed where one In Top-Weld. in which case it follows as a consequence citizen or entity who had contracted with and benefited by said corporation. 5455." The very purpose of the law was circumvented and evaded when the petitioner entered into said agreements despite the prohibition of A foreign corporation doing business in the Philippines may sue in Philippine R. having chosen to ignore or even presumptively take Each party to a corporate transaction is expected to act with utmost candor advantage of the same. 245 SW 2d 107. .A. viz: existence of the disputed contract. to market alien or foreign contemporary. they are manned by sophisticated officers with tried activities in the country. "every business in the Philippines to invoke the lack of capacity to sue of such person must in the exercise of his rights and in the performance of his foreign companies.e.. a party is estopped to challenge the personality of a corporation after having acknowledged the same by entering into a The doctrine of lack of capacity to sue based on the failure to acquire a local contract with it. The license applies to a foreign as well as to domestic corporations. the same ploy is resorted to by ASPAC to duties. particularly." 44 knowledge possibly acquired in violation of fiduciary arrangements between the parties. therefore sustain the appellate court's view that "it was incumbent upon TOP-WELD to know whether or not Notwithstanding such finding that ITEC is doing business in the country. 42 One who has requirement was imposed to subject the foreign corporation doing business dealt with a corporation of foreign origin as a corporate entity is estopped in the Philippines to the jurisdiction of its courts. Moreover. 43 In Antam Consolidated Inc. No. thereby allow a reasonable proportion between benefits and expected burdens. and is thus estopped from raising in defense such management skills and legal experts with practiced eye on legal problems. In this case. The parties in this case being equally guilty of violating R. and not merely one of a temporary is compelled by the fact that the same statute is now being propounded by character. i. 40 the petitioner to bolster its claim. 41 To put it in another way. like directors and officers. Concededly. provision 6. Corporations cannot just feign ignorance of the legal rules as in charged with knowledge that ITEC was not licensed to engage in business most cases. a person When ITEC entered into the disputed contracts with ASPAC and TESSI. Bucher. The terms and conditions of the petitioner had actual knowledge of the applicability of R. Petitioner is deemed to have acceded to such independent character when it entered into the Representative Agreement with ITEC. We. that petitioner is not entitled to the relief prayed for in this case. the record shows that. et al.2 (supra). IRTI and ECED were properly authorized to engage in business in the petitioner is nonetheless estopped from raising this fact to bar ITEC from Philippines when they entered into the licensing and distributorship instituting this injunction case against it. license requirement in order to institute an action in our courts if its representative in the country maintained an independent status during the As observed by this Court in TOP-WELD (supra). 5455. at least. 227 SW 2d 98). we ruled that a foreign corporation may be exempted from the or the other is a foreign entity venturing in a global market. 5455 at the contracts as well as ITEC's conduct indicate that they established within our time the contract was executed and at all times thereafter. Hall v. and fairness and. 45 such person has received the benefits of the contract. electronics and communications products. incapacity of ITEC. (Twiehaus v.A. agreements. Petitioner is fairness. they are in pari delicto. And the doctrine of estoppel to deny corporate existence license is based on considerations of sound public policy. corporations act through agents." enter into a contract and at the time it is to become operative. act with justice. Rosner. they is presumed to be more knowledgeable about his own state law than his were carrying out the purposes for which it was created. No. Obviously. Corporate dealings must be characterized by utmost good faith and By entering into the "Representative Agreement" with ITEC. It was never intended to to deny its corporate existence and capacity: The principle will be applied to favor domestic corporations who enter into solitary transactions with prevent a person contracting with a foreign corporation from later taking unwary foreign firms and then repudiate their obligations simply because advantage of its noncompliance with the statutes chiefly in cases where the latter are not licensed to do business in this country. and observe honesty and prevent the injunctive action filed by ITEC to enjoin petitioner from using good faith. Courts although not authorized to do business here against a Philippine No. 46 we expressed our The rule is deeply rooted in the time-honored axiom of Commodum ex chagrin over this commonly used scheme of defaulting local companies injuria sua non habere debet — no person ought to derive any advantage of which are being sued by unlicensed foreign companies not engaged in his own wrong.A. Court of Appeals. vs. CONFLICTS | 03Dec | 33 customers and on terms and conditions expressly authorized by ITEC in The parties are charged with knowledge of the existing law at the time they writing. This is as it should be for as mandated by law. give everyone his due.

that the following requisites are met: 1) That the Philippine Court is one to which the parties may conveniently resort to. The decision of the Court of Appeals dated June 7. having already acceded to the same by virtue of its entry into the Representative Agreement referred to earlier. 1991. deserves scant consideration. 162894 February 26. CONFLICTS | 03Dec | 34 Petitioner's insistence on the dismissal of this action due to the application. And as we have already observed. No. 48 The aforesaid requirements having been met. the matter of the present forum not being the "most convenient" as a ground for the suit's dismissal. on the principle of forum non convenience. This argument is misplaced because the court has already acquired jurisdiction over the plaintiff in the suit. According to petitioner. the instant Petition is hereby DISMISSED. 2008 . 3) That the Philippine Court has or is likely to have power to enforce its decision. SO ORDERED. the Philippine Court may refuse to assume jurisdiction in spite of its having acquired jurisdiction. the Philippine Court has no venue to apply its discretion whether to give cognizance or not to the present action. or non application. based on the facts of the case. is hereby affirmed in toto. provided. 2) That the Philippine Court is in a position to make an intelligent decision as to the law and the facts. the latter allegedly having no personality to sue before Philippine Courts. of the private international law rule of forum non conveniens defies well-settled rules of fair play.R. by virtue of his filing the original complaint. Thus. 1991. the court may assume jurisdiction over the case if it chooses to do so. whether to give due course to the suit or dismiss it. it is now for the Philippine Court. and ordering the issuance of the Writ of Preliminary Injunction. and. G. 47 Hence. having acquired jurisdiction. because it has not acquired jurisdiction over the person of the plaintiff in the case. upholding the RTC Order dated February 22. Conversely. and in view of the court's disposition to give due course to the questioned action. IN VIEW OF THE FOREGOING PREMISES. petitioner is not at liberty to question plaintiff's standing to sue. denying the petitioners' Motion to Dismiss.

named as On 28 August 2003.13 Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. the NLRC reversed the Petitioner filed a Motion for Reconsideration16 of the order. the parties shall be governed by the laws of the State of Connecticut. Petitioner also denied combining with BMSI and RUST Before this Court is a petition for review on certiorari under Rule 45 of the for the purpose of assuming the alleged obligation of the said companies. Jr. The petitioner’s motion for reconsideration in the assailed Resolution issued on complaint essentially reiterated the allegations in the labor case that BMSI 10 March 2004. Inc. petitioner. Thus. a corporation duly organized and existing under the laws of the State of Connecticut. were sufficient for the trial National Labor Relations Commission (NLRC) a suit against BMSI and Rust court to render a valid judgment thereon. it being a foreign corporation licensed to do employment contract. Pinatubo eruption and mudflows.. United On 18 May 1999. it filed a Rule 65 Petition19 with the but was dismissed in a Resolution dated 26 November 1997. The Complaint. the two corporations impleaded in the earlier labor case. rendered judgment ordering BMSI and RUST to pay respondent’s money claims. La Union.3 In an Order14 dated 13 September 2000. itself had combined and functioned as one company. respondent. Gilbert and Walter G. Rodney C. assuming the same to be admitted.10 Petitioner sought the dismissal of the complaint on grounds of failure to As culled from the records of the case. vs. (BMSI). Inc. business in the Philippines.6 Respondent elevated the case to this Court court denied petitioner’s motion. Labor Arbiter Pablo C. injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting further On 8 January 1999.17 In an Order dated 31 July 2001. 67001 and the written agreement between respondent and BMSI and RUST. The Resolution Court of Appeals praying for the issuance of a writ of certiorari and a writ of became final and executory on 09 November 1998.4 On 28 September 1995. as well as BMSI denying the petition for certiorari for lack of merit. On 11 March 1992. Jr. which motion decision of the Labor Arbiter and dismissed respondent’s complaint on the was opposed by respondent. INC. Pending the projects in the Philippines for an agreed remuneration of 10% of the gross resolution of the omnibus motion.8 petitioner alleged that contrary to respondent’s claim. it was a foreign corporation duly licensed to do business in the Philippines and TINGA. The trial court held that the factual allegations in the On 16 July 1994.11 Sometime in 1990. JR.9 1997 Rules of Civil Procedure which seeks the reversal of the Decision1 and Petitioner also referred to the NLRC decision which disclosed that per the Resolution2 of the Court of Appeals in CA-G. (RUST). Inc. petitioner filed an Omnibus Motion for Preliminary Hearing States of America.20 action for damages before the Regional Trial Court (RTC) of Bauang. It also denied and RUST. then a resident of La Union. CONFLICTS | 03Dec | 35 RAYTHEON INTERNATIONAL.22 verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions The appellate court held that although the trial court should not have due him from the Pinatubo dredging project which he secured on behalf of confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving petitioner’s omnibus motion. It also ruled that the principle of International. and respondent Stockton W. SP No. J. respondent filed before the Arbitration Branch of the complaint. the deposition of Walter Browning was receipts. it . Rouzie.: denied entering into any arrangement with respondent or paying the latter any sum of money." the rights and obligations of trial court. BMSI.7 docketed as Civil Case No. 1192-BG.15 Espiritu. the RTC denied petitioner’s omnibus motion. instituted an proceedings. Respondent opposed the same. illegal termination and breach of judgment on petitioner. an American Based on Affirmative Defenses and for Summary Judgment12 seeking the citizen. the following antecedents appear: state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim.18 the trial ground of lack of jurisdiction. the Court of Appeals rendered the assailed Decision21 defendants herein petitioner Raytheon International. Browning for forum non conveniens was inapplicable because the trial court could enforce alleged nonpayment of commissions.5 Upon appeal by BMSI. The complaint also averred that BMSI and RUST as well as petitioner STOCKTON W. ROUZIE. respondent. DECISION In its Answer.. denominated dismissal of the civil case filed by respondent against petitioner with the as "Special Sales Representative Agreement.. Brand Marine Services.R. entered into a contract whereby BMSI hired respondent as its dismissal of the complaint on grounds of forum non conveniens and failure representative to negotiate the sale of services in several government to state a cause of action. respondent secured a service contract with the taken before the Philippine Consulate General in Chicago.

counsel on record for respondent. In a Resolution25 dated 20 That the subject contract included a stipulation that the same shall be November 2006. Thus.29 WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO Jurisdiction over the nature and subject matter of an action is conferred by DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION the Constitution and the law30 and by the material allegations in the AGAINST RAYTHEON INTERNATIONAL. and (3) that the Philippine Court has or is likely to have the power to including petitioner. Petitioner theorizes that the foreign elements cases. the parties and the res. a court. that is. Karagdag or of respondent despite diligent efforts. While it is within the discretion of the .23 Moreover. in the instances27 where the Court held that the local judicial non conveniens requires a factual determination. facts. (2) that the Philippine failed to state a cause of action. two distinct concepts. it may or can proceed to try the inapplicability of the principle of forum non conveniens. Jurisdiction considers whether it is fair to cause a defendant to travel to this state. or any other foreign tribunal for that matter. Philippine courts. Moreover. As regards jurisdiction over the parties. over herein respondent (as party plaintiff) upon the filing of the complaint. that is. case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. the parties and develop. in conflicts-of-laws courts inconvenient forums.33 The choice of law stipulation will governed by the laws of the State of Connecticut.28 together based solely on the evidence presented by respondent.32 petition and that it could no longer find the whereabouts of Atty. choice of law. considered as a matter of defense. irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein. complaint. may refuse impositions on its jurisdiction where it is not the most of the dispute necessitate the immediate application of the doctrine of "convenient" or available forum and the parties are not precluded from forum non conveniens. The appellate court also stated that it could Court is in a position to make an intelligent decision as to the law and the not rule one way or the other on the issue of whether the corporations. It also mentions the become relevant only when the substantive issues of the instant case presence of foreign elements in the dispute – namely. jurisdiction over the person of petitioner (as party severed relations with the law firm even before the filing of the instant defendant) was acquired by its voluntary appearance in court. manifested that the lawyer handling the case. and recognition and enforcement of judgments. the nature of the action and the amount of damages prayed CONVENIENS.24 are within the jurisdiction of the RTC. the propriety of dismissing a case based on the principle of forum Thus. choice of law asks the further question Petitioner mainly asserts that the written contract between respondent and whether the application of a substantive law which will determine the merits BMSI included a valid choice of law clause. phases involved in judicial resolution of conflicts-of-laws problems.31 Civil Case No. named as defendants in the case had indeed merged enforce its decision. the deposition of Walter the following requisites had to be proved: (1) that the Philippine Court is Browning. Rogelio Karagdag. insufficient for purposes of determining whether the complaint one to which the parties may conveniently resort. INC. Atty. CONFLICTS | 03Dec | 36 found the evidence presented by petitioner. No. witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our local Under the doctrine of forum non conveniens. it held that the issue should be threshed out during trial. that is.26 the Court outlined three consecutive jurisdiction over Civil Case No. hence. 1192-BG and the parties involved. this petition raising the following issues: country where the case is filed. Kitamura. This is an exercise of sovereign prerogative of the Hence. 1192- WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO BG is an action for damages arising from an alleged breach of contract. after hearing on the merits proceeds before the trial court. namely: jurisdiction. are precluded from hearing the civil action. had On the other hand. seeking remedies elsewhere.34 Petitioner’s averments of the foreign elements in the instant case are not sufficient to oust the trial court of its Recently in Hasegawa v. the Court resolved to dispense with the filing of a governed by the laws of the State of Connecticut does not suggest that the comment. DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON Undoubtedly. it is more properly machinery was adequate to resolve controversies with a foreign element. Jurisdiction and choice of law are The instant petition lacks merit. the trial court acquired jurisdiction The Ceferino Padua Law Office. respondent failed to file a comment despite repeated notices. Incidentally. that the contract shall be of the case is fair to both parties. the On the matter of jurisdiction over a conflicts-of-laws problem where the appellate court deferred to the discretion of the trial court when the latter case is filed in a Philippine court and where the court has jurisdiction over decided not to desist from assuming jurisdiction on the ground of the the subject matter.

38 As correctly pointed out by the Court of Appeals. Costs against petitioner. which only a full-blown trial on the merits can afford. the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded.R. Inc. it should do SO ORDERED.R... after Rust International ceased to exist after being absorbed by REC. (REC) assumed the warranty obligations of defendant Rust International in the Makar Port Project in General Santos City. have combined into one company. The Decision and Resolution of the Court of Appeals in CA-G. BMSI and RUST merged together requires the presentation of further evidence. On this score. WHEREFORE.35 Finding no grave abuse of discretion on the trial court. the question of whether petitioner. and Brand Marine Service. the surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for unpaid commissions. Other documents already submitted in evidence are likewise meager to preponderantly conclude that Raytheon International. Rust International[.37 The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. CONFLICTS | 03Dec | 37 trial court to abstain from assuming jurisdiction on this ground. Inc. Failure to state a cause of action refers to the insufficiency of allegation in the pleading. 67001 are hereby AFFIRMED. Neither these documents clearly speak otherwise. Inc.] Inc. 125078 May 30. convincing and conclusive proofs that Raytheon Engineers and Constructors. the instant petition for review on certiorari is DENIED.36 As a general rule. Petitioner contends that the deposition of Walter Browning rebutted this allegation. In the same manner. G. so much so that Raytheon International. the resolution of the Court of Appeals is instructive. Petitioner also contends that the complaint in Civil Case No. Walter Browning as well as other documents produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete a ruling that the complaint fails to state a cause of action. to determine whether special circumstances require the court’s desistance. so only after vital facts are established. the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. thus: x x x Our examination of the deposition of Mr. 2011 . the Court defers to the sound discretion of the lower courts because their findings are binding on this Court. 1192-BG failed to state a cause of action against petitioner. SP No. Inc. Annexes "A" to "E" by themselves are not substantial. No.

19964 and July 9. the Federal District Court conditionally granted the defendants’ motion to dismiss. a number of personal injury suits were filed in different INC. Branch 37.. H-95-1356. THE REGIONAL TRIAL COURT OF DAVAO CITY.R. 24. G.12 MARASIGAN.10 April 28. Davao City. Regional Trial Court. ROMEO D. 125598 On the other hand. 126654. H-94-1359. Shell Oil Co. Nos. INC. CHIQUITA BRANDS. 127856.7 and 1283988 seek the reversal of the Order9 dated October 1. No. 1996 of the Regional Trial Court (RTC) of General Santos City.." which was docketed as Civil Action No. Branch 37. STANDARD FRUIT CO. 125078.. et al..A.R. SHELL OIL CO..... INC. 1996 of the RTC THE DOW CHEMICAL COMPANY and OCCIDENTAL CHEMICAL of Davao City. . DEL MONTE TROPICAL FRUIT CO. ET.. 1995. OCCIDENTAL The factual antecedents of the petitions are as follows: CHEMICAL CORP. 1250781 and 1255982 both assail the Order3 Presiding Judge... DOW CHEMICAL CO. The said Order decreed the CORP.R. ET. which arose out of two civil cases that were filed in different courts but whose factual background and issues are closely (1) participated in expedited discovery in the United States xxx. JR. proceed with Civil Case No. INC. NAVIDA. No." G. Petitioners. Shell Oil Co.. intertwined. Branch 16. DIZON. DEL MONTE TROPICAL FRUIT CO. ET. The defendants in the consolidated cases prayed for the INC. SHELL OIL CO.. 1997. AL.. Jorge Carcamo. ET AL Houston Division.. 126654.. ANITA ALFELOR-ALAGABAN. Branch 16. the Federal District Court for the Southern District of Texas. JR.. DEL Proceedings before the Texas Courts MONTE FRESH PRODUCE N. 5617.. The cases therein that involved plaintiffs from the Philippines were "Jorge Colindres Carcamo. STANDARD FRUIT CO. General Santos dated May 20.. The cases were eventually transferred to. Nos. INC. a chemical used to kill nematodes (worms). The thousands of plaintiffs sought damages for injuries they G. the petitions in G. 127856 allegedly sustained from their exposure to dibromochloropropane (DBCP). 199711 and March 10.R. Nos. including the Philippines. 125598. et al. in Civil Case No. and DEL MONTE TROPICAL FRUIT foreign countries. Davao City. dismissal of the case in view of the perceived lack of jurisdiction of the RTC DOLE FOOD CO. Valdez and Isae Carcamo will be dismissed 90 days after the entry of this Memorandum and Order provided that Before the Court are consolidated Petitions for Review on Certiorari under defendants and third. DOLE FOOD CO. which also dismissed CORPORATION. BRANCHES 16 AND 13. v. vs. v. 128398 which was docketed as Civil Action No..A. ET AL VS HON. No. In a Memorandum and Order dated July 11. and CHIQUITA BRANDS. capacity as Presiding Judge of the Regional Trial Court. and CHIQUITA BRANDS. et al. while working on farms in 23 DEL MONTE FRESH PRODUCE N. and CO. INC. The petition in G.R. HON. 1996.: Delgado.. 1999. the DECISION court ordered that: LEONARDO-DE CASTRO. JR. Beginning 1993. vs. Petitioners. STANDARD FRUIT & STEAMSHIP CO. OCCIDENTAL CHEMICAL City.. No. Branch 13. 5617..A. 125598 PRODUCE N. G. AL.5 which BRANDS INTERNATIONAL. STANDARD FRUIT & STEAMSHIP CO. consolidated in. CHIQUITA BRANDS INTERNATIONAL... and 128398 were consolidated in the Resolutions dated February 10. DEL MONTE FRESH over the subject matter of the complaint. DOLE FRESH FRUIT CO.. and CHIQUITA BRANDS INTERNATIONAL.. BERNABE L. CHIQUITA also challenges the Orders dated June 4. and "Juan Ramon Valdez.. Pertinently. DOW CHEMICAL CO. the case on the ground of lack of jurisdiction. J. et al.R.R. TEODORO A. in Civil Case No. The petitions in G. in her dismissal of all the actions under the doctrine of forum non conveniens. CORNELIO ABELLA. CONFLICTS | 03Dec | 38 BERNABE NAVIDA. held that the RTC of General Santos City no longer had jurisdiction to Respondents. VS THE HON. INC..6 127856. No. 126654 G.. Presiding Judge of Regional Trial Court.R. DOLE FRESH FRUIT CO. Texas state courts by citizens of twelve foreign countries.and fourth-party defendants have: Rule 45 of the Rules of Court. vs.. AL..251-96. CORNELIO ABELLA.

First. the subject matter stated in the complaint and which is Ltd. Any plaintiff because of their exposure to DBCP. hereinafter referred to as NAVIDA.13 to wit: Civil Case No. Standard Fruit manufacture of pesticides.A.) . Named as defendants therein were: Shell Oil Co. 1996. Ameribrom. Inc. Ameribrom. et al.. among others. The case was docketed as defendant foreign companies cites activity on their part which took place Civil Case No. (CHIQUITA). They claimed. These acts of defendants cited in the complaint included the (OCCIDENTAL). on March 13. court will resume jurisdiction over the action as if the case had never been the trial court determined that it did not have jurisdiction to hear the case. as party defendants.. Bromine Compounds.. Inc. companies in that they produced. the RTC of General Santos City issued an Order dismissing the complaint. (DOW). (hereinafter collectively referred to as DEL MONTE).) filed a Joint Complaint14 in the The substance of the cause of action as stated in the complaint against the RTC of General Santos City on August 10. and/or when they resided within the agricultural area where (3) waived within 40 days after the entry of this Memorandum and Order such chemical was used. stream of commerce.. conducted in proceedings initiated there.. Navida. Inc.R. that they desiring to bring such an action will do so within 30 days after the entry of were exposed to this chemical during the early 1970’s up to the early this Memorandum and Order.. Dole Fresh Fruit Co. Inc. Ltd.15 During the pendency an agreement binding them to satisfy any final judgment rendered in favor of the motions. Chiquita Brands. dismissed for [forum non conveniens].. (The aforementioned defendants are hereinafter collectively referred conduct engaged in by foreign defendants outside Philippine territory. (hereinafter collectively referred to through sale or other disposition. claimed that their illnesses and any limitations-based defense that has matured since the commencement injuries were due to the fault or negligence of each of the defendant of these actions in the courts of Texas. their distribution Co.16 excluding Dead Sea Bromine Co. Complaint. or ought to have known. prayed for the payment of damages in view of the illnesses and Order in any action commenced by a plaintiff in these actions in his and injuries to the reproductive systems which they allegedly suffered home country or the country in which his injury occurred. 5617. 1980’s when they used the same in the banana plantations where they worked at. a total of 336 xxxx plaintiffs from General Santos City (the petitioners in G. 1996. THE COMPLAINT FOR DAMAGES FILED WITH THE REGIONAL TRIAL COURT 125078 and 125598 SHOULD BE DISMISSED FOR LACK OF JURISDICTION In accordance with the above Memorandum and Order. and Instead of answering the complaint. Dole Food Co. et al. consisted of activity or course of Corp. Dow Chemical Co. xxxx Again. According to NAVIDA. they (4) stipulated within 40 days after the entry of this Memorandum and Order were allowed to be exposed to the said products. 1995. DOW filed an Answer with Order... and Del Monte Tropical Fruit Co.18 affirms the dismissal for lack of jurisdiction of an action commenced by a plaintiff in these actions in his home country or the country in which he was On May 20. CONFLICTS | 03Dec | 39 (2) either waived or accepted service of process and waived any other jurisdictional defense within 40 days after the entry of this Memorandum Navida. Inc. to as defendant companies. No. Accordingly. in the event that the highest court of any foreign country finally Counterclaim. Ltd. Bromine Compounds.. Occidental Chemical Corp. the remaining defendant companies filed their various Motions for Notwithstanding the dismissals that may result from this Memorandum and Bill of Particulars. et al. that plaintiff may return to this court and. and Amvac Chemical uniquely particular to the present case. 125078..17 On May 15.. resulting in their becoming part of the as DOLE). abroad and had occurred outside and beyond the territorial domain of the (SHELL). Philippines. and Amvac Chemical Corp. NAVIDA. 5617 before the RTC of General Santos City and G. which the defendant that any discovery conducted during the pendency of these actions may be companies knew. upon proper motion.. were highly injurious to the used in any foreign proceeding to the same extent as if it had been former’s health and well-being. their packaging in containers. Del Monte Fresh Produce N. sold and/or otherwise put into the stream of commerce DBCP-containing products. filed an Amended Joint of plaintiffs by a foreign court. the injured.. Nos. most of the defendant companies (5) submitted within 40 days after the entry of this Memorandum and Order respectively filed their Motions for Bill of Particulars. et al. 1996. Dead Sea Bromine Co. and Chiquita Brands International. Standard Fruit and Steamship Co. et al.. Ltd. without resolving the motions filed by the parties.R.

This is necessarily so. When the averments in the case pending with the U. District court dismissing the case filed thereat.S.. et al.. Amended Complaint).S. if and only if the Civil Code of the Philippines. the trial court ascribed little significance to the voluntary decline jurisdiction over the cause of action. District JURISDICTION OF THE REGIONAL TRIAL COURT.COERCED AND ANOMALOUS xxxx The Court views that the plaintiffs did not freely choose to file the instant THE FILING OF THE CASE IN U.S. in their complaint is a tort category that is not recognized in the "Defendants’ Amended Agreement Regarding Conditions of Dismissal Philippine laws. JURISDICTION District Court’s Order dated July 11.S.S. courts. To allow the parties to litigate in this court when they Third. were are actively pursuing the same cases in another forum. BECAUSE IT IS NOT A Court dismissing the case is not yet final and executory since both the TORT CATEGORY WITHIN THE PURVIEW OF THE PHILIPPINE LAW plaintiffs and defendants appealed therefrom (par. which is really a matter of venue.S. 1995. and the liability of the defendant foreign companies. therefore.S.S. Thus in Navida. The trial court expounded: It is clear. thus produces no legal effect and is ineffective at the manufactured by defendant foreign companies. since the authority of the agent of the The specific tort asserted against defendant foreign companies in the defendants in the Philippines is conditioned on the final adjudication of the present complaint is product liability tort. defendants declared that "(t)he authority of each designated THE TORT ASSERTED IN THE PRESENT COMPLAINT AGAINST DEFENDANT representative to accept service of process will become effective upon final FOREIGN COMPANIES IS NOT WITHIN THE SUBJECT MATTER dismissal of these actions by the Court". filing the case in the Philippine courts violated the rules on forum shopping and litis pendencia. it appears that such Second. District Court has. District Court. Said the trial court: for Forum Non Conveniens" (Annex to the Complaint) filed with the U. of manufacturer of the pesticides. because it is the product suspensive condition. courts divested this court of its own jurisdiction. While it is true that this court acquires jurisdiction over persons of the defendants through their voluntary appearance. 3(h). thus: ground of forum non conveniens. Consequently. CONFLICTS | 03Dec | 40 hence. being subject to a product liability tort.S. or a suppletory THE JURISDICTION FROWNS UPON AND PROHIBITS FORUM SHOPPING special law prescribes a product liability tort.22 proximate cause of the damages sustained by the plaintiff workers.S. x x x. the filing of the case in the U. IS ILLUSORY It is settled that initial acquisition of jurisdiction divests another of its own jurisdiction.20 pursuing their appeal of the decision of the U. FILING OF CASES IN THE PHILIPPINES . viz: ‘forum shopping’ so abhorred in this jurisdiction. the RTC of General Santos City ruled that the act of NAVIDA. outside and beyond the jurisdiction of Philippine Courts. recognized in the Philippine Civil Code. Defendants have appointed their agents authorized to accept service of summons/processes in the Philippines pursuant to the agreement in the xxxx . This court takes note that the U.S. THE DEFENDANTS’ SUBMISSION TO JURISDICTION IS CONDITIONAL AS IT concurrent jurisdiction with this court over the subject matter of this case. court that defendants will voluntarily submit to the jurisdiction of this the present Regional Trial Court. x x x.19 court. which is asserted to be the moment. et al. x x x. District Court. violates the rule on coerced into submitting their case to the Philippine courts.. including U. The case was dismissed on the appearance of the defendant companies therein. inclusive of and comprehending the specific tort described in the complaint of the plaintiff This court frowns upon the fact that the parties herein are both vigorously workers. 3(i). DIVESTED THIS COURT OF ITS OWN action. et al. District Court did not Fourth. in essence. The decision of the U. the acquisition of jurisdiction by this present complaint are examined in terms of the particular categories of tort court over the persons of the defendants is also conditional. the RTC of General Santos City declared that the tort alleged by voluntary appearance of the defendants in this case is conditional. is premised on being the Fifth. By taking cognizance of the case. but rather were coerced to do so. the U. it becomes stark clear that such averments describe and identify the category of specific tort known as The appointment of agents by the defendants. and in order to keep open to the plaintiffs the opportunity to return to the U. that the Regional Trial Court has jurisdiction over the present case. the RTC of General Santos City adjudged that Navida. merely to comply with the U.21 Moreover.

June 4. this Court resolved to consolidate G.R. 1996. exposure resulted in "serious and permanent injuries to their health. Furthermore. as that it had already lost its jurisdiction over the case as it took into workers in the banana plantation and/or as residents near the said consideration the Manifestation of the counsel of NAVIDA. There exists litis pendencia since order to assail the RTC Order dated May 20. 1996. 1996. might accord this court a of the case as well as the persons of the defendant companies. et al. 1996. et al.25 dismissing DOW’s Answer with Counterclaim. the trial court held that: on Certiorari. this case is now was denied through a Resolution37 dated January 27. DOW. is still pending. 1996. which merely noted the incidents still pending in Civil Case No.R. No.. 125598. DOW and OCCIDENTAL aver that the RTC of General Constitution). No. the subsequent case must be dismissed. Civil Case No.38 In an Order29 dated July 9. Their petition was It behooves this Court. et al. 1996.S. No. and 128398 Order. then this case is barred by and reiterated that it no longer had any jurisdiction over the case. No. Article III. 1996 and July 9. CHIQUITA filed a Motion for Reconsideration. 1996.34 which sought the deprive the parties – especially the plaintiffs – of their possible remedies. but not limited to. as it is now presented. 1996. 1996. the rule on "litis pendencia. According to ABELLA. reversal of the RTC Orders dated May 20. DOW and OCCIDENTAL also filed a Joint Motion for Reconsideration28 of the 126654. This evaluation and action is made not on account of but rather with due consideration to the fact that the dismissal of this case does not necessarily CHIQUITA filed a Petition for Review on Certiorari.R. In a Resolution33 dated October 7. this court concludes that since the case 1996.24 Civil Case No. they were made to use and/or were exposed to nematocides. 1996. including.R. failure of CHIQUITA to show that the RTC committed grave abuse of discretion. charming appearance. 127856.. CONFLICTS | 03Dec | 41 CHIQUITA and SHELL filed their motions for reconsideration30 of the above THIS CASE IS BARRED BY THE RULE OF "LITIS PENDENCIA" order. such before this Court. alleged that. 1996. and CHIQUITA was filed before Branch 16 of the RTC of of the RTC Order dated May 20. sterility and severe injuries to their . This case was docketed as reconsideration27 of the RTC Order dated June 4.R. Nos. 125598 with G. Another joint complaint for damages against SHELL."23 On August 30. while DOW filed a motion for Davao City by 155 plaintiffs from Davao City.32 challenging the orders of the RTC of General Santos City dated May 20.251-96. proceedings. 1996. 1997. 16. which plantation. No.. the RTC of General Santos City declared Similar to the complaint of NAVIDA. 126018.R. as in this case. the RTC of General Santos City likewise issued an 126654. Sec. 1996.36 but the same WHEREFORE. The court G. the Court dismissed the aforesaid petition for omissions as in this case. would be violative of the constitutional provision on the Bill of Rights guaranteeing speedy disposition of cases (Ref. 125078. would like to emphasize that in accordance with the rule on litis pendencia x x x. 1996. CHIQUITA.) amended their Joint- RTC Order dated May 20. On June 4. ABELLA. stated that the latter had already filed a petition for review on certiorari which contained the chemical DBCP. hereinafter referred to as ABELLA. 5617 between the parties in the U. For to continue with these docketed as G. which was docketed as there are two cases involving the same parties and interests. DOW and OCCIDENTAL filed their Petition for Review In fine. The petition was docketed as G. et al. No. In a Resolution35 that earlier case between the herein parties involving the same acts or dated November 13. On July 11. OCCIDENTAL. DEL MONTE. But the same insistence would actually thwart the very ends of justice which it seeks to achieve. Complaint on May 21. Applying the foregoing The RTC of General Santos City then issued an Order31 dated August 14. et al. et al. 125078. Subsequently. filed a Petition for Review on Certiorari in same rights and interests. The court has no other choice.S.R. DEL MONTE and SHELL each filed a motion for reconsideration26 DOLE. court involves the same parties.251-96 before the RTC of Davao City and G. In their petition. NAVIDA.. 24. 24. July 9.. 1996 and August The court is cognizant that the Federal Court may resume proceedings of 14. These plaintiffs (the petitioners in G. the case filed in the U. [precept] to the case-at-bar. To insist on further Santos City erred in ruling that it has no jurisdiction over the subject matter proceedings with this case. considered DISMISSED. in view of the foregoing considerations. 1996. then to dismiss this case.

Retired Supreme Court Justice Abraham Sarmiento opined that while a Produce. DOLE Fresh suit against foreign companies since the causes of action alleged in the Fruit Company. junked Civil Case No. DBCP without warning the users of its hazardous injured x x x. their home countries [or] the countries where they were injured. plaintiffs state that: defendants have no properties in the Philippines. Former Justice Secretary Demetrio Demetria in a May 1995 opinion said: DOW Chemicals Company." to wit: Upon a thorough review of the Complaint and Amended Complaint For: Damages filed by the plaintiffs against the defendants Shell Oil Company. in its entirety.. 1) In the original Joint Complaint. No product foreign corporations on their respective countries. July 22. upon proper motion. The Court however is constrained to dismiss the case at bar not solely on the basis of the above but because it shares the opinion of legal experts The RTC of Davao City.A.251-96 on the ground of lack of jurisdiction. Should the Philippine Case No. and Del Monte Tropical Fruit Co. et al. 1996). as correctly pointed This means there is no available evidence which will prove and disprove the out by one of the defendants. the said plaintiffs may return to that court and. Chiquita Brands. defendants’ Motion to Dismiss on Forum non [conveniens]. filed their opposition. strict 12. Courts refuse or deny jurisdiction. claimed that the defendant Filipino complainants. 24. are now compelled by a decision of a Texas District Court to file cases under torts in this Case ordered dismissed. 3.. 1996. CONFLICTS | 03Dec | 42 reproductive capacities. N. 19). and Del Monte Tropical Fruits Co.. sold. In the Amended Joint Complaint. Notwithstanding. the Court. dismissing several of the consolidated actions including those filed by the . the RTC of Davao City has jurisdiction over the subject matter of the case since Articles 2176 and 2187 of the Civil Code 11. et al.) According to ABELLA.. No. and/or made to file actions in their home countries or the countries in which they were available in commerce. as plaintiffs. all foreign in Philippine Jurisprudence awarding to those adversely affected by DBCP. 24. Courts will reassume jurisdiction. 27). et al.R. 18). N. elected to sue in the place of defendants’ residence. 1996 by ABELLA. is convinced that plaintiffs "would have this relation between sterility and DBCP. used. Reply to Opposition dated class suit is allowed in the Philippines the device has been employed strictly. produced. 1996.. S. Del petition do not exist under Philippine laws. conspiracy and international tort theories (par. the petition for review. Honorable Court dismiss the case to pave the way for their getting an affirmance by the Supreme Court" (#10 of Defendants’ Del Monte Fresh 2. Retired High Court Justice Rodolfo Nocom stated that there is simply an plaintiffs are suing the defendants for tortuous acts committed by these absence of doctrine here that permits these causes to be heard. the other defendant companies filed their respective resume jurisdiction as if the case had never been dismissed for forum non motions for bill of particulars to which ABELLA. 1. Inc. and without providing instructions on its proper use and provided that should the highest court of any foreign country affirm the application. There has been no decided case Monte Fresh Produce. however. conveniens. the Court will Except for DOW. Standard Fruit and Steamship. Standard Fruit The Philippines should be an inconvenient forum to file this kind of damage Company. et al. DOLE Food Company. the Memorandum and [O]rder further effects on health. DOW and DEL MONTE filed their respective Answers dated May 17. 1996 and June 24. et al.. Occidental Chemical Corporation."39 ABELLA. are broad enough to cover the acts complained of and to support their the Federal District Court issued a Memorandum and Order conditionally claims for damages. corporations with Philippine Representatives. which..251-96 in its given in the interview made by the Inquirer in its Special report "Pesticide Order dated October 1. said petition was provisionally dismissed on condition that these cases be filed in the ABELLA. they have no agents as well (par..A. after having liability ever filed or tried here. the U. plaintiffs aver that: on 11 July 1995. Chiquita Brands International. dismissal for lack of jurisdictions over these actions filed by the plaintiffs in had they exercised ordinary care and prudence. plaintiffs seeking for payment of damages based on negligence. One of the conditions imposed was for the plaintiffs companies manufactured. upon order of the RTC of Davao City. Consider these: Mass sterility will not qualify as a class suit injury within the contemplation of Philippine statute. 126654. claim that the RTC of Davao City erred in dismissing Civil Philippines or before 11 August 1995 (Philippine date. which the defendant companies knew or ought to have known. Docketed as G. filed on November USA. a petition was filed by same plaintiffs against same defendants in the Courts of Texas. reads: Cause Mass Sterility.40 jurisdiction for causes of actions which occurred abroad (par. assails before this Court the above-quoted liability. distributed.

1998. OCCIDENTAL. . and SHELL. Pursuant to said agreement. as well as reconsideration filed by defendant companies. The Consolidated Motion to Drop DOW. Thereafter. 125598. 1999. in a Resolution dated June 22. and ABELLA. opposed the motion. 1996 and December 16. 53 explaining that the said petition "is already moot and academic and no longer presents a justiciable DEL MONTE claims that the RTC of Davao City has jurisdiction over Civil controversy" since they have already entered into an amicable settlement Case No. 1997. Nos. They also maintain that In the Resolutions dated February 10. the plaintiff claimants sought to withdraw their petitions as against DOW. as defined under the law and that the said court with NAVIDA. later. and ABELLA. This settlement The presiding judge of Branch 16 then issued an Order41 dated December agreement was evidenced by facsimiles of the "Compromise Settlement.45 The an additional motion for the inhibition of the presiding judge. 128398. which contained this Court a Consolidated Motion (to Drop Party-Respondents).47 SHELL asked to be Davao City cannot dismiss the case simply on the basis of opinions of excused from the filing of a memorandum alleging that it had already alleged legal experts appearing in a newspaper article. CHIQUITA. DEL MONTE also filed its petition for review on certiorari before this Court assailing the above-mentioned orders of the RTC of Davao On July 13. 2. et al. further aver that the dismissal of the case.. 1998. 1996. this Court in its Resolution43 dated July 28. April 28. executed a compromise agreement with the plaintiff claimants. et al.251-96.51 and DOW and forum shopping. based on the acted beyond its authority when it dismissed the case motu proprio or opinions of legal luminaries reported in a newspaper. 125078. 1996. the settlement entered into between the plaintiff claimants and DOW. et al. City is bereft of basis. et al. by the RTC of Davao without any motion to dismiss from any of the parties to the case.. CHIQUITA filed a Petition for Review dated March 5. 127856. the absence of jurisprudence regarding the award of damages in favor of 1999. 125598 On March 7. however. issues. 1998.. OCCIDENTAL jointly filed a Memorandum on December 23. In its petition. et al. and ABELLA. motion. plaintiff claimants alleged that they had amicably settled their cases with DOW. et al. the case Indemnity.. presenting evidence to prove their allegations that their exposure to DBCP caused their sterility and/or infertility. questioning the Orders dated October 1. DOW and OCCIDENTAL added that they have fully already obtained jurisdiction over its person by its voluntary appearance complied with their obligations set forth in the 1997 Compromise and the filing of a motion for bill of particulars and. and SHELL as Party- Respondents filed by NAVIDA.48 DOLE filed its Memorandum on October 12. 1997.R. 1997. and March 10. 1997. the RTC of Davao City. 1999. 1996 of the RTC of Davao On September 26. 2004. This case was docketed as G. OCCIDENTAL. the RTC of Davao City affirmed the Order dated October 1. those adversely affected by the DBCP does not preclude them from and 128398. their cause of action is based on quasi-delict under Article 2176 of the Civil Code. CHIQUITA argues that the RTC of Davao City erred in this Court.R. et al. voluntarily inhibiting himself from trying the case." which were attached to the said was re-raffled to Branch 13 of the RTC of Davao City. 1996. In an Order42 dated December 16. 199849 while DEL MONTE filed on Initially. No. therefore. CONFLICTS | 03Dec | 43 ABELLA. No. DOW. and SHELL sometime in July 1997. complaint. and Hold Harmless Agreement. 126654. et al. this Court consolidated G. OCCIDENTAL.46 required all the parties dismissing the case motu proprio as it acquired jurisdiction over the subject to submit their respective memoranda.50 NAVIDA. According to them. an answer to the Agreements. filed a motion for reconsideration. and SHELL. According to DEL MONTE. and CHIQUITA each filed their respective motions for reconsideration of the Order dated October 1. OCCIDENTAL. matter of the case as well as over the persons of the defendant companies which voluntarily appeared before it. NAVIDA. filed their petition filed by CHIQUITA for submitting a defective certificate against Consolidated Memorandum on February 3.R. 1997. 125598. No. and arguments adduced by the parties. and denied the respective motions for DOLE. Thus. SHELL.52 which was granted by this Court in the Resolution44 dated October 8. filed before City. CHIQUITA also claims that the RTC of CHIQUITA filed its Memorandum on August 28.R.R. 24.. No. however. dismissed the October 13. 1997. Considering the allegations. Petition for Review in G. 1997. DOW and OCCIDENTAL filed a Motion to Withdraw City. 1996 of The Memoranda of the Parties the RTC of Davao City. DEL MONTE also filed its motion for reconsideration. DEL MONTE and CHIQUITA. The Motion to Withdraw Petition for Review in G. Its petition was docketed as G. 127856.

stated no cause of action against the defendant companies. DOLE posits that the Philippines is the situs of the tortious acts . and further stating that they claims did not divest Philippine [c]ourts of jurisdiction over the same. 2176 of the Civil Code of the Philippines is broad enough to cover insufficiency of the law. Essentially.. this Court granted. and ABELLA. provisions of Chapter 2 of the Preliminary Title of the Civil Code. and THE CASE. NAVIDA. the general principles of law.55 DISCUSSION stating that they agree with the view of DOW and OCCIDENTAL that the petition in G. 125598 has become moot and academic because Civil On the issue of jurisdiction Case No. DOLE states that if there were no actionable wrongs committed under Philippine law.. NAVIDA. 2004. DEL MONTE filed its Comment on Motion to RTC of General Santos City and the RTC of Davao City erred in dismissing Withdraw Petition for Review Filed by Petitioners in G. and ABELLA. Said fact allegedly IN REFUTATION constitutes reasonable basis for our courts to assume jurisdiction over the case.54 interposing no c. Assumption of jurisdiction by the U. et al. 5617 and 24. prejudice remaining respondents Dole. 2004. among All parties contend that the RTC of General Santos City and the RTC of others. the Texas court.R. The Compromise Agreement and the subsequent Consolidated Motion to prosecuting the cross-claims of DOLE. et al. Occidental and Shell does not unjustifiably is reinstated. Remarkably. The court may still resolve the case. also filed their Comment dated September 14.. the crux of the controversy in the petitions at bar is whether the On September 27. No. in the event that the complaint below Drop Party Respondents Dow. In IN SUPPORT OF THE PETITION addition. et al.7 million for each of the plaintiff claimants. should be retained as defendants for purposes of d. et al.. for lack of jurisdiction. et al. which falls under Article 2176 of the Civil Code. acts of defendant companies as actionable wrong. THE TRIAL COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF on the ground that the Amended Joint-Complaints of NAVIDA. In a Resolution57 dated October 11. The acts complained of occurred within Philippine territory. Furthermore. NAVIDA. et al. Specifically. as well as other settling defendant companies. pray that the respective rulings of faith with petitioners intending to have the same dismissed and returned to the RTC of General Santos City and the RTC of Davao City in Civil Case Nos. et al. 5617 had already been amicably settled by the parties in 1997. distributed or otherwise put into the stream of commerce by defendant companies happened in the Philippines. and ABELLA. respectively. stating that it has no objections to the withdrawal of the petition filed by DOW and OCCIDENTAL in G. DOLE similarly maintains that the acts attributed to defendant companies constitute a quasi-delict. 125598.. No. District Court over petitioner[s’] objection to the withdrawal of the petition.. CONFLICTS | 03Dec | 44 DOLE filed its Manifestation dated September 6. 2004. specifically for OCCIDENTAL. b) The court dismissed the case because it was convinced that it did not have jurisdiction.58 NAVIDA. argue that the allegedly tortious acts and/or omissions of defendant companies occurred within Philippine In their Consolidated Memorandum.. the use of and exposure to DBCP that was presented the following issues for our consideration: manufactured.R. 125598. none of the parties to this case claims that the courts a quo are bereft of jurisdiction to determine and resolve the above-stated cases. Del Monte and Chiquita. approximately P2. 2004.251-96. the courts a quo should have dismissed the civil cases II..56 Civil Case Nos. THE COURT DISMISSED THE CASE DUE TO LACK OF JURISDICTION. a) The court did not simply dismiss the case because it was filed in bad Thus. in the absence thereof. the motion to withdraw petition for review filed by DOW and Davao City have jurisdiction over the action for damages. ABELLA. Art. et al. applying the the acts complained of.. as well as Article 2176 thereof. DOLE also argues that if indeed there is no positive law defining the alleged a.. 5617 and 24. territory. THE ISSUES NAVIDA. customs of the place and.R. et al. et al.251-96 be reversed and that the said cases be remanded to the courts a quo for further proceedings. Article 9 of the Civil Code dictates that a judge may not refuse to render a decision on the ground of b.. and ABELLA. assert that the I.S. et al. maintain their position that DOW and OCCIDENTAL. are broad enough to cover their claim for damages. No.

000.. and cases under Batas Pambansa Blg. et al. on a particular court or body. 7691. d) TO PAY EACH PLAINTIFF attorneys fees of Two Hundred Thousand Pesos At the time of the filing of the complaints.500. point to their alleged exposure to DBCP which occurred in exclusive original jurisdiction: the Philippines.. 24. Here. CONFLICTS | 03Dec | 45 allegedly committed by defendant companies as NAVIDA. Likewise. respectively.00) each.. et al. as amended by Republic Act No. applies to cases where the damages claimant. (P100. damages without any evidentiary value. and SEC. as amended by R. the jurisdiction of the RTC in civil (P200.61 . CHIQUITA argues that the courts a quo had jurisdiction 2.00) or. – Regional Trial Courts shall exercise ABELLA. which amount falls within the jurisdiction of the RTC. and costs or the the newspaper reports were taken judicial notice of. DBCP. 5617 and 24. the following the jurisdiction of the RTC by making voluntary appearances and seeking prayer: for affirmative reliefs during the course of the proceedings.251-96. 7691. legislature through the enactment of a law. irrespective of whether the plaintiffs are Hundred Thousand Pesos (P400. judgment be rendered in favor of the plaintiffs ordering the defendants: The RTC of General Santos City and the RTC of Davao City have jurisdiction over Civil Case Nos. states: In a similar vein. in cases where the claim for damages is the main cause of action. 19. was: e) TO PAY THE COSTS of the suit.60 actions for the purpose of convincing the U. respectively a) TO PAY EACH PLAINTIFF moral damages in the amount of One Million Five Hundred Thousand Pesos (P1. et al. Finally.00). jurisdictional amount under Section 19 (8) and Section 33 (1) of B.251-96 given that newspaper articles are hearsay and (8) In all other cases in which the demand. sought in their similarly-worded CHIQUITA and the other defendant companies also submitted themselves to Amended Joint-Complaints filed before the courts a quo.59 Once vested by law.7 million in damages for each plaintiff 129. No. DOLE. the jurisdiction over the subject matter c) TO PAY EACH PLAINTIFF exemplary damages in the amount of Six or nature of the action cannot be dislodged by anybody other than by the Hundred Thousand Pesos (P600. Jurisdiction in civil cases. distribution. The rule is settled that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and b) TO PAY EACH PLAINTIFF nominal damages in the amount of Four the character of the relief sought.000. The exclusion of the term "damages of whatever kind" in determining the over the subject matter of the cases filed before them. entitled to all or some of the claims asserted therein. Blg. as the cause of the sterility and other reproductive system problems that they allegedly suffered. Federal District Court to re- assume jurisdiction over the cases. and ABELLA. 09-94.251-96 was proper.000. exclusive of interest. etc. hearing. None of the defendant companies ever objected to the exercise of jurisdiction by the PRAYER courts a quo over their persons. which states that the law of the place where the alleged wrong was committed will govern the action. CHIQUITA are merely incidental to or a consequence of the main cause of action.000.A. however. DOLE adds that the RTC of xxxx Davao City gravely erred in relying upon newspaper reports in dismissing Civil Case No. CHIQUITA.. Supreme Court Administrative Circular No.00). sale. 5617 and 24. given that plaintiff claimants merely exclusive of the abovementioned items exceeds Two hundred thousand prosecuted the cases with the sole intent of securing a dismissal of the pesos (P200. et al. packaging. Complaints sought approximately P2. 5617 and 24. 129. The Amended Joint. litigation expenses.00. attorney’s fees. opines that the dismissal of Civil Case Nos.00).P. prays for the remand of Civil Case Nos. NAVIDA.00). where the demand. theory in determining the situs of a tort. thus. avers that the pertinent matter is the place of the alleged exposure to However. premises considered. of or one of the causes of action. without any notice to value of the property in controversy exceeds One hundred thousand pesos the parties. Corollary thereto.000. the amount of such claim shall be considered the said chemical. it is most respectfully prayed that after the RTC of Davao City.251-96 to the RTC of General Santos City and WHEREFORE. not the place of manufacture. in such other cases in Metro Manila. This is in consonance with the lex loci delicti commisi in determining the jurisdiction of the court..S. the alleged legal opinions cited in of whatever kind.

The plaintiffs were exposed to DBCP in the 1970s up to the early 1980s Company. AMONG OTHERS: STERILITY and severe injuries to their reproductive capacities. The illnesses and injuries of each plaintiff are also due to the FAULT or negligence of defendants Standard Fruit Company. As a result of such exposure. Failed to test DBCP prior to releasing these products for sale. The Defendants manufactured. in a language understandable to the and Davao City. or to cause said 7. The RTCs unmistakably have jurisdiction over the cases filed in General Santos City c. which plagued f. highly harmful and injurious to the Plaintiffs’ health and well-being. Failed to warn Plaintiffs of the hazards of exposure to said products or to in the exercise of ordinary care and prudence ought to have known. et al. approximately P2. banana plantations. or to cause their subsidiaries or affiliates to do so. and/or (b) they resided within the agricultural area WHERE prevent each plaintiff’s harmful exposure to DBCP-containing products IT WAS USED. PUT THE SAME into the stream of commerce. distributed. the plaintiffs suffered serious which defendants knew or should have known were hazardous to each and permanent injuries TO THEIR HEALTH. the allegations in both Amended Joint-Complaints narrate that: d. DBCP-containing materials which THEY knew. 8. Chiquita Brands. used. ON THE HEALTH OF PERSONS EXPOSED TO IT AFFECTING the human reproductive system as well. 4. sold. Failed to implement proper methods and techniques of application of said OF ITS HAZARDOUS EFFECTS ON HEALTH AND/OR WITHOUT products. or to cause their subsidiaries or OUT. a. 129. and Chiquita WHILE (a) they used this product in the banana plantations WHERE they Brands International. Failed to adequately supervise and instruct Plaintiffs in the safe and 6. INCLUDING THOSE in the Philippines.7 million for each of the plaintiff claimants. AMONG OTHERS: e. on containers of DBCP-containing materials to warn of the dangers within the purview of the definition of the jurisdiction of the RTC under to health of coming into contact with DBCP. adopt and enforce a safety plan and a safe method of handling and THE CAUSES OF ACTION applying DBCP. d. if any. and dibromochloropropane. DBCP not only destroyed nematodes. IT ALSO CAUSED ILL-EFFECTS affiliate to do so. or to cause their subsidiaries or Batas Pambansa Blg. SOLD. or to cause their subsidiaries or affiliates to do so.. or to cause their subsidiaries or affiliates to so warn plaintiffs. but not limited to. Failed to monitor the health of plaintiffs exposed to said products. and . and/or USED DBCP and/or otherwise. plaintiff in that they. Inc. sold. fall worker. MANUFACTURED. et al. Inc. AS IT TURNED governmental agencies and the public. Concealed from Plaintiffs information concerning the observed effects of said products on Plaintiffs. or to cause AVAILABLE IN COMMERCE nematocides containing the chemical their subsidiaries or affiliates to do so.. PRODUCED. CONFLICTS | 03Dec | 46 From the foregoing. Failed to reveal the results of tests conducted on DBCP to each plaintiff.. Failed to adequately warn Plaintiffs of the dangerous characteristics of DBCP. MADE AVAILABLE OR PUT DBCP INTO THE STREAM OF COMMERCE were negligent OR AT FAULT in that they. a. Failed to take reasonable precaution or to exercise reasonable care to publish. in that they failed to exercise reasonable care to were employed. AND/OR MADE e. Moreover. commonly known as DBCP. affiliates to do so. produced. f. THE CHEMICAL WAS USED AGAINST the parasite known as the nematode. or c. Failed to test said products for adverse health effects. THEY allowed Plaintiffs to be exposed to. DISTRIBUTED. products to be tested. and ABELLA. Failed to provide plaintiffs with information as to what should be g. Dole Food Company. Dole Fresh Fruit 5. Failed to place adequate labels on containers of said products to warn reasonably safe and sufficient clothing and proper protective equipment and them of the damages of said products. were cause them to be so warned. Failed to place adequate warnings. to protect plaintiffs from the harmful effects of exposure of action and that the total amount sought in the complaints is to DBCP. The Defendants WHO MANUFACTURED. as both claims by NAVIDA. b. or to cause such to be implemented. Inc. including. WITHOUT INFORMING THE USERS b. it is clear that the claim for damages is the main cause appliances. THE DEFENDANTS WERE AT FAULT OR WERE NEGLIGENT IN THAT THEY proper application of DBCP-containing products. INSTRUCTIONS ON ITS PROPER USE AND APPLICATION.

and ABELLA. Second. producing. Third. Court of Appeals. which NAVIDA. Failed to use substitute nematocides for said products or to cause such Moreover..7 million for each plaintiff claimant. the question of jurisdiction would almost entirely depend upon Philippines. their distribution through sale or other disposition. alleged cause of action of NAVIDA. Whoever by act or omission causes damage to another. where he may be companies in manufacturing. and ABELLA. initially filed not the plaintiffs are entitled to recover upon all or some of the claims their claims for damages. it is not far-fetched to assume that voluminous records are of the action pleaded as appearing from the allegations in the complaint. either in General Verily. there outside the jurisdiction of the RTCs. family members upon the defenses set up in the answer or upon the motion to dismiss. is obliged to pay for the damage done. et al. According to NAVIDA. and and tried in the appropriate court.. al. To be precise. "the manufacture of the pesticides.. the injuries and illnesses. they damages filed by NAVIDA. the testimonial and documentary evidence asserted therein. with individual claims are. most of the evidence required to prove the claims of without instructions on its proper use and application. The RTC of acts and/or omissions which led to their exposure to nematocides General Santos City and the RTC of Davao City obviously have reasonable containing the chemical DBCP. co-workers.. et al. injuries and illnesses. indeed. and ABELLA. nematocides which contain DBCP. against the defendant companies for damages occurred in the Philippines. these additional factors..) employed in the banana plantations located in the Philippines or while they were residing within the agricultural areas also located in the Philippines. v.. the acts and/or omissions attributed to the defendant that. hence. Such fault or negligence. point to the acts and/or omissions of the defendant resides. using.. their negligence. which under the Civil Code is defined as took place abroad and had occurred outside and beyond the territorial an act. and/or otherwise found. for and other members of the community. or the parties. N. which obviously falls within the purview of the civil action jurisdiction of the RTCs. et al.. et al. and ABELLA.67 of approximately P2. The jurisdiction of the court cannot be made to depend from important witnesses. et al. What determines the jurisdiction of the court is the nature this case.. and ABELLA. the convenient fora for trying these cases. demonstrate Clearly then. It is. error on the part of the courts a quo when they dismissed the cases on the ground of lack of jurisdiction on the mistaken assumption Thus. et al.A. et al. which undeniably occurred in the Philippines. i. the cases below are not criminal cases where territoriality. and ABELLA. Article 2176 of the Civil Code provides: packaging in containers. and ABELLA. there being fault or boundaries of the Philippines. CONFLICTS | 03Dec | 47 h. et al. et al. Thus. or omission which causes damage to another. is called a quasi-delict and is governed by the provisions of this situs of the act complained of. NAVIDA.62 (Emphasis supplied and words in brackets al. allegedly suffered resulted from their exposure to DBCP while they were ours. or in the case of a non-resident defendant. the allegations in the Amended Joint-Complaints of The factual allegations in the Amended Joint-Complaints all point to their NAVIDA. therefore.64 this Court has always Santos City or in Davao City. et al.. The RTC of General Santos City and the RTC of Davao City validly acquired jurisdiction over the persons of all the defendant companies . specifically to their reproductive system. if there is no pre-existing contractual relation between the Certainly. In personal civil actions. attribute to defendant companies certain cause of action. apart from the RTC of General Santos City and the RTC of Davao City companies constitute a quasi-delict which is the basis for the claim for having jurisdiction over the subject matter in the instant civil cases.... in Citibank. would be determinative of jurisdiction and Chapter.. et al.. would be easier to gather in the otherwise." 63 NAVIDA. First.. such exposure to the said chemical caused ill effects.. being fault or negligence. venue for trial of cases. at the election of the plaintiff. coupled with the fact that the to be consulted. plaintiff claimants are all residents of the Philippines. selling.66 putting into the stream of commerce. Article 2176. et al. plaintiff claimants – a quasi-delict."65 and. involved in the presentation of evidence to support the claim of plaintiff The averments therein and the character of the relief sought are the ones claimants. et al. et basis to assume jurisdiction over the cases.. Considering the great number of plaintiff claimants involved in the defendants. the Rules of Court allow the action to be commenced As specifically enumerated in the amended complaints. where any of the plaintiffs or defendants ABELLA. such as claims for payment of damages. are available only in the Philippines. et al. resulting in their becoming part of the stream of commerce.e. the specific areas where they were reminded that jurisdiction of the court over the subject matter of the action allegedly exposed to the chemical DBCP are within the territorial jurisdiction is determined by the allegations of the complaint. et al. et al.. such as doctors. irrespective of whether or of the courts a quo wherein NAVIDA. Quite evidently. "without informing the users of its hazardous effects on health and/or In a very real sense. and ABELLA. et substitutes to [be] used. these allegations in the complaints constitute the cause of action of that the cause of action narrated by NAVIDA.

considering the fact that the RTC of General Santos City and the a quo by making several voluntary appearances. Should the subject motion of NAVIDA.70 on the part of all the defendants allegedly gives any co-defendant the statutory right to proceed against the other co-defendants for the payment Plaintiffs’ purported bad faith in filing the subject civil cases in Philippine of their respective shares. et al. All the defendant companies submitted themselves to the jurisdiction of the courts In sum. since the latter’s Amended Complaints court may commit in the exercise of its jurisdiction is merely an error of cited several instances of tortious conduct that were allegedly committed judgment.. OCCIDENTAL and SHELL as active participation of a party in the proceedings is tantamount to an respondents in view of their amicable settlement with NAVIDA. on realities.. as these may not exist at all.251-96 to the RTC of General Santos City and the v. in civil cases is acquired either by his voluntary appearance in court and his submission to its authority or by service of summons. and the Court subsequently orders the remand of the action to the trial court for continuance. much less jointly and severally by the defendant companies. What is more.72 represent them in the proceedings before the courts a quo. be granted. et al. as well as in Civil Case Nos. et al. the On the issue of the dropping of DOW. unconditionally and It must be remembered that this Court does not rule on allegations that are knowingly appeared and submitted themselves to the jurisdiction of the unsupported by evidence on record. Accordingly. NAVIDA... and ABELLA. settling defendants allegedly manifested that they intended to file their as well as over the subject matter of the instant case.. justice and law will be short- "[t]he defendant’s voluntary appearance in the action shall be equivalent to lived. which has been acquired and has been vested on the courts a agreements. have validly acquired jurisdiction over the persons of the defendant companies in the action below. the decision on all questions In their Memoranda. in Meat Packing Corporation of the Philippines Case Nos. assert that the cross-claims are already barred. by praying for various RTC of Davao City have jurisdiction over the subject matter of the amended affirmative reliefs. are further praying that DOW. Sandiganbayan. case. Furthermore. This solidary obligation divest the court of the jurisdiction over the case.71 This is especially true with respect to allegations of bad faith. and SHELL were executed. NAVIDA. CHIQUITA and DOLE would .. This Court deals with facts. and ABELLA. this Court finds such argument much asserting that the RTC of General Santos City and the RTC of Davao City too speculative to deserve any merit. and ABELLA. defendants did not aver any cross-claim in their answers to the complaint and that they subsequently sought to amend their answers to plead their It may also be pertinently stressed that "jurisdiction" is different from the cross-claims only after the settlement between the plaintiff claimants and "exercise of jurisdiction.251-96.68 held that jurisdiction over the person of the defendant RTC of Davao City. All parties are one in return to the forum of their choice. not the orders or the decision rendered therein. and by actively participating during the course of the complaints filed by NAVIDA. which are manifestly conjectural. CONFLICTS | 03Dec | 48 Anent the insinuation by DOLE that the plaintiff claimants filed their cases It is well to stress again that none of the parties claims that the courts a in bad faith merely to procure a dismissal of the same and to allow them to quo lack jurisdiction over the cases filed before them. continues until the termination of the proceedings. this Court.." Jurisdiction refers to the authority to decide a DOW. Any error that the NAVIDA. OCCIDENTAL.. and ABELLA. and invocation of the court’s jurisdiction and a willingness to abide by the ABELLA. behooves this Court to order the remand of Civil In line herewith.69 NAVIDA. the RTC of General Santos City and the RTC of Davao City have and 126654. and that the courts a proceedings below. resolution of the case.. et al. as in the case of the courts a quo.. et al. When this Court Rule 14. court has jurisdiction over the persons of the defendants and the subject matter. therefore. et al.. Nos. Section 20 of the 1997 Rules of Civil Procedure provides that acts on appearances instead of realities. et al. All parties voluntarily. argue that the non-settling quo. and courts ABELLA.. not fancies. it therefore. 5617 and 24. OCCIDENTAL and SHELL be dropped as respondents in G. et al. all the defendant companies line with the basic rule that good faith is always presumed and bad faith designated and authorized representatives to receive summons and to must be proved. and will bar said party from later on impugning the court or body’s jurisdiction. et al. CHIQUITA and DOLE are opposing the above motion of arising therefrom is but an exercise of such jurisdiction. not appearances. et al. quo have also acquired jurisdiction over the persons of all the defendant companies. and ABELLA. this cross-claims against their co-defendants who entered into compromise jurisdiction. respectively. et al. where a et al. 125078 Thus. et al. which does not affect its authority to decide the case. et al. The non- validly acquired jurisdiction over the persons of the defendant companies.R." In this connection. in service of summons. This Court does not rule on allegations courts a quo.. 5617 and 24.

contract. if any. a third party complaint or a separate the RTC of Davao City should first receive in evidence and examine all of trial. . 5617 and 24. Furthermore. 24. the Court deems that the Consolidated Motions (to Drop Party. It is a consensual contract. the paying debtor’s right of reimbursement is being manifested by the meeting of the offer and the acceptance upon the provided for under Article 1217 of the Civil Code. by making reciprocal concessions.76 Judicial approval is not required for its perfection. alleged compromise agreements are. the latter In solidary obligations. et al. the creditor may the agreement has not been judicially approved. 5617 Del Monte parties"75 and that the latter have executed amicable jointly filed a complaint without individually specifying their claims against settlements which completely satisfied any claims against DEL MONTE. of the Compromise Settlement. DEL MONTE filed a Manifestation and Motion73 subsequent developments. and ABELLA. stating that similar settlement agreements were allegedly their own amicable settlements with the plaintiff claimants. et al. the RTC of General Santos City and their other co-defendants.R.251-96. Thereafter. No. should likewise be referred to the said trial courts for appropriate disposition. the said allegation of DEL MONTE was simply stipulated in their between DEL MONTE and the settling plaintiffs. that was filed by NAVIDA. CHIQUITA and DOLE similarly insist that the motion of determine the propriety of dropping any party as a defendant therefrom. thus. 2007. on the Having adjudged that Civil Case Nos. However.. as well as their corresponding rights 127856 and accordingly prayed that it be allowed to withdraw the same. in view of the above settlement agreements with ABELLA. among the defendants may be dropped from the said cases. For this purpose. and obligations therein. the 336 plaintiff claimants in Civil Case No. A Under Article 2028 of the Civil Code. as well as in Civil Case The Court notes that the Consolidated Motions (to Drop Party-Respondents) Nos. would only unduly delay and complicate the the alleged compromise settlements involved in the cases at bar to proceedings. and ABELLA. under Article 2194 of the Civil Code.81 compromise agreement is not excepted from rules and principles of a contract. and ABELLA.74 DEL MONTE specified therein that there were truth could not be verified with certainty based on the records elevated to "only four (4) plaintiffs in Civil Case No.77 A compromise has upon the Art. not one accordance with the alleged compromise agreements with the four plaintiffs plaintiff claimant filed a motion for the removal of either DEL MONTE or in Civil Case No. Indemnity. OCCIDENTAL and SHELL in view of the latter companies’ alleged Incidentally.251-96 should be basis of the records of the cases at bar and the additional evidence remanded to the RTC of General Santos City and the RTC of Davao City. Joint-Complaint in the said civil case. et al. CONFLICTS | 03Dec | 49 allegedly be deprived of their right to prosecute their cross-claims against In light of the foregoing legal precepts. be denied. the courts a quo may require the presentation of additional evidence from the parties. In DEL MONTE or any of the other defendant companies. It is true that.79 In addition. 5617 and 24.. "[a] compromise is a contract whereby solidary obligation is one in which each of the debtors is liable for the entire the parties. 5617 who are claiming against the this Court. Indemnity. as a binding choose which offer to accept. Attached to the said manifestation were copies allegedly the only ones who were asserting claims against DEL MONTE. on April 2. Furthermore. the responsibility of two or more persons who are liable for the same quasi-delict is solidary.." Like any other contract. to drop DOW. a primary need to establish who the specific parties to the DEL MONTE stated that it no longer wished to pursue its petition in G. There is. Purportedly included in the agreements were Civil Case plaintiff claimants in Civil Case No. 5617 and 24. et al.. Moreover.80 He who made the payment may claim from his co-debtors only the share which corresponds to each. and Hold Harmless Agreement However. an extrajudicial of the whole obligation from any or all of the debtors. avoid a litigation or put an obligation. DEL MONTE sought the dismissal of the Amended CHIQUITA as defendants in Civil Case Nos. These four plaintiff claimants were Nos. If two or more solidary debtors offer to pay. after the parties have submitted their compromise agreements with the plaintiff claimants. to wit: thing and the cause which are to constitute the contract. only pertained to DOW. a compromise agreement determines the rights and obligations of only the parties to it. et al. as well as the Release in Compromise Settlement. Nos. NAVIDA. et al.. the trial courts can then determine who respectively.251-96. 5617. according to CHIQUITA. with the interest for the payment already made.R.251-96. DEL MONTE and CHIQUITA supposedly reached before the Court. 5617. but DEL MONTE executed by the plaintiff claimants with DEL MONTE and CHIQUITA qualified that it entered into a settlement agreement with only four of the sometime in 1999. Payment made by one of the solidary debtors extinguishes the parties the effect and authority of res judicata78 and this holds true even if obligation. 1217. perfected by mere consent. submitted by the parties. 5617 and 24. in Civil Case No. and Hold Harmless Agreement and its Full executed by the latter.. SHELL and OCCIDENTAL as respondents in G.. Respondents) filed by NAVIDA. in respective memoranda. Significantly. 125078 and 126654. et al. and each of the creditors is entitled to demand the satisfaction end to one already commenced.251-96.

no interest for the agreements allegedly entered into by NAVIDA. As succinctly held in Lapanday respective Regional Trial Courts of origin for further and appropriate Agricultural Development Corporation v. No. 149177 November 23. Hence. if proper. Nos. No. obligation to pay on the part of the defendants.R."83 The Court likewise GRANTS the motion filed by Del Monte to withdraw its petition in G. and the Order dated The above right of reimbursement of a paying debtor. is the operative fact which will entitle and 24. is not affected by the compromise G. 1996 denying reconsideration in however. in a joint and solidary obligation. which would necessarily give rise to an No pronouncement as to costs. 125078. et al. in Philippine International Surety Co. either of the solidary debtors to seek reimbursement for the share which corresponds to each of the [other] debtors. and 128398.. When one of the solidary debtors cannot. no cross-claims have been interposed by any defendant against another defendant. proceedings in line with the ruling herein that said courts have jurisdiction which means not only the delivery of money but also the performance.251-96. We REVERSE and SET borne by all his co-debtors. If and when such a cross-claim is made by a non-settling defendant against a settling defendant. such share shall be certiorari in G. 1996 of the Regional Trial Court of Davao City. Branch 16. In view of the previous grant of the motion to In the cases at bar.R. 127856 and trial on the merits must necessarily be conducted first in order to establish 125598 are considered CLOSED AND TERMINATED. 5617.R. Court of Appeals. In Armed Forces of the Philippines Mutual Benefit Association. and REMAND the records of this case to the actually delivers payment to the creditor.86 the Court upheld the ruling of the trial court that. Gonzales..R. in Civil Case No. will only arise.251-96. its subsequent Order dated December 16. 126654. Inc. along with the parties to the compromise. and ABELLA. both G. and corresponding liability of the co-debtors to reimburse. whether or not defendant companies are liable for the claims for damages filed by the plaintiff claimants. it is within the discretion of the trial court to determine the propriety of allowing such a cross-claim and if the settling defendant must remain a party to the case purely in relation to the cross claim. A withdraw the petition in G. v. in proportion to the debt of each. because of his insolvency. other persons involved in the litigation who have not taken part in concluding the compromise agreement but are adversely affected or feel prejudiced thereby. should not be precluded from invoking in the same proceedings an adequate relief therefor. Inc. intervening period may be demanded.84 the Court had the occasion to state that "where there are. 5617 any other manner. 125598."85 Relevantly. with some of the defendant companies. in over the subject matter of the amended complaints in Civil Case Nos. CONFLICTS | 03Dec | 50 If the payment is made before the debt is due. v. At the point in time where the proceedings below were prematurely halted. 127856. of the obligation. 24. et al. Branch 37.. 2007 . 1996 of the Regional Trial Court of General Santos City. the paying debtor may file a third-party complaint and/or a cross-claim to enforce his right to seek contribution from his co-debtors. Nos.1avvphil ASIDE the Order dated May 20. WHEREFORE. if a solidary debtor who is made to answer for an obligation Civil Case No. and the October 1. the right of the remaining defendant(s) to seek reimbursement in the above situation.R. No.82 "[p]ayment. Court of Appeals. there is no right of reimbursement to speak of as yet. SO ORDERED. the Court hereby GRANTS the petitions for review on reimburse his share to the debtor paying the obligation.

17 prompting them to file with the appellate court. 2000. the DPWH approved Nippon's request (CA) in CA-G. respondent consequently initiated on June 1. 2000.3 entered into regulated by the law prevailing at the place of performance. 2000.R. 2001 Decision22 finding no grave abuse of discretion services would be engaged by the company only up to the substantial in the trial court's denial of the motion to dismiss.6 forum shopping. 2000. petitioner Nippon Engineering Consultants Co. 2001 Resolution. CONFLICTS | 03Dec | 51 KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS for specific performance and damages with the Regional Trial Court of Lipa CO. They asserted that the claim for improper pre-termination of respondent's ICA could only be heard and NACHURA. 60827. Respondent. Ltd.11 vs.7 Respondent was named as the project manager in the contract's attaching thereto the proper verification and certification. Aggrieved by this development. This second Appendix 3. correct in applying instead the principle of lex loci solutionis. 2000 Civil Case No. 00-0264 . MINORU KITAMURA. respondent. petitioners filed with the CA. a Japanese consultancy firm providing technical and management Frank14 that matters connected with the performance of contracts are support in the infrastructure projects of foreign governments. 2000. invoking our ruling in Insular Government v. their first Petition for Certiorari under Rule 65 [docketed Nippon for a year starting on April 1. LTD. (Nippon). informed respondent that the Ruling on the merits of the second petition.18 On August 23. and refused to negotiate for the renewal of Petitioners' motion for reconsideration was subsequently denied by the CA the ICA. For their part. 1999. a second Petition for construction supervision of the Bongabon-Baler Road Improvement (BBRI) Certiorari under Rule 65 already stating therein the material dates and Project. The CA thus declared that the trial court was Threatened with impending unemployment.. 2000.19 An Entry of Judgment was later issued by the appellate court on September 20. The CA ruled. SP No.8 petition.5 Nippon then assigned as CA-G. just in time for the others. following the company's consultancy material dates and for insufficient verification and certification against contract with the Philippine Government. Petitioners. 1999.. through his lawyer.21 On February 28.. On June 29. Kotake as project manager the motion for reconsideration thereof.16 The trial court subsequently denied petitioners' motion Kitamura.4 The for reconsideration.R. petitioners. the Department of Public Works and Highways (DPWH) engaged the consultancy services of Nippon. on September on January 28. City.9 case. on agreement provides that respondent was to extend professional services to August 14.1.23 requested a negotiation conference and demanded that he be assigned to the BBRI project. SP No.: ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.24 As he was not able to generate a positive response from the petitioners. the RTC. that the principle of lex loci celebrationis was not applicable to the ICA's expiry. contending that the ICA had been perfected in Japan and executed by and between Japanese nationals. on June 20.R. moved to dismiss DECISION the complaint for lack of jurisdiction. 2000.13 On March 30. among completion of the STAR Project on March 31. 2001 Resolution2 denying for the replacement of Kitamura by a certain Y. J.10 in the assailed July 25. a Japanese national permanently residing in the Philippines. which substantially raised the same issues as those in the first. was docketed as CA-G. petitioner Kazuhiro Hasegawa. because nowhere in the pleadings was the validity of the written agreement put in issue. Nippon insisted that respondent’s contract was for a fixed term that had already expired. and the July 25. 60205].15 denied the an Independent Contractor Agreement (ICA) with respondent Minoru motion to dismiss. 60827. His the assailed April 18. 2001 Decision1 of the Court of Appeals In the meantime. 2000. Nippon's general manager for its International Division. of the BBRI Project. the CA resolved to respondent to work as the project manager of the Southern Tagalog Access dismiss the petition on procedural grounds—for lack of statement of Road (STAR) Project in the Philippines. still within the reglementary period. 2000.12 Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18. this time for the detailed engineering and 19. SP No.20 When the STAR Project was near completion. the appellate court rendered company had no more intention of automatically renewing his ICA.

can bind the corporation. OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE It will not warrant the dismissal and nullification of the entire proceedings. of the petition's defective certification of non-forum shopping. and even if petitioners still indicated in the verification and THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT certification of the second certiorari petition that the first had already been CONTROVERSY. SP No.40 The dismissal of a case without prejudice signifies the absence of a decision Considering that Hasegawa verified and certified the petition only on his on the merits and leaves the parties free to litigate the matter in a behalf and not on behalf of the other petitioner. 2000. In other words. which is attached to the second celebrationis.34 The pivotal question that this Court is called upon to resolve is whether the The Court also finds no merit in respondent's contention that petitioner subject matter jurisdiction of Philippine courts in civil cases for specific Hasegawa is only authorized to verify and certify. thus. As respondent pointed out. petitioners does not bar another action involving the same parties.33 petitioners are no longer required by OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO the Rules to indicate in their certification of non-forum shopping in the JAPANESE NATIONALS. satisfactory explanation and a subsequent fulfillment of the requirements G. CONFLICTS | 03Dec | 52 Remaining steadfast in their stance despite the series of denials. however. SP No.42 While technical rules of procedure are designed not to . no person. 60205 has already barred the filing of the second petition have been made. instant petition for review. 60205 on account Rules. on behalf of Nippon. In any case. DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER dismissed on procedural grounds. this Court has liberally applied the Rules or even suspended its application whenever a Kitamura contends that the finality of the appellate court's decision in CA. Office of the Ombudsman. the performance and damages involving contracts executed outside the country certiorari petition filed with the CA and not the instant petition. Rule directors.41 Substantial commenced. aforesaid first petition before the CA.R.36 In a plethora of cases. In not a few cases. The aforesaid September 4. as in the present case. or file a second petition attaching thereto the subsequent August 17. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN res judicata and litis pendentia.27 The same holds true in the CA's dismissal of However. it was a dismissal without prejudice. on the same instituted the instant Petition for Review on Certiorari25 imputing the subject matter and theory. the status of the AND EXECUTED IN TOKYO. 2001 Authorization were issued only by Nippon's appropriate verification and certification—as they.R." or forum non conveniens. an omission in the certificate of non-forum shopping about any event that will not constitute B. SP No. because the said dismissal is without prejudice and has no res A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT judicata effect. the petition has to be subsequent action as though the dismissed action had not been denied pursuant to Loquias v.R. before ruling on this issue. petitioners this case. Authorization39 for Hasegawa to act on behalf of the company in the instant petition. in fact did—and stating president and chief executive officer. When the CA dismissed CA-G. within the prescribed period30 in Section 4. the Court cannot extend the same liberal treatment to the defect the said case due to defects in the formal requirement of verification28 and in the verification and certification. is not a fatal defect. the "state of the most significant relationship certiorari petition and which is also attached to the instant petition for rule. the by foreign nationals may be assailed on the principles of lex loci Authorization35 dated September 4. review. we must first dispose of the procedural filed with the appellate court. Hasegawa is truly not authorized to act on behalf of Nippon in of the material dates. we have ruled that corporate powers are 65 of the said Rules. 2000 Authorization and even the can re-file the petition. and that authority cannot extend to the matters raised by the respondent. the Court finds the same as sufficient compliance with the We do not agree.32 following errors to the appellate court: Necessarily. not even its officers. not by the company's board of therein the material dates. True.26 no longer present. WRITTEN WHOLLY IN THE JAPANESE LANGUAGE instant petition for review of the second certiorari petition. and to which in the other requirement in Rule 46 of the Rules of Court on the statement we agree.31 exercised by the board of directors. the termination of a case not on the merits compliance will not suffice in a matter that demands strict observance of the Rules. OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN considering that the evils sought to be prevented by the said certificate are PRIVATE INTERNATIONAL LAWS. 60827 (fundamentally raising the same issues misgivings on this point and appended to their Reply38 an updated as those in the first one) and the instant petition for review thereof. lex contractus.37 Given that petitioners herein sufficiently explained their docketed as CA-G. JAPAN.29 The dismissal being without prejudice. in the absence of authority from the board. is limited in scope—its wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition However.

has various aspects. posit that local courts have no substantial relationship to the parties46 over the res or the thing which is the subject of the litigation. in case of an adverse decision. petitioners subject matter. three The Court finds the invocation of these grounds unsound. and introduced their new argument that the applicable principle is In the instant case.55 The rule.59 To Japan. over the issues of the case and. and cannot be the subject of the extraordinary petition for substantive law which will determine the merits of the case is fair to both certiorari or mandamus. In the Motion to the sovereign authority which establishes and organizes the court.52 We only pointed out petitioners' inconstancy in their grounds to question subject matter jurisdiction are the principles of lex loci arguments to emphasize their incorrect assertion of conflict of laws celebrationis and lex contractus. The ICA subject of the power to adjudicate a controversy. The appropriate recourse is to file an answer and parties.45 petitioners' case does not fall among them. in the judicial resolution of conflicts problems. petitioners never contended that the given only by law and in the manner prescribed by law. choice of law. Japan.51 the trial court is not properly vested by law with jurisdiction to hear the subject controversy for. jurisdiction to enter a judgment. they are intended to effect the following questions: (1) Where can or should litigation be initiated? (2) proper and orderly disposition of cases and effectively prevent the clogging Which law will the court apply? and (3) Where can the resulting judgment of court dockets. maintained the forum non conveniens defense. relationship rule. following the principles of lex loci celebrationis and lex contractus. in cases involving property.60 the movant must show that the court. as explained in Philippine Ports Authority properly cognizable by the RTC of Lipa City.47 subject matter jurisdiction. 00-0264 for specific Be that as it may. however. and written wholly in the Japanese language. and recognition and enforcement of judgments. to proceed to state constitutional authority to apply forum law. do not claim that the [state of the] most significant relationship rule. over the defendant or the respondent.58 It is further RTC is an inconvenient forum. It is a Jurisdiction considers whether it is fair to cause a defendant to travel to this well-established rule that an order denying a motion to dismiss is state. question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have This brings us to the discussion of the substantive issue of the case. The Court notes that petitioners adopted an additional but different theory Jurisdiction over the subject matter in a judicial proceeding is conferred by when they elevated the case to the appellate court. petitioners." To elucidate. it must have jurisdiction over the litigation was entered into and perfected in Tokyo. petitioners In this case. the "minimum contacts" for one do appeal in due course. the Court has observed that petitioners incorrectly filed a Rule 65 Analytically. nonetheless. They merely argued that the applicable law determined by the allegations of the complaint irrespective of whether the which will determine the validity or invalidity of respondent's claim is that of plaintiff is entitled to all or some of the claims asserted therein. petitioners are actually referring to International Law. CONFLICTS | 03Dec | 53 frustrate the ends of justice.49 succeed in its motion for the dismissal of an action for lack of jurisdiction While not abandoning this stance in their petition before the appellate over the subject matter of the claim. petitioners on certiorari significantly invoked the defense of forum court or tribunal cannot act on the matter submitted to it because no law non conveniens.54 petition to question the trial court's denial of their motion to dismiss. While jurisdiction and the trial.1âwphi1 question its jurisdiction to hear and resolve the civil case for specific Jurisdiction. consecutive phases are involved: jurisdiction. petitioners grants it the power to adjudicate the claims. and. by Japanese plaintiff or the petitioner. indeed.56 Asserting that the RTC of Lipa City is an inconvenient forum. only the first phase is at issue—jurisdiction. For a court to validly exercise its performance and damages filed by the respondent.61 dropped their other arguments. over the nationals.62 What they rather raise as v.43 be enforced?53 Further.50 On petition for review before this Court.44 While there are recognized exceptions to this not always provide the necessary "significant contacts" for the other.57 In assailing following the [state of the] most significant relationship rule in Private the trial court's jurisdiction herein. City of Iloilo. to elevate the entire case by choice of the lex fori will often coincide. Corresponding to these phases are the . choice of law asks the further question whether the application of a interlocutory. and the "state of the most significant principles. Civil Case No. this Court is not inclined to deny this petition merely on performance and damages is one not capable of pecuniary estimation and is the basis of the change in theory. It is Dismiss48 filed with the trial court. Thus. in their motion to dismiss. The power to exercise jurisdiction does not automatically give a to interpose as defenses the objections raised in the motion. jurisdiction and choice of law are two distinct concepts.

the existence of such DENIED. premises considered.70 They determine which state's law is to be applied in jurisdiction. since the RTC is vested by law with the power to entertain and Further.72 Also.69 does not include it as a ground. First."65 It controls the nature. or place of incorporation of Neither can the other ground raised. is brought before a court or administrative agency. the limited by foreign sovereign law short of treaties or other formal court should determine which state has the most substantial connection to agreements. Rule 16 of the Rules of Court issue to be resolved.75 should consider where the contract was made. Accordingly.74 The court’s power to hear voluntarily agreed upon by the parties or the law intended by them either cases and controversies is derived from the Constitution and the laws.64 The doctrine of lex because of lack of jurisdiction or refusal to assume jurisdiction over the contractus or lex loci contractus means the "law of the place where a case. hence. the court sovereigns.76 be used to the parties. one involving a foreign element. It should be noted that when a conflicts case. the propriety of dismissing a case based on this principle resolving the substantive issues of a conflicts problem. was to be performed. when the law of a foreign country is invoked WHEREFORE. the RTC decided to assume choice of law." to ascertain what state law to apply to a dispute.68 This rule takes into account several contacts and evaluates deprive the trial court of its jurisdiction herein. the forum. whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely Since these three principles in conflict of laws make reference to the law upon the facts of the particular case and is addressed to the sound applicable to a dispute. first there correctly denied the petitioners’ motion to dismiss. (2) assume jurisdiction over the case and apply the internal law of contract is executed or to be performed. as requires a factual determination. or (3) assume jurisdiction over the case and take into account construction. In a case involving a contract. CONFLICTS | 03Dec | 54 Lex loci celebrationis relates to the "law of the place of the ceremony"63 or alternatives open to the latter in disposing of it: (1) dismiss the case. expressly or implicitly. should exist a conflict of laws situation requiring the application of the conflict of laws rules. they are rules proper for the second phase.79 only inapplicable but also not yet called for.78 In this case. there are three . forum non conveniens. either the law of the place where a contract is made. law must be pleaded and proved. the trial and appellate courts of Japan and ours.67 Under the "state of the most significant While it may choose to recognize laws of foreign nations.77 Second. even in matters regarding rights provided by foreign the occurrence and the parties. choice-of-law rules are not properly considered a matter of defense. petitioners' premature invocation of choice-of-law rules is exposed hear the civil case filed by respondent and the grounds raised by petitioners by the fact that they have not yet pointed out any conflict between the laws to assail that jurisdiction are inappropriate.71 Necessarily. was negotiated. and the domicile. this conflicts principle is more the only issue in this case is that of jurisdiction. the discretion of the trial court.73 SO ORDERED. the petition for review on certiorari is to provide the proper rules for the solution of a case. the court is not relationship rule. Third. Before determining which law should apply. it is not a proper basis them according to their relative importance with respect to the particular for a motion to dismiss because Section 1. place of business. and validity of the contract66 and it may pertain to the law or apply the law of some other State or States.