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1. G.R. No.

L-37750 May 19, 1978

SWEET LINES, INC., petitioner,

HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO


Lessons Applicable: Contract of Adhesion (Transportation)

FACTS: Respondents Atty. Leovigildo Tandog and Rogelio Tiro bought tickets for Tagbilaran City via the
port of Cebu.

Since many passengers were bound for Surigao, M/S "Sweet Hope would not be proceeding to Bohol.

They went to the proper branch office and was relocated to M/S "Sweet Town" where they were forced to
agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." and
they were exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn
grits and their tickets were not honored so they had to purchase a new one.

They sued Sweet Lines for damages and for breach of contract of carriage before the Court of First
Instance of Misamis Oriental who dismissed the complaint for improper venue. A motion was premised
on the condition printed at the back of the tickets dismissed instant petition for prohibition for
preliminary injunction.

This motion was premised on the condition printed at the back of the tickets, i.e., Condition No. 14, which

14. It is hereby agreed and understood that any and all actions arising out of the
conditions and provisions of this ticket, irrespective of where it is issued, shall be
filed in the competent courts in the City of Cebu.

ISSUE: W/N a common carrier engaged in inter-island shipping stipulate thru condition printed at the
back of passage tickets to its vessels that any and all actions arising out of the contract of carriage should
be filed only in a particular province or city


There is no question that there was a valid contract of carriage entered into by petitioner and private
respondents and that the passage tickets, upon which the latter based their complaint, are the best
evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and
object, are present.

It should be borne in mind, however, that with respect to the fourteen (14) conditions one of which is
"Condition No. 14" which is in issue in this case printed at the back of the passage tickets, these are
commonly known as "contracts of adhesion," the validity and/or enforceability of which will have to be
determined by the peculiar circumstances obtaining in each case and the nature of the conditions or
terms sought to be enforced.

For, "(W)hile generally, stipulations in a contract come about after deliberate drafting by the parties
thereto, ... there are certain contracts almost all the provisions of which have been drafted only by
one party, usually a corporation. Contract of adhesion not that kind of a contract where the parties sit
down to deliberate, discuss and agree specifically on all its terms, but rather, one which respondents took
no part at all in preparing just imposed upon them when they paid for the fare for the freight they wanted
to ship.

Considered in the light Of the foregoing norms and in the context Of circumstances Prevailing in the
inter-island ship. ping industry in the country today, We find and hold that Condition No. 14 printed at the
back of the passage tickets should be held as void and unenforceable:

first, under circumstances obligation in the inter-island ship. ping industry, it is not just and fair to bind
passengers to the terms of the conditions printed at the back of the passage tickets, on which
Condition No. 14 is Printed in fine letters, and second, this subverts the public policy on transfer of venue
of proceedings of this nature, since the same will prejudice rights and interests of innumerable
passengers in different s of the country who, under Condition No. 14, will have to file suits against
petitioner only in the City of Cebu.

Public policy is ". . . that principle of the law which holds that no subject or citizen can lawfully do that
which has a tendency to be injurious to the public or against the public good ...

Under this principle" ... freedom of contract or private dealing is restricted by law for the good of the
public. Clearly, Condition No. 14, if enforced, will be subversive of the public good or interest, since it will
frustrate in meritorious cases, actions of passenger cants outside of Cebu City, thus placing petitioner
company at a decided advantage over said persons, who may have perfectly legitimate claims against it.

2. In Re Union Carbide Corp. Gas Plant Disaster, 634 F. Supp. 842 (S.D.N.Y. 1986)
U.S. District Court for the Southern District of New York - 634 F. Supp. 842 (S.D.N.Y. 1986)
June 10, 1986


On the night of 23 December 1984, a gas leak occurred at the pesticide plant of Union Carbide India
Limited (UCIL) in Bhopal, India resulting in the deaths of more than 2,000 people and injuries to more
than 200,000 others. . Thereafter, the India passed a law giving the Indian government the exclusive right
to represent the victims of the disaster.

As thus, the Indian government filed a complaint before a New York district court.

The Union Carbide Corporation (UCC) filed a motion to dismiss on the ground of forum non
conveniens and lack of personality.

The district court granted the motion on three conditions, namely, that UCC: (1) consent to the jurisdiction
of Indian courts and waive defenses based on the Statute of Limitations; (2) agree to the satisfy the
judgement of the Indian court, provided it complied with the requirements of due process; and (3) be
subject to discovery under the Federal Rules of Civil Procedure of the US.

Consequently, the Indian government filed sued the UCIL and the UCC before the a district court in

The UCC appealed the conditions.

Arguments for the Defendant
While Indian courts may provide an adequate alternative forum, they adhere to standards of due process
much lower than that followed in the US. Hence, US courts must supervise the proceedings before Indian

WON the dismissal on the ground of forum non conveniens is proper.


The Indian courts are adequate alternative fora.

Ratio Decidendi
Almost all of the estimated 200,000 plaintiffs are citizens and residents of India who have revoked their
representation by an American counsel in favor of the Indian government, which now prefers Indian
courts. Further, the UCC has already consented to the assumption of jurisdiction by the Indian courts. All
the witnesses and evidence are likewise in India.

As to the conditions, the first is valid in order to secure the viability of the Indian courts as alternate fora.
The second is problematic as it gives the impression that foreign judgments the UCC's consent is
necessary in order for the judgement of the Indian courts to be enforceable in New York.

The laws of New York, in fact, recognizes that a judgment rendered by a foreign court may be enforced in
that State except if such judgment was rendered in violation of due process or without jurisdiction over the
person of the defendant.

The request of UCC of supervision by US courts of Indian courts is untenable. The power of US courts
cannot extend beyond their territorial jurisdiction. Moreover, once US courts dismiss a case on the ground
of forum non conveniens, they lose any further jurisdiction over the case, except in case of an action for
enforcement later on. Denial of due process may, however, constitute a defense against the enforcement
of the Indian judgment. The third condition is likewise invalid. Basic justice dictates that both parties must
be given equal access to evidence in each other's possession. Hence, both parties maybe subjected to
the modes of discovery under the Federal Rules of Civil Procedure on equal terms subject to approval by
Indian courts.


(SEPTEMBER 10, 1997)

FACTS: Bensusan Restaurant Corporation, the plaintiff, owned the Blue Note jazz club in New Yorks
Greenwich Village, and owned a federal trademark registration for the mark THE BLUE NOTE.

The defendant, Richard King, operated The Blue Note, a small club in the college town of
Columbia, Missouri, and had used that mark on a local basis since 1980 several years prior to use of
Blue Note by the now-famous New York club.

Although the New York jazz club had obtained a federal registration for the Blue Note mark in
1985, the Missouri club could continue to use the name within its local area based on the Missouri club's
prior use of the name.
In April 1996, the Missouri club began operation of a website
(http// that offered general information about Kings club, including a
calendar of events and ticketing information.

Tickets could not be ordered via the Internet; instead, one could order tickets for an advertised
event by telephone and then pick-up the tickets in person at a box office in Columbia, Missouri. The
Missouri clubs website also included a hyperlink to the website for Greenwich Villages Blue Note club,
while also offering a disclaimer that "The Blue Notes Cyberspot should not be confused with one of
the worlds finest jazz clubs, the Blue Note, located in the heart of New Yorks Greenwich Village.
If you should find yourself in the Big Apple give them a visit.
The New York jazz club viewed the Missouri club's website on the Internet as an expansion of use of the
Blue Note name outside of the local area, and raised this objection with King. In response, King removed
the second sentence of the disclaimer and the hyperlink from his website.

The operator of the New York jazz club sued the operator of the Missouri jazz club for trademark
infringement in New York.

The district court dismissed the complaint on the ground of lack of personal jurisdiction. Because
King does not transact business in New York State.

ISSUE: WON the district court erred in dismissing the complaint.


The New York law dealing with personal jurisdiction based upon tortious acts of a non-domiciliary who
does not transact business in New York is contained in sub-paragraphs (a)(2) and (a)(3) of CPLR 302.

As construed by the Feathers decision, jurisdiction cannot be asserted over a nonresident under
this provision unless the nonresident commits an act in this state. This is tantamount to a
requirement that the defendant or his agent be physically present in New York In short, the
failure to perform a duty in New York is not a tortious act in this state, under the cases, unless the
defendant or his agent enters the state.

To satisfy the latter requirement, Bensusan relies on the arguments that King participated in interstate
commerce by hiring bands of national stature and received revenue from customers-students of the
University of Missouri-who, while residing in Missouri, were domiciliaries of other states.

These alleged facts were not sufficient to establish that substantial revenues were derived from interstate
commerce, a requirement that is intended to exclude non-domiciliaries whose business operations are of
a local character.

The court stated that "[t]he mere fact that a person can gain information on the allegedly infringing
product is not the equivalent of a person advertising, promoting, selling or otherwise making an effort
to target its product in New York."

Consequently, the district court concluded that any tortious action of trademark infringement would arise
in Missouri rather than in New York. In examining whether the exercise of jurisdiction over King would
satisfy due process, the court asserted that creating a site, like placing a product into the stream of
commerce, may be felt nationwide or even worldwide but, without more, it is not an act purposefully
directed toward the forum state.

For all the reasons above stated, we affirm the judgment of the district court.

4. G.R. No. 122191 October 8, 1998

Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.


297 SCRA 469 Conflict of Laws Private International Law Situs Locus Actus

FATCS: On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines
based in Jeddah, Saudi Arabia.

In 1990, while she and some co-workers were in a lay-over in Jakarta, Indonesia, an Arab co-worker tried

to rape her in a hotel room. Fortunately, a roomboy heard her cry for help and two of her Arab co-workers

were arrested and detained in Indonesia. Later, Saudia Airlines re-assigned her to work in their Manila


While working in Manila, Saudia Airlines advised her to meet with a Saudia Airlines officer in Saudi.

She did but to her surprise, she was brought to a Saudi court where she was interrogated and

eventually sentenced to 5 months imprisonment and 289 lashes; she allegedly violated Muslim

customs by partying with males.

The Prince of Makkah got wind of her conviction and the Prince determined that she was wrongfully

convicted hence the Prince absolved her and sent her back to the Philippines.

Saudia Airlines later on dismissed Morada. Morada then sued Saudia Airlines for damages under Article

19 and 21 of the Civil Code.

Saudia Airlines filed a motion to dismiss on the ground that the RTC has no jurisdiction over the case

because the applicable law should be the law of Saudi Arabia. Saudia Airlines also prayed for other

reliefs under the premises.

ISSUE: WON Saudi Airlines contention s tenable.


Firstly, the RTC has acquired jurisdiction over Saudia Airlines when the latter filed a motion to dismiss

with petition for other reliefs. The asking for other reliefs effectively asked the court to make a

determination of Saudia Airliness rights hence a submission to the courts jurisdiction.

Secondly, the RTC has acquired jurisdiction over the case because as alleged in the complaint of

Morada, she is bringing the suit for damages under the provisions of our Civil Law and not of the Arabian


Morada then has the right to file it in the QC RTC because under the Rules of Court, a plaintiff may elect

whether to file an action in personam (case at bar) in the place where she resides or where the

defendant resides.

Obviously, it is well within her right to file the case here because if shell file it in Saudi Arabia, it will be

very disadvantageous for her (and of course, again, Philippine Civil Law is the law invoked).

Thirdly, one important test factor to determine where to file a case, if there is a foreign element involved,

is the so called locus actus or where an act has been done. In the case at bar, Morada was already

working in Manila when she was summoned by her superior to go to Saudi Arabia to meet with a Saudia

Airlines officer. She was not informed that she was going to appear in a court trial. Clearly, she was

defrauded into appearing before a court trial which led to her wrongful conviction. The act of defrauding,

which is tortuous, was committed in Manila and this led to her humiliation, misery, and suffering. And

applying the torts principle in a conflicts case, the SC finds that the Philippines could be said as a situs of

the tort (the place where the alleged tortious conduct took place).

5. GR. No. 92013 July 25, 1990

SALVADOR H. LAUREL, petitioner, vs. RAMON GARCIA, as head of the Asset Privatization Trust,



The subject property in this case is one of the four (4) properties in Japan acquired by the

Philippine government under the Reparations Agreement entered into with Japan on May 9, 1956.

The Roppongi property was acquired from the Japanese government and listed under the heading

"Government Sector", through Reparations Contract No. 300 dated June 27, 1958.
The Roppongi property consists of the land and building "for the Chancery of the Philippine

Embassy" (Annex M-D to Memorandum for Petitioner, p. 503). As intended, it became the site of

the Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976 when the

Roppongi building needed major repairs. Due to the failure of our government to provide

necessary funds, the Roppongi property has remained undeveloped since that time.

Amidst opposition by various sectors, the Executive branch of the government has been pushing,

with great vigor, its decision to sell the reparations properties starting with the Roppongi lot.

Petitioners seek to stop the Philippine Government to sell the Roppongi Property, which is located in

Japan. It is one of the properties given by the Japanese Government as reparations for damage done by

the latter to the former during the war.

Petitioner argues that under Philippine Law, the subject property is property of public dominion. As

such, it is outside the commerce of men. Therefore, it cannot be alienated.

Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because the

property is located in Japan. They posit that the principle of lex situs applies.


1. WON the subject property can be alienated being of public dominion.

2. WON the conflict of law rule shall apply.


1. NO.

Under Philippine Law, there can be no doubt that it is of public dominion unless it is convincingly shown

that the property has become patrimonial. This, the respondents have failed to do. As property of public

dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated.

2. NO.

We see no reason why a conflict of law rule should apply when no conflict of law situation exists.
A conflict of law situation arises only when:

(1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and

transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the

interpretation and effect of a conveyance, are to be determined; and

(2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the

same matters. Hence, the need to determine which law should apply.

In the instant case, none of the above elements exists.

The issues are not concerned with validity of ownership or title. There is no question that the property

belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of

property belonging to the State. And the validity of the procedures adopted to effect its sale. This is

governed by Philippine Law. The rule of lex situs does not apply.

The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule

is misplaced. The opinion does not tackle the alienability of the real properties procured through

reparations nor the existence in what body of the authority to sell them. In discussing who are capable of

acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can

acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to

Filipino citizens and entities wholly owned by Filipinos is inapplicable.

WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is
issued enjoining the respondents from proceeding with the sale of the Roppongi property in
Tokyo, Japan.