You are on page 1of 16

[G.R. No. 122191. October 8, 1998] detention.

Eventually, they were again put in service by


defendant SAUDI (sic). In September 1990, defendant
SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF SAUDIA transferred plaintiff to Manila.
APPEALS, MILAGROS P. MORADA and HON. RODOLFO
A. ORTIZ, in his capacity as Presiding Judge of Branch 89, On January 14, 1992, just when plaintiff thought that the
Regional Trial Court of Quezon City, respondents. Jakarta incident was already behind her, her superiors
requested her to see Mr. Ali Meniewy, Chief Legal Officer of
DECISION SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
QUISUMBING, J.:
passport and questioned her about the Jakarta
This petition for certiorari pursuant to Rule 45 of the Rules of incident.Miniewy simply stood by as the police put pressure
Court seeks to annul and set aside the Resolution[1] dated on her to make a statement dropping the case against Thamer
September 27, 1995 and the Decision[2] dated April 10, 1996 and Allah. Not until she agreed to do so did the police return
of the Court of Appeals[3] in CA-G.R. SP No. 36533,[4] and her passport and allowed her to catch the afternoon flight out
the Orders[5] dated August 29, 1994[6] and February 2, of Jeddah.
1995[7] that were issued by the trial court in Civil Case No.
One year and a half later or on June 16, 1993, in Riyadh,
Q-93-18394.[8]
Saudi Arabia, a few minutes before the departure of her flight
The pertinent antecedent facts which gave rise to the instant to Manila, plaintiff was not allowed to board the plane and
petition, as stated in the questioned Decision[9], are as instead ordered to take a later flight to Jeddah to see Mr.
follows: Miniewy, the Chief Legal Officer of SAUDIA. When she did,
a certain Khalid of the SAUDIA office brought her to a Saudi
On January 21, 1988 defendant SAUDIA hired plaintiff as a court where she was asked to sign a document written in
Flight Attendant for its airlines based in Jeddah, Saudi Arabia. Arabic. They told her that this was necessary to close the case
xxx against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27,
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, 1993. Plaintiff then returned to Manila.
plaintiff went to a disco dance with fellow crew members
Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi Shortly afterwards, defendant SAUDIA summoned plaintiff to
nationals. Because it was almost morning when they returned report to Jeddah once again and see Miniewy on June 27, 1993
to their hotels, they agreed to have breakfast together at the for further investigation. Plaintiff did so after receiving
room of Thamer. When they were in te (sic) room, Allah left assurance from SAUDIAs Manila manager, Aslam Saleemi,
on some pretext. Shortly after he did, Thamer attempted to that the investigation was routinary and that it posed no danger
rape plaintiff. Fortunately, a roomboy and several security to her.
personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al- In Jeddah, a SAUDIA legal officer brought plaintiff to the
Gazzawi, the latter as an accomplice. same Saudi court on June 27, 1993. Nothing happened then
but on June 28, 1993, a Saudi judge interrogated plaintiff
When plaintiff returned to Jeddah a few days later, several through an interpreter about the Jakarta incident. After one
SAUDIA officials interrogated her about the Jakarta hour of interrogation, they let her go. At the airport, however,
incident. They then requested her to go back to Jakarta to help just as her plane was about to take off, a SAUDIA officer told
arrange the release of Thamer and Allah. In Jakarta, SAUDIA her that the airline had forbidden her to take flight. At the
Legal Officer Sirah Akkad and base manager Baharini Inflight Service Office where she was told to go, the secretary
negotiated with the police for the immediate release of the of Mr. Yahya Saddick took away her passport and told her to
detained crew members but did not succeed because plaintiff remain in Jeddah, at the crew quarters, until further orders.
refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to On July 3, 1993 a SAUDIA legal officer again escorted
understand the local dialect. She also declined to sign a blank plaintiff to the same court where the judge, to her
paper and a document written in the local dialect. Eventually, astonishment and shock, rendered a decision, translated to her
SAUDIA allowed plaintiff to return to Jeddah but barred her in English, sentencing her to five months imprisonment and to
from the Jakarta flights. 286 lashes. Only then did she realize that the Saudi court had
tried her, together with Thamer and Allah, for what happened
Plaintiff learned that, through the intercession of the Saudi in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
Arabian government, the Indonesian authorities agreed to going to a disco, dancing and listening to the music in
deport Thamer and Allah after two weeks of
violation of Islamic laws; and (3) socializing with the male the Philippines does not have any substantial interest in the
crew, in contravention of Islamic tradition.[10] prosecution of the instant case, and hence, without jurisdiction
to adjudicate the same.
Facing conviction, private respondent sought the help of her
employer, petitioner SAUDIA. Unfortunately, she was denied Respondent Judge subsequently issued another
any assistance. She then asked the Philippine Embassy in Order[24] dated February 2, 1995, denying SAUDIAs Motion
Jeddah to help her while her case is on appeal. Meanwhile, to for Reconsideration. The pertinent portion of the assailed
pay for her upkeep, she worked on the domestic flight of Order reads as follows:
SAUDIA, while Thamer and Allah continued to serve in the
international flights.[11] Acting on the Motion for Reconsideration of defendant Saudi
Arabian Airlines filed, thru counsel, on September 20, 1994,
Because she was wrongfully convicted, the Prince of Makkah and the Opposition thereto of the plaintiff filed, thru counsel,
dismissed the case against her and allowed her to leave Saudi on October 14, 1994, as well as the Reply therewith of
Arabia. Shortly before her return to Manila,[12] she was defendant Saudi Arabian Airlines filed, thru counsel, on
terminated from the service by SAUDIA, without her being October 24, 1994, considering that a perusal of the plaintiffs
informed of the cause. Amended Complaint, which is one for the recovery of actual,
moral and exemplary damages plus attorneys fees, upon the
On November 23, 1993, Morada filed a Complaint[13] for basis of the applicable Philippine law, Article 21 of the New
damages against SAUDIA, and Khaled Al-Balawi (Al- Civil Code of the Philippines, is, clearly, within the
Balawi), its country manager. jurisdiction of this Court as regards the subject matter, and
there being nothing new of substance which might cause the
On January 19, 1994, SAUDIA filed an Omnibus Motion To
reversal or modification of the order sought to be
Dismiss[14] which raised the following grounds, to wit: (1)
reconsidered, the motion for reconsideration of the defendant,
that the Complaint states no cause of action against Saudia; (2)
is DENIED.
that defendant Al-Balawi is not a real party in interest; (3) that
the claim or demand set forth in the Complaint has been SO ORDERED.[25]
waived, abandoned or otherwise extinguished; and (4) that the
trial court has no jurisdiction to try the case. Consequently, on February 20, 1995, SAUDIA filed its
Petition for Certiorari and Prohibition with Prayer for Issuance
On February 10, 1994, Morada filed her Opposition (To of Writ of Preliminary Injunction and/or Temporary
Motion to Dismiss)[15] Saudia filed a reply[16] thereto on Restraining Order[26] with the Court of Appeals.
March 3, 1994.
Respondent Court of Appeals promulgated a Resolution with
On June 23, 1994, Morada filed an Amended Temporary Restraining Order[27] dated February 23, 1995,
Complaint[17] wherein Al-Balawi was dropped as party prohibiting the respondent Judge from further conducting any
defendant. On August 11, 1994, Saudia filed its Manifestation proceeding, unless otherwise directed, in the interim.
and Motion to Dismiss Amended Complaint[18].
In another Resolution[28] promulgated on September 27,
The trial court issued an Order[19] dated August 29, 1994 1995, now assailed, the appellate court denied SAUDIAs
denying the Motion to Dismiss Amended Complaint filed by Petition for the Issuance of a Writ of Preliminary Injunction
Saudia. dated February 18, 1995, to wit:
From the Order of respondent Judge[20] denying the Motion The Petition for the Issuance of a Writ of Preliminary
to Dismiss, SAUDIA filed on September 20, 1994, its Motion Injunction is hereby DENIED, after considering the Answer,
for Reconsideration[21] of the Order dated August 29, 1994. It with Prayer to Deny Writ of Preliminary Injunction (Rollo, p.
alleged that the trial court has no jurisdiction to hear and try 135) the Reply and Rejoinder, it appearing that herein
the case on the basis of Article 21 of the Civil Code, since the petitioner is not clearly entitled thereto (Unciano Paramedical
proper law applicable is the law of the Kingdom of Saudi College, et. Al., v. Court of Appeals, et. Al., 100335, April 7,
Arabia.On October 14, 1994, Morada filed her 1993, Second Division).
Opposition[22] (To Defendants Motion for Reconsideration).
SO ORDERED.
In the Reply[23] filed with the trial court on October 24, 1994,
SAUDIA alleged that since its Motion for Reconsideration On October 20, 1995, SAUDIA filed with this Honorable
raised lack of jurisdiction as its cause of action, the Omnibus Court the instant Petition[29] for Review with Prayer for
Motion Rule does not apply, even if that ground is raised for Temporary Restraining Order dated October 13, 1995.
the first time on appeal. Additionally, SAUDIA alleged that
However, during the pendency of the instant Petition, I.
respondent Court of Appeals rendered the Decision[30] dated
April 10, 1996, now also assailed. It ruled that the Philippines WHETHER RESPONDENT APPELLATE COURT ERRED
is an appropriate forum considering that the Amended IN HOLDING THAT THE REGIONAL TRIAL COURT OF
Complaints basis for recovery of damages is Article 21 of the QUEZON CITY HAS JURISDICTION TO HEAR AND TRY
Civil Code, and thus, clearly within the jurisdiction of CIVIL CASE NO. Q-93-18394 ENTITLED MILAGROS P.
respondent Court. It further held that certiorari is not the MORADA V. SAUDI ARABIAN AIRLINES.
proper remedy in a denial of a Motion to Dismiss, inasmuch as
II.
the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal. WHETHER RESPONDENT APPELLATE COURT ERRED
IN RULING THAT IN THE CASE PHILIPPINE LAW
On May 7, 1996, SAUDIA filed its Supplemental Petition for
SHOULD GOVERN.
Review with Prayer for Temporary Restraining
Order[31] dated April 30, 1996, given due course by this Petitioner SAUDIA claims that before us is a conflict of laws
Court. After both parties submitted their Memoranda,[32] the that must be settled at the outset. It maintains that private
instant case is now deemed submitted for decision. respondents claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. It alleges that the existence of a
Petitioner SAUDIA raised the following issues:
foreign element qualifies the instant case for the application of
I the law of the Kingdom of Saudi Arabia, by virtue of the lex
loci delicti commissi rule.[34]
The trial court has no jurisdiction to hear and try Civil Case
No. Q-93-18394 based on Article 21 of the New Civil Code On the other hand, private respondent contends that since her
since the proper law applicable is the law of the Kingdom of Amended Complaint is based on Articles 19[35] and 21[36] of
Saudi Arabia inasmuch as this case involves what is known in the Civil Code, then the instant case is properly a matter of
private international law as a conflicts problem. Otherwise, the domestic law.[37]
Republic of the Philippines will sit in judgment of the acts
Under the factual antecedents obtaining in this case, there is
done by another sovereign state which is abhorred.
no dispute that the interplay of events occurred in two states,
II. the Philippines and Saudi Arabia.

Leave of court before filing a supplemental pleading is not a As stated by private respondent in her Amended
jurisdictional requirement. Besides, the matter as to absence of Complaint[38] dated June 23, 1994:
leave of court is now moot and academic when this Honorable
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a
Court required the respondents to comment on petitioners
foreign airlines corporation doing business in the
April 30, 1996 Supplemental Petition For Review With Prayer
Philippines. It may be served with summons and other court
For A Temporary Restraining Order Within Ten (10) Days
processes at Travel Wide Associated Sales (Phils.), Inc.,
From Notice Thereof. Further, the Revised Rules of Court
3rd Floor, Cougar Building, 114 Valero St., Salcedo Village,
should be construed with liberality pursuant to Section 2, Rule
Makati, Metro Manila.
1 thereof.
xxxxxxxxx
III.
6. Plaintiff learned that, through the intercession of the Saudi
Petitioner received on April 22, 1996 the April 10, 1996
Arabian government, the Indonesian authorities agreed to
decision in CA-G.R. SP NO. 36533 entitled Saudi Arabian
deport Thamer and Allah after two weeks of
Airlines v. Hon. Rodolfo A. Ortiz, et al. and filed its April 30,
detention.Eventually, they were again put in service by
1996 Supplemental Petition For Review With Prayer For A
defendant SAUDIA. In September 1990, defendant SAUDIA
Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or
transferred plaintiff to Manila.
within the 15-day reglementary period as provided for under
Section 1, Rule 45 of the Revised Rules of Court. Therefore, 7. On January 14, 1992, just when plaintiff thought that the
the decision in CA-G.R. SP NO. 36533 has not yet become Jakarta incident was already behind her, her superiors
final and executory and this Honorable Court can take requested her to see MR. Ali Meniewy, Chief Legal Officer of
cognizance of this case.[33] SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
From the foregoing factual and procedural antecedents, the
passport and questioned her about the Jakarta
following issues emerge for our resolution:
incident.Miniewy simply stood by as the police put pressure
on her to make a statement dropping the case against Thamer A factual situation that cuts across territorial lines and is
and Allah. Not until she agreed to do so did the police return affected by the diverse laws of two or more states is said to
her passport and allowed her to catch the afternoon flight out contain a foreign element. The presence of a foreign element
of Jeddah. is inevitable since social and economic affairs of individuals
and associations are rarely confined to the geographic limits of
8. One year and a half later or on June 16, 1993, in Riyadh, their birth or conception.[40]
Saudi Arabia, a few minutes before the departure of her flight
to Manila, plaintiff was not allowed to board the plane and The forms in which this foreign element may appear are
instead ordered to take a later flight to Jeddah to see Mr. many.[41] The foreign element may simply consist in the fact
Meniewy, the Chief Legal Officer of SAUDIA. When she did, that one of the parties to a contract is an alien or has a foreign
a certain Khalid of the SAUDIA office brought her to a Saudi domicile, or that a contract between nationals of one State
court where she was asked to sign a document written in involves properties situated in another State. In other cases,
Arabic. They told her that this was necessary to close the case the foreign element may assume a complex form.[42]
against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, In the instant case, the foreign element consisted in the fact
1993. Plaintiff then returned to Manila. that private respondent Morada is a resident Philippine
national, and that petitioner SAUDIA is a resident foreign
9. Shortly afterwards, defendant SAUDIA summoned plaintiff corporation. Also, by virtue of the employment of Morada
to report to Jeddah once again and see Miniewy on June 27, with the petitioner Saudia as a flight stewardess, events did
1993 for further investigation. Plaintiff did so after receiving transpire during her many occasions of travel across national
assurance from SAUDIAs Manila manager, Aslam Saleemi, borders, particularly from Manila, Philippines to Jeddah,
that the investigation was routinary and that it posed no danger Saudi Arabia, and vice versa, that caused a conflicts situation
to her. to arise.

10. In Jeddah, a SAUDIA legal officer brought plaintiff to the We thus find private respondents assertion that the case is
same Saudi court on June 27, 1993. Nothing happened then purely domestic, imprecise. A conflicts problem presents itself
but on June 28, 1993, a Saudi judge interrogated plaintiff here, and the question of jurisdiction[43] confronts the court a
through an interpreter about the Jakarta incident. After one quo.
hour of interrogation, they let her go. At the airport, however,
just as her plane was about to take off, a SAUDIA officer told After a careful study of the private respondents Amended
her that the airline had forbidden her to take that flight. At the Complaint,[44] and the Comment thereon, we note that she
Inflight Service Office where she was told to go, the secretary aptly predicated her cause of action on Articles 19 and 21 of
of Mr. Yahya Saddick took away her passport and told her to the New Civil Code.
remain in Jeddah, at the crew quarters, until further orders.
On one hand, Article 19 of the New Civil Code provides;
11. On July 3, 1993 a SAUDIA legal officer again escorted
Art. 19. Every person must, in the exercise of his rights and in
plaintiff to the same court where the judge, to her
the performance of his duties, act with justice give everyone
astonishment and shock, rendered a decision, translated to her
his due and observe honesty and good faith.
in English, sentencing her to five months imprisonment and to
286 lashes. Only then did she realize that the Saudi court had On the other hand, Article 21 of the New Civil Code provides:
tried her, together with Thamer and Allah, for what happened
in Jakarta. The court found plaintiff guilty of (1) adultery; (2) Art. 21. Any person who willfully causes loss or injury to
going to a disco, dancing, and listening to the music in another in a manner that is contrary to morals, good customs
violation of Islamic laws; (3) socializing with the male crew, or public policy shall compensate the latter for damages.
in contravention of Islamic tradition.
Thus, in Philippine National Bank (PNB) vs. Court of
12. Because SAUDIA refused to lend her a hand in the case, Appeals,[45] this Court held that:
plaintiff sought the help of the Philippine Embassy in
Jeddah. The latter helped her pursue an appeal from the The aforecited provisions on human relations were intended to
decision of the court. To pay for her upkeep, she worked on expand the concept of torts in this jurisdiction by granting
the domestic flights of defendant SAUDIA while, ironically, adequate legal remedy for the untold number of moral wrongs
Thamer and Allah freely served the international flights.[39] which is impossible for human foresight to specifically
provide in the statutes.
Where the factual antecedents satisfactorily establish the
existence of a foreign element, we agree with petitioner that Although Article 19 merely declares a principle of law, Article
the problem herein could present a conflicts case. 21 gives flesh to its provisions. Thus, we agree with private
respondents assertion that violations of Articles 19 and 21 are plaintiff (private respondent now) to seek remedial action
actionable, with judicially enforceable remedies in the elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
municipal forum. longer maintains substantial connections. That would have
caused a fundamental unfairness to her.
Based on the allegations[46] in the Amended Complaint, read
in the light of the Rules of Court on jurisdiction[47] we find Moreover, by hearing the case in the Philippines no
that the Regional Trial Court (RTC) of Quezon City possesses unnecessary difficulties and inconvenience have been shown
jurisdiction over the subject matter of the suit.[48] Its by either of the parties. The choice of forum of the plaintiff
authority to try and hear the case is provided for under Section (now private respondent) should be upheld.
1 of Republic Act No. 7691, to wit:
Similarly, the trial court also possesses jurisdiction over the
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise persons of the parties herein. By filing her Complaint and
known as the Judiciary Reorganization Act of 1980, is hereby Amended Complaint with the trial court, private respondent
amended to read as follows: has voluntary submitted herself to the jurisdiction of the court.

SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts The records show that petitioner SAUDIA has filed several
shall exercise exclusive jurisdiction: motions[50] praying for the dismissal of Moradas Amended
Complaint. SAUDIA also filed an Answer In Ex Abundante
xxxxxxxxx Cautelam dated February 20, 1995. What is very patent and
explicit from the motions filed, is that SAUDIA prayed for
(8) In all other cases in which demand, exclusive of interest,
other reliefs under the premises. Undeniably, petitioner
damages of whatever kind, attorneys fees, litigation expenses,
SAUDIA has effectively submitted to the trial courts
and costs or the value of the property in controversy exceeds
jurisdiction by praying for the dismissal of the Amended
One hundred thousand pesos (P100,000.00) or, in such other
Complaint on grounds other than lack of jurisdiction.
cases in Metro Manila, where the demand, exclusive of the
above-mentioned items exceeds Two hundred Thousand pesos As held by this Court in Republic vs. Ker and Company,
(P200,000.00). (Emphasis ours) Ltd.:[51]

xxxxxxxxx We observe that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower courts jurisdiction over
And following Section 2 (b), Rule 4 of the Revised Rules of
defendants person, prayed for dismissal of the complaint on
Courtthe venue, Quezon City, is appropriate:
the ground that plaintiffs cause of action has prescribed. By
SEC. 2 Venue in Courts of First Instance. [Now Regional interposing such second ground in its motion to dismiss, Ker
Trial Court] and Co., Ltd. availed of an affirmative defense on the basis of
which it prayed the court to resolve controversy in its
(a) x x x x x x x x x favor. For the court to validly decide the said plea of
defendant Ker & Co., Ltd., it necessarily had to acquire
(b) Personal actions. All other actions may be commenced and jurisdiction upon the latters person, who, being the proponent
tried where the defendant or any of the defendants resides or of the affirmative defense, should be deemed to have
may be found, or where the plaintiff or any of the plaintiff abandoned its special appearance and voluntarily submitted
resides, at the election of the plaintiff. itself to the jurisdiction of the court.

Pragmatic considerations, including the convenience of the Similarly, the case of De Midgely vs. Ferandos, held that:
parties, also weigh heavily in favor of the RTC Quezon City
assuming jurisdiction. Paramount is the private interest of the When the appearance is by motion for the purpose of
litigant. Enforceability of a judgment if one is obtained is quite objecting to the jurisdiction of the court over the person, it
obvious. Relative advantages and obstacles to a fair trial are must be for the sole and separate purpose of objecting to the
equally important. Plaintiff may not, by choice of an jurisdiction of the court. If his motion is for any other purpose
inconvenient forum, vex, harass, or oppress the defendant, e.g. than to object to the jurisdiction of the court over his person,
by inflicting upon him needless expense or disturbance. But he thereby submits himself to the jurisdiction of the court.A
unless the balance is strongly in favor of the defendant, the special appearance by motion made for the purpose of
plaintiffs choice of forum should rarely be disturbed.[49] objecting to the jurisdiction of the court over the person will
be held to be a general appearance, if the party in said motion
Weighing the relative claims of the parties, the court a should, for example, ask for a dismissal of the action upon the
quo found it best to hear the case in the Philippines. Had it further ground that the court had no jurisdiction over the
refused to take cognizance of the case, it would be forcing subject matter.[52]
Clearly, petitioner had submitted to the jurisdiction of the (5) the place where an act is intended to come into effect, e.g.,
Regional Trial Court of Quezon City. Thus, we find that the the place of performance of contractual duties, or the place
trial court has jurisdiction over the case and that its exercise where a power of attorney is to be exercised;
thereof, justified.
(6) the intention of the contracting parties as to the law that
As to the choice of applicable law, we note that choice-of-law should govern their agreement, the lex loci intentionis;
problems seek to answer two important questions: (1) What
legal system should control a given situation where some of (7) the place where judicial or administrative proceedings are
the significant facts occurred in two or more states; and (2) to instituted or done. The lex forithe law of the forumis
what extent should the chosen legal system regulate the particularly important because, as we have seen earlier,
situation.[53] matters of procedure not going to the substance of the claim
involved are governed by it; and because the lex fori applies
Several theories have been propounded in order to identify the whenever the content of the otherwise applicable foreign law
legal system that should ultimately control. Although ideally, is excluded from application in a given case for the reason that
all choice-of-law theories should intrinsically advance both it falls under one of the exceptions to the applications of
notions of justice and predictability, they do not always do foreign law; and
so. The forum is then faced with the problem of deciding
which of these two important values should be stressed.[54] (8) the flag of a ship, which in many cases is decisive of
practically all legal relationships of the ship and of its master
Before a choice can be made, it is necessary for us to or owner as such. It also covers contractual relationships
determine under what category a certain set of facts or rules particularly contracts of affreightment.[60] (Underscoring
fall. This process is known as characterization, or the doctrine ours.)
of qualification. It is the process of deciding whether or not
the facts relate to the kind of question specified in a conflicts After a careful study of the pleadings on record, including
rule.[55] The purpose of characterization is to enable the allegations in the Amended Complaint deemed submitted for
forum to select the proper law.[56] purposes of the motion to dismiss, we are convinced that there
is reasonable basis for private respondents assertion that
Our starting point of analysis here is not a legal relation, but a although she was already working in Manila, petitioner
factual situation, event, or operative fact.[57] An essential brought her to Jeddah on the pretense that she would merely
element of conflict rules is the indication of a test or testify in an investigation of the charges she made against the
connecting factor or point of contact. Choice-of-law rules two SAUDIA crew members for the attack on her person
invariably consist of a factual relationship (such as property while they were in Jakarta. As it turned out, she was the one
right, contract claim) and a connecting factor or point of made to face trial for very serious charges, including adultery
contact, such as the situsof the res, the place of celebration, the and violation of Islamic laws and tradition.
place of performance, or the place of wrongdoing.[58]
There is likewise logical basis on record for the claim that the
Note that one or more circumstances may be present to serve handing over or turning over of the person of private
as the possible test for the determination of the applicable respondent to Jeddah officials, petitioner may have acted
law.[59] These test factors or points of contact or connecting beyond its duties as employer. Petitioners purported act
factors could be any of the following: contributed to and amplified or even proximately caused
additional humiliation, misery and suffering of private
(1) The nationality of a person, his domicile, his residence, his respondent. Petitioner thereby allegedly facilitated the arrest,
place of sojourn, or his origin; detention and prosecution of private respondent under the
guise of petitioners authority as employer, taking advantage of
(2) the seat of a legal or juridical person, such as a
the trust, confidence and faith she reposed upon it. As
corporation;
purportedly found by the Prince of Makkah, the alleged
(3) the situs of a thing, that is, the place where a thing is, or is conviction and imprisonment of private respondent was
deemed to be situated. In particular, the lex situs is decisive wrongful. But these capped the injury or harm allegedly
when real rights are involved; inflicted upon her person and reputation, for which petitioner
could be liable as claimed, to provide compensation or redress
(4) the place where an act has been done, the locus actus, such for the wrongs done, once duly proven.
as the place where a contract has been made, a marriage
celebrated, a will signed or a tort committed.The lex loci Considering that the complaint in the court a quo is one
actus is particularly important in contracts and torts; involving torts, the connecting factor or point of contact could
be the place or places where the tortious conduct or lex loci
actus occurred. And applying the torts principle in a conflicts
case, we find that the Philippines could be said as a situs of the Regional Trial Court has jurisdiction over the parties and the
tort (the place where the alleged tortious conduct took subject matter of the complaint; the appropriate venue is in
place). This is because it is in the Philippines where petitioner Quezon City, which could properly apply Philippine
allegedly deceived private respondent, a Filipina residing and law. Moreover, we find untenable petitioners insistence that
working here. According to her, she had honestly believed that [s]ince private respondent instituted this suit, she has the
petitioner would, in the exercise of its rights and in the burden of pleading and proving the applicable Saudi law on
performance of its duties, act with justice, give her her due and the matter.[64] As aptly said by private respondent, she has no
observe honesty and good faith. Instead, petitioner failed to obligation to plead and prove the law of the Kingdom of Saudi
protect her, she claimed. That certain acts or parts of the injury Arabia since her cause of action is based on Articles 19 and 21
allegedly occurred in another country is of no moment. For in of the Civil Code of the Philippines. In her Amended
our view what is important here is the place where the over-all Complaint and subsequent pleadings she never alleged that
harm or the fatality of the alleged injury to the person, Saudi law should govern this case.[65] And as correctly held
reputation, social standing and human rights of complainant, by the respondent appellate court, considering that it was the
had lodged, according to the plaintiff below (herein private petitioner who was invoking the applicability of the law of
respondent). All told, it is not without basis to identify the Saudi Arabia, thus the burden was on it [petitioner] to plead
Philippines as the situs of the alleged tort. and to establish what the law of Saudi Arabia is.[66]

Moreover, with the widespread criticism of the traditional rule Lastly, no error could be imputed to the respondent appellate
of lex loci delicti commissi, modern theories and rules on tort court in upholding the trial courts denial of defendants (herein
liability[61] have been advanced to offer fresh judicial petitioners) motion to dismiss the case. Not only was
approaches to arrive at just results. In keeping abreast with jurisdiction in order and venue properly laid, but appeal after
the modern theories on tort liability, we find here an occasion trial was obviously available, and the expeditious trial itself
to apply the State of the most significant relationship rule, indicated by the nature of the case at hand. Indubitably, the
which in our view should be appropriate to apply now, given Philippines is the state intimately concerned with the ultimate
the factual context of this case. outcome of the case below not just for the benefit of all the
litigants, but also for the vindication of the countrys system of
In applying said principle to determine the State which has the law and justice in a transnational setting. With these
most significant relationship, the following contacts are to be guidelines in mind, the trial court must proceed to try and
taken into account and evaluated according to their relative adjudge the case in the light of relevant Philippine law, with
importance with respect to the particular issue: (a) the place due consideration of the foreign element or elements
where the injury occurred; (b) the place where the conduct involved. Nothing said herein, of course, should be construed
causing the injury occurred; (c) the domicile, residence, as prejudging the results of the case in any manner
nationality, place of incorporation and place of business of the whatsoever.
parties, and (d) the place where the relationship, if any,
between the parties is centered.[62] WHEREFORE, the instant petition for certiorari is hereby
DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P.
As already discussed, there is basis for the claim that over-all Morada vs. Saudi Arabia Airlines is hereby REMANDED to
injury occurred and lodged in the Philippines. There is Regional Trial Court of Quezon City, Branch 89 for further
likewise no question that private respondent is a resident proceedings.
Filipina national, working with petitioner, a resident foreign
corporation engaged here in the business of international air SO ORDERED.
carriage. Thus, the relationship between the parties was
centered here, although it should be stressed that this suit is
not based on mere labor law violations. From the record, the
claim that the Philippines has the most significant contact with
the matter in this dispute,[63] raised by private respondent as
plaintiff below against defendant (herein petitioner), in our
view, has been properly established.

Prescinding from this premise that the Philippines is


the situs of the tort complaint of and the place having the most
interest in the problem, we find, by way of recapitulation, that
the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case. Further, we hold that the respondent
G.R. No. 104235 November 18, 1993 holding the full-fare ticket of his daughter, was allowed to
board the plane; while his wife and daughter, who presented
SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA the discounted tickets were denied boarding. According to Mr.
ZALAMEA, petitioners, Zalamea, it was only later when he discovered the he was
vs. holding his daughter's full-fare ticket.
HONORABLE COURT OF APPEALS and TRANSWORLD
AIRLINES, INC., respondents. Even in the next TWA flight to Los Angeles Mrs. Zalamea
and her daughter, could not be accommodated because it was
Sycip, Salazar, Hernandez, Gatmaitan for petitioners. also fully booked. Thus, they were constrained to book in
another flight and purchased two tickets from American
Quisumbing, Torres & Evangelista for private-respondent.
Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.

Upon their arrival in the Philippines, petitioners filed an action


NOCON, J.: for damages based on breach of contract of air carriage before
the Regional Trial Court of Makati, Metro Manila, Branch
Disgruntled over TransWorld Airlines, Inc.'s refusal to 145. As aforesaid, the lower court ruled in favor of petitioners
accommodate them in TWA Flight 007 departing from New in its decision 1 dated January 9, 1989 the dispositive portion
York to Los Angeles on June 6, 1984 despite possession of of which states as follows:
confirmed tickets, petitioners filed an action for damages
before the Regional Trial Court of Makati, Metro Manila, WHEREFORE, judgment is hereby rendered ordering the
Branch 145. Advocating petitioner's position, the trial court defendant to pay plaintiffs the following amounts:
categorically ruled that respondent TransWorld Airlines
(1) US $918.00, or its peso equivalent at the time of payment
(TWA) breached its contract of carriage with petitioners and
representing the price of the tickets bought by Suthira and
that said breach was "characterized by bad faith." On appeal,
Liana Zalamea from American Airlines, to enable them to fly
however, the appellate court found that while there was a
to Los Angeles from New York City;
breach of contract on respondent TWA's part, there was
neither fraud nor bad faith because under the Code of Federal (2) US $159.49, or its peso equivalent at the time of payment,
Regulations by the Civil Aeronautics Board of the United representing the price of Suthira Zalamea's ticket for TWA
States of America it is allowed to overbook flights. Flight 007;

The factual backdrop of the case is as follows: (3) Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty
Centavos (P8,934.50, Philippine Currency, representing the
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea,
price of Liana Zalamea's ticket for TWA Flight 007,
and their daughter, Liana Zalamea, purchased three (3) airline
tickets from the Manila agent of respondent TransWorld (4) Two Hundred Fifty Thousand Pesos (P250,000.00),
Airlines, Inc. for a flight to New York to Los Angeles on June Philippine Currency, as moral damages for all the plaintiffs'
6, 1984. The tickets of petitioners-spouses were purchased at a
discount of 75% while that of their daughter was a full fare (5) One Hundred Thousand Pesos (P100,000.00), Philippine
ticket. All three tickets represented confirmed reservations. Currency, as and for attorney's fees; and

While in New York, on June 4, 1984, petitioners received (6) The costs of suit.
notice of the reconfirmation of their reservations for said
flight. On the appointed date, however, petitioners checked in SO ORDERED. 2
at 10:00 a.m., an hour earlier than the scheduled flight at 11:00
On appeal, the respondent Court of Appeals held that moral
a.m. but were placed on the wait-list because the number of
damages are recoverable in a damage suit predicated upon a
passengers who had checked in before them had already taken
breach of contract of carriage only where there is fraud or bad
all the seats available on the flight. Liana Zalamea appeared as
faith. Since it is a matter of record that overbooking of flights
the No. 13 on the wait-list while the two other Zalameas were
is a common and accepted practice of airlines in the United
listed as "No. 34, showing a party of two." Out of the 42
States and is specifically allowed under the Code of Federal
names on the wait list, the first 22 names were eventually
Regulations by the Civil Aeronautics Board, no fraud nor bad
allowed to board the flight to Los Angeles, including
faith could be imputed on respondent TransWorld Airlines.
petitioner Cesar Zalamea. The two others, on the other hand,
at No. 34, being ranked lower than 22, were not able to fly. As Moreover, while respondent TWA was remiss in not
it were, those holding full-fare tickets were given first priority informing petitioners that the flight was overbooked and that
among the wait-listed passengers. Mr. Zalamea, who was even a person with a confirmed reservation may be denied
accommodation on an overbooked flight, nevertheless it ruled disputed. The U.S. law or regulation allegedly authorizing
that such omission or negligence cannot under the overbooking has never been proved. Foreign laws do not
circumstances be considered to be so gross as to amount to prove themselves nor can the courts take judicial notice of
bad faith. them. Like any other fact, they must be alleged and
proved.6 Written law may be evidenced by an official
Finally, it also held that there was no bad faith in placing publication thereof or by a copy attested by the officer having
petitioners in the wait-list along with forty-eight (48) other the legal custody of the record, or by his deputy, and
passengers where full-fare first class tickets were given accompanied with a certificate that such officer has custody.
priority over discounted tickets. The certificate may be made by a secretary of an embassy or
legation, consul general, consul, vice-consul, or consular agent
The dispositive portion of the decision of respondent Court of
or by any officer in the foreign service of the Philippines
Appeals3 dated October 25, 1991 states as follows:
stationed in the foreign country in which the record is kept,
WHEREFORE, in view of all the foregoing, the decision and authenticated by the seal of his office.7
under review is hereby MODIFIED in that the award of moral
Respondent TWA relied solely on the statement of Ms.
and exemplary damages to the plaintiffs is eliminated, and the
Gwendolyn Lather, its customer service agent, in her
defendant-appellant is hereby ordered to pay the plaintiff the
deposition dated January 27, 1986 that the Code of Federal
following amounts:
Regulations of the Civil Aeronautics Board allows
(1) US$159.49, or its peso equivalent at the time of the overbooking. Aside from said statement, no official
payment, representing the price of Suthira Zalamea's ticket for publication of said code was presented as evidence. Thus,
TWA Flight 007; respondent court's finding that overbooking is specifically
allowed by the US Code of Federal Regulations has no basis
(2) US$159.49, or its peso equivalent at the time of the in fact.
payment, representing the price of Cesar Zalamea's ticket for
TWA Flight 007; Even if the claimed U.S. Code of Federal Regulations does
exist, the same is not applicable to the case at bar in
(3) P50,000.00 as and for attorney's fees. accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was
(4) The costs of suit. issued should be applied by the court where the passengers are
residents and nationals of the forum and the ticket is issued in
SO ORDERED.4
such State by the defendant airline.8 Since the tickets were
Not satisfied with the decision, petitioners raised the case on sold and issued in the Philippines, the applicable law in this
petition for review on certiorari and alleged the following case would be Philippine law.
errors committed by the respondent Court of Appeals, to wit:
Existing jurisprudence explicitly states that overbooking
I. amounts to bad faith, entitling the passengers concerned to an
award of moral damages. In Alitalia Airways v. Court of
. . . IN HOLDING THAT THERE WAS NO FRAUD OR Appeals,9 where passengers with confirmed bookings were
BAD FAITH ON THE PART OF RESPONDENT TWA refused carriage on the last minute, this Court held that when
BECAUSE IT HAS A RIGHT TO OVERBOOK FLIGHTS. an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises,
II. and the passenger has every right to expect that he would fly
on that flight and on that date. If he does not, then the carrier
. . . IN ELIMINATING THE AWARD OF EXEMPLARY
opens itself to a suit for breach of contract of carriage. Where
DAMAGES.
an airline had deliberately overbooked, it took the risk of
III. having to deprive some passengers of their seats in case all of
them would show up for the check in. For the indignity and
. . . IN NOT ORDERING THE REFUND OF LIANA inconvenience of being refused a confirmed seat on the last
ZALAMEA'S TWA TICKET AND PAYMENT FOR THE minute, said passenger is entitled to an award of moral
AMERICAN AIRLINES damages.
TICKETS.5
Similarly, in Korean Airlines Co., Ltd. v. Court of
That there was fraud or bad faith on the part of respondent Appeals, 10 where private respondent was not allowed to
airline when it did not allow petitioners to board their flight board the plane because her seat had already been given to
for Los Angeles in spite of confirmed tickets cannot be another passenger even before the allowable period for
passengers to check in had lapsed despite the fact that she had discounted tickets. While the petitioners had checked in at the
a confirmed ticket and she had arrived on time, this Court held same time, and held confirmed tickets, yet, only one of them
that petitioner airline acted in bad faith in violating private was allowed to board the plane ten minutes before departure
respondent's rights under their contract of carriage and is time because the full-fare ticket he was holding was given
therefore liable for the injuries she has sustained as a result. priority over discounted tickets. The other two petitioners
were left behind.
In fact, existing jurisprudence abounds with rulings where the
breach of contract of carriage amounts to bad faith. In Pan It is respondent TWA's position that the practice of
American World Airways, Inc. v. Intermediate Appellate overbooking and the airline system of boarding priorities are
Court, 11 where a would-be passenger had the necessary reasonable policies, which when implemented do not amount
ticket, baggage claim and clearance from immigration all to bad faith. But the issue raised in this case is not the
clearly and unmistakably showing that she was, in fact, reasonableness of said policies but whether or not said policies
included in the passenger manifest of said flight, and yet was were incorporated or deemed written on petitioners' contracts
denied accommodation in said flight, this Court did not of carriage. Respondent TWA failed to show that there are
hesitate to affirm the lower court's finding awarding her provisions to that effect. Neither did it present any argument
damages. of substance to show that petitioners were duly apprised of the
overbooked condition of the flight or that there is a hierarchy
A contract to transport passengers is quite different in kind of boarding priorities in booking passengers. It is evident that
and degree from any other contractual relation. So ruled this petitioners had the right to rely upon the assurance of
Court in Zulueta v. Pan American World Airways, respondent TWA, thru its agent in Manila, then in New York,
Inc. 12 This is so, for a contract of carriage generates a that their tickets represented confirmed seats without any
relation attended with public duty — a duty to provide public qualification. The failure of respondent TWA to so inform
service and convenience to its passengers which must be them when it could easily have done so thereby enabling
paramount to self-interest or enrichment. Thus, it was also respondent to hold on to them as passengers up to the last
held that the switch of planes from Lockheed 1011 to a minute amounts to bad faith. Evidently, respondent TWA
smaller Boeing 707 because there were only 138 confirmed placed its self-interest over the rights of petitioners under their
economy class passengers who could very well be contracts of carriage. Such conscious disregard of petitioners'
accommodated in the smaller planes, thereby sacrificing the rights makes respondent TWA liable for moral damages. To
comfort of its first class passengers for the sake of economy, deter breach of contracts by respondent TWA in similar
amounts to bad faith. Such inattention and lack of care for the fashion in the future, we adjudge respondent TWA liable for
interest of its passengers who are entitled to its utmost exemplary damages, as well.
consideration entitles the passenger to an award of moral
damages. 13 Petitioners also assail the respondent court's decision not to
require the refund of Liana Zalamea's ticket because the ticket
Even on the assumption that overbooking is allowed, was used by her father. On this score, we uphold the
respondent TWA is still guilty of bad faith in not informing its respondent court. Petitioners had not shown with certainty that
passengers beforehand that it could breach the contract of the act of respondent TWA in allowing Mr. Zalamea to use the
carriage even if they have confirmed tickets if there was ticket of her daughter was due to inadvertence or deliberate
overbooking. Respondent TWA should have incorporated act. Petitioners had also failed to establish that they did not
stipulations on overbooking on the tickets issued or to accede to said agreement. The logical conclusion, therefore, is
properly inform its passengers about these policies so that the that both petitioners and respondent TWA agreed, albeit
latter would be prepared for such eventuality or would have impliedly, to the course of action taken.
the choice to ride with another airline.
The respondent court erred, however, in not ordering the
Respondent TWA contends that Exhibit I, the detached flight refund of the American Airlines tickets purchased and used by
coupon upon which were written the name of the passenger petitioners Suthira and Liana. The evidence shows that
and the points of origin and destination, contained such a petitioners Suthira and Liana were constrained to take the
notice. An examination of Exhibit I does not bear this out. At American Airlines flight to Los Angeles not because they
any rate, said exhibit was not offered for the purpose of "opted not to use their TWA tickets on another TWA flight"
showing the existence of a notice of overbooking but to show but because respondent TWA could not accommodate them
that Exhibit I was used for flight 007 in first class of June 11, either on the next TWA flight which was also fully
1984 from New York to Los Angeles. booked. 14 The purchase of the American Airlines tickets by
petitioners Suthira and Liana was the consequence of
Moreover, respondent TWA was also guilty of not informing
respondent TWA's unjustifiable breach of its contracts of
its passengers of its alleged policy of giving less priority to
carriage with petitioners. In accordance with Article 2201,
New Civil Code, respondent TWA should, therefore, be
responsible for all damages which may be reasonably
attributed to the non-performance of its obligation. In the
previously cited case of Alitalia Airways v. Court of
Appeals, 15 this Court explicitly held that a passenger is
entitled to be reimbursed for the cost of the tickets he had to
buy for a flight to another airline. Thus, instead of simply
being refunded for the cost of the unused TWA tickets,
petitioners should be awarded the actual cost of their flight
from New York to Los Angeles. On this score, we differ from
the trial court's ruling which ordered not only the
reimbursement of the American Airlines tickets but also the
refund of the unused TWA tickets. To require both prestations
would have enabled petitioners to fly from New York to Los
Angeles without any fare being paid.

The award to petitioners of attorney's fees is also justified


under Article 2208(2) of the Civil Code which allows recovery
when the defendant's act or omission has compelled plaintiff
to litigate or to incur expenses to protect his interest. However,
the award for moral damages and exemplary damages by the
trial court is excessive in the light of the fact that only Suthira
and Liana Zalamea were actually "bumped off." An award of
P50,000.00 moral damages and another P50,000.00 exemplary
damages would suffice under the circumstances obtaining in
the instant case.

WHEREFORE, the petition is hereby GRANTED and the


decision of the respondent Court of Appeals is hereby
MODIFIED to the extent of adjudging respondent TransWorld
Airlines to pay damages to petitioners in the following
amounts, to wit:

(1) US$918.00 or its peso equivalent at the time of payment


representing the price of the tickets bought by Suthira and
Liana Zalamea from American Airlines, to enable them to fly
to Los Angeles from New York City;

(2) P50,000.00 as moral damages;

(3) P50,000.00 as exemplary damages;

(4) P50,000.00 as attorney's fees; and

(5) Costs of suit.

SO ORDERED.
[G.R. No. 110263. July 20, 2001] 2. Construction & Development

ASIAVEST MERCHANT BANKERS (M) Corporation of the Philippines Defendant


BERHAD, petitioner, vs. COURT OF APPEALS and
PHILIPPINE NATIONAL CONSTRUCTION JUDGMENT
CORPORATION, respondents.
The 2nd Defendant having entered appearance herein and the
DECISION Court having under Order 14, rule 3 ordered that judgment as
hereinafter provided be entered for the Plaintiffs against the
DE LEON, JR., J.: 2nd Defendant.

Before us is a petition for review on certiorari of the IT IS THIS DAY ADJUDGED that the 2nd defendant do pay
Decision[1] of the Court of Appeals dated May 19, 1993 in the Plaintiffs the sum of $5,108,290.23 (Ringgit Five million
CA-G.R. CV No. 35871 affirming the Decision[2] dated one hundred and eight thousand two hundred and ninety and
October 14, 1991 of the Regional Trial Court of Pasig, Metro Sen twenty-three) together with interest at the rate of 12% per
Manila, Branch 168 in Civil Case No. 56368 which dismissed annum on: -
the complaint of petitioner Asiavest Merchant Bankers (M)
Berhad for the enforcement of the money judgment of the (i) the sum of $2,586,866.91 from the 2nd day of March 1983
High Court of Malaya in Kuala Lumpur against private to the date of payment; and
respondent Philippine National Construction Corporation.
(ii) the sum of $2,521,423.32 from the 11th day of March
The petitioner Asiavest Merchant Bankers (M) Berhad is a 1983 to the date of payment; and $350.00 (Ringgit Three
corporation organized under the laws of Malaysia while Hundred and Fifty) costs.
private respondent Philippine National Construction
Dated the 13th day of September, 1985.
Corporation is a corporation duly incorporated and existing
under Philippine laws. Senior Assistant Registrar,
It appears that sometime in 1983, petitioner initiated a suit for High Court, Kuala Lumpur
collection against private respondent, then known as
Construction and Development Corporation of the Philippines, This Judgment is filed by Messrs. Skrine & Co., 3rd Floor,
before the High Court of Malaya in Kuala Lumpur entitled Straits Trading Building, No. 4, Leboh Pasar, Besar, Kuala
Asiavest Merchant Bankers (M) Berhad v. Asiavest CDCP Lumpur, Solicitors for the Plaintiffs abovenamed.
Sdn. Bhd. and Construction and Development Corporation of (VP/Ong/81194.7/83)[4]
the Philippines.[3]
On the same day, September 13, 1985, the High Court of
Petitioner sought to recover the indemnity of the performance Malaya issued an Order directing the private respondent (also
bond it had put up in favor of private respondent to guarantee designated therein as the 2nd Defendant) to pay petitioner
the completion of the Felda Project and the non-payment of interest on the sums covered by the said Judgment, thus:
the loan it extended to Asiavest-CDCP Sdn. Bhd. for the
completion of Paloh Hanai and Kuantan By-Pass Project. SUIT NO. C638 OF 1983

On September 13, 1985, the High Court of Malaya Between


(Commercial Division) rendered judgment in favor of the
Asiavest Merchant Bankers (M) Berhad Plaintiffs
petitioner and against the private respondent which is also
designated therein as the 2ndDefendant. The judgment reads And
in full:
1. Asiavest-CDCP Sdn. Bhd.
SUIT NO. C638 of 1983
2. Construction & Development
Between
Corporation of the Philippines Defendants
Asiavest Merchant Bankers (M) Berhad Plaintiffs
BEFORE THE SENIOR ASSISTANT REGISTRAR
And
CIK SUSILA S. PARAM
1. Asiavest-CDCP Sdn. Bhd.
THIS 13th DAY OF SEPTEMBER, 1985 IN CHAMBERS
ORDER proper grounds in a motion to dismiss under Rule 16 of the
Revised Rules of Court.[9]
Upon the application of Asiavest Merchant Bankers (M)
Berhad, the Plaintiffs in this action AND UPON READING On May 22, 1989, private respondent filed its Answer with
the Summons in Chambers dated the 16th day of August, 1984 Compulsory Counterclaim[10] and therein raised the grounds
and the Affidavit of Lee Foong Mee affirmed on the 14th day it brought up in its motion to dismiss. In its Reply[11] filed on
of August 1984 both filed herein AND UPON HEARING Mr. June 8, 1989, the petitioner contended that the High Court of
T. Thomas of Counsel for the Plaintiffs and Mr. Khaw Chay Malaya acquired jurisdiction over the person of private
Tee of Counsel for the 2nd Defendant abovenamed on the respondent by its voluntary submission to the courts
26th day of December 1984 IT WAS ORDERED that the jurisdiction through its appointed counsel, Mr. Khay Chay
Plaintiffs be at liberty to sign final judgment against the 2nd Tee. Furthermore, private respondents counsel waived any and
Defendant for the sum of $5,108.290.23 AND IT WAS all objections to the High Courts jurisdiction in a pleading
ORDEREDthat the 2nd Defendant do pay the Plaintiffs the filed before the court.
costs of suit at $350.00 AND IT WAS FURTHER
ORDERED that the plaintiffs be at liberty to apply for In due time, the trial court rendered its Decision dated October
payment of interest AND upon the application of the Plaintiffs 14, 1991 dismissing petitioners complaint. Petitioner
for payment of interest coming on for hearing on the 1st day interposed an appeal with the Court of Appeals, but the
of August in the presence of Mr. Palpanaban Devarajoo of appellate court dismissed the same and affirmed the decision
Counsel for the Plaintiffs and Mr. Khaw Chay Tee of Counsel of the trial court in a Decision dated May 19, 1993.
for the 2ndDefendant above-named AND UPON HEARING
Hence, the instant petition which is anchored on two (2)
Counsel as aforesaid BY CONSENT IT WAS ORDERED that
assigned errors,[12] to wit:
the 2nd Defendant do pay the Plaintiffs interest at a rate to be
assessed AND the same coming on for assessment this day in I
the presence of Mr. Palpanaban Devarajoo of Counsel for the
Plaintiffs and Mr. Khaw Chay Tee of Counsel for the THE COURT OF APPEALS ERRED IN HOLDING THAT
2nd Defendant AND UPON HEARING Counsel as THE MALAYSIAN COURT DID NOT ACQUIRE
aforesaid BY CONSENT IT IS ORDERED that the PERSONAL JURISDICTION OVER PNCC,
2nd Defendant do pay the Plaintiffs interest at the rate of 12% NOTWITHSTANDING THAT (a) THE FOREIGN COURT
per annum on: HAD SERVED SUMMONS ON PNCC AT ITS MALAYSIA
OFFICE, AND (b) PNCC ITSELF APPEARED BY
(i) the sum of $2,586,866.91 from the 2nd day of March 1983 COUNSEL IN THE CASE BEFORE THAT COURT.
to the date of payment; and
II
(ii) the sum of $2,521,423.32 from the 11th day of March
1983 to the date of Payment. THE COURT OF APPEALS ERRED IN DENYING
RECOGNITION AND ENFORCEMENT TO (SIC) THE
Dated the 13th day of September, 1985. MALAYSIAN COURT JUDGMENT.
Senior Assistant Registrar, Generally, in the absence of a special compact, no sovereign is
bound to give effect within its dominion to a judgment
High Court, Kuala Lumpur.[5]
rendered by a tribunal of another country;[13] however, the
Following unsuccessful attempts[6] to secure payment from rules of comity, utility and convenience of nations have
private respondent under the judgment, petitioner initiated on established a usage among civilized states by which final
September 5, 1988 the complaint before Regional Trial Court judgments of foreign courts of competent jurisdiction are
of Pasig, Metro Manila, to enforce the judgment of the High reciprocally respected and rendered efficacious under certain
Court of Malaya.[7] conditions that may vary in different countries.[14]

Private respondent sought the dismissal of the case via a In this jurisdiction, a valid judgment rendered by a foreign
Motion to Dismiss filed on October 5, 1988, contending that tribunal may be recognized insofar as the immediate parties
the alleged judgment of the High Court of Malaya should be and the underlying cause of action are concerned so long as it
denied recognition or enforcement since on its face, it is is convincingly shown that there has been an opportunity for a
tainted with want of jurisdiction, want of notice to private full and fair hearing before a court of competent jurisdiction;
respondent, collusion and/or fraud, and there is a clear mistake that the trial upon regular proceedings has been conducted,
of law or fact.[8] Dismissal was, however, denied by the trial following due citation or voluntary appearance of the
court considering that the grounds relied upon are not the defendant and under a system of jurisprudence likely to secure
an impartial administration of justice; and that there is nothing In addition to the said testimonial evidence, petitioner offered
to indicate either a prejudice in court and in the system of laws the following documentary evidence:
under which it is sitting or fraud in procuring the
judgment.[15] (a) A certified and authenticated copy of the Judgment
promulgated by the Malaysian High Court dated September
A foreign judgment is presumed to be valid and binding in the 13, 1985 directing private respondent to pay petitioner the sum
country from which it comes, until a contrary showing, on the of $5,108,290.23 Malaysian Ringgit plus interests from March
basis of a presumption of regularity of proceedings and the 1983 until fully paid;[24]
giving of due notice in the foreign forum. Under Section
50(b),[16] Rule 39 of the Revised Rules of Court, which was (b) A certified and authenticated copy of the Order dated
the governing law at the time the instant case was decided by September 13, 1985 issued by the Malaysian High Court in
the trial court and respondent appellate court, a judgment, Civil Suit No. C638 of 1983;[25]
against a person, of a tribunal of a foreign country having
(c) Computation of principal and interest due as of January 31,
jurisdiction to pronounce the same is presumptive evidence of
1990 on the amount adjudged payable to petitioner by private
a right as between the parties and their successors in interest
respondent;[26]
by a subsequent title. The judgment may, however, be assailed
by evidence of want of jurisdiction, want of notice to the (d) Letter and Statement of Account of petitioners counsel in
party, collusion, fraud, or clear mistake of law or fact. In Malaysia indicating the costs for prosecuting and
addition, under Section 3(n), Rule 131 of the Revised Rules of implementing the Malaysian High Courts Judgment;[27]
Court, a court, whether in the Philippines or elsewhere, enjoys
the presumption that it was acting in the lawful exercise of its (e) Letters between petitioners Malaysian counsel, Skrine and
jurisdiction. Hence, once the authenticity of the foreign Co., and its local counsel, Sycip Salazar Law Offices, relative
judgment is proved, the party attacking a foreign judgment, is to institution of the action in the Philippines;[28]
tasked with the burden of overcoming its presumptive validity.
(f) Billing Memorandum of Sycip Salazar Law Offices dated
In the instant case, petitioner sufficiently established the January 2, 1990 showing attorneys fees paid by and due from
existence of the money judgment of the High Court of Malaya petitioner;[29]
by the evidence it offered. Vinayak Prabhakar Pradhan,
presented as petitioners sole witness, testified to the effect that (g) Statement of Claim, Writ of Summons and Affidavit of
he is in active practice of the law profession in Service of such writ in petitioners suit against private
Malaysia;[17] that he was connected with Skrine and respondent before the Malaysian High Court;[30]
Company as Legal Assistant up to 1981;[18] that private
(h) Memorandum of Conditional Appearance dated March 28,
respondent, then known as Construction and Development
1983 filed by counsel for private respondent with the
Corporation of the Philippines, was sued by his client,
Malaysian High Court;[31]
Asiavest Merchant Bankers (M) Berhad, in Kuala
Lumpur;[19] that the writ of summons were served on March (i) Summons in Chambers and Affidavit of Khaw Chay Tee,
17, 1983 at the registered office of private respondent and on counsel for private respondent, submitted during the
March 21, 1983 on Cora S. Deala, a financial planning officer proceedings before the Malaysian High Court;[32]
of private respondent for Southeast Asia operations;[20] that
upon the filing of the case, Messrs. Allen and Gledhill, (j) Record of the Courts Proceedings in Civil Case No. C638
Advocates and Solicitors, with address at 24th Floor, UMBC of 1983;[33]
Building, Jalan Sulaiman, Kuala Lumpur, entered their
conditional appearance for private respondent questioning the (k) Petitioners verified Application for Summary Judgment
regularity of the service of the writ of summons but dated August 14, 1984;[34] and
subsequently withdrew the same when it realized that the writ
(l) Letter dated November 6, 1985 from petitioners Malaysian
was properly served;[21] that because private respondent
counsel to private respondents counsel in Malaysia.[35]
failed to file a statement of defense within two (2) weeks,
petitioner filed an application for summary judgment and Having thus proven, through the foregoing evidence, the
submitted affidavits and documentary evidence in support of existence and authenticity of the foreign judgment, said
its claim;[22] that the matter was then heard before the High foreign judgment enjoys presumptive validity and the burden
Court of Kuala Lumpur in a series of dates where private then fell upon the party who disputes its validity, herein
respondent was represented by counsel;[23] and that the end private respondent, to prove otherwise.
result of all these proceedings is the judgment sought to be
enforced.
Private respondent failed to sufficiently discharge the burden and represent a defendant and the formal requirements in a
that fell upon it to prove by clear and convincing evidence the decision are governed by the lex fori or the internal law of the
grounds which it relied upon to prevent enforcement of the forum,[43] i.e., the law of Malaysia in this case.
Malaysian High Court judgment, namely, (a) that jurisdiction
was not acquired by the Malaysian Court over the person of In this case, it is the procedural law of Malaysia where the
private respondent due to alleged improper service of judgment was rendered that determines the validity of the
summons upon private respondent and the alleged lack of service of court process on private respondent as well as other
authority of its counsel to appear and represent private matters raised by it. As to what the Malaysian procedural law
respondent in the suit; (b) the foreign judgment is allegedly is, remains a question of fact, not of law. It may not be taken
tainted by evident collusion, fraud and clear mistake of fact or judicial notice of and must be pleaded and proved like any
law; and (c) not only were the requisites for enforcement or other fact. Sections 24 and 25 of Rule 132 of the Revised
recognition allegedly not complied with but also that the Rules of Court provide that it may be evidenced by an official
Malaysian judgment is allegedly contrary to the Constitutional publication or by a duly attested or authenticated copy
prescription that the every decision must state the facts and thereof. It was then incumbent upon private respondent to
law on which it is based.[36] present evidence as to what that Malaysian procedural law is
and to show that under it, the assailed service of summons
Private respondent relied solely on the testimony of its two (2) upon a financial officer of a corporation, as alleged by it, is
witnesses, namely, Mr. Alfredo N. Calupitan, an accountant of invalid. It did not. Accordingly, the presumption of validity
private respondent, and Virginia Abelardo, Executive and regularity of service of summons and the decision
Secretary and a member of the staff of the Corporate thereafter rendered by the High Court of Malaya must
Secretariat Section of the Corporate Legal Division, of private stand.[44]
respondent, both of whom failed to shed light and amplify its
defense or claim for non-enforcement of the foreign judgment On the matter of alleged lack of authority of the law firm of
against it. Allen and Gledhill to represent private respondent, not only
did the private respondents witnesses admit that the said law
Mr. Calupitans testimony centered on the following: that from firm of Allen and Gledhill were its counsels in its transactions
January to December 1982 he was assigned in Malaysia as in Malaysia,[45] but of greater significance is the fact that
Project Comptroller of the Pahang Project Package A and B petitioner offered in evidence relevant Malaysian
for road construction under the joint venture of private jurisprudence[46] to the effect that (a) it is not necessary under
respondent and Asiavest Holdings;[37] that under the joint Malaysian law for counsel appearing before the Malaysian
venture, Asiavest Holdings would handle the financial aspect High Court to submit a special power of attorney authorizing
of the project, which is fifty-one percent (51%) while private him to represent a client before said court, (b) that counsel
respondent would handle the technical aspect of the project, or appearing before the Malaysian High Court has full authority
forty-nine percent (49%);[38] and, that Cora Deala was not to compromise the suit, and (c) that counsel appearing before
authorized to receive summons for and in behalf of the private the Malaysian High Court need not comply with certain pre-
respondent.[39]Ms. Abelardos testimony, on the other hand, requisites as required under Philippine law to appear and
focused on the following: that there was no board resolution compromise judgments on behalf of their clients before said
authorizing Allen and Gledhill to admit all the claims of court.[47]
petitioner in the suit brought before the High Court of
Malaya,[40] though on cross-examination she admitted that Furthermore, there is no basis for or truth to the appellate
Allen and Gledhill were the retained lawyers of private courts conclusion that the conditional appearance of private
respondent in Malaysia.[41] respondents counsel who was allegedly not authorized to
appear and represent, cannot be considered as voluntary
The foregoing reasons or grounds relied upon by private submission to the jurisdiction of the High Court of Malaya,
respondent in preventing enforcement and recognition of the inasmuch as said conditional appearance was not premised on
Malaysian judgment primarily refer to matters of remedy and the alleged lack of authority of said counsel but the
procedure taken by the Malaysian High Court relative to the conditional appearance was entered to question the regularity
suit for collection initiated by petitioner. Needless to stress, of the service of the writ of summons. Such conditional
the recognition to be accorded a foreign judgment is not appearance was in fact subsequently withdrawn when counsel
necessarily affected by the fact that the procedure in the courts realized that the writ was properly served.[48]
of the country in which such judgment was rendered differs
from that of the courts of the country in which the judgment is On the ground that collusion, fraud and clear mistake of fact
relied on.[42] Ultimately, matters of remedy and procedure and law tainted the judgment of the High Court of Malaya, no
such as those relating to the service of summons or court clear evidence of the same was adduced or shown. The facts
process upon the defendant, the authority of counsel to appear which the trial court found intriguing amounted to mere
conjectures and specious observations. The trial courts finding Asiavest Merchant Bankers (M) Berhad the amounts adjudged
on the absence of judgment against Asiavest-CDCP Sdn. Bhd. in the said foreign Judgment, subject of the said case.
is contradicted by evidence on record that recovery was also
sought against Asiavest-CDCP Sdn. Bhd. but the same was Costs against the private respondent.
found insolvent.[49] Furthermore, even when the foreign
SO ORDERED.
judgment is based on the drafts prepared by counsel for the
successful party, such is not per se indicative of collusion or
fraud. Fraud to hinder the enforcement within the jurisdiction
of a foreign judgment must be extrinsic, i.e., fraud based on
facts not controverted or resolved in the case where judgment
is rendered,[50] or that which would go to the jurisdiction of
the court or would deprive the party against whom judgment is
rendered a chance to defend the action to which he has a
meritorious defense.[51] Intrinsic fraud is one which goes to
the very existence of the cause of action is deemed already
adjudged, and it, therefore, cannot militate against the
recognition or enforcement of the foreign
judgment.[52] Evidence is wanting on the alleged extrinsic
fraud. Hence, such unsubstantiated allegation cannot give rise
to liability therein.

Lastly, there is no merit to the argument that the foreign


judgment is not enforceable in view of the absence of any
statement of facts and law upon which the award in favor of
the petitioner was based. As aforestated, the lex fori or the
internal law of the forum governs matters of remedy and
procedure.[53] Considering that under the procedural rules of
the High Court of Malaya, a valid judgment may be rendered
even without stating in the judgment every fact and law upon
which the judgment is based, then the same must be accorded
respect and the courts in this jurisdiction cannot invalidate the
judgment of the foreign court simply because our rules
provide otherwise.

All in all, private respondent had the ultimate duty to


demonstrate the alleged invalidity of such foreign judgment,
being the party challenging the judgment rendered by the High
Court of Malaya. But instead of doing so, private respondent
merely argued, to which the trial court agreed, that the burden
lay upon petitioner to prove the validity of the money
judgment. Such is clearly erroneous and would render
meaningless the presumption of validity accorded a foreign
judgment were the party seeking to enforce it be required to
first establish its validity.[54]

WHEREFORE, the instant petition is GRANTED. The


Decision of the Court of Appeals dated May 19, 1993 in CA-
G.R. CV No. 35871 sustaining the Decision dated October 14,
1991 in Civil Case No. 56368 of the Regional Trial Court of
Pasig, Branch 168 denying the enforcement of the Judgment
dated September 13, 1985 of the High Court of Malaya in
Kuala Lumpur is REVERSED and SET ASIDE, and another
in its stead is hereby rendered ORDERING private respondent
Philippine National Construction Corporation to pay petitioner