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Koh vs.

Court of Appeals

No. L-40428. December 17, 1976. *

FRANCISCO T. KOH, petitioner, vs. COURT OF APPEALS, HON. MANUEL V. ROMILLO, JR., District Judge,
Court of First Instance of Ilocos Norte, Branch I, and JOSE P. COLOMA, respondents.

Actions; Venue; Venue of actions fixed by Rules of Court.—It is fundamental in the law governing venue of actions (Rule 4 of the
Rules of Court) that the situs for bringing real and personal civil actions are fixed by the rules to attain the greatest convenience possible
to the parties litigants by taking into consideration the maximum accessibility to them of the courts of justice.
Same; Same; Personal actions commenced and tried where defendant resides or may be found or where plaintiff resides, ‘at the
election of plaintiff.—The law on venue in courts of first instance (Section 2, Rule 4 of the Rules of Court) in referring to the parties
utilizes the words “resides or may be found,” and not “is domiciled,” thus: “Sec. 2 (b) Personal actions. All other actions may be commenced
and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at
the election of the plaintiff.”
Same; Same; Residence differentiated from domicile.—The term domicile is not exactly synonymous in legal contemplation with
the term residence, for it is an established principle in Conflict of Laws that domicile refers to the relatively more permanent abode of a
person while residence applies to a temporary stay of a person in a given place. In fact this distinction is very well emphasized in those
cases where the Domiciliary Theory must necessarily supplant the Nationality Theory in cases involving stateless persons. “There is a
difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary; domicile
denotes a fixed permanent residence to which when absent, one has the intention of returning. A man may have a residence in one place
and a domicile in another. Residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited
time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His
place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of residence without intention
of remaining will constitute domicile.”

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* FIRST DIVISION.

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Pleadings and practice; Cause of action; Action for damages; Where complaint in criminal case filed by fiscal, action for damages
against offended party without basis; Reasons; Case at bar.—The petitioner was not the one who filed the criminal case against the
private respondent, the former being merely the offended party. The criminal complaint against the private respondent could hardly be
termed “baseless and unfounded” because he himself admitted that he issued a post-dated check that was dishonored. If the criminal
complaint against him was dismissed by the CFI of Rizal upon his own motion and perchance by some reason of technicality or by reason
of reasonable doubt, the private respondent is by no means absolved from the civil liability of refunding the amount written in the
dishonored check to the petitioner. The logical conclusion that could be derived from all the foregoing is that the criminal complaint filed
against the private respondent for estafa by the fiscal of Rizal is by no means “malicious,” “baseless,” and “unfounded” and therefore,
the action for damages is without any basis and that the private respondent’s civil complaint for damages filed in the CFI of Ilocos Norte
was without sufficient cause of action.

G.R. No. 182864. January 12, 2015.*

EASTERN SHIPPING LINES, INC., petitioner, vs. BPI/MS INSURANCE CORP., & MITSUI SUMITOMO
INSURANCE CO., LTD., respondents.

Civil Law; Common Carriers; Extraordinary Responsibility; The extraordinary


responsibility of the common carrier lasts from the time the goods are unconditionally placed
in the possession of, and received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the person who has a right to
receive them.—Common carriers, from the nature of their business and on public policy
considerations, are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. Subject to certain exceptions enumerated under Article 1734 of the
Civil Code, common carriers are responsible for the loss, destruction, or deterioration of the
goods. The extraordinary responsibility of the common carrier lasts from the time the goods
are unconditionally placed in the possession of, and received by the carrier for transportation
until the same are delivered,

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* FIRST DIVISION.

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actually or constructively, by the carrier to the consignee, or to the person who has a
right to receive them.
Same; Same; Maritime Transportation; Bills of Lading; In maritime transportation, a
bill of lading is issued by a common carrier as a contract, receipt and symbol of the goods
covered by it.—In maritime transportation, a bill of lading is issued by a common carrier as
a contract, receipt and symbol of the goods covered by it. If it has no notation of any defect or
damage in the goods, it is considered as a “clean bill of lading.” A clean bill of lading
constitutes prima facie evidence of the receipt by the carrier of the goods as therein described.
Same; Same; Mere proof of delivery of the goods in good order to a common carrier and
of their arrival in bad order at their destination constitutes a prima facie case of fault or
negligence against the carrier.—Mere proof of delivery of the goods in good order to a common
carrier and of their arrival in bad order at their destination constitutes a prima facie case of
fault or negligence against the carrier. If no adequate explanation is given as to how the
deterioration, loss, or destruction of the goods happened, the transporter shall be held
responsible. From the foregoing, the fault is attributable to ESLI. While no longer an issue,
it may be nonetheless state that ATI was correctly absolved of liability for the damage.
Same; Same; Conflict of Laws; Law of Destination; According to the New Civil Code, the
law of the country to which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.—According to the New Civil Code,
the law of the country to which the goods are to be transported shall govern the liability of
the common carrier for their loss, destruction or deterioration. The Code takes precedence as
the primary law over the rights and obligations of common carriers with the Code of
Commerce and COGSA applying suppletorily.
Same; Same; The New Civil Code provides that a stipulation limiting a common carrier’s
liability to the value of the goods appearing in the bill of lading is binding, unless the shipper
or owner declares a greater value.—The New Civil Code provides that a stipulation limiting
a common carrier’s liability to the value of the goods appearing in the bill of lading is binding,
unless the shipper or owner declares a greater value. In addition, a contract fixing the sum
that
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may be recovered by the owner or shipper for the loss, destruction, or deterioration of
the goods is valid, if it is reasonable and just under the circumstances, and has been fairly
and freely agreed upon.
Same; Same; Carriage of Goods by Sea Act; Carriage of Goods by Sea Act (COGSA)
provides under Section 4, Subsection 5 that an amount recoverable in case of loss or damage
shall not exceed US$500.00 per package or per customary freight unless the nature and value
of such goods have been declared by the shipper before shipment and inserted in the bill of
lading.—COGSA, on the other hand, provides under Section 4, Subsection 5 that an amount
recoverable in case of loss or damage shall not exceed US$500.00 per package or per
customary freight unless the nature and value of such goods have been declared by
the shipper before shipment and inserted in the bill of lading.
Same; Same; Maritime Transportation; Bills of Lading; The bills of lading represent the
formal expression of the parties’ rights, duties and obligations.—The bills of lading represent
the formal expression of the parties’ rights, duties and obligations. It is the best evidence of
the intention of the parties which is to be deciphered from the language used in the contract,
not from the unilateral post facto assertions of one of the parties, or of third parties who are
strangers to the contract. Thus, when the terms of an agreement have been reduced to
writing, it is deemed to contain all the terms agreed upon and there can be, between the
parties and their successors-in-interest, no evidence of such terms other than the contents of
the written agreement.
Same; Same; Same; Same; The declaration requirement does not require that all the
details must be written down on the very bill of lading itself.—As to the non-declaration of the
value of the goods on the second bill of lading, we see no error on the part of the appellate
court when it ruled that there was a compliance of the requirement provided by COGSA. The
declaration requirement does not require that all the details must be written down on the
very bill of lading itself. It must be emphasized that all the needed details are in the invoice,
which “contains the itemized list of goods shipped to a buyer, stating quantities, prices,
shipping charges,” and other details which may contain numerous sheets. Compliance can be
attained by incorporating the invoice, by way of reference, to the bill of lading
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provided that the former containing the description of the nature, value and/or payment
of freight charges is as in this case duly admitted as evidence.
Remedial Law; Evidence; Judicial Admissions; Judicial admissions are legally binding
on the party making the admissions.—Judicial admissions are legally binding on the party
making the admissions. Pretrial admission in civil cases is one of the instances of judicial
admissions explicitly provided for under Section 7, Rule 18 of the Rules of Court, which
mandates that the contents of the pretrial order shall control the subsequent course of the
action, thereby, defining and limiting the issues to be tried.
Same; Same; Same; The admission having been made in a stipulation of facts at pretrial
by the parties, it must be treated as a judicial admission. Under Section 4, of Rule 129 of the
Rules of Court, a judicial admission requires no proof.—The admission having been made in
a stipulation of facts at pretrial by the parties, it must be treated as a judicial admission.
Under Section 4, of Rule 129 of the Rules of Court, a judicial admission requires no proof. It
is inconceivable that a shipping company with maritime experience and resource like the
ESLI will admit the existence of a maritime document like an invoice even if it has no
knowledge of its contents or without having any copy thereof.

G.R. No. 198587. January 14, 2015.*

SAUDI ARABIAN AIRLINES (SAUDIA) and BRENDA J. BETIA, petitioners, vs. MA. JOPETTE M. REBESENCIO,
MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A. CRISTOBAL and LORAINE S. SCHNEIDERCRUZ,
respondents.

Conflict of Laws; Corporations; Foreign Corporations Doing Business in the Philippines;


Foreign Investments Act; A plain application of Section 3(d) of the Foreign Investments Act
leads to no other conclusion than that Saudia is a foreign corporation doing business in the
Philippines. As such, Saudia may be sued in the Philippines and is subject to the jurisdiction
of Philippine tribunals.—By its own admission, Saudia, while a foreign corporation, has a
Philippine office. Section 3(d) of Republic Act No. 7042, otherwise known as the Foreign
Investments Act of 1991, provides the following: The phrase “doing business” shall
include . . . opening offices, whether called “liaison” offices or branches; . . . and any
other act or acts that imply a continuity of commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the exercise of some of the
functions normally incident to, and in progressive prosecution of commercial gain or of the
purpose and object of the business organization. (Emphasis supplied) A plain application of
Section 3(d) of the Foreign Investments Act leads to no other conclusion than that Saudia is
a foreign corporation doing business in the Philippines. As such, Saudia may be sued in the
Philippines and is subject to the jurisdiction of Philippine tribunals.
Same; Contracts; Transnational transactions entail differing laws on the requirements
for the validity of the formalities and substantive provisions of contracts and their
interpretation.—Transnational transactions entail differing laws on the requirements for the
validity of the formalities and substantive provisions of contracts and their interpretation.
These transactions inevitably lend themselves to the possibility of various fora for litigation
and dispute resolution. As observed by an eminent expert on transnational law:

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* SECOND DIVISION.

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The more jurisdictions having an interest in, or merely even a point of contact with, a
transaction or relationship, the greater the number of potential fora for the resolution of
disputes arising out of or related to that transaction or relationship. In a world of increased
mobility, where business and personal transactions transcend national boundaries, the
jurisdiction of a number of different fora may easily be invoked in a single or a set of related
disputes.
Remedial Law; Civil Procedure; Forum Shopping; In the Philippines, the 1997 Rules on
Civil Procedure provide for willful and deliberate forum shopping as a ground not only for
summary dismissal with prejudice but also for citing parties and counsels in direct contempt,
as well as for the imposition of administrative sanctions.— In the Philippines, the 1997 Rules
on Civil Procedure provide for willful and deliberate forum shopping as a ground not only for
summary dismissal with prejudice but also for citing parties and counsels in direct contempt,
as well as for the imposition of administrative sanctions. Likewise, the same rules expressly
provide that a party may seek the dismissal of a Complaint or another pleading asserting a
claim on the ground “[t]hat there is another action pending between the same parties for the
same cause,” i.e, litis pendentia, or “[t]hat the cause of action is barred by a prior
judgment,” i.e., res judicata.
Conflict of Laws; Forum Non Conveniens; The doctrine of forum non conveniens
addresses the same rationale that the rule against forum shopping does, albeit on a
multijurisdictional scale.—Forum non conveniens literally translates to “the forum is
inconvenient.” It is a concept in private international law and was devised to combat the “less
than honorable” reasons and excuses that litigants use to secure procedural advantages,
annoy and harass defendants, avoid overcrowded dockets, and select a “friendlier” venue.
Thus, the doctrine of forum non conveniens addresses the same rationale that the rule
against forum shopping does, albeit on a multijurisdictional scale. Forum non conveniens,
like res judicata, is a concept originating in common law. However, unlike the rule on res
judicata, as well as those on litis pendentia and forum shopping, forum non conveniens finds
no textual anchor, whether in statute or in procedural rules, in our civil law system.
Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to decline
its exercise of jurisdiction.
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Same; Same; Under the doctrine of forum non conveniens, “a court, in conflicts of law
cases, may refuse impositions on its jurisdiction where it is not the most ‘convenient’ or
available forum and the parties are not precluded from seeking remedies elsewhere.”—
Accordingly, under the doctrine of forum non conveniens, “a court, in conflicts of law
cases, may refuse impositions on its jurisdiction where it is “not the most ‘convenient’ or
available forum and the parties are not precluded from seeking remedies elsewhere.”
In Puyat v. Zabarte, 352 SCRA 738 (2001), this court recognized the following situations as
among those that may warrant a court’s desistance from exercising jurisdiction: 1) The belief
that the matter can be better tried and decided elsewhere, either because the main aspects
of the case transpired in a foreign jurisdiction or the material witnesses have their residence
there; 2) The belief that the nonresident plaintiff sought the forum[,] a practice known
as forum shopping[,] merely to secure procedural advantages or to convey or harass the
defendant; 3) The unwillingness to extend local judicial facilities to nonresidents or aliens
when the docket may already be overcrowded; 4) The inadequacy of the local judicial
machinery for effectuating the right sought to be maintained; and 5) The difficulty of
ascertaining foreign law.
Same; Contracts; Principle of Autonomy of Contracts; Article 1306 of the Civil Code
expressly provides that “[t]the contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient.”—Our law on contracts recognizes the
validity of contractual choice of law provisions. Where such provisions exist, Philippine
tribunals, acting as the forum court, generally defer to the parties’ articulated choice. This is
consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civil
Code expressly provides that “[t]he contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient.” Nevertheless, while a
Philippine tribunal (acting as the forum court) is called upon to respect the parties’ choice of
governing law, such respect must not be so permissive as to lose sight of considerations of
law, morals, good customs, public order, or public policy that underlie the contract central to
the controversy.
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International Law; Convention on the Elimination of all Forms of Discrimination


Against Women; The Convention on the Elimination of all Forms of Discrimination Against
Women (CEDAW), signed and ratified by the Philippines on July 15, 1980, and on August 5,
1981, respectively, is part of the law of the land.—Article II, Section 14 of the 1987
Constitution provides that “[t]he State . . . shall ensure the fundamental equality before the
law of women and men.” Contrasted with Article II, Section 1 of the 1987 Constitution’s
statement that “[n]o person shall . . . be denied the equal protection of the laws,” Article II,
Section 14 exhorts the State to “ensure.” This does not only mean that the Philippines shall
not countenance nor lend legal recognition and approbation to measures that discriminate
on the basis of one’s being male or female. It imposes an obligation to actively engage in
securing the fundamental equality of men and women. The Convention on the Elimination
of all Forms of Discrimination against Women (CEDAW), signed and ratified by the
Philippines on July 15, 1980, and on August 5, 1981, respectively, is part of the law of the
land. In view of the widespread signing and ratification of, as well as adherence (in practice)
to it by states, it may even be said that many provisions of the CEDAW may have become
customary international law.
Constitutional Law; Equal Protection of the Laws; Apart from the constitutional policy
on the fundamental equality before the law of men and women, it is settled that contracts
relating to labor and employment are impressed with public interest.—Apart from the
constitutional policy on the fundamental equality before the law of men and women, it is
settled that contracts relating to labor and employment are impressed with public interest.
Article 1700 of the Civil Code provides that “[t]he relation between capital and labor are not
merely contractual. They are so impressed with public interest that labor contracts must
yield to the common good.”
Conflict of Laws; As the present dispute relates to (what the respondents allege to be) the
illegal termination of respondents’ employment, this case is immutably a matter of public
interest and public policy. Consistent with clear pronouncements in law and jurisprudence,
Philippine laws properly find application in and govern this case.—As the present dispute
relates to (what the respondents allege to be) the illegal termination of respondents’
employment, this case is immutably a matter of public interest and
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public policy. Consistent with clear pronouncements in law and jurisprudence,


Philippine laws properly find application in and govern this case. Moreover, as this premise
for Saudia’s insistence on the application forum non conveniens has been shattered, it follows
that Philippine tribunals may properly assume jurisdiction over the present controversy.
Same; Even if we were to assume, for the sake of discussion, that it is the laws of Saudi
Arabia which should apply, it does not follow that Philippine tribunals should refrain from
exercising jurisdiction.—As the question of applicable law has been settled, the supposed
difficulty of ascertaining foreign law (which requires the application of forum non conveniens)
provides no insurmountable inconvenience or special circumstance that will justify depriving
Philippine tribunals of jurisdiction. Even if we were to assume, for the sake of discussion,
that it is the laws of Saudi Arabia which should apply, it does not follow that Philippine
tribunals should refrain from exercising jurisdiction. To recall our pronouncements in Puyat,
as well as in Bank of America NT&SA v. Court of Appeals, 400 SCRA 156 (2003), it is not so
much the mere applicability of foreign law which calls into operation forum non conveniens.
Rather, what justifies a court’s desistance from exercising jurisdiction is “[t]he difficulty of
ascertaining foreign law” or the inability of a “Philippine Court . . . to make an intelligent
decision as to the law[.]” Consistent with lex loci intentionis, to the extent that it is proper
and practicable (i.e., “to make an intelligent decision”), Philippine tribunals may apply the
foreign law selected by the parties. In fact, (albeit without meaning to make a pronouncement
on the accuracy and reliability of respondents’ citation) in this case, respondents themselves
have made averments as to the laws of Saudi Arabia.
Same; The immense public policy considerations attendant to this case behoove
Philippine tribunals to not shy away from their duty to rule on the case.—All told, the
considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of
America NT&SA have been satisfied. First, all the parties are based in the Philippines and
all the material incidents transpired in this jurisdiction. Thus, the parties may conveniently
seek relief from Philippine tribunals. Second, Philippine tribunals are in a position to make
an intelligent decision as to the law and the facts. Third, Philippine tribunals are in a position
to enforce their decisions. There is no
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compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the
immense public policy considerations attendant to this case behoove Philippine tribunals to
not shy away from their duty to rule on the case.
Labor Law; Maternity Leave; The very nature of a maternity leave means that a pregnant
employee will not report for work only temporarily and that she will resume the performance
of her duties as soon as the leave allowance expires.—Applying the cited standards on
resignation and constructive dismissal, it is clear that respondents were constructively
dismissed. Hence, their termination was illegal. The termination of respondents’ employment
happened when they were pregnant and expecting to incur costs on account of child delivery
and infant rearing. As noted by the Court of Appeals, pregnancy is a time when they need
employment to sustain their families. Indeed, it goes against normal and reasonable human
behavior to abandon one’s livelihood in a time of great financial need. It is clear that
respondents intended to remain employed with Saudia. All they did was avail of their
maternity leaves. Evidently, the very nature of a maternity leave means that a pregnant
employee will not report for work only temporarily and that she will resume the performance
of her duties as soon as the leave allowance expires. It is also clear that respondents exerted
all efforts to remain employed with Saudia. Each of them repeatedly filed appeal letters (as
much as five [5] letters in the case of Rebesencio) asking Saudia to reconsider the ultimatum
that they resign or be terminated along with the forfeiture of their benefits. Some of them
even went to Saudia’s office to personally seek reconsideration.
Same; Termination of Employment; In termination of cases, the burden of proving just or
valid cause for dismissing an employee rests on the employer.—“In termination of cases, the
burden of proving just or valid cause for dismissing an employee rests on the employer.” In
this case, Saudia makes much of how respondents supposedly completed their exit
interviews, executed quitclaims, received their separation pay, and took more than a year to
file their Complaint. If at all, however, these circumstances prove only the fact of their
occurrence, nothing more. The voluntariness of respondents’ departure from Saudia is non
sequitur.
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Same; Same; Quitclaims; As to respondents’ quitclaims, in Phil. Employ Services and


Resources, Inc. v. Paramio, 427 SCRA 732 (2004), the Supreme Court (SC) noted that “[i]f (a)
there is clear proof that the waiver was wangled from an unsuspecting or gullible person; or
(b) the terms of the settlement are unconscionable, and on their face invalid, such quitclaims
must be struck down as invalid or illegal.”—As to respondents’ quitclaims, in Phil. Employ
Services and Resources, Inc. v. Paramio, 427 SCRA 732 (2004), this court noted that “[i]f (a)
there is clear proof that the waiver was wangled from an unsuspecting or gullible person; or
(b) the terms of the settlement are unconscionable, and on their face invalid, such quitclaims
must be struck down as invalid or illegal.” Respondents executed their quitclaims after
having been unfairly given an ultimatum to resign or be terminated (and forfeit their
benefits).
Same; Same; Illegal Dismissals; Backwages; Separation Pay; Having been illegally and
unjustly dismissed, respondents are entitled to full backwages and benefits from the time of
their termination until the finality of this Decision. They are likewise entitled to separation
pay in the amount of one (1) month’s salary for every year of service until the finality of this
Decision, with a fraction of a year of at least six (6) months being counted as one (1) whole
year.—Having been illegally and unjustly dismissed, respondents are entitled to full
backwages and benefits from the time of their termination until the finality of this Decision.
They are likewise entitled to separation pay in the amount of one (1) month’s salary for every
year of service until the finality of this Decision, with a fraction of a year of at least six (6)
months being counted as one (1) whole year.
Same; Same; Same; Moral Damages; Moral damages are awarded in termination cases
where the employee’s dismissal was attended by bad faith, malice or fraud, or where it
constitutes an act oppressive to labor, or where it was done in a manner contrary to morals,
good customs or public policy.—“[M]oral damages are awarded in termination cases where
the employee’s dismissal was attended by bad faith, malice or fraud, or where it constitutes
an act oppressive to labor, or where it was done in a manner contrary to morals, good customs
or public policy.” In this case, Saudia terminated respondents’ employment in a manner that
is patently discriminatory and running afoul of the public interest that underlies
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employer-employee relationships. As such, respondents are entitled to moral damages.


Same; Same; Same; Exemplary Damages; In a long line of cases, the Supreme Court (SC)
awarded exemplary damages to illegally dismissed employees whose “dismissal[s were]
effected in a wanton, oppressive or malevolent manner.”—In a long line of cases, this court
awarded exemplary damages to illegally dismissed employees whose “dismissal[s were]
effected in a wanton, oppressive or malevolent manner.” This court has awarded exemplary
damages to employees who were terminated on such frivolous, arbitrary, and unjust grounds
as membership in or involvement with labor unions, injuries sustained in the course of
employment, development of a medical condition due to the employer’s own violation of the
employment contract, and lodging of a Complaint against the employer. Exemplary damages
were also awarded to employees who were deemed illegally dismissed by an employer in an
attempt to evade compliance with statutorily established employee benefits. Likewise,
employees dismissed for supposedly just causes, but in violation of due process requirements,
were awarded exemplary damages.
Same; Same; Same; Liability of Corporate Officers; As a rule, corporate directors and
officers are not liable for the illegal termination of a corporation’s employees.—A corporation
has a personality separate and distinct from those of the persons composing it. Thus, as a
rule, corporate directors and officers are not liable for the illegal termination of a
corporation’s employees. It is only when they acted in bad faith or with malice that they
become solidarily liable with the corporation.

G.R. No. 189272. January 21, 2015.*

PEOPLE OF THE PHILIPPINES, appellee, vs. CHI CHAN LIU a.k.a. CHAN QUE and HUI LAO
CHUNG a.k.a. LEOFE SENGLAO, appellants.
Criminal Law; Dangerous Drugs Act; Illegal Importation of Regulated Drugs; The crime
of importation of regulated drugs is committed by importing or bringing any regulated drug
into the Philippines without being authorized by law.—On the basis of the foregoing
provisions, the crime of importation of regulated drugs is committed by importing or bringing
any regulated drug into the Philippines without being authorized by law. According to
appellants, if it is not proven that the regulated drugs are brought into the Philippines from
a foreign origin, there is no importation.
Same; Same; Same; Importation; Words and Phrases; The Black’s Law Dictionary
defines importation as “the act of bringing goods and merchandise into a country from a
foreign country.”—The Black’s Law Dictionary defines importation as “the act of bringing
goods and merchandise into a country from a foreign country.” As used in our tariff and
customs laws, imported articles, those which are brought into the Philippines from any
foreign country, are subject to duty upon each importation. Similarly, in a statute controlling
the entry of toxic substances and hazardous and nuclear wastes, importation was construed
as the entry of products or substances into the Philippines through the seaports or airports
of entry. Importation then, necessarily connotes the introduction of something into a certain
territory coming from an external source. Logically, if the article merely came from the same
territory, there cannot be any importation of the same.
Same; Same; Same; Illegal Possession of Regulated Drugs; Appellants’ exoneration from
illegal importation of regulated drugs under Section 14, Article III of Republic Act (RA) No.
6425 does not, however, free them from all criminal liability for their possession of the same.—
Appellants’ exoneration from illegal importation of regu-

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* THIRD DIVISION.

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lated drugs under Section 14, Article III of RA No. 6425 does not, however, free them
from all criminal liability for their possession of the same is clearly evident.
Same; Same; Same; Same; The Supreme Court (SC) finds that while appellants cannot
be held liable for the offense of illegal importation charged in the information, their criminal
liability for illegal possession, if proven beyond reasonable doubt, may nevertheless be
sustained.—This Court finds that while appellants cannot be held liable for the offense of
illegal importation charged in the information, their criminal liability for illegal possession,
if proven beyond reasonable doubt, may nevertheless be sustained. As previously mentioned,
the crime of importation of regulated drugs is committed by importing or bringing any
regulated drug into the Philippines without being authorized by law. Indeed, when one brings
something or causes something to be brought into the country, he necessarily has possession
of the same. Necessarily, therefore, importation can never be proven without first
establishing possession, affirming the fact that possession is a condition sine qua non for it
would rather be unjust to convict one of illegal importation of regulated drugs when he is not
proven to be in possession thereof.
Same; Same; Same; Same; Variance Between Offense Charged and Offense Proved; The
Supreme Court (SC) notes that charging appellants with illegal possession when the
information filed against them charges the crime of importation does not violate their
constitutional right to be informed of the nature and cause of the accusation brought against
them.—At this point, this Court notes that charging appellants with illegal possession when
the information filed against them charges the crime of importation does not violate their
constitutional right to be informed of the nature and cause of the accusation brought against
them. The rule is that when there is a variance between the offense charged in the complaint
or information, and that proved or established by the evidence, and the offense as charged
necessarily includes the offense proved, the accused shall be convicted of the offense proved
included in that which is charged. An offense charged necessarily includes that which is
proved, when some of the essential elements or ingredients of the former, as this is alleged
in the complaint or information, constitute the latter.
478

478 SUPREME COURT REPORTS ANNOTATED


People vs. Chi Chan Liu

Same; Same; Illegal Sale of Dangerous Drugs; Illegal Possession of Dangerous Drugs;
Variance Between Offense Charged and Offense Proved; The Supreme Court (SC) upheld the
prevailing doctrine that the illegal sale of dangerous drugs absorbs the illegal possession
thereof except if the seller was also apprehended in the illegal possession of another quantity
of dangerous drugs not covered by or not included in the illegal sale, and the other quantity of
dangerous drugs was probably intended for some future dealings or use by the accused.—
Indeed, We have had several occasions in the past wherein an accused, charged with the
illegal sale of dangerous drugs, was convicted of illegal possession thereof. In those cases,
this Court upheld the prevailing doctrine that the illegal sale of dangerous drugs absorbs the
illegal possession thereof except if the seller was also apprehended in the illegal possession
of another quantity of dangerous drugs not covered by or not included in the illegal sale, and
the other quantity of dangerous drugs was probably intended for some future dealings or use
by the accused. Illegal possession of dangerous drugs is therefore an element of and is
necessarily included in illegal sale. Hence, convicting the accused with the former does not
violate his right to be informed of the accusation against him for it is an element of the latter.
Same; Same; Illegal Importation of Regulated Drugs; Illegal Possession of Dangerous
Drugs; Variance Between Offense Charged and Offense Proved; Where an accused is charged
with a specific crime, he is duly informed not only of such specific crime but also of lesser
crimes or offenses included therein.—Considering that illegal possession is likewise an
element of and is necessarily included in illegal importation of dangerous drugs, convicting
appellants of the former, if duly established beyond reasonable doubt, does not amount to a
violation of their right to be informed of the nature and cause of accusation against them.
Indeed, where an accused is charged with a specific crime, he is duly informed not only of
such specific crime but also of lesser crimes or offenses included therein.
Same; Same; Illegal Possession of Regulated Drugs; Elements of.—The elements of illegal
possession of regulated drugs are as follows: (a) the accused is in possession of an item or
object which is identified to be a regulated drug; (b) such possession is not authorized by law;
and (c) the accused freely and consciously possessed the regulated drug.
479

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People vs. Chi Chan Liu

Same; Denial; Frame-Up; In order to prosper, the defense of denial and frame-up must
be proved with strong and convincing evidence.—This Court has consistently noted that
denial or frame-up is a standard defense ploy in most prosecutions for violations of the
Dangerous Drugs Law. This defense has been invariably viewed with disfavor for it can easily
be concocted. In order to prosper, the defense of denial and frame-up must be proved with
strong and convincing evidence. Without proof of any intent on the part of the police officers
to falsely impute to appellants the commission of a crime, the presumption of regularity in
the performance of official duty and the principle that the findings of the trial court on the
credibility of witnesses are entitled to great respect, deserve to prevail over the bare denials
and self-serving claims of frame-up by appellants.
Constitutional Law; Criminal Procedure; Warrantless Arrests; A settled exception to the
guaranteed right against warrantless arrests is an arrest made during the commission of a
crime, which does not require a previously issued warrant, under Section 5(a), Rule 113 of the
Revised Rules on Criminal Procedure.—Section 2, Article III of the Philippine Constitution
provides: Section 2. The right of the people to be secure in their persons, houses, papers, and
effects against unreasonable searches and seizures of whatever nature and for any purpose
shall be inviolable, and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized. A settled exception,
however, to the above guaranteed right is an arrest made during the commission of a crime,
which does not require a previously issued warrant, under Section 5(a), Rule 113 of the
Revised Rules on Criminal Procedure, to wit: Sec. 5. Arrest without warrant; when lawful.—
A peace officer of a private person may, without a warrant, arrest a person: (a) When, in his
presence, the person to be arrested has committed, is actually committing, or is attempting
to commit an offense. This Court has ruled that for an arrest to fall under the above exception,
two (2) elements must be present: (1) the person to be arrested must execute an overt act
indicating that he has just committed, is actually committing, or is attempting to commit a
crime; and (2) such
480

480 SUPREME COURT REPORTS ANNOTATED


People vs. Chi Chan Liu

overt act is done in the presence or within the view of the arresting officer.
Same; Same; Warrantless Searches and Seizures; Plain View Doctrine; The Supreme
Court (SC) does not find the consequent warrantless search and seizure conducted on
appellants unreasonable in view of the fact that the bags containing the regulated drugs were
in plain view of the arresting officers, one of the judicially recognized exceptions to the
requirement of obtaining a search warrant.—In addition, this Court does not find the
consequent warrantless search and seizure conducted on appellants unreasonable in view of
the fact that the bags containing the regulated drugs were in plain view of the arresting
officers, one of the judicially recognized exceptions to the requirement of obtaining a search
warrant.
Same; Same; Same; Same; Under the plain view doctrine, objects falling in the “plain
view” of an officer, who has a right to be in the position to have that view, are subject to seizure
and may be presented as evidence.—Under the plain view doctrine, objects falling in the “plain
view” of an officer, who has a right to be in the position to have that view, are subject to
seizure and may be presented as evidence. It applies when the following requisites concur:
(a) the law enforcement officer in search of the evidence has a prior justification for an
intrusion or is in a position from which he can view a particular area; (b) the discovery of the
evidence in plain view is inadvertent; and (c) it is immediately apparent to the officer that
the item he observes may be evidence of a crime, contraband, or otherwise subject to seizure.
The law enforcement officer must lawfully make an initial intrusion or properly be in a
position from which he can particularly view the area. In the course of such lawful intrusion,
he came inadvertently across a piece of evidence incriminating the accused. The object must
be open to eye and hand, and its discovery inadvertent.
Remedial Law; Criminal Procedure; Appeals; Findings of facts of the trial court, as
affirmed by the appellate court, are conclusive on this Court, absent any evidence that both
courts ignored, misconstrued, or misinterpreted cogent facts and circumstances of substance
which, if considered, would warrant a modification or reversal of the outcome of the case.—In
view of the well-entrenched rule that the findings of facts of the trial court, as affirmed by
the appellate court,
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People vs. Chi Chan Liu

are conclusive on this Court, absent any evidence that both courts ignored,
misconstrued, or misinterpreted cogent facts and circumstances of substance which, if
considered, would warrant a modification or reversal of the outcome of the case, this Court
finds no cogent reason to deviate from the above findings. It is clear, therefore, that based on
the findings of the courts below, appellants were, in fact, in possession of regulated drugs
without the requisite authority.

G.R. Nos. 178382-83. September 23, 2015.*

CONTINENTAL MICRONESIA, INC., petitioner, vs. JOSEPH BASSO, respondent.

Civil Law; Conflict of Laws; In Hasegawa v. Kitamura, 538 SCRA 261 (2007), the
Supreme Court (SC) stated that in the judicial resolution of conflict-of-laws problems, three
(3) consecutive phases are involved: jurisdiction, choice of law, and recognition and
enforcement of judgments.—In Hasegawa v. Kitamura, 538 SCRA 261 (2007), we stated that
in the judicial resolution of conflict-of-laws problems, three consecutive phases are involved:
jurisdiction, choice of law, and recognition and enforcement of judgments. In resolving the
conflicts problem, courts should ask the following questions: 1. Under the law, do I have
jurisdiction over the subject matter and the parties to this case? 2. If the answer is yes, is
this a convenient forum to the parties, in light of the facts? 3. If the answer is yes, what is
the conflicts rule for this particular problem? 4. If the conflicts rule points to a foreign law,
has said law been properly pleaded and proved by the one invoking it? 5. If so, is the
application or enforcement of the foreign law in the forum one of the basic exceptions to the
application of foreign law? In short, is there any strong policy or vital interest of the forum
that is at stake in this case and which should preclude the application of foreign law?
Remedial Law; Civil Procedure; Jurisdiction; Jurisdiction over the subject matter is
conferred by the Constitution or by law and by the material allegations in the complaint,
regardless of whether or not the plaintiff is entitled to recover all or some of the claims or
reliefs sought therein.—Jurisdiction is defined as the power and authority of the courts to
hear, try and decide cases. Jurisdiction over the subject matter is conferred by the
Constitution or by law and by the material allegations in the complaint, regardless of whether
or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein. It
cannot be acquired through a waiver or enlarged by the omission of the parties or conferred
by the acquiescence of the court. That the employment contract of Basso

_______________

* THIRD DIVISION.

330

330 SUPREME COURT REPORTS ANNOTATED


Continental Micronesia, Inc. vs. Basso

was replete with references to US laws, and that it originated from and was returned to
the US, do not automatically preclude our labor tribunals from exercising jurisdiction to hear
and try this case.
Mercantile Law; Corporations; Foreign Corporations; The purpose of the law in requiring
that foreign corporations doing business in the country be licensed to do so, is to subject the
foreign corporations to the jurisdiction of our courts.—As regards jurisdiction over the parties,
we agree with the Court of Appeals that the Labor Arbiter acquired jurisdiction over the
person of Basso, notwithstanding his citizenship, when he filed his complaint against CMI.
On the other hand, jurisdiction over the person of CMI was acquired through the coercive
process of service of summons. We note that CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the proceedings before
the courts. Though a foreign corporation, CMI is licensed to do business in the Philippines
and has a local business address here. The purpose of the law in requiring that foreign
corporations doing business in the country be licensed to do so, is to subject the foreign
corporations to the jurisdiction of our courts.
Civil Law; Conflict of Laws; Doctrine of Forum Non Conveniens; Under the doctrine of
forum non conveniens, a Philippine court in a conflict-of-laws case may assume jurisdiction if
it chooses to do so.—Under the doctrine of forum non conveniens, a Philippine court in a
conflict-of-laws case may assume jurisdiction if it chooses to do so, provided, that the
following requisites are met: (1) that the Philippine Court is one to which the parties may
conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent
decision as to the law and the facts; and (3) that the Philippine Court has or is likely to have
power to enforce its decision. All these requisites are present here. Basso may conveniently
resort to our labor tribunals as he and CMI had physical presence in the Philippines during
the duration of the trial. CMI has a Philippine branch, while Basso, before his death, was
residing here. Thus, it could be reasonably expected that no extraordinary measures were
needed for the parties to make arrangements in advocating their respective cases.
Same; Same; The choice-of-law issue in a conflict-of-laws case seeks to answer the
following important questions: (1) What legal

331

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Continental Micronesia, Inc. vs. Basso

system should control a given situation where some of the significant facts occurred in
two (2) or more states; and (2) to what extent should the chosen legal system regulate the
situation.—The choice-of-law issue in a conflict-of-laws case seeks to answer the following
important questions: (1) What legal system should control a given situation where some of
the significant facts occurred in two or more states; and (2) to what extent should the chosen
legal system regulate the situation. These questions are entirely different from the question
of jurisdiction that only seeks to answer whether the courts of a state where the case is
initiated have jurisdiction to enter a judgment. As such, the power to exercise jurisdiction
does not automatically give a state constitutional authority to apply forum law.
Same; Same; In Saudi Arabian Airlines v. Court of Appeals, 297 SCRA 469 (1998), the
Supreme Court (SC) emphasized that an essential element of conflict rules is the indication of
a “test” or “connecting factor” or “point of contact.”—In Saudi Arabian Airlines v. Court of
Appeals, 297 SCRA 469 (1998), we emphasized that an essential element of conflict rules is
the indication of a “test” or “connecting factor” or “point of contact.” Choice-of-law rules
invariably consist of a factual relationship (such as property right, contract claim) and a
connecting fact or point of contact, such as the situs of the res, the place of celebration, the
place of performance, or the place of wrongdoing. Pursuant to Saudi Arabian Airlines, we
hold that the “test factors,” “points of contact” or “connecting factors” in this case are the
following: (1) The nationality, domicile or residence of Basso; (2) The seat of CMI; (3) The
place where the employment contract has been made, the locus actus; (4) The place where
the act is intended to come into effect, e.g., the place of performance of contractual duties; (5)
The intention of the contracting parties as to the law that should govern their agreement,
the lex loci intentionis; and (6) The place where judicial or administrative proceedings are
instituted or done.
Remedial Law; Evidence; Foreign Law; Processual Presumption; If the foreign law is not
properly pleaded or proved, the presumption of identity or similarity of the foreign law to our
own laws, otherwise known as processual presumption, applies.—The rule is that there is no
judicial notice of any foreign law. As any other fact, it must be alleged and proved. If the
foreign law is not properly pleaded or proved, the presumption of identity or similarity of the

332
332 SUPREME COURT REPORTS ANNOTATED
Continental Micronesia, Inc. vs. Basso

foreign law to our own laws, otherwise known as processual presumption, applies. Here,
US law may have been properly pleaded but it was not proved in the labor tribunals.
Labor Law; Managerial Employees; Security of Tenure; Managerial employees enjoy
security of tenure and the right of the management to dismiss must be balanced against the
managerial employee’s right to security of tenure, which is not one of the guaranties he gives
up.—It is of no moment that Basso was a managerial employee of CMI. Managerial
employees enjoy security of tenure and the right of the management to dismiss must be
balanced against the managerial employee’s right to security of tenure, which is not one of
the guaranties he gives up.
Same; Termination of Employment; Loss of Trust and Confidence; Guidelines in
Dismissing an Employee on the Ground of Loss of Trust and Confidence.—In Apo Cement
Corporation v. Baptisma, 674 SCRA 162 (2012), we ruled that for an employer to validly
dismiss an employee on the ground of loss of trust and confidence under Article 282(c) of the
Labor Code, the employer must observe the following guidelines: 1) loss of confidence should
not be simulated; 2) it should not be used as subterfuge for causes which are improper, illegal
or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming evidence to
the contrary; and 4) it must be genuine, not a mere afterthought to justify earlier action taken
in bad faith. More importantly, it must be based on a willful breach of trust and founded on
clearly established facts.
Same; Same; Illegal Dismissal; Reinstatement; Backwages; Under Article 279 of the
Labor Code, an employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges, and to his full backwages,
inclusive of allowances and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld up to the time of actual reinstatement.—Under Article
279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges, and to his
full backwages, inclusive of allowances and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld up to the time of actual
reinstatement.

333

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Continental Micronesia, Inc. vs. Basso

Same; Same; Same; Same; Where reinstatement is no longer viable as an option,


separation pay equivalent to one (1) month salary for every year of service should be awarded
as an alternative. The payment of separation pay is in addition to payment of backwages.—
Where reinstatement is no longer viable as an option, separation pay equivalent to one (1)
month salary for every year of service should be awarded as an alternative. The payment of
separation pay is in addition to payment of backwages. In the case of Basso, reinstatement
is no longer possible since he has already passed away. Thus, Basso’s separation pay with
full backwages shall be paid to his heirs.

G.R. No. 187701. July 23, 2014.*


PHILAM INSURANCE COMPANY, INC. (now CHARTIS PHILIPPINES INSURANCE, INC.**, petitioner, vs. HEUNG-
A SHIPPING CORPORATION and WALLEM PHILIPPINES SHIPPING, INC., respondents.
G.R. No. 187812. July 23, 2014.*
HEUNG-A SHIPPING CORPORATION and WALLEM PHILIPPINES SHIPPING, INC., petitioners, vs. PHILAM
INSURANCE COMPANY, INC. (now CHARTIS PHILIPPINES INSURANCE, INC.), respondent.

Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; It is not the
Supreme Court’s (SC’s) duty to evaluate and weigh the evidence all over again as such function
is conceded to be

_______________

* FIRST DIVISION.
**Per Court Resolution dated July 21, 2010 on the basis Motion for Substitution of Petitioner/Respondent’s
name as evidenced by Certificate of Filing of Amended Articles of Incorporation dated October 15, 2009, see Rollo
(G.R. No. 187701), pp. 148-151, 158-159; Rollo (G.R. No. 187812), pp. 217-220, 222-223.

513

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Philam Insurance Company, Inc. (now Chartis
Philippines Insurance, Inc.) vs. Heung-A Shipping
Corporation

within the expertise of the trial court whose findings, when supported by substantial
evidence on record and affirmed by the Court of Appeals (CA), are regarded with respect, if
not binding effect, by the SC; Exceptions.—Being a factual question, it is not reviewable in
the herein petition filed under Rule 45 of the Rules of Court. It is not the Court’s duty to
evaluate and weigh the evidence all over again as such function is conceded to be within the
expertise of the trial court whose findings, when supported by substantial evidence on record
and affirmed by the CA, are regarded with respect, if not binding effect, by this Court. There
are certain instances, however, when the Court is compelled to deviate from this rule,
dismantle the factual findings of the courts a quo and conduct a probe into the factual
questions at issue. These circumstances are: (1) the inference made is manifestly mistaken,
absurd or impossible; (2) there is grave abuse of discretion; (3) the findings are grounded
entirely on speculations, surmises or conjectures; (4) the judgment of the CA is based on
misapprehension of facts; (5) the CA, in making its findings, went beyond the issues of the
case and the same is contrary to the admissions of both appellant and appellee; (6) the
findings of fact are conclusions without citation of specific evidence on which they are based;
(7) the CA manifestly overlooked certain relevant facts not disputed by the parties and which,
if properly considered, would justify a different conclusion; and (8) the findings of fact of the
CA are premised on the absence of evidence and are contradicted by the evidence on record.
Mercantile Law; Transportation Law; Charter Party; Ships and Shipping; A charter
party has been defined in Planters Products, Inc. v. Court of Appeals, 226 SCRA 476 (1993),
as: A contract by which an entire ship, or some principal part thereof, is let by the owner to
another person for a specified time or use; a contract of affreightment by which the owner of a
ship or other vessel lets the whole or a part of her to a merchant or other person for the
conveyance of goods, on a particular voyage, in consideration of the payment of freight.—A
charter party has been defined in Planters Products, Inc. v. Court of Appeals, 226 SCRA 476
(1993) as: [A] contract by which an entire ship, or some principal part thereof, is let by the
owner to another person for a specified time or use; a contract of affreightment by which the
owner of a ship or other vessel lets the whole or a part of her to a merchant or other person
for the conveyance of goods, on a particular voyage, in consideration of the payment of freight.
x x x.
514

514 SUPREME COURT REPORTS


ANNOTATED
Philam Insurance Company, Inc. (now Chartis
Philippines Insurance, Inc.) vs. Heung-A Shipping
Corporation

(Citations omitted) A charter party has two types. First, it could be a contract of
affreightment whereby the use of shipping space on vessels is leased in part or as a whole, to
carry goods for others. The charter-party provides for the hire of vessel only, either for a
determinate period of time (time charter) or for a single or consecutive voyage (voyage
charter). The shipowner supplies the ship’s stores, pay for the wages of the master and the
crew, and defray the expenses for the maintenance of the ship. The voyage remains under
the responsibility of the carrier and it is answerable for the loss of goods received for
transportation. The charterer is free from liability to third persons in respect of the
ship. Second, charter by demise or bareboat charter under which the whole vessel is let to
the charterer with a transfer to him of its entire command and possession and consequent
control over its navigation, including the master and the crew, who are his servants. The
charterer mans the vessel with his own people and becomes, in effect, the owner for the
voyage or service stipulated and hence liable for damages or loss sustained by the goods
transported.
Same; Same; Common Carriers; Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary diligence and vigilance with
respect to the safety of the goods and the passengers they transport.—“[C]ommon carriers, from
the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence and vigilance with respect to the safety of the goods and the
passengers they transport. Thus, common carriers are required to render service with the
greatest skill and foresight and ‘to use all reasonable means to ascertain the nature and
characteristics of the goods tendered for shipment, and to exercise due care in the handling
and stowage, including such methods as their nature requires.’”
Same; Same; Same; Common carriers, as a general rule, are presumed to have been at
fault or negligent if the goods they transported deteriorated or got lost or destroyed.—
“[C]ommon carriers, as a general rule, are presumed to have been at fault or negligent if the
goods they transported deteriorated or got lost or destroyed. That is, unless they prove that
they exercised extraordinary diligence in transporting the goods. In order to avoid
responsibility for any loss or damage, therefore, they have the burden of proving that they
observed such diligence.” Further, under Article 1742 of the Civil
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Philam Insurance Company, Inc. (now Chartis
Philippines Insurance, Inc.) vs. Heung-A Shipping
Corporation

Code, even if the loss, destruction, or deterioration of the goods should be caused by the
faulty nature of the containers, the common carrier must exercise due diligence to forestall
or lessen the loss.
Same; Same; Same; Bill of Lading; A bill of lading is a written acknowledgment of the
receipt of goods and an agreement to transport and to deliver them at a specified place to a
person named or on his or her order. It operates both as a receipt and as a contract.—PROTOP
is solidarily liable with HEUNG-A for the lost/damaged shipment in view of the bill of lading
the former issued to NOVARTIS. “A bill of lading is a written acknowledgment of the receipt
of goods and an agreement to transport and to deliver them at a specified place to a person
named or on his or her order. It operates both as a receipt and as a contract. It is a receipt
for the goods shipped and a contract to transport and deliver the same as therein stipulated.”
PROTOP breached its contract with NOVARTIS when it failed to deliver the goods in the
same quantity, quality and description as stated in Bill of Lading No. PROTAS 200387.
Civil Law; Transportation Law; Conflict of Laws; Under Article 1753 of the Civil Code,
the law of the country to which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.—Under Article 1753 of the Civil
Code, the law of the country to which the goods are to be transported shall govern the liability
of the common carrier for their loss, destruction or deterioration. Since the subject shipment
was being transported from South Korea to the Philippines, the Civil Code provisions shall
apply. In all matters not regulated by the Civil Code, the rights and obligations of common
carriers shall be governed by the Code of Commerce and by special laws, such as the COGSA.
Mercantile Law; Carriage of Goods by Sea Act; Conflict of Laws; Actions; Prescription;
The prescriptive period for filing an action for lost/damaged goods governed by contracts of
carriage by sea to and from Philippine ports in foreign trade is governed by paragraph 6,
Section 3 of the Carriage of Goods by Sea Act (COGSA).—Consonant with the ruling in the
recent Asian Terminals, Inc. v. Philam Insurance Co., Inc., 702 SCRA 88 (2013), the
prescriptive period for filing an action for lost/damaged goods governed by contracts of
carriage by sea to and from Philippine ports in foreign trade
516

516 SUPREME COURT REPORTS


ANNOTATED
Philam Insurance Company, Inc. (now Chartis
Philippines Insurance, Inc.) vs. Heung-A Shipping
Corporation
is governed by paragraph 6, Section 3 of the COGSA which states: (6) Unless notice of
loss or damage and the general nature of such loss or damage be given in writing to the
carrier or his agent at the port of discharge before or at the time of the removal of the goods
into the custody of the person entitled to delivery thereof under the contract of carriage, such
removal shall be prima facie evidence of the delivery by the carrier of the goods as described
in the bill of lading. If the loss or damage is not apparent, the notice must be given within
three days of the delivery. Said notice of loss or damage maybe endorsed upon the receipt for
the goods given by the person taking delivery thereof. The notice in writing need not be given
if the state of the goods has at the time of their receipt been the subject of joint survey or
inspection. In any event the carrier and the ship shall be discharged from all liability in
respect of loss or damage unless suit is brought within one year after delivery of the goods or
the date when the goods should have been delivered: Provided, That if a notice of loss or
damage, either apparent or concealed, is not given as provided for in this section, that fact
shall not affect or prejudice the right of the shipper to bring suit within one year after the
delivery of the goods or the date when the goods should have been delivered.

G.R. No. 181163. July 24, 2013.*


ASIAN TERMINALS, INC., petitioner, vs. PHILAM INSURANCE CO., INC. (now Chartis Philippines Insurance, Inc.),
respondent.

G.R. No. 181262. July 24, 2013.*


PHILAM INSURANCE CO., INC. (now Chartis Philippines Insurance, Inc.), petitioner, vs. WESTWIND SHIPPING
CORPORATION and ASIAN TERMINALS, INC., respondents.

_______________
* FIRST DIVISION.

89

VOL. 702, JULY 24, 2013 89


Asian Terminals, Inc. vs. Philam Insurance Co., Inc.

G.R. No. 181319. July 24, 2013.*


WESTWIND SHIPPING CORPORATION, petitioner, vs. PHILAM INSURANCE CO., INC. (now Chartis Philippines
Insurance, Inc.) and ASIAN TERMINALS, INC., respondents.

Remedial Law; Civil Procedure; “Question of Law” and “Question of Fact,”


Distinguished.—There is a question of law if the issue raised is capable of being resolved
without need of reviewing the probative value of the evidence. The resolution of the issue
must rest solely on what the law provides on the given set of circumstances. Once it is clear
that the issue invites a review of the evidence presented, the question posed is one of fact. If
the query requires a re-evaluation of the credibility of witnesses, or the existence or relevance
of surrounding circumstances and their relation to each other, the issue in that query is
factual.
Same; Same; Supreme Court; The Supreme Court may resolve questions of fact when the
case falls under any of the exceptions.—But while it is not our duty to review, examine and
evaluate or weigh all over again the probative value of the evidence presented, the Court may
nonetheless resolve questions of fact when the case falls under any of the following
exceptions: (1) when the findings are grounded entirely on speculation, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3)
when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension
of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court
of Appeals went beyond the issues of the case, or its findings are contrary to the admissions
of both the appellant and the appellee; (7) when the findings are contrary to those of the trial
court; (8) when the findings are conclusions without citation of specific evidence on which
they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main
and reply briefs are not disputed by the respondent; and (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record.
Insurance Law; Right of Subrogation; The right of subrogation accrues simply upon
payment by the insurance company of the insurance claim.—The Court holds that petitioner
Philam has adequately
90

90 SUPREME COURT REPORTS ANNOTATED


Asian Terminals, Inc. vs. Philam Insurance Co., Inc.

established the basis of its claim against petitioners ATI and Westwind. Philam, as
insurer, was subrogated to the rights of the consignee, Universal Motors Corporation,
pursuant to the Subrogation Receipt executed by the latter in favor of the former. The right
of subrogation accrues simply upon payment by the insurance company of the insurance
claim. Petitioner Philam’s action finds support in Article 2207 of the Civil Code, which
provides as follows: Art. 2207. If the plaintiff’s property has been insured, and he has received
indemnity from the insurance company for the injury or loss arising out of the wrong or
breach of contract complained of, the insurance company shall be subrogated to the rights of
the insured against the wrongdoer or the person who has violated the contract.
Remedial Law; Evidence; Public Documents; Private Documents; The nature of
documents as either public or private determines how the documents may be presented as
evidence in court. Public documents, as enumerated under Section 19, Rule 132 of the Rules
of Court, are self-authenticating and require no further authentication in order to be presented
as evidence in court. In contrast, a private document is any other writing, deed or instrument
executed by a private person without the intervention of a notary or other person legally
authorized by which some disposition or agreement is proved or set forth.—The nature of
documents as either public or private determines how the documents may be presented as
evidence in court. Public documents, as enumerated under Section 19, Rule 132 of the Rules
of Court, are self-authenticating and require no further authentication in order to be
presented as evidence in court. In contrast, a private document is any other writing, deed or
instrument executed by a private person without the intervention of a notary or other person
legally authorized by which some disposition or agreement is proved or set forth. Lacking the
official or sovereign character of a public document, or the solemnities prescribed by law, a
private document requires authentication in the manner prescribed under Section 20, Rule
132 of the Rules: SEC. 20. Proof of private document.—Before any private document offered
as authentic is received in evidence, its due execution and authenticity must be proved either:
(a) By anyone who saw the document executed or written; or (b) By evidence of the
genuineness of the signature or handwriting of the maker. Any other private document need
only be identified as that which it is claimed to be. The requirement of authentication of a
private document is excused only in four instances,
91

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Asian Terminals, Inc. vs. Philam Insurance Co., Inc.

specifically: (a) when the document is an ancient one within the context of Section 21,
Rule 132 of the Rules; (b) when the genuineness and authenticity of the actionable document
have not been specifically denied under oath by the adverse party; (c) when the genuineness
and authenticity of the document have been admitted; or (d) when the document is not being
offered as genuine.
Mercantile Law; Carriage of Goods by Sea Act (COGSA); The Carriage of Goods by Sea
Act (COGSA) or Public Act No. 521 of the 74th US Congress, was accepted to be made
applicable to all contracts for the carriage of goods by sea to and from Philippine ports in
foreign trade by virtue of Commonwealth Act (C.A.) No. 65.—The Carriage of Goods by Sea
Act (COGSA) or Public Act No. 521 of the 74th US Congress, was accepted to be made
applicable to all contracts for the carriage of goods by sea to and from Philippine ports in
foreign trade by virtue of Commonwealth Act (C.A.) No. 65. Section 1 of C.A. No. 65 states:
Section 1. That the provisions of Public Act Numbered Five hundred and twenty-one of the
Seventy-fourth Congress of the United States, approved on April sixteenth, nineteen hundred
and thirty-six, be accepted, as it is hereby accepted to be made applicable to all contracts for
the carriage of goods by sea to and from Philippine ports in foreign trade: Provided, That
nothing in the Act shall be construed as repealing any existing provision of the Code of
Commerce which is now in force, or as limiting its application.
Same; Letter of Credit; Words and Phrases; A letter of credit is a financial device
developed by merchants as a convenient and relatively safe mode of dealing with sales of goods
to satisfy the seemingly irreconcilable interests of a seller, who refuses to part with his goods
before he is paid, and a buyer, who wants to have control of his goods before paying.—A letter
of credit is a financial device developed by merchants as a convenient and relatively safe
mode of dealing with sales of goods to satisfy the seemingly irreconcilable interests of a seller,
who refuses to part with his goods before he is paid, and a buyer, who wants to have control
of his goods before paying. However, letters of credit are employed by the parties desiring to
enter into commercial transactions, not for the benefit of the issuing bank but mainly for the
benefit of the parties to the original transaction, in these cases, Nichimen Corporation as the
seller and Universal Motors as the buyer. Hence, the latter, as the buyer of the Nissan CKD
parts, should be regarded as the person entitled to delivery of
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Asian Terminals, Inc. vs. Philam Insurance Co., Inc.

the goods. Accordingly, for purposes of reckoning when notice of loss or damage should
be given to the carrier or its agent, the date of delivery to Universal Motors is controlling.
Same; Common Carriers; Extraordinary Diligence; Common carriers, from the nature of
their business and for reasons of public policy, are bound to observe extraordinary diligence
in the vigilance over the goods transported by them.—Common carriers, from the nature of
their business and for reasons of public policy, are bound to observe extraordinary diligence
in the vigilance over the goods transported by them. Subject to certain exceptions enumerated
under Article 1734 of the Civil Code, common carriers are responsible for the loss,
destruction, or deterioration of the goods. The extraordinary responsibility of the common
carrier lasts from the time the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive
them.
Same; Same; It is settled in maritime law jurisprudence that cargoes while being
unloaded generally remain under the custody of the carrier.—It is settled in maritime law
jurisprudence that cargoes while being unloaded generally remain under the custody of the
carrier. The Damage Survey Report of the survey conducted by Phil. Navtech Services, Inc.
from April 20-21, 1995 reveals that Case No. 03-245-42K/1 was damaged by ATI stevedores
due to overtightening of a cable sling hold during discharge from the vessel’s hatch to the
pier. Since the damage to the cargo was incurred during the discharge of the shipment and
while under the supervision of the carrier, the latter is liable for the damage caused to the
cargo.
Same; Arrastre Operators; The functions of an arrastre operator involve the handling of
cargo deposited on the wharf or between the establishment of the consignee or shipper and the
ship’s tackle.—The functions of an arrastre operator involve the handling of cargo deposited
on the wharf or between the establishment of the consignee or shipper and the ship’s tackle.
Being the custodian of the goods discharged from a vessel, an arrastre operator’s duty is to
take good care of the goods and to turn them over to the party entitled to their possession.
Handling cargo is mainly the arrastre operator’s principal work so its drivers/operators or
employees should observe the
93

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Asian Terminals, Inc. vs. Philam Insurance Co., Inc.

standards and measures necessary to prevent losses and damage to shipments under its
custody. While it is true that an arrastre operator and a carrier may not be held solidarily
liable at all times, the facts of these cases show that apart from ATI’s stevedores being
directly in charge of the physical unloading of the cargo, its foreman picked the cable sling
that was used to hoist the packages for transfer to the dock. Moreover, the fact that 218 of
the 219 packages were unloaded with the same sling unharmed is telling of the inadequate
care with which ATI’s stevedore handled and discharged Case No. 03-245-42K/1.

G.R. No. 196049. June 26, 2013.*


MINORU FUJIKI, petitioner, vs. MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL
REGISTRAR OF QUEZON CITY, and THE ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE
NATIONAL STATISTICS OFFICE, respondents.

Remedial Law; Civil Procedure; Foreign Judgments; Conflict of Law; For Philippine
courts to recognize a foreign judgment relating to the status of a marriage where one of the
parties is a citizen of a foreign country, the petitioner only needs to prove the foreign judgment
as a fact under the Rules of Court.—For Philippine courts to recognize a foreign judgment
relating to the status of a marriage where one of the parties is a citizen of a foreign country,
the petitioner only needs to prove the foreign judgment as a fact under the

_______________
* SECOND DIVISION.

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70 SUPREME COURT REPORTS ANNOTATED


Fujiki vs. Marinay

Rules of Court. To be more specific, a copy of the foreign judgment may be admitted in
evidence and proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39,
Section 48(b) of the Rules of Court. Petitioner may prove the Japanese Family Court
judgment through (1) an official publication or (2) a certification or copy attested by the officer
who has custody of the judgment. If the office which has custody is in a foreign country such
as Japan, the certification may be made by the proper diplomatic or consular officer of the
Philippine foreign service in Japan and authenticated by the seal of office.
Same; Same; Same; Same; A foreign judgment relating to the status of a marriage affects
the civil status, condition and legal capacity of its parties. However, the effect of a foreign
judgment is not automatic. To extend the effect of a foreign judgment in the Philippines,
Philippine courts must determine if the foreign judgment is consistent with domestic public
policy and other mandatory laws.—A foreign judgment relating to the status of a marriage
affects the civil status, condition and legal capacity of its parties. However, the effect of a
foreign judgment is not automatic. To extend the effect of a foreign judgment in the
Philippines, Philippine courts must determine if the foreign judgment is consistent with
domestic public policy and other mandatory laws. Article 15 of the Civil Code provides that
“[l]aws relating to family rights and duties, or to the status, condition and legal capacity of
persons are binding upon citizens of the Philippines, even though living abroad.” This is the
rule of lex nationalii in private international law. Thus, the Philippine State may require, for
effectivity in the Philippines, recognition by Philippine courts of a foreign judgment affecting
its citizen, over whom it exercises personal jurisdiction relating to the status, condition and
legal capacity of such citizen.
Same; Same; Same; Same; A petition to recognize a foreign judgment declaring a
marriage void does not require relitigation under a Philippine court of the case as if it were a
new petition for declaration of nullity of marriage.—A petition to recognize a foreign judgment
declaring a marriage void does not require relitigation under a Philippine court of the case
as if it were a new petition for declaration of nullity of marriage. Philippine courts cannot
presume to know the foreign laws under which the foreign judgment was rendered. They
cannot substitute their judgment on the status,
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Fujiki vs. Marinay
condition and legal capacity of the foreign citizen who is under the jurisdiction of another
state. Thus, Philippine courts can only recognize the foreign judgment as a fact according to
the rules of evidence.
Same; Same; Same; Same; Once a foreign judgment is admitted and proven in a
Philippine court, it can only be repelled on grounds external to its merits, i.e., “want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.”—
Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order
against a person creates a “presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title.” Moreover, Section 48 of the Rules of Court states
that “the judgment or final order may be repelled by evidence of a want of jurisdiction, want
of notice to the party, collusion, fraud, or clear mistake of law or fact.” Thus, Philippine courts
exercise limited review on foreign judgments. Courts are not allowed to delve into the merits
of a foreign judgment. Once a foreign judgment is admitted and proven in a Philippine court,
it can only be repelled on grounds external to its merits, i.e., “want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake of law or fact.” The rule on limited review
embodies the policy of efficiency and the protection of party expectations, as well as
respecting the jurisdiction of other states.
Same; Same; Same; Same; Civil Law; Divorce; While the Philippines does not have a
divorce law, Philippine courts may, however, recognize a foreign divorce decree under the
second paragraph of Article 26 of the Family Code, to capacitate a Filipino citizen to remarry
when his or her foreign spouse obtained a divorce decree abroad.—Since 1922 in Adong v.
Cheong Seng Gee, 43 Phil. 43 (1922), Philippine courts have recognized foreign divorce
decrees between a Filipino and a foreign citizen if they are successfully proven under the
rules of evidence. Divorce involves the dissolution of a marriage, but the recognition of a
foreign divorce decree does not involve the extended procedure under A.M. No. 02-11-10-SC
or the rules of ordinary trial. While the Philippines does not have a divorce law, Philippine
courts may, however, recognize a foreign divorce decree under the second paragraph of Article
26 of the Family Code, to capacitate a Filipino citizen to remarry when his or her foreign
spouse obtained a divorce decree abroad.72

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Fujiki vs. Marinay

Same; Same; Same; Same; Since the recognition of a foreign judgment only requires proof
of fact of the judgment, it may be made in a special proceeding for cancellation or correction
of entries in the civil registry under Rule 108 of the Rules of Court. Rule 1, Section 3 of the
Rules of Court provides that “[a] special proceeding is a remedy by which a party seeks to
establish a status, a right, or a particular fact.”—Since the recognition of a foreign judgment
only requires proof of fact of the judgment, it may be made in a special proceeding for
cancellation or correction of entries in the civil registry under Rule 108 of the Rules of Court.
Rule 1, Section 3 of the Rules of Court provides that “[a] special proceeding is a remedy by
which a party seeks to establish a status, a right, or a particular fact.” Rule 108 creates a
remedy to rectify facts of a person’s life which are recorded by the State pursuant to the Civil
Register Law or Act No. 3753. These are facts of public consequence such as birth, death or
marriage, which the State has an interest in recording. As noted by the Solicitor General,
in Corpuz v. Sto. Tomas, 628 SCRA 266 (2010), this Court declared that “[t]he recognition of
the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special
proceedings (such as that in Rule 108 of the Rules of Court) is precisely to establish the status
or right of a party or a particular fact.”
Civil Law; Marriages; Parties; When Section 2(a) states that “[a] petition for declaration
of absolute nullity of void marriage may be filed solely by the husband or the wife” — it refers
to the husband or the wife of the subsisting marriage; The husband or the wife of the prior
subsisting marriage is the one who has the personality to file a petition for declaration of
absolute nullity of void marriage under Section 2(a) of A.M. No. 02-11-10-SC.—Section 2(a)
of A.M. No. 02-11-10-SC does not preclude a spouse of a subsisting marriage to question the
validity of a subsequent marriage on the ground of bigamy. On the contrary, when Section
2(a) states that “[a] petition for declaration of absolute nullity of void marriage may be
filed solely by the husband or the wife” — it refers to the husband or the wife of the
subsisting marriage. Under Article 35(4) of the Family Code, bigamous marriages are void
from the beginning. Thus, the parties in a bigamous marriage are neither the husband nor
the wife under the law. The husband or the wife of the prior subsisting marriage is the one
who has the personality to file a petition for declaration of absolute nullity of void marriage
under Section 2(a) of A.M. No. 02-11-10-SC.73

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Fujiki vs. Marinay

Criminal Law; Bigamy; Parties; Bigamy is a public crime. Thus, anyone can initiate
prosecution for bigamy because any citizen has an interest in the prosecution and prevention
of crimes. If anyone can file a criminal action which leads to the declaration of nullity of a
bigamous marriage, there is more reason to confer personality to sue on the husband or the
wife of a subsisting marriage.—Article 35(4) of the Family Code, which declares bigamous
marriages void from the beginning, is the civil aspect of Article 349 of the Revised Penal
Code, which penalizes bigamy. Bigamy is a public crime. Thus, anyone can initiate
prosecution for bigamy because any citizen has an interest in the prosecution and prevention
of crimes. If anyone can file a criminal action which leads to the declaration of nullity of a
bigamous marriage, there is more reason to confer personality to sue on the husband or the
wife of a subsisting marriage. The prior spouse does not only share in the public interest of
prosecuting and preventing crimes, he is also personally interested in the purely civil aspect
of protecting his marriage.
Remedial Law; Special Proceedings; Correction of Entries; A petition for correction or
cancellation of an entry in the civil registry cannot substitute for an action to invalidate a
marriage. A direct action is necessary to prevent circumvention of the substantive and
procedural safeguards of marriage under the Family Code, A.M. No. 02-11-10-SC and other
related laws.—To be sure, a petition for correction or cancellation of an entry in the civil
registry cannot substitute for an action to invalidate a marriage. A direct action is necessary
to prevent circumvention of the substantive and procedural safeguards of marriage under the
Family Code, A.M. No. 02-11-10-SC and other related laws. Among these safeguards are the
requirement of proving the limited grounds for the dissolution of marriage, support pendente
lite of the spouses and children, the liquidation, partition and distribution of the properties
of the spouses, and the investigation of the public prosecutor to determine collusion. A direct
action for declaration of nullity or annulment of marriage is also necessary to prevent
circumvention of the jurisdiction of the Family Courts under the Family Courts Act of 1997
(Republic Act No. 8369), as a petition for cancellation or correction of entries in the civil
registry may be filed in the Regional Trial Court “where the corresponding civil registry is
located.” In other words, a Filipino citizen cannot dissolve his marriage by the mere expedient
of changing his entry of marriage in the civil registry. However, this does not
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74 SUPREME COURT REPORTS ANNOTATED


Fujiki vs. Marinay

apply in a petition for correction or cancellation of a civil registry entry based on the
recognition of a foreign judgment annulling a marriage where one of the parties is a citizen
of the foreign country. There is neither circumvention of the substantive and procedural
safeguards of marriage under Philippine law, nor of the jurisdiction of Family Courts under
R.A. No. 8369. A recognition of a foreign judgment is not an action to nullify a marriage. It is
an action for Philippine courts to recognize the effectivity of a foreign judgment, which
presupposes a case which was already tried and decided under foreign law. The
procedure in A.M. No. 02-11-10-SC does not apply in a petition to recognize a foreign
judgment annulling a bigamous marriage where one of the parties is a citizen of the foreign
country. Neither can R.A. No. 8369 define the jurisdiction of the foreign court.
Civil Law; Conflict of Law; Marriages; Annulment of Marriage; Foreign Judgments;
Divorce; Article 26 of the Family Code confers jurisdiction on Philippine courts to extend the
effect of a foreign divorce decree to a Filipino spouse without undergoing trial to determine the
validity of the dissolution of the marriage.—Article 26 of the Family Code confers jurisdiction
on Philippine courts to extend the effect of a foreign divorce decree to a Filipino spouse
without undergoing trial to determine the validity of the dissolution of the marriage. The
second paragraph of Article 26 of the Family Code provides that “[w]here a marriage between
a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly
obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law.” In Republic v. Orbecido, 472 SCRA 114
(2005), this Court recognized the legislative intent of the second paragraph of Article 26
which is “to avoid the absurd situation where the Filipino spouse remains married to the
alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse” under
the laws of his or her country. The second paragraph of Article 26 of the Family Code only
authorizes Philippine courts to adopt the effects of a foreign divorce decree precisely because
the Philippines does not allow divorce. Philippine courts cannot try the case on the merits
because it is tantamount to trying a case for divorce.
Same; Same; Marriages; Annulment of Marriage; Divorce; Foreign Judgments; The
principle in Article 26 of the Family Code applies in a marriage between a Filipino and a
foreign citizen who
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Fujiki vs. Marinay

obtains a foreign judgment nullifying the marriage on the ground of bigamy; If the foreign
judgment is not recognized in the Philippines, the Filipino spouse will be discriminated — the
foreign spouse can remarry while the Filipino spouse cannot remarry.—The principle in
Article 26 of the Family Code applies in a marriage between a Filipino and a foreign citizen
who obtains a foreign judgment nullifying the marriage on the ground of bigamy. The Filipino
spouse may file a petition abroad to declare the marriage void on the ground of bigamy. The
principle in the second paragraph of Article 26 of the Family Code applies because the foreign
spouse, after the foreign judgment nullifying the marriage, is capacitated to remarry under
the laws of his or her country. If the foreign judgment is not recognized in the Philippines,
the Filipino spouse will be discriminated — the foreign spouse can remarry while the Filipino
spouse cannot remarry.
Same; Same; Same; Bigamy, as a ground for the nullity of marriage, is fully consistent
with Philippine public policy as expressed in Article 35(4) of the Family Code and Article 349
of the Revised Penal Code.—Under the second paragraph of Article 26 of the Family Code,
Philippine courts are empowered to correct a situation where the Filipino spouse is still tied
to the marriage while the foreign spouse is free to marry. Moreover, notwithstanding Article
26 of the Family Code, Philippine courts already have jurisdiction to extend the effect of a
foreign judgment in the Philippines to the extent that the foreign judgment does not
contravene domestic public policy. A critical difference between the case of a foreign divorce
decree and a foreign judgment nullifying a bigamous marriage is that bigamy, as a ground
for the nullity of marriage, is fully consistent with Philippine public policy as expressed in
Article 35(4) of the Family Code and Article 349 of the Revised Penal Code. The Filipino
spouse has the option to undergo full trial by filing a petition for declaration of nullity of
marriage under A.M. No. 02-11-10-SC, but this is not the only remedy available to him or
her. Philippine courts have jurisdiction to recognize a foreign judgment nullifying a bigamous
marriage, without prejudice to a criminal prosecution for bigamy.
Remedial Law; Civil Procedure; Courts; Conflict of Law; Philippine courts will only
determine (1) whether the foreign judgment is inconsistent with an overriding public policy in
the Philippines; and (2) whether any alleging party is able to prove an extrinsic ground to
76

76 SUPREME COURT REPORTS ANNOTATED


Fujiki vs. Marinay

repel the foreign judgment, i.e. want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.—Philippine courts will only determine (1) whether the
foreign judgment is inconsistent with an overriding public policy in the Philippines; and (2)
whether any alleging party is able to prove an extrinsic ground to repel the foreign judgment,
i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law
or fact. If there is neither inconsistency with public policy nor adequate proof to repel the
judgment, Philippine courts should, by default, recognize the foreign judgment as part of the
comity of nations. Section 48(b), Rule 39 of the Rules of Court states that the foreign judgment
is already “presumptive evidence of a right between the parties.” Upon recognition of the
foreign judgment, this right becomes conclusive and the judgment serves as the basis for the
correction or cancellation of entry in the civil registry. The recognition of the foreign judgment
nullifying a bigamous marriage is a subsequent event that establishes a new status, right
and fact that needs to be reflected in the civil registry. Otherwise, there will be an
inconsistency between the recognition of the effectivity of the foreign judgment and the public
records in the Philippines.
Criminal Law; Bigamy; Foreign Judgments; Conflict of Law; The recognition of a foreign
judgment nullifying a bigamous marriage is not a ground for extinction of criminal liability
under Articles 89 and 94 of the Revised Penal Code.—The recognition of a foreign judgment
nullifying a bigamous marriage is without prejudice to prosecution for bigamy under Article
349 of the Revised Penal Code. The recognition of a foreign judgment nullifying a bigamous
marriage is not a ground for extinction of criminal liability under Articles 89 and 94 of the
Revised Penal Code. Moreover, under Article 91 of the Revised Penal Code, “[t]he term of
prescription [of the crime of bigamy] shall not run when the offender is absent from the
Philippine archipelago.”

G.R. No. 200289. November 25, 2013.*


WESTWIND SHIPPING CORPORATION, petitioner, vs. UCPB GENERAL INSURANCE CO., INC. and ASIAN
TERMINALS, INC., respondents.

G.R. No. 200314. November 25, 2013.*


ORIENT FREIGHT INTERNATIONAL, INC., petitioner, vs. UCPB GENERAL INSURANCE CO., INC. and ASIAN
TERMINALS, INC., respondents.

Civil Law; Common Carriers; Arrastre Operators; Extraordinary Diligence; The


extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to the consignee, or to the
person who has a right to receive them; Handling

_______________
* THIRD DIVISION.

545cargo is mainly the arrastre operator’s principal work so its drivers/operators or


employees should observe the standards and measures necessary to prevent losses and damage
to shipments under its custody.—The case of Philippines First Insurance Co., Inc. v. Wallem
Phils. Shipping, Inc., 582 SCRA 457 (2009), applies, as it settled the query on which between
a common carrier and an arrastre operator should be responsible for damage or loss incurred
by the shipment during its unloading. We elucidated at length: Common carriers, from the
nature of their business and for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods transported by them. Subject to certain exceptions
enumerated under Article 1734 of the Civil Code, common carriers are responsible for the
loss, destruction, or deterioration of the goods. The extraordinary responsibility of the
common carrier lasts from the time the goods are unconditionally placed in the possession of,
and received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive
them. x x x x x x On the other hand, the functions of an arrastre operator involve the
handling of cargo deposited on the wharf or between the establishment of the consignee or
shipper and the ship’s tackle. Being the custodian of the goods discharged from a vessel, an
arrastre operator’s duty is to take good care of the goods and to turn them over to the party
entitled to their possession. Handling cargo is mainly the arrastre operator’s principal work
so its drivers/operators or employees should observe the standards and measures necessary
to prevent losses and damage to shipments under its custody.
Same; Same; Extraordinary Diligence; The extraordinary responsibility of the common
carrier lasts until the time the goods are actually or constructively delivered by the carrier to
the consignee or to the person who has a right to receive them. There is actual delivery in
contracts for the transport of goods when possession has been turned over to the consignee or
to his duly authorized agent and a reasonable time is given him to remove the goods.—We
cannot agree with Westwind’s disputation that “the carrier in Wallem clearly exercised
supervision during the discharge of the shipment and that is why it was faulted and held
liable for the damage incurred by the shipment during such time.” What Westwind failed to
realize is that the extraordinary responsibility of the common carrier lasts until the time the
goods are actually or constructively delivered by the carrier
546to the consignee or to the person who has a right to receive them. There is actual
delivery in contracts for the transport of goods when possession has been turned over to the
consignee or to his duly authorized agent and a reasonable time is given him to remove the
goods. In this case, since the discharging of the containers/skids, which were covered by only
one bill of lading, had not yet been completed at the time the damage occurred, there is no
reason to imply that there was already delivery, actual or constructive, of the cargoes to ATI.
Same; Same; Customs Brokers; A customs broker has been regarded as a common carrier
because transportation of goods is an integral part of its business.—A customs broker has
been regarded as a common carrier because transportation of goods is an integral part of its
business. In Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., 456
SCRA 557 (2005), the Court already reiterated: It is settled that under a given set of facts, a
customs broker may be regarded as a common carrier. Thus, this Court, in A.F. Sanchez
Brokerage, Inc. v. The Honorable Court of Appeals held: The appellate court did not err in
finding petitioner, a customs broker, to be also a common carrier, as defined under Article
1732 of the Civil Code, to wit, Art. 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both,
by land, water, or air, for compensation, offering their services to the public. x x x x Article
1732 does not distinguish between one whose principal business activity is the carrying of
goods and one who does such carrying only as an ancillary activity. The contention, therefore,
of petitioner that it is not a common carrier but a customs broker whose principal function is
to prepare the correct customs declaration and proper shipping documents as required by law
is bereft of merit. It suffices that petitioner undertakes to deliver the goods for pecuniary
consideration. And in Calvo v. UCPB General Insurance Co., Inc., this Court held that as the
transportation of goods is an integral part of a customs broker, the customs broker is also a
common carrier. For to declare otherwise “would be to deprive those with whom [it] contracts
the protection which the law affords them notwithstanding the fact that the obligation to
carry goods for [its] customers, is part and parcel of petitioner’s business.” That OFII is a
common carrier is buttressed by the testimony of its own witness, Mr. Loveric Panganiban
Cueto, that part of the services it offers to clients is cargo
547forwarding, which includes the delivery of the shipment to the consignee. Thus, for
undertaking the transport of cargoes from ATI to SMC’s warehouse in Calamba, Laguna,
OFII is considered a common carrier. As long as a person or corporation holds itself to the
public for the purpose of transporting goods as a business, it is already considered a common
carrier regardless of whether it owns the vehicle to be used or has to actually hire one.
Same; Same; Same; Extraordinary Diligence; As a common carrier, a customs broker is
mandated to observe, under Article 1733 of the Civil Code, extraordinary diligence in the
vigilance over the goods it transports according to the peculiar circumstances of each case.—
As a common carrier, OFII is mandated to observe, under Article 1733 of the Civil Code,
extraordinary diligence in the vigilance over the goods it transports according to the peculiar
circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it
is presumed to have been at fault or to have acted negligently, unless it proves that it
observed extraordinary diligence. In the case at bar, it was established that, except for the
six containers/skids already damaged, OFII received the cargoes from ATI in good order and
condition; and that upon its delivery to SMC, additional nine containers/skids were found to
be in bad order, as noted in the Delivery Receipts issued by OFII and as indicated in the
Report of Cares Marine & Cargo Surveyors. Instead of merely excusing itself from liability
by putting the blame to ATI and SMC, it is incumbent upon OFII to prove that it actively
took care of the goods by exercising extraordinary diligence in the carriage thereof. It failed
to do so. Hence, its presumed negligence under Article 1735 of the Civil Code remains
unrebutted.

G.R. No. 180784. February 15, 2012.*


INSURANCE COMPANY OF NORTH AMERICA, petitioner, vs. ASIAN TERMINALs, INC.,
respondent.

Civil Procedure; Appeals; “Question of Law” and “Question of Fact,” Distinguished.—Microsoft


Corporation v. Maxicorp, Inc., 438 SCRA 224 (2004), explains the difference between questions of
law and questions of fact, thus: The distinction between questions of law and questions of fact is
settled. A question of law exists when the doubt or difference centers on what the law is on a certain
state of facts. A question of fact exists if the doubt centers on the truth or falsity of the alleged facts.
Though this delineation seems simple, determining the true nature and extent of the distinction is
sometimes problematic. For example, it is incorrect to presume that all cases where the facts are not
in dispute automatically involve purely questions of law. There is a question of law if the issue raised
is capable of being resolved without need of reviewing the probative value of the evidence. The
resolution of the issue must rest solely on what the law provides on the given set of circumstances.
Once it is clear that the issue invites a review of the evidence presented, the question posed is one
of fact. If the query requires a re-evaluation of the credibility of witnesses, or the existence or
relevance of surrounding circumstances and their relation to each other, the issue in that query is
factual.

Same; Same; Supreme Court; Jurisdiction; Under Section 1, Rule 45, providing for appeals by
certiorari before the Supreme Court, it is clearly enunciated that only questions of law may be set
forth; Exceptions.—Under Section 1, Rule 45, providing for appeals by certiorari before the Supreme
Court, it is clearly enunciated that only questions of law may be set forth. The Court may resolve
questions of fact only when the case falls under the following exceptions: (1) when the findings are
grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when
the judgment is based on a misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when

_______________

* THIRD DIVISION.

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Insurance Company of North America vs. Asian Terminals, Inc.

in making its findings the Court of Appeals went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary
to those of the trial court; (8) when the findings are conclusions without citation of specific evidence
on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main
and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the evidence on record. In this case, the
fourth exception cited above applies, as the trial court rendered judgment based on a
misapprehension of facts.

Common Carriers; Carriage of Goods by Sea Act (COGSA); The Carriage of Goods by Sea Act
(COGSA), Public Act No. 521 of the 74th US Congress, was accepted to be made applicable to all
contracts for the carriage of goods by sea to and from Philippine ports in foreign trade by virtue of
Commonwealth Act (CA) No. 65.—The Carriage of Goods by Sea Act (COGSA), Public Act No. 521
of the 74th US Congress, was accepted to be made applicable to all contracts for the carriage of
goods by sea to and from Philippine ports in foreign trade by virtue of CA No. 65. Section 1 of CA
No. 65 states: Section 1. That the provisions of Public Act Numbered Five hundred and twenty-one
of the Seventy-fourth Congress of the United States, approved on April sixteenth, nineteen hundred
and thirty-six, be accepted, as it is hereby accepted to be made applicable to all contracts for the
carriage of goods by sea to and from Philippine ports in foreign trade: Provided, That nothing
in the Act shall be construed as repealing any existing provision of the Code of Commerce which is
now in force, or as limiting its application. Section 1, Title I of CA No. 65 defines the relevant terms
in Carriage of Goods by Sea, thus: Section 1. When used in this Act—(a) The term “carrier” includes
the owner or the charterer who enters into a contract of carriage with a shipper. (b) The term
“contract of carriage” applies only to contracts of carriage covered by a bill of lading or any similar
document of title, insofar as such document relates to the carriage of goods by sea, including any bill
of lading or any similar document as aforesaid issued under or pursuant to a charter party from the
moment at which such bill of lading or similar document of title regulates the relations between a
carrier and a holder of the same. (c) The term “goods” includes goods, wares, merchandise, and
articles of every kind whatsoever, except live animals and cargo

228

228 SUPREME COURT REPORTS ANNOTATED


Insurance Company of North America vs. Asian Terminals, Inc.

which by the contract of carriage is stated as being carried on deck and is so carried. (d) The term
“ship” means any vessel used for the carriage of goods by sea. (e) The term “carriage of goods”
covers the period from the time when the goods are loaded to the time when they are
discharged from the ship.

Same; Same; The term “carriage of goods” in the Carriage of Goods by Sea Act (COGSA) covers
the period from the time the goods are loaded to the vessel to the time they are discharged
therefrom.—It is noted that the term “carriage of goods” covers the period from the time when the
goods are loaded to the time when they are discharged from the ship; thus, it can be inferred that the
period of time when the goods have been discharged from the ship and given to the custody of the
arrastre operator is not covered by the COGSA.

Same; Same; The carrier and the ship shall be discharged from all liability in respect of loss or
damage unless suit is brought within one year after delivery of the goods or the date when the goods
should have been delivered.—The prescriptive period for filing an action for the loss or damage of
the goods under the COGSA is found in paragraph (6), Section 3, thus: 6) Unless notice of loss or
damage and the general nature of such loss or damage be given in writing to the carrier or his agent
at the port of discharge before or at the time of the removal of the goods into the custody of the
person entitled to delivery thereof under the contract of carriage, such removal shall be prima
facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss
or damage is not apparent, the notice must be given within three days of the delivery. Said notice of
loss or damage maybe endorsed upon the receipt for the goods given by the person taking delivery
thereof. The notice in writing need not be given if the state of the goods has at the time of their
receipt been the subject of joint survey or inspection. In any event the carrier and the ship shall
be discharged from all liability in respect of loss or damage unless suit is brought within one
year after delivery of the goods or the date when the goods should have been
delivered: Provided, That if a notice of loss or damage, either apparent or concealed, is not given as
provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit
within one year after the delivery of the goods or the date when the goods should have been
delivered. From the provision above, the carrier and the ship may put up the

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Insurance Company of North America vs. Asian Terminals, Inc.

defense of prescription if the action for damages is not brought within one year after the delivery of
the goods or the date when the goods should have been delivered. It has been held that not only the
shipper, but also the consignee or legal holder of the bill may invoke the prescriptive period.
However, the COGSA does not mention that an arrastre operator may invoke the prescriptive period
of one year; hence, it does not cover the arrastre operator.

G.R. No. 180245. July 4, 2012.*


PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., petitioner, vs.TAKENAKA CORPORATION and
ASAHIKOSAN CORPORATION, respondents.

Grave Abuse of Discretion; Words and Phrases; By grave abuse of discretion is meant
such capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction.—
The established definition of grave abuse of discretion was reiterated in Ligeralde v.
Patalinghug, 618 SCRA 315 (2010), in this wise: x x x By grave abuse of discretion is meant
such capricious or whimsical exercise of judgment as is equivalent to lack of
jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion
of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law as where the power is exercised in an arbitrary and despotic
manner by reason of passion and hostility. In sum, for the extraordinary writ of certiorari to
lie, there must be capricious, arbitrary or whimsical exercise of power.
Due Process; It is an oft-repeated principle that where opportunity to be heard, either
through oral arguments or pleadings, is accorded, there is no denial of due process.—It is an
oft-repeated principle that where opportunity to be heard, either through oral arguments or
pleadings, is accorded, there is no denial of due process. Moreover, the issues that petitioner
seeks to tackle in the requested hearing on the motion to dismiss, i.e., novation, payment,
extinguishment or abandonment of the obligation, are the meat of their defense and would
require the presentation of voluminous evidence. Such issues are better threshed out during
trial proper. Thus, the trial court was not amiss in ruling that petitioner already had the
opportunity to be heard and there was no longer any need to set another hearing on the
motion to dismiss.
Civil Procedure; Verification; Certification Against Forum Shopping; on the issue of the
Verification/Certification, the court has
_______________
* THIRD DIVISION.

675

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Philippine International Air Terminals Co., Inc. vs.
Takenaka Corporation

the power to give due course to the complaint even with the supposed defect, if special
circumstances warrant.—On the issue of the Verification/Certification, the court has the
power to give due course to the complaint even with the supposed defect, if special
circumstances warrant. Even assuming arguendo, that the form used to show Mr.
Kurebayashi’s authority to execute the Verification and Certification Against Forum
Shopping is defective, petitioner should bear in mind that this Court may relax the
application of procedural rules for the greater interest of substantial justice.

G.R. No. 171337. July 11, 2012.*


BENJAMIN CUA (CUA HIAN TEK), petitioner, vs. WALLEM PHILIPPINES SHIPPING, INC. and ADVANCE
SHIPPING CORPORATION, respondents.

Civil Procedure; Motion to Dismiss; The failure to raise or plead the grounds for motion
to dismiss generally amounts to a waiver, except if the ground pertains to (1) lack of
jurisdiction over the subject matter, (2) litis pendentia, (3) res judicata, or (4) prescription.—
Section 1, Rule 16 of the Rules of Court enumerates the grounds on which a motion to dismiss
a complaint may be based, and the prescription of an action is included as one of the grounds
under paragraph (f). The defendant may either raise the grounds in a motion to dismiss or
plead them as an affirmative defense in his answer. The failure to raise or plead the grounds
generally amounts to a waiver, except if the ground pertains to (1) lack of jurisdiction over
the subject matter, (2) litis pendentia, (3) res judicata, or (4) prescription. If the facts
supporting any of these four listed grounds are apparent from the pleadings or the evidence
on record, the courts may consider these grounds motu proprio and accordingly dismiss the
complaint.
Civil Law; Common Carriers; Carriage of Goods by Sea Act (COGSA); The Carriage of
Goods by Sea Act (COGSA) is the applicable law for all contracts for carriage of goods by sea
to and from Philippine ports in foreign trade.—The COGSA is the applicable law for all
contracts for carriage of goods by sea to and from Philippine ports in foreign trade; it is thus
the law that the Court shall consider in the present case since the cargo was transported
from Brazil to the Philippines.
Same; Same; Same; Under Section 3(6) of the Carriage of Goods by Sea Act (COGSA),
the carrier is discharged from liability for loss or damage to the cargo unless the suit is brought
within one year after delivery of the goods or the date when the goods should have been
delivered.—Under Section 3(6) of the COGSA, the car-
_______________
* SECOND DIVISION.

144

144 SUPREME COURT REPORTS ANNOTATED


Cua vs. Wallem Philippines Shipping, Inc.

rier is discharged from liability for loss or damage to the cargo “unless the suit is brought
within one year after delivery of the goods or the date when the goods should have been
delivered.” Jurisprudence, however, recognized the validity of an agreement between the
carrier and the shipper/consignee extending the one-year period to file a claim.
Civil Procedure; Specific Denials; A specific denial is made by specifying each material
allegation of fact, the truth of which the defendant does not admit and, whenever practicable,
setting forth the substance of the matters upon which he relies to support his denial.—A
specific denial is made by specifying each material allegation of fact, the truth of which the
defendant does not admit and, whenever practicable, setting forth the substance of the
matters upon which he relies to support his denial. The purpose of requiring the defendant
to make a specific denial is to make him disclose the matters alleged in the complaint which
he succinctly intends to disprove at the trial, together with the matter which he relied upon
to support the denial.
Civil Law; Common Carriers; Code of Commerce; Article 366 of the Code of Commerce
requires that a claim be made with the carrier within 24 hours from the delivery of the cargo.—
We cannot consider the respondents’ discussion on prescription in their Memorandum filed
with the RTC, since their arguments were based on Cua’s supposed failure to comply with
Article 366 of the Code of Commerce, not Section 3(6) of the COGSA—the relevant and
material provision in this case. Article 366 of the Code of Commerce requires that a claim be
made with the carrier within 24 hours from the delivery of the cargo; the respondents alleged
that they were informed of the damage and shortage only on September 13, 1989, months
after the vessel’s arrival in Manila.

Navida vs. Dizon, Jr.

Courts; Jurisdiction; Once vested by law, on a particular court or body, the jurisdiction
over the subject matter or nature of the action cannot be dislodged by anybody other than by
the legislature through the enactment of a law.—The rule is settled that jurisdiction over the
subject matter of a case is conferred by law and is determined by the allegations in the
complaint and the character of the relief sought, irrespective of whether the plaintiffs are
entitled to all or some of the claims asserted therein. Once vested by law, on a particular
court or body, the jurisdiction over the subject matter or nature of the action cannot be
dislodged by anybody other than by the legislature through the enactment of a law.
Same; Same; Quasi-Delicts; Words and Phrases; A quasi-delict, is defined as an act, or
omission which causes damage to another, there being fault or negligence.—Quite evidently,
the allegations in the Amended Joint-Complaints of NAVIDA, et al., and ABELLA, et al.,
attribute to defendant companies certain acts and/or omissions which led to their exposure
to nematocides containing the chemical DBCP. According to NAVIDA, et al., and ABELLA, et
al., such exposure to the said chemical caused ill effects, injuries and illnesses, specifically to
their reproductive system. Thus, these allegations in the complaints constitute the cause of
action of plaintiff claimants—a quasi-delict, which under the Civil Code is defined as an act,
or omission which causes damage to another, there being fault or negligence. To be precise,
Article 2176 of the Civil Code provides: Article 2176. Whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions of this Chapter.
Same; Same; Same; Pleadings and Practice; Jurisdiction of the court over the subject
matter of the action is determined by the allegations of the complaint, irrespective of whether
or not the plaintiffs are entitled to recover upon all or some of the claims asserted therein—it
cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss,
for otherwise, the question of jurisdiction would almost entirely depend upon the defendants.—
In Citibank, N.A. v. Court of Appeals, 299 SCRA 390 (1998), this Court has always reminded
that jurisdiction of the court over the subject matter of the action is determined by the
allegations of the complaint, irre-
48

48 SUPREME COURT REPORTS ANNOTATED


Navida vs. Dizon, Jr.

spective of whether or not the plaintiffs are entitled to recover upon all or some of the
claims asserted therein. The jurisdiction of the court cannot be made to depend upon the
defenses set up in the answer or upon the motion to dismiss, for otherwise, the question of
jurisdiction would almost entirely depend upon the defendants. What determines the
jurisdiction of the court is the nature of the action pleaded as appearing from the allegations
in the complaint. The averments therein and the character of the relief sought are the ones
to be consulted.
Same; Same; Same; Conflict of Laws; Where the factual allegations in the Amended
Joint-Complaints all point to their cause of action, which undeniably occurred in the
Philippines, it is error on the part of the courts a quo to dismiss the cases on the ground of lack
of jurisdiction on the mistaken assumption that the cause of action narrated by the plaintiffs
took place abroad and had occurred outside and beyond the territorial boundaries of the
Philippines, i.e., “the manufacture of the pesticides, their packaging in containers, their
distribution through sale or other disposition, resulting in their becoming part of the stream
of commerce.”—Moreover, the injuries and illnesses, which NAVIDA, et al., and ABELLA, et
al., allegedly suffered resulted from their exposure to DBCP while they were employed in the
banana plantations located in the Philippines or while they were residing within the
agricultural areas also located in the Philippines. The factual allegations in the Amended
Joint-Complaints all point to their cause of action, which undeniably occurred in the
Philippines. The RTC of General Santos City and the RTC of Davao City obviously have
reasonable basis to assume jurisdiction over the cases. It is, therefore, error on the part of
the courts a quo when they dismissed the cases on the ground of lack of jurisdiction on the
mistaken assumption that the cause of action narrated by NAVIDA, et al., and ABELLA, et
al., took place abroad and had occurred outside and beyond the territorial boundaries of the
Philippines, i.e., “the manufacture of the pesticides, their packaging in containers, their
distribution through sale or other disposition, resulting in their becoming part of the stream
of commerce,” and, hence, outside the jurisdiction of the RTCs.
Same; Same; Same; Venue; In personal civil actions, such as claims for payment of
damages, the Rules of Court allow the action to be commenced and tried in the appropriate
court, where any of the
49

VOL. 649, MAY 30, 2011 49


Navida vs. Dizon, Jr.

plaintiffs or defendants resides, or in the case of a non-resident defendant, where he may


be found, at the election of the plaintiff.—Certainly, the cases below are not criminal cases
where territoriality, or the situs of the act complained of, would be determinative of
jurisdiction and venue for trial of cases. In personal civil actions, such as claims for payment
of damages, the Rules of Court allow the action to be commenced and tried in the appropriate
court, where any of the plaintiffs or defendants resides, or in the case of a non-resident
defendant, where he may be found, at the election of the plaintiff.
Same; Same; The defendant companies submitted themselves to the jurisdiction of the
courts a quo by making several voluntary appearances, by praying for various affirmative
reliefs, and by actively participating during the course of the proceedings below.—It is well to
stress again that none of the parties claims that the courts a quo lack jurisdiction over the
cases filed before them. All parties are one in asserting that the RTC of General Santos City
and the RTC of Davao City have validly acquired jurisdiction over the persons of the
defendant companies in the action below. All parties voluntarily, unconditionally and
knowingly appeared and submitted themselves to the jurisdiction of the courts a quo. Rule
14, Section 20 of the 1997 Rules of Civil Procedure provides that “[t]he defendant’s voluntary
appearance in the action shall be equivalent to service of summons.” In this connection, all
the defendant companies designated and authorized representatives to receive summons and
to represent them in the proceedings before the courts a quo. All the defendant companies
submitted themselves to the jurisdiction of the courts a quo by making several voluntary
appearances, by praying for various affirmative reliefs, and by actively participating during
the course of the proceedings below.
Same; Same; “Jurisdiction” is different from the “exercise of jurisdiction”—jurisdiction
refers to the authority to decide a case, not the orders or the decision rendered therein, and any
error that the court may commit in the exercise of its jurisdiction is merely an error of
judgment, which does not affect its authority to decide the case, much less divest the court of
the jurisdiction over the case.—It may also be pertinently stressed that “jurisdiction” is
different from the “exercise of jurisdiction.” Jurisdiction refers to the authority to decide a
case, not the orders or the decision rendered therein. Accord-
50

50 SUPREME COURT REPORTS ANNOTATED


Navida vs. Dizon, Jr.

ingly, where a court has jurisdiction over the persons of the defendants and the subject
matter, as in the case of the courts a quo, the decision on all questions arising therefrom is
but an exercise of such jurisdiction. Any error that the court may commit in the exercise of
its jurisdiction is merely an error of judgment, which does not affect its authority to decide
the case, much less divest the court of the jurisdiction over the case.
Same; Same; The Supreme Court does not rule on allegations that are unsupported by
evidence on record—it does not rule on allegations which are manifestly conjectural, as these
may not exist at all.—Anent the insinuation by DOLE that the plaintiff claimants filed their
cases in bad faith merely to procure a dismissal of the same and to allow them to return to
the forum of their choice, this Court finds such argument much too speculative to deserve
any merit. It must be remembered that this Court does not rule on allegations that are
unsupported by evidence on record. This Court does not rule on allegations which are
manifestly conjectural, as these may not exist at all. This Court deals with facts, not fancies;
on realities, not appearances. When this Court acts on appearances instead of realities,
justice and law will be short-lived. This is especially true with respect to allegations of bad
faith, in line with the basic rule that good faith is always presumed and bad faith must be
proved.
Compromise Agreements; Like any other contract, an extrajudicial compromise
agreement is not excepted from rules and principles of a contract—it is a consensual contract,
perfected by mere consent, the latter being manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract; Judicial
approval is not required for perfection of a compromise agreement.—Under Article 2028 of the
Civil Code, “[a] compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.” Like any other
contract, an extrajudicial compromise agreement is not excepted from rules and principles of
a contract. It is a consensual contract, perfected by mere consent, the latter being manifested
by the meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract. Judicial approval is not required for its perfection. A compromise has
upon the parties the effect and authority of res judicata and this holds true even if the
51

VOL. 649, MAY 30, 2011 51


Navida vs. Dizon, Jr.

agreement has not been judicially approved. In addition, as a binding contract, a


compromise agreement determines the rights and obligations of only the parties to it.
Obligations and Contracts; Quasi-Delicts; Words and Phrases; The responsibility of two
or more persons who are liable for the same quasi-delict is solidary. A solidary obligation is
one in which each of the debtors is liable for the entire obligation, and each of the creditors is
entitled to demand the satisfaction of the whole obligation from any or all of the debtors.—It
is true that, under Article 2194 of the Civil Code, the responsibility of two or more persons
who are liable for the same quasi-delict is solidary. A solidary obligation is one in which each
of the debtors is liable for the entire obligation, and each of the creditors is entitled to demand
the satisfaction of the whole obligation from any or all of the debtors.
Same; Same; Same; Payment, which means not only the delivery of money but also the
performance, in any other manner, of the obligation, is the operative fact which will entitle
either of the solidary debtors to seek reimbursement for the share which corresponds to each
of the other debtors.—In solidary obligations, the paying debtor’s right of reimbursement is
provided for under Article 1217 of the Civil Code, to wit: Art. 1217. Payment made by one of
the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay,
the creditor may choose which offer to accept. He who made the payment may claim from his
co-debtors only the share which corresponds to each, with the interest for the payment
already made. If the payment is made before the debt is due, no interest for the intervening
period may be demanded. When one of the solidary debtors cannot, because of his insolvency,
reimburse his share to the debtor paying the obligation, such share shall be borne by all his
co-debtors, in proportion to the debt of each. The above right of reimbursement of a paying
debtor, and the corresponding liability of the co-debtors to reimburse, will only arise,
however, if a solidary debtor who is made to answer for an obligation actually delivers
payment to the creditor. As succinctly held in Lapanday Agricultural Development
Corporation v. Court of Appeals, 324 SCRA 39 (2000), “[p]ayment, which means not only the
delivery of money but also the performance, in any other manner, of the obligation, is the
operative fact which will entitle either of the solidary
52

52 SUPREME COURT REPORTS ANNOTATED


Navida vs. Dizon, Jr.

debtors to seek reimbursement for the share which corresponds to each of the [other]
debtors.”
Compromise Agreements; Parties; Where there are, along with the parties to the
compromise, other persons involved in the litigation who have not taken part in concluding
the compromise agreement but are adversely affected or feel prejudiced thereby, should not be
precluded from invoking in the same proceedings an adequate relief therefor.—At the point in
time where the proceedings below were prematurely halted, no cross-claims have been
interposed by any defendant against another defendant. If and when such a cross-claim is
made by a non-settling defendant against a settling defendant, it is within the discretion of
the trial court to determine the propriety of allowing such a cross-claim and if the settling
defendant must remain a party to the case purely in relation to the cross claim. In Armed
Forces of the Philippines Mutual Benefit Association, Inc. v. Court of Appeals, 311 SCRA 143
(1999), the Court had the occasion to state that “where there are, along with the parties to
the compromise, other persons involved in the litigation who have not taken part in
concluding the compromise agreement but are adversely affected or feel prejudiced thereby,
should not be precluded from invoking in the same proceedings an adequate relief therefor.”

G.R. No. 171092. March 15, 2010.*


EDNA DIAGO LHUILLIER, petitioner, vs. BRITISH AIRWAYS, respondent.

Civil Law; Common Carriers; Warsaw Convention; Damages; It is settled that the
Warsaw Convention has the force and effect of law in this country.—It is settled that the
Warsaw Convention has the force and effect of law in this country. In Santos III v. Northwest
Orient Airlines, 210 SCRA 256 (1992), we held that: The Republic of the Philippines is a party
to the Convention for the Unification of Certain Rules Relating to International
Transportation by Air, otherwise known as the Warsaw Convention. It took effect on
February 13, 1933. The Convention was concurred in by the Senate, through its Resolution
No. 19, on May 16, 1950. The Philippine instrument of accession was signed by President
Elpidio Quirino on October 13, 1950, and was deposited with the Polish government on
November 9,
_______________

* SECOND DIVISION.

381

VOL. 615, March 15, 2010 381


Lhuillier vs. British Airways

1950. The Convention became applicable to the Philippines on February 9, 1951. On


September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201, declaring
our formal adherence thereto, “to the end that the same and every article and clause thereof
may be observed and fulfilled in good faith by the Republic of the Philippines and the citizens
thereof.” The Convention is thus a treaty commitment voluntarily assumed by the Philippine
government and, as such, has the force and effect of law in this country.
Same; Same; Same; Same; Meaning of “International Carriage.”—For the purposes of
this Convention the expression “international carriage” means any carriage in which,
according to the contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the carriage or a transhipment, are situated
either within the territories of two High Contracting Parties, or within the territory of a
single High Contracting Party, if there is an agreed stopping place within a territory subject
to the sovereignty, suzerainty, mandate or authority of another Power, even though that
Power is not a party to this Convention. A carriage without such an agreed stopping place
between territories subject to the sovereignty, suzerainty, mandate or authority of the same
High Contracting Party is not deemed to be international for the purposes of this Convention.
Same; Same; Same; Same; Place where plaintiff may bring the action for damages.—
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages
before—the court where the carrier is domiciled; 2. the court where the carrier has its
principal place of business; 3. the court where the carrier has an establishment by which the
contract has been made; or 4. the court of the place of destination.
Same; Same; Same; Jurisdiction; Article 28(1) of the Warsaw Convention is jurisdictional
in character.—We further held that Article 28(1) of the Warsaw Convention is jurisdictional
in character. Thus: A number of reasons tends to support the characterization of Article 28(1)
as a jurisdiction and not a venue provision. First, the wording of Article 32, which indicates
the places where the action for damages “must” be brought, underscores the mandatory
nature of Article 28(1). Second, this characterization is consistent with one of the objectives
of the Convention, which is to “regulate in a uniform
382

382 SUPREME COURT REPORTS ANNOTATED


Lhuillier vs. British Airways

manner the conditions of international transportation by air.” Third, the Convention


does not contain any provision prescribing rules of jurisdiction other than Article 28(1), which
means that the phrase “rules as to jurisdiction” used in Article 32 must refer only to Article
28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive enumeration
in Article 28(1) as “jurisdictions,” which, as such, cannot be left to the will of the parties
regardless of the time when the damage occurred.
Remedial Law; Jurisdiction; Voluntary Appearance; A defendant who files a motion to
dismiss assailing the jurisdiction of the court over his person together with other grounds
raised therein is not deemed to have appeared voluntarily before the court.—The second
sentence of Sec. 20, Rule 14 of the Revised Rules of Civil Procedure clearly provides: Sec.
20. Voluntary appearance.—The defendant’s voluntary appearance in the action shall be
equivalent to service of summons. The inclusion in a motion to dismiss of other grounds aside
from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary
appearance. Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the
court over his person, together with other grounds raised therein, is not deemed to have
appeared voluntarily before the court. What the rule on voluntary appearance—the first
sentence of the above-quoted rule—means is that the voluntary appearance of the defendant
in court is without qualification, in which case he is deemed to have waived his defense of
lack of jurisdiction over his person due to improper service of summons.

G.R. No. 191938. July 2, 2010.*


ABRAHAM KAHLIL B. MITRA, petitioner, vs. COMMISSION ON ELECTIONS, ANTONIO
V. GONZALES, and ORLANDO R. BALBON, JR., respondents.
Election Law; Residency Requirement; Residency can readily be appreciated as a requirement that goes into the heart of our democ-

_______________
* EN BANC.

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ratic system, directly supporting the purpose of representation—electing those who can best serve the community because of their
knowledge and sensitivity to its needs.—The purpose of the residency requirement is “best met by individuals who have either had actual
residence in the area for a given period or who have been domiciled in the same area either by origin or by choice.” At the same time, the
constituents themselves can best know and evaluate the candidates’ qualifications and fitness for office if these candidates have lived
among them. Read and understood in this manner, residency can readily be appreciated as a requirement that goes into the heart of our
democratic system; it directly supports the purpose of representation—electing those who can best serve the community because of their
knowledge and sensitivity to its needs. It likewise adds meaning and substance to the voters’ freedom of choice in the electoral exercise
that characterizes every democracy.
Same; Certiorari; Words and Phrases; As a concept, “grave abuse of discretion” defies exact definition—generally, it refers to
“capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction”; the abuse of discretion must be patent and gross as
to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law,
as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility; The Court has held, too, that the
use of wrong or irrelevant considerations in deciding an issue is sufficient to taint a decision-maker’s action with grave abuse of
discretion.—Whether the COMELEC, by law, has jurisdiction over a case or matter brought to it is resolved by considering the black-
letter provisions of the Constitution and pertinent election laws, and we see no disputed issue on this point. Other than the respondents’
procedural objections which we will fully discuss below, the present case rests on the allegation of grave abuse of discretion—an issue
that generally is not as simple to resolve. As a concept, “grave abuse of discretion” defies exact definition; generally, it refers to “capricious
or whimsical exercise of judgment as is equivalent to lack of jurisdiction”; the abuse of discretion must be patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where
the power is exercised in an arbitrary and despotic manner by reason of passion and hostility. Mere abuse of discretion is not enough; it
must be grave. We have held, too, that the use of wrong or irrelevant con-
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Mitra vs. Commission on Elections
siderations in deciding an issue is sufficient to taint a decision-maker’s action with grave abuse of discretion.
Same; Same; When grave abuse of discretion is present, resulting errors arising from the grave abuse mutate from error of judgment
to one of jurisdiction.—In light of our limited authority to review findings of fact, we do not ordinarily review in a certiorari case the
COMELEC’s appreciation and evaluation of evidence. Any misstep by the COMELEC in this regard generally involves an error of
judgment, not of jurisdiction. In exceptional cases, however, when the COMELEC’s action on the appreciation and evaluation of evidence
oversteps the limits of its discretion to the point of being grossly unreasonable, the Court is not only obliged, but has the constitutional
duty to intervene. When grave abuse of discretion is present, resulting errors arising from the grave abuse mutate from error of judgment
to one of jurisdiction.
Same; Omnibus Election Code (OEC); Certificates of Candidacy (COCs); The misrepresentation that Section 78 of the Omnibus
Election Code (OEC) addresses cannot be the result of a mere innocuous mistake, and cannot exist in a situation where the intent to deceive
is patently absent, or where no deception on the electorate results.—The false representation that these provisions mention must
necessarily pertain to a material fact. The critical material facts are those that refer to a candidate’s qualifications for elective office,
such as his or her citizenship and residence. The candidate’s status as a registered voter in the political unit where he or she is a
candidate similarly falls under this classification as it is a requirement that, by law (the Local Government Code), must be reflected in
the COC. The reason for this is obvious: the candidate, if he or she wins, will work for and represent the political unit where he or she
ran as a candidate. The false representation under Section 78 must likewise be a “deliberate attempt to mislead, misinform, or hide a
fact that would otherwise render a candidate ineligible.” Given the purpose of the requirement, it must be made with the intention to
deceive the electorate as to the would-be candidate’s qualifications for public office. Thus, the misrepresentation that Section 78
addresses cannot be the result of a mere innocuous mistake, and cannot exist in a situation where the intent to deceive is patently
absent, or where no deception on the electorate results. The deliberate character of the misrepresentation necessarily follows from a
consideration of the consequences of any
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material falsity: a candidate who falsifies a material fact cannot run; if he runs and is elected, he cannot serve; in both cases, he can be
prosecuted for violation of the election laws.

Same; Same; Same; Residency Requirement; Domicile of Choice; Requisites.—Mitra’s domicile of origin is undisputedly Puerto
Princesa City. For him to qualify as Governor—in light of the relatively recent change of status of Puerto Princesa City from a component
city to a highly urbanized city whose residents can no longer vote for provincial officials—he had to abandon his domicile of origin and
acquire a new one within the local government unit where he intended to run; this would be his domicile of choice. To acquire a domicile
of choice, jurisprudence, which the COMELEC correctly invoked, requires the following: (1) residence or bodily presence in a new locality;
(2) an intention to remain there; and (3) an intention to abandon the old domicile.

Same; Same; Same; Evidence; Substantial Evidence; Substantial evidence is not a simple question of number—reason demands
that the focus be on what these differing statements say.—The seeming contradictions arose from the sworn statements of some Aborlan
residents attesting that they never saw Mitra in Aborlan; these are controverted by similar sworn statements by other Aborlan residents
that Mitra physically resides in Aborlan. The number of witnesses and their conflicting claims for and against Mitra’s residency appear
to have sidetracked the COMELEC. Substantial evidence, however, is not a simple question of number; reason demands that the focus
be on what these differing statements say.

Same; Same; Same; Residency; Where a dwelling qualifies as a residence—i.e., the dwelling where a person permanently intends
to return to and to remain—his or her capacity or inclination to decorate the place, or the lack of it, is immaterial.—In considering the
residency issue, the COMELEC practically focused solely on its consideration of Mitra’s residence at Maligaya Feedmill, on the basis of
mere photographs of the premises. In the COMELEC’s view (expressly voiced out by the Division and fully concurred in by the En Banc),
the Maligaya Feedmill building could not have been Mitra’s residence because it is cold and utterly devoid of any indication of Mitra’s
personality and that it lacks loving attention and details inherent in every home to make it one’s residence. This was the main reason that
the COMELEC relied upon for its conclusion. Such
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Mitra vs. Commission on Elections
assessment, in our view, based on the interior design and furnishings of a dwelling as shown by and examined only through photographs,
is far from reasonable; the COMELEC thereby determined the fitness of a dwelling as a person’s residence based solely on very personal
and subjective assessment standards when the law is replete with standards that can be used. Where a dwelling qualifies as a residence—
i.e., the dwelling where a person permanently intends to return to and to remain—his or her capacity or inclination to decorate the place,
or the lack of it, is immaterial.
Same; Same; Same; The Commission on Elections’ (COMELEC’s) approach—i.e., the application of subjective non-legal standards
and the gross misappreciation of the evidence—is tainted with grave abuse of discretion, as the COMELEC used wrong considerations
and grossly misread the evidence in arriving at its conclusion; In using subjective standards, the Commission on Elections (COMELEC)
committed an act not otherwise within the contemplation of law on an evidentiary point that served as a major basis for its conclusion in
the case.—Examined further, the COMELEC’s reasoning is not only intensely subjective but also flimsy, to the point of grave abuse of
discretion when compared with the surrounding indicators showing the Mitra has indeed been physically present in Aborlan for the
required period with every intent to settle there. Specifically, it was lost on the COMELEC majority (but not on the Dissent) that Mitra
made definite, although incremental transfer moves, as shown by the undisputed business interests he has established in Aborlan in
2008; by the lease of a dwelling where he established his base; by the purchase of a lot for his permanent home; by his transfer of
registration as a voter in March 2009; and by the construction of a house all viewed against the backdrop of a bachelor Representative
who spent most of his working hours in Manila, who had a whole congressional district to take care of, and who was establishing at the
same time his significant presence in the whole Province of Palawan. From these perspectives, we cannot but conclude that the
COMELEC’s approach—i.e., the application of subjective non-legal standards and the gross misappreciation of the evidence—is tainted
with grave abuse of discretion, as the COMELEC used wrong considerations and grossly misread the evidence in arriving at its
conclusion. In using subjective standards, the COMELEC committed an act not otherwise within the contemplation of law on an
evidentiary point that served as a major basis for its conclusion in the case.
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Same; Same; Same; Statutory Construction; While provisions relating to certificates of candidacy are in mandatory terms, it is an
established rule of interpretation as regards election laws, that mandatory provisions, requiring certain steps before elections, will be
construed as directory after the elections, to give effect to the will of the people.—We have applied in past cases the principle that the
manifest will of the people as expressed through the ballot must be given fullest effect; in case of doubt, political laws must be interpreted
to give life and spirit to the popular mandate. Thus, we have held that while provisions relating to certificates of candidacy are in
mandatory terms, it is an established rule of interpretation as regards election laws, that mandatory provisions, requiring certain steps
before elections, will be construed as directory after the elections, to give effect to the will of the people.
Same; Same; Same; Same; Certificate of Candidacy (COC) defects beyond matters of form and that involve material
misrepresentations cannot avail of the benefit of the rule that COC mandatory requirements before elections are considered merely
directory after the people shall have spoken—a mandatory and material election law requirement involves more than the will of the people
in any given locality.—Quite recently, however, we warned against a blanket and unqualified reading and application of this ruling, as
it may carry dangerous significance to the rule of law and the integrity of our elections. For one, such blanket/unqualified reading may
provide a way around the law that effectively negates election requirements aimed at providing the electorate with the basic information
for an informed choice about a candidate’s eligibility and fitness for office. Short of adopting a clear cut standard, we thus made the
following clarification: We distinguish our ruling in this case from others that we have made in the past by the clarification that COC
defects beyond matters of form and that involve material misrepresentations cannot avail of the benefit of our ruling that COC
mandatory requirements before elections are considered merely directory after the people shall have spoken. A mandatory and material
election law requirement involves more than the will of the people in any given locality. Where a material COC misrepresentation under
oath is made, thereby violating both our election and criminal laws, we are faced as well with an assault on the will of the people of the
Philippines as expressed in our laws. In a choice between provisions on material qualifications of elected officials, on the one hand, and
the
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Mitra vs. Commission on Elections
will of the electorate in any given locality, on the other, we believe and so hold that we cannot choose the electorate will.