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G.R. No. 122191 October 8, 1998 Officer of SAUDIA.

When she did, a certain Khalid of the SAUDIA


office brought her to a Saudi court where she was asked to sign a
SAUDI ARABIAN AIRLINES, petitioner,
document written in Arabic. They told her that this was
vs.
necessary to close the case against Thamer and Allah. As it turned
COURT OF APPEALS, MILAGROS P. MORADA and HON.
out, plaintiff signed a notice to her to appear before the court on
RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
June 27, 1993. Plaintiff then returned to Manila.
Branch 89, Regional Trial Court of Quezon City, respondents.
Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27, 1993 for
QUISUMBING, J.: further investigation. Plaintiff did so after receiving assurance
from SAUDIA's Manila manager, Aslam Saleemi, that the
This petition for certiorari pursuant to Rule 45 of the Rules of investigation was routinary and that it posed no danger to her.
Court seeks to annul and set aside the Resolution1dated
September 27, 1995 and the Decision2 dated April 10, 1996 of the In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Court of Appeals3 in CA-G.R. SP No. 36533,4 and the Orders5 dated Saudi court on June 27, 1993. Nothing happened then but on June
August 29, 1994 6 and February 2, 19957 that were issued by the 28, 1993, a Saudi judge interrogated plaintiff through an
trial court in Civil Case No. Q-93-18394.8 interpreter about the Jakarta incident. After one hour of
interrogation, they let her go. At the airport, however, just as her
The pertinent antecedent facts which gave rise to the instant plane was about to take off, a SAUDIA officer told her that the
petition, as stated in the questioned Decision9, are as follows: airline had forbidden her to take flight. At the Inflight Service
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Office where she was told to go, the secretary of Mr. Yahya
Attendant for its airlines based in Jeddah, Saudi Arabia. . . . Saddick took away her passport and told her to remain in Jeddah,
at the crew quarters, until further orders.
On April 27, 1990, while on a lay-over in Jakarta, Indonesia,
plaintiff went to a disco dance with fellow crew members Thamer On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to
Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it the same court where the judge, to her astonishment and shock,
was almost morning when they returned to their hotels, they rendered a decision, translated to her in English, sentencing her
agreed to have breakfast together at the room of Thamer. When to five months imprisonment and to 286 lashes. Only then did she
they were in te (sic) room, Allah left on some pretext. Shortly realize that the Saudi court had tried her, together with Thamer
after he did, Thamer attempted to rape plaintiff. Fortunately, a and Allah, for what happened in Jakarta. The court found plaintiff
roomboy and several security personnel heard her cries for help guilty of (1) adultery; (2) going to a disco, dancing and listening
and rescued her. Later, the Indonesian police came and arrested to the music in violation of Islamic laws; and (3) socializing with
Thamer and Allah Al-Gazzawi, the latter as an accomplice. the male crew, in contravention of Islamic tradition. 10

When plaintiff returned to Jeddah a few days later, several Facing conviction, private respondent sought the help of her
SAUDIA officials interrogated her about the Jakarta incident. employer, petitioner SAUDIA. Unfortunately, she was denied any
They then requested her to go back to Jakarta to help arrange the assistance. She then asked the Philippine Embassy in Jeddah to
release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer help her while her case is on appeal. Meanwhile, to pay for her
Sirah Akkad and base manager Baharini negotiated with the upkeep, she worked on the domestic flight of SAUDIA, while
police for the immediate release of the detained crew members Thamer and Allah continued to serve in the international
but did not succeed because plaintiff refused to cooperate. She flights. 11
was afraid that she might be tricked into something she did not Because she was wrongfully convicted, the Prince of Makkah
want because of her inability to understand the local dialect. She dismissed the case against her and allowed her to leave Saudi
also declined to sign a blank paper and a document written in the Arabia. Shortly before her return to Manila, 12 she was terminated
local dialect. Eventually, SAUDIA allowed plaintiff to return to from the service by SAUDIA, without her being informed of the
Jeddah but barred her from the Jakarta flights. cause.
Plaintiff learned that, through the intercession of the Saudi On November 23, 1993, Morada filed a Complaint 13 for damages
Arabian government, the Indonesian authorities agreed to deport against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country
Thamer and Allah after two weeks of detention. Eventually, they manager.
were again put in service by defendant SAUDI (sic). In September
1990, defendant SAUDIA transferred plaintiff to Manila. On January 19, 1994, SAUDIA filed an Omnibus Motion To
Dismiss 14 which raised the following grounds, to wit: (1) that the
On January 14, 1992, just when plaintiff thought that the Jakarta Complaint states no cause of action against Saudia; (2) that
incident was already behind her, her superiors requested her to defendant Al-Balawi is not a real party in interest; (3) that the
see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, claim or demand set forth in the Complaint has been waived,
Saudi Arabia. When she saw him, he brought her to the police abandoned or otherwise extinguished; and (4) that the trial court
station where the police took her passport and questioned her has no jurisdiction to try the case.
about the Jakarta incident. Miniewy simply stood by as the police
put pressure on her to make a statement dropping the case On February 10, 1994, Morada filed her Opposition (To Motion to
against Thamer and Allah. Not until she agreed to do so did the Dismiss) 15. Saudia filed a reply 16 thereto on March 3, 1994.
police return her passport and allowed her to catch the afternoon
On June 23, 1994, Morada filed an Amended
flight out of Jeddah.
Complaint 17 wherein Al-Balawi was dropped as party defendant.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi On August 11, 1994, Saudia filed its Manifestation and Motion to
Arabia, a few minutes before the departure of her flight to Manila, Dismiss Amended Complaint 18.
plaintiff was not allowed to board the plane and instead ordered
The trial court issued an Order 19 dated August 29, 1994 denying
to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal
the Motion to Dismiss Amended Complaint filed by Saudia.
1
From the Order of respondent Judge 20 denying the Motion to However, during the pendency of the instant Petition, respondent
Dismiss, SAUDIA filed on September 20, 1994, its Motion for Court of Appeals rendered the Decision 30dated April 10, 1996,
Reconsideration 21 of the Order dated August 29, 1994. It alleged now also assailed. It ruled that the Philippines is an appropriate
that the trial court has no jurisdiction to hear and try the case on forum considering that the Amended Complaint's basis for
the basis of Article 21 of the Civil Code, since the proper law recovery of damages is Article 21 of the Civil Code, and thus,
applicable is the law of the Kingdom of Saudi Arabia. On October clearly within the jurisdiction of respondent Court. It further held
14, 1994, Morada filed her Opposition 22(To Defendant's Motion that certiorari is not the proper remedy in a denial of a Motion to
for Reconsideration). Dismiss, inasmuch as the petitioner should have proceeded to
trial, and in case of an adverse ruling, find recourse in an appeal.
In the Reply 23 filed with the trial court on October 24, 1994,
SAUDIA alleged that since its Motion for Reconsideration raised On May 7, 1996, SAUDIA filed its Supplemental Petition for
lack of jurisdiction as its cause of action, the Omnibus Motion Review with Prayer for Temporary Restraining Order 31 dated
Rule does not apply, even if that ground is raised for the first time April 30, 1996, given due course by this Court. After both parties
on appeal. Additionally, SAUDIA alleged that the Philippines does submitted their Memoranda, 32 the instant case is now deemed
not have any substantial interest in the prosecution of the instant submitted for decision.
case, and hence, without jurisdiction to adjudicate the same.
Petitioner SAUDIA raised the following issues:
Respondent Judge subsequently issued another Order 24 dated
I
February 2, 1995, denying SAUDIA's Motion for Reconsideration.
The pertinent portion of the assailed Order reads as follows: The trial court has no jurisdiction to hear and try Civil Case No. Q-
93-18394 based on Article 21 of the New Civil Code since the
Acting on the Motion for Reconsideration of defendant Saudi
proper law applicable is the law of the Kingdom of Saudi Arabia
Arabian Airlines filed, thru counsel, on September 20, 1994, and
inasmuch as this case involves what is known in private
the Opposition thereto of the plaintiff filed, thru counsel, on
October 14, 1994, as well as the Reply therewith of defendant international law as a "conflicts problem". Otherwise, the
Republic of the Philippines will sit in judgment of the acts done
Saudi Arabian Airlines filed, thru counsel, on October 24, 1994,
by another sovereign state which is abhorred.
considering that a perusal of the plaintiffs Amended Complaint,
which is one for the recovery of actual, moral and exemplary II
damages plus attorney's fees, upon the basis of the applicable
Philippine law, Article 21 of the New Civil Code of the Philippines, Leave of court before filing a supplemental pleading is not a
is, clearly, within the jurisdiction of this Court as regards the jurisdictional requirement. Besides, the matter as to absence of
subject matter, and there being nothing new of substance which leave of court is now moot and academic when this Honorable
might cause the reversal or modification of the order sought to be Court required the respondents to comment on petitioner's April
reconsidered, the motion for reconsideration of the defendant, is 30, 1996 Supplemental Petition For Review With Prayer For A
DENIED. Temporary Restraining Order Within Ten (10) Days From Notice
Thereof. Further, the Revised Rules of Court should be construed
SO ORDERED. 25 with liberality pursuant to Section 2, Rule 1 thereof.
Consequently, on February 20, 1995, SAUDIA filed its Petition III
for Certiorari and Prohibition with Prayer for Issuance of Writ of
Preliminary Injunction and/or Temporary Restraining Petitioner received on April 22, 1996 the April 10, 1996 decision
Order 26 with the Court of Appeals. in CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon.
Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental
Respondent Court of Appeals promulgated a Resolution with Petition For Review With Prayer For A Temporary Restraining
Temporary Restraining Order 27 dated February 23, 1995, Order on May 7, 1996 at 10:29 a.m. or within the 15-day
prohibiting the respondent Judge from further conducting any reglementary period as provided for under Section 1, Rule 45 of
proceeding, unless otherwise directed, in the interim. the Revised Rules of Court. Therefore, the decision in CA-G.R. SP
NO. 36533 has not yet become final and executory and this
In another Resolution 28 promulgated on September 27, 1995,
Honorable Court can take cognizance of this case. 33
now assailed, the appellate court denied SAUDIA's Petition for
the Issuance of a Writ of Preliminary Injunction dated February From the foregoing factual and procedural antecedents, the
18, 1995, to wit: following issues emerge for our resolution:
The Petition for the Issuance of a Writ of I.
Preliminary Injunction is hereby DENIED,
after considering the Answer, with Prayer to WHETHER RESPONDENT APPELLATE COURT ERRED IN
Deny Writ of Preliminary Injunction (Rollo, p. HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON CITY
135) the Reply and Rejoinder, it appearing HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-
that herein petitioner is not clearly entitled 18394 ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN
thereto (Unciano Paramedical College, et. Al., v. AIRLINES".
Court of Appeals, et. Al., 100335, April 7, 1993, II.
Second Division).
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING
SO ORDERED. THAT IN THIS CASE PHILIPPINE LAW SHOULD GOVERN.
On October 20, 1995, SAUDIA filed with this Honorable Court the Petitioner SAUDIA claims that before us is a conflict of laws that
instant Petition 29 for Review with Prayer for Temporary must be settled at the outset. It maintains that private
Restraining Order dated October 13, 1995. respondent's claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. It alleges that the existence of a foreign

2
element qualifies the instant case for the application of the law of 11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff
the Kingdom of Saudi Arabia, by virtue of the lex loci delicti to the same court where the judge, to her astonishment and
commissi rule. 34 shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes.
On the other hand, private respondent contends that since her
Only then did she realize that the Saudi court had tried her,
Amended Complaint is based on Articles 19 35 and 21 36 of the
together with Thamer and Allah, for what happened in Jakarta.
Civil Code, then the instant case is properly a matter of domestic
The court found plaintiff guilty of (1) adultery; (2) going to a
law. 37 disco, dancing, and listening to the music in violation of Islamic
Under the factual antecedents obtaining in this case, there is no laws; (3) socializing with the male crew, in contravention of
dispute that the interplay of events occurred in two states, the Islamic tradition.
Philippines and Saudi Arabia.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff
As stated by private respondent in her Amended sought the help of the Philippines Embassy in Jeddah. The latter
Complaint 38 dated June 23, 1994: helped her pursue an appeal from the decision of the court. To
pay for her upkeep, she worked on the domestic flights of
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign defendant SAUDIA while, ironically, Thamer and Allah freely
airlines corporation doing business in the Philippines. It may be served the international flights. 39
served with summons and other court processes at Travel Wide
Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Where the factual antecedents satisfactorily establish the
Valero St., Salcedo Village, Makati, Metro Manila. existence of a foreign element, we agree with petitioner that the
problem herein could present a "conflicts" case.
xxx xxx xxx
A factual situation that cuts across territorial lines and is affected
6. Plaintiff learned that, through the intercession of the Saudi by the diverse laws of two or more states is said to contain a
Arabian government, the Indonesian authorities agreed to deport "foreign element". The presence of a foreign element is inevitable
Thamer and Allah after two weeks of detention. Eventually, they since social and economic affairs of individuals and associations
were again put in service by defendant SAUDIA. In September are rarely confined to the geographic limits of their birth or
1990, defendant SAUDIA transferred plaintiff to Manila. conception. 40
7. On January 14, 1992, just when plaintiff thought that the Jakarta The forms in which this foreign element may appear are
incident was already behind her, her superiors reauested her to see many. 41 The foreign element may simply consist in the fact that
MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi one of the parties to a contract is an alien or has a foreign
Arabia. When she saw him, he brought her to the police station domicile, or that a contract between nationals of one State
where the police took her passport and questioned her about the involves properties situated in another State. In other cases, the
Jakarta incident. Miniewy simply stood by as the police put foreign element may assume a complex form. 42
pressure on her to make a statement dropping the case against
Thamer and Allah. Not until she agreed to do so did the police In the instant case, the foreign element consisted in the fact that
return her passport and allowed her to catch the afternoon flight private respondent Morada is a resident Philippine national, and
out of Jeddah. that petitioner SAUDIA is a resident foreign corporation. Also, by
virtue of the employment of Morada with the petitioner Saudia as
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi a flight stewardess, events did transpire during her many
Arabia, a few minutes before the departure of her flight to Manila, occasions of travel across national borders, particularly from
plaintiff was not allowed to board the plane and instead ordered Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that
to take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal caused a "conflicts" situation to arise.
Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was asked to sigh a We thus find private respondent's assertion that the case is
document written in Arabic. They told her that this was purely domestic, imprecise. A conflicts problem presents itself
necessary to close the case against Thamer and Allah. As it turned here, and the question of jurisdiction 43 confronts the court a quo.
out, plaintiff signed a notice to her to appear before the court on
After a careful study of the private respondent's Amended
June 27, 1993. Plaintiff then returned to Manila.
Complaint, 44 and the Comment thereon, we note that she aptly
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to predicated her cause of action on Articles 19 and 21 of the New
report to Jeddah once again and see Miniewy on June 27, 1993 for Civil Code.
further investigation. Plaintiff did so after receiving assurance from
On one hand, Article 19 of the New Civil Code provides:
SAUDIA's Manila manger, Aslam Saleemi, that the investigation
was routinary and that it posed no danger to her. Art. 19. Every person must, in the exercise of
his rights and in the performance of his duties,
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same act with justice give everyone his due and
Saudi court on June 27, 1993. Nothing happened then but on June
observe honesty and good faith.
28, 1993, a Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour of On the other hand, Article 21 of the New Civil Code provides:
interrogation, they let her go. At the airport, however, just as her
Art. 21. Any person who willfully causes loss
plane was about to take off, a SAUDIA officer told her that the
or injury to another in a manner that is
airline had forbidden her to take that flight. At the Inflight Service
contrary to morals, good customs or public
Office where she was told to go, the secretary of Mr. Yahya
policy shall compensate the latter for
Saddick took away her passport and told her to remain in Jeddah,
damages.
at the crew quarters, until further orders.

3
Thus, in Philippine National Bank (PNB) vs. Court of substantial connections. That would have caused a fundamental
Appeals, 45 this Court held that: unfairness to her.
The aforecited provisions on human relations Moreover, by hearing the case in the Philippines no unnecessary
were intended to expand the concept of torts difficulties and inconvenience have been shown by either of the
in this jurisdiction by granting adequate legal parties. The choice of forum of the plaintiff (now private
remedy for the untold number of moral respondent) should be upheld.
wrongs which is impossible for human
foresight to specifically provide in the statutes. Similarly, the trial court also possesses jurisdiction over the
persons of the parties herein. By filing her Complaint and
Although Article 19 merely declares a principle of law, Article 21 Amended Complaint with the trial court, private respondent has
gives flesh to its provisions. Thus, we agree with private voluntary submitted herself to the jurisdiction of the court.
respondent's assertion that violations of Articles 19 and 21 are
The records show that petitioner SAUDIA has filed several
actionable, with judicially enforceable remedies in the municipal
motions 50 praying for the dismissal of Morada's Amended
forum.
Complaint. SAUDIA also filed an Answer In Ex Abundante
Based on the allegations 46 in the Amended Complaint, read in the Cautelam dated February 20, 1995. What is very patent and
light of the Rules of Court on jurisdiction 47 we find that the explicit from the motions filed, is that SAUDIA prayed for other
Regional Trial Court (RTC) of Quezon City possesses jurisdiction reliefs under the premises. Undeniably, petitioner SAUDIA has
over the subject matter of the suit. 48 Its authority to try and hear effectively submitted to the trial court's jurisdiction by praying
the case is provided for under Section 1 of Republic Act No. 7691, for the dismissal of the Amended Complaint on grounds other
to wit: than lack of jurisdiction.
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known As held by this Court in Republic vs. Ker and Company, Ltd.: 51
as the "Judiciary Reorganization Act of 1980", is hereby amended
to read as follows: We observe that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower court's jurisdiction over
Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall defendant's person, prayed for dismissal of the complaint on the
exercise exclusive jurisdiction: ground that plaintiff's cause of action has prescribed. By
interposing such second ground in its motion to dismiss, Ker and
xxx xxx xxx
Co., Ltd. availed of an affirmative defense on the basis of which it
(8) In all other cases in which demand, exclusive of interest, prayed the court to resolve controversy in its favor. For the court
damages of whatever kind, attorney's fees, litigation expenses, to validly decide the said plea of defendant Ker & Co., Ltd., it
and cots or the value of the property in controversy exceeds One necessarily had to acquire jurisdiction upon the latter's person,
hundred thousand pesos (P100,000.00) or, in such other cases in who, being the proponent of the affirmative defense, should be
Metro Manila, where the demand, exclusive of the above- deemed to have abandoned its special appearance and
mentioned items exceeds Two hundred Thousand pesos voluntarily submitted itself to the jurisdiction of the court.
(P200,000.00). (Emphasis ours)
Similarly, the case of De Midgely vs. Ferandos, held that;
xxx xxx xxx
When the appearance is by motion for the purpose of objecting to
And following Section 2 (b), Rule 4 of the Revised Rules of Court the jurisdiction of the court over the person, it must be for the
— the venue, Quezon City, is appropriate: sole and separate purpose of objecting to the jurisdiction of the
court. If his motion is for any other purpose than to object to the
Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial jurisdiction of the court over his person, he thereby submits
Court] himself to the jurisdiction of the court. A special appearance by
(a) xxx xxx xxx motion made for the purpose of objecting to the jurisdiction of
the court over the person will be held to be a general appearance,
(b) Personal actions. — All other actions may be commenced and if the party in said motion should, for example, ask for a dismissal
tried where the defendant or any of the defendants resides or of the action upon the further ground that the court had no
may be found, or where the plaintiff or any of the plaintiff resides, jurisdiction over the subject matter. 52
at the election of the plaintiff.
Clearly, petitioner had submitted to the jurisdiction of the
Pragmatic considerations, including the convenience of the Regional Trial Court of Quezon City. Thus, we find that the trial
parties, also weigh heavily in favor of the RTC Quezon City court has jurisdiction over the case and that its exercise thereof,
assuming jurisdiction. Paramount is the private interest of the justified.
litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are As to the choice of applicable law, we note that choice-of-law
equally important. Plaintiff may not, by choice of an inconvenient problems seek to answer two important questions: (1) What
forum, "vex", "harass", or "oppress" the defendant, e.g. by legal system should control a given situation where some of the
inflicting upon him needless expense or disturbance. But unless significant facts occurred in two or more states; and (2) to what
the balance is strongly in favor of the defendant, the plaintiffs extent should the chosen legal system regulate the situation. 53
choice of forum should rarely be disturbed. 49 Several theories have been propounded in order to identify the
Weighing the relative claims of the parties, the court a quo found legal system that should ultimately control. Although ideally, all
it best to hear the case in the Philippines. Had it refused to take choice-of-law theories should intrinsically advance both notions
cognizance of the case, it would be forcing plaintiff (private of justice and predictability, they do not always do so. The forum
respondent now) to seek remedial action elsewhere, i.e. in the is then faced with the problem of deciding which of these two
Kingdom of Saudi Arabia where she no longer maintains important values should be stressed. 54

4
Before a choice can be made, it is necessary for us to determine There is likewise logical basis on record for the claim that the
under what category a certain set of facts or rules fall. This "handing over" or "turning over" of the person of private
process is known as "characterization", or the "doctrine of respondent to Jeddah officials, petitioner may have acted beyond
qualification". It is the "process of deciding whether or not the its duties as employer. Petitioner's purported act contributed to
facts relate to the kind of question specified in a conflicts and amplified or even proximately caused additional humiliation,
rule." 55The purpose of "characterization" is to enable the forum misery and suffering of private respondent. Petitioner thereby
to select the proper law. 56 allegedly facilitated the arrest, detention and prosecution of
private respondent under the guise of petitioner's authority as
Our starting point of analysis here is not a legal relation, but a
employer, taking advantage of the trust, confidence and faith she
factual situation, event, or operative fact. 57An essential element
reposed upon it. As purportedly found by the Prince of Makkah,
of conflict rules is the indication of a "test" or "connecting factor"
the alleged conviction and imprisonment of private respondent
or "point of contact". Choice-of-law rules invariably consist of a
was wrongful. But these capped the injury or harm allegedly
factual relationship (such as property right, contract claim) and a
inflicted upon her person and reputation, for which petitioner
connecting factor or point of contact, such as the situs of the res,
could be liable as claimed, to provide compensation or redress
the place of celebration, the place of performance, or the place of
for the wrongs done, once duly proven.
wrongdoing. 58
Considering that the complaint in the court a quo is one involving
Note that one or more circumstances may be present to serve as
torts, the "connecting factor" or "point of contact" could be the
the possible test for the determination of the applicable
place or places where the tortious conduct or lex loci
law. 59 These "test factors" or "points of contact" or "connecting
actus occurred. And applying the torts principle in a conflicts
factors" could be any of the following:
case, we find that the Philippines could be said as a situs of the
(1) The nationality of a person, his domicile, his residence, his tort (the place where the alleged tortious conduct took place).
place of sojourn, or his origin; This is because it is in the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing and working
(2) the seat of a legal or juridical person, such as a corporation; here. According to her, she had honestly believed that petitioner
(3) the situs of a thing, that is, the place where a thing is, or is would, in the exercise of its rights and in the performance of its
deemed to be situated. In particular, the lex situs is decisive when duties, "act with justice, give her due and observe honesty and
real rights are involved; good faith." Instead, petitioner failed to protect her, she claimed.
That certain acts or parts of the injury allegedly occurred in
(4) the place where an act has been done, the locus actus, such as another country is of no moment. For in our view what is
the place where a contract has been made, a marriage celebrated, important here is the place where the over-all harm or the
a will signed or a tort committed. The lex loci actus is particularly totality of the alleged injury to the person, reputation, social
important in contracts and torts; standing and human rights of complainant, had lodged, according
(5) the place where an act is intended to come into effect, e.g., the to the plaintiff below (herein private respondent). All told, it is
place of performance of contractual duties, or the place where a not without basis to identify the Philippines as the situs of the
power of attorney is to be exercised; alleged tort.

(6) the intention of the contracting parties as to the law that Moreover, with the widespread criticism of the traditional rule
should govern their agreement, thelex loci intentionis; of lex loci delicti commissi, modern theories and rules on tort
liability 61 have been advanced to offer fresh judicial approaches
(7) the place where judicial or administrative proceedings are to arrive at just results. In keeping abreast with the modern
instituted or done. The lex fori — the law of the forum — is theories on tort liability, we find here an occasion to apply the
particularly important because, as we have seen earlier, matters "State of the most significant relationship" rule, which in our
of "procedure" not going to the substance of the claim involved view should be appropriate to apply now, given the factual
are governed by it; and because the lex fori applies whenever the context of this case.
content of the otherwise applicable foreign law is excluded from
application in a given case for the reason that it falls under one of In applying said principle to determine the State which has the
the exceptions to the applications of foreign law; and most significant relationship, the following contacts are to be
taken into account and evaluated according to their relative
(8) the flag of a ship, which in many cases is decisive of importance with respect to the particular issue: (a) the place
practically all legal relationships of the ship and of its master or where the injury occurred; (b) the place where the conduct
owner as such. It also covers contractual relationships causing the injury occurred; (c) the domicile, residence,
particularly contracts of affreightment. 60 (Emphasis ours.) nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any, between
After a careful study of the pleadings on record, including
the parties is centered. 62
allegations in the Amended Complaint deemed admitted for
purposes of the motion to dismiss, we are convinced that there is As already discussed, there is basis for the claim that over-all
reasonable basis for private respondent's assertion that although injury occurred and lodged in the Philippines. There is likewise
she was already working in Manila, petitioner brought her to no question that private respondent is a resident Filipina
Jeddah on the pretense that she would merely testify in an national, working with petitioner, a resident foreign corporation
investigation of the charges she made against the two SAUDIA engaged here in the business of international air carriage. Thus,
crew members for the attack on her person while they were in the "relationship" between the parties was centered here,
Jakarta. As it turned out, she was the one made to face trial for although it should be stressed that this suit is not based on mere
very serious charges, including adultery and violation of Islamic labor law violations. From the record, the claim that the
laws and tradition. Philippines has the most significant contact with the matter in
this dispute, 63 raised by private respondent as plaintiff below

5
against defendant (herein petitioner), in our view, has been
properly established.
Prescinding from this premise that the Philippines is the situs of
the tort complained of and the place "having the most interest in
the problem", we find, by way of recapitulation, that the
Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case. Further, we hold that the respondent
Regional Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue is in
Quezon City, which could properly apply Philippine law.
Moreover, we find untenable petitioner's insistence that "[s]ince
private respondent instituted this suit, she has the burden of
pleading and proving the applicable Saudi law on the
matter." 64As aptly said by private respondent, she has "no
obligation to plead and prove the law of the Kingdom of Saudi
Arabia since her cause of action is based on Articles 19 and 21" of
the Civil Code of the Philippines. In her Amended Complaint and
subsequent pleadings, she never alleged that Saudi law should
govern this case. 65 And as correctly held by the respondent
appellate court, "considering that it was the petitioner who was
invoking the applicability of the law of Saudi Arabia, then the
burden was on it [petitioner] to plead and to establish what the
law of Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate
court in upholding the trial court's denial of defendant's (herein
petitioner's) motion to dismiss the case. Not only was jurisdiction
in order and venue properly laid, but appeal after trial was
obviously available, and expeditious trial itself indicated by the
nature of the case at hand. Indubitably, the Philippines is the
state intimately concerned with the ultimate outcome of the case
below, not just for the benefit of all the litigants, but also for the
vindication of the country's system of law and justice in a
transnational setting. With these guidelines in mind, the trial
court must proceed to try and adjudge the case in the light of
relevant Philippine law, with due consideration of the foreign
element or elements involved. Nothing said herein, of course,
should be construed as prejudging the results of the case in any
manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby
DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P.
Morada vs. Saudi Arabia Airlines" is hereby REMANDED to
Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
SO ORDERED.

6
G.R. No. 149177 November 23, 2007 performance of contracts are regulated by the law prevailing at
the place of performance,15 denied the motion to dismiss.16 The
KAZUHIRO HASEGAWA and NIPPON ENGINEERING
trial court subsequently denied petitioners' motion for
CONSULTANTS CO., LTD., Petitioners,
reconsideration,17 prompting them to file with the appellate
vs.
court, on August 14, 2000, their first Petition for Certiorari under
MINORU KITAMURA, Respondent.
Rule 65 [docketed as CA-G.R. SP No. 60205].18 On August 23,
DECISION 2000, the CA resolved to dismiss the petition on procedural
grounds—for lack of statement of material dates and for
NACHURA, J.: insufficient verification and certification against forum
Before the Court is a petition for review on certiorari under Rule shopping.19 An Entry of Judgment was later issued by the
45 of the Rules of Court assailing the April 18, 2001 Decision1 of appellate court on September 20, 2000.20
the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July Aggrieved by this development, petitioners filed with the CA, on
25, 2001 Resolution2 denying the motion for reconsideration September 19, 2000, still within the reglementary period,
thereof. a second Petition for Certiorari under Rule 65 already stating
On March 30, 1999, petitioner Nippon Engineering Consultants therein the material dates and attaching thereto the proper
Co., Ltd. (Nippon), a Japanese consultancy firm providing verification and certification. This second petition, which
technical and management support in the infrastructure projects substantially raised the same issues as those in the first, was
of foreign governments,3 entered into an Independent Contractor docketed as CA-G.R. SP No. 60827.21
Agreement (ICA) with respondent Minoru Kitamura, a Japanese Ruling on the merits of the second petition, the appellate court
national permanently residing in the Philippines.4 The agreement rendered the assailed April 18, 2001 Decision 22finding no grave
provides that respondent was to extend professional services to abuse of discretion in the trial court's denial of the motion to
Nippon for a year starting on April 1, 1999.5 Nippon then dismiss. The CA ruled, among others, that the principle of lex loci
assigned respondent to work as the project manager of the celebrationis was not applicable to the case, because nowhere in
Southern Tagalog Access Road (STAR) Project in the Philippines, the pleadings was the validity of the written agreement put in
following the company's consultancy contract with the Philippine issue. The CA thus declared that the trial court was correct in
Government.6 applying instead the principle of lex loci solutionis.23
When the STAR Project was near completion, the Department of Petitioners' motion for reconsideration was subsequently denied
Public Works and Highways (DPWH) engaged the consultancy by the CA in the assailed July 25, 2001 Resolution.24
services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler Remaining steadfast in their stance despite the series of denials,
Road Improvement (BBRI) Project.7 Respondent was named as petitioners instituted the instant Petition for Review
the project manager in the contract's Appendix 3.1.8 on Certiorari25 imputing the following errors to the appellate
court:
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's
general manager for its International Division, informed A. THE HONORABLE COURT OF APPEALS GRAVELY
respondent that the company had no more intention of ERRED IN FINDING THAT THE TRIAL COURT VALIDLY
automatically renewing his ICA. His services would be engaged EXERCISED JURISDICTION OVER THE INSTANT
by the company only up to the substantial completion of the CONTROVERSY, DESPITE THE FACT THAT THE
STAR Project on March 31, 2000, just in time for the ICA's CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A
expiry.9 QUO WAS ENTERED INTO BY AND BETWEEN TWO
JAPANESE NATIONALS, WRITTEN WHOLLY IN THE
Threatened with impending unemployment, respondent, through JAPANESE LANGUAGE AND EXECUTED IN TOKYO,
his lawyer, requested a negotiation conference and demanded JAPAN.
that he be assigned to the BBRI project. Nippon insisted that
respondent’s contract was for a fixed term that had already B. THE HONORABLE COURT OF APPEALS GRAVELY
expired, and refused to negotiate for the renewal of the ICA.10 ERRED IN OVERLOOKING THE NEED TO REVIEW OUR
ADHERENCE TO THE PRINCIPLE OF LEX LOCI
As he was not able to generate a positive response from the SOLUTIONIS IN THE LIGHT OF RECENT
petitioners, respondent consequently initiated on June 1, 2000 DEVELOPMENT[S] IN PRIVATE INTERNATIONAL
Civil Case No. 00-0264 for specific performance and damages LAWS.26
with the Regional Trial Court of Lipa City.11
The pivotal question that this Court is called upon to resolve is
For their part, petitioners, contending that the ICA had been whether the subject matter jurisdiction of Philippine courts in
perfected in Japan and executed by and between Japanese civil cases for specific performance and damages involving
nationals, moved to dismiss the complaint for lack of jurisdiction. contracts executed outside the country by foreign nationals may
They asserted that the claim for improper pre-termination of be assailed on the principles of lex loci celebrationis, lex
respondent's ICA could only be heard and ventilated in the contractus, the "state of the most significant relationship rule,"
proper courts of Japan following the principles of lex loci or forum non conveniens.
celebrationis and lex contractus.12
However, before ruling on this issue, we must first dispose of the
In the meantime, on June 20, 2000, the DPWH approved Nippon's procedural matters raised by the respondent.
request for the replacement of Kitamura by a certain Y. Kotake as
project manager of the BBRI Project.13 Kitamura contends that the finality of the appellate court's
decision in CA-G.R. SP No. 60205 has already barred the filing of
On June 29, 2000, the RTC, invoking our ruling in Insular the second petition docketed as CA-G.R. SP No. 60827
Government v. Frank14 that matters connected with the

7
(fundamentally raising the same issues as those in the first one) and certified the petition only on his behalf and not on behalf of
and the instant petition for review thereof. the other petitioner, the petition has to be denied pursuant
to Loquias v. Office of the Ombudsman.41 Substantial compliance
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on
will not suffice in a matter that demands strict observance of the
account of the petition's defective certification of non-forum
Rules.42 While technical rules of procedure are designed not to
shopping, it was a dismissal without prejudice.27 The same holds
frustrate the ends of justice, nonetheless, they are intended to
true in the CA's dismissal of the said case due to defects in the
effect the proper and orderly disposition of cases and effectively
formal requirement of verification28 and in the other requirement prevent the clogging of court dockets.43
in Rule 46 of the Rules of Court on the statement of the material
dates.29 The dismissal being without prejudice, petitioners can Further, the Court has observed that petitioners incorrectly filed
re-file the petition, or file a second petition attaching thereto the a Rule 65 petition to question the trial court's denial of their
appropriate verification and certification—as they, in fact did— motion to dismiss. It is a well-established rule that an order
and stating therein the material dates, within the prescribed denying a motion to dismiss is interlocutory, and cannot be the
period30 in Section 4, Rule 65 of the said Rules.31 subject of the extraordinary petition for certiorari or mandamus.
The appropriate recourse is to file an answer and to interpose as
The dismissal of a case without prejudice signifies the absence of
defenses the objections raised in the motion, to proceed to trial,
a decision on the merits and leaves the parties free to litigate the
and, in case of an adverse decision, to elevate the entire case by
matter in a subsequent action as though the dismissed action had
appeal in due course.44 While there are recognized exceptions to
not been commenced. In other words, the termination of a case
this rule,45 petitioners' case does not fall among them.
not on the merits does not bar another action involving the same
parties, on the same subject matter and theory.32 This brings us to the discussion of the substantive issue of the
case.
Necessarily, because the said dismissal is without prejudice and
has no res judicata effect, and even if petitioners still indicated in Asserting that the RTC of Lipa City is an inconvenient forum,
the verification and certification of the second certiorari petition petitioners question its jurisdiction to hear and resolve the civil
that the first had already been dismissed on procedural case for specific performance and damages filed by the
grounds,33 petitioners are no longer required by the Rules to respondent. The ICA subject of the litigation was entered into and
indicate in their certification of non-forum shopping in the instant perfected in Tokyo, Japan, by Japanese nationals, and written
petition for review of the second certiorari petition, the status of wholly in the Japanese language. Thus, petitioners posit that local
the aforesaid first petition before the CA. In any case, an omission courts have no substantial relationship to the parties46 following
in the certificate of non-forum shopping about any event that will the [state of the] most significant relationship rule in Private
not constitute res judicata and litis pendentia, as in the present International Law.47
case, is not a fatal defect. It will not warrant the dismissal and
The Court notes that petitioners adopted an additional but
nullification of the entire proceedings, considering that the evils
different theory when they elevated the case to the appellate
sought to be prevented by the said certificate are no longer
court. In the Motion to Dismiss48 filed with the trial court,
present.34
petitioners never contended that the RTC is an inconvenient
The Court also finds no merit in respondent's contention that forum. They merely argued that the applicable law which will
petitioner Hasegawa is only authorized to verify and certify, on determine the validity or invalidity of respondent's claim is that
behalf of Nippon, the certiorari petition filed with the CA and not of Japan, following the principles of lex loci celebrationis and lex
the instant petition. True, the Authorization35 dated September 4, contractus.49 While not abandoning this stance in their petition
2000, which is attached to the second certiorari petition and before the appellate court, petitioners on certiorari significantly
which is also attached to the instant petition for review, is limited invoked the defense of forum non conveniens.50 On petition for
in scope—its wordings indicate that Hasegawa is given the review before this Court, petitioners dropped their other
authority to sign for and act on behalf of the company only in the arguments, maintained the forum non conveniens defense, and
petition filed with the appellate court, and that authority cannot introduced their new argument that the applicable principle is
extend to the instant petition for review.36 In a plethora of cases, the [state of the] most significant relationship rule.51
however, this Court has liberally applied the Rules or even
Be that as it may, this Court is not inclined to deny this petition
suspended its application whenever a satisfactory explanation
merely on the basis of the change in theory, as explained
and a subsequent fulfillment of the requirements have been
in Philippine Ports Authority v. City of Iloilo.52 We only pointed out
made.37 Given that petitioners herein sufficiently explained their
petitioners' inconstancy in their arguments to emphasize their
misgivings on this point and appended to their Reply38 an
incorrect assertion of conflict of laws principles.
updated Authorization39 for Hasegawa to act on behalf of the
company in the instant petition, the Court finds the same as To elucidate, in the judicial resolution of conflicts problems, three
sufficient compliance with the Rules. consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to
However, the Court cannot extend the same liberal treatment to
these phases are the following questions: (1) Where can or
the defect in the verification and certification. As respondent
should litigation be initiated? (2) Which law will the court apply?
pointed out, and to which we agree, Hasegawa is truly not
and (3) Where can the resulting judgment be enforced?53
authorized to act on behalf of Nippon in this case. The aforesaid
September 4, 2000 Authorization and even the subsequent Analytically, jurisdiction and choice of law are two distinct
August 17, 2001 Authorization were issued only by Nippon's concepts.54 Jurisdiction considers whether it is fair to cause a
president and chief executive officer, not by the company's board defendant to travel to this state; choice of law asks the further
of directors. In not a few cases, we have ruled that corporate question whether the application of a substantive law which will
powers are exercised by the board of directors; thus, no person, determine the merits of the case is fair to both parties. The power
not even its officers, can bind the corporation, in the absence of to exercise jurisdiction does not automatically give a state
authority from the board.40 Considering that Hasegawa verified constitutional authority to apply forum law. While jurisdiction

8
and the choice of the lex fori will often coincide, the "minimum conflict between the laws of Japan and ours. Before determining
contacts" for one do not always provide the necessary which law should apply, first there should exist a conflict of laws
"significant contacts" for the other.55 The question of whether the situation requiring the application of the conflict of laws
law of a state can be applied to a transaction is different from the rules.72 Also, when the law of a foreign country is invoked to
question of whether the courts of that state have jurisdiction to provide the proper rules for the solution of a case, the existence
enter a judgment.56 of such law must be pleaded and proved.73
In this case, only the first phase is at issue— It should be noted that when a conflicts case, one involving a
jurisdiction.1âwphi1 Jurisdiction, however, has various aspects. foreign element, is brought before a court or administrative
For a court to validly exercise its power to adjudicate a agency, there are three alternatives open to the latter in
controversy, it must have jurisdiction over the plaintiff or the disposing of it: (1) dismiss the case, either because of lack of
petitioner, over the defendant or the respondent, over the subject jurisdiction or refusal to assume jurisdiction over the case; (2)
matter, over the issues of the case and, in cases involving assume jurisdiction over the case and apply the internal law of
property, over the res or the thing which is the subject of the the forum; or (3) assume jurisdiction over the case and take into
litigation.57 In assailing the trial court's jurisdiction herein, account or apply the law of some other State or States.74 The
petitioners are actually referring to subject matter jurisdiction. court’s power to hear cases and controversies is derived from the
Constitution and the laws. While it may choose to recognize laws
Jurisdiction over the subject matter in a judicial proceeding is
of foreign nations, the court is not limited by foreign sovereign
conferred by the sovereign authority which establishes and
law short of treaties or other formal agreements, even in matters
organizes the court. It is given only by law and in the manner
regarding rights provided by foreign sovereigns.75
prescribed by law.58 It is further determined by the allegations of
the complaint irrespective of whether the plaintiff is entitled to Neither can the other ground raised, forum non conveniens,76 be
all or some of the claims asserted therein.59 To succeed in its used to deprive the trial court of its jurisdiction herein. First, it is
motion for the dismissal of an action for lack of jurisdiction over not a proper basis for a motion to dismiss because Section 1, Rule
the subject matter of the claim,60 the movant must show that the 16 of the Rules of Court does not include it as a ground.77 Second,
court or tribunal cannot act on the matter submitted to it because whether a suit should be entertained or dismissed on the basis of
no law grants it the power to adjudicate the claims.61 the said doctrine depends largely upon the facts of the particular
case and is addressed to the sound discretion of the trial
In the instant case, petitioners, in their motion to dismiss, do not
court.78 In this case, the RTC decided to assume jurisdiction.
claim that the trial court is not properly vested by law with
Third, the propriety of dismissing a case based on this principle
jurisdiction to hear the subject controversy for, indeed, Civil Case
requires a factual determination; hence, this conflicts principle is
No. 00-0264 for specific performance and damages is one not
more properly considered a matter of defense.79
capable of pecuniary estimation and is properly cognizable by the
RTC of Lipa City.62 What they rather raise as grounds to question Accordingly, since the RTC is vested by law with the power to
subject matter jurisdiction are the principles of lex loci entertain and hear the civil case filed by respondent and the
celebrationis and lex contractus, and the "state of the most grounds raised by petitioners to assail that jurisdiction are
significant relationship rule." inappropriate, the trial and appellate courts correctly denied the
petitioners’ motion to dismiss.
The Court finds the invocation of these grounds unsound.
WHEREFORE, premises considered, the petition for review
Lex loci celebrationis relates to the "law of the place of the
on certiorari is DENIED.
ceremony"63 or the law of the place where a contract is
made.64 The doctrine of lex contractus or lex loci SO ORDERED.
contractus means the "law of the place where a contract is
executed or to be performed."65 It controls the nature,
construction, and validity of the contract66 and it may pertain to
the law voluntarily agreed upon by the parties or the law
intended by them either expressly or implicitly.67 Under the
"state of the most significant relationship rule," to ascertain what
state law to apply to a dispute, the court should determine which
state has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should
consider where the contract was made, was negotiated, was to be
performed, and the domicile, place of business, or place of
incorporation of the parties.68 This rule takes into account
several contacts and evaluates them according to their relative
importance with respect to the particular issue to be resolved.69
Since these three principles in conflict of laws make reference to
the law applicable to a dispute, they are rules proper for the
second phase, the choice of law.70 They determine which state's
law is to be applied in resolving the substantive issues of a
conflicts problem.71 Necessarily, as the only issue in this case is
that of jurisdiction, choice-of-law rules are not only inapplicable
but also not yet called for.
Further, petitioners' premature invocation of choice-of-law rules
is exposed by the fact that they have not yet pointed out any

9
10
G.R. No. 162894 February 26, 2008 of the State of Connecticut.10 Petitioner sought the dismissal of
the complaint on grounds of failure to state a cause of action
RAYTHEON INTERNATIONAL, INC., petitioner,
and forum non conveniens and prayed for damages by way of
vs.
compulsory counterclaim.11
STOCKTON W. ROUZIE, JR., respondent.
On 18 May 1999, petitioner filed an Omnibus Motion for
DECISION
Preliminary Hearing Based on Affirmative Defenses and for
TINGA, J.: Summary Judgment12 seeking the dismissal of the complaint on
grounds of forum non conveniens and failure to state a cause of
Before this Court is a petition for review on certiorari under Rule action. Respondent opposed the same. Pending the resolution of
45 of the 1997 Rules of Civil Procedure which seeks the reversal the omnibus motion, the deposition of Walter Browning was
of the Decision1 and Resolution2 of the Court of Appeals in CA- taken before the Philippine Consulate General in Chicago.13
G.R. SP No. 67001 and the dismissal of the civil case filed by
respondent against petitioner with the trial court. In an Order14 dated 13 September 2000, the RTC denied
petitioner’s omnibus motion. The trial court held that the factual
As culled from the records of the case, the following antecedents allegations in the complaint, assuming the same to be admitted,
appear: were sufficient for the trial court to render a valid judgment
Sometime in 1990, Brand Marine Services, Inc. (BMSI), a thereon. It also ruled that the principle of forum non
corporation duly organized and existing under the laws of the conveniens was inapplicable because the trial court could enforce
State of Connecticut, United States of America, and respondent judgment on petitioner, it being a foreign corporation licensed to
Stockton W. Rouzie, Jr., an American citizen, entered into a do business in the Philippines.15
contract whereby BMSI hired respondent as its representative to Petitioner filed a Motion for Reconsideration16 of the order,
negotiate the sale of services in several government projects in which motion was opposed by respondent.17 In an Order dated
the Philippines for an agreed remuneration of 10% of the gross 31 July 2001,18 the trial court denied petitioner’s motion. Thus, it
receipts. On 11 March 1992, respondent secured a service filed a Rule 65 Petition19 with the Court of Appeals praying for
contract with the Republic of the Philippines on behalf of BMSI the issuance of a writ of certiorari and a writ of injunction to set
for the dredging of rivers affected by the Mt. Pinatubo eruption aside the twin orders of the trial court dated 13 September 2000
and mudflows.3 and 31 July 2001 and to enjoin the trial court from conducting
On 16 July 1994, respondent filed before the Arbitration Branch further proceedings.20
of the National Labor Relations Commission (NLRC) a suit against On 28 August 2003, the Court of Appeals rendered the assailed
BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Decision21 denying the petition for certiorari for lack of merit. It
Walter G. Browning for alleged nonpayment of commissions, also denied petitioner’s motion for reconsideration in the
illegal termination and breach of employment contract.4 On 28 assailed Resolution issued on 10 March 2004.22
September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered
judgment ordering BMSI and RUST to pay respondent’s money The appellate court held that although the trial court should not
claims.5 Upon appeal by BMSI, the NLRC reversed the decision of have confined itself to the allegations in the complaint and should
the Labor Arbiter and dismissed respondent’s complaint on the have also considered evidence aliunde in resolving petitioner’s
ground of lack of jurisdiction.6 Respondent elevated the case to omnibus motion, it found the evidence presented by petitioner,
this Court but was dismissed in a Resolution dated 26 November that is, the deposition of Walter Browning, insufficient for
1997. The Resolution became final and executory on 09 purposes of determining whether the complaint failed to state a
November 1998. cause of action. The appellate court also stated that it could not
rule one way or the other on the issue of whether the
On 8 January 1999, respondent, then a resident of La Union, corporations, including petitioner, named as defendants in the
instituted an action for damages before the Regional Trial Court case had indeed merged together based solely on the evidence
(RTC) of Bauang, La Union. The Complaint,7 docketed as Civil presented by respondent. Thus, it held that the issue should be
Case No. 1192-BG, named as defendants herein petitioner threshed out during trial.23 Moreover, the appellate court
Raytheon International, Inc. as well as BMSI and RUST, the two deferred to the discretion of the trial court when the latter
corporations impleaded in the earlier labor case. The complaint decided not to desist from assuming jurisdiction on the ground of
essentially reiterated the allegations in the labor case that BMSI the inapplicability of the principle of forum non conveniens.
verbally employed respondent to negotiate the sale of services in
government projects and that respondent was not paid the Hence, this petition raising the following issues:
commissions due him from the Pinatubo dredging project which
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
he secured on behalf of BMSI. The complaint also averred that
REFUSING TO DISMISS THE COMPLAINT FOR FAILURE
BMSI and RUST as well as petitioner itself had combined and TO STATE A CAUSE OF ACTION AGAINST RAYTHEON
functioned as one company.
INTERNATIONAL, INC.
In its Answer,8 petitioner alleged that contrary to respondent’s
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
claim, it was a foreign corporation duly licensed to do business in
REFUSING TO DISMISS THE COMPLAINT ON THE
the Philippines and denied entering into any arrangement with
GROUND OF FORUM NON CONVENIENS.24
respondent or paying the latter any sum of money. Petitioner also
denied combining with BMSI and RUST for the purpose of Incidentally, respondent failed to file a comment despite
assuming the alleged obligation of the said companies.9 Petitioner repeated notices. The Ceferino Padua Law Office, counsel on
also referred to the NLRC decision which disclosed that per the record for respondent, manifested that the lawyer handling the
written agreement between respondent and BMSI and RUST, case, Atty. Rogelio Karagdag, had severed relations with the law
denominated as "Special Sales Representative Agreement," the firm even before the filing of the instant petition and that it could
rights and obligations of the parties shall be governed by the laws no longer find the whereabouts of Atty. Karagdag or of

11
respondent despite diligent efforts. In a Resolution25 dated 20 elsewhere.34 Petitioner’s averments of the foreign elements in the
November 2006, the Court resolved to dispense with the filing of instant case are not sufficient to oust the trial court of its
a comment. jurisdiction over Civil Case No. No. 1192-BG and the parties
involved.
The instant petition lacks merit.
Moreover, the propriety of dismissing a case based on the
Petitioner mainly asserts that the written contract between
principle of forum non conveniens requires a factual
respondent and BMSI included a valid choice of law clause, that
determination; hence, it is more properly considered as a matter
is, that the contract shall be governed by the laws of the State of of defense. While it is within the discretion of the trial court to
Connecticut. It also mentions the presence of foreign elements in
abstain from assuming jurisdiction on this ground, it should do so
the dispute – namely, the parties and witnesses involved are
only after vital facts are established, to determine whether
American corporations and citizens and the evidence to be
special circumstances require the court’s desistance.35
presented is located outside the Philippines – that renders our
local courts inconvenient forums. Petitioner theorizes that the Finding no grave abuse of discretion on the trial court, the Court
foreign elements of the dispute necessitate the immediate of Appeals respected its conclusion that it can assume
application of the doctrine of forum non conveniens. jurisdiction over the dispute notwithstanding its foreign
elements. In the same manner, the Court defers to the sound
Recently in Hasegawa v. Kitamura,26 the Court outlined three
discretion of the lower courts because their findings are binding
consecutive phases involved in judicial resolution of conflicts-of-
on this Court.
laws problems, namely: jurisdiction, choice of law, and
recognition and enforcement of judgments. Thus, in the Petitioner also contends that the complaint in Civil Case No.
instances27 where the Court held that the local judicial machinery 1192-BG failed to state a cause of action against petitioner.
was adequate to resolve controversies with a foreign element, the Failure to state a cause of action refers to the insufficiency of
following requisites had to be proved: (1) that the Philippine allegation in the pleading.36 As a general rule, the elementary test
Court is one to which the parties may conveniently resort; (2) for failure to state a cause of action is whether the complaint
that the Philippine Court is in a position to make an intelligent alleges facts which if true would justify the relief demanded.37
decision as to the law and the facts; and (3) that the Philippine
The complaint alleged that petitioner had combined with BMSI
Court has or is likely to have the power to enforce its decision.28
and RUST to function as one company. Petitioner contends that
On the matter of jurisdiction over a conflicts-of-laws problem the deposition of Walter Browning rebutted this allegation. On
where the case is filed in a Philippine court and where the court this score, the resolution of the Court of Appeals is instructive,
has jurisdiction over the subject matter, the parties and the res, it thus:
may or can proceed to try the case even if the rules of conflict-of-
x x x Our examination of the deposition of Mr. Walter
laws or the convenience of the parties point to a foreign forum.
Browning as well as other documents produced in the
This is an exercise of sovereign prerogative of the country where
hearing shows that these evidence aliunde are not quite
the case is filed.29
sufficient for us to mete a ruling that the complaint fails
Jurisdiction over the nature and subject matter of an action is to state a cause of action.
conferred by the Constitution and the law30 and by the material
Annexes "A" to "E" by themselves are not substantial,
allegations in the complaint, irrespective of whether or not the
plaintiff is entitled to recover all or some of the claims or reliefs convincing and conclusive proofs that Raytheon
Engineers and Constructors, Inc. (REC) assumed the
sought therein.31 Civil Case No. 1192-BG is an action for damages
warranty obligations of defendant Rust International in
arising from an alleged breach of contract. Undoubtedly, the
the Makar Port Project in General Santos City, after Rust
nature of the action and the amount of damages prayed are
International ceased to exist after being absorbed by
within the jurisdiction of the RTC.
REC. Other documents already submitted in evidence
As regards jurisdiction over the parties, the trial court acquired are likewise meager to preponderantly conclude that
jurisdiction over herein respondent (as party plaintiff) upon the Raytheon International, Inc., Rust International[,] Inc.
filing of the complaint. On the other hand, jurisdiction over the and Brand Marine Service, Inc. have combined into one
person of petitioner (as party defendant) was acquired by its company, so much so that Raytheon International, Inc.,
voluntary appearance in court.32 the surviving company (if at all) may be held liable for
the obligation of BMSI to respondent Rouzie for unpaid
That the subject contract included a stipulation that the same
commissions. Neither these documents clearly speak
shall be governed by the laws of the State of Connecticut does not
otherwise.38
suggest that the Philippine courts, or any other foreign tribunal
for that matter, are precluded from hearing the civil action. As correctly pointed out by the Court of Appeals, the question of
Jurisdiction and choice of law are two distinct concepts. whether petitioner, BMSI and RUST merged together requires the
Jurisdiction considers whether it is fair to cause a defendant to presentation of further evidence, which only a full-blown trial on
travel to this state; choice of law asks the further question the merits can afford.
whether the application of a substantive law which will
WHEREFORE, the instant petition for review on certiorari
determine the merits of the case is fair to both parties. 33 The
is DENIED. The Decision and Resolution of the Court of Appeals
choice of law stipulation will become relevant only when the
in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs against
substantive issues of the instant case develop, that is, after
petitioner.
hearing on the merits proceeds before the trial court.
SO ORDERED.
Under the doctrine of forum non conveniens, a court, in conflicts-
of-laws 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
12
In a Motion to Dismiss filed on December 14, 1984, the
defendants seek the dismissal of the complaint on two grounds,
G.R. No. 72494 August 11, 1989
namely:
HONGKONG AND SHANGHAI BANKING
1. That the court has no jurisdiction over the subject matter of the
CORPORATION, petitioner,
complaint; and
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE 2. That the court has no jurisdiction over the persons of the
INTERMEDIATE APPELLATE COURT, respondents. defendants.
Quiason, Makalintal, Barot & Torres for petitioner. In the light of the Opposition thereto filed by plaintiff, the Court
finds no merit in the motion. "On the first ground, defendants
Alejandro, Aranzaso & Associates for private respondents.
claim that by virtue of the provision in the Guarantee (the
actionable document) which reads —

MEDIALDEA, J.: This guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may be
This is a petition for review on certiorari of the decision of the enforced in accordance with the laws of the Republic of
Intermediate Appellate Court (now Court of Appeals) dated Singapore. We hereby agree that the courts in Singapore shall
August 2, 1985, which reversed the order of the Regional Trial have jurisdiction over all disputes arising under this guarantee,
Court dated February 28,1985 denying the Motion to Dismiss
filed by private respondents Jack Robert Sherman and Deodato the Court has no jurisdiction over the subject matter of the case.
Reloj. The Court finds and concludes otherwise. There is nothing in the
Guarantee which says that the courts of Singapore shall have
A complaint for collection of a sum of money (pp. 49-52, Rollo) jurisdiction to the exclusion of the courts of other countries or
was filed by petitioner Hongkong and Shanghai Banking nations. Also, it has long been established in law and
Corporation (hereinafter referred to as petitioner BANK) against jurisprudence that jurisdiction of courts is fixed by law; it cannot
private respondents Jack Robert Sherman and Deodato Reloj, be conferred by the will, submission or consent of the parties.
docketed as Civil Case No. Q-42850 before the Regional Trial
Court of Quezon City, Branch 84. On the second ground, it is asserted that defendant Robert' ,
Sherman is not a citizen nor a resident of the Philippines. This
It appears that sometime in 1981, Eastern Book Supply Service argument holds no water. Jurisdiction over the persons of
PTE, Ltd. (hereinafter referred to as COMPANY), a company defendants is acquired by service of summons and copy of the
incorporated in Singapore applied with, and was granted by, the complaint on them. There has been a valid service of summons
Singapore branch of petitioner BANK an overdraft facility in the on both defendants and in fact the same is admitted when said
maximum amount of Singapore dollars 200,000.00 (which defendants filed a 'Motion for Extension of Time to File
amount was subsequently increased to Singapore dollars Responsive Pleading on December 5, 1984.
375,000.00) with interest at 3% over petitioner BANK prime rate,
payable monthly, on amounts due under said overdraft facility; as WHEREFORE, the Motion to Dismiss is hereby DENIED.
a security for the repayment by the COMPANY of sums advanced
SO ORDERED.
by petitioner BANK to it through the aforesaid overdraft facility,
on October 7, 1982, both private respondents and a certain Robin A motion for reconsideration of the said order was filed by
de Clive Lowe, all of whom were directors of the COMPANY at private respondents which was, however, denied (p. 66,Rollo).
such time, executed a Joint and Several Guarantee (p. 53, Rollo) in
Private respondents then filed before the respondent
favor of petitioner BANK whereby private respondents and Lowe
Intermediate Appellate Court (now Court of Appeals) a petition
agreed to pay, jointly and severally, on demand all sums owed by
for prohibition with preliminary injunction and/or prayer for a
the COMPANY to petitioner BANK under the aforestated
restraining order (pp. 39-48, Rollo). On August 2, 1985, the
overdraft facility.
respondent Court rendered a decision (p. 37, Rollo), the
The Joint and Several Guarantee provides, inter alia, that: dispositive portion of which reads:
This guarantee and all rights, obligations and liabilities arising WHEREFORE, the petition for prohibition with preliminary
hereunder shall be construed and determined under and may be injuction is hereby GRANTED. The respondent Court is enjoined
enforced in accordance with the laws of the Republic of from taking further cognizance of the case and to dismiss the
Singapore. We hereby agree that the Courts of Singapore shall same for filing with the proper court of Singapore which is the
have jurisdiction over all disputes arising under this guarantee. ... proper forum. No costs.
(p. 33-A, Rollo).
SO ORDERED.
The COMPANY failed to pay its obligation. Thus, petitioner BANK
The motion for reconsideration was denied (p. 38, Rollo), hence,
demanded payment of the obligation from private respondents,
conformably with the provisions of the Joint and Several the present petition.
Guarantee. Inasmuch as the private respondents still failed to The main issue is whether or not Philippine courts have
pay, petitioner BANK filed the above-mentioned complaint. jurisdiction over the suit.
On December 14,1984, private respondents filed a motion to The controversy stems from the interpretation of a provision in
dismiss (pp 54-56, Rollo) which was opposed by petitioner BANK the Joint and Several Guarantee, to wit:
(pp. 58-62, Rollo). Acting on the motion, the trial court issued an
order dated February 28, 1985 (pp, 64-65, Rollo), which read as (14) This guarantee and all rights, obligations and liabilites
follows: arising hereunder shall be construed and determined under and
may be enforced in accordance with the laws of the Republic of

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Singapore. We hereby agree that the Courts in Singapore shall The defense of private respondents that the complaint should
have jurisdiction over all disputes arising under this guarantee. ... have been filed in Singapore is based merely on technicality. They
(p. 53-A, Rollo) did not even claim, much less prove, that the filing of the action
here will cause them any unnecessary trouble, damage, or
In rendering the decision in favor of private respondents, the
expense. On the other hand, there is no showing that petitioner
Court of Appeals made, the following observations (pp. 35-
BANK filed the action here just to harass private respondents.
36, Rollo):
In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033,
There are significant aspects of the case to which our attention is October 31, 1969, 30 SCRA 187, it was ruled:
invited. The loan was obtained by Eastern Book Service PTE, Ltd.,
a company incorporated in Singapore. The loan was granted by ... An accurate reading, however, of the stipulation, 'The parties
the Singapore Branch of Hongkong and Shanghai Banking agree to sue and be sued in the Courts of Manila,' does not
Corporation. The Joint and Several Guarantee was also concluded preclude the filing of suits in the residence of plaintiff or
in Singapore. The loan was in Singaporean dollars and the defendant. The plain meaning is that the parties merely
repayment thereof also in the same currency. The transaction, to consented to be sued in Manila. Qualifying or restrictive words
say the least, took place in Singporean setting in which the law of which would indicate that Manila and Manila alone is the venue
that country is the measure by which that relationship of the are totally absent therefrom. We cannot read into that clause that
parties will be governed. plaintiff and defendant bound themselves to file suits with
respect to the last two transactions in question only or
xxx xxx xxx
exclusively in Manila. For, that agreement did not change or
Contrary to the position taken by respondents, the guarantee transfer venue. It simply is permissive. The parties solely agreed
agreement compliance that any litigation will be before the to add the courts of Manila as tribunals to which they may resort.
courts of Singapore and that the rights and obligations of the They did not waive their right to pursue remedy in the courts
parties shall be construed and determined in accordance with the specifically mentioned in Section 2(b) of Rule 4. Renuntiatio non
laws of the Republic of Singapore. A closer examination of praesumitur.
paragraph 14 of the Guarantee Agreement upon which the
This ruling was reiterated in the case of Neville Y. Lamis Ents., et
motion to dismiss is based, employs in clear and unmistakeable
al. v. Lagamon, etc., et al., G.R. No. 57250, October 30, 1981, 108
(sic) terms the word 'shall' which under statutory construction is
SCRA 740, where the stipulation was "[i]n case of litigation,
mandatory.
jurisdiction shall be vested in the Court of Davao City." We held:
Thus it was ruled that:
Anent the claim that Davao City had been stipulated as the venue,
... the word 'shall' is imperative, operating to impose a duty which suffice it to say that a stipulation as to venue does not preclude
may be enforced (Dizon vs. Encarnacion, 9 SCRA 714).lâwphî1.ñèt the filing of suits in the residence of plaintiff or defendant under
Section 2 (b), Rule 4, Rules of Court, in the absence of qualifying
There is nothing more imperative and restrictive than what the or restrictive words in the agreement which would indicate that
agreement categorically commands that 'all rights, obligations, the place named is the only venue agreed upon by the parties.
and liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance with Applying the foregoing to the case at bar, the parties did not
the laws of the Republic of Singapore.' thereby stipulate that only the courts of Singapore, to the
exclusion of all the rest, has jurisdiction. Neither did the clause in
While it is true that "the transaction took place in Singaporean question operate to divest Philippine courts of jurisdiction. In
setting" and that the Joint and Several Guarantee contains a International Law, jurisdiction is often defined as the light of a
choice-of-forum clause, the very essence of due process dictates State to exercise authority over persons and things within its
that the stipulation that "[t]his guarantee and all rights, boundaries subject to certain exceptions. Thus, a State does not
obligations and liabilities arising hereunder shall be construed assume jurisdiction over travelling sovereigns, ambassadors and
and determined under and may be enforced in accordance with diplomatic representatives of other States, and foreign military
the laws of the Republic of Singapore. We hereby agree that the units stationed in or marching through State territory with the
Courts in Singapore shall have jurisdiction over all disputes permission of the latter's authorities. This authority, which finds
arising under this guarantee" be liberally construed. One basic its source in the concept of sovereignty, is exclusive within and
principle underlies all rules of jurisdiction in International Law: a throughout the domain of the State. A State is competent to take
State does not have jurisdiction in the absence of some hold of any judicial matter it sees fit by making its courts and
reasonable basis for exercising it, whether the proceedings are in agencies assume jurisdiction over all kinds of cases brought
rem quasi in rem or in personam. To be reasonable, the before them (J. Salonga, Private International Law, 1981, pp. 37-
jurisdiction must be based on some minimum contacts that will 38).lâwphî1.ñèt
not offend traditional notions of fair play and substantial justice
(J. Salonga, Private International Law, 1981, p. 46). Indeed, as As regards the issue on improper venue, petitioner BANK avers
pointed-out by petitioner BANK at the outset, the instant case that the objection to improper venue has been waived. However,
presents a very odd situation. In the ordinary habits of life, We agree with the ruling of the respondent Court that:
anyone would be disinclined to litigate before a foreign tribunal,
While in the main, the motion to dismiss fails to categorically use
with more reason as a defendant. However, in this case, private
with exactitude the words 'improper venue' it can be perceived
respondents are Philippine residents (a fact which was not
from the general thrust and context of the motion that what is
disputed by them) who would rather face a complaint against
meant is improper venue, The use of the word 'jurisdiction' was
them before a foreign court and in the process incur considerable
merely an attempt to copy-cat the same word employed in the
expenses, not to mention inconvenience, than to have a
guarantee agreement but conveys the concept of venue. Brushing
Philippine court try and resolve the case. Private respondents'
aside all technicalities, it would appear that jurisdiction was used
stance is hardly comprehensible, unless their ultimate intent is to
evade, or at least delay, the payment of a just obligation.
14
loosely as to be synonymous with venue. It is in this spirit that
this Court must view the motion to dismiss. ... (p. 35, Rollo).
At any rate, this issue is now of no moment because We hold that
venue here was properly laid for the same reasons discussed
above.
The respondent Court likewise ruled that (pp. 36-37, Rollo):
... In a conflict problem, a court will simply refuse to entertain the
case if it is not authorized by law to exercise jurisdiction. And
even if it is so authorized, it may still refuse to entertain the case
by applying the principle of forum non conveniens. ...
However, whether a suit should be entertained or dismissed on
the basis of the principle of forum non conveniensdepends largely
upon the facts of the particular case and is addressed to the
sound discretion of the trial court (J. Salonga, Private
International Law, 1981, p. 49).lâwphî1.ñèt Thus, the respondent
Court should not have relied on such principle.
Although the Joint and Several Guarantee prepared by petitioner
BANK is a contract of adhesion and that consequently, it cannot
be permitted to take a stand contrary to the stipulations of the
contract, substantial bases exist for petitioner Bank's choice of
forum, as discussed earlier.
Lastly, private respondents allege that neither the petitioner
based at Hongkong nor its Philippine branch is involved in the
transaction sued upon. This is a vain attempt on their part to
further thwart the proceedings below inasmuch as well-known is
the rule that a defendant cannot plead any defense that has not
been interposed in the court below.
ACCORDINGLY, the decision of the respondent Court is hereby
REVERSED and the decision of the Regional Trial Court is
REINSTATED, with costs against private respondents. This
decision is immediately executory.
SO ORDERED.

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