!.

BANCODO BRASIL VS CA

Rule 14, Section 15 - Banco do Brasil vs Court of Appeals 333 SCRA 545 (June 16, 2000)
Ponente: Justice De Leon
Facts:
M/V Star Ace a vessel owned and operated by Poro Point Shipping Services (PPSS) ran
aground in La Union during a typhoon. In 1989, Cesar Urbino, Sr. sued PPSS for damages. He
also impleaded Banco do Brasil (BDB) for the sole reason that it has a claim over the ship. BDB
is a foreign corporation not engaged in business in the Philippines. The Trial court ruled in favor
of Urbino. BDB appealed arguing that there was no valid service of summons because the
same was issued to the ambassador of Brazil and that summon through publication was
inapplicable to it as the action against them is an action in personam.

Issue: Whether or not the summons were properly issued.

Held: The summons was not properly issued. When the defendant is a non-resident and he is
not found in the country, summons may be served extraterritorially in accordance with Rule 14,
Section 17 (now section 15) of the Rules of Court. Under this provision, there are only four (4)
instances when extraterritorial service of summons is proper, namely: "(1) when the action
affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of
which is property, within the Philippines, in which the defendant claims a lien or interest, actual
or contingent; (3) when the relief demanded in such action consists, wholly or in part, in
excluding the defendant from any interest in property located in the Philippines; and (4) when
the defendant non-resident’s property has been attached within the Philippines." In these
instances, service of summons may be effected by (a) personal service out of the country, with
leave of court; (b) publication, also with leave of court; or (c) any other manner the court may
deem sufficient. Extrajudicial services of summons apply only where the action is in rem.
However, where the action is in personam, jurisdiction over the person of the defendant is
necessary for the court to validly try and decide the case. When the defendant is a non-
resident, personal service of summons within the state is essential to the acquisition of
jurisdiction over the person. This cannot be done, however, if the defendant is not physically
present in the country, and thus, the court cannot acquire jurisdiction over his person and
therefore cannot validly try and decide the case against him. In the present case, the relief
demanded went beyond the res by making a claim for damages, thus, converting the
respondent’s action into an action in personam. Bearing in mind the in personam nature of
the action, personal or, if not possible, substituted service of summons on petitioner, and not
extraterritorial service, is necessary to confer jurisdiction over the person of petitioner and
validly hold it liable to private respondent for damages.

333 SCRA 545 – Conflict of Laws – Private International Law – Service of Summons in In
Personam Cases
In 1989, Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former incurred
when one of the latterʼs ship ran aground causing losses to Urbino. Urbino impleaded Banco
Do Brasil (BDB), a foreign corporation not engaged in business in the Philippines nor does it
have any office here or any agent. BDB was impleaded simply because it has a claim over the
sunken ship. BDB however failed to appear multiple times. Eventually, a judgment was rendered
and BDB was adjudged to pay $300,000.00 in damages in favor of Urbino for BDB being a
nuisance defendant.
BDB assailed the said decision as it argued that there was no valid service of summons
because the summons was issued to the ambassador of Brazil. Further, the other summons
which were made through publication is not applicable to BDB as it alleged that the action
against them is in personam.

ISSUE: Whether or not the court acquired jurisdiction over Banco Do Brasil.

HELD: No. Banco Do Brasil is correct. Although the suit is originally in rem as it was BDBʼs
claim on the sunken ship which was used as the basis for it being impleaded, the action
nevertheless became an in personam one when Urbino asked for damages in the said amount.
As such, only a personal service of summons would have vested the court jurisdiction over
BDB. Where the action is in personam, one brought against a person on the basis of his
personal liability, jurisdiction over the person of the defendant is necessary for the court to
validly try and decide the case. When the defendant is a non-resident, personal service of
summons within the state is essential to the acquisition of jurisdiction over the person. This
cannot be done, however, if the defendant is not physically present in the country, and thus,
the court cannot acquire jurisdiction over his person and therefore cannot validly try and
decide the case against him.

f. Bank Of America V. CA (2003)

G.R. No. 120135           March 31, 2003

Lessons Applicable: forum non conveniens (conflicts of laws)
FACTS:
● Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas) were engaged in the
shipping business owning 2 vessels: Don Aurelio and El Champion
● Because their business where doing well, Bank of America (BA) offered them to
take a loan for them to increase their ships.  
● BA acquired through them as borrowers four more ships: (a) El Carrier; (b) El
General; (c) El Challenger; and (d) El Conqueror.  The registration, operation, income,
funds, possession of the vessel belonged to the corporation.
● May 10, 1993: Litonjuas filed a complaint to the RTC Pasig claming that during its
operations and the foreclosure sale, BA as trutees failed to fully render an account of the
income.  They lost all their 6 vessels and 10% of their personal funds and they still have an
unpaid balance of their loans.
● BA NT&SA, and BA international filed a Motion to Dismiss on grounds of forum
non conveniens and lack of cause of action against them
● RTC and CA: Dismissed
ISSUE: 
1. W/N there is grounds of forum non conveniens
2. W/N there is litis pendentia

HELD: Denied

1. NO.
● The doctrine of forum non-conveniens, literally meaning 'the forum is
inconvenient', emerged in private international law to deter the practice of global forum
shopping
● Under this doctrine, 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.
● Whether a suit should be entertained or dismissed on the basis of said doctrine
depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court.
● Philippine Court may assume jurisdiction over the case 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; - present
○ (2) that the Philippine Court is in a position to make an intelligent decision as
to the law and the facts; and, - present
○ (3) that the Philippine Court has or is likely to have power to enforce its
decision - present
● This Court further ruled that while it is within the discretion of the trial court to
abstain from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the court's desistance;
and that the propriety of dismissing a case based on this principle of forum non
conveniens requires a factual determination, hence it is more properly considered a
matter of defense
2. NO.
● litis pendentia to be a ground for the dismissal of an action there must be:
○ (a) identity of the parties or at least such as to represent the same interest
in both actions -present
○ (b) identity of rights asserted and relief prayed for, the relief being founded
on the same acts - not shown
○ (c) the identity in the two cases should be such that the judgment which
may be rendered in one would, regardless of which party is successful, amount to
res judicata in the other - not shown
● It merely mentioned that civil cases were filed in Hongkong and England 
 p. ANTONIO Y. CO v. ELECTORAL TRIBUNAL OF HOUSE OF REPRESENTATIVES, GR Nos.
92191-92, 1991-07-30
Facts:
petitioners come to this Court asking for the setting aside and reversal of a decision of the
(HRET).
HRET declared that respondent Jose Ong, Jr. is a natural born Filipino citizen and a resident of
Northern Samar
Northern Samar for voting purposes.
On
1987, the congressional election for the second district of Northern Samar was held.
Among the candidates who vied for the position of representative... are the petitioners, Sixto
Balinquit and Antonio Co and the private respondent, Jose Ong,... Jr.
Respondent Ong was proclaimed the duly elected representative of the second district of
Northern Samar.
petitioners filed election protests against the private respondent premised on the following
grounds:
1)      Jose Ong, Jr. is not a natural born citizen of the Philippines; and
2)      Jose Ong, Jr. is not a resident of the second district of Northern Samar
2)      Jose Ong, Jr. is not a resident of the second district of Northern Samar.

Issues:
whether or not, in making that determination, the HRET acted with grave abuse of discretion.

ON THE ISSUE OF CITIZENSHIP

Ruling:
The records show that in the year 1895, the private respondent's grandfather, Ong Te, arrived
in the Philippines from China.
To expect the respondent to have formally or in writing elected citizenship when he came of
age is to ask for the unnatural and unnecessary.  The reason is obvious.  He was already a
citizen.  Not only was his mother a... natural born citizen but his father had been naturalized
when the respondent was only nine (9) years old.
The private respondent did more than merely exercise his right of suffrage.  He has established
his life here in the Philippines.
For those in the peculiar situation of the respondent who cannot be expected to have elected
citizenship as they were already citizens, we apply the In Re Mallare rule.
The filing of a sworn statement or formal declaration is a requirement for those who still have
to elect citizenship.  For those already Filipinos when the time to elect came up, there are acts
of deliberate choice which cannot be... less binding.  Entering a profession open only to
Filipinos, serving in public office where citizenship is a qualification, voting during election
time, running for public office, and other categorical acts of similar nature are themselves
formal manifestations... of choice for these persons.
An election of Philippine citizenship presupposes that the person electing is an alien.  Or his
status is doubtful because he is a national of two countries.  There is no doubt in this case
about Mr. Ong's being a Filipino when... he turned twenty-one (21).
We repeat that any election of Philippine citizenship on the part of the private respondent
would not only have been superfluous but it would also have resulted in an absurdity.  How can
a Filipino citizen elect Philippine citizenship?
The respondent HRET has an interesting view as to how Mr. Ong elected citizenship.  It
observed that "when protestee was only nine years of age, his father, Jose Ong Chuan became
a naturalized
Filipino.  Section 15 of the Revised Naturalization Act squarely applies its benefit to him for he
was then a minor residing in this country.  Concededly, it was the law itself that had... already
elected Philippine citizenship for protestee by declaring him as such."

s. KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., vs 

MINORU KITAMURA

G.R. No. 149177

November 23, 2007
 
FACTS:

Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing

technical and management support in the infrastructure projects national permanently
residing in the Philippines. The agreement provides that Kitamaru was to extend
professional services to Nippon for a year. Nippon assigned Kitamaru to work as the
project manager of the Southern Tagalog Access Road (STAR) project. When the STAR
project was near completion, DPWH engaged the consultancy services of Nippon, this
time for the detailed engineering & construction supervision of the Bongabon-Baler
Road Improvement (BBRI) Project. Kitamaru was named as the project manger in the
contract.

Hasegawa, Nipponʼs general manager for its International Division, informed Kitamaru
that the company had no more intention of automatically renewing his ICA. His services
would be engaged by the company only up to the substantial completion of the STAR
Project.

Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted that
Kitamaruʼs contract was for a fixed term that had expired. Kitamaru then filed for
specific performance & damages w/ the RTC of Lipa City. Nippon filed a MTD.

Nipponʼs contention: The ICA had been perfected in Japan & executed by & between
Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The claim for
improper pre-termination of Kitamaruʼs ICA could only be heard & ventilated in the
proper courts of Japan following the principles of lex loci celebrationis & lex
contractus.
The RTC denied the motion to dismiss. The CA ruled hat the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the pleadings was the
validity of the written agreement put in issue. It held that the RTC was correct in
applying the principle of lex loci solutionis.

ISSUE:

Whether or not the subject matter jurisdiction of Philippine courts in civil cases for
specific performance & damages involving contracts executed outside the country by
foreign nationals may be assailed on the principles of lex loci celebrationis, lex
contractus, “the state of the most significant relationship rule,” or forum non
conveniens.

HELD:

NO. In the judicial resolution of conflicts problems, 3 consecutive phases are involved:
jurisdiction, choice of law, and recognition and enforcement of judgments. Jurisdiction
& choice of law are 2 distinct concepts. Jurisdiction considers whether it is fair to
cause a defendant to travel to this state; choice of law asks the further question
whether the application of a substantive law w/c will determine the merits of the case
is fair to both parties. The power to exercise jurisdiction does not automatically give a
state constitutional authority to apply forum law. While jurisdiction and the choice of
the lex fori will often coincide, the “minimum contacts” for one do not always provide
the necessary “significant contacts” for the other. The question of whether the law of a
state can be applied to a transaction is different from the question of whether the
courts of that state have jurisdiction to enter a judgment.

In this case, only the 1st phase is at issue—jurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy, it
must have jurisdiction over the plaintiff/petitioner, over the defendant/respondent,
over the subject matter, over the issues of the case and, in cases involving property,
over the res or the thing w/c is the subject of the litigation. In assailing the trial court's
jurisdiction herein, Nippon is actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the

sovereign authority w/c establishes and organizes the court. It is given only by law and
in the manner prescribed by law. It is further determined by the allegations of the
complaint irrespective of whether the plaintiff is entitled to all or some of the claims
asserted therein. To succeed in its motion for the dismissal of an action for lack of
jurisdiction over the subject matter of the claim, the movant must show that the court
or tribunal cannot act on the matter submitted to it because no law grants it the power
to adjudicate the claims.

In the instant case, Nippon, in its MTD, does not claim that the RTC is not properly
vested by law w/ jurisdiction to hear the subject controversy for a civil case for specific
performance & damages is one not capable of pecuniary estimation & is properly
cognizable by the RTC of Lipa City. What they rather raise as grounds to question
subject matter jurisdiction are the principles of lex loci celebrationis and lex
contractus, and the “state of the most significant relationship rule.” The Court finds
the invocation of these grounds unsound.

Lex loci celebrationis relates to the “law of the place of the ceremony” or the law of the
place where a contract is made. The doctrine of lex contractus  or lex loci contractus
means the “law of the place where a contract is executed or to be performed.” It
controls the nature, construction, and validity of the contract and it may pertain to the
law voluntarily agreed upon by the parties or the law intended by them either expressly
or implicitly. 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. This rule takes into account several contacts and evaluates them according to
their relative importance with respect to the particular issue to be resolved.

Since these 3 principles in conflict of laws make reference to the law applicable to a
dispute, they are rules proper for the 2nd phase, the choice of law. They determine
which state's law is to be applied in resolving the substantive issues of a conflicts
problem. 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, Nipponʼs premature invocation of choice-of-law rules is exposed by the fact

that they have not yet pointed out any conflict between the laws of Japan and ours.
Before determining which law should apply, 1st there should exist a conflict of laws
situation requiring the application of the conflict of laws rules. Also, when the law of a
foreign country is invoked to provide the proper rules for the solution of a case, the
existence of such law must be pleaded and proved.

It should be noted that when a conflicts case, one involving a foreign element, is
brought before a court or administrative agency, there are 3 alternatives open to the
latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or
refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and
apply the internal law of the forum; or (3) assume jurisdiction over the case and take
into account or apply the law of some other State or States. The courtʼs power to hear
cases and controversies is derived from the Constitution and the laws. While it may
choose to recognize laws of foreign nations, the court is not limited by foreign
sovereign law short of treaties or other formal agreements, even in matters regarding
rights provided by foreign sovereigns.

Neither can the other ground raised, forum non conveniens, be used to deprive the RTC
of its jurisdiction. 1st, it is not a proper basis for a motion to dismiss because Sec. 1,
Rule 16 of the Rules of Court does not include it as a ground. 2nd, whether a suit
should be entertained or dismissed on the basis of the said doctrine depends largely
upon the facts of the particular case and is addressed to the sound discretion of the
RTC. In this case, the RTC decided to assume jurisdiction. 3rd, the propriety of
dismissing a case based on this principle requires a factual determination; hence, this
conflicts principle is more properly considered a matter of defense

u. HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC) vs. SHERMAN et al

G.R. No. 72494
August 11, 1989

FACTS: It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (COMPANY),
a company incorporated in Singapore applied with and was granted by HSBC Singapore branch
an overdraft facility in the maximum amount of Singapore dollars 200,000 with interest at 3%
over HSBC prime rate, payable monthly, on amounts due under said overdraft facility.
As a security for the repayment by the COMPANY of sums advanced by HSBC to it through the
aforesaid overdraft facility, in 1982, both private respondents and a certain Lowe, all of whom
were directors of the COMPANY at such time, executed a Joint and Several Guarantee in favor
of HSBC whereby private respondents and Lowe agreed to pay, jointly and severally, on
demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft
facility.
The Joint and Several Guarantee provides, inter alia, that:
This guarantee and all rights, obligations and liabilities arising hereunder shall be construed
and determined under and may be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts of Singapore shall have jurisdiction over all
disputes arising under this guarantee. …
The COMPANY failed to pay its obligation. Thus, HSBC demanded payment and inasmuch as
the private respondents still failed to pay, HSBC filed A complaint for collection of a sum of
money against private respondents Sherman and Reloj before RTC of Quezon City.
Private respondents filed an MTD on the ground of lack of jurisdiction over the subject matter.
The trial court denied the motion. They then filed before the respondent IAC a petition for
prohibition with preliminary injunction and/or prayer for a restraining order. The IAC rendered a
decision enjoining the RTC Quezon City from taking further cognizance of the case and to
dismiss the same for filing with the proper court of Singapore which is the proper forum. MR
denied, hence this petition.
ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the Guarantee stipulation
regarding jurisdiction?
HELD: YES
One basic principle underlies all rules of jurisdiction in International Law: a State does not have
jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings
are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on
some minimum contacts that will not offend traditional notions of fair play and substantial
justice
The defense of private respondents that the complaint should have been filed in Singapore is
based merely on technicality. They did not even claim, much less prove, that the filing of the
action here will cause them any unnecessary trouble, damage, or expense. On the other hand,
there is no showing that petitioner BANK filed the action here just to harass private
respondents.
**
In the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., where the stipulation was “[i]n
case of litigation, jurisdiction shall be vested in the Court of Davao City.” We held:
Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a
stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, ROC, in the absence of qualifying or restrictive words in
the agreement which would indicate that the place named is the only venue agreed upon by
the parties.
Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the
courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in
question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is
often defined as the light of a State to exercise authority over persons and things within its
boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over
travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign
military units stationed in or marching through State territory with the permission of the latterʼs
authorities. This authority, which finds its source in the concept of sovereignty, is exclusive
within and throughout the domain of the State. A State is competent to take hold of any judicial
matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases
brought before them
NOTES:
The respondent IAC likewise ruled that:
… 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 conveniens depends largely upon the facts of the particular case and is addressed
to the sound discretion of the trial court. Thus, the IAC should not have relied on such
principle.

x. Manila Hotel Corporation vs National Labor Relations Commission

Facts:
In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he was recruited
by Palace Hotel in Beijing, China. Due to higher pay and benefits, Santos agreed to the hotelʼs
job offer and so he started working there in November 1988. The employment contract
between him and Palace Hotel was however without the intervention of the Philippine Overseas
Employment Administration (POEA). In August 1989, Palace Hotel notified Santos that he will
be laid off due to business reverses. In September 1989, he was officially terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel Corporation
(MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was impleaded but no
summons were served upon it. MHC is a government owned and controlled corporation. It
owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL manages the affair of the Palace
Hotel. The labor arbiter who handled the case ruled in favor of Santos. The National Labor
Relations Commission (NLRC) affirmed the labor arbiter.

ISSUE: Whether or not the NLRC has jurisdiction over the case.

HELD: No. The NLRC is a very inconvenient forum for the following reasons:
1.    The only link that the Philippines has in this case is the fact that Santos is a Filipino;
2.    However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be held liable
because it merely owns 50% of MHIL, it has no direct business in the affairs of the Palace
Hotel. The veil of corporate fiction canʼt be pierced because it was not shown that MHC is
directly managing the affairs of MHIL. Hence, they are separate entities.
3.    Santosʼ contract with the Palace Hotel was not entered into in the Philippines;
4.    Santosʼ contract was entered into without the intervention of the POEA (had POEA
intervened, NLRC still does not have jurisdiction because it will be the POEA which will hear the
case);
5.    MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers
are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining to
the case. It is not competent to determine the facts because the acts complained of happened
outside our jurisdiction. It cannot determine which law is applicable. And in case a judgment is
rendered, it cannot be enforced against the Palace Hotel (in the first place, it was not served
any summons).
~. The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided:
•. (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.
!!. None of the above conditions are apparent in the case at bar.

~. NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED vs LEPANTO CONSOLIDATED

MINING COMPANY
G.R. No.  175799
November 28, 2011
FACTS:
On August 30, 2005, Lepanto Consolidated Mining Company filed with the Regional Trial Court
of Makati City a Complaint against NM Rothschild & Sons (Australia) Limited praying for a
judgment declaring the loan and hedging contracts between the parties void for being contrary
to Article 2018 of the Civil Code of the Philippines and for damages.
Upon respondentʼs motion, the trial court authorized respondentʼs counsel to personally bring
the summons and Complaint to the Philippine Consulate General in Sydney, Australia for the
latter office to effect service of summons on petitioner.
On October 20, 2005, petitioner filed a Special Appearance With Motion to Dismiss praying for
the dismissal of the Complaint on the grounds that the court has not acquired jurisdiction over
the person of petitioner due to the defective and improper service of summons; the Complaint
failed to state a cause of action; respondent does not have any against petitioner; and other
grounds.
On December 9, 2005, the trial court issued an Order denying the Motion to Dismiss providing
that there was a proper service of summons through the Department of Foreign Affairs on
account of the fact that the defendant has neither applied for a license to do business in the
Philippines, nor filed with the Securities and Exchange Commission a Written Power of Attorney
designating some person on whom summons and other legal processes maybe served.  The
trial court also held that the Complaint sufficiently stated a cause of action.  The other
allegations in the Motion to Dismiss were brushed aside as matters of defense which can best
be ventilated during the trial.
On April 3, 2006, petitioner sought redress via a Petition for Certiorari with the Court of
Appeals, alleging that the trial court committed grave abuse of discretion in denying its Motion
to Dismiss.  
On September 8, 2006, the Court of Appeals rendered the assailed Decision dismissing the
Petition for Certiorari.
Hence, petitioner filed the present petition assailing the Decision and Resolution of the Court
of Appeals.

ISSUE:
Whether or not the RTC is considered to have committed grave abuse of discretion amounting
to lack or excess of jurisdiction in the denial of the Motion to Dismiss on account of its failure
to acquire jurisdiction over the person of the defendant.

HELD:
Petitioner alleges that the RTC has not acquired jurisdiction over its person on account of the
improper service of summons.  Summons was served on petitioner through the DFA, with
respondentʼs counsel personally bringing the summons and Complaint to the Philippine
Consulate General in Sydney, Australia.
Respondent argues that extraterritorial service of summons upon foreign private juridical
entities is not proscribed under the Rules of Court.
Section 15, Rule 14, however, is the specific provision dealing precisely with the service of
summons on a defendant which does not reside and is not found in the Philippines.
Breaking down Section 15, Rule 14, it is apparent that there are only four instances wherein a
defendant who is a non-resident and is not found in the country may be served with summons
by extraterritorial service, to wit: (1) when the action affects the personal status of the
plaintiffs; (2) when the action relates to, or the subject of which is property, within the
Philippines, in which the defendant claims a lien or an interest, actual or contingent; (3) when
the relief demanded in such action consists, wholly or in part, in excluding the defendant from
any interest in property located in the Philippines; and (4) when the defendant non-resident's
property has been attached within the Philippines.  In these instances, service of summons
may be effected by (a) personal service out of the country, with leave of court; (b) publication,
also with leave of court; or (c) any other manner the court may deem sufficient.
Undoubtedly, extraterritorial service of summons applies only where the action is in
rem or quasi in rem, but not if an action is in personam. .  On the other hand, when the
defendant or respondent does not reside and is not found in the Philippines, and the action
involved is in personam, Philippine courts cannot try any case against him because of the
impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court
It is likewise settled that an action in personam is lodged against a person based on personal
liability; an action in rem is directed against the thing itself instead of the person; while an
action quasi in rem names a person as defendant, but its object is to subject that personʼs
interest in a property to a corresponding lien or obligation.
The Complaint in the case at bar is an action to declare the loan and Hedging Contracts
between the parties void with a prayer for damages.  It is a suit in which the plaintiff seeks to
be freed from its obligations to the defendant under a contract and to hold said defendant
pecuniarily liable to the plaintiff for entering into such contract.  It is therefore an action in
personam, unless and until the plaintiff attaches a property within the Philippines belonging to
the defendant, in which case the action will be converted to onequasi in rem.
Since the action involved in the case at bar is in personam and since the defendant, petitioner
Rothschild/Investec, does not reside and is not found in the Philippines, the Philippine courts
cannot try any case against it because of the impossibility of acquiring jurisdiction over its
person unless it voluntarily appears in court
In this regard, respondent vigorously argues that petitioner should be held to have voluntarily
appeared before the trial court when it prayed for, and was actually afforded, specific reliefs
from the trial court.
The Court therefore rule that petitioner, by seeking affirmative reliefs from the trial court, is
deemed to have voluntarily submitted to the jurisdiction of said court.  A party cannot invoke
the jurisdiction of a court to secure affirmative relief against his opponent and after obtaining
or failing to obtain such relief, repudiate or question that same jurisdiction
Consequently, the trial court cannot be considered to have committed grave abuse of
discretion amounting to lack or excess of jurisdiction in the denial of the Motion to Dismiss on
account of failure to acquire jurisdiction over the person of the defendant.

Petition is DENIED

•. PHILSEC INVESTMENT CORPORATION v. CA, GR No. 103493, 1997-06-19

Facts:
On January 15, 1983, private respondent Ventura O. Ducat obtained separate loans from
petitioners Ayala International Finance Limited (hereafter called AYALA)[1] and Philsec
Investment Corporation (hereafter called PHILSEC) in the sum of US$2,500,000.00,... secured
by shares of stock owned by Ducat with a market value of P14,088,995.00. In order to facilitate
the payment of the loans, private respondent 1488, Inc., through its president, private
respondent Drago Daic, assumed Ducat's obligation under an Agreement, dated January 27,...
1983, whereby 1488, Inc. executed a Warranty Deed with Vendor's Lien by which it sold to
petitioner Athona Holdings, N.V. (hereafter called ATHONA) a parcel of land in Harris County,
Texas, U.S.A., for US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in
the... amount of US$2,500,000.00 as initial payment of the purchase price. The balance of
US$307,209.02 was to be paid by means of a promissory note executed by ATHONA in favor of
1488, Inc. Subsequently, upon their receipt of the US$2,500,000.00 from 1488, Inc., PHILSEC
and AYALA... released Ducat from his indebtedness and delivered to 1488, Inc. all the shares of
stock in their possession belonging to Ducat.
On April 10, 1987, while Civil Case No. H-86-440 was pending in the United States, petitioners
filed a complaint "For Sum of Money with Damages and Writ of Preliminary Attachment"
against private respondents in the Regional Trial Court of Makati, where it was docketed as
Civil
Case No. 16563.
The complaint reiterated the allegation of petitioners in their respective counterclaims in Civil
Action No. H-86-440 of the United States District Court of Southern Texas that private
respondents committed fraud by selling the property at a price 400 percent... more than its
true value of US$800,000.00.
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis
pendentia, vis-a-vis Civil Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2)
forum non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state a cause of...
action.
On the other hand, private respondents 1488, Inc. and its president Daic filed a joint "Special
Appearance and Qualified Motion to Dismiss," contending that the action being in personam,
extraterritorial service of summons by publication was ineffectual and did not... vest the court
with jurisdiction over 1488, Inc., which is a non-resident foreign corporation, and Daic, who is a
non-resident alien.

Issues:
the principal issue to be resolved in this case is whether Civil Case No. 16536 is barred by the
judgment of the U.S. court.

Ruling:
Private respondents contend that for a foreign judgment to be pleaded as res judicata, a
judgment admitting the foreign decision is not necessary. On the other hand, petitioners argue
that the foreign judgment cannot be given the effect of res judicata without giving them an...
opportunity to impeach it on grounds stated in Rule 39, §50 of the Rules of Court, to wit: "want
of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
Petitioners' contention is meritorious. While this Court has given the effect of res judicata to
foreign judgments in several cases,[7] it was after the parties opposed to the judgment had
been given ample opportunity to repel them on grounds allowed under... the law.[8] It is not
necessary for this purpose to initiate a separate action or proceeding for enforcement of the
foreign judgment. What is essential is that there is opportunity to challenge the foreign
judgment, in order for the court to properly... determine its efficacy. This is because in this
jurisdiction, with respect to actions in personam, as distinguished from actions in rem, a
foreign judgment merely constitutes prima facie evidence of the justness of the claim of a
party and, as such, is subject to proof to the... contrary.
In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the
judgment of the U.S. court as basis for declaring it res judicata or conclusive of the rights of
private respondents. The proceedings in the trial court were summary. Neither the... trial court
nor the appellate court was even furnished copies of the pleadings in the U.S. court or
apprised of the evidence presented thereat, to assure a proper determination of whether the
issues then being litigated in the U.S. court were exactly the issues raised in this... case such
that the judgment that might be rendered would constitute res judicata.
Nor is the trial court's refusal to take cognizance of the case justifiable under the principle of
forum non conveniens. First, a motion to dismiss is limited to the grounds under Rule 16, §1,
which does not include forum non conveniens.[16] The... propriety of dismissing a case based
on this principle requires a factual determination, hence, it is more properly considered a
matter of defense.
In this case, the trial court abstained from taking jurisdiction solely on the basis of the
pleadings filed by private respondents in connection with the motion to dismiss. It failed to
consider that one of the plaintiffs (PHILSEC) is a domestic corporation and one of the...
defendants (Ventura Ducat) is a Filipino, and that it was the extinguishment of the latter's debt
which was the object of the transaction under litigation. The trial court arbitrarily dismissed the
case even after finding that Ducat was not a party in the U.S. case.

€. Pioneer Concrete Philippines Inc v. Antonio D. Todaro (G.R. No. 154830)

Date: December 10, 2016

Facts:
Pioneer International Limited (PIL), an Australian company engaged in the ready-mix concrete
business, established herein petitioner PCPI to undertake its business in the Philippines. PIL
contacted respondent Todaro and asked if the latter is available to join them in their intention
to establish plant operations in the country to which the latter agreed. Subsequently, PIL and
Todaro came to an agreement wherein the former consented to engage the services of the
latter as consultant for 2-3 months, after which he would be employed as manager of concrete
operations should PIL decide to invest in the Philippines. PIL started its operation however it
refused to comply with its undertaking to employ Todaro on a permanent basis. Respondent
thus filed a complaint for sum of money and damages against petitioner. Petitioner meanwhile
contends that the case should fall with the NLRC as the damages arose from an alleged breach
of employment contract. Both the trial court and CA ruled in favor of respondent.

Issue:
Whether or not there is employer-employee relationship between PIL and respondent.

Ruling: NO.
In the present case, no employer-employee relationship exists between petitioners and
respondent. In fact, in his complaint, private respondent is not seeking any relief under the
Labor Code, but seeks payment of damages on account of petitionersʼ alleged breach of their
obligation under their agreement to employ him. It is settled that an action for breach of
contractual obligation is intrinsically a civil dispute. In the alternative, respondent seeks redress
on the basis of the provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear that the
present action is within the realm of civil law, and jurisdiction over it belongs to the regular
courts.
This Court has consistently held that where no employer-employee relationship exists between
the parties and no issue is involved which may be resolved by reference to the Labor Code,
other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that
has jurisdiction.

!•. Puyat vs. Zabarte 352 SCRA 738

 
Doctrine of Forum Non-Conveniens is inapplicable in this case
FACTS:  On Jan. 24, 1994, respondent Zabarte commenced an action to enforce the money
judgment against petitioner Puyat rendered by the Superior Court for the State of California,
Country of Contra Costa, USA.
Puyat filed his Answer with the special and affirmative defenses such that the Superior Court
for the State of California did not properly acquire jurisdiction over the subject matter of and
over the persons involved in, thus the judgment on stipulation for entry in judgment is null and
void and unenforceable in the Philippines; and that respondent has no capacity to sue in the
Philippines.
On Aug. 1, 1994, respondent filed a Motion for Summary Judgment under Rule 34 (ROC)
alleging that the Answer filed by petitioner failed to tender any genuine issue as to the material
facts. Petitioner begs to disagree; in support hereof, he alleged that the Judgment on
Stipulations for Entry in Judgment is null and void, fraudulent, illegal and unenforceable, the
same having been obtained by means of fraud, collusion, undue influence and/or clear mistake
of fact and law. He also maintained that said Judgment was obtained without the assistance of
counsel for petitioner and without sufficient notice to him and therefore, was rendered in
violation of his constitutional rights to substantial and procedural due process.
The RTC granted respondentʼs Motion for Summary Judgment. Petitioner filed a Motion for
Reconsideration and thereafter a Motion to Dismiss on the ground of lack of jurisdiction over
the subject matter of the case and forum non conveniens.
The RTC rendered its judgment and ordered petitioner to pay respondent. CA affirmed and
ruled that summary judgment was proper, because petitioner had failed to tender any genuine
issue of fact and was merely maneuvering to delay the full effects of the judgment. The CA
also rejected petitionerʼs argument that the RTC should have dismissed the action for the
enforcement of a foreign judgment, on the ground of forum non conveniens. It reasoned out
that the recognition of the foreign judgment was based on comity, reciprocity and res judicata.

ISSUE:   Whether the principle of forum non conveniens is applicable in this case.

HELD:    NO. Since the present action lodged in the RTC was for the enforcement of a foreign
judgment, there was no need to ascertain the rights and the obligations of the parties based on
foreign laws or contracts. The parties needed only to perform their obligations under the
Compromise Agreement they had entered into. Also, under Sec. 5 (n) of Rule 131, a court –
whether in the Philippines or elsewhere – enjoys the presumption that it is acting in the lawful
exercise of jurisdiction, and that it is regularly performing its official duty.
The petitioner claims that the trial court had no jurisdiction, because the case involved
partnership interest, and there was difficulty in ascertaining the applicable law in California. All
the aspects of the transaction took place in a foreign country, and respondent is not even a
Filipino.
The Supreme Court disagreed and ruled that in the absence of proof of California law on the
jurisdiction of courts, it is presumed that such law, if any, is similar to Philippine law. This
conclusion is based on the presumption of identity or similarity, also known as processual
presumption.
The grounds relied upon by the petitioner are contradictory. On the one hand, he insists that
the RTC take jurisdiction over the enforcement case in order to invalidate the foreign judgment;
yet, he avers that the trial court should not exercise jurisdiction over the same case on the
basis of forum non conveniens. Not only these defenses weaken each other, but they bolster
the finding of the lower courts that he was merely maneuvering to avoid or delay payment of
his obligation.
                Under the principle of forum non conveniens, even if the exercise of jurisdiction is
authorized by law, courts may nonetheless refuse to entertain a case for any of the following
practical reasons:
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 non-resident 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 non-residents 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.
None of the aforementioned reasons barred the RTC from exercising its jurisdiction. In the case
at bar, there was no more need for material witnesses, no forum shopping or harassment of
petitioner, no inadequacy in the local machinery to enforce the foreign judgment, and no
question raised as to the application of any foreign law.
Authorities agree that the issue of whether a suit should be entertained or dismissed on the
basis of the above-mentioned principle depends largely upon the facts of each case and on
the sound discretion of the trial court.
The petiton is DENIED.

!!. raytheon international vs rouzie gr 162894

FACTS

Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing under the laws of
Connecticut, &Stockton Rouzie, Jr., an American citizen, entered into a contract

BMSI hired Rouzie as its representative to negotiate the sale of services in several government
projects in thePhilippines for an agreed remuneration of 10% of the gross receipts.

Rouzie secured a service contract w/ the Rep. of Phil. on behalf of BMSI for the dredging of
rivers affected by the Mt.Pinatubo eruption & mudflows.

Rouzie filed before the NLRC a suit against BMSI and Rust International (Rust) for alleged
nonpayment of commissions, illegal termination, & breach of employment contract.

The Labor Arbiter order 

ed BMSI & Rust to pay Rouzieʼs money claims.

Upon appeal, the NLRC reversed & dismissed Rouzieʼs complaint on the ground of lack of
jurisdiction.

Rouzie filed an action for damages before the RTC of La Union (where he was a resident)
against Raytheon International. He reiterated that he was not paid the commissions due him
from the Pinatubo dredging project w/c hesecured on behalf of BMSI. The complaint also
averred that BMSI, RUST and Raytheon had combined & functioned as 1 company.

RAYTHEON SOUGHT THE DISMISSAL OF THE COMPLAINT ON THE GROUNDS OF FAILURE

TO STATE ACAUSE OF ACTION & FORUM NON CONVENIENS & PRAYED FOR DAMAGES BY
WAY OF COMPULSORY
COUNTERCLAIM. THE RTC DENIED RAYTHEONʼS MOTION. THE CA AFFIRMED.

Raytheonʼs contention: The written contract between Rouzie & BMSI included a valid choice of
law clause, that is, that the contract shall be governed by the laws of the State of Connecticut.
It also mentions the presence of foreign elements in the dispute, namely that the parties &
witnesses involved are American corporations & citizens & the evidence to be presented is
located outside the Philippines, that renders our local courts inconvenient forums. The foreign
elements of the dispute necessitate the immediate application of the doctrine of forum non
conveniens.

ISSUES(a) W/N the RTC had jurisdiction.(b) W/N the complaint should be dismissed on the
ground of forum non conveniens.

RULING
(a) YES.

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a
Philippine court and where the court has jurisdiction over the subject matter, the parties and
the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the
convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative
of the country where the case is filed.

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution
and the law & by the material allegations in the complaint, irrespective of w/n the plaintiff is
entitled to recover all or some of the claims or reliefs sought therein. The case file was an
action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the
action and the amount of damages prayed are w/in the jurisdiction of the RTC.

 As regards jurisdiction over the parties, the RTC acquired jurisdiction over Rouzi upon

the filing of the complaint. On the other hand, jurisdiction over the person of Raytheon was
acquired by its voluntary appearance in court.

That THE SUBJECT CONTRACT INCLUDED A STIPULATION THAT THE SAME SHALL BE
GOVERNED BYTHE LAWS OF THE STATE OF CONNECTICUT DOES NOT SUGGEST THAT THE
PHILIPPINE COURTS,
OR ANY OTHER FOREIGN TRIBUNAL FOR THAT MATTER, ARE PRECLUDED FROM HEARING T
HE CIVIL ACTION.

JURISDICTION & CHOICE OF LAW ARE 2 DISTINCT CONCEPTS. Jurisdiction considers

whether it is fair to cause a defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law which will determine the merits of the
case is fair to both parties. The choice of law stipulation will be come relevant only when the
substantive issues of the instant case develop, that is, after hearing on the merits proceeds
before the trial court.

(b) NO.

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
ELSEWHERE.
Raytheonʼs averments of the foreign elements are not sufficient to oust the RTC of its
jurisdiction over the case and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens
requires a factual determination; hence, it is more properly considered as a matter of defense.
While it is w/c the discretion of the trial court to abstain from assuming jurisdiction on this
ground, it should do so only after vital facts are established, to determine whether special
circumstances require the courtʼs desistance.

!f. SAUDI ARABIAN AIRLINES v. MA. JOPETTE M. REBESENCIO, GR No. 198587, 2015-01-14
Facts:
!. Petitioner SAUDIA is a foreign corporation established and existing under the Royal
Decree No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia
("KSA"). Its Philippine Office is located at 4/F Metro House Building, Sen, Gil J. Puyat
Avenue,... Makati City (Philippine Office).
Respondents... were recruited and hired by Saudia as Temporary Flight Attendants with the
accreditation and approval of the Philippine Overseas Employment Administration.
after working as Temporary Flight Attendants, respondents became Permanent Flight
Attendants.
Respondents continued their employment with Saudia until they were separated from service
on various dates in 2006.
Respondents were told that if they did not resign, Saudia would terminate them all the same.
The threat of termination entailed the loss of benefits, such as separation pay and ticket
discount entitlements.
if the Air Hostess becomes pregnant at any time during the term of this contract, this shall
render her employment contract as void and she... will be terminated due to lack of medical
fitness.

Issues:
whether respondents' voluntarily resigned or were illegally terminated

Ruling:
we emphasize the glaringly discriminatory nature of Saudia's policy. As argued by respondents,
Saudia's policy entails the termination of employment of flight attendants who become
pregnant. At the risk of stating the obvious, pregnancy is an... occurrence that pertains
specifically to women. Saudia's policy excludes from and restricts employment on the basis of
no other consideration but sex.
We do not lose sight of the reality that pregnancy does present physical limitations that may
render difficult the performance of functions associated with being a flight attendant.
Nevertheless, it would be the height of iniquity to view pregnancy as a disability so
permanent... and immutable that, it must entail the termination of one's employment. It is clear
to us that any individual, regardless of gender, may be subject to exigencies that limit the
performance of functions. However, we fail to appreciate how pregnancy could be such an
impairing... occurrence that it leaves no other recourse but the complete termination of the
means through which a woman earns a living.
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.
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.
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[109]) 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
Respondents also adduced a copy of the "Unified Employment Contract for Female Cabin
Attendants."[111] This contract deemed void the employment of a flight attendant who
becomes pregnant and threatened termination due to lack of medical fitness.[112] The threat
of termination (and the forfeiture of benefits that it entailed) is enough to compel a reasonable
person in respondents' position to give up his or her employment.
Stripped of all unnecessary complexities, respondents were dismissed for no other reason than
simply that they were pregnant. This is as wanton, oppressive, and tainted with bad faith as
any reason for termination of... employment can be. This is no ordinary case of illegal dismissal.
This is a case of manifest gender discrimination. It is an affront not only to our statutes and
policies on employees' security of tenure, but more so, to the Constitution's dictum of
fundamental equality between... men and women

!p. SAUDI ARABIAN AIRLINES (SAUDIA) vs. COURT OF APPEALS, MILAGROS P. MORADA and
HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, RTC of
Quezon City
G.R. No. 122191 October 8, 1998

FACTS: Petitioner SAUDIA hired private respondent MORADA as a flight attendant in 1988,
based in Jeddah. On 1990, while on a lay-over in Jakarta, Indonesia, she went to party with 2
male attendants, and on the following morning in their hotel, one of the male attendants
attempted to rape her. She was rescued by hotel attendants who heard her cry for help. The
Indonesian police arrested the 2.
MORADA returned to Jeddah, but was asked by the company to go back to Jakarta and help
arrange the release of the 2 male attendants. MORADA did not cooperate when she got to
Jakarta.
What followed was a series of interrogations from the Saudi Courts which she did not
understand as this was in their language. In 1993, she was surprised, upon being ordered by
SAUDIA to go to the Saudi court, that she was being convicted of (1) adultery; (2) going to a
disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with
the male crew, in contravention of Islamic tradition, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her,
together with the 2, for what happened in Jakarta.
SAUDIA denied her the assistance she requested, But because she was wrongfully convicted,
Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly
before her return to Manila, she was terminated from the service by SAUDIA, without her being
informed of the cause.
On November 23, 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-
Balawi (“Al-Balawi”), its country manager.
SAUDIA ALLEGES: Private respondentʼs claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant
case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci
delicti commissi rule.
MORADA ALLEGES: Since her Amended Complaint is based on Articles 19 and 21 of the Civil
Code, then the instant case is properly a matter of domestic law.

ISSUE: WON the Philippine courts have jurisdiction to try the case

HELD: YES.
On the presence of a “Foreign Element” in the case: A factual situation that cuts across
territorial lines and is affected by the diverse laws of two or more states is said to contain a
“foreign element”. The presence of a foreign element is inevitable since social and economic
affairs of individuals and associations are rarely confined to the geographic limits of their birth
or conception. The forms in which this foreign element may appear are many. The foreign
element may simply consist in the fact that one of the parties to a contract is an alien or has a
foreign domicile, or that a contract between nationals of one State involves properties situated
in another State. In other cases, the foreign element may assume a complex form.
In the instant case, the foreign element consisted in the fact that private respondent Morada is
a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation.
Also, by virtue of the employment of Morada with the petitioner Saudia as a flight stewardess,
events did transpire during her many occasions of travel across national borders, particularly
from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a “conflicts”
situation to arise.
COURT disagrees with MORADA that his is purely a domestic case. However, the court finds
that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its
authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691, to
wit:
BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive
jurisdiction:
xxx xxx xxx
(8) In all other cases in which demand, exclusive of interest, damages of whatever kind,
attorney`yʼs fees, litigation expenses, and cots or the value of the property in controversy
exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the above-mentioned items exceeds Two hundred Thousand
pesos (P200,000.00). (Emphasis ours)
xxx xxx xxx
Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]
(a) xxx xxx xxx
(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 plaintiff
resides, at the election of the plaintiff.
Weighing the relative claims of the parties, the court a quo found it best to hear the case in the
Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private
respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where
she no longer maintains substantial connections. That would have caused a fundamental
unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience
have been shown by either of the parties. The choice of forum of the plaintiff (now private
respondent) should be upheld.
The trial court also acquired jurisdiction over the parties. MORADA through her act of filing,
and SAUDIA by praying for the dismissal of the Amended Complaint on grounds other than lack
of jurisdiction.
As to the choice of applicable law, we note that choice-of-law problems seek to answer two
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.
Considering that the complaint in the court a quo is one involving torts, the “connecting factor”
or “point of contact” could be the place or places where the tortious conduct or lex loci actus
occurred. And applying the torts principle in a conflicts case, we find that the Philippines could
be said as a situs of the tort (the place where the alleged tortious conduct took place). This is
because it is in the Philippines where petitioner allegedly deceived private respondent, a
Filipina residing and working here. According to her, she had honestly believed that petitioner
would, in the exercise of its rights and in the performance of its duties, “act with justice, give
her due and observe honesty and good faith.” Instead, petitioner failed to protect her, she
claimed. That certain acts or parts of the injury allegedly occurred in another country is of no
moment. For in our view what is important here is the place where the over-all harm or the
totality of the alleged injury to the person, reputation, social standing and human rights of
complainant, had lodged, according to the plaintiff below (herein private respondent). All told,
it is not without basis to identify the Philippines as the situs of the alleged tort.

In applying “State of the most significant relationship” rule, to determine the State which has
the most significant relationship, the following contacts are to be taken into account and
evaluated according to their relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any, between the parties is centered.

As already discussed, there is basis for the claim that over-all injury occurred and lodged in the
Philippines. There is likewise no question that private respondent is a resident Filipina national,
working with petitioner, a resident foreign corporation engaged here in the business of
international air carriage. Thus, the “relationship” between the parties was centered here,
although it should be stressed that this suit is not based on mere labor law violations. From the
record, the claim that the Philippines has the most significant contact with the matter in this
dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in
our view, has been properly established.

NOTE:
These “test factors” or “points of contact” or “connecting factors” could be any of the
following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In
particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the place where a contract
has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is
particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of performance of
contractual duties, or the place where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should govern their agreement,
the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done. The lex fori —
the law of the forum — is particularly important because, as we have seen earlier, matters of
“procedure” not going to the substance of the claim involved are governed by it; and because
the lex fori applies whenever the content of the otherwise applicable foreign law is excluded
from application in a given case for the reason that it falls under one of the exceptions to the
applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the
ship and of its master or owner as such. It also covers contractual relationships particularly
contracts of affreightment.