Home Insurance Company vs.
Eastern Shipping Lines also found to be complete and intact, leaving 5 cases in bad order.
[GR L-34382, 20 July 1983];
Home Insurance vs. Nedlloyd Lijnen [GR L-34383]
Facts: [GR L-34382] On or about 13 January 1967, S. Kajita & Co.,
on behalf of Atlas Consolidated Mining & Development
Corporation, shipped on board the SS Eastern Jupiter from Osaka,
Japan, 2,361 coils of Black Hot Rolled Copper Wire Rods. The said
VESSEL is owned and operated by Eastern Shipping Lines. The
shipment was covered by Bill of Lading O-MA-9, with arrival
notice to Phelps Dodge Copper Products Corporation of the
Philippines at Manila. The shipment was insured with the Home
Insurance Company against all risks in the amount of
P1,580,105.06 under its Insurance Policy AS-73633. The coils
discharged from the VESSEL numbered 2,361, of which 53 were in
bad order. What the Phelps Dodge ultimately received at its
warehouse was the same number of 2,361 coils, with 73 coils
loose and partly cut, and 28 coils entangled, partly cut, and which
had to be considered as scrap. Upon weighing at Phelps Dodge's
warehouse, the 2,361 coils were found to weight 263,940.85 kilos
as against its invoiced weight of 264,534.00 kilos or a net
loss/shortage of 593.15 kilos, or 1,209,56 lbs., according to the
claims presented by the Phelps Dodge against Home Insurance,
the Eastern Shipping, and Angel Jose Transportation Inc. For the
loss/damage suffered by the cargo, Home Insurance paid the
Phelps Dodge under its insurance policy the amount of P3,260.44,
by virtue of which Home Insurance became subrogated to the
rights and actions of the Phelps Dodge. Home Insurance made
demands for payment against the Eastern Shipping and the Angel
Jose Transportation for reimbursement of the aforesaid amount
but each refused to pay the same."
[GR L-34383] On or about 22 December 1966, the Hansa
Transport Kontor shipped from Bremen, Germany, 30 packages of
Service Parts of Farm Equipment and Implements on board the
VESSEL, SS 'NEDER RIJN' owned by N. V. Nedlloyd Lijnen, and
represented in the Philippines by its local agent, the Columbian
Philippines, Inc.. The shipment was covered by Bill of Lading No.
22 for transportation to, and delivery at, Manila, in favor of
International Harvester Macleod, Inc. The shipment was insured
with Home Insurance company under its Cargo Policy AS-73735
'with average terms' for P98,567.79. The packages discharged
from the VESSEL numbered 29, of which seven packages were
found to be in bad order. What International Harvester ultimately
received at its warehouse was the same number of 29 packages
with 9 packages in bad order. Out of these 9 packages, 1 package
was accepted by International Harvester in good order due to the
negligible damages sustained. Upon inspection at International
Harvester's warehouse, the contents of 3 out of the 8 cases were
The contents of these 5 packages showed several items missing in
the total amount of $131.14; while the contents of the
undelivered 1 package were valued at $394.66, or a total of
$525.80 or P2,426.98. For the short-delivery of 1 package and the
missing items in 5 other packages, Home Insurance paid
International Harvester under its Insurance Cargo Policy the
amount of P2,426.98, by virtue of which Home Insurance became
subrogated to the rights and actions of International Harvester.
Demands were made on N.V. Nedlloyd Lijnen and International
Harvester for reimbursement thereof but they failed and refused
to pay the same."
When the insurance contracts which formed the basis of these
cases were executed, Home Insurance had not yet secured the
necessary licenses and authority; but when the complaints in
these two cases were filed, Home Insurance had already secured
the necessary license to conduct its insurance business in the
Philippines. In both cases, Home Insurance made the averment
regarding its capacity to sue, as that it "is a foreign insurance
company duly authorized to do business in the Philippines
through its agent, Mr. Victor H. Bello, of legal age and with office
address at Oledan Building, Ayala Avenue, Makati, Rizal." The
Court of First Instance of Manila, Branch XVII, however, dismissed
the complaints in both cases, on the ground that Home Insurance
had failed to prove its capacity to sue. Home Insurance filed the
petitions for review on certiorari, which were consolidated.
Issue: Whether Home Insurance, a foreign corporation licensed to
do business at he time of the filing of the case, has the capacity to
sue for claims on contracts made when it has no license yet to do
business in the Philippines.
Held: As early as 1924, the Supreme Court ruled in the leading
case of Marshall Wells Co. v. Henry W. Elser & Co. (46 Phil. 70)
that the object of Sections 68 and 69 of the Corporation Law was
to subject the foreign corporation doing business in the
Philippines to the jurisdiction of Philippine courts. The
Corporation Law must be given a reasonable, not an unduly harsh,
interpretation which does not hamper the development of trade
relations and which fosters friendly commercial intercourse
among countries. The objectives enunciated in the 1924 decision
are even more relevant today when we commercial relations are
viewed in terms of a world economy, when the tendency is to re-
examine the political boundaries separating one nation from
another insofar as they define business requirements or restrict
marketing conditions. The court distinguished between the denial
of a right to take remedial action and the penal sanction for non-
registration. Insofar as transacting business without a license is
concerned, Section 69 of the Corporation Law imposed a penal
sanction — imprisonment for not less than 6 months nor more
than 2 years or payment of a fine not less than P200.00 nor more
than P1,000.00 or both in the discretion of the court. There is a
penalty for transacting business without registration. And insofar
as litigation is concerned, the foreign corporation or its assignee
may not maintain any suit for the recovery of any debt, claim, or
demand whatever. The Corporation Law is silent on whether or
not the contract executed by a foreign corporation with no
capacity to sue is null and void ab initio. Still, there is no question
that the contracts are enforceable. The requirement of
registration affects only the remedy. Significantly, Batas
Pambansa 68, the Corporation Code of the Philippines has
corrected the ambiguity caused by the wording of Section 69 of
the old Corporation Law. Section 133 of the present Corporation
Code provides that "No foreign corporation transacting business
in the Philippines without a license, or its successors or assigns,
shall be permitted to maintain or intervene in any action, suit or
proceeding in any court or administrative agency in the
Philippines; but such corporation may be sued or proceeded
against before Philippine courts or administrative tribunals on any
valid cause of action recognized under Philippine laws." The old
Section 69 has been reworded in terms of non-access to courts
and administrative agencies in order to maintain or intervene in
any action or proceeding. The prohibition against doing business
without first securing a license is now given penal sanction which
is also applicable to other violations of the Corporation Code
under the general provisions of Section 144 of the Code. It is,
therefore, not necessary to declare the contract null and void
even as against the erring foreign corporation. The penal sanction
for the violation and the denial of access to Philippine courts and
administrative bodies are sufficient from the viewpoint of
legislative policy. Herein, the lack of capacity at the time of the
execution of the contracts was cured by the subsequent
registration is also strengthened by the procedural aspects of
these cases. Home Insurance averred in its complaints that it is a
foreign insurance company, that it is authorized to do business in
the Philippines, that its agent is Mr. Victor H. Bello, and that its
office address is the Oledan Building at Ayala Avenue, Makati.
These are all the averments required by Section 4, Rule 8 of the
Rules of Court. Home Insurance sufficiently alleged its capacity to
sue.
FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers
Bank of the Philippines) and MERCURIO RIVERA vs. CA, CARLOS
EJERCITO in substitution of DEMETRIO DEMETRIA, and JOSE
JANOLO
January 24, 1996
FACTS: Producer Bank of the Philippines acquired 6 parcels of
land at Laguna. The property used to be owned by BYME
Investment and Development Corporation which had them
mortgaged with the bank as collateral for a loan. Demetrio
Demetria and Jose O. Janolo wanted to purchase the property and
thus initiated negotiations for that purpose.
In August 1987, Demetria and Janolo met with Mercurio Rivera,
Manager of the Property Management Department of the Bank to
discuss their plan to buy the property. Thereafter, they had a
series of letters where parties accepted the offer of Demetria and
Janolo. Later in October, the conservator of the bank (which has
been placed under conservatorship by the Central Bank since
1984) was replaced; and subsequently the proposal of Demetria
and Janolo to buy the properties was under study pursuant to the
new conservator’s mandate. After which, a series of demands
ensued.
ISSUE: WON the conservator may revoke a perfected and
enforceable contract. NO.
RULING: Section 28-A of Republic Act No. 265 (otherwise known
as the Central Bank Act) as follows:
Section 28-A - Whenever, on the basis of a report submitted by
the appropriate supervising or examining department, the
Monetary Board finds that a bank or a non-bank financial
intermediary performing quasi-banking functions is in a state of
continuing inability or unwillingness to maintain a state of
liquidity deemed adequate to protect the interest of depositors
and creditors, the Monetary Board may appoint a conservator to
take charge of the assets, liabilities, and the management of that
institution, collect all monies and debts due said institution and
exercise all powers necessary to preserve the assets of the
institution, reorganize the management thereof, and restore its
viability. He shall have the power to overrule or revoke the
actions of the previous management and board of directors of the
bank or non-bank financial intermediary performing quasi-
banking functions, any provision of law to the contrary
notwithstanding, and such other powers as the Monetary Board
shall deem necessary.
While admittedly, the Central Bank law gives vast and far-reaching
powers to the conservator of a bank, it must be pointed out that
such powers must be related to the "(preservation of) the assets
of the bank, (the reorganization of) the management thereof and
(the restoration of) its viability." Such powers, enormous and
extensive as they are, cannot extend to the post-facto repudiation
of perfected transactions, otherwise they would infringe against
the non-impairment clause of the Constitution.
Section 28-A merely gives the conservator power to revoke
contracts that are, under existing law, deemed to be defective.
Hence, the conservator merely takes the place of a bank's board
of directors, so what the board cannot do; the conservator cannot
do either. His power is however, not unilateral as he cannot
simply repudiate valid obligations of the Bank. His authority would
be only to bring court actions to assail such contracts.
In the case, it is not disputed that the bank was under a
conservator placed by the Central Bank of the Philippines during
the time that the negotiation and perfection of the contract of
sale took place. Moreover, there was absolutely no evidence that
the Conservator, at the time the contract was perfected, actually
repudiated or overruled said contract of sale. The bank never
objected to the sale, what it unilaterally repudiated was—not the
contract —but the authority of Rivera to make a binding offer —
and which unarguably came months after the perfection of the
contract.
The conservator’s authority would be only to bring court actions
to assail such contracts —as he has already done so in the instant
case. A contrary understanding of the law would simply not be
permitted by the Constitution. Neither by common sense. To rule
otherwise would be to enable a failing bank to become solvent, at
the expense of third parties, by simply getting the conservator to
unilaterally revoke all previous dealings which had one way or
another or come to be considered unfavorable to the Bank,
yielding nothing to perfected contractual rights nor vested
interests of the third parties who had dealt with the Bank.
McGee v. International Life Insurance Co
Brief Fact Summary. A California resident and the beneficiary of a
life insurance policy, sued an insurance company when the
company failed to pay following the death of the insured.
Synopsis of Rule of Law. A state court’s jurisdiction satisfies due
process when it is based on a contract with substantial connection
with that state.
Facts. In 1944, Lowell Franklin, a resident of California, purchased
a life insurance policy form an insurer subsequently bought by
Defendant International Life Insurance Co., who then mailed a
reinsurance certificate to Franklin in California offering to insure
him. Franklin accepted the offer and paid premiums by mail from
his California home to Defendant’s office in Texas until his death
in 1950. When the beneficiary, Plaintiff McGee, notified
Defendant of Franklin’s death, they refused to pay. Neither the
original insurer nor respondent ever had any office or agent in
California.
Issue. Whether a non-resident corporation is subject to
jurisdiction in a state in which it never had any agent or office,
merely because it was a party to a contract with a resident of the
state.
Held. No. The Supreme Court of the United States ruled that the
Due Process clause did not preclude the California court from
entering a judgment binding on Defendant. The Supreme Court
found that it is sufficient for purposes of due process that the suit
was based on a contract that had substantial connection with
California. A state has a manifest interest in providing effective
means of redress for its residents when their insurers refuse to
pay claims.
Discussion. The Supreme Court, in considering fact the contract
was delivered in California, the premiums were mailed from there
and the insured was a resident of California when he died,
combined with the recognition that modern transportation and
communication have made it much less burdensome for a party
sued to defend themselves in a state where they conduct
business, found that it did not violate just and fair play for the
California court to enter a binding agreement on International
Life. Moreover, the Court reasoned that California residents
would be at a severe disadvantage if they had to leave their own
state to obtain payment from their insurance company.
SPOUSES ALFREDO D. VALMONTE and MARIA LOURDES A.
VALMONTE v. CLARITA ALCALA
G.R. No. 168667, 23 July 2008, SECOND DIVISION, (Brion, J.)
The Court does not consider the variance between the dates as
fatal to the Valmontes’ case because the variance did not
necessarily lead to the conclusion that no verification was made,
or that the verification was false. More importantly, the variance
totally lost significance after the Valmontes sent from the US and
submitted to the CA the required Verification/Certification in
compliance with their previously manifested intent. As this Court
noted in a case where compliance with a certificate of non-forum
shopping was at issue, the fact that the Rules require strict
compliance merely underscores its mandatory nature; it cannot be
dispensed with or its requirements altogether disregarded, but it
does not thereby interdict substantial compliance with its
provisions under justifiable circumstances, as we find in this case.
Facts: The Spouses Alfredo and Maria Lourdes Valmonte are the
unregistered owners of Apartment No. 1411 which they leased to
respondent Alcala, since they were migrating to the United States.
Due to Alcala’s subsequent failure to pay the agreed rentals
despite written demand, the Spouses Valmonte filed a complaint
for unlawful detainer against her before the Metropolitan Trial
Court (MTC). As the Spouses Valmonte were already US residents
at that time, they signed the required Verification/Certification of
Non-Forum Shopping of their complaint before a notary public in
the state of Washington, and had this Verification/Certification
authenticated by the Philippine Consulate General in San
Francisco. The MTC ruled in favor of the Spouses Valmonte,
however, it was reversed by the Regional Trial Court on appeal by
Alcala.
The Spouses Valmonte filed a Petition for Review (CA Petition)
with the Court of Appeals (CA), which was dismissed. The Spouses
Valmonte then filed a Motion for Reconsideration which was
likewise denied by the CA, on the ground that while the
verification/certification was purportedly executed on March 17,
2005, the petition is dated March 31, 2005. Hence, this petition.
ISSUE:
Whether or not the variance between the dates of the
Verification/Certification that the Valmontes executed abroad and
the CA Petition conclude that they did not read the petition
before it was filed in court
HELD:
Petition GRANTED.
Generally, a pleading is not required to be verified unless required
by law or by the Rules of Court. One such requirement is found in
Section 1 of Rule 42 which requires a party appealing from a
decision of the RTC rendered in the exercise of its appellate
jurisdiction to file a verified petition for review with the CA.
Verification, when required, is intended to secure an assurance
that the allegations of a pleading are true and correct; are not
speculative or merely imagined; and have been made in good
faith. To achieve this purpose, the verification of a pleading is
made through an affidavit or sworn statement confirming that the
affiant has read the pleading whose allegations are true and
correct of the affiant’s personal knowledge or based on authentic
records.
Apparently, the CA concluded that no real verification, as above
required, had been undertaken since the CA Petition was dated
March 31, 2005 while the Verification/Certification carried an
earlier date – March 17, 2005; the petition “was still inexistent”
when the Verification/Certification was executed.
The Court finds this conclusion erroneous for the following
reasons:
First, the variance in dates does not necessarily contradict the
categorical declaration made by Valmontes in their affidavit that
they read and understood the contents of the pleading. The
Valmontes’ claim in this regard is that they read a copy of the CA
Petition through an electronic mail (e-mail) sent to them by their
lawyers. The Court finds this claim, under the circumstances more
fully discussed below, to be a reasonable explanation of why a
variance in dates existed. We should not lose sight of the reality
that pleadings are prepared and signed by the counsel at the
instructions of the client; the latter merely provides the
supporting facts of the pleading and, as needed, verifies that the
allegations are true and correct. In short, the pleading and the
verification are prepared separately and a variance in their dates
is a matter that may satisfactorily be explained. To demand the
litigants to read the very same document that is to be filed before
the courts is too rigorous a requirement; what the Rules require is
for a party to read the contents of a pleading without any specific
requirement on the form or manner in which the reading is to be
done. That a client may read the contents of a pleading without
seeing the same pleading to be actually filed with the court is, in
these days of e-mails and other technological advances in
communication, not an explanation that is hard to believe.
Apparently in this case, counsel sent a copy of the draft petition
by e- mail and finalized it as soon as it was approved by the
Valmontes. The latter, on the other hand, complied with their end
not only by approving the terms of the petition, but also by
sending a copy of their sworn statement (as yet unauthenticated)
in order to file the petition soonest, thereby complying with the
required timeliness for the filing of the petition. To the Court’s
mind, beyond the manner of these exchanges, what is important
is that efforts were made to satisfy the objective of the Rule – to
ensure good faith and veracity in the allegations of a pleading –
thereby allowing the courts to act on the case with reasonable
certainty that the Valmontes’ real positions have been pleaded.
Second, the “circumstances” the Court mentioned above refer to
the Valmontes’ unique situation as parties residing overseas who
are litigating locally through their local counsel. While these
overseas litigants are not excused from complying with our Rules
such as the strict observance of the periods for appeal and the
verification requirement, we must take into account the
attendant realities brought into play because they are suing from
overseas or via long distance communications with their counsel.
In the verification requirement, there are added formalities
required for the acceptance in the Philippines of statements
sworn overseas before foreign notaries; we require their
authentication by our consulates. This is a process whose
completion time may vary depending, among others, on various
factors such as the location of the requesting party from the
consulate; the peculiarities of foreign laws on notaries; the
volume of transactions in a consulate, noting particularly the time
of year when the authentication is requested; and the mode of
sending the authenticated documents to the Philippines.
Apparently compelled by one or a combination of these reasons,
the Valmontes in fact manifested when they filed their petition
(on March 31, 2005) that they were submitting a photostatic copy
of the Verification/Certification executed in Washington on March
17, 2005 since the original was still with the Philippine Consulate
in San Francisco for authentication. The Court takes judicial notice
that the Valmontes’ request for authentication coincided with the
observance of the Holy Week – a traditional period of prayer and
holidays in the Philippines, for the Philippines’ foreign embassies
and consulates, and even for Filipinos overseas. The Court finds it
significant that, conformably with their Manifestation, the
Valmontes’ counsel filed on April 8, 2005 the duly sworn and
authenticated Verification as soon as counsel received it. Under
these circumstances, there is every reason for an equitable and
relaxed application of the rules to the Valmontes’ situation.
Third, the Court discerns utmost good faith on the part of the
Valmontes when they filed their Manifestation about their
problem, intent, and plan of compliance with the verification
requirement. They in fact stated early on through this
Manifestation that their verification had been executed on March
17, 2005 in Washington, that is, at a date much earlier than the
filing of their petition and manifestation. Unfortunately, the CA
failed to note the variance in dates at the earliest opportunity;
thus, the CA dismissed the petition on some other ground, only to
hark back later on to the variance in dates in their reconsideration
of the earlier dismissal. Given this good faith and the early
disclosure, it was basically unfair for the CA – who had earlier
overlooked the variance in dates – to subsequently make this
ground the basis of yet another dismissal of the petition. The CA –
after overlooking the variance in dates at the first opportunity –
should have at least asked for the petitioners’ explanation on why
the variance should not be an additional ground for the dismissal
of the petition, instead of reflecting in their order on
reconsideration that it could have granted the motion for
reconsideration based on attachments already made, but there
existed another reason – the variance in dates – for maintaining
the dismissal of the petition.
Fourth, the Court notes that most of the material allegations set
forth by the Valmontes in their CA Petition are already in their
complaint for unlawful detainer filed before the MTC on April 26,
2002. Attached to the complaint was a Verification/Certification
dated March 18, 2002 (authenticated by the Philippine Consulate
in San Francisco on March 27, 2002) in which the Valmontes
declared under oath that they had caused the preparation of the
complaint through their lawyers and had read and understood the
allegations of the complaint. The material facts alleged in the CA
Petition are likewise stated in the records of the case, as part of
the findings of facts made by the MTC and the RTC. Verification as
to the truth of these facts in the petition for review before the CA
was, therefore, strictly a redundancy; its filing remained a
necessity only because the Rules on the filing of a petition for
review before the CA require it. This consideration could have led
to a more equitable treatment of the Valmontes’ failure to strictly
comply with the Rules, additionally justified by the fact that the
failure to comply with the rules on verification is a formal rather
than a jurisdictional defect.
In sum, the Court finds sufficient justification to rule – under the
circumstances of this case – that the CA committed a reversible
error when it dismissed the petition for failure to strictly follow
the verification requirements. Stated otherwise, the Court does
not consider the variance between the dates as fatal to the
Valmontes’ case because the variance did not necessarily lead to
the conclusion that no verification was made, or that the
verification was false. More importantly, the variance totally lost
significance after the Valmontes sent from the US and submitted
to the CA the required Verification/Certification in compliance
with their previously manifested intent. As this Court noted in a
case where compliance with a certificate of non-forum shopping
was at issue, the fact that the Rules require strict compliance
merely underscores its mandatory nature; it cannot be dispensed
with or its requirements altogether disregarded, but it does not
thereby interdict substantial compliance with its provisions under
justifiable circumstances, as we find in this case.
EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 111 S. Ct. 1227, 113 L.
Ed. 2d 274, 1991 U.S. LEXIS 1855, 59 U.S.L.W. 4225, 55 Fair Empl.
Prac. Cas. (BNA) 449, 55 Empl. Prac. Dec. (CCH) P40,607 (U.S.
Mar. 26, 1991)
Brief Fact Summary
Boureslan (Plaintiff), an American working abroad for Aramco
(Defendant), an American corporation, claimed employment
discrimination in violation of the 1964 Civil Rights Act.
Synopsis of Rule of Law.
The 1964 Civil Rights Act does not apply to American employers
abroad.
Facts
Boureslan (Plaintiff) had been an employee of Arabian American
Oil Co. (Aramco) (Defendant), working in Saudia Arabia. He was
discharged, and afterward filed a suit in U.S. District Court,
claiming employment discrimination on the basis of race, religion,
and national origin, in violation of the 1964 Civil Rights Act. The
district court dismissed, ruling that the Act did not have
extraterritorial application. The Fifth Circuit affirmed, and the
Supreme Court granted review.
Issue
Does the 1964 Civil Rights Act apply to American employers
abroad?
Held
(Rehnquist, C.J.) No. The 1964 Civil Rights Act does not apply
to American employers abroad. The only determination to make
in this issue is the intent to Congress. The analysis begins with
the presumption that laws are not intended to have
extraterritorial application. To reach a contrary conclusion, a
court must find clear evidence of legislative intent. The Act
contains no language to this effect. The jurisdictional language
in the statute, while broad, is unclear regarding extraterritorial
application. In addition, the Act provides no mechanisms for
foreign enforcements and contains no provisions for conflicts with
foreign laws, as most statutes with foreign application do. In
this case, the Equal Employment Opportunity Commission
(Plaintiff), which has intervened, urges extraterritorial
application. Courts must show some regard to administrative
agency interpretations of law, but the final decision must be left
to the courts. It seems clear in this case that Congress did not
intend the Act to have foreign application. Affirmed.
Discussion
The presumption against extraterritorial application of a law is
merely that, a presumption. It does not address the power of
Congress to legislate in such a manner. This power, without
doubt, exists. It is universally recognized in international law
that a government can legislate regarding the activities of its
citizens abroad.
Small v. United States
Facts of the case
Federal law made gun possession illegal for any person "convicted
in any court" for crimes punishable by more than a year in prison.
A Japanese court convicted Gary Sherwood Small for crimes
punishable by a prison term longer than one year. Years later a
U.S. District Court convicted Small, because of his prior conviction,
of illegally possessing a gun. Small appealed and argued the term
"convicted in any court" did not include convictions in foreign
courts. The Third Circuit Court of Appeals ruled against Small.
Question
Federal law made gun possession illegal for any person "convicted
in any court" for crimes punishable by more than a year in prison.
Does "convicted in any court" include convictions in foreign
courts?
Conclusion
No. In a 5-3 opinion delivered by Justice Stephen Breyer, the
Court held that the federal law's phrase, "convicted in any court,"
encompassed only domestic, not foreign, convictions. The
majority reasoned that in determining the scope of the phrase, it
was appropriate to assume Congress had domestic concerns in
mind. Moreover, the statute's overall language suggested no
intent to reach beyond domestic convictions.
SIM v. NLRC
G.R. No. 157376
Petitioner: CORAZON C. SIM
Respondents: NATIONAL LABOR RELATIONS COMMISSION AND
EQUITABLE PCI-BANK
Petition: Illegal dismissal; Appeal by Certiorari under Rule 45 of
the Rules of Court
FACTS:
1. Corazon Sim filed a case for illegal dismissal with the
Labor Arbiter, alleging that she was initially employed by
Equitable PCI-Bank in 1990 as Italian Remittance
Marketing Consultant to the Frankfurt Representative
Office.
2. Eventually, she was promoted to Manager position, until
September 1999, when she received a letter from
Remegio David -- the Senior Officer, European Head of
PCIBank, and Managing Director of PCIB- Europe --
informing her that she was being dismissed due to loss of
trust and confidence based on alleged mismanagement
and misappropriation of funds.
3. Equitable PCI Bank denied any employer-employee
relationship between them, and sought the dismissal of
the complaint.
4. The Labor Arbiter rendered its Decision dismissing the
case for want of jurisdiction and/or lack of merit.
According to the Labor Arbiter: It should be stressed at
this juncture that the labor relations system in the
Philippines has no extra-territorial jurisdiction. It is
limited to the relationship between labor and capital
within the Philippines.
5. Sim was accused of withdrawing P3,000,000.00 lire from
the bank's account.
6. Sim does not deny withdrawing the said amount. What
she submits is that she used said amount for the Radio
Pilipinas sa Roma radio program of the company.
 7. Equitable PCI-Bank countered that at the time Sim
withdrew said amount, the radio program was already
off the air. She is a managerial employee. Thus, loss of
trust and confidence is a valid ground for her dismissal.
ISSUE/S:
1. Whether or not the Labor Relations System of the
Philippines has extraterritorial jurisdiction
2. Whether or not the National Labor Relations Commission
has jurisdiction over overseas Filipino workers
RULING/RATIO: Yes to both issues. The Labor relations system in
the Philippines has extra-territorial jurisdiction and the Labor
Arbiters of the National Labor Relations Commission (NLRC) have
jurisdiction to hear and decide, within the claims arising out of an
employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of
damages.
Article 217 of the Labor Code provides for the jurisdiction of the
Labor Arbiter and the National Labor Relations Commission, viz.:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a)
Except as otherwise provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by
the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wage, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount of exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The commission shall have exclusive appellate jurisdiction over
all cases decided by Labor Arbiters.
Moreover, Section 10 of Republic Act (R.A.) No. 8042, or the
Migrant Workers and Overseas Filipinos Act of 1995, provides:
SECTION 10. Money Claims. — Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days
after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of
damages.
Also, Section 62 of the Omnibus Rules and Regulations
Implementing R.A. No. 8042 provides that the Labor Arbiters of
the NLRC shall have the original and exclusive jurisdiction to hear
and decide all claims arising out of employer-employee
relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages, subject to the
rules and procedures of the NLRC. In Philippine National Bank v.
Cabansag, the Court pronounced:
“Whether employed locally or overseas, all Filipino workers enjoy
the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. This
pronouncement is in keeping with the basic public policy of the
State to afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed,
and regulate the relations between workers and employers. For
the State assures the basic rights of all workers to self-
organization, collective bargaining, security of tenure, and just
and humane conditions of work [Article 3 of the Labor Code of the
Philippines; See also Section 18, Article II and Section 3, Article XIII,
1987 Constitution]. This ruling is likewise rendered imperative by
Article 17 of the Civil Code which states that laws "which have for
their object public order, public policy and good customs shall not
be rendered ineffective by laws or judgments promulgated, or by
determination or conventions agreed upon in a foreign country."
DISPOSITIVE: Petition was denied due to procedural issues. The
CA did not commit any error in dismissing the petition before it
for failure to file a prior motion for reconsideration with the NLRC.
The Labor Arbiter and the NLRC's factual findings as regards the
validity of petitioner's dismissal are accorded great weight and
respect and even finality when the same are supported by
substantial evidence.
DOCTRINE: Labor arbiters have original and exclusive jurisdiction
over claims arising from employer-employee relations, including
termination disputes involving all workers, among whom are
overseas Filipino workers.
AAA v. BBB, GR No. 212448, 2018-01-11
Facts:
AAA and BBB were married on August 1, 2006 in Quezon City.
Their union produced two children: CCC was born on March 4,
2007 and DDD on October 1, 2009.
BBB started working in Singapore as a chef, where he acquired
permanent resident status
BBB sent little to no financial support,... compelled her to fly extra
hours and take on additional jobs to augment her income as a
flight attendant... allegations of virtual abandonment,
mistreatment of her and their son CCC, and physical and sexual
violence. To make matters worse, BBB supposedly started having
an affair with a Singaporean woman
AAA and BBB had a violent altercation at a hotel room in
Singapore during her visit with their kids.
AAA was also able to secure a Hold-Departure Order against BBB
who continued to evade the warrant of arres
Granting the motion to quash on the ground of lack of jurisdiction
and thereby dismissing the case, the trial court
Granting the motion to quash on the ground of lack of jurisdiction
and thereby dismissing the case, the trial court r
Issues:
whether or not Philippine courts are deprived of territorial
jurisdiction over a criminal charge of psychological abuse under
R.A. No. 9262 when committed through marital infidelity and the
alleged illicit relationship took place outside the Philippines.
Ruling:
Physical violence is only the most visible form of abuse.
Psychological abuse, particularly forced social and economic
isolation of women, is also common."[30] In this regard, Section 3
of R.A. No. 9262 made it a point to encompass in a non-limiting
manner the various forms of violence that may be committed
against women and their children... what R.A. No. 9262
criminalizes is not the marital infidelity per se but the
psychological violence causing mental or emotional suffering on
the wife.
Marital infidelity as cited in the law is only one of the various acts
by which psychological violence may be committed... the mental
or emotional suffering of the victim is an essential and distinct
element in the commission of the offense.
Section 7 of R.A. No. 9262 is that the law contemplates that acts
of violence against women and their children may manifest as
transitory or continuing crimes
We say that even if the alleged extra marital affair causing the
offended wife mental and emotional anguish is committed
abroad, the same does not place a prosecution under R.A. No.
9262 absolutely beyond the reach of Philippine courts.
Kirtsaeng v. John Wiley & Sons, Inc. (2013)
Facts of the case
Supap Kirtsaeng came to the United States from Thailand in 1997.
He obtained an undergraduate degree at Cornell University
before being accepted into a PhD program at the University of
Southern California. To subsidize the cost of his education,
Kirtsaeng asked friends and family in Thailand to buy copies of
textbooks in Thailand and to ship those books to him in the
United States. Kirstaeng then sold the textbooks on eBay at a
profit. Among the books Kirtsaeng sold, were eight textbooks
printed in Asia by John Wiley and Sons, Inc.
Wiley sued Kirtsaeng in district court for copyright infringement
under Section 602(a)(1) of the Copyright Act, which makes it
impermissible to import a work "without the authority of the
owner." Kirtsaeng asserted a defense under Section 109(a) of the
Copyright Act, which allows the owner of a copy "lawfully made
under this title" to sell or otherwise dispose of the copy without
the copyright owner's permission. The district court rejected
Kirtsaeng's argument, and held that the doctrine was inapplicable
to goods manufactured in a foreign country.
Kirtsaeng appealed to the United States Court of Appeals for the
Second Circuit. A divided panel acknowledged that it was a
difficult question of statutory construction, but the majority held
that Section 109(a) referred specifically to works that are made in
the United States and did not apply to works manufactured
abroad. Kirtsaeng's request for rehearing was denied, and he
appealed the appellate court's decision.
Question
If a copy was made legally, acquired abroad and then imported
into the United States, can that foreign-made copy ever be resold
within the United States without the copyright owner's
permission under Section 602(a)(1) and Section 109(a) of the
copyright act?
Conclusion
Yes. Justice Stephen G. Breyer delivered the opinion of the 6-3
majority. The Supreme Court held that there was no geographic
restriction on the "first sale" doctrine, which states that the
copyright owner maintains control of the first sale only. The
language and common-law history of the Copyright Act support a
non-geographic reading of the Act that allows for unrestricted
resale of copyrighted goods regardless of the location of their
manufacture. The Court also held that a geography-based reading
of the "first sale" doctrine would drastically harm the used-book
business as it would force book sellers to be subject to the whim
of foreign copyright holders.
In her concurring opinion, Justice Elena Kagan wrote that the
majority's decision did not limit copyright protection for copyright
owners any further than previous decisions had. She argued that a
stricter reading of copyright protection goes against the
demonstrated legislative intent of the Act. Justice Samuel A. Alito,
Jr. joined in the concurrence.
Justice Ruth Bader Ginsburg wrote a dissenting opinion in which
she argued that the majority's opinion runs counter to the
Copyright Act's purpose of protecting copyright owners from the
importation of low-cost versions of their products. The language
and legislative history of the Copyright Act indicate that Congress
did not intend the "first sale" doctrine to apply to copies
manufactured abroad. She also argued that the majority's opinion
drastically shifts the government's policy in regards to
international copyright agreements. Justice Anthony M. Kennedy
and Justice Antonin Scalia joined in the dissent.
Kirtsaeng v. John Wiley & Sons (2016)
Facts of the case
Academic textbook publisher John Wiley & Sons, Inc. (Wiley) owns
the American copyright for textbooks and often assigns its rights
to its foreign subsidiaries to publish, print, and sell its textbooks
abroad. Supap Kirtsaeng is a Thai citizen who came to the United
States in 1997 to study mathematics. While he was in the United
States, Kirtsaeng asked friends and family in Thailand to buy the
English-language versions of his textbooks there, where they were
cheaper, and mail them to him. Kirtsaeng would then sell the
textbooks in America, where they were worth more, reimburse
his friends and family, and make a profit.
In 2008, Wiley sued Kirtsaeng for copyright infringement. The case
went to the U.S. Supreme Court on the question of whether
Kirtsaeng was barred from asserting an affirmative defense
because the copyrighted works in question were manufactured
abroad. The Court held that the affirmative defense was available
to Kirtsaeng and remanded the case. Kirtsaeng won the case on
remand and sought an award of attorneys' fees and
reimbursement of litigation expenses pursuant to Section 505 of
the Copyright Act. The district court held that Section 505
provides that the court may “in its discretion” award attorney’s
fees but is not bound to do so. Because Wiley’s suit was not
“frivolous” or “objectively unreasonable,” the district court held
that awarding Kirtsaeng attorney’s fees would “not promote the
purposes of the Copyright Act.” The U.S. Court of Appeals for the
Second Circuit affirmed.
Question
What constitutes the appropriate standard for awarding
attorneys’ fees to a prevailing party under Section 505 of the
Copyright Act?
Conclusion
When deciding whether to grant attorney’s fees under Section
505 of the Copyright Act, courts should give substantial weight to
the objective reasonableness of the losing party’s position, but
that determination should not be the controlling factor. Justice
Elena Kagan delivered the opinion for the unanimous Court, which
held that, while the objective reasonableness of the losing party’s
position should be given substantial weight, the court retained
discretion to consider that factor in light of other relevant
considerations. While the language of Section 505 clearly granted
a court discretion in awarding attorney’s fees, the Supreme Court
had created some restrictions that advanced the overall goals of
the Copyright Act -- to encourage creation while allowing others
to build on previous work. The objective reasonableness factor for
determining fee awards furthered useful copyright litigation
because it encouraged both parties to advance strong legal
positions and deterred frivolous suits based on weak claims.
However, any fee award analysis must take into account more
than only this factor, as others were relevant to the court’s
determination.
BMW of North America, Inc. v. Gore citizens by prohibiting deceptive trade practices. State
sovereignty, however, prevents states from imposing economic
Brief Fact Summary. The Respondent, Ira Gore, Jr. (Respondent), sanctions with the intent of changing the tortfeasors’ lawful
purchased a new BMW and later learned that the car had been conduct in other States. Alabama does not have the power to
repainted. In a suit for suppression of a material fact, the punish petitioner for conduct that was lawful where it occurred
Respondent was awarded $2 million in punitive damages. The and had no impact on Alabama.
Petitioner, BMW of North America, Inc. (Petitioner), appeals, * Three guideposts lead the Supreme Court of the United States
claiming the punitive damages award is grossly excessive. (Supreme Court) to the determination that the $2 million award
against Petitioner is grossly excessive: (i) the degree of
Synopsis of Rule of Law. The Due Process Clause of the 14th reprehensibility; (ii) the disparity between the harm suffered and
Amendment of the United States Constitution (Constitution) limits the punitive damage award; and (iii) the difference between this
the amount recoverable in punitive damages when the damages remedy and civil penalties authorized in comparable cases.
constitute grossly excessive punishment for a tortfeasor. * First, the degree of reprehensibility. Nonviolent crimes are less
serious than violent crimes. Trickery and deceit is more
reprehensible than negligence. The harm Petitioner inflicted was
Facts. The Respondent purchased a BMW sports sedan from an
purely economic in nature. There is no evidence Petitioner acted
authorized BMW dealer in Birmingham, Alabama. After
in bad faith. Petitioner reasonably relied on state disclosure
approximately nine months, Respondent took the car to an
statutes, allowing the car sales in this case in most states. Based
independent detailer to have the car detailed. The proprietor of
on these facts, Petitioner’s conduct was not sufficiently
the independent detailer detected evidence that the car had been
reprehensible to warrant a $2 million exemplary damages award.
repainted. The repainting was done by BMW to repair acid rain
* Second, the ratio between the harm suffered and the punitive
damage that occurred when the car was in transit from Germany.
damage award. There must be a reasonable relationship between
Respondent brought suit against the Petitioner alleging that the
the punitive damages award and the compensatory damages.
failure to disclose the fact that the car had been repainted
Although the Supreme Court refuses to draw a mathematical
constituted suppression of a material fact. At trial, Petitioner
bright line, this punitive damages award is 500 times the amount
acknowledged it had adopted a nationwide policy of selling cars
of the actual harm determined by the jury. This exceptional
as new without advising the dealer that any repairs had been
difference raises suspicions.
made when the repair cost did not exceed three percent of the
* Third, sanctions for comparable misconduct. Substantial
suggested retail price. At trial, Respondent introduced evidence
deference should be given to legislative judgments concerning
that his repainted car was worth less than a car that had not been
appropriate sanctions for the conduct at issue. In this case, the
refinished. In support of a punitive damages claim, he introduced
punitive damages were tantamount to that of a severe criminal
evidence that since 1983 Petitioner had sold nine hundred eighty
penalty. This Court believes that based on these three guidelines,
three refinished cars as new, including fourteen in Alabama.
the punitive damage award imposed, violates the constitutional
Petitioner disputed evidence that refinished cars were worth less,
limit of the 14th Amendment of the Constitution.
argued that its good-faith belief made punitive damages
inappropriate and that transactions other than Alabama had no
Dissent. Justice Antonin Scalia’s (J. Scalia) dissent, in which Justice
relevance to respondent’s claim. The jury found Petitioner liable
Clarence Thomas (J. Thomas) joined, is omitted. Justice Ruth
for $4,000 in compensatory damages and $4 million in punitive
Bader Ginsburg’s (J. Ginsburg) dissent, in which the Chief Justice
damages. The trial judge denied Petitioner’s motion to set aside
joined, is omitted.
the punitive damages, finding that it was not grossly excessive,
Concurrence. Justice Stephen Breyer’s (J. Breyer) concurrence, in
and therefore did not violate the Due Process Clause of the 14th
which Justice Sandra Day O’Conner (J. O’Connor) and Justice
Amendment of the Constitution. After post-trial motions, the
David Souter (J. Souter) joined, is omitted.
Alabama Supreme Court reduced the award to $2 million on the
ground that the jury improperly multiplied Gore’s compensatory
Discussion. On remand, the Alabama Supreme Court ordered a
damages by the number of similar sales in all States.
remittitur of the punitive damages award to $50,000 and
Respondent accepted.
Issue. Was the $2 million punitive damages award to the
purchaser of a refinished car grossly excessive, so as to violate the
Due Process Clause of the 14th Amendment of the Constitution?

Held. Yes. Judgment reversed and case remanded.

* Punitive damages may be imposed to further a State’s
legitimate interests in punishing unlawful conduct and deterring
its repetition. States have considerable flexibility to protect its
Spector v. Norwegian Cruise Line Ltd
Brief Fact Summary. A class action which sought declarative and
injunctive relief against the Norwegian Cruise Line Ltd (NCL) (D)
under the Title III of the ADA, which prohibits discrimination
based on disability was filed by disabled individuals (P) and their
companions (P) who had bought tickets for round-trip cruises
from a U.S. port.
Synopsis of Rule of Law. The Title III of the Americans with
Disabilities Act does not seek to regulate a vessel’s internal affairs
but it is applies to foreign-flag ships in U.S. waters.
Facts. With its principal place of business in Miami, Florida, NCL
(D), a Bermuda Corporation, operated cruise ships that departed
from and returned to port in the United States. A large chunk of
the company’s revenue came from the U.S but almost all of NCL’s
(D) vessels were registered in other countries. A class action was
brought against the cruise company by disabled individuals (P)
and their companions (P) who had purchased tickets for round-
trip cruises from a U.S. port.
The plaintiffs sought declarative and injunctive relief against NCL
(D) under the Title III of the ADA, which prohibit discrimination.
Because the ADA does not apply to foreign-flag vessels in U.S.
territory absent a clear indication of congressional intent to the
contrary, the court of appeals dismissed the claim. But the U.S.
Supreme Court granted certiorari.
Issue. Does the Title III of the Americans with Disabilities Act seek
to regulate a vessel’s internal affairs and does it applies to
foreign-flag ships in U.S. waters?
Held. (kennedy, J.) Yes. The Title III of the Americans with
Disabilities Act does not seek to regulate a vessel’s internal affairs
but it is applies to foreign-flag ships in U.S. waters. It is only when
the of the United States or its citizens rather than the interest
internal to the ship are at stake that the general statutes are
presumed to apply to conduct that takes place aboard a foreign-
flag vessel in U.S. territory.
The absence of a clear statement of congressional intent is the
narrow exception to this presumption which is based on
international comity, and the general statute is not applicable to
foreign-flag vessels as to matters involving order and discipline of
the vessel. If the Title III were to be read to require permanent
and significant structural modifications to foreign vessels, then
clear-statement rule would most likely come into play. Otherwise,
Title III is applicable to NCL’s (D) foreign-flag cruise ship. Reversed
and remanded.
Dissent. (Scalia, J) It is when laws interfere with the regulation of
a ship internal order that the clear-statement rule comes into play
and this is designed to promote international comity and avoid
international discord. It is not applicable in situation whereby the
pervasive regulation of the internal order of a ship is not present.
The structural modifications needed under Title III for compliance
with its barrier-removal provisions clearly would affect the
internal order of the ship because the physical aspect of the ship
would be altered and some of this is related to safety, which
under international law traditionally has been the province of the
ship’s flag state. This would not be in consonance with the
International Convention for the Safety of Life at Sea (SOLAS) and
other similar inconsistencies might exist between the structural
requirements of Title III and the disability laws of other countries.
According, the ADA should not apply to foreign-flag cruise ships in
U.S. waters.
Discussion. Unlike the statute’s unambiguous general terms, the
clear-statement rul is an implied limitation and operates much
like other implied rules, which avoid applications of otherwise
unambiguous statutes that would intrude on sensitive domains in
a way that Congress is unlikely to have intended had it considered
the matter.
An all-or-nothing approach to the rule was avoided by the court in
this case, under which a statute is altogether inapplicable if but
one of its specific applications trenches on the domain protected
by a clear-statement rule. This approach taking would change the
clear-statement rule from a principle of interpretive caution into a
trap for an unwary Congress, which would require the
cancellation of the entire statute or of some arbitrary set of
applications larger than the domain the rule protects.
Pennoyer v. Neff
Citation. 95 U.S. 714, 5 Otto 714, 24 L. Ed. 565 (1878).
Brief Fact Summary. Defendant Neff was being sued by Mitchell
in Oregon for unpaid legal fees. A default judgment was entered
against Defendant for his failure to come to court or otherwise
resist the lawsuit, despite the fact that he was not personally
served with process, nor was a resident of Oregon. Later, in an
attempt to collect upon his judgment, Mitchell attached land
located in Oregon belonging to Defendant, and had it sold to
Plaintiff Pennoyer through a Sheriff’s sale.
Synopsis of Rule of Law. Proceedings in a court of law to
determine the personal rights and obligations of parties over
whom the court has not jurisdiction are invalid for want of due
process of law.
Facts. Mitchell, a lawyer, sued Defendant, his client, in Oregon
state court for unpaid legal fees. At the time Defendant was a
non-resident of the state who was not personally served with
process. Constructive service was issued upon Defendant by
publication. Defendant did not come to court or otherwise resist
the lawsuit, and default judgment was entered against him. After
the default judgment, Defendant acquired 300 acres of land in
Oregon. To satisfy his judgment against Defendant, Mitchell had
the sheriff seize and sell Defendant’s land. The land was
purchased by Plaintiff, who received a sheriff’s deed as evidence
of title. The sheriff then turned the sale proceeds over to Mitchell.
Shortly after the sheriff’s sale, Defendant discovered what had
happened to his land and brought suit against Plaintiff to recover
the land. This appeal followed after Defendant lost his suit against
Plaintiff.
Issue. Can judgments obtained against non-residents who fail to
appear in court be sustained by default judgments where service
of process is accomplished solely through publication (i.e.
constructive service)?
Is constructive service sufficient notice to attach property within
the forum state owned by a non-resident?
Held. No. The personal judgment recovered in the state court of
Oregon against Plaintiff was without validity, and the decision of
the Court of Appeals overturning that judgment was affirmed.
When a suit is merely in personam (i.e. against a person),
constructive service through publication upon a non-resident is
ineffective.
No state can exercise direct jurisdiction and authority over
persons or property without its territory. However, a state may
subject property within its boundaries to the payments of its
citizens, even when the land is owned by a non-resident, without
infringing upon the sovereignty of the state of residency of the
landowner.
Discussion. Here the Supreme Court of the United States is
distinguishing between suits in personam, and in rem. An in
personam suit is a suit against a person, whose purpose is to
determine the personal rights and obligations of the defendant.
An in rem action, meanwhile, is an action where jurisdiction
pertains to property. Thus the court reasoned that constructive
service is sufficient to inform parties of action taken against any
properties owned by them within the forum state, because
property is always in possession of the owner, and seizure of the
property will inform the owner of legal action taken against him.
ASIAVEST MERCHANT BANKERS (M) BERHAD vs. CA and PNCC
G.R. No. 110263, July 20, 2001
Facts: Petitioner Asiavest Merchant Bankers (M) Berhad is a
corporation organized under the laws of Malaysia while private
respondent Philippine National Construction Corporation is a
corporation duly incorporated and existing under Philippine laws.
Petitioner initiated a suit for collection against private
respondent, then known as Construction and Development
Corporation of the Philippines, before the High Court of Malaya in
Kuala Lumpur entitled “Asiavest Merchant Bankers (M) Berhad v.
Asiavest CDCP Sdn. Bhd. and Construction and Development
Corporation of the Philippines.”
Petitioner sought to recover the indemnity of the performance
bond it had put up in favor of private respondent to guarantee the
completion of the Felda Project and the nonpayment of the loan it
extended to Asiavest-CDCP Sdn. Bhd. for the completion of Paloh
Hanai and Kuantan By Pass; Project.
The High Court of Malaya (Commercial Division) rendered
judgment in favor of the petitioner and against the private
respondent. Following unsuccessful attempts to secure payment
from private respondent under the judgment, petitioner initiated
the complaint before RTC of Pasig, Metro Manila, to enforce the
judgment of the High Court of Malaya.
Private respondent sought the dismissal of the case via a Motion
to Dismiss, contending that the alleged judgment of the High
Court of Malaya should be denied recognition or enforcement
since on in face, it is tainted with want of jurisdiction, want of
notice to private respondent, collusion and/or fraud, and there is
a clear mistake of law or fact. Dismissal was, however, denied by
the trial court considering that the grounds relied upon are not
the proper grounds in a motion to dismiss under Rule 16 of the
Revised Rules of Court.
Subsequently, private respondent filed its Answer with
Compulsory Counter claim’s and therein raised the grounds it
brought up in its motion to dismiss. In its Reply filed, the
petitioner contended that the High Court of Malaya acquired
jurisdiction over the person of private respondent by its voluntary
submission the court’s jurisdiction through its appointed counsel.
Furthermore, private respondent’s counsel waived any and all
objections to the High Court’s jurisdiction in a pleading filed
before the court.
In due time, the trial court rendered its decision dismissing
petitioner’s complaint. Petitioner interposed an appeal with the
Court of Appeals, but the appellate court dismissed the same and
affirmed the decision of the trial court.
Issue: Whether or not the CA erred in denying recognition and
enforcement to the Malaysian Court judgment.
Ruling: Yes.
Generally, in the absence of a special compact, no sovereign is
bound to give effect within its dominion to a judgment rendered
by a tribunal of another country; however, the rules of comity,
utility and convenience of nations have established a usage
among civilized states by which final judgments of foreign courts
of competent jurisdiction are reciprocally respected and rendered
efficacious under certain conditions that may vary in different
countries.
In this jurisdiction, a valid judgment rendered by a foreign tribunal
may be recognized insofar as the immediate parties and the
underlying cause of action are concerned so long as it is
convincingly shown that there has been an opportunity for a full
and fair hearing before a court of competent jurisdiction; that the
trial upon regular proceedings has been conducted, following due
citation or voluntary appearance of the defendant and under a
system of jurisprudence likely to secure an impartial
administration of justice; and that there is nothing to indicate
either a prejudice in court and in the system of laws under which
it is sitting or fraud in procuring the judgment.
A foreign judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing, on the
basis of a presumption of regularity of proceedings and the giving
of due notice in the foreign forum Under Section 50(b), Rule 39 of
the Revised Rules of Court, which was the governing law at the
time the instant case was decided by the trial court and
respondent appellate court, a judgment, against a person, of a
tribunal of a foreign country having jurisdiction to pronounce the
same is presumptive evidence of a right as between the parties
and their successors in interest by a subsequent title. The
judgment may, however, be assailed by evidence of want of
jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact. In addition, under Section 3(n), Rule 131 of
the Revised Rules of Court, a court, whether in the Philippines or
elsewhere, enjoys the presumption that it was acting in the lawful
exercise of its jurisdiction. Hence, once the authenticity of the
foreign judgment is proved, the party attacking a foreign
judgment, is tasked with the burden of overcoming its
presumptive validity.
In the instant case, petitioner sufficiently established the
existence of the money judgment of the High Court of Malaya by
the evidence it offered. Petitioner’s sole witness, testified to the
effect that he is in active practice of the law profession in
Malaysia; that he was connected with Skrine and Company as
Legal Assistant up to 1981; that private respondent, then known
as Construction and Development Corporation of the Philippines,
was sued by his client, Asiavest Merchant Bankers (M) Berhad, in
Kuala Lumpur; that the writ of summons were served on March
17, 1983 at the registered office of private respondent and on
March 21, 1983 on Cora S. Deala, a financial planning officer of
private respondent for Southeast Asia operations; that upon the
filing of the case, Messrs. Allen and Gledhill, Advocates and
Solicitors, with address at 24th Floor, UMBC Building, Jalan
Sulaiman, Kuala Lumpur, entered their conditional appearance for
private respondent questioning the regularity of the service of the
writ of summons but subsequently withdrew the same when it
realized that the writ was properly served; that because private
respondent failed to file a statement of defense within two (2)
weeks, petitioner filed an application for summary judgment and
submitted affidavits and documentary evidence in support of its
claim; that the matter was then heard before the High Court of
Kuala Lumpur in a series of dates where private respondent was
represented by counsel; and that the end result of all these
proceedings is the judgment sought to be enforced.
In addition to the said testimonial evidence, petitioner also
offered the documentary evidence to support their claim.
Having thus proven, through the foregoing evidence, the
existence and authenticity of the foreign judgment, said foreign
judgment enjoys presumptive validity and the burden then fell
upon the party who disputes its validity, herein private
respondent, to prove otherwise. However, private respondent
failed to sufficiently discharge the burden that fell upon it – to
prove by clear and convincing evidence the grounds which it
relied upon to prevent enforcement of the Malaysian High Court
judgment.
Banco do Brasil vs CA
Petitioner: BANCO DO BRASIL
Respondents: THE COURT OF APPEALS, HON. ARSENIO M.
GONONG, and CESAR S. URBINO, SR.
Topic: Extra-territorial service of summons;
Facts:
Cesar Urbino, Sr. sued Poro Point Shipping Services for damages
the former incurred when one of the latter’s 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 BDB’s 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.

Significantly, the publication of summons effected by private

respondent is invalid and ineffective for the trial court to acquire
jurisdiction over the person of petitioner.