ARTICLE I
Citizens of the Philippines who marry aliens shall production-sharing agreements with Filipino citizens, or
National Territory
The national territory comprises the Philippine archipelago, with
all the islands and waters embraced therein, and all other
territories over which the Philippines has sovereignty or
jurisdiction, consisting of its terrestrial, fluvial, and aerial
domains, including its territorial sea, the seabed, the subsoil, the
insular shelves, and other submarine areas. The waters around,
between, and connecting the islands of the archipelago,
regardless of their breadth and dimensions, form part of the
internal waters of the Philippines.
ARTICLE IV
Citizenship
SECTION 1. The following are citizens of the Philippines:
(1) Those who are citizens of the Philippines at the time of the
adoption of this Constitution;
(2) Those whose fathers or mothers are citizens of the
Philippines;
(3) Those born before January 17, 1973, of Filipino mothers,
who elect Philippine citizenship upon reaching the age of
majority; and
(4) Those who are naturalized in accordance with law.
SECTION 2. Natural-born citizens are those who are citizens of
the Philippines from birth without having to perform any act to
acquire or perfect their Philippine citizenship. Those who elect
Philippine citizenship in accordance with paragraph (3), Section
1 hereof shall be deemed natural-born citizens.
SECTION 3. Philippine citizenship may be lost or reacquired in
the manner provided by law.
SECTION 4.
retain their citizenship, unless by their act or omission they are
deemed, under the law, to have renounced it.
SECTION 5. Dual allegiance of citizens is inimical to the
national interest and shall be dealt with by law.
ARTICLE XII
National Economy and Patrimony
SECTION 1. The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services produced
by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all,
especially the underprivileged.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian reform,
through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic
and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade
practices.
In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to
develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.
SECTION 2. All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the State. With the
exception of agricultural lands, all other natural resources shall
not be alienated. The exploration, development, and utilization
of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such
activities, or it may enter into co-production, joint venture, or
corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more
than twenty-five years, and under such terms and conditions as
may be provided by law. In cases of water rights for irrigation,
water supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be the measure
and limit of the grant.
The State shall protect the nation’s marine wealth in its
archipelagic waters, territorial sea, and exclusive economic zone,
and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fishworkers
in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to
the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of every contract entered
into in accordance with this provision, within thirty days from its
execution.
SECTION 3. Lands of the public domain are classified into
agricultural, forest or timber, mineral lands, and national parks.
Agricultural lands of the public domain may be further classified
by law according to the uses which they may be devoted.
Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not
hold such alienable lands of the public domain except by lease,
for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more
than five hundred hectares, or acquire not more than twelve
hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology,
and development, and subject to the requirements of agrarian
reform, the Congress shall determine, by law, the size of lands of
the public domain which may be acquired, developed, held, or
leased and the conditions therefor.
SECTION 4. The Congress shall, as soon as possible, determine
by law the specific limits of forest lands and national parks,
marking clearly their boundaries on the ground. Thereafter, such
forest lands and national parks shall be conserved and may not
be increased nor diminished, except by law. The Congress shall
provide, for such period as it may determine, measures to
prohibit logging in endangered forests and watershed areas.
SECTION 5. The State, subject to the provisions of this
Constitution and national development policies and programs,
shall protect the rights of indigenous cultural communities to
their ancestral lands to ensure their economic, social, and
cultural well-being.
The Congress may provide for the applicability of customary
laws governing property rights or relations in determining the
ownership and extent of ancestral domain.
SECTION 6. The use of property bears a social function, and all
economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the
right to own, establish, and operate economic enterprises, subject
to the duty of the State to promote distributive justice and to
intervene when the common good so demands.
SECTION 7. Save in cases of hereditary succession, no private
lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of
the public domain.
SECTION 8. Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who has lost his
Philippine citizenship may be a transferee of private lands,
subject to limitations provided by law.
SECTION 9. The Congress may establish an independent
economic and planning agency headed by the President, which
shall, after consultations with the appropriate public agencies,
various private sectors, and local government units, recommend
to Congress, and implement continuing integrated and
coordinated programs and policies for national development.
Until the Congress provides otherwise, the National Economic
and Development Authority shall function as the independent
planning agency of the government.
SECTION 10. The Congress shall, upon recommendation of the
economic and planning agency, when the national interest
dictates, reserve to citizens of the Philippines or to corporations
or associations at least sixty per centum of whose capital is
owned by such citizens, or such higher percentage as Congress
may prescribe, certain areas of investments. The Congress shall
enact measures that will encourage the formation and operation
of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference
to qualified Filipinos.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance
with its national goals and priorities.
SECTION 11. No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted
except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least
sixty per centum of whose capital is owned by such citizens, nor
shall such franchise, certificate, or authorization be exclusive in
character or for a longer period than fifty years. Neither shall any
such franchise or right be granted except under the condition that
it shall be subject to amendment, alteration, or repeal by the
Congress when the common good so requires. The State shall
encourage equity participation in public utilities by the general
public. The participation of foreign investors in the governing
body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be
citizens of the Philippines.
SECTION 12. The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced goods,
and adopt measures that help make them competitive.
SECTION 13. The State shall pursue a trade policy that serves
the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
SECTION 14. The sustained development of a reservoir of
national talents consisting of Filipino scientists, entrepreneurs,
professionals, managers, high-level technical manpower and
skilled workers and craftsmen in all fields shall be promoted by
the State. The State shall encourage appropriate technology and
regulate its transfer for the national benefit.
The practice of all professions in the Philippines shall be limited
to Filipino citizens, save in cases prescribed by law.
SECTION 15. The Congress shall create an agency to promote
the viability and growth of cooperatives as instruments for social
justice and economic development.
SECTION 16. The Congress shall not, except by general law,
provide for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may
be created or established by special charters in the interest of the
common good and subject to the test of economic viability.
SECTION 17. In times of national emergency, when the public
interest so requires, the State may, during the emergency and
under reasonable terms prescribed by it, temporarily take over or
direct the operation of any privately owned public utility or
business affected with public interest.
SECTION 18. The State may, in the interest of national welfare
or defense, establish and operate vital industries and, upon
payment of just compensation, transfer to public ownership
utilities and other private enterprises to be operated by the
Government.
SECTION 19. The State shall regulate or prohibit monopolies
when the public interest so requires. No combinations in restraint
of trade or unfair competition shall be allowed.
SECTION 20. The Congress shall establish an independent
central monetary authority, the members of whose governing
board must be natural-born Filipino citizens, of known probity,
integrity, and patriotism, the majority of whom shall come from
the private sector. They shall also be subject to such other
qualifications and disabilities as may be prescribed by law. The
authority shall provide policy direction in the areas of money,
banking, and credit. It shall have supervision over the operations
of banks and exercise such regulatory powers as may be
provided by law over the operations of finance companies and
other institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the
Philippines, operating under existing laws, shall function as the
central monetary authority.
SECTION 21. Foreign loans may only be incurred in accordance
with law and the regulation of the monetary authority.
Information on foreign loans obtained or guaranteed by the
Government shall be made available to the public.
SECTION 22. Acts which circumvent or negate any of the
provisions of this Article shall be considered inimical to the
national interest and subject to criminal and civil sanctions, as
may be provided by law.
Hasegawa vs. Kitamura
Facts
 Nippon Engineering Consultants Co., Ltd. entered into
an Independent Contractor Agreement (ICA) with
Kitamura
 The agreement provides that respondent was to extend
professional services to Nippon for a certain period.
 Prior to the expiration of the said agreement, petitioner
Kazuhiro Hasegawa, Nippon's general manager for its
International Division, informed respondent that the
company had no more intention of automatically
renewing his ICA.
 Threatened with impending unemployment, respondent,
through his lawyer, requested a negotiation conference
and demanded that he be assigned to the BBRI project.
 Nippon insisted that respondent’s contract was for a
fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.
 As he was not able to generate a positive response from
the petitioners, respondent consequently initiated a case
for specific performance and damages with the RTC.
 petitioners, contending that the ICA had been perfected
in Japan and executed by and between Japanese
nationals, moved to dismiss the complaint for lack of
jurisdiction.
 They asserted that the claim for
improper pre-termination of
respondent's ICA could only be heard
and ventilated in the proper courts of
Japan following the principles of lex loci
celebrationis and lex contractus.
 The RTC ruled in favor of Kitamura contending that
matters connected with the performance of contracts are
regulated by the law prevailing at the place of
performance.
 The CA affirmed the RTC’s ruling contending that 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.
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?
Ruling
 No
 To elucidate, in the judicial resolution of
conflicts problems, three consecutive phases are
involved: jurisdiction, choice of law, and recognition
and enforcement of judgments. Corresponding to
these phases are the following questions: (1) Where
can or should litigation be initiated? (2) Which law
will the court apply? and (3) Where can the resulting
judgment be enforced
 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."
 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.
 Since these three principles in conflict of laws
make reference to the law applicable to a dispute,
they are rules proper for the second phase, the choice
of law. 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, petitioners' 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, first 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
Saudia vs. Resencio
Facts:
In this case, Respondents (complainants before the Labor
Arbiter) were recruited and hired by Saudia as Temporary Flight
Attendants with the accreditation and approval of the POEA.
After undergoing seminars required by the POEA for
deployment overseas, as well as training modules offered by
Saudia, respondents became Permanent Flight Attendants. They
then entered into Cabin Attendant contracts with Saudia.
Respondents continued their employment with Saudia until they
were separated from service on various dates in 2006.
Respondents contended that the termination of their employment
was illegal. They alleged that the termination was made solely
because they were pregnant.
Respondents informed Saudia of their respective pregnancies
and had gone through the necessary procedures to process their
maternity leaves but it was denied by the management of Saudia.
Saudia required respondents to file their resignation letter,
otherwise Saudia would terminate them all.
Saudia anchored its disapproval of respondents’ maternity leaves
and demand for their resignation on its “Unified Employment
Contract for Female Cabin Attendants” (Unified Contract) that
the employment of a Flight Attendant who becomes pregnant is
rendered void stating that 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.
Faced with dilemma, respondents filed their resignation, but
subsequently filed a complaint against Saudia for illegal
dismissal. The complaint was filed before the Labor Arbiter.
However, Saudia assailed the jurisdicton of the LA claiming that
all the determining points of contact referred to foreign law and
insisted that the Complaint ought to be dismissed on the ground
of forum non conveniens.
Issue:
WON the laws of Saudia apply and the Philippines is a forum
non convenience.
Held:
A choice of law governing the validity of contracts or the
interpretation of its provisions dees not necessarily imply forum
non conveniens. Choice of law and forum non conveniens are
entirely different matters.
Choice of law provisions are an offshoot of the fundamental
principle of autonomy of contracts. Article 1306 of the Civil
Code firmly ensconces this:
Article 1306. The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
In contrast, forum non conveniens is a device akin to the rule
against forum shopping. It is designed to frustrate illicit means
for securing advantages and vexing litigants that would
otherwise be possible if the venue of litigation (or dispute
resolution) were left entirely to the whim of either party.
Likewise, contractual choice of law is not determinative of
jurisdiction. Stipulating on the laws of a given jurisdiction as the
governing law of a contract does not preclude the exercise of
jurisdiction by tribunals elsewhere. The reverse is equally true:
The assumption of jurisdiction by tribunals does not ipso facto
mean that it cannot apply and rule on the basis of the parties'
stipulation.
Philippine law is definite as to what governs the formal or
extrinsic validity of contracts. The first paragraph of Article 17
of the Civil Code provides that "[t]he forms and solemnities of
contracts . . . shall be governed by the laws of the country in
which they are executed"
In contrast, there is no statutorily established mode of settling
conflict of laws situations on matters pertaining to substantive
content of contracts. It has been noted that three (3) modes have
emerged: (1) lex loci contractus or the law of the place of the
making; (2) lex loci solutionis or the law of the place of
performance; and (3) lex loci intentionis or the law intended by
the parties.
Given Saudia's assertions, of particular relevance to resolving the
present dispute is lex loci intentionis that the stipulations set in
the Cabin Attendant contracts require the application of the laws
of Saudi Arabia. It insists that the need to comply with these
stipulations calls into operation the doctrine of forum non
conveniens and, in turn, makes it necessary for Philippine
tribunals to refrain from exercising jurisdiction.
When parallel litigation arises strictly within the context of a
single jurisdiction, such rules as those on forum shopping, litis
pendentia, and res judicata come into operation. Forum non
conveniens, like the rules of forum shopping, litis pendentia, and
res judicata, is a means of addressing the problem of parallel
litigation. While the rules of forum shopping, litis pendentia, and
res judicata are designed to address the problem of parallel
litigation within a single jurisdiction, forum non conveniens is a
means devised to address parallel litigation arising in multiple
jurisdictions.
Forum non conveniens literally translates to "the forum is
inconvenient." It is a concept in private international law and
was devised to combat the "less than honorable" reasons and
excuses that litigants use to secure procedural advantages, annoy
and harass defendants, avoid overcrowded dockets, and select a
"friendlier" venue. Thus, the doctrine of forum non conveniens
addresses the same rationale that the rule against forum shopping
does, albeit on a multijurisdictional scale.
Unlike the rule on res judicata, as well as those on litis pendentia
and forum shopping, forum non conveniens finds no textual
anchor, whether in statute or in procedural rules, in our civil law
system. Nevertheless, jurisprudence has applied forum non
conveniens as basis for a court to decline its exercise of
jurisdiction.
Accordingly, under the doctrine of forum non conveniens, "a
court, in conflicts of law cases, may refuse impositions on its
jurisdiction where it is not the most 'convenient' or available
forum and the parties are not precluded from seeking remedies
elsewhere."
In Bank of America, NT&SA, Bank of America International,
Ltd. v. Court of Appeals, this court underscored that a Philippine
court may properly assume jurisdiction over a case if it chooses
to do so to the extent: "(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."
The use of the word "may" (i.e., "may refuse impositions on its
jurisdiction") in the decisions shows that the matter of
jurisdiction rests on the sound discretion of a court. Neither the
mere invocation of forum non conveniens nor the averment of
foreign elements operates to automatically divest a court of
jurisdiction. Rather, a court should renounce jurisdiction only
"after 'vital facts are established, to determine whether special
circumstances' require the court's desistance." As the propriety of
applying forum non conveniens is contingent on a factual
determination, it is, therefore, a matter of defense.
Forum non conveniens must not only be clearly pleaded as a
ground for dismissal; it must be pleaded as such at the earliest
possible opportunity. Otherwise, it shall be deemed waived. This
court notes that in Hasegawa, this court stated that forum non
conveniens is not a ground for a motion to dismiss. Consistent
with forum non conveniens as fundamentally a factual matter, it
is imperative that it proceed from & factually established basis.
It would be improper to dismiss an action pursuant to forum non
conveniens based merely on a perceived, likely, or hypothetical
multiplicity of fora. Thus, a defendant must also plead and show
that a prior suit has, in fact, been brought in another jurisdiction.
In the greater interest of prudence that a defendant not only
allege supposed dangerous tendencies in litigating in this
jurisdiction; the defendant must also show that such danger is
real and present in that litigation or dispute resolution has
commenced in another jurisdiction and that a foreign tribunal has
chosen to exercise jurisdiction.
Forum non conveniens relates to forum, not to the choice of
governing law. Thai forum non conveniens may ultimately result
in the application of foreign law is merely an incident of its
application. In this strict sense, forum non conveniens is not
applicable. It is not the primarily pivotal consideration in this
case.
Any evaluation of the propriety of contracting parties' choice of a
forum and'its incidents must grapple with two (2) considerations:
first, the availability and adequacy of recourse to a foreign
tribunal; and second, the question of where, as between the
forum court and a foreign court, the balance of interests inhering
in a dispute weighs more heavily.
The first is a pragmatic matter. It relates to the viability of ceding
jurisdiction to a foreign tribunal and can be resolved by
juxtaposing the competencies and practical circumstances of the
tribunals in alternative fora. Exigencies, like the statute of
limitations, capacity to enforce orders and judgments, access to
records, requirements for the acquisition of jurisdiction, and even
questions relating to the integrity of foreign courts, may render
undesirable or even totally unfeasible recourse to a foreign court.
As mentioned, we consider it in the greater interest of prudence
that a defendant show, in pleading forum non conveniens, that
litigation has commenced in another jurisdiction and that a
foieign tribunal has, in fact, chosen to exercise jurisdiction.
Two (2) factors weigh into a court's appraisal of the balance of
interests inhering in a dispute: first, the vinculum which the
parties and their relation have to a given jurisdiction; and second,
the public interest that must animate a tribunal, in its capacity as
an agent of the sovereign, in choosing to assume or decline
jurisdiction. The first is more concerned with the parties, their
personal circumstances, and private interests; the second
concerns itself with the state and the greater social order.
In considering the vinculum, a court must look into the
preponderance of linkages which the parties and their transaction
may have to either jurisdiction. In this respect, factors, such as
the parties' respective nationalities and places of negotiation,
execution, performance, engagement or deployment, come into
play.
In considering public interest, a court proceeds with a
consciousness that it is an organ of the state. It must, thus,
determine if the interests of the sovereign (which acts through it)
are outweighed by those of the alternative jurisdiction. In this
respect, the court delves into a consideration of public policy.
Should it find that public interest weighs more heavily in favor
of its assumption of jurisdiction, it should proceed in
adjudicating the dispute, any doubt or .contrary view arising
from the preponderance of linkages notwithstanding.
Our law on contracts recognizes the validity of contractual
choice of law provisions. Where such provisions exist,
Philippine tribunals, acting as the forum court, generally defer to
the parties' articulated choice.
This is consistent with the fundamental principle of autonomy of
contracts. Article 1306 of the Civ:l Code expressly provides that
"[t]he contracting parties may establish 'such stipulations,
clauses, terms and conditions as they may deem convenient."
Nevertheless, while a Philippine tribunal (acting as the forum
court) is called upon to respect the parties' choice of governing
law, such respect must not be so permissive as to lose sight of
considerations of law, morals, good customs, public order, or
public policy that underlie the contract central to the controversy.
Article II, Section 14 of the 1987 Constitution provides that
"[t]he State ... shall ensure the fundamental equality before the
law of women and men." Contrasted with Article II, Section 1 of
the 1987 Constitution's statement that "[n]o person shall ... be
denied the equal protection of the laws," Article II, Section 14
exhorts the State to "ensure." This does not only mean that the
Philippines shall not countenance nor lend legal recognition and
approbation to measures that discriminate on the basis of one's
being male or female. It imposes an obligation to actively engage
in securing the fundamental equality of men and women. The
Convention on the Elimination of all Forms of Discrimination
against Women (CEDAW), signed and ratified by the
Philippines on July 15, 1980, and on August 5, 1981,
respectively, is part of the law of the land. In view of the
widespread signing and ratification of, as well as adherence (in
practice) to it by states, it may even be said that many provisions
of the CEDAW may have become customary international law.
The CEDAW gives effect to the Constitution's policy statement
in Article II, Section 14.
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.
SAUDI ARABIAN AIRLINES vs. CA
FACTS:
Milagros Morada is a Filipina hired bu Saudia Airlines as a flight
attendant. During the lay over of her flight in Jakarta, she was
allegedly raped by one of her co-cabin crew. Saudia Airlines did
not helped her in the case. Instead, she was terminated by the
airline without informing her of the cause. When she arrived in
the Philippines, she filed a case for damages against employer.
The RTC ruled that the Philippines is an appropriate forum
considering that the Amended Complaint's basis for recovery of
damages is Article 21 of the Civil Code, and thus, clearly within
the jurisdiction of respondent Court.
Petitioner SAUDIA claims that before us is a conflict of laws
that must be settled at the outset. It maintains that private
respondent's 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.
On the other hand, private respondent contends that since her
Amended Complaint is based on Articles 19, 35 and 21, 36 of
the Civil Code, then the instant case is properly a matter of
domestic law.
ISSUE: 1. Whether or not this case involve conflict of laws.
2. Which law is applicable in the case at bar?
HELD: 1. Where the factual antecedents satisfactorily establish
the existence of a foreign element, we agree with petitioner that
the problem herein could present a "conflicts" 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.
We thus find private respondent's assertion that the case is purely
domestic, imprecise. A conflicts problem presents itself here,
and the question of jurisdiction confronts the court a quo.
2. Before a choice can be made, it is necessary for us to
determine under what category a certain set of facts or rules fall.
This process is known as "characterization", or the "doctrine of
qualification". It is the "process of deciding whether or not the
facts relate to the kind of question specified in a conflicts rule."
The purpose of "characterization" is to enable the forum to select
the proper law.
Our starting point of analysis here is not a legal relation, but a
factual situation, event, or operative fact. An essential element of
conflict rules is the indication of a "test" or "connecting factor"
or "point of contact". Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract claim) and a
connecting factor or point of contact, such as the situs of the res,
the place of celebration, the place of performance, or the place of
wrongdoing.
Note that one or more circumstances may be present to serve as
the possible test for the determination of the applicable law.
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.
After a careful study of the pleadings on record, including
allegations in the Amended Complaint deemed admitted for
purposes of the motion to dismiss, we are convinced that there is importance with respect to the particular issue: (a) the place
reasonable basis for private respondent's assertion that although where the injury occurred; (b) the place where the conduct
she was already working in Manila, petitioner brought her to causing the injury occurred; (c) the domicile, residence,
Jeddah on the pretense that she would merely testify in an nationality, place of incorporation and place of business of the
investigation of the charges she made against the two SAUDIA parties, and (d) the place where the relationship, if any, between
crew members for the attack on her person while they were in the parties is centered.
Jakarta. As it turned out, she was the one made to face trial for As already discussed, there is basis for the claim that over-all
very serious charges, including adultery and violation of Islamic injury occurred and lodged in the Philippines. There is likewise
laws and tradition. no question that private respondent is a resident Filipina national,
working with petitioner, a resident foreign corporation engaged
Considering that the complaint in the court a quo is one here in the business of international air carriage. Thus, the
involving torts, the "connecting factor" or "point of contact" "relationship" between the parties was centered here, although it
could be the place or places where the tortious conduct or lex should be stressed that this suit is not based on mere labor law
loci actus occurred. And applying the torts principle in a violations. From the record, the claim that the Philippines has the
conflicts case, we find that the Philippines could be said as a most significant contact with the matter in this dispute, 63 raised
situs of the tort (the place where the alleged tortious conduct by private respondent as plaintiff below against defendant
took place). This is because it is in the Philippines where (herein petitioner), in our view, has been properly established.
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.
Moreover, with the widespread criticism of the traditional rule of
lex loci delicti commissi, modern theories and rules on tort
liability have been advanced to offer fresh judicial approaches to
arrive at just results. In keeping abreast with the modern theories
on tort liability, we find here an occasion to apply the "State of
the most significant relationship" rule, which in our view should
be appropriate to apply now, given the factual context of this
case.

In applying said principle 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