PHILSEC VS.
CA District Court of Southern Texas that private respondents committed
MARCH 28, 2013 ~ VBDIAZ
PHILSEC INVESTMENT et al vs.CA et al
G.R. No. 103493
June 19, 1997
FACTS: Private respondent Ducat obtained separate loans from
petitioners Ayala International Finance Limited (AYALA) and
Philsec Investment Corp (PHILSEC), secured by shares of stock
owned by Ducat.
In order to facilitate the payment of the loans, private respondent
1488, Inc., through its president, private respondent Daic, assumed
Ducat’s obligation under an Agreement, whereby 1488, Inc.
executed a Warranty Deed with Vendor’s Lien by which it sold to
petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in
Texas, U.S.A., while PHILSEC and AYALA extended a loan to
ATHONA as initial payment of the purchase price. The balance was
to be paid by means of a promissory note executed by ATHONA in
favor of 1488, Inc. Subsequently, upon their receipt of the money
from 1488, Inc., PHILSEC and AYALA released Ducat from his
indebtedness and delivered to 1488, Inc. all the shares of stock in
their possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance, the entire
amount covered by the note became due and demandable.
Accordingly, private respondent 1488, Inc. sued petitioners
PHILSEC, AYALA, and ATHONA in the United States for
payment of the balance and for damages for breach of contract and
for fraud allegedly perpetrated by petitioners in misrepresenting the
marketability of the shares of stock delivered to 1488, Inc. under the
Agreement.
While the Civil Case was pending in the United States, petitioners
filed a complaint “For Sum of Money with Damages and Writ of
Preliminary Attachment” against private respondents in the RTC
Makati. The complaint reiterated the allegation of petitioners in their
respective counterclaims in the Civil Action in the United States
fraud by selling the property at a price 400 percent more than its true
value.
Ducat moved to dismiss the Civil Case in the RTC-Makati on the
grounds of (1) litis pendentia, vis-a-vis the Civil Action in the U.S.,
(2) forum non conveniens, and (3) failure of petitioners PHILSEC
and BPI-IFL to state a cause of action.
The trial court granted Ducat’s MTD, stating that “the evidentiary
requirements of the controversy may be more suitably tried before
the forum of the litis pendentia in the U.S., under the principle in
private international law of forum non conveniens,” even as it noted
that Ducat was not a party in the U.S. case.
Petitioners appealed to the CA, arguing that the trial court erred in
applying the principle of litis pendentia and forum non conveniens.
The CA affirmed the dismissal of Civil Case against Ducat, 1488,
Inc., and Daic on the ground of litis pendentia.
ISSUE: is the Civil Case in the RTC-Makati barred by the judgment
of the U.S. court?
HELD: CA reversed. Case remanded to RTC-Makati
NO
While this Court has given the effect of res judicata to foreign
judgments in several cases, it was after the parties opposed to the
judgment had been given ample opportunity to repel them on
grounds allowed under the law. This is because in this jurisdiction,
with respect to actions in personam, as distinguished from actions in
rem, a foreign judgment merely constitutes prima facie evidence of
the justness of the claim of a party and, as such, is subject to proof
to the contrary. Rule 39, §50 provides:
Sec. 50. Effect of foreign judgments. — The effect of a judgment of
a tribunal of a foreign country, having jurisdiction to pronounce the
judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is

conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title; but the judgment may be
repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.

In the case at bar, it cannot be said that petitioners were given the
opportunity to challenge the judgment of the U.S. court as basis for
declaring it res judicata or conclusive of the rights of private
respondents. The proceedings in the trial court were summary.
Neither the trial court nor the appellate court was even furnished
copies of the pleadings in the U.S. court or apprised of the evidence
presented thereat, to assure a proper determination of whether the
issues then being litigated in the U.S. court were exactly the issues
raised in this case such that the judgment that might be rendered
would constitute res judicata.

Second. Nor is the trial court’s refusal to take cognizance of the case
justifiable under the principle of forum non conveniens:

First, a MTD is limited to the grounds under Rule 16, sec.1, which
does not include forum non conveniens. The propriety of dismissing
a case based on this principle requires a factual determination,
hence, it is more properly considered a matter of defense.
Second, while it is within the discretion of the trial court to abstain
from assuming jurisdiction on this ground, it should do so only after
“vital facts are established, to determine whether special
circumstances” require the court’s desistance.
ILLUH ASAALI, HATIB ABDURASID, INGKOH BANTALA,
BASOK INGKIN, and MOHAMMAD BANTALA, petitioners,
v. THE COMMISSIONER OF CUSTOMS, respondent.
No. L-24170,        December 16, 1968
Facts:
At noontime of September 10, 1950, five sailing vessels, from
Borneo toward the ports of Tawi-tawi and Sulu, were spotted and
intercepted in high seas by the Custom Patrol Team. The
said patrol team aboard Boat ST-23 found out that the five vessels
contained 181 cases of “Herald” cigarettes, 9 cases of “Camel”
cigarettes, and some rattan chairs. The sailing vessels were all
Philippine registered, owned and manned by Filipino residents from
Sulu. Petitioners, however, possessed no permit from the
Commissioner of Customs so that they can engage in the
importation of the goods they carry (as required by Section 1363 [a]
of the Revised Administrative Code). Also, the goods the petitioners
carry were not covered by RA 426 or the Import Control Law. The
Custom Patrol Team then seized the goods even if they were in the
high seas. Petitioners claim that the interception and seizure of the
items were illegal because they were intercepted outside the territory
of the Philippines. Also, the petitioners contend that they could not
have been engaged to the importation of the above-mentioned items
to incur the forfeiture under Section 1363 of
the Revised Administrative Code. The Court of Tax Appeals held
that Section 1363 should be applied because all the vessels were all
headed to Tawi-tawi. No import license and permit were carried
violating RA 426. Their course, that is—they are about to enter the
Philippine territory, announced loudly that they were about to
import these items in the Philippines.
Issues:
Whether or not the interception and seizure by customs officials of
the vessels valid in the contention that importation had not yet
begun and that the seizure was effected outside our territorial
waters.
Whether or not the Import Control Law was violated since it had
expired when the offense was committed.
Ruling:
The Court affirmed the decision of the Court of Tax Appeals stating
that “it is quite irrational for Filipino sailors …to sneak out of the
Philippines…and come a long way back laden with highly taxable
goods only to turn about upon reaching the brink of our territorial
waters and head for another country”. Further, the Court said that
the contention, regarding the apprehension and seizure of the items,
of the petitioner-appellant is without merit. The vessels are all
Philippine registered and are therefore under the jurisdiction of the
Philippines as expressed in the Revised Penal Code. The petitioners
also violated Section 1363(a). Therefore, the action taken then by
the Commissioner of Customs was in accordance to the law.
The Court also ruled that “The expiration of the Import Control Law
‘did not produce the effect the declaring legal the importation of
goods which were illegally imported and the seizure and forefeiture
thereof as ordered by the Collector of Customs illegal or null and
void’.” The expiration of the law does not mean that the law had
been abrogated, meaning even if the law had already expired, the
Philippines should still have jurisdiction over this kinds of cases
until their final determination.
 People v. Look Chaw, 18 Phil. 573 ISSUE: W/N the Philippine court has jurisdiction.
G.R. No.L-5887. December 16, 1910.
ARELLANO, C. J. HELD:  YES. Modified by reducing the imprisonment and the fine
imposed to six months and P1,000
Lesson:  Crimes NOT involving a breach of public order committed ·         GR: mere possession of a thing of prohibited use in these Islands,
on board a public vessel is NOT triable by our courts aboard a foreign vessel in transit, in any of their ports, does NOT
constitute a crime triable by the courts of this country, on account of
Laws Applicable: Art. 2 RPC, Opium Law such vessel being considered as an extension of its own nationality
·         EX: when the article, whose use is prohibited within the
FACTS: Philippine Islands, in the present case a can of opium, is landed from
Ø  Upon arrival of steamship Erroll of English nationality, that it came the vessel upon Philippine soil, thus committing an open violation of
from Hongkong, and that it was bound for Mexico, via  the call ports the laws of the land with respect to which, as it is a violation of the
of Manila and Cebu, 2 sacks of opium where found during the penal law in force at the place of the commission of the crime, only
inspection and search of the cargo.  the court established in that said place itself had competent
o   Smaller sack of opium on the cabin near the saloon jurisdiction, in the absence of an agreement under an international
o   larger sack in the hold treaty.
o   Later on, there was also 4 cans of opium found on the part of the ship
where the firemen habitually sleep
§  the firemen and crew of foreign vessels, pursuant to the instructions
he had from the Manila custom-house, were permitted to retain
certain amounts of opium, always provided it should not be taken
shore so it was returned
Ø  2 charges were filed against Look Chaw at the Court of First Instance
of Cebu:
o   unlawful possession of opium
o   unlawful sale of opium
Ø  Look Chaw admitted that he had bought these sacks of opium, in
Hongkong with the intention of selling them as contraband in
Mexico or Vera Cruz, and that, as his hold had already been
searched several times for opium, he ordered two other Chinamen to
keep the sack.
Ø  The court ruled that it did not lack jurisdiction, inasmuch as the
crime had been committed within its district, on the wharf of Cebu.
The court sentenced him to5 years imprisonment, to pay a fine of
P10,000, with additional subsidiary imprisonment in case of
insolvencyxxx  It further ordered the confiscation, in favor of the
Insular Government.
Case Title: People vs Wong Cheng, 46 Phil 729
Subject Matter: Applicability of Art. 2 of the Revised Penal
Code
Facts:

The appellant, in representation of the Attorney General, filed an

appeal that urges the revocation of a demurrer sustained by the
Court of First Instance of Manila presented by the defendant. The
defendant, accused of having illegally smoked opium aboard the
merchant vessel Changsa of English nationality while the said vessel
was anchored in Manila Bay, two and a half miles from the shores
of the city. In the said demurrer, the defendant contended the lack of
jurisdiction of the lower court of the said crime, which resulted to
the dismissal of the case.

Issue:

Whether or not the Philippine courts have jurisdiction over the crime
committed aboard merchant vessels anchored in our jurisdictional
waters.

Held:

Yes. The crime in the case at bar was committed in our internal
waters thus the Philippine courts have a right of jurisdiction over the
said offense. The Court said that having the opium smoked within
our territorial waters even though aboard a foreign merchant ship is
a breach of the public order because it causes such drugs to produce
pernicious effects within our territory. Therefore, the demurrer is
revoked and the Court ordered further proceedings.