G.R. No.
149177 November 23, 2007 When the STAR Project was near completion, the
KAZUHIRO HASEGAWA and NIPPON
ENGINEERING CONSULTANTS CO., LTD.,
Petitioners,
vs.
MINORU KITAMURA, Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on
certiorari under Rule 45 of the Rules of Court
assailing the April 18, 2001 Decision1 of the Court
of Appeals (CA) in CA-G.R. SP No. 60827, and the
July 25, 2001 Resolution2 denying the motion for
reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering
Consultants Co., Ltd. (Nippon), a Japanese
consultancy firm providing technical and
management support in the infrastructure projects
of foreign governments,3 entered into an
Independent Contractor Agreement (ICA) with
respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines.4 The
agreement provides that respondent was to
extend professional services to Nippon for a year
starting on April 1, 1999.5 Nippon then assigned
respondent to work as the project manager of the
Southern Tagalog Access Road (STAR) Project in
the Philippines, following the company's
consultancy contract with the Philippine
Government.6
complaint for lack of jurisdiction. They asserted
Department of Public Works and Highways
(DPWH) engaged the consultancy services of
Nippon, on January 28, 2000, this time for the
detailed engineering and construction supervision
of the Bongabon-Baler Road Improvement (BBRI)
Project.7 Respondent was named as the project
manager in the contract's Appendix 3.1.8
On February 28, 2000, 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. His services would
be engaged by the company only up to the
substantial completion of the STAR Project on
March 31, 2000, just in time for the ICA's expiry.9
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.10
As he was not able to generate a positive response
from the petitioners, respondent consequently
initiated on June 1, 2000 Civil Case No. 00-0264 for
specific performance and damages with the
Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA
had been perfected in Japan and executed by and
between Japanese nationals, moved to dismiss the
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.12
In the meantime, on June 20, 2000, the DPWH
approved Nippon's request for the replacement of
Kitamura by a certain Y. Kotake as project manager
of the BBRI Project.13
On June 29, 2000, the RTC, invoking our ruling in
Insular Government v. Frank14 that matters
connected with the performance of contracts are
regulated by the law prevailing at the place of
performance,15 denied the motion to dismiss.16
The trial court subsequently denied petitioners'
motion for reconsideration,17 prompting them to
file with the appellate court, on August 14, 2000,
their first Petition for Certiorari under Rule 65
[docketed as CA-G.R. SP No. 60205].18 On August
23, 2000, the CA resolved to dismiss the petition on
procedural grounds—for lack of statement of
material dates and for insufficient verification and
certification against forum shopping.19 An Entry of
Judgment was later issued by the appellate court
on September 20, 2000.20
Aggrieved by this development, petitioners filed
with the CA, on September 19, 2000, still within the
reglementary period, a second Petition for
Certiorari under Rule 65 already stating therein the
material dates and attaching thereto the proper
verification and certification. This second petition,
which substantially raised the same issues as those
in the first, was docketed as CA-G.R. SP No.
60827.21
Ruling on the merits of the second petition, the
appellate court rendered the assailed April 18,
2001 Decision22 finding no grave abuse of
discretion in the trial court's denial of the motion
to dismiss. The CA ruled, among others, 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.
The CA thus declared that the trial court was
correct in applying instead the principle of lex loci
solutionis.23
Petitioners' motion for reconsideration was
subsequently denied by the CA in the assailed July
25, 2001 Resolution.24
Remaining steadfast in their stance despite the
series of denials, petitioners instituted the instant
Petition for Review on Certiorari25 imputing the
following errors to the appellate court:
A. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT THE TRIAL COURT
VALIDLY EXERCISED JURISDICTION OVER THE
INSTANT CONTROVERSY, DESPITE THE FACT THAT
THE CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND
BETWEEN TWO JAPANESE NATIONALS, WRITTEN
WHOLLY IN THE JAPANESE LANGUAGE AND
EXECUTED IN TOKYO, JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN OVERLOOKING THE NEED TO REVIEW
OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI
SOLUTIONIS IN THE LIGHT OF RECENT
DEVELOPMENT[S] IN PRIVATE INTERNATIONAL
LAWS.26
The pivotal question that this Court is called upon
to resolve is whether the subject matter
jurisdiction of Philippine courts in civil cases for
specific performance and 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.
However, before ruling on this issue, we must first
dispose of the procedural matters raised by the
respondent.
Kitamura contends that the finality of the appellate
court's decision in CA-G.R. SP No. 60205 has
already barred the filing of the second petition
docketed as CA-G.R. SP No. 60827 (fundamentally
raising the same issues as those in the first one)
and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R.
SP No. 60205 on account of the petition's defective
certification of non-forum shopping, it was a
dismissal without prejudice.27 The same holds true
in the CA's dismissal of the said case due to defects
in the formal requirement of verification28 and in
the other requirement in Rule 46 of the Rules of
Court on the statement of the material dates.29 The
dismissal being without prejudice, petitioners can
re-file the petition, or file a second petition
attaching thereto the appropriate verification and
certification—as they, in fact did—and stating
therein the material dates, within the prescribed
period30 in Section 4, Rule 65 of the said Rules.31
The dismissal of a case without prejudice signifies
the absence of a decision on the merits and leaves
the parties free to litigate the matter in a
subsequent action as though the dismissed action
had not been commenced. In other words, the
termination of a case not on the merits does not
bar another action involving the same parties, on
the same subject matter and theory.32
Necessarily, because the said dismissal is without
prejudice and has no res judicata effect, and even
if petitioners still indicated in the verification and
certification of the second certiorari petition that
the first had already been dismissed on procedural
grounds,33 petitioners are no longer required by
the Rules to indicate in their certification of non-
forum shopping in the instant petition for review of
the second certiorari petition, the status of the
aforesaid first petition before the CA. In any case,
an omission in the certificate of non-forum
shopping about any event that will not constitute
res judicata and litis pendentia, as in the present
case, is not a fatal defect. It will not warrant the
dismissal and nullification of the entire
proceedings, considering that the evils sought to
be prevented by the said certificate are no longer
present.34
The Court also finds no merit in respondent's
contention that petitioner Hasegawa is only
authorized to verify and certify, on behalf of
Nippon, the certiorari petition filed with the CA and
not the instant petition. True, the Authorization35
dated September 4, 2000, which is attached to the
second certiorari petition and which is also
attached to the instant petition for review, is
limited in scope—its wordings indicate that
Hasegawa is given the authority to sign for and act
on behalf of the company only in the petition filed
with the appellate court, and that authority cannot
extend to the instant petition for review.36 In a
plethora of cases, however, this Court has liberally
applied the Rules or even suspended its application
whenever a satisfactory explanation and a
subsequent fulfillment of the requirements have
been made.37 Given that petitioners herein
sufficiently explained their misgivings on this point
and appended to their Reply38 an updated
Authorization39 for Hasegawa to act on behalf of
the company in the instant petition, the Court finds
the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal
treatment to the defect in the verification and
certification. As respondent pointed out, and to
which we agree, Hasegawa is truly not authorized
to act on behalf of Nippon in this case. The
aforesaid September 4, 2000 Authorization and
even the subsequent August 17, 2001
Authorization were issued only by Nippon's
president and chief executive officer, not by the
company's board of directors. In not a few cases,
we have ruled that corporate powers are exercised
by the board of directors; thus, no person, not even
its officers, can bind the corporation, in the
absence of authority from the board.40 Considering
that Hasegawa verified and certified the petition
only on his behalf and not on behalf of the other
petitioner, the petition has to be denied pursuant
to Loquias v. Office of the Ombudsman.41
Substantial compliance will not suffice in a matter
that demands strict observance of the Rules.42
While technical rules of procedure are designed
not to frustrate the ends of justice, nonetheless,
they are intended to effect the proper and orderly
disposition of cases and effectively prevent the
clogging of court dockets.43
Further, the Court has observed that petitioners
incorrectly filed a Rule 65 petition to question the
trial court's denial of their motion to dismiss. It is a
well-established rule that an order denying a
motion to dismiss is interlocutory, and cannot be
the subject of the extraordinary petition for
certiorari or mandamus. The appropriate recourse
is to file an answer and to interpose as defenses
the objections raised in the motion, to proceed to
trial, and, in case of an adverse decision, to elevate
the entire case by appeal in due course.44 While
there are recognized exceptions to this rule,45
petitioners' case does not fall among them.
This brings us to the discussion of the substantive
issue of the case.
Asserting that the RTC of Lipa City is an
inconvenient forum, petitioners question its
jurisdiction to hear and resolve the civil case for
specific performance and damages filed by the
respondent. The ICA subject of the litigation was
entered into and perfected in Tokyo, Japan, by
Japanese nationals, and written wholly in the
Japanese language. Thus, petitioners posit that
local courts have no substantial relationship to the
parties46 following the [state of the] most
significant relationship rule in Private International
Law.47
The Court notes that petitioners adopted an
additional but different theory when they elevated
the case to the appellate court. In the Motion to
Dismiss48 filed with the trial court, petitioners
never contended that the RTC is an inconvenient
forum. They merely argued that the applicable law
which will determine the validity or invalidity of
respondent's claim is that of Japan, following the
principles of lex loci celebrationis and lex
contractus.49 While not abandoning this stance in
their petition before the appellate court,
petitioners on certiorari significantly invoked the
defense of forum non conveniens.50 On petition for
review before this Court, petitioners dropped their
other arguments, maintained the forum non
conveniens defense, and introduced their new
argument that the applicable principle is the [state
of the] most significant relationship rule.51
Be that as it may, this Court is not inclined to deny
this petition merely on the basis of the change in
theory, as explained in Philippine Ports Authority v.
City of Iloilo.52 We only pointed out petitioners'
inconstancy in their arguments to emphasize their
incorrect assertion of conflict of laws principles.
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?53
Analytically, jurisdiction and choice of law are two
distinct concepts.54 Jurisdiction considers whether
it is fair to cause a defendant to travel to this state;
choice of law asks the further question whether
the application of a substantive law which will
determine the merits of the case is fair to both
parties. The power to exercise jurisdiction does not
automatically give a state constitutional authority
to apply forum law. While jurisdiction and the
choice of the lex fori will often coincide, the
"minimum contacts" for one do not always provide
the necessary "significant contacts" for the other.55
The question of whether the law of a state can be
applied to a transaction is different from the
question of whether the courts of that state have
jurisdiction to enter a judgment.56
In this case, only the first phase is at issue—
jurisdiction.1âwphi1 Jurisdiction, however, has
various aspects. For a court to validly exercise its
power to adjudicate a controversy, it must have
jurisdiction over the plaintiff or the petitioner, over
the defendant or the respondent, over the subject
matter, over the issues of the case and, in cases
involving property, over the res or the thing which
is the subject of the litigation.57 In assailing the trial
court's jurisdiction herein, petitioners are actually
referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial
proceeding is conferred by the sovereign authority
which establishes and organizes the court. It is
given only by law and in the manner prescribed by
law.58 It is further determined by the allegations of
the complaint irrespective of whether the plaintiff
is entitled to all or some of the claims asserted
therein.59 To succeed in its motion for the dismissal
of an action for lack of jurisdiction over the subject
matter of the claim,60 the movant must show that
the court or tribunal cannot act on the matter
submitted to it because no law grants it the power
to adjudicate the claims.61
In the instant case, petitioners, in their motion to
dismiss, do not claim that the trial court is not
properly vested by law with jurisdiction to hear the
subject controversy for, indeed, Civil Case No. 00-
0264 for specific performance and damages is one
not capable of pecuniary estimation and is
properly cognizable by the RTC of Lipa City.62 What
they rather raise as grounds to question subject
matter jurisdiction are the principles of lex loci
celebrationis and lex contractus, and the "state of
the most significant relationship rule."
The Court finds the invocation of these grounds
unsound.
Lex loci celebrationis relates to the "law of the
place of the ceremony"63 or the law of the place
where a contract is made.64 The doctrine of lex
contractus or lex loci contractus means the "law of
the place where a contract is executed or to be
performed."65 It controls the nature, construction,
and validity of the contract66 and it may pertain to
the law voluntarily agreed upon by the parties or
the law intended by them either expressly or
implicitly.67 Under the "state of the most
significant relationship rule," to ascertain what
state law to apply to a dispute, the court should
determine which state has the most substantial
connection to the occurrence and the parties. In a
case involving a contract, the court should consider
where the contract was made, was negotiated,
was to be performed, and the domicile, place of
business, or place of incorporation of the parties.68
This rule takes into account several contacts and
evaluates them according to their relative
importance with respect to the particular issue to
be resolved.69
Since these three principles in conflict of laws make
reference to the law applicable to a dispute, they
are rules proper for the second phase, the choice
of law.70 They determine which state's law is to be
applied in resolving the substantive issues of a
conflicts problem.71 Necessarily, as the only issue
in this case is that of jurisdiction, choice-of-law
rules are not only inapplicable but also not yet
called for.
Further, petitioners' premature invocation of
choice-of-law rules is exposed by the fact that they
have not yet pointed out any 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.72 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.73
It should be noted that when a conflicts case, one
involving a foreign element, is brought before a
court or administrative agency, there are three
alternatives open to the latter in disposing of it: (1)
dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over
the case; (2) assume jurisdiction over the case and
apply the internal law of the forum; or (3) assume
jurisdiction over the case and take into account or
apply the law of some other State or States.74 The
court’s power to hear cases and controversies is
derived from the Constitution and the laws. While
it may choose to recognize laws of foreign nations,
the court is not limited by foreign sovereign law
short of treaties or other formal agreements, even
in matters regarding rights provided by foreign
sovereigns.75
Neither can the other ground raised, forum non
conveniens,76 be used to deprive the trial court of
its jurisdiction herein. First, it is not a proper basis
for a motion to dismiss because Section 1, Rule 16
of the Rules of Court does not include it as a
ground.77 Second, whether a suit should be
entertained or dismissed on the basis of the said
doctrine depends largely upon the facts of the
particular case and is addressed to the sound
discretion of the trial court.78 In this case, the RTC
decided to assume jurisdiction. Third, the propriety
of dismissing a case based on this principle requires
a factual determination; hence, this conflicts
principle is more properly considered a matter of
defense.79
Accordingly, since the RTC is vested by law with the
power to entertain and hear the civil case filed by
respondent and the grounds raised by petitioners
to assail that jurisdiction are inappropriate, the
trial and appellate courts correctly denied the
petitioners’ motion to dismiss.
WHEREFORE, premises considered, the petition for
review on certiorari is DENIED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
2) Saudi Arabian Airlines vs. Rebesemcio et. al.
January 14, 2015,
G.R. No. 198587, January 14, 2015
SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J.
BETIA, Petitioners, v. MA. JOPETTE M. REBESENCIO,
MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A.
CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ,
Respondents.
DECISION
LEONEN, J.:
All Filipinos are entitled to the protection of the rights
guaranteed in the Constitution.
This is a Petition for Review on Certiorari with
application for the issuance of a temporary restraining
order and/or writ of preliminary injunction under Rule
45 of the 1997 Rules of Civil Procedure praying that
judgment be rendered reversing and setting aside the
June 16, 2011 Decision1 and September 13, 2011
Resolution2 of the Court of Appeals in CA-G.R. SP. No.
113006.
Petitioner Saudi Arabian Airlines (Saudia) is a foreign
corporation established and existing under the laws of
Jeddah, Kingdom of Saudi Arabia. It has a Philippine
office located at 4/F, Metro House Building, Sen. Gil J.
Puyat Avenue, Makati City.3 In its Petition filed with
this court, Saudia identified itself as
follows:chanroblesvirtuallawlibrary
1. Petitioner SAUDIA is a foreign corporation
established and existing under the Royal Decree No.
M/24 of 18.07.1385H (10.02.1962G) in Jeddah,
Kingdom of Saudi Arabia ("KSA"). Its Philippine Office is
located at 4/F Metro House Building, Sen, Gil J. Puyat
Avenue, Makati City (Philippine Office). It may be
served with orders of this Honorable Court through
undersigned counsel at 4th and 6th Floors, Citibank
Center Bldg., 8741 Paseo de Roxas, Makati City.4
(Emphasis supplied)
Respondents (complainants before the Labor Arbiter)
were recruited and hired by Saudia as Temporary
Flight Attendants with the accreditation and approval
of the Philippine Overseas Employment
5
Administration. After undergoing seminars required
by the Philippine Overseas Employment
Administration for deployment overseas, as well as
training modules offered by Saudia (e.g., initial flight
attendant/training course and transition training), and
after working as Temporary Flight Attendants,
respondents became Permanent Flight Attendants.
They then entered into Cabin Attendant contracts with
Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on
May 16, 1990;6 Montassah B. Sacar-Adiong
(Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth)
on May 22, 1993;7 and Loraine Schneider-Cruz
(Loraine) on August 27, 1995.8
Respondents continued their employment with Saudia
until they were separated from service on various
dates in 2006.9
Respondents contended that the termination of their
employment was illegal. They alleged that the
termination was made solely because they were
pregnant.10
As respondents alleged, they had informed Saudia of
their respective pregnancies and had gone through the
necessary procedures to process their maternity
leaves. Initially, Saudia had given its approval but later
on informed respondents that its management in
Jeddah, Saudi Arabia had disapproved their maternity
leaves. In addition, it required respondents to file their
resignation letters.11
Respondents were told that if they did not resign,
Saudia would terminate them all the same. The threat
of termination entailed the loss of benefits, such as
separation pay and ticket discount entitlements.12
Specifically, Ma. Jopette received a call on October 16,
2006 from Saudia's Base Manager, Abdulmalik Saddik
(Abdulmalik).13 Montassah was informed personally by
Abdulmalik and a certain Faisal Hussein on October 20,
2006 after being required to report to the office one
(1) month into her maternity leave.14 Rouen Ruth was
also personally informed by Abdulmalik on October 17,
2006 after being required to report to the office by her
Group Supervisor.15 Loraine received a call on October
12, 2006 from her Group Supervisor, Dakila Salvador.16
Saudia anchored its disapproval of respondents'
maternity leaves and demand for their resignation on
its "Unified Employment Contract for Female Cabin
Attendants" (Unified Contract).17 Under the Unified
Contract, the employment of a Flight Attendant who
becomes pregnant is rendered void. It
provides:chanroblesvirtuallawlibrary
(H) Due to the essential nature of the Air Hostess
functions to be physically fit on board to provide
various services required in normal or emergency
cases on both domestic/international flights beside
her role in maintaining continuous safety and security
of passengers, and since she will not be able to
maintain the required medical fitness while at work in
case of pregnancy, accordingly, 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.18 (Emphasis supplied)
In their Comment on the present Petition,19
respondents emphasized that the Unified Contract
took effect on September 23, 2006 (the first day of
Ramadan),20 well after they had filed and had their
maternity leaves approved. Ma. Jopette filed her
maternity leave application on September 5, 2006.21
Montassah filed her maternity leave application on
August 29, 2006, and its approval was already
indicated in Saudia's computer system by August 30,
2006.22 Rouen Ruth filed her maternity leave
application on September 13, 2006,23 and Loraine filed
her maternity leave application on August 22, 2006.24
Rather than comply and tender resignation letters,
respondents filed separate appeal letters that were all
rejected.25
Despite these initial rejections, respondents each
received calls on the morning of November 6, 2006
from Saudia's office secretary informing them that
their maternity leaves had been approved. Saudia,
however, was quick to renege on its approval. On the
evening of November 6, 2006, respondents again
received calls informing them that it had received
notification from Jeddah, Saudi Arabia that their
maternity leaves had been disapproved.26
Faced with the dilemma of resigning or totally losing
their benefits, respondents executed handwritten
resignation letters. In Montassah's and Rouen Ruth's
cases, their resignations were executed on Saudia's
blank letterheads that Saudia had provided. These
letterheads already had the word "RESIGNATION"
typed on the subject portions of their headings when
these were handed to respondents.27
On November 8, 2007, respondents filed a Complaint
against Saudia and its officers for illegal dismissal and
for underpayment of salary, overtime pay, premium
pay for holiday, rest day, premium, service incentive
leave pay, 13th month pay, separation pay, night shift
differentials, medical expense reimbursements,
retirement benefits, illegal deduction, lay-over
expense and allowances, moral and exemplary
damages, and attorney's fees.28 The case was initially
assigned to Labor Arbiter Hermino V. Suelo and
docketed as NLRC NCR Case No. 00-11-12342-07.
Saudia assailed the jurisdiction of the Labor Arbiter.29
It claimed 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.30 It added that respondents had no cause
of action as they resigned voluntarily.31
On December 12, 2008, Executive Labor Arbiter Fatima
Jambaro-Franco rendered the Decision32 dismissing
respondents' Complaint. The dispositive portion of this
Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, premises' considered, judgment is
hereby rendered DISMISSING the instant complaint
for lack of jurisdiction/merit.33cralawlawlibrary
On respondents' appeal, the National Labor Relations
Commission's Sixth Division reversed the ruling of
Executive Labor Arbiter Jambaro-Franco. It explained
that "[considering that complainants-appellants are
OFWs, the Labor Arbiters and the NLRC has [sic]
jurisdiction to hear and decide their complaint for
illegal termination."34 On the matter of forum non
conveniens, it noted that there were no special
circumstances that warranted its abstention from
exercising jurisdiction.35 On the issue of whether
respondents were validly dismissed, it held that there
was nothing on record to support Saudia's claim that
respondents resigned voluntarily.
The dispositive portion of the November 19, 2009
National Labor Relations Commission Decision36
reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, judgment is
hereby rendered finding the appeal impressed with
merit. The respondents-appellees are hereby directed
to pay complainants-appellants the aggregate amount
of SR614,001.24 corresponding to their backwages
and separation pay plus ten (10%) percent thereof as
attorney's fees. The decision of the Labor Arbiter dated
December 12, 2008 is hereby VACATED and SET ASIDE.
Attached is the computation prepared by this
Commission and made an integral part of this
Decision.37cralawlawlibrary
In the Resolution dated February 11, 2010,38 the
National Labor Relations Commission denied
petitioners' Motion for Reconsideration.
In the June 16, 2011 Decision,39 the Court of Appeals
denied petitioners' Rule 65 Petition and modified the
Decision of the National Labor Relations Commission
with respect to the award of separation pay and
backwages.
The dispositive portion of the Court of Appeals
Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, the instant petition is hereby DENIED.
The Decision dated November 19, 2009 issued by
public respondent, Sixth Division of the National Labor
Relations Commission - National Capital Region is
MODIFIED only insofar as the computation of the
award of separation pay and backwages. For greater
clarity, petitioners are ordered to pay private
respondents separation pay which shall be computed
from private respondents' first day of employment up
to the finality of this decision, at the rate of one month
per year of service and backwages which shall be
computed from the date the private respondents were
illegally terminated until finality of this decision.
Consequently, the ten percent (10%) attorney's fees
shall be based on the total amount of the award. The
assailed Decision is affirmed in all other respects.
The labor arbiter is hereby DIRECTED to make a
recomputation based on the
foregoing.40cralawlawlibrary
In the Resolution dated September 13, 2011,41 the
Court of Appeals denied petitioners' Motion for
Reconsideration.
Hence, this Appeal was filed.
The issues for resolution are the following:
First, whether the Labor Arbiter and the National Labor
Relations Commission may exercise jurisdiction over
Saudi Arabian Airlines and apply Philippine law in Lastly, it was with "Saudia Jeddah" that respondents
adjudicating the present dispute; filed their resignations.44
Second, whether respondents' voluntarily resigned or Saudia posits that respondents' Complaint was
were illegally terminated; and brought against the wrong party because "Saudia
Manila," upon which summons was served, was never
Lastly, whether Brenda J. Betia may be held personally the employer of respondents.45
liable along with Saudi Arabian
Airlines.chanRoblesvirtualLawlibrary Saudia is vainly splitting hairs in its effort to absolve
I itself of liability. Other than its bare allegation, there is
no basis for concluding that "Saudia Jeddah" is distinct
Summons were validly served on Saudia and from "Saudia Manila."
jurisdiction over it validly acquired.
What is clear is Saudia's statement in its own Petition
There is no doubt that the pleadings and summons that what it has is a "Philippine Office . . . located at 4/F
were served on Saudia through its counsel.42 Saudia, Metro House Building, Sen. Gil J. Puyat Avenue, Makati
however, claims that the Labor Arbiter and the City."46 Even in the position paper that Saudia
National Labor Relations Commission had no submitted to the Labor Arbiter,47 what Saudia now
jurisdiction over it because summons were never refers to as "Saudia Jeddah" was then only referred to
served on it but on "Saudia Manila."43 Referring to as "Saudia Head Office at Jeddah, KSA,"48 while what
itself as "Saudia Jeddah," it claims that "Saudia Jeddah" Saudia now refers to as "Saudia Manila" was then only
and not "Saudia Manila" was the employer of referred to as "Saudia's office in Manila."49
respondents because:
By its own admission, Saudia, while a foreign
First, "Saudia Manila" was never a party to the Cabin corporation, has a Philippine office.
Attendant contracts entered into by respondents;
Section 3(d) of Republic Act No.. 7042, otherwise
Second, it was "Saudia Jeddah" that provided the known as the Foreign Investments Act of 1991,
funds to pay for respondents' salaries and benefits; provides the following:chanroblesvirtuallawlibrary
and
The phrase "doing business" shall include . . . opening
offices, whether called "liaison" offices or branches; .
. . and any other act or acts that imply a continuity of
commercial dealings or arrangements and
contemplate to that extent the performance of acts or
works, or the exercise of some of the functions
normally incident to, and in progressive prosecution of
commercial gain or of the purpose and object of the
business organization. (Emphasis supplied)
A plain application of Section 3(d) of the Foreign
Investments Act leads to no other conclusion than that
Saudia is a foreign corporation doing business in the
Philippines. As such, Saudia may be sued in the
Philippines and is subject to the jurisdiction of
Philippine tribunals.
Moreover, since there is no real distinction between
"Saudia Jeddah" and "Saudia Manila" — the latter
being nothing more than Saudia's local office —
service of summons to Saudia's office in Manila
sufficed to vest jurisdiction over Saudia's person in
Philippine tribunals.chanRoblesvirtualLawlibrary
II
Saudia asserts that Philippine courts and/or tribunals
are not in a position to make an intelligent decision as
to the law and the facts. This is because respondents'
Cabin Attendant contracts require the application of
the laws of Saudi Arabia, rather than those of the
Philippines.50 It claims that the difficulty of
ascertaining foreign law calls into operation the
principle of forum non conveniens, thereby rendering
improper the exercise of jurisdiction by Philippine
tribunals.51
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:chanroblesvirtuallawlibrary
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.
Contractual choice of law provisions factor into
transnational litigation and dispute resolution in one
of or in a combination of four ways: (1) procedures for
settling disputes, e.g., arbitration; (2) forum, i.e.,
venue; (3) governing law; and (4) basis for
interpretation. Forum non conveniens relates to, but is
not subsumed by, the second of these.
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. In Hasegawa v.
Kitamura:52ChanRoblesVirtualawlibrary
Analytically, jurisdiction and choice of law are two
distinct concepts. Jurisdiction considers whether it is
fair to cause a defendant to travel to this state; choice
of law asks the further question whether the
application of a substantive law V'hich will determine
the merits of the case is fair to both parties. The power
to exercise jurisdiction does not automatically give a
state constitutional authority to apply forum law.
While jurisdiction and the choice of the lex fori will
often, coincide, the "minimum contacts" for one do
not always provide the necessary "significant
contacts" for the other. The question of whether the
law of a state can be applied to a transaction is
different from the question of whether the courts of
that state have jurisdiction to enter a
judgment.53cralawlawlibrary
As various dealings, commercial or otherwise, are
facilitated by the progressive ease of communication
and travel, persons from various jurisdictions find
themselves transacting with each other. Contracts
involving foreign elements are, however, nothing new.
Conflict of laws situations precipitated by disputes and
litigation anchored on these contracts are not totally
novel.
Transnational transactions entail differing laws on the
requirements Q for the validity of the formalities and
substantive provisions of contracts and their
interpretation. These transactions inevitably lend
themselves to the possibility of various fora for
litigation and dispute resolution. As observed by an
eminent expert on transnational
law:chanroblesvirtuallawlibrary
The more jurisdictions having an interest in, or merely
even a point of contact with, a transaction or
relationship, the greater the number of potential fora
for the resolution of disputes arising out of or related
to that transaction or relationship. In a world of
increased mobility, where business and personal
transactions transcend national boundaries, the
jurisdiction of a number of different fora may easily be
invoked in a single or a set of related
disputes.54cralawlawlibrary
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"55
(i.e., lex loci celebrationis).
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.56
Given Saudia's assertions, of particular relevance to
resolving the present dispute is lex loci intentionis.
An author observed that Spanish jurists and
commentators "favor lex loci intentionis."57 These
jurists and commentators proceed from the Civil Code
of Spain, which, like our Civil Code, is silent on what
governs the intrinsic validity of contracts, and the
same civil law traditions from which we draw ours.
In this jurisdiction, this court, in Philippine Export and
Foreign Loan Guarantee v. V.P. Eusebio Construction,
Inc.,58 manifested preference for allowing the parties
to select the law applicable to their
contract":chanroblesvirtuallawlibrary
No conflicts rule on essential validity of contracts is
expressly provided for in our laws. The rule followed
by most legal systems, however, is that the intrinsic
validity of a contract must be governed by the lex
contractus or "proper law of the contract." This is the
law voluntarily agreed upon by the parties (the lex loci
voluntatis) or the law intended by them either
expressly or implicitly (the lex loci intentionis). The law
selected may be implied from such factors as
substantial connection with the transaction, or the
nationality or domicile of the parties. Philippine courts
would do well to adopt the first and most basic rule in
most legal systems, namely, to allow the parties to
select the law applicable to their contract, subject to
the limitation that it is not against the law, morals, or
public policy of the forum and that the chosen law must
bear a substantive relationship to the transaction.59
(Emphasis in the original)
Saudia asserts that 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.
As mentioned, contractual choice of laws factors into
transnational litigation in any or a combination of four
(4) ways. Moreover, forum non conveniens relates to
one of these: choosing between multiple possible fora.
Nevertheless, the possibility of parallel litigation in
multiple fora — along with the host of difficulties it
poses — is not unique to transnational litigation. It is a
difficulty that similarly arises in disputes well within
the bounds of a singe 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. Thus, in the Philippines, the 1997 Rules
on Civil Procedure provide for willful and deliberate
forum shopping as a ground not only for summary
dismissal with prejudice but also for citing parties and
counsels in direct contempt, as well as for the
imposition of administrative sanctions.60 Likewise, the
same rules expressly provide that a party may seek the
dismissal of a Complaint or another pleading asserting
a claim on the ground "[t]hat there is another action
pending between the same parties for the same
cause," i.e., litis pendentia, or "[t]hat the cause of
action is barred by a prior judgment,"61 i.e., res
judicata.
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."62 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.63 Thus, the doctrine of forum non
conveniens addresses the same rationale that the rule
against forum shopping does, albeit on a
multijurisdictional scale.
Forum non conveniens, like res judicata,64 is a concept
originating in common law.65 However, 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.66
Forum non conveniens is soundly applied not only to
address parallel litigation and undermine a litigant's
capacity to vex and secure undue advantages by
engaging in forum shopping on an international scale.
It is also grounded on principles of comity and judicial
efficiency.
Consistent with the principle of comity, a tribunal's
desistance in exercising jurisdiction on account of
forum non conveniens is a deferential gesture to the
tribunals of another sovereign. It is a measure that
prevents the former's having to interfere in affairs
which are better and more competently addressed by
the latter. Further, forum non conveniens entails a
recognition not only that tribunals elsewhere are
better suited to rule on and resolve a controversy, but
also, that these tribunals are better positioned to
enforce judgments and, ultimately, to dispense justice.
Forum non conveniens prevents the embarrassment of
an awkward situation where a tribunal is rendered
incompetent in the face of the greater capability —
both analytical and practical — of a tribunal in another
jurisdiction.
The wisdom of avoiding conflicting and unenforceable
judgments is as much a matter of efficiency and
economy as it is a matter of international courtesy. A
court would effectively be neutering itself if it insists
on adjudicating a controversy when it knows full well
that it is in no position to enforce its judgment. Doing
so is not only an exercise in futility; it is an act of
frivolity. It clogs the dockets of a.tribunal and leaves it
to waste its efforts on affairs, which, given
transnational exigencies, will be reduced to mere
academic, if not trivial, exercises.
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."67 In Puyat v. Zabarte,68 this court
recognized the following situations as among those
that may warrant a court's desistance from exercising
jurisdiction:chanroblesvirtuallawlibrary
1) The belief that the matter can be better tried and
decided elsewhere, either because the main aspects
of the case transpired in a foreign jurisdiction or the
material witnesses have their residence there;
2) The belief that the non-resident plaintiff sought the
forum[,] a practice known as forum shopping[,]
merely to secure procedural advantages or to
convey or harass the defendant;
3) The unwillingness to extend local judicial facilities to
non residents or aliens when the docket may
already be overcrowded;
4) The inadequacy of the local judicial machinery for
effectuating the right sought to be maintained; and
5) The difficulty of ascertaining foreign law.69
In Bank of America, NT&SA, Bank of America
International, Ltd. v. Court of Appeals,70 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."71
The use of the word "may" (i.e., "may refuse
impositions on its jurisdiction"72) 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."73 As the propriety of applying
forum non conveniens is contingent on a factual
determination, it is, therefore, a matter of defense.74
The second sentence of Rule 9, Section 1 of the 1997
Rules of Civil Procedure is exclusive in its recital of the
grounds for dismissal that are exempt from the
omnibus motion rule: (1) lack of jurisdiction over the
subject matter; (2) litis pendentia; (3) res judicata; and
(4) prescription. Moreover, dismissal on account
offorum non conveniens is a fundamentally
discretionary matter. It is, therefore, not a matter for
a defendant to foist upon the court at his or her own
convenience; rather, it must be pleaded at the earliest
possible opportunity.
On the matter of pleading forum non conveniens, we
state the rule, thus: 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,76 this court stated
that forum non conveniens is not a ground for a motion
to dismiss. The factual ambience of this case however
does not squarely raise the viability of this doctrine.
Until the opportunity comes to review the use of
motions to dismiss for parallel litigation, Hasegawa
remains existing doctrine.
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.
The existence of a prior suit makes real the vexation
engendered by duplicitous litigation, the
embarrassment of intruding into the affairs of another
sovereign, and the squandering of judicial efforts in
resolving a dispute already lodged and better resolved
elsewhere. As has been
noted:chanroblesvirtuallawlibrary
A case will not be stayed o dismissed on [forum] non
conveniens grounds unless the plaintiff is shown to
have an available alternative forum elsewhere. On
this, the moving party bears the burden of proof.
A number of factors affect the assessment of an
alternative forum's adequacy. The statute of
limitations abroad may have run, of the foreign court
may lack either subject matter or personal jurisdiction
over the defendant. . . . Occasionally, doubts will be
raised as to the integrity or impartiality of the foreign
court (based, for example, on suspicions of corruption
or bias in favor of local nationals), as to the fairness of
its judicial procedures, or as to is operational efficiency
(due, for example, to lack of resources, congestion and
delay, or interfering circumstances such as a civil
unrest). In one noted case, [it was found] that delays
of 'up to a quarter of a century' rendered the foreign
forum... inadequate for these
77
purposes. cralawlawlibrary
We deem it more appropriate and 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.
III
Forum non conveniens finds no application and does
not operate to divest Philippine tribunals of
jurisdiction and to require the application of foreign
law.
Saudia invokes forum non conveniens to supposedly
effectuate the stipulations of the Cabin Attendant
contracts that require the application of the laws of
Saudi Arabia.
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.
In any case, even a further consideration of the
applicability of forum non conveniens on the incidental
matter of the law governing respondents' relation with
Saudia leads to the conclusion that it is improper for
Philippine tribunals to divest themselves of
jurisdiction.
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."78
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.
Specifically with respect to public policy, in Pakistan
International Airlines Corporation v. Ople,79 this court
explained that:chanroblesvirtuallawlibrary
counter-balancing the principle of autonomy of
contracting parties is the equally general rule that
provisions of applicable law, especially provisions
relating to matters affected with public policy, are
deemed written inta the contract. Put a little
differently, the governing principle is that parties may
not contract away applicable provisions of law
especially peremptory provisions dealing with matters
heavily impressed with public interest.80 (Emphasis
supplied)
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,81 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. Article I of the
CEDAW defines "discrimination against women"
as:chanroblesvirtuallawlibrary
any distinction, exclusion or restriction made on the
basis of sex which has the effect or purpose of
impairing or nullifying the recognition, enjoyment or
exercise by women, irrespective of their marital status,
on a basis of equality of men and women, of human
rights and fundamental freedoms in the political,
economic, social, cultural, civil or any other
field.82cralawlawlibrary
The constitutional exhortation to ensure fundamental
equality, as illumined by its enabling law, the CEDAW,
must inform and animate all the actions of all
personalities acting on behalf of the State. It is,
therefore, the bounden duty of this court, in rendering
judgment on the disputes brought before it, to ensure
that no discrimination is heaped upon women on the
mere basis of their being women. This is a point so
basic and central that all our discussions and
pronouncements — regardless of whatever averments
there may be of foreign law — must proceed from this
premise.
So informed and animated, we emphasize the glaringly
discriminatory nature of Saudia's policy. As argued by
respondents, Saudia's policy entails the termination of
employment of flight attendants who become
pregnant. At the risk of stating the obvious, pregnancy
is an occurrence that pertains specifically to women.
Saudia's policy excludes from and restricts
employment on the basis of no other consideration
but sex.
We do not lose sight of the reality that pregnancy does
present physical limitations that may render difficult
the performance of functions associated with being a
flight attendant. Nevertheless, it would be the height
of iniquity to view pregnancy as a disability so
permanent and immutable that, it must entail the
termination of one's employment. It is clear to us that
any individual, regardless of gender, may be subject to
exigencies that limit the performance of functions.
However, we fail to appreciate how pregnancy could
be such an impairing occurrence that it leaves no other
recourse but the complete termination of the means
through which a woman earns a living.
Apart from the constitutional policy on the
fundamental equality before the law of men and
women, it is settled that contracts relating to labor and
employment are impressed with public interest.
Article 1700 of the Civil Code provides that "[t]he
relation between capital and labor are not merely
contractual. They are so impressed with public interest
that labor contracts must yield to the common good."
Consistent with this, this court's pronouncements in
Pakistan International Airlines Corporation 83 are clear
and unmistakable:chanroblesvirtuallawlibrary
Petitioner PIA cannot take refuge in paragraph 10 of its
employment agreement which specifies, firstly, the
law of Pakistan as the applicable law of the agreement,
and, secondly, lays the venue for settlement of any
dispute arising out of or in connection with the
agreement "only [in] courts of Karachi, Pakistan". The
first clause of paragraph 10 cannot be invoked to
prevent the application of Philippine labor laws
and'regulations to the subject matter of this case, i.e.,
the employer-employee relationship between
petitioner PIA and private respondents. We have
already pointed out that the relationship is much
affected with public interest and that the otherwise
applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some
other law to govern their relationship. . . . Under these
circumstances, paragraph 10 of the employment
agreement cannot be given effect so as to oust
Philippine agencies and courts of the jurisdiction
vested upon them by Philippine law.84 (Emphasis
supplied)
As the present dispute relates to (what the
respondents allege to be) the illegal termination of
respondents' employment, this case is immutably a
matter of public interest and public policy. Consistent
with clear pronouncements in law and jurisprudence,
Philippine laws properly find application in and govern
this case. 'Moreover, as this premise for Saudia's
insistence on the application forum non conveniens
has been shattered, it follows that Philippine tribunals
may properly assume jurisdiction over the present
controversy. Philippine jurisprudence provides ample
illustrations of when a court's renunciation of
jurisdiction on account of forum non conveniens is
proper or improper.'
In Philsec Investment Corporation v. Court of
Appeals,85 this court noted that the trial court failed to
consider that one of the plaintiffs was a domestic
corporation, that one of the defendants was a Filipino,
and that it was the extinguishment of the latter's debt
that was the object of the transaction subject of the
litigation. Thus, this court held, among others, that the
trial court's refusal to assume jurisdiction was not
justified by forum non conveniens and remanded the
case to the trial court.
In Raytheon International, Inc. v. Rouzie, Jr.,86 this
court sustained the trial court's assumption of
jurisdiction considering that the trial court could
properly enforce judgment on the petitioner which
was a foreign corporation licensed to do business in
the Philippines.
In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court
found no reason to disturb the trial court's assumption
of jurisdiction over a case in which, as noted by the trial
court, "it is more convenient to hear and decide the
case in the Philippines because Todaro [the plaintiff]
resides in the Philippines and the contract allegedly
breached involve[d] employment in the Philippines."88
In Pacific Consultants International Asia, Inc. v.
Schonfeld,89 this court held that the fact that the
complainant in an illegal dismissal case was a Canadian
citizen and a repatriate did not warrant the application
of forum non conveniens considering that: (1) the
Labor Code does not include forum non conveniens as
a ground for the dismissal of a complaint for illegal
dismissal; (2) the propriety of dismissing a case based
on forum non conveniens requires a factual
determination; and (3) the requisites for assumption
of jurisdiction as laid out in Bank of America, NT&SA90
were all satisfied.
In contrast, this court ruled in The Manila Hotel Corp.
v. National Labor Relations Commission91 that the
National Labor Relations Q Commission was a seriously
inconvenient forum. In that case, private respondent
Marcelo G. Santos was working in the Sultanate of
Oman when he received a letter from Palace Hotel
recruiting him for employment in Beijing, China.
Santos accepted the offer. Subsequently, however, he
was released from employment supposedly due to
business reverses arising from political upheavals in
China (i.e., the Tiananmen Square incidents of 1989).
Santos later filed a Complaint for illegal dismissal
impleading Palace Hotel's General Manager, Mr.
Gerhard Schmidt, the Manila Hotel International
Company Ltd. (which was, responsible for training
Palace Hotel's personnel and staff), and the Manila
Hotel Corporation (which owned 50% of Manila Hotel
International Company Ltd.'s capital stock).
In ruling against the National Labor Relations
Commission's exercise of jurisdiction, this court noted
that the main aspects of the case transpired in two (2)
foreign jurisdictions, Oman and China, and that the
case involved purely foreign elements. Specifically,
Santos was directly hired by a foreign employer
through correspondence sent to Oman. Also, the
proper defendants were neither Philippine nationals
nor engaged in business in the Philippines, while the
main witnesses were not residents of the Philippines.
Likewise, this court noted that the National Labor
Relations Commission was in no position to conduct
the following: first, determine the law governing the
employment contract, as it was entered into in foreign
soil; second, determine the facts, as Santos'
employment was terminated in Beijing; and third,
enforce its judgment, since Santos' employer, Palace
Hotel, was incorporated under the laws of China and
was not even served with summons.
Contrary to Manila Hotel, the case now before us does
not entail a preponderance of linkages that favor a
foreign jurisdiction.
Here, the circumstances of the parties and their
relation do not approximate the circumstances
enumerated in Puyat,92 which this court recognized as
possibly justifying the desistance of Philippine
tribunals from exercising jurisdiction.
First, there is no basis for concluding that the case can
be more conveniently tried elsewhere. As established
earlier, Saudia is doing business in the Philippines. For
their part, all four (4) respondents are Filipino citizens
maintaining residence in the Philippines and, apart
from their previous employment with Saudia, have no
other connection to the Kingdom of Saudi Arabia. It
would even be to respondents' inconvenience if this
case were to be tried elsewhere.
Second, the records are bereft of any indication that
respondents filed their Complaint in an effort to
engage in forum shopping or to vex and inconvenience
Saudia.
Third, there is no indication of "unwillingness to
extend local judicial facilities to non-residents or
aliens."93 That Saudia has managed to bring the
present controversy all the way to this court proves
this.
Fourth, it cannot be said that the local judicial
machinery is inadequate for effectuating the right
sought to be maintained. Summons was properly
served on Saudia and jurisdiction over its person was
validly acquired.
Lastly, there is not even room for considering foreign
law. Philippine law properly governs the present
dispute.
As the question of applicable law has been settled, the
supposed difficulty of ascertaining foreign law (which
requires the application of forum non conveniens)
provides no insurmountable inconvenience or special
circumstance that will justify depriving Philippine
tribunals of jurisdiction.
Even if we were to assume, for the sake of discussion,
that it is the laws of Saudi Arabia which should apply,
it does not follow that Philippine tribunals should
refrain from exercising jurisdiction. To. recall our
pronouncements in Puyat,94 as well as in Bank of
America, NT&SA,95 it is not so much the mere
applicability of foreign law which calls into operation
forum non conveniens. Rather, what justifies a court's
desistance from exercising jurisdiction is "[t]he
difficulty of ascertaining foreign law"96 or the inability
of a "Philippine Court to make an intelligent decision
as to the law[.]"97
Consistent with lex loci intentionis, to the extent that it
is proper and practicable (i.e., "to make an intelligent
decision"98), Philippine tribunals may apply the foreign
law selected by the parties. In fact, (albeit without
meaning to make a pronouncement on the accuracy
and reliability of respondents' citation) in this case,
respondents themselves have made averments as to
the laws of Saudi Arabia. In their Comment,
respondents write:chanroblesvirtuallawlibrary
Under the Labor Laws of Saudi Arabia and the
Philippines[,] it is illegal and unlawful to terminate the
employment of any woman by virtue of pregnancy.
The law in Saudi Arabia is even more harsh and strict
[sic] in that no employer can terminate the
employment of a female worker or give her a warning
of the same while on Maternity Leave, the specific
provision of Saudi Labor Laws on the matter is hereto
quoted as follows:chanroblesvirtuallawlibrary
"An employer may not terminate the employment of a
female worker or give her a warning of the same while
on maternity leave." (Article 155, Labor Law of the
Kingdom of Saudi Arabia, Royal Decree No.
M/51.)99cralawlawlibrary
All told, the considerations for assumption of
jurisdiction by Philippine tribunals as outlined in Bank
of America, NT&SA100 have been satisfied. First, all the
parties are based in the Philippines and all the material
incidents transpired in this jurisdiction. Thus, the
parties may conveniently seek relief from Philippine
tribunals. Second, Philippine tribunals are in a position
to make an intelligent decision as to the law and the
facts. Third, Philippine tribunals are in a position to
enforce their decisions. There is no compelling basis
for ceding jurisdiction to a foreign tribunal. Quite the
contrary, the immense public policy considerations
attendant to this case behoove Philippine tribunals to
not shy away from their duty to rule on the
case.chanRoblesvirtualLawlibrary
IV
Respondents were illegally terminated.
In Bilbao v. Saudi Arabian Airlines,101 this court defined
voluntary resignation as "the voluntary act of an
employee who is in a situation where one believes that
personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice
but to dissociate oneself from employment. It is a
formal pronouncement or relinquishment of an office,
with the intention of relinquishing the office
accompanied by the act of relinquishment."102 Thus,
essential to the act of resignation is voluntariness. It
must be the result of an employee's exercise of his or
her own will.
In the same case of Bilbao, this court advanced a
means for determining whether an employee resigned
voluntarily:chanroblesvirtuallawlibrary
As the intent to relinquish must concur with the overt
act of relinquishment, the acts of the employee before
and after the alleged resignation must be considered in
determining whether he or she, in fact, intended, to
sever his or her employment.103 (Emphasis supplied)
On the other hand, constructive dismissal has been
defined as "cessation of work because 'continued
employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank or a
diminution in pay' and other benefits."104
In Penaflor v. Outdoor Clothing Manufacturing
Corporation,105 constructive dismissal has been
described as tantamount to "involuntarily [sic]
resignation due to the harsh, hostile, and unfavorable
conditions set by the employer."106 In the same case, it
was noted that "[t]he gauge for constructive dismissal
is whether a reasonable person in the employee's
position would feel compelled to give up his
employment under the prevailing circumstances."107
Applying the cited standards on resignation and
constructive dismissal, it is clear that respondents
were constructively dismissed. Hence, their
termination was illegal.

The termination of respondents' employment
happened when they were pregnant and expecting to
incur costs on account of child delivery and infant
rearing. As noted by the Court of Appeals, pregnancy
is a time when they need employment to sustain their
families.108 Indeed, it goes against normal and
reasonable human behavior to abandon one's
livelihood in a time of great financial need.
It is clear that respondents intended to remain
employed with Saudia. All they did was avail of their
maternity leaves. Evidently, the very nature of a
maternity leave means that a pregnant employee will
not report for work only temporarily and that she will
resume the performance of her duties as soon as the
leave allowance expires.
It is also clear that respondents exerted all efforts to'
remain employed with Saudia. Each of them
repeatedly filed appeal letters (as much as five [5]
letters in the case of Rebesencio109) asking Saudia to
reconsider the ultimatum that they resign or be
terminated along with the forfeiture of their benefits.
Some of them even went to Saudia's office to
personally seek reconsideration.110
Respondents also adduced a copy of the "Unified
Employment Contract for Female Cabin
111
Attendants." This contract deemed void the
employment of a flight attendant who becomes
pregnant and threatened termination due to lack of
medical fitness.112 The threat of termination (and the
forfeiture of benefits that it entailed) is enough to
compel a reasonable person in respondents' position
to give up his or her employment.
Saudia draws attention to how respondents'
resignation letters were supposedly made in their own
handwriting. This minutia fails to surmount all the
other indications negating any voluntariness on
respondents' part. If at all, these same resignation
letters are proof of how any supposed resignation did
not arise from respondents' own initiative. As earlier
pointed out, respondents' resignations were executed
on Saudia's blank letterheads that Saudia had
provided. These letterheads already had the word
"RESIGNATION" typed on the subject portion of their
respective headings when these were handed to
respondents.113ChanRoblesVirtualawlibrary
"In termination cases, the burden of proving just or
valid cause for dismissing an employee rests on the
employer."114 In this case, Saudia makes much of how
respondents supposedly completed their exit
interviews, executed quitclaims, received their
separation pay, and took more than a year to file their
Complaint.115 If at all, however, these circumstances
prove only the fact of their occurrence, nothing more.
The voluntariness of respondents' departure from
Saudia is non sequitur.
Mere compliance with standard procedures or
processes, such as the completion of their exit
interviews, neither negates compulsion nor indicates
voluntariness.
As with respondent's resignation letters, their exit
interview forms even support their claim of illegal
dismissal and militates against Saudia's arguments.
These exit interview forms, as reproduced by Saudia in
its own Petition, confirms the unfavorable conditions
as regards respondents' maternity leaves. Ma.
Jopette's and Loraine's exit interview forms are
particularly telling:chanroblesvirtuallawlibrary
a. From Ma. Jopette's exit interview form:
3. In what respects has the job met or failed to meet
your expectations?
THE SUDDEN TWIST OF DECISION REGARDING THE
MATERNITY LEAVE.116
b. From Loraine's exit interview form:
1. What are your main reasons for leaving Saudia?
What company are you joining?
xxx xxx xxx
Others
CHANGING POLICIES REGARDING MATERNITY LEAVE
(PREGNANCY)117
As to respondents' quitclaims, in Phil. Employ Services
and Resources, Inc. v. Paramio,118 this court noted that
"[i]f (a) there is clear proof that the waiver was
wangled from an unsuspecting or gullible person; or
(b) the terms of the settlement are unconscionable,
and on their face invalid, such quitclaims must be
struck down as invalid or illegal."119 Respondents
executed their quitclaims after having been unfairly
given an ultimatum to resign or be terminated (and
forfeit their benefits).chanRoblesvirtualLawlibrary
V exemplary damages to employees who were
Having been illegally and unjustly dismissed,
respondents are entitled to full backwages and
benefits from the time of their termination until the
finality of this Decision. They are likewise entitled to
separation pay in the amount of one (1) month's salary
for every year of service until the fmality of this
Decision, with a fraction of a year of at least six (6)
months being counted as one (1) whole year.
Moreover, "[m]oral damages are awarded in
termination cases where the employee's dismissal was
attended by bad faith, malice or fraud, or where it
constitutes an act oppressive to labor, or where it was
done in a manner contrary to morals, good customs or
public policy."120 In this case, Saudia terminated
respondents' employment in a manner that is patently
discriminatory and running afoul of the public interest
that underlies employer-employee relationships. As
such, respondents are entitled to moral damages.
To provide an "example or correction for the public
good"121 as against such discriminatory and callous
schemes, respondents are likewise entitled to
exemplary damages.
In a long line of cases, this court awarded exemplary
damages to illegally dismissed employees whose
"dismissal[s were] effected in a wanton, oppressive or
malevolent manner."122 This court has awarded
terminated on such frivolous, arbitrary, and unjust
grounds as membership in or involvement with labor
unions,123 injuries sustained in the course of
employment,124 development of a medical condition
due to the employer's own violation of the
employment contract,125 and lodging of a Complaint
against the employer.126 Exemplary damages were
also awarded to employees who were deemed illegally
dismissed by an employer in an attempt to evade
compliance with statutorily established employee
benefits.127 Likewise, employees dismissed for
supposedly just causes, but in violation of due process
requirements, were awarded exemplary damages.128
These examples pale in comparison to the present
controversy. Stripped of all unnecessary complexities,
respondents were dismissed for no other reason than
simply that they were pregnant. This is as wanton,
oppressive, and tainted with bad faith as any reason
for termination of employment can be. This is no
ordinary case of illegal dismissal. This is a case of
manifest gender discrimination. It is an affront not only
to our statutes and policies on employees' security of
tenure, but more so, to the Constitution's dictum of
fundamental equality between men and women.129
The award of exemplary damages is, therefore,
warranted, not only to remind employers of the need
to adhere to the requirements of procedural and
substantive due process in termination of
employment, but more importantly, to demonstrate
that gender discrimination should in no case be
countenanced.
Having been compelled to litigate to seek reliefs for
their illegal and unjust dismissal, respondents are
likewise entitled to attorney's fees in the amount of
10% of the total monetary award.130
VI
Petitioner Brenda J. Betia may not be held liable.
A corporation has a personality separate and distinct
from those of the persons composing it. Thus, as a rule,
corporate directors and officers are not liable for the
illegal termination of a corporation's employees. It is
only when they acted in bad faith or with malice that
they become solidarity liable with the corporation. 131
In Ever Electrical Manufacturing, Inc. (EEMI) v.
Samahang Manggagawa ng Ever Electrical,132 this
court clarified that "[b]ad faith does not connote bad
judgment or negligence; it imports a dishonest
purpose or some moral obliquity and conscious doing
of wrong; it means breach of a known duty through
some motive or interest or ill will; it partakes of the
nature of fraud."133
Respondents have not produced proof to show that
Brenda J. Betia acted in bad faith or with malice as
regards their termination. Thus, she may not be held
solidarity liable with Saudia.cralawred
WHEREFORE, with the MODIFICATIONS that first,
petitioner Brenda J. Betia is not solidarity liable with
petitioner Saudi Arabian Airlines, and second, that
petitioner Saudi Arabian Airlines is liable for moral and
exemplary damages. The June 16, 2011 Decision and
the September 13, 2011 Resolution of the Court of
Appeals in CA-G.R. SP. No. 113006 are hereby
AFFIRMED in all other respects. Accordingly, petitioner
Saudi Arabian Airlines is ordered to pay respondents:
(1)Full backwages and all other benefits computed
from the respective dates in which each of the
respondents were illegally terminated until the
finality of this Decision;
(2)Separation pay computed from the respective dates
in which each of the respondents commenced
employment until the finality of this Decision at the
rate of one (1) month's salary for every year of
service, with a fraction of a year of at least six (6)
months being counted as one (1) whole year;
(3)Moral damages in the amount of P100,000.00 per
respondent;
(4)Exemplary damages in the amount of P200,000.00 in Special Proceeding No. 622 of said court, dated
per respondent; and September 14, 1949, approving among things the final
(5)Attorney's fees equivalent to 10% of the total accounts of the executor, directing the executor to
award. reimburse Maria Lucy Christensen the amount of
P3,600 paid by her to Helen Christensen Garcia as her
Interest of 6% per annum shall likewise be imposed on legacy, and declaring Maria Lucy Christensen entitled
the total judgment award from the finality of this to the residue of the property to be enjoyed during her
Decision until full satisfaction thereof. lifetime, and in case of death without issue, one-half
of said residue to be payable to Mrs. Carrie Louise C.
This case is REMANDED to the Labor Arbiter to make a Borton, etc., in accordance with the provisions of the
detailed computation of the amounts due to will of the testator Edward E. Christensen. The will was
respondents which petitioner Saudi Arabian Airlines executed in Manila on March 5, 1951 and contains the
should pay without delay. following provisions:
3. I declare ... that I have but ONE (1) child,
SO ORDERED. named MARIA LUCY CHRISTENSEN (now Mrs.
Bernard Daney), who was born in the
3) Aznar vs. Garcia January 31, 1963, Philippines about twenty-eight years ago, and
who is now residing at No. 665 Rodger Young
G.R. No. L-16749 January 31, 1963 Village, Los Angeles, California, U.S.A.
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD 4. I further declare that I now have no living
E. CHRISTENSEN, DECEASED. ascendants, and no descendants except my
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, above named daughter, MARIA LUCY
Heir of the deceased, Executor and Heir-appellees, CHRISTENSEN DANEY.
vs. xxx xxx xxx
HELEN CHRISTENSEN GARCIA, oppositor-appellant. 7. I give, devise and bequeath unto MARIA
M. R. Sotelo for executor and heir-appellees. HELEN CHRISTENSEN, now married to Eduardo
Leopoldo M. Abellera and Jovito Salonga for oppositor- Garcia, about eighteen years of age and who,
appellant. notwithstanding the fact that she was baptized
LABRADOR, J.: Christensen, is not in any way related to me,
This is an appeal from a decision of the Court of First nor has she been at any time adopted by me,
Instance of Davao, Hon. Vicente N. Cusi, Jr., presiding, and who, from all information I have now
 resides in Egpit, Digos, Davao, Philippines, the
sum of THREE THOUSAND SIX HUNDRED PESOS
(P3,600.00), Philippine Currency the same to
be deposited in trust for the said Maria Helen
Christensen with the Davao Branch of the
Philippine National Bank, and paid to her at the
rate of One Hundred Pesos (P100.00),
Philippine Currency per month until the
principal thereof as well as any interest which
may have accrued thereon, is exhausted..
xxx xxx xxx
12. I hereby give, devise and bequeath, unto
my well-beloved daughter, the said MARIA
LUCY CHRISTENSEN DANEY (Mrs. Bernard
Daney), now residing as aforesaid at No. 665
Rodger Young Village, Los Angeles, California,
U.S.A., all the income from the rest, remainder,
and residue of my property and estate, real,
personal and/or mixed, of whatsoever kind or
character, and wheresoever situated, of which
I may be possessed at my death and which may
have come to me from any source whatsoever,
during her lifetime: ....
It is in accordance with the above-quoted provisions
that the executor in his final account and project of
partition ratified the payment of only P3,600 to Helen
Christensen Garcia and proposed that the residue of
the estate be transferred to his daughter, Maria Lucy
Christensen.
Opposition to the approval of the project of partition
was filed by Helen Christensen Garcia, insofar as it
deprives her (Helen) of her legitime as an
acknowledged natural child, she having been declared
by Us in G.R. Nos. L-11483-84 an acknowledged natural
child of the deceased Edward E. Christensen. The legal
grounds of opposition are (a) that the distribution
should be governed by the laws of the Philippines, and
(b) that said order of distribution is contrary thereto
insofar as it denies to Helen Christensen, one of two
acknowledged natural children, one-half of the estate
in full ownership. In amplification of the above
grounds it was alleged that the law that should govern
the estate of the deceased Christensen should not be
the internal law of California alone, but the entire law
thereof because several foreign elements are involved,
that the forum is the Philippines and even if the case
were decided in California, Section 946 of the
California Civil Code, which requires that the domicile
of the decedent should apply, should be applicable. It
was also alleged that Maria Helen Christensen having
been declared an acknowledged natural child of the
decedent, she is deemed for all purposes legitimate
from the time of her birth.
The court below ruled that as Edward E. Christensen
was a citizen of the United States and of the State of
California at the time of his death, the successional
rights and intrinsic validity of the provisions in his will
are to be governed by the law of California, in
accordance with which a testator has the right to
dispose of his property in the way he desires, because
the right of absolute dominion over his property is
sacred and inviolable (In re McDaniel's Estate, 77 Cal.
Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117
Cal. 286, 49 Pac. 192, cited in page 179, Record on
Appeal). Oppositor Maria Helen Christensen, through
counsel, filed various motions for reconsideration, but
these were denied. Hence, this appeal.
The most important assignments of error are as
follows:
I
THE LOWER COURT ERRED IN IGNORING THE DECISION
OF THE HONORABLE SUPREME COURT THAT HELEN IS
THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E.
CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING
HER OF HER JUST SHARE IN THE INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY IGNORING
AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF
SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES
CALLING FOR THE APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE
THAT UNDER INTERNATIONAL LAW, PARTICULARLY
UNDER THE RENVOI DOCTRINE, THE INTRINSIC
VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE
DISTRIBUTION OF THE ESTATE OF THE DECEASED
EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY
THE LAWS OF THE PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT
THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE
EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT
UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN
GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE
ESTATE IN FULL OWNERSHIP.
There is no question that Edward E. Christensen was a
citizen of the United States and of the State of
California at the time of his death. But there is also no
question that at the time of his death he was domiciled
in the Philippines, as witness the following facts
admitted by the executor himself in appellee's brief:
In the proceedings for admission of the will to probate,
the facts of record show that the deceased Edward E.
Christensen was born on November 29, 1875 in New
York City, N.Y., U.S.A.; his first arrival in the Philippines,
as an appointed school teacher, was on July 1, 1901,
on board the U.S. Army Transport "Sheridan" with Port
of Embarkation as the City of San Francisco, in the
State of California, U.S.A. He stayed in the Philippines
until 1904.
In December, 1904, Mr. Christensen returned to the
United States and stayed there for the following nine
years until 1913, during which time he resided in, and
was teaching school in Sacramento, California.
Mr. Christensen's next arrival in the Philippines was in
July of the year 1913. However, in 1928, he again
departed the Philippines for the United States and
came back here the following year, 1929. Some nine
years later, in 1938, he again returned to his own
country, and came back to the Philippines the
following year, 1939.
Wherefore, the parties respectfully pray that the
foregoing stipulation of facts be admitted and
approved by this Honorable Court, without prejudice
to the parties adducing other evidence to prove their
case not covered by this stipulation of facts.
1äwphï1.ñët
Being an American citizen, Mr. Christensen was
interned by the Japanese Military Forces in the
Philippines during World War II. Upon liberation, in
April 1945, he left for the United States but returned
to the Philippines in December, 1945. Appellees
Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as
Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM",
"MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21,
1953.)
In April, 1951, Edward E. Christensen returned once
more to California shortly after the making of his last
will and testament (now in question herein) which he
executed at his lawyers' offices in Manila on March 5,
1951. He died at the St. Luke's Hospital in the City of
Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the
deceased is the Philippines, we are persuaded by the
fact that he was born in New York, migrated to
California and resided there for nine years, and since
he came to the Philippines in 1913 he returned to
California very rarely and only for short visits (perhaps
to relatives), and considering that he appears never to
have owned or acquired a home or properties in that
state, which would indicate that he would ultimately
abandon the Philippines and make home in the State
of California.
Sec. 16. Residence is a term used with many shades of
meaning from mere temporary presence to the most
permanent abode. Generally, however, it is used to
denote something more than mere physical presence.
(Goodrich on Conflict of Laws, p. 29)
As to his citizenship, however, We find that the
citizenship that he acquired in California when he
resided in Sacramento, California from 1904 to 1913,
was never lost by his stay in the Philippines, for the
latter was a territory of the United States (not a state)
until 1946 and the deceased appears to have
considered himself as a citizen of California by the fact
that when he executed his will in 1951 he declared that
he was a citizen of that State; so that he appears never
to have intended to abandon his California citizenship
by acquiring another. This conclusion is in accordance
with the following principle expounded by Goodrich in
his Conflict of Laws.
The terms "'residence" and "domicile" might well be
taken to mean the same thing, a place of permanent
abode. But domicile, as has been shown, has acquired
a technical meaning. Thus one may be domiciled in a
place where he has never been. And he may reside in
a place where he has no domicile. The man with two
homes, between which he divides his time, certainly
resides in each one, while living in it. But if he went on
business which would require his presence for several
weeks or months, he might properly be said to have
sufficient connection with the place to be called a
 resident. It is clear, however, that, if he treated his
settlement as continuing only for the particular
business in hand, not giving up his former "home," he
could not be a domiciled New Yorker. Acquisition of a
domicile of choice requires the exercise of intention
as well as physical presence. "Residence simply
requires bodily presence of an inhabitant in a given
place, while domicile requires bodily presence in that
place and also an intention to make it one's domicile."
Residence, however, is a term used with many shades
of meaning, from the merest temporary presence to
the most permanent abode, and it is not safe to insist
that any one use et the only proper one. (Goodrich, p.
29)
The law that governs the validity of his testamentary
dispositions is defined in Article 16 of the Civil Code of
the Philippines, which is as follows:
ART. 16. Real property as well as personal property is
subject to the law of the country where it is situated.
However, intestate and testamentary successions,
both with respect to the order of succession and to
the amount of successional rights and to the intrinsic
validity of testamentary provisions, shall be regulated
by the national law of the person whose succession is
under consideration, whatever may be the nature of
the property and regardless of the country where said
property may be found.
The application of this article in the case at bar
requires the determination of the meaning of the term
"national law" is used therein.
There is no single American law governing the validity
of testamentary provisions in the United States, each
state of the Union having its own private law
applicable to its citizens only and in force only within
the state. The "national law" indicated in Article 16 of
the Civil Code above quoted can not, therefore,
possibly mean or apply to any general American law.
So it can refer to no other than the private law of the
State of California.
The next question is: What is the law in California
governing the disposition of personal property? The
decision of the court below, sustains the contention of
the executor-appellee that under the California
Probate Code, a testator may dispose of his property
by will in the form and manner he desires, citing the
case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P.
2d 952. But appellant invokes the provisions of Article
946 of the Civil Code of California, which is as follows:
If there is no law to the contrary, in the place where
personal property is situated, it is deemed to follow
the person of its owner, and is governed by the law of
his domicile.
The existence of this provision is alleged in appellant's
opposition and is not denied. We have checked it in the
California Civil Code and it is there. Appellee, on the
other hand, relies on the case cited in the decision and
testified to by a witness. (Only the case of Kaufman is
correctly cited.) It is argued on executor's behalf that
as the deceased Christensen was a citizen of the State
of California, the internal law thereof, which is that
given in the abovecited case, should govern the
determination of the validity of the testamentary
provisions of Christensen's will, such law being in force
in the State of California of which Christensen was a
citizen. Appellant, on the other hand, insists that
Article 946 should be applicable, and in accordance
therewith and following the doctrine of the renvoi, the
question of the validity of the testamentary provision
in question should be referred back to the law of the
decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by
various authors, thus:
The problem has been stated in this way: "When the
Conflict of Laws rule of the forum refers a jural matter
to a foreign law for decision, is the reference to the
purely internal rules of law of the foreign system; i.e.,
to the totality of the foreign law minus its Conflict of
Laws rules?"
On logic, the solution is not an easy one. The Michigan
court chose to accept the renvoi, that is, applied the
Conflict of Laws rule of Illinois which referred the
matter back to Michigan law. But once having
determined the the Conflict of Laws principle is the
rule looked to, it is difficult to see why the reference
back should not have been to Michigan Conflict of
Laws. This would have resulted in the "endless chain of
references" which has so often been criticized be legal
writers. The opponents of the renvoi would have
looked merely to the internal law of Illinois, thus
rejecting the renvoi or the reference back. Yet there
seems no compelling logical reason why the original
reference should be the internal law rather than to the
Conflict of Laws rule. It is true that such a solution
avoids going on a merry-go-round, but those who have
accepted the renvoi theory avoid this inextricabilis
circulas by getting off at the second reference and at
that point applying internal law. Perhaps the
opponents of the renvoi are a bit more consistent for
they look always to internal law as the rule of
reference.
Strangely enough, both the advocates for and the
objectors to the renvoi plead that greater uniformity
will result from adoption of their respective views. And
still more strange is the fact that the only way to
achieve uniformity in this choice-of-law problem is if in
the dispute the two states whose laws form the legal
basis of the litigation disagree as to whether the renvoi
should be accepted. If both reject, or both accept the
doctrine, the result of the litigation will vary with the
choice of the forum. In the case stated above, had the
Michigan court rejected the renvoi, judgment would
have been against the woman; if the suit had been
brought in the Illinois courts, and they too rejected the
renvoi, judgment would be for the woman. The same
result would happen, though the courts would switch
with respect to which would hold liability, if both
courts accepted the renvoi.
The Restatement accepts the renvoi theory in two
instances: where the title to land is in question, and
where the validity of a decree of divorce is challenged.
In these cases the Conflict of Laws rule of the situs of
the land, or the domicile of the parties in the divorce
case, is applied by the forum, but any further reference
goes only to the internal law. Thus, a person's title to
land, recognized by the situs, will be recognized by
every court; and every divorce, valid by the domicile of
the parties, will be valid everywhere. (Goodrich,
Conflict of Laws, Sec. 7, pp. 13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled
in France, leaving movable property in Massachusetts,
England, and France. The question arises as to how this
property is to be distributed among X's next of kin.
Assume (1) that this question arises in a Massachusetts
court. There the rule of the conflict of laws as to
intestate succession to movables calls for an
application of the law of the deceased's last domicile.
Since by hypothesis X's last domicile was France, the
natural thing for the Massachusetts court to do would
be to turn to French statute of distributions, or
whatever corresponds thereto in French law, and
decree a distribution accordingly. An examination of
French law, however, would show that if a French
court were called upon to determine how this property
should be distributed, it would refer the distribution to
the national law of the deceased, thus applying the
Massachusetts statute of distributions. So on the
surface of things the Massachusetts court has open to
it alternative course of action: (a) either to apply the
French law is to intestate succession, or (b) to resolve
itself into a French court and apply the Massachusetts
statute of distributions, on the assumption that this is
what a French court would do. If it accepts the so-
called renvoi doctrine, it will follow the latter course,
thus applying its own law.
This is one type of renvoi. A jural matter is presented
which the conflict-of-laws rule of the forum refers to a
foreign law, the conflict-of-laws rule of which, in turn,
refers the matter back again to the law of the forum.
This is renvoi in the narrower sense. The German term
for this judicial process is 'Ruckverweisung.'" (Harvard
Law Review, Vol. 31, pp. 523-571.)
After a decision has been arrived at that a foreign law
is to be resorted to as governing a particular case, the
further question may arise: Are the rules as to the
conflict of laws contained in such foreign law also to be
resorted to? This is a question which, while it has been
considered by the courts in but a few instances, has
been the subject of frequent discussion by textwriters
and essayists; and the doctrine involved has been
descriptively designated by them as the "Renvoyer" to
send back, or the "Ruchversweisung", or the
"Weiterverweisung", since an affirmative answer to
the question postulated and the operation of the
adoption of the foreign law in toto would in many
cases result in returning the main controversy to be
decided according to the law of the forum. ... (16 C.J.S.
872.)
Another theory, known as the "doctrine of renvoi", has
been advanced. The theory of the doctrine of renvoi is
that the court of the forum, in determining the
question before it, must take into account the whole
law of the other jurisdiction, but also its rules as to
conflict of laws, and then apply the law to the actual
question which the rules of the other jurisdiction
prescribe. This may be the law of the forum. The
doctrine of the renvoi has generally been repudiated
by the American authorities. (2 Am. Jur. 296)
The scope of the theory of renvoi has also been defined
and the reasons for its application in a country
explained by Prof. Lorenzen in an article in the Yale
Law Journal, Vol. 27, 1917-1918, pp. 529-531. The
pertinent parts of the article are quoted herein below:
The recognition of the renvoi theory implies that the
rules of the conflict of laws are to be understood as
incorporating not only the ordinary or internal law of
the foreign state or country, but its rules of the conflict
of laws as well. According to this theory 'the law of a
country' means the whole of its law.
xxx xxx xxx
Von Bar presented his views at the meeting of the
Institute of International Law, at Neuchatel, in 1900, in
the form of the following theses:
(1) Every court shall observe the law of its country as
regards the application of foreign laws.
(2) Provided that no express provision to the contrary
exists, the court shall respect:
(a) The provisions of a foreign law which disclaims the
right to bind its nationals abroad as regards their
personal statute, and desires that said personal
statute shall be determined by the law of the
domicile, or even by the law of the place where the
act in question occurred.
(b) The decision of two or more foreign systems of
law, provided it be certain that one of them is
necessarily competent, which agree in attributing the
determination of a question to the same system of
law.
xxx xxx xxx
If, for example, the English law directs its judge to
distribute the personal estate of an Englishman who
has died domiciled in Belgium in accordance with the
law of his domicile, he must first inquire whether the
law of Belgium would distribute personal property
upon death in accordance with the law of domicile,
and if he finds that the Belgian law would make the
distribution in accordance with the law of nationality
— that is the English law — he must accept this
reference back to his own law.
We note that Article 946 of the California Civil Code is
its conflict of laws rule, while the rule applied in In re
Kaufman, Supra, its internal law. If the law on
succession and the conflict of laws rules of California
are to be enforced jointly, each in its own intended and
appropriate sphere, the principle cited In re Kaufman
should apply to citizens living in the State, but Article
946 should apply to such of its citizens as are not
domiciled in California but in other jurisdictions. The
rule laid down of resorting to the law of the domicile
in the determination of matters with foreign element
involved is in accord with the general principle of
American law that the domiciliary law should govern in
most matters or rights which follow the person of the
owner.
When a man dies leaving personal property in one or
more states, and leaves a will directing the manner of
distribution of the property, the law of the state where
he was domiciled at the time of his death will be
looked to in deciding legal questions about the will,
almost as completely as the law of situs is consulted in
questions about the devise of land. It is logical that,
since the domiciliary rules control devolution of the
personal estate in case of intestate succession, the
same rules should determine the validity of an
attempted testamentary dispostion of the property.
Here, also, it is not that the domiciliary has effect
beyond the borders of the domiciliary state. The rules
of the domicile are recognized as controlling by the
Conflict of Laws rules at the situs property, and the
reason for the recognition as in the case of intestate
succession, is the general convenience of the doctrine.
The New York court has said on the point: 'The general
principle that a dispostiton of a personal property,
valid at the domicile of the owner, is valid anywhere,
is one of the universal application. It had its origin in
that international comity which was one of the first
fruits of civilization, and it this age, when business
intercourse and the process of accumulating property
take but little notice of boundary lines, the practical
wisdom and justice of the rule is more apparent than
ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-
443.)
Appellees argue that what Article 16 of the Civil Code
of the Philippines pointed out as the national law is the
internal law of California. But as above explained the
laws of California have prescribed two sets of laws for
its citizens, one for residents therein and another for
those domiciled in other jurisdictions. Reason
demands that We should enforce the California
internal law prescribed for its citizens residing therein,
and enforce the conflict of laws rules for the citizens
domiciled abroad. If we must enforce the law of
California as in comity we are bound to go, as so
declared in Article 16 of our Civil Code, then we must
enforce the law of California in accordance with the
express mandate thereof and as above explained, i.e.,
apply the internal law for residents therein, and its
conflict-of-laws rule for those domiciled abroad.
It is argued on appellees' behalf that the clause "if
there is no law to the contrary in the place where the
property is situated" in Sec. 946 of the California Civil
Code refers to Article 16 of the Civil Code of the
Philippines and that the law to the contrary in the
Philippines is the provision in said Article 16 that the
national law of the deceased should govern. This
contention can not be sustained. As explained in the
various authorities cited above the national law
mentioned in Article 16 of our Civil Code is the law on
conflict of laws in the California Civil Code, i.e., Article
946, which authorizes the reference or return of the
question to the law of the testator's domicile. The
conflict of laws rule in California, Article 946, Civil
Code, precisely refers back the case, when a decedent
is not domiciled in California, to the law of his domicile,
the Philippines in the case at bar. The court of the
domicile can not and should not refer the case back to
California; such action would leave the issue incapable
of determination because the case will then be like a
football, tossed back and forth between the two
states, between the country of which the decedent
was a citizen and the country of his domicile. The
Philippine court must apply its own law as directed in
the conflict of laws rule of the state of the decedent, if
the question has to be decided, especially as the
application of the internal law of California provides no
legitime for children while the Philippine law, Arts.
887(4) and 894, Civil Code of the Philippines, makes
natural children legally acknowledged forced heirs of
the parent recognizing them.
The Philippine cases (In re Estate of Johnson, 39 Phil.
156; Riera vs. Palmaroli, 40 Phil. 105; Miciano vs.
Brimo, 50 Phil. 867; Babcock Templeton vs. Rider
Babcock, 52 Phil. 130; and Gibbs vs. Government, 59
Phil. 293.) cited by appellees to support the decision
can not possibly apply in the case at bar, for two
important reasons, i.e., the subject in each case does
not appear to be a citizen of a state in the United States
but with domicile in the Philippines, and it does not
appear in each case that there exists in the state of
which the subject is a citizen, a law similar to or
identical with Art. 946 of the California Civil Code.
We therefore find that as the domicile of the deceased
Christensen, a citizen of California, is the Philippines,
the validity of the provisions of his will depriving his
acknowledged natural child, the appellant, should be
governed by the Philippine Law, the domicile, pursuant
to Art. 946 of the Civil Code of California, not by the
internal law of California..
WHEREFORE, the decision appealed from is hereby
reversed and the case returned to the lower court with
instructions that the partition be made as the
Philippine law on succession provides. Judgment
reversed, with costs against appellees.
4) Bellis vs. Bellis June 6, 1967,
G.R. No. L-23678 June 6, 1967
TESTATE ESTATE OF AMOS G. BELLIS, deceased.
PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS,
oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors
appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-
appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et
al.
J. R. Balonkita for appellee People's Bank & Trust
Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of
law, from an order of the Court of First Instance of
Manila dated April 30, 1964, approving the project of
partition filed by the executor in Civil Case No. 37089
therein.1äwphï1.ñët
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the
State of Texas and of the United States." By his first
wife, Mary E. Mallen, whom he divorced, he had five
legitimate children: Edward A. Bellis, George Bellis
(who pre-deceased him in infancy), Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman; by his second
wife, Violet Kennedy, who survived him, he had three
legitimate children: Edwin G. Bellis, Walter S. Bellis and
Dorothy Bellis; and finally, he had three illegitimate
children: Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in
the Philippines, in which he directed that after all
taxes, obligations, and expenses of administration are
paid for, his distributable estate should be divided, in
trust, in the following order and manner: (a)
$240,000.00 to his first wife, Mary E. Mallen; (b)
P120,000.00 to his three illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or
P40,000.00 each and (c) after the foregoing two items
have been satisfied, the remainder shall go to his seven
surviving children by his first and second wives,
namely: Edward A. Bellis, Henry A. Bellis, Alexander
Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter
S. Bellis, and Dorothy E. Bellis, in equal
shares.1äwphï1.ñët
Subsequently, or on July 8, 1958, Amos G. Bellis died a
resident of San Antonio, Texas, U.S.A. His will was
admitted to probate in the Court of First Instance of
Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of
the will, paid all the bequests therein including the
amount of $240,000.00 in the form of shares of stock
to Mary E. Mallen and to the three (3) illegitimate
children, Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis, various amounts totalling
P40,000.00 each in satisfaction of their respective
legacies, or a total of P120,000.00, which it released
from time to time according as the lower court
approved and allowed the various motions or petitions
filed by the latter three requesting partial advances on
account of their respective legacies.
On January 8, 1964, preparatory to closing its
administration, the executor submitted and filed its
"Executor's Final Account, Report of Administration
and Project of Partition" wherein it reported, inter alia,
the satisfaction of the legacy of Mary E. Mallen by the
delivery to her of shares of stock amounting to
$240,000.00, and the legacies of Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis in the amount
of P40,000.00 each or a total of P120,000.00. In the
project of partition, the executor — pursuant to the
"Twelfth" clause of the testator's Last Will and
Testament — divided the residuary estate into seven
equal portions for the benefit of the testator's seven
legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam
Palma Bellis filed their respective oppositions to the
project of partition on the ground that they were
deprived of their legitimes as illegitimate children and,
therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite
notice to him, proof of service of which is evidenced by
the registry receipt submitted on April 27, 1964 by the
executor.1
After the parties filed their respective memoranda and
other pertinent pleadings, the lower court, on April 30,
1964, issued an order overruling the oppositions and
approving the executor's final account, report and
administration and project of partition. Relying upon
Art. 16 of the Civil Code, it applied the national law of
the decedent, which in this case is Texas law, which did
not provide for legitimes.
Their respective motions for reconsideration having
been denied by the lower court on June 11, 1964,
oppositors-appellants appealed to this Court to raise
the issue of which law must apply — Texas law or
Philippine law.
In this regard, the parties do not submit the case on,
nor even discuss, the doctrine of renvoi, applied by this
Court in Aznar v. Christensen Garcia, L-16749, January
31, 1963. Said doctrine is usually pertinent where the
decedent is a national of one country, and a domicile
of another. In the present case, it is not disputed that
the decedent was both a national of Texas and a
domicile thereof at the time of his death.2 So that even
assuming Texas has a conflict of law rule providing that
the domiciliary system (law of the domicile) should
govern, the same would not result in a reference back
(renvoi) to Philippine law, but would still refer to Texas
law. Nonetheless, if Texas has a conflicts rule adopting
the situs theory (lex rei sitae) calling for the application
of the law of the place where the properties are
situated, renvoi would arise, since the properties here
involved are found in the Philippines. In the absence,
however, of proof as to the conflict of law rule of
Texas, it should not be presumed different from ours.3
Appellants' position is therefore not rested on the
doctrine of renvoi. As stated, they never invoked nor
even mentioned it in their arguments. Rather, they
argue that their case falls under the circumstances
mentioned in the third paragraph of Article 17 in
relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code,
render applicable the national law of the decedent, in
intestate or testamentary successions, with regard to
four items: (a) the order of succession; (b) the amount
of successional rights; (e) the intrinsic validity of the
provisions of the will; and (d) the capacity to succeed.
They provide that —
ART. 16. Real property as well as personal
property is subject to the law of the country
where it is situated.
However, intestate and testamentary
successions, both with respect to the order of
succession and to the amount of successional
rights and to the intrinsic validity of
testamentary provisions, shall be regulated by
the national law of the person whose
succession is under consideration, whatever
may he the nature of the property and
regardless of the country wherein said
property may be found.
ART. 1039. Capacity to succeed is governed by
the law of the nation of the decedent.
Appellants would however counter that Art. 17,
paragraph three, of the Civil Code, stating that —
Prohibitive laws concerning persons, their acts
or property, and those which have for their
object public order, public policy and good
customs shall not be rendered ineffective by
laws or judgments promulgated, or by
determinations or conventions agreed upon in
a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil
Code afore-quoted. This is not correct. Precisely,
Congress deleted the phrase, "notwithstanding the
provisions of this and the next preceding article" when
they incorporated Art. 11 of the old Civil Code as Art.
17 of the new Civil Code, while reproducing without
substantial change the second paragraph of Art. 10 of
the old Civil Code as Art. 16 in the new. It must have
been their purpose to make the second paragraph of
Art. 16 a specific provision in itself which must be
applied in testate and intestate succession. As further
indication of this legislative intent, Congress added a
new provision, under Art. 1039, which decrees that
capacity to succeed is to be governed by the national
law of the decedent.
It is therefore evident that whatever public policy or
good customs may be involved in our System of
legitimes, Congress has not intended to extend the
same to the succession of foreign nationals. For it has
specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national law.
Specific provisions must prevail over general ones.
Appellants would also point out that the decedent
executed two wills — one to govern his Texas estate
and the other his Philippine estate — arguing from this
that he intended Philippine law to govern his
Philippine estate. Assuming that such was the
decedent's intention in executing a separate Philippine
will, it would not alter the law, for as this Court ruled
in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
foreigner's will to the effect that his properties shall be
distributed in accordance with Philippine law and not
with his national law, is illegal and void, for his national
law cannot be ignored in regard to those matters that
Article 10 — now Article 16 — of the Civil Code states
said national law should govern.
The parties admit that the decedent, Amos G. Bellis,
was a citizen of the State of Texas, U.S.A., and that
under the laws of Texas, there are no forced heirs or
legitimes. Accordingly, since the intrinsic validity of the
provision of the will and the amount of successional
rights are to be determined under Texas law, the
Philippine law on legitimes cannot be applied to the
testacy of Amos G. Bellis.
Wherefore, the order of the probate court is hereby
affirmed in toto, with costs against appellants. So
ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala,
Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.

5) Cadali. et. al. vs. POEA Administrator,
G.R. No. L-104776 December 5, 1994
BIENVENIDO M. CADALIN, ROLANDO M. AMUL,
DONATO B. EVANGELISTA, and the rest of 1,767
NAMED-COMPLAINANTS, thru and by their Attorney-
in-fact, Atty. GERARDO A. DEL MUNDO, petitioners,
vs.
PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION'S ADMINISTRATOR, NATIONAL
LABOR RELATIONS COMMISSION, BROWN & ROOT
INTERNATIONAL, INC. AND/OR ASIA INTERNATIONAL
BUILDERS CORPORATION, respondents.
Gerardo A. Del Mundo and Associates for petitioners.
Romulo, Mabanta, Sayoc, Buenaventura, De los
Angeles Law Offices for BRII/AIBC.
Florante M. De Castro for private respondents in
105029-32.
QUIASON, J.:
The petition in G.R. No. 104776, entitled "Bienvenido
M. Cadalin, et. al. v. Philippine Overseas Employment
Administration's Administrator, et. al.," was filed
under Rule 65 of the Revised Rules of Court:
(1) to modify the Resolution dated September 2, 1991
of the National Labor Relations Commission (NLRC) in
POEA Cases Nos.
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-
460; (2) to render a new decision: (i) declaring private
respondents as in default; (ii) declaring the said labor
cases as a class suit; (iii) ordering Asia International
Builders Corporation (AIBC) and Brown and Root
International Inc. (BRII) to pay the claims of the 1,767
claimants in said labor cases; (iv) declaring Atty.
Florante M. de Castro guilty of forum-shopping; and (v)
dismissing POEA Case No. L-86-05-460; and
(3) to reverse the Resolution dated March 24, 1992 of
NLRC, denying the motion for reconsideration of its
Resolution dated September 2, 1991 (Rollo, pp. 8-288).
The petition in G.R. Nos. 104911-14, entitled
"Bienvenido M. Cadalin, et. al., v. Hon. National Labor
Relations Commission, et. al.," was filed under Rule 65
of the Revised Rules of Court:
(1) to reverse the Resolution dated September 2, 1991
of NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777,
L-85-10-799 and
L-86-05-460 insofar as it: (i) applied the three-year
prescriptive period under the Labor Code of the
Philippines instead of the ten-year prescriptive period
under the Civil Code of the Philippines; and (ii) denied
the
"three-hour daily average" formula in the computation
of petitioners' overtime pay; and
(2) to reverse the Resolution dated March 24, 1992 of
NLRC, denying the motion for reconsideration of its
Resolution dated September 2, 1991 (Rollo, pp. 8-25;
26-220).
The petition in G.R. Nos. 105029-32, entitled "Asia
International Builders Corporation, et. al., v. National
Labor Relations Commission, et. al." was filed under
Rule 65 of the Revised Rules of Court:
(1) to reverse the Resolution dated September 2, 1991
of NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777,
L-85-10-779 and
L-86-05-460, insofar as it granted the claims of 149
claimants; and
(2) to reverse the Resolution dated March 21, 1992 of
NLRC insofar as it denied the motions for
reconsideration of AIBC and BRII (Rollo, pp. 2-59; 61-
230).
The Resolution dated September 2, 1991 of NLRC,
which modified the decision of POEA in four labor
cases: (1) awarded monetary benefits only to 149
claimants and (2) directed Labor Arbiter Fatima J.
Franco to conduct hearings and to receive evidence on
the claims dismissed by the POEA for lack of
substantial evidence or proof of employment.
Consolidation of Cases
G.R. Nos. 104776 and 105029-32 were originally
raffled to the Third Division while G.R. Nos. 104911-14
were raffled to the Second Division. In the Resolution
dated July 26, 1993, the Second Division referred G.R.
Nos. 104911-14 to the Third Division (G.R. Nos.
104911-14, Rollo, p. 895).
In the Resolution dated September 29, 1993, the Third
Division granted the motion filed in G.R. Nos. 104911-
14 for the consolidation of said cases with G.R. Nos.
104776 and 105029-32, which were assigned to the
First Division (G.R. Nos. 104911-14, Rollo, pp. 986-
1,107; G.R. Nos. 105029-30, Rollo, pp. 369-377, 426-
432). In the Resolution dated October 27, 1993, the
First Division granted the motion to consolidate G.R.
Nos. 104911-14 with G.R. No. 104776 (G.R. Nos.
104911-14, Rollo, p. 1109; G.R. Nos. 105029-32, Rollo,
p. 1562).
I On July 3, 1984, POEA Administrator, upon motion of
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M.
Amul and Donato B. Evangelista, in their own behalf
and on behalf of 728 other overseas contract workers
(OCWs) instituted a class suit by filing an "Amended
Complaint" with the Philippine Overseas Employment
Administration (POEA) for money claims arising from
their recruitment by AIBC and employment by BRII
(POEA Case No. L-84-06-555). The claimants were
represented by Atty. Gerardo del Mundo.
BRII is a foreign corporation with headquarters in
Houston, Texas, and is engaged in construction; while
AIBC is a domestic corporation licensed as a service
contractor to recruit, mobilize and deploy Filipino
workers for overseas employment on behalf of its
foreign principals.
The amended complaint principally sought the
payment of the unexpired portion of the employment
contracts, which was terminated prematurely, and
secondarily, the payment of the interest of the
earnings of the Travel and Reserved Fund, interest on
all the unpaid benefits; area wage and salary
differential pay; fringe benefits; refund of SSS and
premium not remitted to the SSS; refund of
withholding tax not remitted to the BIR; penalties for
committing prohibited practices; as well as the
suspension of the license of AIBC and the accreditation
of BRII (G.R. No. 104776, Rollo, pp. 13-14).
At the hearing on June 25, 1984, AIBC was furnished a
copy of the complaint and was given, together with
BRII, up to July 5, 1984 to file its answer.
AIBC and BRII, ordered the claimants to file a bill of
particulars within ten days from receipt of the order
and the movants to file their answers within ten days
from receipt of the bill of particulars. The POEA
Administrator also scheduled a pre-trial conference on
July 25, 1984.
On July 13, 1984, the claimants submitted their
"Compliance and Manifestation." On July 23, 1984,
AIBC filed a "Motion to Strike Out of the Records", the
"Complaint" and the "Compliance and Manifestation."
On July 25, 1984, the claimants filed their "Rejoinder
and Comments," averring, among other matters, the
failure of AIBC and BRII to file their answers and to
attend the pre-trial conference on July 25, 1984. The
claimants alleged that AIBC and BRII had waived their
right to present evidence and had defaulted by failing
to file their answers and to attend the pre-trial
conference.
On October 2, 1984, the POEA Administrator denied
the "Motion to Strike Out of the Records" filed by AIBC
but required the claimants to correct the deficiencies
in the complaint pointed out in the order.
On October 10, 1984, claimants asked for time within
which to comply with the Order of October 2, 1984 and
filed an "Urgent Manifestation," praying that the POEA
Administrator direct the parties to submit
simultaneously their position papers, after which the
case should be deemed submitted for decision. On the
same day, Atty. Florante de Castro filed another
complaint for the same money claims and benefits in
behalf of several claimants, some of whom were also
claimants in POEA Case No. L-84-06-555 (POEA Case
No. 85-10-779).
On October 19, 1984, claimants filed their
"Compliance" with the Order dated October 2, 1984
and an "Urgent Manifestation," praying that the POEA
direct the parties to submit simultaneously their
position papers after which the case would be deemed
submitted for decision. On the same day, AIBC asked
for time to file its comment on the "Compliance" and
"Urgent Manifestation" of claimants. On November 6,
1984, it filed a second motion for extension of time to
file the comment.
On November 8, 1984, the POEA Administrator
informed AIBC that its motion for extension of time
was granted.
On November 14, 1984, claimants filed an opposition
to the motions for extension of time and asked that
AIBC and BRII be declared in default for failure to file
their answers.
On November 20, 1984, AIBC and BRII filed a
"Comment" praying, among other reliefs, that
claimants should be ordered to amend their
complaint.
On December 27, 1984, the POEA Administrator issued
an order directing AIBC and BRII to file their answers
within ten days from receipt of the order.
On February 27, 1985, AIBC and BRII appealed to NLRC
seeking the reversal of the said order of the POEA
Administrator. Claimants opposed the appeal,
claiming that it was dilatory and praying that AIBC and
BRII be declared in default.
On April 2, 1985, the original claimants filed an
"Amended Complaint and/or Position Paper" dated
March 24, 1985, adding new demands: namely, the
payment of overtime pay, extra night work pay, annual
leave differential pay, leave indemnity pay, retirement
and savings benefits and their share of forfeitures (G.R.
No. 104776, Rollo, pp. 14-16). On April 15, 1985, the
POEA Administrator directed AIBC to file its answer to
the amended complaint (G.R. No. 104776, Rollo, p. 20).
On May 28, 1985, claimants filed an "Urgent Motion
for Summary Judgment." On the same day, the POEA
issued an order directing AIBC and BRII to file their
answers to the "Amended Complaint," otherwise, they
would be deemed to have waived their right to present
evidence and the case would be resolved on the basis
of complainant's evidence.
On June 5, 1985, AIBC countered with a "Motion to
Dismiss as Improper Class Suit and Motion for Bill of
Particulars Re: Amended Complaint dated March 24,
1985." Claimants opposed the motions.
On September 4, 1985, the POEA Administrator
reiterated his directive to AIBC and BRII to file their
answers in POEA Case No. L-84-06-555.
On September 18, 1985, AIBC filed its second appeal to
the NLRC, together with a petition for the issuance of
a writ of injunction. On September 19, 1985, NLRC
enjoined the POEA Administrator from hearing the
labor cases and suspended the period for the filing of
the answers of AIBC and BRII.
On September 19, 1985, claimants asked the POEA
Administrator to include additional claimants in the
case and to investigate alleged wrongdoings of BRII,
AIBC and their respective lawyers.
On October 10, 1985, Romeo Patag and two co-
claimants filed a complaint (POEA Case No. L-85-10-
777) against AIBC and BRII with the POEA, demanding
monetary claims similar to those subject of POEA Case
No. L-84-06-555. In the same month, Solomon Reyes
also filed his own complaint (POEA Case No. L-85-10-
779) against AIBC and BRII.
On October 17, 1985, the law firm of Florante M. de
Castro & Associates asked for the substitution of the
original counsel of record and the cancellation of the
special powers of attorney given the original counsel.
On December 12, 1985, Atty. Del Mundo filed in NLRC
a notice of the claim to enforce attorney's lien.
On May 29, 1986, Atty. De Castro filed a complaint for
money claims (POEA Case No. 86-05-460) in behalf of
11 claimants including Bienvenido Cadalin, a claimant
in POEA Case No. 84-06-555.
On December 12, 1986, the NLRC dismissed the two
appeals filed on February 27, 1985 and September 18,
1985 by AIBC and BRII.
In narrating the proceedings of the labor cases before
the POEA Administrator, it is not amiss to mention that
two cases were filed in the Supreme Court by the
claimants, namely — G.R. No. 72132 on September 26,
1985 and Administrative Case No. 2858 on March 18,
1986. On May 13, 1987, the Supreme Court issued a
resolution in Administrative Case No. 2858 directing
the POEA Administrator to resolve the issues raised in
the motions and oppositions filed in POEA Cases Nos.
L-84-06-555 and L-86-05-460 and to decide the labor
cases with deliberate dispatch.
AIBC also filed a petition in the Supreme Court (G.R.
No. 78489), questioning the Order dated September 4,
1985 of the POEA Administrator. Said order required
BRII and AIBC to answer the amended complaint in
POEA Case No. L-84-06-555. In a resolution dated
November 9, 1987, we dismissed the petition by
informing AIBC that all its technical objections may
properly be resolved in the hearings before the POEA.
Complaints were also filed before the Ombudsman.
The first was filed on September 22, 1988 by claimant
Hermie Arguelles and 18 co-claimants against the
POEA Administrator and several NLRC Commissioners.
The Ombudsman merely referred the complaint to the
Secretary of Labor and Employment with a request for
the early disposition of POEA Case No. L-84-06-555.
The second was filed on April 28, 1989 by claimants
Emigdio P. Bautista and Rolando R. Lobeta charging
AIBC and BRII for violation of labor and social
legislations. The third was filed by Jose R. Santos,
Maximino N. Talibsao and Amado B. Bruce denouncing
AIBC and BRII of violations of labor laws.
On January 13, 1987, AIBC filed a motion for
reconsideration of the NLRC Resolution dated
December 12, 1986.
On January 14, 1987, AIBC reiterated before the POEA
Administrator its motion for suspension of the period
for filing an answer or motion for extension of time to
file the same until the resolution of its motion for
reconsideration of the order of the NLRC dismissing
the two appeals. On April 28, 1987, NLRC en banc
denied the motion for reconsideration.
At the hearing on June 19, 1987, AIBC submitted its
answer to the complaint. At the same hearing, the
parties were given a period of 15 days from said date
within which to submit their respective position
papers. On June 24, 1987 claimants filed their "Urgent
Motion to Strike Out Answer," alleging that the answer
was filed out of time. On June 29, 1987, claimants filed
their "Supplement to Urgent Manifestational Motion"
to comply with the POEA Order of June 19, 1987. On
February 24, 1988, AIBC and BRII submitted their
position paper. On March 4, 1988, claimants filed their
"Ex-Parte Motion to Expunge from the Records" the
position paper of AIBC and BRII, claiming that it was
filed out of time.
On September 1, 1988, the claimants represented by
Atty. De Castro filed their memorandum in POEA Case
No. L-86-05-460. On September 6, 1988, AIBC and BRII
submitted their Supplemental Memorandum. On
September 12, 1988, BRII filed its "Reply to
Complainant's Memorandum." On October 26, 1988,
claimants submitted their "Ex-Parte Manifestational
Motion and Counter-Supplemental Motion," together
with 446 individual contracts of employments and
service records. On October 27, 1988, AIBC and BRII
filed a "Consolidated Reply."
On January 30, 1989, the POEA Administrator
rendered his decision in POEA Case No. L-84-06-555
and the other consolidated cases, which awarded the
amount of $824,652.44 in favor of only 324
complainants.
On February 10, 1989, claimants submitted their
"Appeal Memorandum For Partial Appeal" from the
decision of the POEA. On the same day, AIBC also filed
its motion for reconsideration and/or appeal in
addition to the "Notice of Appeal" filed earlier on
February 6, 1989 by another counsel for AIBC.
On February 17, 1989, claimants filed their "Answer to
Appeal," praying for the dismissal of the appeal of AIBC
and BRII.
On March 15, 1989, claimants filed their "Supplement
to Complainants' Appeal Memorandum," together
with their "newly discovered evidence" consisting of
payroll records.
On April 5, 1989, AIBC and BRII submitted to NLRC their
"Manifestation," stating among other matters that
there were only 728 named claimants. On April 20,
1989, the claimants filed their "Counter-
Manifestation," alleging that there were 1,767 of
them.
On July 27, 1989, claimants filed their "Urgent Motion
for Execution" of the Decision dated January 30, 1989
on the grounds that BRII had failed to appeal on time
and AIBC had not posted the supersedeas bond in the
amount of $824,652.44.
On December 23, 1989, claimants filed another motion
to resolve the labor cases.
On August 21, 1990, claimants filed their
"Manifestational Motion," praying that all the 1,767
claimants be awarded their monetary claims for failure
of private respondents to file their answers within the
reglamentary period required by law.
On September 2, 1991, NLRC promulgated its
Resolution, disposing as follows:
WHEREFORE, premises considered, the Decision of the
POEA in these consolidated cases is modified to the
extent and in accordance with the following
dispositions:
1. The claims of the 94 complainants identified and
listed in Annex "A" hereof are dismissed for having
prescribed;
2. Respondents AIBC and Brown & Root are hereby
ordered, jointly and severally, to pay the 149
complainants, identified and listed in Annex "B"
hereof, the peso equivalent, at the time of payment,
of the total amount in US dollars indicated opposite
their respective names;
3. The awards given by the POEA to the 19
complainants classified and listed in Annex "C"
hereof, who appear to have worked elsewhere than
in Bahrain are hereby set aside.
4. All claims other than those indicated in Annex "B",
including those for overtime work and favorably
granted by the POEA, are hereby dismissed for lack of
substantial evidence in support thereof or are beyond
the competence of this Commission to pass upon.
 In addition, this Commission, in the exercise of its
powers and authority under Article 218(c) of the
Labor Code, as amended by R.A. 6715, hereby directs
Labor Arbiter Fatima J. Franco of this Commission to
summon parties, conduct hearings and receive
evidence, as expeditiously as possible, and thereafter
submit a written report to this Commission (First
Division) of the proceedings taken, regarding the
claims of the following:
(a) complainants identified and listed in Annex "D"
attached and made an integral part of this Resolution,
whose claims were dismissed by the POEA for lack of
proof of employment in Bahrain (these complainants
numbering 683, are listed in pages 13 to 23 of the
decision of POEA, subject of the appeals) and,
(b) complainants identified and listed in Annex "E"
attached and made an integral part of this Resolution,
whose awards decreed by the POEA, to Our mind, are
not supported by substantial evidence" (G.R. No.
104776; Rollo, pp. 113-115; G.R. Nos. 104911-14, pp.
85-87; G.R. Nos. 105029-31, pp. 120-122).
On November 27, 1991, claimant Amado S. Tolentino
and 12
co-claimants, who were former clients of Atty. Del
Mundo, filed a petition for certiorari with the Supreme
Court (G.R. Nos. 120741-44). The petition was
dismissed in a resolution dated January 27, 1992.
Three motions for reconsideration of the September 2,
1991 Resolution of the NLRC were filed. The first, by
the claimants represented by Atty. Del Mundo; the
second, by the claimants represented by Atty. De
Castro; and the third, by AIBC and BRII.
In its Resolution dated March 24, 1992, NLRC denied
all the motions for reconsideration.
Hence, these petitions filed by the claimants
represented by Atty. Del Mundo (G.R. No. 104776), the
claimants represented by Atty. De Castro (G.R. Nos.
104911-14) and by AIBC and BRII (G.R. Nos. 105029-
32).
II
Compromise Agreements
Before this Court, the claimants represented by Atty.
De Castro and AIBC and BRII have submitted, from
time to time, compromise agreements for our
approval and jointly moved for the dismissal of their
respective petitions insofar as the claimants-parties to
the compromise agreements were concerned (See
Annex A for list of claimants who signed quitclaims).
Thus the following manifestations that the parties had
arrived at a compromise agreement and the
corresponding motions for the approval of the
agreements were filed by the parties and approved by
the Court:
1) Joint Manifestation and Motion involving claimant
Emigdio Abarquez and 47 co-claimants dated
September 2, 1992 (G.R. Nos. 104911-14, Rollo, pp.
263-406; G.R. Nos. 105029-32, Rollo, pp.
470-615);
2) Joint Manifestation and Motion involving
petitioner Bienvenido Cadalin and 82 co-petitioners
dated September 3, 1992 (G.R. No. 104776, Rollo, pp.
364-507);
3) Joint Manifestation and Motion involving claimant
Jose
M. Aban and 36 co-claimants dated September 17,
1992 (G.R. Nos. 105029-32, Rollo, pp. 613-722; G.R.
No. 104776, Rollo, pp. 518-626; G.R. Nos. 104911-14,
Rollo, pp. 407-516);
4) Joint Manifestation and Motion involving claimant
Antonio T. Anglo and 17 co-claimants dated October
14, 1992 (G.R. Nos.
105029-32, Rollo, pp. 778-843; G.R. No. 104776,
Rollo, pp. 650-713; G.R. Nos. 104911-14, Rollo, pp.
530-590);
5) Joint Manifestation and Motion involving claimant
Dionisio Bobongo and 6 co-claimants dated January
15, 1993 (G.R. No. 104776, Rollo, pp. 813-836; G.R.
Nos. 104911-14, Rollo, pp. 629-652);
6) Joint Manifestation and Motion involving claimant
Valerio A. Evangelista and 4 co-claimants dated
March 10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731-
746; G.R. No. 104776, Rollo, pp. 1815-1829);
7) Joint Manifestation and Motion involving claimants
Palconeri Banaag and 5 co-claimants dated March 17,
1993 (G.R. No. 104776, Rollo, pp. 1657-1703; G.R.
Nos. 104911-14, Rollo, pp. 655-675);
8) Joint Manifestation and Motion involving claimant
Benjamin Ambrosio and 15 other co-claimants dated
May 4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906-956;
G.R. Nos. 104911-14, Rollo, pp. 679-729; G.R. No.
104776, Rollo, pp. 1773-1814);
9) Joint Manifestation and Motion involving Valerio
Evangelista and 3 co-claimants dated May 10, 1993
(G.R. No. 104776, Rollo, pp. 1815-1829);
10) Joint Manifestation and Motion involving
petitioner Quiterio R. Agudo and 36 co-claimants
dated June 14, 1993 (G.R. Nos. 105029-32, Rollo, pp.
974-1190; G.R. Nos. 104911-14, Rollo, pp. 748-864;
G.R. No. 104776, Rollo, pp. 1066-1183);
11) Joint Manifestation and Motion involving
claimant Arnaldo J. Alonzo and 19 co-claimants dated
July 22, 1993 (G.R. No. 104776, Rollo, pp. 1173-1235;
G.R. Nos. 105029-32, Rollo, pp. 1193-1256; G.R. Nos.
104911-14, Rollo, pp. 896-959);
12) Joint Manifestation and Motion involving
claimant Ricardo C. Dayrit and 2 co-claimants dated
September 7, 1993 (G.R. Nos.
105029-32, Rollo, pp. 1266-1278; G.R. No. 104776,
Rollo, pp. 1243-1254; G.R. Nos. 104911-14, Rollo, pp.
972-984);
13) Joint Manifestation and Motion involving
claimant Dante C. Aceres and 37 co-claimants dated
September 8, 1993 (G.R. No. 104776, Rollo, pp. 1257-
1375; G.R. Nos. 104911-14, Rollo, pp. 987-1105; G.R.
Nos. 105029-32, Rollo, pp. 1280-1397);
14) Joint Manifestation and Motion involving Vivencio
V. Abella and 27 co-claimants dated January 10, 1994
(G.R. Nos. 105029-32, Rollo, Vol. II);
15) Joint Manifestation and Motion involving
Domingo B. Solano and six co-claimants dated August
25, 1994 (G.R. Nos. 105029-32; G.R. No. 104776; G.R.
Nos. 104911-14).
III
The facts as found by the NLRC are as follows:
We have taken painstaking efforts to sift over the
more than fifty volumes now comprising the records
of these cases. From the records, it appears that the
complainants-appellants allege that they were
recruited by respondent-appellant AIBC for its
accredited foreign principal, Brown & Root, on
various dates from 1975 to 1983. They were all
deployed at various projects undertaken by Brown &
Root in several countries in the Middle East, such as
Saudi Arabia, Libya, United Arab Emirates and
Bahrain, as well as in Southeast Asia, in Indonesia and
Malaysia.
Having been officially processed as overseas contract
workers by the Philippine Government, all the
individual complainants signed standard overseas
employment contracts (Records, Vols. 25-32.
Hereafter, reference to the records would be
sparingly made, considering their chaotic
arrangement) with AIBC before their departure from
the Philippines. These overseas employment
contracts invariably contained the following relevant
terms and conditions.
PART B —
(1) Employment Position Classification :——————
———
(Code) :—————————
(2) Company Employment Status :————————
— work, or by change in the type of construction of such
(3) Date of Employment to Commence on :————
—————
(4) Basic Working Hours Per Week :————————
—
(5) Basic Working Hours Per Month :———————
——
(6) Basic Hourly Rate :—————————
(7) Overtime Rate Per Hour :—————————
(8) Projected Period of Service
(Subject to C(1) of this [sic]) :—————————
Months and/or
Job Completion
xxx xxx xxx
3. HOURS OF WORK AND COMPENSATION
a) The Employee is employed at the hourly rate and
overtime rate as set out in Part B of this Document.
b) The hours of work shall be those set forth by the
Employer, and Employer may, at his sole option,
change or adjust such hours as maybe deemed
necessary from time to time.
4. TERMINATION
a) Notwithstanding any other terms and conditions of
this agreement, the Employer may, at his sole
discretion, terminate employee's service with cause,
under this agreement at any time. If the Employer
terminates the services of the Employee under this
Agreement because of the completion or
termination, or suspension of the work on which the
Employee's services were being utilized, or because of
a reduction in force due to a decrease in scope of such
work. The Employer will be responsible for his return
transportation to his country of origin. Normally on
the most expeditious air route, economy class
accommodation.
xxx xxx xxx
10. VACATION/SICK LEAVE BENEFITS
a) After one (1) year of continuous service and/or
satisfactory completion of contract, employee shall
be entitled to 12-days vacation leave with pay. This
shall be computed at the basic wage rate. Fractions of
a year's service will be computed on a pro-rata basis.
b) Sick leave of 15-days shall be granted to the
employee for every year of service for non-work
connected injuries or illness. If the employee failed to
avail of such leave benefits, the same shall be
forfeited at the end of the year in which said sick leave
is granted.
11. BONUS
A bonus of 20% (for offshore work) of gross income
will be accrued and payable only upon satisfactory
completion of this contract.
12. OFFDAY PAY
The seventh day of the week shall be observed as a
day of rest with 8 hours regular pay. If work is
performed on this day, all hours work shall be paid at
the premium rate. However, this offday pay provision
is applicable only when the laws of the Host Country
require payments for rest day.
In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin
Salman Al Kaifa, Amir of Bahrain, issued his Amiri
Decree No. 23 on June 16, 1976, otherwise known as
the Labour Law for the Private Sector (Records, Vol.
18). This decree took effect on August 16, 1976. Some
of the provisions of Amiri Decree No. 23 that are
relevant to the claims of the complainants-appellants
are as follows (italics supplied only for emphasis):
Art. 79: . . . A worker shall receive payment for each
extra hour equivalent to his wage entitlement
increased by a minimum of twenty-five per centum
thereof for hours worked during the day; and by a
minimum of fifty per centum thereof for hours worked
during the night which shall be deemed to being from
seven o'clock in the evening until seven o'clock in the
morning. . . .
Art. 80: Friday shall be deemed to be a weekly day of
rest on full pay.
. . . an employer may require a worker, with his
consent, to work on his weekly day of rest if
circumstances so require and in respect of which an
additional sum equivalent to 150% of his normal wage
shall be paid to him. . . .
Art. 81: . . . When conditions of work require the
worker to work on any official holiday, he shall be paid
an additional sum equivalent to 150% of his normal
wage.
Art. 84: Every worker who has completed one year's
continuous service with his employer shall be entitled
to leave on full pay for a period of not less than 21
days for each year increased to a period not less than
28 days after five continuous years of service.
A worker shall be entitled to such leave upon a
quantum meruit in respect of the proportion of his
service in that year.
Art. 107: A contract of employment made for a period
of indefinite duration may be terminated by either
party thereto after giving the other party thirty days'
prior notice before such termination, in writing, in
respect of monthly paid workers and fifteen days'
notice in respect of other workers. The party
terminating a contract without giving the required
notice shall pay to the other party compensation
equivalent to the amount of wages payable to the
worker for the period of such notice or the unexpired
portion thereof.
Art. 111: . . . the employer concerned shall pay to such
worker, upon termination of employment, a leaving
indemnity for the period of his employment calculated
on the basis of fifteen days' wages for each year of the
first three years of service and of one month's wages
for each year of service thereafter. Such worker shall
be entitled to payment of leaving indemnity upon a
quantum meruit in proportion to the period of his
service completed within a year.
All the individual complainants-appellants have
already been repatriated to the Philippines at the
time of the filing of these cases (R.R. No. 104776,
Rollo, pp. 59-65).
IV
The issues raised before and resolved by the NLRC
were:
First: — Whether or not complainants are entitled to
the benefits provided by Amiri Decree No. 23 of
Bahrain;
(a) Whether or not the complainants who have
worked in Bahrain are entitled to the above-
mentioned benefits.
(b) Whether or not Art. 44 of the same Decree
(allegedly prescribing a more favorable treatment of
alien employees) bars complainants from enjoying its
benefits.
Second: — Assuming that Amiri Decree No. 23 of
Bahrain is applicable in these cases, whether or not
complainants' claim for the benefits provided therein
have prescribed.
Third: — Whether or not the instant cases qualify as a
class suit.
Fourth: — Whether or not the proceedings conducted
by the POEA, as well as the decision that is the subject
of these appeals, conformed with the requirements
of due process;
(a) Whether or not the respondent-appellant was
denied its right to due process;
(b) Whether or not the admission of evidence by the
POEA after these cases were submitted for decision
was valid;
(c) Whether or not the POEA acquired jurisdiction
over Brown & Root International, Inc.;
(d) Whether or not the judgment awards are
supported by substantial evidence;
(e) Whether or not the awards based on the averages
and formula presented by the complainants-
appellants are supported by substantial evidence;
(f) Whether or not the POEA awarded sums beyond
what the complainants-appellants prayed for; and, if
so, whether or not these awards are valid.
Fifth: — Whether or not the POEA erred in holding
respondents AIBC and Brown & Root jointly are
severally liable for the judgment awards despite the
alleged finding that the former was the employer of
the complainants;
(a) Whether or not the POEA has acquired
jurisdiction over Brown & Root;
(b) Whether or not the undisputed fact that AIBC was
a licensed construction contractor precludes a
finding that Brown & Root is liable for complainants
claims.
Sixth: — Whether or not the POEA Administrator's
failure to hold respondents in default constitutes a
reversible error.
Seventh: — Whether or not the POEA Administrator
erred in dismissing the following claims:
a. Unexpired portion of contract;
b. Interest earnings of Travel and Reserve Fund;
c. Retirement and Savings Plan benefits;
d. War Zone bonus or premium pay of at least 100%
of basic pay;
e. Area Differential Pay;
f. Accrued interests on all the unpaid benefits;
g. Salary differential pay;
h. Wage differential pay;
i. Refund of SSS premiums not remitted to SSS;
j. Refund of withholding tax not remitted to BIR;
k. Fringe benefits under B & R's "A Summary of
Employee Benefits" (Annex "Q" of Amended
Complaint);
l. Moral and exemplary damages;
m. Attorney's fees of at least ten percent of the
judgment award;
n. Other reliefs, like suspending and/or cancelling
the license to recruit of AIBC and the accreditation of
B & R issued by POEA;
o. Penalty for violations of Article 34 (prohibited
practices), not excluding reportorial requirements
thereof.
Eighth: — Whether or not the POEA Administrator
erred in not dismissing POEA Case No. (L) 86-65-460
on the ground of multiplicity of suits (G.R. Nos.
104911-14, Rollo, pp. 25-29, 51-55).
Anent the first issue, NLRC set aside Section 1, Rule 129
of the 1989 Revised Rules on Evidence governing the
pleading and proof of a foreign law and admitted in
evidence a simple copy of the Bahrain's Amiri Decree
No. 23 of 1976 (Labour Law for the Private Sector).
NLRC invoked Article 221 of the Labor Code of the
Philippines, vesting on the Commission ample
discretion to use every and all reasonable means to
ascertain the facts in each case without regard to the
technicalities of law or procedure. NLRC agreed with
the POEA Administrator that the Amiri Decree No. 23,
being more favorable and beneficial to the workers,
should form part of the overseas employment contract
of the complainants.
NLRC, however, held that the Amiri Decree No. 23
applied only to the claimants, who worked in Bahrain,
and set aside awards of the POEA Administrator in
favor of the claimants, who worked elsewhere.
On the second issue, NLRC ruled that the prescriptive
period for the filing of the claims of the complainants
was three years, as provided in Article 291 of the Labor
Code of the Philippines, and not ten years as provided
in Article 1144 of the Civil Code of the Philippines nor
one year as provided in the Amiri Decree No. 23 of
1976.
On the third issue, NLRC agreed with the POEA
Administrator that the labor cases cannot be treated
as a class suit for the simple reason that not all the
complainants worked in Bahrain and therefore, the
subject matter of the action, the claims arising from
the Bahrain law, is not of common or general interest
to all the complainants.
On the fourth issue, NLRC found at least three
infractions of the cardinal rules of administrative due
process: namely, (1) the failure of the POEA
Administrator to consider the evidence presented by
AIBC and BRII; (2) some findings of fact were not
supported by substantial evidence; and (3) some of the
evidence upon which the decision was based were not
disclosed to AIBC and BRII during the hearing.
On the fifth issue, NLRC sustained the ruling of the
POEA Administrator that BRII and AIBC are solidarily
liable for the claims of the complainants and held that
BRII was the actual employer of the complainants, or
at the very least, the indirect employer, with AIBC as
the labor contractor.
NLRC also held that jurisdiction over BRII was acquired
by the POEA Administrator through the summons
served on AIBC, its local agent.
On the sixth issue, NLRC held that the POEA
Administrator was correct in denying the Motion to
Declare AIBC in default.
On the seventh issue, which involved other money
claims not based on the Amiri Decree No. 23, NLRC
ruled:
(1) that the POEA Administrator has no jurisdiction
over the claims for refund of the SSS premiums and
refund of withholding taxes and the claimants should
file their claims for said refund with the appropriate
government agencies;
(2) the claimants failed to establish that they are
entitled to the claims which are not based on the
overseas employment contracts nor the Amiri Decree
No. 23 of 1976;
(3) that the POEA Administrator has no jurisdiction
over claims for moral and exemplary damages and
nonetheless, the basis for granting said damages was
not established;
(4) that the claims for salaries corresponding to the
unexpired portion of their contract may be allowed if
filed within the three-year prescriptive period;
(5) that the allegation that complainants were
prematurely repatriated prior to the expiration of their
overseas contract was not established; and
(6) that the POEA Administrator has no jurisdiction
over the complaint for the suspension or cancellation
of the AIBC's recruitment license and the cancellation
of the accreditation of BRII.
NLRC passed sub silencio the last issue, the claim that
POEA Case No. (L) 86-65-460 should have been
dismissed on the ground that the claimants in said case
were also claimants in POEA Case No. (L) 84-06-555.
Instead of dismissing POEA Case No. (L) 86-65-460, the
POEA just resolved the corresponding claims in POEA
Case No. (L) 84-06-555. In other words, the POEA did
not pass upon the same claims twice.
V
G.R. No. 104776
Claimants in G.R. No. 104776 based their petition for
certiorari on the following grounds:
(1) that they were deprived by NLRC and the POEA of
their right to a speedy disposition of their cases as
guaranteed by Section 16, Article III of the 1987
Constitution. The POEA Administrator allowed private
respondents to file their answers in two years (on June
19, 1987) after the filing of the original complaint (on
April 2, 1985) and NLRC, in total disregard of its own
rules, affirmed the action of the POEA Administrator;
(2) that NLRC and the POEA Administrator should have
declared AIBC and BRII in default and should have
rendered summary judgment on the basis of the
pleadings and evidence submitted by claimants;
(3) the NLRC and POEA Administrator erred in not
holding that the labor cases filed by AIBC and BRII
cannot be considered a class suit;
(4) that the prescriptive period for the filing of the
claims is ten years; and
(5) that NLRC and the POEA Administrator should have
dismissed POEA Case No. L-86-05-460, the case filed by
Atty. Florante de Castro (Rollo, pp. 31-40).
AIBC and BRII, commenting on the petition in G.R. No.
104776, argued:
(1) that they were not responsible for the delay in the
disposition of the labor cases, considering the great
difficulty of getting all the records of the more than
1,500 claimants, the piece-meal filing of the
complaints and the addition of hundreds of new
claimants by petitioners;
(2) that considering the number of complaints and
claimants, it was impossible to prepare the answers
within the ten-day period provided in the NLRC Rules,
that when the motion to declare AIBC in default was
filed on July 19, 1987, said party had already filed its
answer, and that considering the staggering amount of
the claims (more than US$50,000,000.00) and the
complicated issues raised by the parties, the ten-day
rule to answer was not fair and reasonable;
(3) that the claimants failed to refute NLRC's finding
that
there was no common or general interest in the
subject matter of the controversy — which was the
applicability of the Amiri Decree No. 23. Likewise, the
nature of the claims varied, some being based on
salaries pertaining to the unexpired portion of the
contracts while others being for pure money claims.
Each claimant demanded separate claims peculiar only
to himself and depending upon the particular
circumstances obtaining in his case;
(4) that the prescriptive period for filing the claims is
that prescribed by Article 291 of the Labor Code of the
Philippines (three years) and not the one prescribed
by Article 1144 of the Civil Code of the Philippines (ten
years); and
(5) that they are not concerned with the issue of
whether POEA Case No. L-86-05-460 should be
dismissed, this being a private quarrel between the
two labor lawyers (Rollo, pp. 292-305).
Attorney's Lien
On November 12, 1992, Atty. Gerardo A. del Mundo
moved to strike out the joint manifestations and
motions of AIBC and BRII dated September 2 and 11,
1992, claiming that all the claimants who entered into
the compromise agreements subject of said
manifestations and motions were his clients and that
Atty. Florante M. de Castro had no right to represent
them in said agreements. He also claimed that the
claimants were paid less than the award given them by
NLRC; that Atty. De Castro collected additional
attorney's fees on top of the 25% which he was
entitled to receive; and that the consent of the
claimants to the compromise agreements and
quitclaims were procured by fraud (G.R. No. 104776,
Rollo, pp. 838-810). In the Resolution dated November
23, 1992, the Court denied the motion to strike out the
Joint Manifestations and Motions dated September 2
and 11, 1992 (G.R. Nos. 104911-14, Rollo, pp. 608-
609).
On December 14, 1992, Atty. Del Mundo filed a
"Notice and Claim to Enforce Attorney's Lien," alleging
that the claimants who entered into compromise
agreements with AIBC and BRII with the assistance of
Atty. De Castro, had all signed a retainer agreement
with his law firm (G.R. No. 104776, Rollo, pp. 623-624;
838-1535).
Contempt of Court
On February 18, 1993, an omnibus motion was filed by
Atty. Del Mundo to cite Atty. De Castro and Atty. Katz
Tierra for contempt of court and for violation of
Canons 1, 15 and 16 of the Code of Professional
Responsibility. The said lawyers allegedly misled this
Court, by making it appear that the claimants who
entered into the compromise agreements were
represented by Atty. De Castro, when in fact they were
represented by Atty. Del Mundo (G.R. No. 104776,
Rollo, pp. 1560-1614).
On September 23, 1994, Atty. Del Mundo reiterated
his charges against Atty. De Castro for unethical
practices and moved for the voiding of the quitclaims
submitted by some of the claimants.
G.R. Nos. 104911-14
The claimants in G.R. Nos. 104911-14 based their
petition for certiorari on the grounds that NLRC gravely
abused its discretion when it: (1) applied the three-
year prescriptive period under the Labor Code of the
Philippines; and (2) it denied the claimant's formula
based on an average overtime pay of three hours a day
(Rollo, pp. 18-22).
The claimants argue that said method was proposed
by BRII itself during the negotiation for an amicable
settlement of their money claims in Bahrain as shown
in the Memorandum dated April 16, 1983 of the
Ministry of Labor of Bahrain (Rollo, pp. 21-22).
BRII and AIBC, in their Comment, reiterated their
contention in G.R. No. 104776 that the prescriptive
period in the Labor Code of the Philippines, a special
law, prevails over that provided in the Civil Code of the
Philippines, a general law.
As to the memorandum of the Ministry of Labor of
Bahrain on the method of computing the overtime
pay, BRII and AIBC claimed that they were not bound
by what appeared therein, because such
memorandum was proposed by a subordinate Bahrain
official and there was no showing that it was approved
by the Bahrain Minister of Labor. Likewise, they
claimed that the averaging method was discussed in
the course of the negotiation for the amicable
settlement of the dispute and any offer made by a
party therein could not be used as an admission by him
(Rollo, pp. 228-236).
G.R. Nos. 105029-32
In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC
gravely abused its discretion when it: (1) enforced the
provisions of the Amiri Decree No. 23 of 1976 and not
the terms of the employment contracts; (2) granted
claims for holiday, overtime and leave indemnity pay
and other benefits, on evidence admitted in
contravention of petitioner's constitutional right to
due process; and (3) ordered the POEA Administrator
to hold new hearings for the 683 claimants whose
claims had been dismissed for lack of proof by the
POEA Administrator or NLRC itself. Lastly, they allege
that assuming that the Amiri Decree No. 23 of 1976
was applicable, NLRC erred when it did not apply the
one-year prescription provided in said law (Rollo, pp.
29-30).
VI
G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos.
105029-32
All the petitions raise the common issue of
prescription although they disagreed as to the time
that should be embraced within the prescriptive
period.
To the POEA Administrator, the prescriptive period
was ten years, applying Article 1144 of the Civil Code
of the Philippines. NLRC believed otherwise, fixing the
prescriptive period at three years as provided in Article
291 of the Labor Code of the Philippines.
The claimants in G.R. No. 104776 and G.R. Nos.
104911-14, invoking different grounds, insisted that
NLRC erred in ruling that the prescriptive period
applicable to the claims was three years, instead of ten
years, as found by the POEA Administrator.
The Solicitor General expressed his personal view that
the prescriptive period was one year as prescribed by
the Amiri Decree No. 23 of 1976 but he deferred to the
ruling of NLRC that Article 291 of the Labor Code of the
Philippines was the operative law.
The POEA Administrator held the view that:
These money claims (under Article 291 of the Labor
Code) refer to those arising from the employer's
violation of the employee's right as provided by the
Labor Code.
In the instant case, what the respondents violated are
not the rights of the workers as provided by the Labor
Code, but the provisions of the Amiri Decree No. 23
issued in Bahrain, which ipso facto amended the
worker's contracts of employment. Respondents
consciously failed to conform to these provisions
which specifically provide for the increase of the
worker's rate. It was only after June 30, 1983, four
months after the brown builders brought a suit against
B & R in Bahrain for this same claim, when respondent
AIBC's contracts have undergone amendments in
Bahrain for the new hires/renewals (Respondent's
Exhibit 7).
Hence, premises considered, the applicable law of
prescription to this instant case is Article 1144 of the
Civil Code of the Philippines, which provides:
Art. 1144. The following actions may be brought
within ten years from the time the cause of action
accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
Thus, herein money claims of the complainants against
the respondents shall prescribe in ten years from
August 16, 1976. Inasmuch as all claims were filed
within the ten-year prescriptive period, no claim
suffered the infirmity of being prescribed (G.R. No.
104776, Rollo, 89-90).
In overruling the POEA Administrator, and holding that
the prescriptive period is three years as provided in
Article 291 of the Labor Code of the Philippines, the
NLRC argued as follows:
The Labor Code provides that "all money claims arising
from employer-employee relations . . . shall be filed
within three years from the time the cause of action
accrued; otherwise they shall be forever barred" (Art.
291, Labor Code, as amended). This three-year
prescriptive period shall be the one applied here and
which should be reckoned from the date of
repatriation of each individual complainant,
considering the fact that the case is having (sic) filed in
this country. We do not agree with the POEA
Administrator that this three-year prescriptive period
applies only to money claims specifically recoverable
under the Philippine Labor Code. Article 291 gives no
such indication. Likewise, We can not consider
complainants' cause/s of action to have accrued from
a violation of their employment contracts. There was
no violation; the claims arise from the benefits of the
law of the country where they worked. (G.R. No.
104776, Rollo, pp.
90-91).
Anent the applicability of the one-year prescriptive
period as provided by the Amiri Decree No. 23 of 1976,
NLRC opined that the applicability of said law was one
of characterization, i.e., whether to characterize the
foreign law on prescription or statute of limitation as
"substantive" or "procedural." NLRC cited the decision
in Bournias v. Atlantic Maritime Company (220 F. 2d.
152, 2d Cir. [1955], where the issue was the
applicability of the Panama Labor Code in a case filed
in the State of New York for claims arising from said
Code. In said case, the claims would have prescribed
under the Panamanian Law but not under the Statute
of Limitations of New York. The U.S. Circuit Court of
Appeals held that the Panamanian Law was procedural
as it was not "specifically intended to be substantive,"
hence, the prescriptive period provided in the law of
the forum should apply. The Court observed:
. . . And where, as here, we are dealing with a statute
of limitations of a foreign country, and it is not clear on
the face of the statute that its purpose was to limit the
enforceability, outside as well as within the foreign
country concerned, of the substantive rights to which
the statute pertains, we think that as a yardstick for
determining whether that was the purpose this test is
the most satisfactory one. It does not lead American
courts into the necessity of examining into the
unfamiliar peculiarities and refinements of different
foreign legal systems. . .
The court further noted:
xxx xxx xxx
Applying that test here it appears to us that the
libelant is entitled to succeed, for the respondents
have failed to satisfy us that the Panamanian period
of limitation in question was specifically aimed
against the particular rights which the libelant seeks
to enforce. The Panama Labor Code is a statute having
broad objectives, viz: "The present Code regulates the
relations between capital and labor, placing them on
a basis of social justice, so that, without injuring any
of the parties, there may be guaranteed for labor the
necessary conditions for a normal life and to capital
an equitable return to its investment." In pursuance
of these objectives the Code gives laborers various
rights against their employers. Article 623 establishes
the period of limitation for all such rights, except
certain ones which are enumerated in Article 621.
And there is nothing in the record to indicate that the
Panamanian legislature gave special consideration to
the impact of Article 623 upon the particular rights
sought to be enforced here, as distinguished from the
other rights to which that Article is also applicable.
Were we confronted with the question of whether
the limitation period of Article 621 (which carves out
particular rights to be governed by a shorter
limitation period) is to be regarded as "substantive"
or "procedural" under the rule of "specifity" we might
have a different case; but here on the surface of
things we appear to be dealing with a "broad," and
not a "specific," statute of limitations (G.R. No.
104776, Rollo, pp.
92-94).
Claimants in G.R. Nos. 104911-14 are of the view that
Article 291 of the Labor Code of the Philippines, which
was applied by NLRC, refers only to claims "arising
from the employer's violation of the employee's right
as provided by the Labor Code." They assert that their
claims are based on the violation of their employment
contracts, as amended by the Amiri Decree No. 23 of
1976 and therefore the claims may be brought within
ten years as provided by Article 1144 of the Civil Code
of the Philippines (Rollo, G.R. Nos. 104911-14, pp.
18-21). To bolster their contention, they cite PALEA v.
Philippine Airlines, Inc., 70 SCRA 244 (1976).
AIBC and BRII, insisting that the actions on the claims
have prescribed under the Amiri Decree No. 23 of
1976, argue that there is in force in the Philippines a
"borrowing law," which is Section 48 of the Code of
Civil Procedure and that where such kind of law exists,
it takes precedence over the common-law conflicts
rule (G.R. No. 104776, Rollo, pp. 45-46).
First to be determined is whether it is the Bahrain law
on prescription of action based on the Amiri Decree
No. 23 of 1976 or a Philippine law on prescription that
shall be the governing law.
Article 156 of the Amiri Decree No. 23 of 1976
provides:
A claim arising out of a contract of employment shall
not be actionable after the lapse of one year from the
date of the expiry of the contract. (G.R. Nos. 105029-
31, Rollo, p. 226).
As a general rule, a foreign procedural law will not be
applied in the forum. Procedural matters, such as
service of process, joinder of actions, period and
requisites for appeal, and so forth, are governed by the
laws of the forum. This is true even if the action is
based upon a foreign substantive law (Restatement of
the Conflict of Laws, Sec. 685; Salonga, Private
International Law, 131 [1979]).
A law on prescription of actions is sui generis in Conflict
of Laws in the sense that it may be viewed either as
procedural or substantive, depending on the
characterization given such a law.
Thus in Bournias v. Atlantic Maritime Company, supra,
the American court applied the statute of limitations
of New York, instead of the Panamanian law, after
finding that there was no showing that the
Panamanian law on prescription was intended to be
substantive. Being considered merely a procedural law
even in Panama, it has to give way to the law of the
forum on prescription of actions.
However, the characterization of a statute into a
procedural or substantive law becomes irrelevant
when the country of the forum has a "borrowing
statute." Said statute has the practical effect of
treating the foreign statute of limitation as one of
substance (Goodrich, Conflict of Laws 152-153 [1938]).
A "borrowing statute" directs the state of the forum to
apply the foreign statute of limitations to the pending
claims based on a foreign law (Siegel, Conflicts, 183
[1975]). While there are several kinds of "borrowing
statutes," one form provides that an action barred by
the laws of the place where it accrued, will not be
enforced in the forum even though the local statute
has not run against it (Goodrich and Scoles, Conflict of
Laws, 152-153 [1938]). Section 48 of our Code of Civil
Procedure is of this kind. Said Section provides:
If by the laws of the state or country where the cause
of action arose, the action is barred, it is also barred in
the Philippines Islands.
Section 48 has not been repealed or amended by the
Civil Code of the Philippines. Article 2270 of said Code
repealed only those provisions of the Code of Civil
Procedures as to which were inconsistent with it.
There is no provision in the Civil Code of the
Philippines, which is inconsistent with or contradictory
to Section 48 of the Code of Civil Procedure (Paras,
Philippine Conflict of Laws 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section
48 cannot be enforced ex proprio vigore insofar as it
ordains the application in this jurisdiction of Section
156 of the Amiri Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign
claim obnoxious to the forum's public policy (Canadian
Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct.
402, 64 L. ed. 713 [1920]). To enforce the one-year
prescriptive period of the Amiri Decree No. 23 of 1976
as regards the claims in question would contravene the
public policy on the protection to labor.
In the Declaration of Principles and State Policies, the
1987 Constitution emphasized that:
The state shall promote social justice in all phases of
national development. (Sec. 10).
The state affirms labor as a primary social economic
force. It shall protect the rights of workers and
promote their welfare (Sec. 18).
In article XIII on Social Justice and Human Rights, the
1987 Constitution provides:
Sec. 3. The State shall afford full protection to labor,
local and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.
Having determined that the applicable law on
prescription is the Philippine law, the next question is
whether the prescriptive period governing the filing of
the claims is three years, as provided by the Labor
Code or ten years, as provided by the Civil Code of the
Philippines.
The claimants are of the view that the applicable
provision is Article 1144 of the Civil Code of the
Philippines, which provides:
The following actions must be brought within ten years
from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
NLRC, on the other hand, believes that the applicable
provision is Article 291 of the Labor Code of the
Philippines, which in pertinent part provides:
Money claims-all money claims arising from employer-
employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the
time the cause of action accrued, otherwise they shall
be forever barred.
xxx xxx xxx
The case of Philippine Air Lines Employees Association
v. Philippine Air Lines, Inc., 70 SCRA 244 (1976) invoked
by the claimants in G.R. Nos. 104911-14 is inapplicable
to the cases at bench (Rollo, p. 21). The said case
involved the correct computation of overtime pay as
provided in the collective bargaining agreements and
not the Eight-Hour Labor Law.
As noted by the Court: "That is precisely why
petitioners did not make any reference as to the
computation for overtime work under the Eight-Hour
Labor Law (Secs. 3 and 4, CA No. 494) and instead
insisted that work computation provided in the
collective bargaining agreements between the parties
be observed. Since the claim for pay differentials is
primarily anchored on the written contracts between
the litigants, the ten-year prescriptive period provided
by Art. 1144(1) of the New Civil Code should govern."
Section 7-a of the Eight-Hour Labor Law (CA No. 444 as
amended by R.A. No. 19933) provides:
Any action to enforce any cause of action under this
Act shall be commenced within three years after the
cause of action accrued otherwise such action shall be
forever barred, . . . .
The court further explained:
The three-year prescriptive period fixed in the Eight-
Hour Labor Law (CA No. 444 as amended) will apply, if
the claim for differentials for overtime work is solely
based on said law, and not on a collective bargaining
agreement or any other contract. In the instant case,
the claim for overtime compensation is not so much
because of Commonwealth Act No. 444, as amended
but because the claim is demandable right of the
employees, by reason of the above-mentioned
collective bargaining agreement.
Section 7-a of the Eight-Hour Labor Law provides the
prescriptive period for filing "actions to enforce any
cause of action under said law." On the other hand,
Article 291 of the Labor Code of the Philippines
provides the prescriptive period for filing "money
claims arising from employer-employee relations." The
claims in the cases at bench all arose from the
employer-employee relations, which is broader in
scope than claims arising from a specific law or from
the collective bargaining agreement.
The contention of the POEA Administrator, that the
three-year prescriptive period under Article 291 of the
Labor Code of the Philippines applies only to money
claims specifically recoverable under said Code, does
not find support in the plain language of the provision.
Neither is the contention of the claimants in G.R. Nos.
104911-14 that said Article refers only to claims
"arising from the employer's violation of the
employee's right," as provided by the Labor Code
supported by the facial reading of the provision.
VII
G.R. No. 104776
A. As to the first two grounds for the petition in G.R.
No. 104776, claimants aver: (1) that while their
complaints were filed on June 6, 1984 with POEA, the
case was decided only on January 30, 1989, a clear
denial of their right to a speedy disposition of the case;
and (2) that NLRC and the POEA Administrator should
have declared AIBC and BRII in default (Rollo, pp.
31-35).
Claimants invoke a new provision incorporated in the
1987 Constitution, which provides:
Sec. 16. All persons shall have the right to a speedy
disposition of their cases before all judicial, quasi-
judicial, or administrative bodies.
It is true that the constitutional right to "a speedy
disposition of cases" is not limited to the accused in
criminal proceedings but extends to all parties in all
cases, including civil and administrative cases, and in
all proceedings, including judicial and quasi-judicial
hearings. Hence, under the Constitution, any party to
a case may demand expeditious action on all officials
who are tasked with the administration of justice.
However, as held in Caballero v. Alfonso, Jr., 153 SCRA
153 (1987), "speedy disposition of cases" is a relative
term. Just like the constitutional guarantee of "speedy
trial" accorded to the accused in all criminal
proceedings, "speedy disposition of cases" is a flexible
concept. It is consistent with delays and depends upon
the circumstances of each case. What the Constitution
prohibits are unreasonable, arbitrary and oppressive
delays which render rights nugatory.
Caballero laid down the factors that may be taken into
consideration in determining whether or not the right
to a "speedy disposition of cases" has been violated,
thus:
In the determination of whether or not the right to a
"speedy trial" has been violated, certain factors may
be considered and balanced against each other. These
are length of delay, reason for the delay, assertion of
the right or failure to assert it, and prejudice caused by
the delay. The same factors may also be considered in
answering judicial inquiry whether or not a person
officially charged with the administration of justice has
violated the speedy disposition of cases.
Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298,
(1991), we held:
It must be here emphasized that the right to a speedy
disposition of a case, like the right to speedy trial, is
deemed violated only when the proceeding is
attended by vexatious, capricious, and oppressive
delays; or when unjustified postponements of the trial
are asked for and secured, or when without cause or
justified motive a long period of time is allowed to
elapse without the party having his case tried.
Since July 25, 1984 or a month after AIBC and BRII were
served with a copy of the amended complaint,
claimants had been asking that AIBC and BRII be
declared in default for failure to file their answers
within the ten-day period provided in Section 1, Rule
III of Book VI of the Rules and Regulations of the POEA.
At that time, there was a pending motion of AIBC and
BRII to strike out of the records the amended
complaint and the "Compliance" of claimants to the
order of the POEA, requiring them to submit a bill of
particulars.
The cases at bench are not of the run-of-the-mill
variety, such that their final disposition in the
administrative level after seven years from their
inception, cannot be said to be attended by
unreasonable, arbitrary and oppressive delays as to
violate the constitutional rights to a speedy disposition
of the cases of complainants.
The amended complaint filed on June 6, 1984 involved
a total of 1,767 claimants. Said complaint had
undergone several amendments, the first being on
April 3, 1985.
The claimants were hired on various dates from 1975
to 1983. They were deployed in different areas, one
group in and the other groups outside of, Bahrain. The
monetary claims totalling more than US$65 million
according to Atty. Del Mundo, included:
1. Unexpired portion of contract;
2. Interest earnings of Travel and Fund;
3. Retirement and Savings Plan benefit;
4. War Zone bonus or premium pay of at least 100%
of basic pay;
5. Area Differential pay;
6. Accrued Interest of all the unpaid benefits;
7. Salary differential pay;
8. Wage Differential pay;
9. Refund of SSS premiums not remitted to Social
Security System;
10. Refund of Withholding Tax not remitted to Bureau
of Internal Revenue (B.I.R.);
11. Fringe Benefits under Brown & Root's "A
Summary of Employees Benefits consisting of 43
pages (Annex "Q" of Amended Complaint);
12. Moral and Exemplary Damages;
13. Attorney's fees of at least ten percent of amounts;
14. Other reliefs, like suspending and/or cancelling
the license to recruit of AIBC and issued by the POEA;
and
15. Penalty for violation of Article 34 (Prohibited
practices) not excluding reportorial requirements
 thereof (NLRC Resolution, September 2, 1991, pp. 18-
19; G.R. No. 104776, Rollo, pp. 73-74).
Inasmuch as the complaint did not allege with
sufficient definiteness and clarity of some facts, the
claimants were ordered to comply with the motion of
AIBC for a bill of particulars. When claimants filed their
"Compliance and Manifestation," AIBC moved to strike
out the complaint from the records for failure of
claimants to submit a proper bill of particulars. While
the POEA Administrator denied the motion to strike
out the complaint, he ordered the claimants "to
correct the deficiencies" pointed out by AIBC.
Before an intelligent answer could be filed in response
to the complaint, the records of employment of the
more than 1,700 claimants had to be retrieved from
various countries in the Middle East. Some of the
records dated as far back as 1975.
The hearings on the merits of the claims before the
POEA Administrator were interrupted several times by
the various appeals, first to NLRC and then to the
Supreme Court.
Aside from the inclusion of additional claimants, two
new cases were filed against AIBC and BRII on October
10, 1985 (POEA Cases Nos.
L-85-10-777 and L-85-10-779). Another complaint was
filed on May 29, 1986 (POEA Case No. L-86-05-460).
NLRC, in exasperation, noted that the exact number of
claimants had never been completely established
(Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p.
57). All the three new cases were consolidated with
POEA Case No. L-84-06-555.
NLRC blamed the parties and their lawyers for the
delay in terminating the proceedings, thus:
These cases could have been spared the long and
arduous route towards resolution had the parties and
their counsel been more interested in pursuing the
truth and the merits of the claims rather than
exhibiting a fanatical reliance on technicalities. Parties
and counsel have made these cases a litigation of
emotion. The intransigence of parties and counsel is
remarkable. As late as last month, this Commission
made a last and final attempt to bring the counsel of
all the parties (this Commission issued a special order
directing respondent Brown & Root's resident agent/s
to appear) to come to a more conciliatory stance. Even
this failed (Rollo,
p. 58).
The squabble between the lawyers of claimants added
to the delay in the disposition of the cases, to the
lament of NLRC, which complained:
It is very evident from the records that the
protagonists in these consolidated cases appear to be
not only the individual complainants, on the one hand,
and AIBC and Brown & Root, on the other hand. The
two lawyers for the complainants, Atty. Gerardo Del
Mundo and Atty. Florante De Castro, have yet to settle
the right of representation, each one persistently
claiming to appear in behalf of most of the
complainants. As a result, there are two appeals by the
complainants. Attempts by this Commission to resolve
counsels' conflicting claims of their respective
authority to represent the complainants prove futile.
The bickerings by these two counsels are reflected in
their pleadings. In the charges and countercharges of
falsification of documents and signatures, and in the
disbarment proceedings by one against the other. All
these have, to a large extent, abetted in confounding
the issues raised in these cases, jumble the
presentation of evidence, and even derailed the
prospects of an amicable settlement. It would not be
far-fetched to imagine that both counsel, unwittingly,
perhaps, painted a rainbow for the complainants, with
the proverbial pot of gold at its end containing more
than US$100 million, the aggregate of the claims in
these cases. It is, likewise, not improbable that their
misplaced zeal and exuberance caused them to throw
all caution to the wind in the matter of elementary
rules of procedure and evidence (Rollo, pp. 58-59).
Adding to the confusion in the proceedings before
NLRC, is the listing of some of the complainants in both
petitions filed by the two lawyers. As noted by NLRC,
"the problem created by this situation is that if one of
the two petitions is dismissed, then the parties and the
public respondents would not know which claim of
which petitioner was dismissed and which was not."
B. Claimants insist that all their claims could properly
be consolidated in a "class suit" because "all the
named complainants have similar money claims and
similar rights sought irrespective of whether they
worked in Bahrain, United Arab Emirates or in Abu
Dhabi, Libya or in any part of the Middle East" (Rollo,
pp. 35-38).
A class suit is proper where the subject matter of the
controversy is one of common or general interest to
many and the parties are so numerous that it is
impracticable to bring them all before the court
(Revised Rules of Court, Rule 3, Sec. 12).
While all the claims are for benefits granted under the
Bahrain Law, many of the claimants worked outside
Bahrain. Some of the claimants were deployed in
Indonesia and Malaysia under different terms and
conditions of employment.
NLRC and the POEA Administrator are correct in their
stance that inasmuch as the first requirement of a class
suit is not present (common or general interest based
on the Amiri Decree of the State of Bahrain), it is only
logical that only those who worked in Bahrain shall be
entitled to file their claims in a class suit.
While there are common defendants (AIBC and BRII)
and the nature of the claims is the same (for
employee's benefits), there is no common question of
law or fact. While some claims are based on the Amiri
Law of Bahrain, many of the claimants never worked in
that country, but were deployed elsewhere. Thus,
each claimant is interested only in his own demand
and not in the claims of the other employees of
defendants. The named claimants have a special or
particular interest in specific benefits completely
different from the benefits in which the other named
claimants and those included as members of a "class"
are claiming (Berses v. Villanueva, 25 Phil. 473 [1913]).
It appears that each claimant is only interested in
collecting his own claims. A claimants has no concern
in protecting the interests of the other claimants as
shown by the fact, that hundreds of them have
abandoned their co-claimants and have entered into
separate compromise settlements of their respective
claims. A principle basic to the concept of "class suit"
is that plaintiffs brought on the record must fairly
represent and protect the interests of the others
(Dimayuga v. Court of Industrial Relations, 101 Phil.
590 [1957]). For this matter, the claimants who
worked in Bahrain can not be allowed to sue in a class
suit in a judicial proceeding. The most that can be
accorded to them under the Rules of Court is to be
allowed to join as plaintiffs in one complaint (Revised
Rules of Court, Rule 3, Sec. 6).
The Court is extra-cautious in allowing class suits
because they are the exceptions to the condition sine
qua non, requiring the joinder of all indispensable
parties.
In an improperly instituted class suit, there would be
no problem if the decision secured is favorable to the
plaintiffs. The problem arises when the decision is
adverse to them, in which case the others who were
impleaded by their self-appointed representatives,
would surely claim denial of due process.
C. The claimants in G.R. No. 104776 also urged that the
POEA Administrator and NLRC should have declared
Atty. Florante De Castro guilty of "forum shopping,
ambulance chasing activities, falsification, duplicity
and other unprofessional activities" and his
appearances as counsel for some of the claimants as
illegal (Rollo, pp. 38-40).
The Anti-Forum Shopping Rule (Revised Circular No.
28-91) is intended to put a stop to the practice of some
parties of filing multiple petitions and complaints
involving the same issues, with the result that the
courts or agencies have to resolve the same issues.
Said Rule, however, applies only to petitions filed with
the Supreme Court and the Court of Appeals. It is
entitled "Additional Requirements For Petitions Filed
with the Supreme Court and the Court of Appeals To
Prevent Forum Shopping or Multiple Filing of
Petitioners and Complainants." The first sentence of
the circular expressly states that said circular applies
to an governs the filing of petitions in the Supreme
Court and the Court of Appeals.
While Administrative Circular No. 04-94 extended the
application of the anti-forum shopping rule to the
lower courts and administrative agencies, said circular
took effect only on April 1, 1994.
POEA and NLRC could not have entertained the
complaint for unethical conduct against Atty. De
Castro because NLRC and POEA have no jurisdiction to
investigate charges of unethical conduct of lawyers.
Attorney's Lien
The "Notice and Claim to Enforce Attorney's Lien"
dated December 14, 1992 was filed by Atty. Gerardo
A. Del Mundo to protect his claim for attorney's fees
for legal services rendered in favor of the claimants
(G.R. No. 104776, Rollo, pp. 841-844).
A statement of a claim for a charging lien shall be filed
with the court or administrative agency which renders
and executes the money judgment secured by the
lawyer for his clients. The lawyer shall cause written
notice thereof to be delivered to his clients and to the
adverse party (Revised Rules of Court, Rule 138, Sec.
37). The statement of the claim for the charging lien of
Atty. Del Mundo should have been filed with the
administrative agency that rendered and executed the
judgment.
Contempt of Court
The complaint of Atty. Gerardo A. Del Mundo to cite
Atty. Florante De Castro and Atty. Katz Tierra for
violation of the Code of Professional Responsibility
should be filed in a separate and appropriate
proceeding.
G.R. No. 104911-14
Claimants charge NLRC with grave abuse of discretion
in not accepting their formula of "Three Hours Average
Daily Overtime" in computing the overtime payments.
They claim that it was BRII itself which proposed the
formula during the negotiations for the settlement of
their claims in Bahrain and therefore it is in estoppel to
disclaim said offer (Rollo, pp. 21-22).
Claimants presented a Memorandum of the Ministry
of Labor of Bahrain dated April 16, 1983, which in
pertinent part states:
After the perusal of the memorandum of the Vice
President and the Area Manager, Middle East, of
Brown & Root Co. and the Summary of the
compensation offered by the Company to the
employees in respect of the difference of pay of the
wages of the overtime and the difference of vacation
leave and the perusal of the documents attached
thereto i.e., minutes of the meetings between the
Representative of the employees and the
management of the Company, the complaint filed by
the employees on 14/2/83 where they have claimed as
hereinabove stated, sample of the Service Contract
executed between one of the employees and the
company through its agent in (sic) Philippines, Asia
International Builders Corporation where it has been
provided for 48 hours of work per week and an annual
leave of 12 days and an overtime wage of 1 & 1/4 of
the normal hourly wage.
xxx xxx xxx
The Company in its computation reached the following
averages:
A. 1. The average duration of the actual service of the
employee is 35 months for the Philippino (sic)
employees . . . .
2. The average wage per hour for the Philippino (sic)
employee is US$2.69 . . . .
3. The average hours for the overtime is 3 hours plus in
all public holidays and weekends.
4. Payment of US$8.72 per months (sic) of service as
compensation for the difference of the wages of the
overtime done for each Philippino (sic) employee . . .
(Rollo, p.22).
BRII and AIBC countered: (1) that the Memorandum
was not prepared by them but by a subordinate official
in the Bahrain Department of Labor; (2) that there was
no showing that the Bahrain Minister of Labor had
approved said memorandum; and (3) that the offer
was made in the course of the negotiation for an
amicable settlement of the claims and therefore it was
not admissible in evidence to prove that anything is
due to the claimants.
While said document was presented to the POEA
without observing the rule on presenting official
documents of a foreign government as provided in
Section 24, Rule 132 of the 1989 Revised Rules on
Evidence, it can be admitted in evidence in
proceedings before an administrative body. The
opposing parties have a copy of the said
memorandum, and they could easily verify its
authenticity and accuracy.
The admissibility of the offer of compromise made by
BRII as contained in the memorandum is another
matter. Under Section 27, Rule 130 of the 1989
Revised Rules on Evidence, an offer to settle a claim is
not an admission that anything is due.
Said Rule provides:
Offer of compromise not admissible. — In civil cases,
an offer of compromise is not an admission of any
liability, and is not admissible in evidence against the
offeror.
This Rule is not only a rule of procedure to avoid the
cluttering of the record with unwanted evidence but a
statement of public policy. There is great public
interest in having the protagonists settle their
differences amicable before these ripen into litigation.
Every effort must be taken to encourage them to arrive
at a settlement. The submission of offers and counter-
offers in the negotiation table is a step in the right
direction. But to bind a party to his offers, as what
claimants would make this Court do, would defeat the
salutary purpose of the Rule.
G.R. Nos. 105029-32
A. NLRC applied the Amiri Decree No. 23 of 1976,
which provides for greater benefits than those
stipulated in the overseas-employment contracts of
the claimants. It was of the belief that "where the laws
of the host country are more favorable and beneficial
to the workers, then the laws of the host country shall
form part of the overseas employment contract." It
quoted with approval the observation of the POEA
Administrator that ". . . in labor proceedings, all doubts
in the implementation of the provisions of the Labor
Code and its implementing regulations shall be
resolved in favor of labor" (Rollo, pp. 90-94).
AIBC and BRII claim that NLRC acted capriciously and
whimsically when it refused to enforce the overseas-
employment contracts, which became the law of the
parties. They contend that the principle that a law is
deemed to be a part of a contract applies only to
provisions of Philippine law in relation to contracts
executed in the Philippines.
The overseas-employment contracts, which were
prepared by AIBC and BRII themselves, provided that
the laws of the host country became applicable to said
contracts if they offer terms and conditions more
favorable that those stipulated therein. It was
stipulated in said contracts that:
The Employee agrees that while in the employ of the
Employer, he will not engage in any other business or
occupation, nor seek employment with anyone other
than the Employer; that he shall devote his entire time
and attention and his best energies, and abilities to the
performance of such duties as may be assigned to him
by the Employer; that he shall at all times be subject to
the direction and control of the Employer; and that the
benefits provided to Employee hereunder are
substituted for and in lieu of all other benefits
provided by any applicable law, provided of course,
that total remuneration and benefits do not fall below
that of the host country regulation or custom, it being
understood that should applicable laws establish that
fringe benefits, or other such benefits additional to the
compensation herein agreed cannot be waived,
Employee agrees that such compensation will be
adjusted downward so that the total compensation
hereunder, plus the non-waivable benefits shall be
equivalent to the compensation herein agreed (Rollo,
pp. 352-353).
The overseas-employment contracts could have been
drafted more felicitously. While a part thereof
provides that the compensation to the employee may
be "adjusted downward so that the total computation
(thereunder) plus the non-waivable benefits shall be
equivalent to the compensation" therein agreed,
another part of the same provision categorically states
"that total remuneration and benefits do not fall below
that of the host country regulation and custom."
Any ambiguity in the overseas-employment contracts
should be interpreted against AIBC and BRII, the
parties that drafted it (Eastern Shipping Lines, Inc. v.
Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
Article 1377 of the Civil Code of the Philippines
provides:
The interpretation of obscure words or stipulations in
a contract shall not favor the party who caused the
obscurity.
Said rule of interpretation is applicable to contracts of
adhesion where there is already a prepared form
containing the stipulations of the employment
contract and the employees merely "take it or leave
it." The presumption is that there was an imposition by
one party against the other and that the employees
signed the contracts out of necessity that reduced
their bargaining power (Fieldmen's Insurance Co., Inc.
v. Songco, 25 SCRA 70 [1968]).
Applying the said legal precepts, we read the overseas-
employment contracts in question as adopting the
provisions of the Amiri Decree No. 23 of 1976 as part
and parcel thereof.
The parties to a contract may select the law by which
it is to be governed (Cheshire, Private International
Law, 187 [7th ed.]). In such a case, the foreign law is
adopted as a "system" to regulate the relations of the
parties, including questions of their capacity to enter
into the contract, the formalities to be observed by
them, matters of performance, and so forth (16 Am Jur
2d,
150-161).
Instead of adopting the entire mass of the foreign law,
the parties may just agree that specific provisions of a
foreign statute shall be deemed incorporated into
their contract "as a set of terms." By such reference to
the provisions of the foreign law, the contract does not
become a foreign contract to be governed by the
foreign law. The said law does not operate as a statute
but as a set of contractual terms deemed written in the
contract (Anton, Private International Law, 197 [1967];
Dicey and Morris, The Conflict of Laws, 702-703, [8th
ed.]).
A basic policy of contract is to protect the expectation
of the parties (Reese, Choice of Law in Torts and
Contracts, 16 Columbia Journal of Transnational Law 1,
21 [1977]). Such party expectation is protected by
giving effect to the parties' own choice of the
applicable law (Fricke v. Isbrandtsen Co., Inc., 151 F.
Supp. 465, 467 [1957]). The choice of law must,
however, bear some relationship to the parties or their
transaction (Scoles and Hayes, Conflict of Law 644-647
[1982]). There is no question that the contracts sought
to be enforced by claimants have a direct connection
with the Bahrain law because the services were
rendered in that country.
In Norse Management Co. (PTE) v. National Seamen
Board, 117 SCRA 486 (1982), the "Employment
Agreement," between Norse Management Co. and the
late husband of the private respondent, expressly
provided that in the event of illness or injury to the
employee arising out of and in the course of his
employment and not due to his own misconduct,
"compensation shall be paid to employee in
accordance with and subject to the limitation of the
Workmen's Compensation Act of the Republic of the
Philippines or the Worker's Insurance Act of registry of
the vessel, whichever is greater." Since the laws of
Singapore, the place of registry of the vessel in which
the late husband of private respondent served at the
time of his death, granted a better compensation
package, we applied said foreign law in preference to
the terms of the contract.
The case of Bagong Filipinas Overseas Corporation v.
National Labor Relations Commission, 135 SCRA 278
(1985), relied upon by AIBC and BRII is inapposite to
the facts of the cases at bench. The issue in that case
was whether the amount of the death compensation
of a Filipino seaman should be determined under the
shipboard employment contract executed in the
Philippines or the Hongkong law. Holding that the
shipboard employment contract was controlling, the
court differentiated said case from Norse
Management Co. in that in the latter case there was an
express stipulation in the employment contract that
the foreign law would be applicable if it afforded
greater compensation.
B. AIBC and BRII claim that they were denied by NLRC
of their right to due process when said administrative
agency granted Friday-pay differential, holiday-pay
differential, annual-leave differential and leave
indemnity pay to the claimants listed in Annex B of the
Resolution. At first, NLRC reversed the resolution of
the POEA Administrator granting these benefits on a
finding that the POEA Administrator failed to consider
the evidence presented by AIBC and BRII, that some
findings of fact of the POEA Administrator were not
supported by the evidence, and that some of the
evidence were not disclosed to AIBC and BRII (Rollo,
pp. 35-36; 106-107). But instead of remanding the case
to the POEA Administrator for a new hearing, which
means further delay in the termination of the case,
NLRC decided to pass upon the validity of the claims
itself. It is this procedure that AIBC and BRII complain
of as being irregular and a "reversible error."
They pointed out that NLRC took into consideration
evidence submitted on appeal, the same evidence
which NLRC found to have been "unilaterally
submitted by the claimants and not disclosed to the
adverse parties" (Rollo, pp. 37-39).
NLRC noted that so many pieces of evidentiary matters
were submitted to the POEA administrator by the
claimants after the cases were deemed submitted for
resolution and which were taken cognizance of by the
POEA Administrator in resolving the cases. While AIBC
and BRII had no opportunity to refute said evidence of
the claimants before the POEA Administrator, they had
all the opportunity to rebut said evidence and to
present their
counter-evidence before NLRC. As a matter of fact,
AIBC and BRII themselves were able to present before
NLRC additional evidence which they failed to present
before the POEA Administrator.
Under Article 221 of the Labor Code of the Philippines,
NLRC is enjoined to "use every and all reasonable
means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law
or procedure, all in the interest of due process."
In deciding to resolve the validity of certain claims on
the basis of the evidence of both parties submitted
before the POEA Administrator and NLRC, the latter
considered that it was not expedient to remand the
cases to the POEA Administrator for that would only
prolong the already protracted legal controversies.
Even the Supreme Court has decided appealed cases
on the merits instead of remanding them to the trial
court for the reception of evidence, where the same
can be readily determined from the uncontroverted
facts on record (Development Bank of the Philippines
v. Intermediate Appellate Court, 190 SCRA 653 [1990];
Pagdonsalan v. National Labor Relations Commission,
127 SCRA 463 [1984]).
C. AIBC and BRII charge NLRC with grave abuse of
discretion when it ordered the POEA Administrator to
hold new hearings for 683 claimants listed in Annex D
of the Resolution dated September 2, 1991 whose
claims had been denied by the POEA Administrator
"for lack of proof" and for 69 claimants listed in Annex
E of the same Resolution, whose claims had been
found by NLRC itself as not "supported by evidence"
(Rollo, pp. 41-45).
NLRC based its ruling on Article 218(c) of the Labor
Code of the Philippines, which empowers it "[to]
conduct investigation for the determination of a
question, matter or controversy, within its jurisdiction,
. . . ."
It is the posture of AIBC and BRII that NLRC has no
authority under Article 218(c) to remand a case
involving claims which had already been dismissed
because such provision contemplates only situations
where there is still a question or controversy to be
resolved (Rollo, pp. 41-42).
A principle well embedded in Administrative Law is
that the technical rules of procedure and evidence do
not apply to the proceedings conducted by
administrative agencies (First Asian Transport &
Shipping Agency, Inc. v. Ople, 142 SCRA 542 [1986];
Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219
[1987]). This principle is enshrined in Article 221 of the
Labor Code of the Philippines and is now the bedrock
of proceedings before NLRC.
Notwithstanding the non-applicability of technical
rules of procedure and evidence in administrative
proceedings, there are cardinal rules which must be
observed by the hearing officers in order to comply
with the due process requirements of the Constitution.
These cardinal rules are collated in Ang Tibay v. Court
of Industrial Relations, 69 Phil. 635 (1940).
VIII
The three petitions were filed under Rule 65 of the
Revised Rules of Court on the grounds that NLRC had
committed grave abuse of discretion amounting to
lack of jurisdiction in issuing the questioned orders.
We find no such abuse of discretion.
WHEREFORE, all the three petitions are DISMISSED.
SO ORDERED.
Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur
6) Dacasin vs. Dacasin February 5, 2010,
G.R. No. 168785 February 5, 2010
HERALD BLACK DACASIN, Petitioner,
vs.
SHARON DEL MUNDO DACASIN, Respondent.
The Case
For review1 is a dismissal2 of a suit to enforce a post-
foreign divorce child custody agreement for lack of
jurisdiction.
The Facts
Petitioner Herald Dacasin (petitioner), American, and
respondent Sharon Del Mundo Dacasin (respondent),
Filipino, were married in Manila in April 1994. They
have one daughter, Stephanie, born on 21 September
1995. In June 1999, respondent sought and obtained
from the Circuit Court, 19th Judicial Circuit, Lake
County, Illinois (Illinois court) a divorce decree against
petitioner.3 In its ruling, the Illinois court dissolved the
marriage of petitioner and respondent, awarded to
respondent sole custody of Stephanie and retained
jurisdiction over the case for enforcement purposes.
On 28 January 2002, petitioner and respondent
executed in Manila a contract (Agreement4 ) for the
joint custody of Stephanie. The parties chose Philippine
courts as exclusive forum to adjudicate disputes arising
from the Agreement. Respondent undertook to obtain
from the Illinois court an order "relinquishing"
jurisdiction to Philippine courts.
In 2004, petitioner sued respondent in the Regional
Trial Court of Makati City, Branch 60 (trial court) to
enforce the Agreement. Petitioner alleged that in
violation of the Agreement, respondent exercised sole
custody over Stephanie.
Respondent sought the dismissal of the complaint for,
among others, lack of jurisdiction because of the
Illinois court’s retention of jurisdiction to enforce the
divorce decree.
The Ruling of the Trial Court
In its Order dated 1 March 2005, the trial court
sustained respondent’s motion and dismissed the case
for lack of jurisdiction. The trial court held that: (1) it
is precluded from taking cognizance over the suit
considering the Illinois court’s retention of jurisdiction
to enforce its divorce decree, including its order
awarding sole custody of Stephanie to respondent; (2)
the divorce decree is binding on petitioner following the
"nationality rule" prevailing in this jurisdiction;5 and
(3) the Agreement is void for contravening Article
2035, paragraph 5 of the Civil Code6 prohibiting
compromise agreements on jurisdiction.7
Petitioner sought reconsideration, raising the new
argument that the divorce decree obtained by
respondent is void. Thus, the divorce decree is no bar
to the trial court’s exercise of jurisdiction over the case.
In its Order dated 23 June 2005, the trial court denied
reconsideration, holding that unlike in the case of
respondent, the divorce decree is binding on petitioner
under the laws of his nationality.
Hence, this petition.
Petitioner submits the following alternative theories for
the validity of the Agreement to justify its enforcement
by the trial court: (1) the Agreement novated the valid
divorce decree, modifying the terms of child custody
from sole (maternal) to joint;8 or (2) the Agreement is
independent of the divorce decree obtained by
respondent.
The Issue
The question is whether the trial court has jurisdiction
to take cognizance of petitioner’s suit and enforce the
Agreement on the joint custody of the parties’ child.
The Ruling of the Court
The trial court has jurisdiction to entertain petitioner’s
suit but not to enforce the Agreement which is void.
However, factual and equity considerations militate
against the dismissal of petitioner’s suit and call for the
remand of the case to settle the question of Stephanie’s
custody.
Regional Trial Courts Vested With Jurisdiction
to Enforce Contracts
Subject matter jurisdiction is conferred by law. At the
time petitioner filed his suit in the trial court, statutory
law vests on Regional Trial Courts exclusive original
jurisdiction over civil actions incapable of pecuniary
estimation.9 An action for specific performance, such
as petitioner’s suit to enforce the Agreement on joint
child custody, belongs to this species of actions.10 Thus,
jurisdiction-wise, petitioner went to the right court.
Indeed, the trial court’s refusal to entertain petitioner’s
suit was grounded not on its lack of power to do so but
on its thinking that the Illinois court’s divorce decree
stripped it of jurisdiction. This conclusion is
unfounded. What the Illinois court retained was
"jurisdiction x x x for the purpose of enforcing all and
sundry the various provisions of [its] Judgment for
Dissolution."11 Petitioner’s suit seeks the enforcement
not of the "various provisions" of the divorce decree but
of the post-divorce Agreement on joint child custody.
Thus, the action lies beyond the zone of the Illinois
court’s so-called "retained jurisdiction."
Petitioner’s Suit Lacks Cause of Action
The foregoing notwithstanding, the trial court cannot
enforce the Agreement which is contrary to law.
In this jurisdiction, parties to a contract are free to
stipulate the terms of agreement subject to the
minimum ban on stipulations contrary to law, morals,
good customs, public order, or public policy.12
Otherwise, the contract is denied legal existence,
deemed "inexistent and void from the beginning."13 For
lack of relevant stipulation in the Agreement, these and
other ancillary Philippine substantive law serve as
default parameters to test the validity of the
Agreement’s joint child custody stipulations.14
At the time the parties executed the Agreement on 28
January 2002, two facts are undisputed: (1) Stephanie
was under seven years old (having been born on 21
September 1995); and (2) petitioner and respondent
were no longer married under the laws of the United
States because of the divorce decree. The relevant
Philippine law on child custody for spouses separated
in fact or in law15 (under the second paragraph of
Article 213 of the Family Code) is also undisputed: "no
child under seven years of age shall be separated from
the mother x x x."16 (This statutory awarding of sole
parental custody17 to the mother is mandatory,18
grounded on sound policy consideration,19 subject only
to a narrow exception not alleged to obtain here.20 )
Clearly then, the Agreement’s object to establish a post-
divorce joint custody regime between respondent and
petitioner over their child under seven years old
contravenes Philippine law.
The Agreement is not only void ab initio for being
contrary to law, it has also been repudiated by the
mother when she refused to allow joint custody by the
father. The Agreement would be valid if the spouses
have not divorced or separated because the law
provides for joint parental authority when spouses live
together.21 However, upon separation of the spouses,
the mother takes sole custody under the law if the child
is below seven years old and any agreement to the
contrary is void. Thus, the law suspends the joint
custody regime for (1) children under seven of (2)
separated or divorced spouses. Simply put, for a child
within this age bracket (and for commonsensical
reasons), the law decides for the separated or divorced
parents how best to take care of the child and that is to
give custody to the separated mother. Indeed, the
separated parents cannot contract away the provision in
the Family Code on the maternal custody of children
below seven years anymore than they can privately
agree that a mother who is unemployed, immoral,
habitually drunk, drug addict, insane or afflicted with a
communicable disease will have sole custody of a child
under seven as these are reasons deemed compelling to
preclude the application of the exclusive maternal
custody regime under the second paragraph of Article
213.22
It will not do to argue that the second paragraph of
Article 213 of the Family Code applies only to judicial
custodial agreements based on its text that "No child
under seven years of age shall be separated from the
mother, unless the court finds compelling reasons to
order otherwise." To limit this provision’s
enforceability to court sanctioned agreements while
placing private agreements beyond its reach is to
sanction a double standard in custody regulation of
children under seven years old of separated parents.
This effectively empowers separated parents, by the
simple expedient of avoiding the courts, to subvert a
legislative policy vesting to the separated mother sole
custody of her children under seven years of age "to
avoid a tragedy where a mother has seen her baby torn
away from her."23 This ignores the legislative basis that
"[n]o man can sound the deep sorrows of a mother who
is deprived of her child of tender age."24
It could very well be that Article 213’s bias favoring
one separated parent (mother) over the other (father)
encourages paternal neglect, presumes incapacity for
joint parental custody, robs the parents of custodial
options, or hijacks decision-making between the
separated parents.25 However, these are objections
which question the law’s wisdom not its validity or
uniform enforceability. The forum to air and remedy
these grievances is the legislature, not this Court. At
any rate, the rule’s seeming harshness or undesirability
is tempered by ancillary agreements the separated
parents may wish to enter such as granting the father
visitation and other privileges. These arrangements are
not inconsistent with the regime of sole maternal
custody under the second paragraph of Article 213
which merely grants to the mother final authority on the
care and custody of the minor under seven years of age,
in case of disagreements.1avvphi1
Further, the imposed custodial regime under the second
paragraph of Article 213 is limited in duration, lasting
only until the child’s seventh year. From the eighth year
until the child’s emancipation, the law gives the
separated parents freedom, subject to the usual
contractual limitations, to agree on custody regimes
they see fit to adopt. Lastly, even supposing that
petitioner and respondent are not barred from entering
into the Agreement for the joint custody of Stephanie,
respondent repudiated the Agreement by asserting sole
custody over Stephanie. Respondent’s act effectively
brought the parties back to ambit of the default
custodial regime in the second paragraph of Article 213
of the Family Code vesting on respondent sole custody
of Stephanie.
Nor can petitioner rely on the divorce decree’s alleged
invalidity - not because the Illinois court lacked
jurisdiction or that the divorce decree violated Illinois
law, but because the divorce was obtained by his
Filipino spouse26 - to support the Agreement’s
enforceability. The argument that foreigners in this
jurisdiction are not bound by foreign divorce decrees is
hardly novel. Van Dorn v. Romillo27 settled the matter
by holding that an alien spouse of a Filipino is bound
by a divorce decree obtained abroad.28 There, we
dismissed the alien divorcee’s Philippine suit for
accounting of alleged post-divorce conjugal property
and rejected his submission that the foreign divorce
(obtained by the Filipino spouse) is not valid in this
jurisdiction in this wise:
There can be no question as to the validity of that
Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as
an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of
the Union. What he is contending in this case is that the
divorce is not valid and binding in this jurisdiction, the
same being contrary to local law and public policy.
It is true that owing to the nationality principle
embodied in Article 15 of the Civil Code, only
Philippine nationals are covered by the policy against
absolute divorces the same being considered contrary
to our concept of public policy and morality. However,
aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid
according to their national law. In this case, the divorce
in Nevada released private respondent from the
marriage from the standards of American law, under
which divorce dissolves the marriage.
xxxx
Thus, pursuant to his national law, private respondent
is no longer the husband of petitioner. He would have
no standing to sue in the case below as petitioner’s
husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own
country’s Court, which validly exercised jurisdiction
over him, and whose decision he does not repudiate, he
is estopped by his own representation before said Court
from asserting his right over the alleged conjugal
property. (Emphasis supplied)
We reiterated Van Dorn in Pilapil v. Ibay-Somera29 to
dismiss criminal complaints for adultery filed by the
alien divorcee (who obtained the foreign divorce
decree) against his former Filipino spouse because he
no longer qualified as "offended spouse" entitled to file
the complaints under Philippine procedural rules. Thus,
it should be clear by now that a foreign divorce decree
carries as much validity against the alien divorcee in
this jurisdiction as it does in the jurisdiction of the
alien’s nationality, irrespective of who obtained the
divorce.
The Facts of the Case and Nature of Proceeding
Justify Remand
Instead of ordering the dismissal of petitioner’s suit, the
logical end to its lack of cause of action, we remand the
case for the trial court to settle the question of
Stephanie’s custody. Stephanie is now nearly 15 years
old, thus removing the case outside of the ambit of the
mandatory maternal custody regime under Article 213
and bringing it within coverage of the default standard
on child custody proceedings – the best interest of the
child.30 As the question of custody is already before the
trial court and the child’s parents, by executing the
Agreement, initially showed inclination to share
custody, it is in the interest of swift and efficient
rendition of justice to allow the parties to take
advantage of the court’s jurisdiction, submit evidence
on the custodial arrangement best serving Stephanie’s
interest, and let the trial court render judgment. This
disposition is consistent with the settled doctrine that in
child custody proceedings, equity may be invoked to
serve the child’s best interest.31
WHEREFORE, we REVERSE the Orders dated 1
March 2005 and 23 June 2005 of the Regional Trial
Court of Makati City, Branch 60. The case is
REMANDED for further proceedings consistent with
this ruling.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

7) Wildvalley Shipping vs. CA October 6, 2000,
G.R. No. 119602 October 6, 2000
WILDVALLEY SHIPPING CO., LTD. petitioner,
vs.
COURT OF APPEALS and PHILIPPINE
PRESIDENT LINES INC., respondents.
DECISION
BUENA, J.:
This is a petition for review on certiorari seeking to set
aside the decision of the Court of Appeals which
reversed the decision of the lower court in CA-G.R. CV
No. 36821, entitled "Wildvalley Shipping Co., Ltd.,
plaintiff-appellant, versus Philippine President Lines,
Inc., defendant-appellant."
The antecedent facts of the case are as follows:
Sometime in February 1988, the Philippine Roxas, a
vessel owned by Philippine President Lines, Inc.,
private respondent herein, arrived in Puerto Ordaz,
Venezuela, to load iron ore. Upon the completion of the
loading and when the vessel was ready to leave port,
Mr. Ezzar del Valle Solarzano Vasquez, an official pilot
of Venezuela, was designated by the harbour authorities
in Puerto Ordaz to navigate the Philippine Roxas
through the Orinoco River.1 He was asked to pilot the
said vessel on February 11, 19882 boarding it that night
at 11:00 p.m.3
The master (captain) of the Philippine Roxas, Captain
Nicandro Colon, was at the bridge together with the
pilot (Vasquez), the vessel's third mate (then the officer
on watch), and a helmsman when the vessel left the
port4 at 1:40 a.m. on February 12, 1988.5 Captain
Colon left the bridge when the vessel was under way.6
The Philippine Roxas experienced some vibrations
when it entered the San Roque Channel at mile 172.7
The vessel proceeded on its way, with the pilot assuring
the watch officer that the vibration was a result of the
shallowness of the channel.8
Between mile 158 and 157, the vessel again
experienced some vibrations.9 These occurred at 4:12
a.m.10 It was then that the watch officer called the
master to the bridge.11
The master (captain) checked the position of the
vessel12 and verified that it was in the centre of the
channel.13 He then went to confirm, or set down, the
position of the vessel on the chart.14 He ordered
Simplicio A. Monis, Chief Officer of the President
Roxas, to check all the double bottom tanks.15
At around 4:35 a.m., the Philippine Roxas ran aground
in the Orinoco River,16 thus obstructing the ingress and
egress of vessels.
As a result of the blockage, the Malandrinon, a vessel
owned by herein petitioner Wildvalley Shipping
Company, Ltd., was unable to sail out of Puerto Ordaz
on that day.
Subsequently, Wildvalley Shipping Company, Ltd.
filed a suit with the Regional Trial Court of Manila,
Branch III against Philippine President Lines, Inc. and
Pioneer Insurance Company (the underwriter/insurer of
Philippine Roxas) for damages in the form of unearned
profits, and interest thereon amounting to US
$400,000.00 plus attorney's fees, costs, and expenses of
litigation. The complaint against Pioneer Insurance
Company was dismissed in an Order dated November
7, 1988.17
At the pre-trial conference, the parties agreed on the
following facts:
"1. The jurisdictional facts, as specified in their
respective pleadings;
"2. That defendant PPL was the owner of the vessel
Philippine Roxas at the time of the incident;
"3. That defendant Pioneer Insurance was the
insurance underwriter for defendant PPL;
"4. That plaintiff Wildvalley Shipping Co., Inc. is the
owner of the vessel Malandrinon, whose passage was
obstructed by the vessel Philippine Roxas at Puerto
Ordaz, Venezuela, as specified in par. 4, page 2 of the
complaint;
"5. That on February 12, 1988, while the Philippine
Roxas was navigating the channel at Puerto Ordaz, the
said vessel grounded and as a result, obstructed
navigation at the channel;
"6. That the Orinoco River in Puerto Ordaz is a
compulsory pilotage channel;
"7. That at the time of the incident, the vessel,
Philippine Roxas, was under the command of the pilot
Ezzar Solarzano, assigned by the government thereat,
but plaintiff claims that it is under the command of the
master;
"8. The plaintiff filed a case in Middleburg, Holland
which is related to the present case;
"9. The plaintiff caused the arrest of the Philippine
Collier, a vessel owned by the defendant PPL;
"10. The Orinoco River is 150 miles long and it takes
approximately 12 hours to navigate out of the said
river;
"11. That no security for the plaintiff's claim was given
until after the Philippine Collier was arrested; and
"12. That a letter of guarantee, dated 12-May-88 was
issued by the Steamship Mutual Underwriters Ltd."18
The trial court rendered its decision on October 16,
1991 in favor of the petitioner, Wildvalley Shipping
Co., Ltd. The dispositive portion thereof reads as plus cost of suit. Plaintiff-appellant's appeal is
follows: DISMISSED.
"WHEREFORE, judgment is rendered for the plaintiff, "SO ORDERED."21
ordering defendant Philippine President Lines, Inc. to
pay to the plaintiff the sum of U.S. $259,243.43, as Petitioner filed a motion for reconsideration22 but the
actual and compensatory damages, and U.S. same was denied for lack of merit in the resolution
$162,031.53, as expenses incurred abroad for its dated March 29, 1995.23
foreign lawyers, plus additional sum of U.S.
$22,000.00, as and for attorney's fees of plaintiff's local Hence, this petition.
lawyer, and to pay the cost of this suit.
The petitioner assigns the following errors to the court
"Defendant's counterclaim is dismissed for lack of a quo:
merit.
1. RESPONDENT COURT OF APPEALS
"SO ORDERED."19 SERIOUSLY ERRED IN FINDING THAT UNDER
PHILIPPINE LAW NO FAULT OR NEGLIGENCE
Both parties appealed: the petitioner appealing the non- CAN BE ATTRIBUTED TO THE MASTER NOR
award of interest with the private respondent THE OWNER OF THE "PHILIPPINE ROXAS" FOR
questioning the decision on the merits of the case. THE GROUNDING OF SAID VESSEL
RESULTING IN THE BLOCKAGE OF THE RIO
After the requisite pleadings had been filed, the Court ORINOCO;
of Appeals came out with its questioned decision dated
June 14, 1994,20 the dispositive portion of which reads 2. RESPONDENT COURT OF APPEALS
as follows: SERIOUSLY ERRED IN REVERSING THE
FINDINGS OF FACTS OF THE TRIAL COURT
"WHEREFORE, finding defendant-appellant's appeal CONTRARY TO EVIDENCE;
to be meritorious, judgment is hereby rendered
reversing the Decision of the lower court. Plaintiff- 3. RESPONDENT COURT OF APPEALS
appellant's Complaint is dismissed and it is ordered to SERIOUSLY ERRED IN FINDING THAT THE
pay defendant-appellant the amount of Three Hundred "PHILIPPINE ROXAS" IS SEAWORTHY;
Twenty-three Thousand, Forty-two Pesos and Fifty-
three Centavos (₱323,042.53) as and for attorney's fees
4. RESPONDENT COURT OF APPEALS
SERIOUSLY ERRED IN DISREGARDING
VENEZUELAN LAW DESPITE THE FACT THAT
THE SAME HAS BEEN SUBSTANTIALLY
PROVED IN THE TRIAL COURT WITHOUT ANY
OBJECTION FROM PRIVATE RESPONDENT,
AND WHOSE OBJECTION WAS INTERPOSED
BELATEDLY ON APPEAL;
5. RESPONDENT COURT OF APPEALS
SERIOUSLY ERRED IN AWARDING
ATTORNEY'S FEES AND COSTS TO PRIVATE
RESPONDENT WITHOUT ANY FAIR OR
REASONABLE BASIS WHATSOEVER;
6. RESPONDENT COURT OF APPEALS
SERIOUSLY ERRED IN NOT FINDING THAT
PETITIONER'S CAUSE IS MERITORIOUS
HENCE, PETITIONER SHOULD BE ENTITLED
TO ATTORNEY'S FEES, COSTS AND INTEREST.
The petition is without merit.
The primary issue to be determined is whether or not
Venezuelan law is applicable to the case at bar.
It is well-settled that foreign laws do not prove
themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them. Like any
other fact, they must be alleged and proved.24
A distinction is to be made as to the manner of proving
a written and an unwritten law. The former falls under
Section 24, Rule 132 of the Rules of Court, as amended,
the entire provision of which is quoted hereunder.
Where the foreign law sought to be proved is
"unwritten," the oral testimony of expert witnesses is
admissible, as are printed and published books of
reports of decisions of the courts of the country
concerned if proved to be commonly admitted in such
courts.25
Section 24 of Rule 132 of the Rules of Court, as
amended, provides:
"Sec. 24. Proof of official record. -- The record of
public documents referred to in paragraph (a) of Section
19, when admissible for any purpose, may be evidenced
by an official publication thereof or by a copy attested
by the officer having the legal custody of the record, or
by his deputy, and accompanied, if the record is not
kept in the Philippines, with a certificate that such
officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate may
be made by a secretary of the embassy or legation,
consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his
office." (Underscoring supplied)
The court has interpreted Section 25 (now Section 24)
to include competent evidence like the testimony of a
witness to prove the existence of a written foreign
law.26
In the noted case of Willamette Iron & Steel Works vs.
Muzzal,27 it was held that:
"… Mr. Arthur W. Bolton, an attorney-at-law of San
Francisco, California, since the year 1918 under oath,
quoted verbatim section 322 of the California Civil
Code and stated that said section was in force at the time
the obligations of defendant to the plaintiff were
incurred, i.e. on November 5, 1928 and December 22,
1928. This evidence sufficiently established the fact
that the section in question was the law of the State of
California on the above dates. A reading of sections 300
and 301 of our Code of Civil Procedure will convince
one that these sections do not exclude the presentation
of other competent evidence to prove the existence of a
foreign law.
"`The foreign law is a matter of fact …You ask the
witness what the law is; he may, from his recollection,
or on producing and referring to books, say what it is.'
(Lord Campbell concurring in an opinion of Lord Chief
Justice Denman in a well-known English case where a
witness was called upon to prove the Roman laws of
marriage and was permitted to testify, though he
referred to a book containing the decrees of the Council
of Trent as controlling, Jones on Evidence, Second
Edition, Volume 4, pages 3148-3152.) x x x."
We do not dispute the competency of Capt. Oscar Leon
Monzon, the Assistant Harbor Master and Chief of
Pilots at Puerto Ordaz, Venezuela,28 to testify on the
existence of the Reglamento General de la Ley de
Pilotaje (pilotage law of Venezuela)29 and the
Reglamento Para la Zona de Pilotaje No 1 del Orinoco
(rules governing the navigation of the Orinoco River).
Captain Monzon has held the aforementioned posts for
eight years.30 As such he is in charge of designating the
pilots for maneuvering and navigating the Orinoco
River. He is also in charge of the documents that come
into the office of the harbour masters.31
Nevertheless, we take note that these written laws were
not proven in the manner provided by Section 24 of
Rule 132 of the Rules of Court.
The Reglamento General de la Ley de Pilotaje was
published in the Gaceta Oficial32 of the Republic of
Venezuela. A photocopy of the Gaceta Oficial was
presented in evidence as an official publication of the
Republic of Venezuela.
The Reglamento Para la Zona de Pilotaje No 1 del
Orinoco is published in a book issued by the Ministerio
de Comunicaciones of Venezuela.33 Only a photocopy
of the said rules was likewise presented as evidence.
Both of these documents are considered in Philippine
jurisprudence to be public documents for they are the
written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and
public officers of Venezuela.34
For a copy of a foreign public document to be
admissible, the following requisites are mandatory: (1)
It must be attested by the officer having legal custody
of the records or by his deputy; and (2) It must be
accompanied by a certificate by a secretary of the
embassy or legation, consul general, consul, vice
consular or consular agent or foreign service officer,
and with the seal of his office.35 The latter requirement
is not a mere technicality but is intended to justify the
giving of full faith and credit to the genuineness of a
document in a foreign country.36
It is not enough that the Gaceta Oficial, or a book
published by the Ministerio de Comunicaciones of
Venezuela, was presented as evidence with Captain
Monzon attesting it. It is also required by Section 24 of
Rule 132 of the Rules of Court that a certificate that
Captain Monzon, who attested the documents, is the
officer who had legal custody of those records made by
a secretary of the embassy or legation, consul general,
consul, vice consul or consular agent or by any officer
in the foreign service of the Philippines stationed in
Venezuela, and authenticated by the seal of his office
accompanying the copy of the public document. No
such certificate could be found in the records of the
case.
With respect to proof of written laws, parol proof is
objectionable, for the written law itself is the best
evidence. According to the weight of authority, when a
foreign statute is involved, the best evidence rule
requires that it be proved by a duly authenticated copy
of the statute.37
At this juncture, we have to point out that the
Venezuelan law was not pleaded before the lower court.
A foreign law is considered to be pleaded if there is an
allegation in the pleading about the existence of the
foreign law, its import and legal consequence on the
event or transaction in issue.38
A review of the Complaint39 revealed that it was never
alleged or invoked despite the fact that the grounding
of the M/V Philippine Roxas occurred within the
territorial jurisdiction of Venezuela.
We reiterate that under the rules of private international
law, a foreign law must be properly pleaded and proved
as a fact. In the absence of pleading and proof, the laws
of a foreign country, or state, will be presumed to be the
same as our own local or domestic law and this is
known as processual presumption.40
Having cleared this point, we now proceed to a
thorough study of the errors assigned by the petitioner.
Petitioner alleges that there was negligence on the part
of the private respondent that would warrant the award
of damages.
There being no contractual obligation, the private
respondent is obliged to give only the diligence
required of a good father of a family in accordance with
the provisions of Article 1173 of the New Civil Code,
thus:
"Art. 1173. The fault or negligence of the obligor
consists in the omission of that diligence which is
required by the nature of the obligation and corresponds
with the circumstances of the persons, of the time and
of the place. When negligence shows bad faith, the
provisions of articles 1171 and 2201, paragraph 2, shall
apply.
"If the law or contract does not state the diligence which
is to be observed in the performance, that which is
expected of a good father of a family shall be required."
The diligence of a good father of a family requires only
that diligence which an ordinary prudent man would
exercise with regard to his own property. This we have
found private respondent to have exercised when the
vessel sailed only after the "main engine, machineries,
and other auxiliaries" were checked and found to be in
good running condition;41 when the master left a
competent officer, the officer on watch on the bridge
with a pilot who is experienced in navigating the
Orinoco River; when the master ordered the inspection
of the vessel's double bottom tanks when the vibrations
occurred anew.42
The Philippine rules on pilotage, embodied in
Philippine Ports Authority Administrative Order No.
03-85, otherwise known as the Rules and Regulations
Governing Pilotage Services, the Conduct of Pilots and
Pilotage Fees in Philippine Ports enunciate the duties
and responsibilities of a master of a vessel and its pilot,
among other things.
The pertinent provisions of the said administrative
order governing these persons are quoted hereunder:
"Sec. 11. Control of Vessels and Liability for Damage.
-- On compulsory pilotage grounds, the Harbor Pilot
providing the service to a vessel shall be responsible for
the damage caused to a vessel or to life and property at
ports due to his negligence or fault. He can be absolved
from liability if the accident is caused by force majeure
or natural calamities provided he has exercised
prudence and extra diligence to prevent or minimize the
damage.
"The Master shall retain overall command of the vessel
even on pilotage grounds whereby he can countermand
or overrule the order or command of the Harbor Pilot
on board. In such event, any damage caused to a vessel
or to life and property at ports by reason of the fault or
negligence of the Master shall be the responsibility and
liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.
"Such liability of the owner or Master of the vessel or
its pilots shall be determined by competent authority in
appropriate proceedings in the light of the facts and
circumstances of each particular case.
"x x x
"Sec. 32. Duties and Responsibilities of the Pilots or
Pilots’ Association. -- The duties and responsibilities of
the Harbor Pilot shall be as follows:
"x x x
"f) A pilot shall be held responsible for the direction of
a vessel from the time he assumes his work as a pilot
thereof until he leaves it anchored or berthed safely;
Provided, however, that his responsibility shall cease at
the moment the Master neglects or refuses to carry out
his order."
The Code of Commerce likewise provides for the
obligations expected of a captain of a vessel, to wit:
"Art. 612. The following obligations shall be inherent
in the office of captain:
"x x x
"7. To be on deck on reaching land and to take
command on entering and leaving ports, canals,
roadsteads, and rivers, unless there is a pilot on board
discharging his duties. x x x."
The law is very explicit. The master remains the overall
commander of the vessel even when there is a pilot on
board. He remains in control of the ship as he can still
perform the duties conferred upon him by law43 despite
the presence of a pilot who is temporarily in charge of
the vessel. It is not required of him to be on the bridge
while the vessel is being navigated by a pilot.
However, Section 8 of PPA Administrative Order No.
03-85, provides:
"Sec. 8. Compulsory Pilotage Service - For entering a
harbor and anchoring thereat, or passing through rivers
or straits within a pilotage district, as well as docking
and undocking at any pier/wharf, or shifting from one
berth or another, every vessel engaged in coastwise and
foreign trade shall be under compulsory pilotage.
"xxx."
The Orinoco River being a compulsory pilotage
channel necessitated the engaging of a pilot who was
presumed to be knowledgeable of every shoal, bank,
deep and shallow ends of the river. In his deposition,
pilot Ezzar Solarzano Vasquez testified that he is an
official pilot in the Harbour at Port Ordaz,
Venezuela,44 and that he had been a pilot for twelve
(12) years.45 He also had experience in navigating the
waters of the Orinoco River.46
The law does provide that the master can countermand
or overrule the order or command of the harbor pilot on
board. The master of the Philippine Roxas deemed it
best not to order him (the pilot) to stop the vessel,47
mayhap, because the latter had assured him that they
were navigating normally before the grounding of the
vessel.48 Moreover, the pilot had admitted that on
account of his experience he was very familiar with the
configuration of the river as well as the course
headings, and that he does not even refer to river charts
when navigating the Orinoco River.49
Based on these declarations, it comes as no surprise to
us that the master chose not to regain control of the ship.
Admitting his limited knowledge of the Orinoco River,
Captain Colon relied on the knowledge and experience
of pilot Vasquez to guide the vessel safely.
"Licensed pilots, enjoying the emoluments of
compulsory pilotage, are in a different class from
ordinary employees, for they assume to have a skill and
a knowledge of navigation in the particular waters over
which their licenses extend superior to that of the
master; pilots are bound to use due diligence and
reasonable care and skill. A pilot's ordinary skill is in
proportion to the pilot's responsibilities, and implies a
knowledge and observance of the usual rules of
navigation, acquaintance with the waters piloted in their
ordinary condition, and nautical skill in avoiding all
known obstructions. The character of the skill and
knowledge required of a pilot in charge of a vessel on
the rivers of a country is very different from that which
enables a navigator to carry a vessel safely in the ocean.
On the ocean, a knowledge of the rules of navigation,
with charts that disclose the places of hidden rocks,
dangerous shores, or other dangers of the way, are the
main elements of a pilot's knowledge and skill. But the
pilot of a river vessel, like the harbor pilot, is selected
for the individual's personal knowledge of the
topography through which the vessel is steered."50
We find that the grounding of the vessel is attributable
to the pilot. When the vibrations were first felt the
watch officer asked him what was going on, and pilot
Vasquez replied that "(they) were in the middle of the
channel and that the vibration was as (sic) a result of the
shallowness of the channel."51
Pilot Ezzar Solarzano Vasquez was assigned to pilot the
vessel Philippine Roxas as well as other vessels on the
Orinoco River due to his knowledge of the same. In his
experience as a pilot, he should have been aware of the
portions which are shallow and which are not. His
failure to determine the depth of the said river and his
decision to plod on his set course, in all probability,
caused damage to the vessel. Thus, we hold him as
negligent and liable for its grounding.
In the case of Homer Ramsdell Transportation
Company vs. La Compagnie Generale
Transatlantique, 182 U.S. 406, it was held that:
"x x x The master of a ship, and the owner also, is liable
for any injury done by the negligence of the crew
employed in the ship. The same doctrine will apply to
the case of a pilot employed by the master or owner, by
whose negligence any injury happens to a third person
or his property: as, for example, by a collision with
another ship, occasioned by his negligence. And it will
make no difference in the case that the pilot, if any is
employed, is required to be a licensed pilot; provided
the master is at liberty to take a pilot, or not, at his
pleasure, for in such a case the master acts voluntarily,
although he is necessarily required to select from a
particular class. On the other hand, if it is compulsive
upon the master to take a pilot, and, a fortiori, if he
is bound to do so under penalty, then, and in such
case, neither he nor the owner will be liable for
injuries occasioned by the negligence of the pilot; for
in such a case the pilot cannot be deemed properly the
servant of the master or the owner, but is forced upon
them, and the maxim Qui facit per alium facit per se
does not apply." (Underscoring supplied)
Anent the river passage plan, we find that, while there
was none,52 the voyage has been sufficiently planned
and monitored as shown by the following actions
undertaken by the pilot, Ezzar Solarzano Vasquez, to
wit: contacting the radio marina via VHF for
information regarding the channel, river traffic,53
soundings of the river, depth of the river, bulletin on the
buoys.54 The officer on watch also monitored the
voyage.55
We, therefore, do not find the absence of a river passage
plan to be the cause for the grounding of the vessel.
The doctrine of res ipsa loquitur does not apply to the
case at bar because the circumstances surrounding the
injury do not clearly indicate negligence on the part of
the private respondent. For the said doctrine to apply,
the following conditions must be met: (1) the accident
was of such character as to warrant an inference that it
would not have happened except for defendant's
negligence; (2) the accident must have been caused by
an agency or instrumentality within the exclusive
management or control of the person charged with the
negligence complained of; and (3) the accident must not
have been due to any voluntary action or contribution
on the part of the person injured.56
As has already been held above, there was a temporary
shift of control over the ship from the master of the
vessel to the pilot on a compulsory pilotage channel.
Thus, two of the requisites necessary for the doctrine to
apply, i.e., negligence and control, to render the
respondent liable, are absent.
As to the claim that the ship was unseaworthy, we hold
that it is not.
The Lloyd’s Register of Shipping confirmed the
vessel’s seaworthiness in a Confirmation of Class
issued on February 16, 1988 by finding that "the above
named ship (Philippine Roxas) maintained the class
"+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8
Holds may be empty (CC) and +LMC" from 31/12/87
up until the time of casualty on or about 12/2/88."57
The same would not have been issued had not the vessel
been built according to the standards set by Lloyd's.
Samuel Lim, a marine surveyor, at Lloyd's Register of
Shipping testified thus:
"Q Now, in your opinion, as a surveyor, did top side
tank have any bearing at all to the seaworthiness of the
vessel?
"A Well, judging on this particular vessel, and also
basing on the class record of the vessel, wherein
recommendations were made on the top side tank, and
it was given sufficient time to be repaired, it means that
the vessel is fit to travel even with those defects on the
ship.
"COURT
What do you mean by that? You explain. The vessel is
fit to travel even with defects? Is that what you mean?
Explain.
"WITNESS
"A Yes, your Honor. Because the class society which
register (sic) is the third party looking into the condition
of the vessel and as far as their record states, the vessel
was class or maintained, and she is fit to travel during
that voyage."
"x x x
"ATTY. MISA
Before we proceed to other matter, will you kindly tell
us what is (sic) the 'class +100A1 Strengthened for Ore
Cargoes', mean?
"WITNESS
"A Plus 100A1 means that the vessel was built
according to Lloyd's rules and she is capable of carrying
ore bulk cargoes, but she is particularly capable of
carrying Ore Cargoes with No. 2 and No. 8 holds
empty.
"x x x
"COURT
The vessel is classed, meaning?
"A Meaning she is fit to travel, your Honor, or
seaworthy."58
It is not required that the vessel must be perfect. To be
seaworthy, a ship must be reasonably fit to perform the
services, and to encounter the ordinary perils of the
voyage, contemplated by the parties to the policy.59
As further evidence that the vessel was seaworthy, we
quote the deposition of pilot Vasquez:
"Q Was there any instance when your orders or
directions were not complied with because of the
inability of the vessel to do so?
"A No.
"Q. Was the vessel able to respond to all your
commands and orders?
"A. The vessel was navigating normally."60
Eduardo P. Mata, Second Engineer of the Philippine
Roxas submitted an accident report wherein he stated
that on February 11, 1988, he checked and prepared the
main engine, machineries and all other auxiliaries and
found them all to be in good running condition and
ready for maneuvering. That same day the main engine,
bridge and engine telegraph and steering gear motor
were also tested.61 Engineer Mata also prepared the
fuel for consumption for maneuvering and checked the
engine generators.62
Finally, we find the award of attorney’s fee
justified.1âwphi1
Article 2208 of the New Civil Code provides that:
"Art. 2208. In the absence of stipulation, attorney's fees
and expenses of litigation, other than judicial costs,
cannot be recovered, except:
"x x x
"(11) In any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation
should be recovered.
"x x x"
Due to the unfounded filing of this case, the private
respondent was unjustifiably forced to litigate, thus the
award of attorney’s fees was proper.
WHEREFORE, IN VIEW OF THE FOREGOING,
the petition is DENIED and the decision of the Court of
Appeals in CA G.R. CV No. 36821 is AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and De
leon, Jr., JJ., concur.
8) Edi-Staff Builders Int’l vs. NLRC October 26,
2007,
G.R. No. 145587 October 26, 2007
EDI-STAFFBUILDERS INTERNATIONAL, INC.,
petitioner,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and ELEAZAR S. GRAN,
respondents.
The Case
This Petition for Review on Certiorari1 seeks to set
aside the October 18, 2000 Decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 56120 which
affirmed the January 15, 1999 Decision3 and September
30, 1999 Resolution4 rendered by the National Labor
Relations Commission (NLRC) (Third Division) in
POEA ADJ (L) 94-06-2194, ordering Expertise Search
International (ESI), EDI-Staffbuilders International,
Inc. (EDI), and Omar Ahmed Ali Bin Bechr Est. (OAB)
jointly and severally to pay Eleazar S. Gran (Gran) the
amount of USD 16,150.00 as unpaid salaries.
The Facts
Petitioner EDI is a corporation engaged in recruitment
and placement of Overseas Filipino Workers (OFWs).5
ESI is another recruitment agency which collaborated
with EDI to process the documentation and deployment
of private respondent to Saudi Arabia.
Private respondent Gran was an OFW recruited by EDI,
and deployed by ESI to work for OAB, in Riyadh,
Kingdom of Saudi Arabia.6
It appears that OAB asked EDI through its October 3,
1993 letter for curricula vitae of qualified applicants for
the position of "Computer Specialist."7 In a facsimile
transmission dated November 29, 1993, OAB informed
EDI that, from the applicants' curricula vitae submitted
to it for evaluation, it selected Gran for the position of
"Computer Specialist." The faxed letter also stated that
if Gran agrees to the terms and conditions of
employment contained in it, one of which was a
monthly salary of SR (Saudi Riyal) 2,250.00 (USD
600.00), EDI may arrange for Gran's immediate
dispatch.8
After accepting OAB's offer of employment, Gran
signed an employment contract9 that granted him a
monthly salary of USD 850.00 for a period of two
years. Gran was then deployed to Riyadh, Kingdom of
Saudi Arabia on February 7, 1994.
Upon arrival in Riyadh, Gran questioned the
discrepancy in his monthly salary—his employment
contract stated USD 850.00; while his Philippine
Overseas Employment Agency (POEA) Information
Sheet indicated USD 600.00 only. However, through
the assistance of the EDI office in Riyadh, OAB agreed
to pay Gran USD 850.00 a month.10
After Gran had been working for about five months for
OAB, his employment was terminated through OAB's
July 9, 1994 letter,11 on the following grounds:
1. Non-compliance to contract requirements by the
recruitment agency primarily on your salary and
contract duration.
2. Non-compliance to pre-qualification requirements
by the recruitment agency[,] vide OAB letter ref. F-
5751-93, dated October 3, 1993.12
3. Insubordination or disobedience to Top
Management Order and/or instructions (non-submittal
of daily activity reports despite several instructions).
On July 11, 1994, Gran received from OAB the total
amount of SR 2,948.00 representing his final pay, and
on the same day, he executed a Declaration13 releasing
OAB from any financial obligation or otherwise,
towards him.
After his arrival in the Philippines, Gran instituted a
complaint, on July 21, 1994, against ESI/EDI, OAB,
Country Bankers Insurance Corporation, and Western
Guaranty Corporation with the NLRC, National Capital
Region, Quezon City, which was docketed as POEA
ADJ (L) 94-06-2194 for underpayment of
wages/salaries and illegal dismissal.
The Ruling of the Labor Arbiter
In his February 10, 1998 Decision,14 Labor Arbiter
Manuel R. Caday, to whom Gran's case was assigned,
ruled that there was neither underpayment nor illegal
dismissal.
The Labor Arbiter reasoned that there was no
underpayment of salaries since according to the POEA-
Overseas Contract Worker (OCW) Information Sheet,
Gran's monthly salary was USD 600.00, and in his
Confirmation of Appointment as Computer Specialist,
his monthly basic salary was fixed at SR 2,500.00,
which was equivalent to USD 600.00.
Arbiter Caday also cited the Declaration executed by
Gran, to justify that Gran had no claim for unpaid
salaries or wages against OAB.
With regard to the issue of illegal dismissal, the Labor
Arbiter found that Gran failed to refute EDI's
allegations; namely, (1) that Gran did not submit a
single activity report of his daily activity as dictated by
company policy; (2) that he was not qualified for the
job as computer specialist due to his insufficient
knowledge in programming and lack of knowledge in
ACAD system; (3) that Gran refused to follow
management's instruction for him to gain more
knowledge of the job to prove his worth as computer
specialist; (4) that Gran's employment contract had
never been substituted; (5) and that Gran was paid a
monthly salary of USD 850.00, and USD 350.00
monthly as food allowance.
Accordingly, the Labor Arbiter decided that Gran was
validly dismissed from his work due to insubordination,
disobedience, and his failure to submit daily activity
reports.
Thus, on February 10, 1998, Arbiter Caday dismissed
Gran's complaint for lack of merit.
Dissatisfied, Gran filed an Appeal15 on April 6, 1998
with the NLRC, Third Division. However, it appears
from the records that Gran failed to furnish EDI with a
copy of his Appeal Memorandum.
The Ruling of the NLRC
The NLRC held that EDI's seemingly harmless transfer
of Gran's contract to ESI is actually "reprocessing,"
which is a prohibited transaction under Article 34 (b) of
the Labor Code. This scheme constituted
misrepresentation through the conspiracy between EDI
and ESI in misleading Gran and even POEA of the
actual terms and conditions of the OFW's employment.
In addition, it was found that Gran did not commit any
act that constituted a legal ground for dismissal. The
alleged non-compliance with contractual stipulations
relating to Gran's salary and contract duration, and the
absence of pre-qualification requirements cannot be
attributed to Gran but to EDI, which dealt directly with
OAB. In addition, the charge of insubordination was
not substantiated, and Gran was not even afforded the
required notice and investigation on his alleged
offenses.
Thus, the NLRC reversed the Labor Arbiter's Decision
and rendered a new one, the dispositive portion of
which reads:
WHEREFORE, the assailed decision is SET ASIDE.
Respondents Expertise Search International, Inc., EDI
Staffbuilders Int'l., Inc. and Omar Ahmed Ali Bin
Bechr Est. (OAB) are hereby ordered jointly and
severally liable to pay the complainant Eleazar Gran
the Philippine peso equivalent at the time of actual
payment of SIXTEEN THOUSAND ONE
HUNDRED FIFTY US DOLLARS (US$16,150.00)
representing his salaries for the unexpired portion of
his contract.
SO ORDERED.16
Gran then filed a Motion for Execution of Judgment17
on March 29, 1999 with the NLRC and petitioner
receiving a copy of this motion on the same date.18
To prevent the execution, petitioner filed an
Opposition19 to Gran's motion arguing that the Writ of
Execution cannot issue because it was not notified of
the appellate proceedings before the NLRC and was not
given a copy of the memorandum of appeal nor any
opportunity to participate in the appeal.
Seeing that the NLRC did not act on Gran's motion after
EDI had filed its Opposition, petitioner filed, on August
26, 1999, a Motion for Reconsideration of the NLRC
Decision after receiving a copy of the Decision on
August 16, 1999.20
The NLRC then issued a Resolution21 denying
petitioner's Motion for Reconsideration, ratiocinating
that the issues and arguments raised in the motion "had
already been amply discussed, considered, and ruled
upon" in the Decision, and that there was "no cogent
reason or patent or palpable error that warrant any
disturbance thereof."
Unconvinced of the NLRC's reasoning, EDI filed a
Petition for Certiorari before the CA. Petitioner claimed
in its petition that the NLRC committed grave abuse of
discretion in giving due course to the appeal despite
Gran's failure to perfect the appeal.
The Ruling of the Court of Appeals
The CA subsequently ruled on the procedural and
substantive issues of EDI's petition.
On the procedural issue, the appellate court held that
"Gran's failure to furnish a copy of his appeal
memorandum [to EDI was] a mere formal lapse, an
excusable neglect and not a jurisdictional defect which
would justify the dismissal of his appeal."22 The court
also held that petitioner EDI failed to prove that private
respondent was terminated for a valid cause and in
accordance with due process; and that Gran's
Declaration releasing OAB from any monetary
obligation had no force and effect. The appellate court
ratiocinated that EDI had the burden of proving Gran's
incompetence; however, other than the termination
letter, no evidence was presented to show how and why
Gran was considered to be incompetent. The court held
that since the law requires the recruitment agencies to
subject OFWs to trade tests before deployment, Gran
must have been competent and qualified; otherwise, he
would not have been hired and deployed abroad.
As for the charge of insubordination and disobedience
due to Gran's failure to submit a "Daily Activity
Report," the appellate court found that EDI failed to
show that the submission of the "Daily Activity Report"
was a part of Gran's duty or the company's policy. The
court also held that even if Gran was guilty of
insubordination, he should have just been suspended or
reprimanded, but not dismissed.
The CA also held that Gran was not afforded due
process, given that OAB did not abide by the twin
notice requirement. The court found that Gran was
terminated on the same day he received the termination
letter, without having been apprised of the bases of his
dismissal or afforded an opportunity to explain his side.
Finally, the CA held that the Declaration signed by
Gran did not bar him from demanding benefits to which
he was entitled. The appellate court found that the
Declaration was in the form of a quitclaim, and as such
is frowned upon as contrary to public policy especially
where the monetary consideration given in the
Declaration was very much less than what he was
legally entitled to—his backwages amounting to USD
16,150.00.
As a result of these findings, on October 18, 2000, the
appellate court denied the petition to set aside the
NLRC Decision.
Hence, this instant petition is before the Court.
The Issues
Petitioner raises the following issues for our
consideration:
I. WHETHER THE FAILURE OF GRAN TO
FURNISH A COPY OF HIS APPEAL
MEMORANDUM TO PETITIONER EDI WOULD
CONSTITUTE A JURISDICTIONAL DEFECT
AND A DEPRIVATION OF PETITIONER EDI'S
RIGHT TO DUE PROCESS AS WOULD JUSTIFY
THE DISMISSAL OF GRAN'S APPEAL.
II. WHETHER PETITIONER EDI HAS
ESTABLISHED BY WAY OF SUBSTANTIAL
EVIDENCE THAT GRAN'S TERMINATION WAS
JUSTIFIABLE BY REASON OF INCOMPETENCE.
COROLLARY HERETO, WHETHER THE PRIETO
VS. NLRC RULING, AS APPLIED BY THE
COURT OF APPEALS, IS APPLICABLE IN THE
INSTANT CASE.
III. WHETHER PETITIONER HAS ESTABLISHED
BY WAY OF SUBSTANTIAL EVIDENCE THAT
GRAN'S TERMINATION WAS JUSTIFIABLE BY
REASON OF INSUBORDINATION AND
DISOBEDIENCE.
IV. WHETHER GRAN WAS AFFORDED DUE
PROCESS PRIOR TO TERMINATION.
V. WHETHER GRAN IS ENTITLED TO
BACKWAGES FOR THE UNEXPIRED PORTION
OF HIS CONTRACT.23
The Court's Ruling
The petition lacks merit except with respect to Gran's
failure to furnish EDI with his Appeal Memorandum
filed with the NLRC.
First Issue: NLRC's Duty is to Require Respondent
to Provide Petitioner a Copy of the Appeal
Petitioner EDI claims that Gran's failure to furnish it a
copy of the Appeal Memorandum constitutes a
jurisdictional defect and a deprivation of due process
that would warrant a rejection of the appeal.
This position is devoid of merit.
In a catena of cases, it was ruled that failure of
appellant to furnish a copy of the appeal to the
adverse party is not fatal to the appeal.
In Estrada v. National Labor Relations Commission,24
this Court set aside the order of the NLRC which
dismissed an appeal on the sole ground that the
appellant did not furnish the appellee a memorandum
of appeal contrary to the requirements of Article 223 of
the New Labor Code and Section 9, Rule XIII of its
Implementing Rules and Regulations.
Also, in J.D. Magpayo Customs Brokerage Corp. v.
NLRC, the order of dismissal of an appeal to the NLRC
based on the ground that "there is no showing
whatsoever that a copy of the appeal was served by the
appellant on the appellee"25 was annulled. The Court
ratiocinated as follows:
The failure to give a copy of the appeal to the adverse
party was a mere formal lapse, an excusable neglect.
Time and again We have acted on petitions to review
decisions of the Court of Appeals even in the absence
of proof of service of a copy thereof to the Court of
Appeals as required by Section 1 of Rule 45, Rules of
Court. We act on the petitions and simply require
the petitioners to comply with the rule.26 (Emphasis
supplied.)
The J.D. Magpayo ruling was reiterated in Carnation
Philippines Employees Labor Union-FFW v. National
Labor Relations Commission,27 Pagdonsalan v.
NLRC,28 and in Sunrise Manning Agency, Inc. v.
NLRC.29
Thus, the doctrine that evolved from these cases is that
failure to furnish the adverse party with a copy of the
appeal is treated only as a formal lapse, an excusable
neglect, and hence, not a jurisdictional defect.
Accordingly, in such a situation, the appeal should not
be dismissed; however, it should not be given due
course either. As enunciated in J.D. Magpayo, the duty
that is imposed on the NLRC, in such a case, is to
require the appellant to comply with the rule that
the opposing party should be provided with a copy
of the appeal memorandum.
While Gran's failure to furnish EDI with a copy of the
Appeal Memorandum is excusable, the abject failure of
the NLRC to order Gran to furnish EDI with the Appeal
Memorandum constitutes grave abuse of discretion.
The records reveal that the NLRC discovered that Gran
failed to furnish EDI a copy of the Appeal
Memorandum. The NLRC then ordered Gran to present
proof of service. In compliance with the order, Gran
submitted a copy of Camp Crame Post Office's list of
mail/parcels sent on April 7, 1998.30 The post office's
list shows that private respondent Gran sent two pieces
of mail on the same date: one addressed to a certain Dan
O. de Guzman of Legaspi Village, Makati; and the
other appears to be addressed to Neil B. Garcia (or
Gran),31 of Ermita, Manila—both of whom are not
connected with petitioner.
This mailing list, however, is not a conclusive proof
that EDI indeed received a copy of the Appeal
Memorandum.
Sec. 5 of the NLRC Rules of Procedure (1990) provides
for the proof and completeness of service in
proceedings before the NLRC:
Section 5.32 Proof and completeness of service.—The
return is prima facie proof of the facts indicated therein.
Service by registered mail is complete upon receipt
by the addressee or his agent; but if the addressee fails
to claim his mail from the post office within five (5)
days from the date of first notice of the postmaster,
service shall take effect after such time. (Emphasis
supplied.)
Hence, if the service is done through registered mail, it
is only deemed complete when the addressee or his
agent received the mail or after five (5) days from the
date of first notice of the postmaster. However, the
NLRC Rules do not state what would constitute proper
proof of service.
Sec. 13, Rule 13 of the Rules of Court, provides for
proofs of service:
Section 13. Proof of service.—Proof of personal
service shall consist of a written admission of the party
served or the official return of the server, or the
affidavit of the party serving, containing a full
statement of the date, place and manner of service. If
the service is by ordinary mail, proof thereof shall
consist of an affidavit of the person mailing of facts
showing compliance with section 7 of this Rule. If
service is made by registered mail, proof shall be
made by such affidavit and registry receipt issued
by the mailing office. The registry return card shall
be filed immediately upon its receipt by the sender,
or in lieu thereof the unclaimed letter together with
the certified or sworn copy of the notice given by
the postmaster to the addressee (emphasis supplied).
Based on the foregoing provision, it is obvious that the
list submitted by Gran is not conclusive proof that he
had served a copy of his appeal memorandum to EDI,
nor is it conclusive proof that EDI received its copy of
the Appeal Memorandum. He should have submitted an
affidavit proving that he mailed the Appeal
Memorandum together with the registry receipt issued
by the post office; afterwards, Gran should have
immediately filed the registry return card.
Hence, after seeing that Gran failed to attach the proof
of service, the NLRC should not have simply accepted
the post office's list of mail and parcels sent; but it
should have required Gran to properly furnish the
opposing parties with copies of his Appeal
Memorandum as prescribed in J.D. Magpayo and
the other cases. The NLRC should not have proceeded
with the adjudication of the case, as this constitutes
grave abuse of discretion.
The glaring failure of NLRC to ensure that Gran should
have furnished petitioner EDI a copy of the Appeal
Memorandum before rendering judgment reversing the
dismissal of Gran's complaint constitutes an evasion of
the pertinent NLRC Rules and established
jurisprudence. Worse, this failure deprived EDI of
procedural due process guaranteed by the Constitution
which can serve as basis for the nullification of
proceedings in the appeal before the NLRC. One can
only surmise the shock and dismay that OAB, EDI, and
ESI experienced when they thought that the dismissal
of Gran's complaint became final, only to receive a
copy of Gran's Motion for Execution of Judgment
which also informed them that Gran had obtained a
favorable NLRC Decision. This is not level playing
field and absolutely unfair and discriminatory against
the employer and the job recruiters. The rights of the
employers to procedural due process cannot be
cavalierly disregarded for they too have rights assured
under the Constitution.
However, instead of annulling the dispositions of the
NLRC and remanding the case for further proceedings
we will resolve the petition based on the records before
us to avoid a protracted litigation.33
The second and third issues have a common matter—
whether there was just cause for Gran's dismissal—
hence, they will be discussed jointly.
Second and Third Issues: Whether Gran's dismissal
is justifiable by reason of incompetence,
insubordination, and disobedience
In cases involving OFWs, the rights and obligations
among and between the OFW, the local recruiter/agent,
and the foreign employer/principal are governed by the
employment contract. A contract freely entered into is
considered law between the parties; and hence, should
be respected. In formulating the contract, the 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.34
In the present case, the employment contract signed by
Gran specifically states that Saudi Labor Laws will
govern matters not provided for in the contract (e.g.
specific causes for termination, termination procedures,
etc.). Being the law intended by the parties (lex loci
intentiones) to apply to the contract, Saudi Labor Laws
should govern all matters relating to the termination of
the employment of Gran.
In international law, the party who wants to have a
foreign law applied to a dispute or case has the burden
of proving the foreign law. The foreign law is treated as
a question of fact to be properly pleaded and proved as
the judge or labor arbiter cannot take judicial notice of
a foreign law. He is presumed to know only domestic
or forum law.35
Unfortunately for petitioner, it did not prove the
pertinent Saudi laws on the matter; thus, the
International Law doctrine of presumed-identity
approach or processual presumption comes into play.36
Where a foreign law is not pleaded or, even if pleaded,
is not proved, the presumption is that foreign law is the
same as ours.37 Thus, we apply Philippine labor laws in
determining the issues presented before us.
Petitioner EDI claims that it had proven that Gran was
legally dismissed due to incompetence and
insubordination or disobedience.
This claim has no merit.
In illegal dismissal cases, it has been established by
Philippine law and jurisprudence that the employer
should prove that the dismissal of employees or
personnel is legal and just.
Section 33 of Article 277 of the Labor Code38 states
that:
ART. 277. MISCELLANEOUS PROVISIONS39
(b) Subject to the constitutional right of workers to
security of tenure and their right to be protected against
dismissal except for a just and authorized cause and
without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a
written notice containing a statement of the causes for
termination and shall afford the latter ample
opportunity to be heard and to defend himself with the
assistance of his representative if he so desires in
accordance with company rules and regulations
promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision
taken by the employer shall be without prejudice to the
right of the workers to contest the validity or legality of
his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission.
The burden of proving that the termination was for
a valid or authorized cause shall rest on the
employer. x x x
In many cases, it has been held that in termination
disputes or illegal dismissal cases, the employer has the
burden of proving that the dismissal is for just and valid
causes; and failure to do so would necessarily mean that
the dismissal was not justified and therefore illegal.40
Taking into account the character of the charges and the
penalty meted to an employee, the employer is bound
to adduce clear, accurate, consistent, and convincing
evidence to prove that the dismissal is valid and legal.41
This is consistent with the principle of security of
tenure as guaranteed by the Constitution and reinforced
by Article 277 (b) of the Labor Code of the
Philippines.42
In the instant case, petitioner claims that private
respondent Gran was validly dismissed for just cause,
due to incompetence and insubordination or
disobedience. To prove its allegations, EDI submitted
two letters as evidence. The first is the July 9, 1994
termination letter,43 addressed to Gran, from Andrea E.
Nicolaou, Managing Director of OAB. The second is
an unsigned April 11, 1995 letter44 from OAB
addressed to EDI and ESI, which outlined the reasons
why OAB had terminated Gran's employment.
Petitioner claims that Gran was incompetent for the
Computer Specialist position because he had
"insufficient knowledge in programming and zero
knowledge of [the] ACAD system."45 Petitioner also
claims that Gran was justifiably dismissed due to
insubordination or disobedience because he continually
failed to submit the required "Daily Activity Reports."46
However, other than the abovementioned letters, no
other evidence was presented to show how and why
Gran was considered incompetent, insubordinate, or
disobedient. Petitioner EDI had clearly failed to
overcome the burden of proving that Gran was validly
dismissed.
Petitioner's imputation of incompetence on private
respondent due to his "insufficient knowledge in
programming and zero knowledge of the ACAD
system" based only on the above mentioned letters,
without any other evidence, cannot be given credence.
An allegation of incompetence should have a factual
foundation. Incompetence may be shown by weighing
it against a standard, benchmark, or criterion. However,
EDI failed to establish any such bases to show how
petitioner found Gran incompetent.
In addition, the elements that must concur for the
charge of insubordination or willful disobedience to
prosper were not present.
In Micro Sales Operation Network v. NLRC, we held
that:
For willful disobedience to be a valid cause for
dismissal, the following twin elements must concur: (1)
the employee's assailed conduct must have been willful,
that is, characterized by a wrongful and perverse
attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee and
must pertain to the duties which he had been engaged
to discharge.47
EDI failed to discharge the burden of proving Gran's
insubordination or willful disobedience. As indicated
by the second requirement provided for in Micro Sales
Operation Network, in order to justify willful
disobedience, we must determine whether the order
violated by the employee is reasonable, lawful, made
known to the employee, and pertains to the duties which
he had been engaged to discharge. In the case at bar,
petitioner failed to show that the order of the company
which was violated—the submission of "Daily Activity
Reports"—was part of Gran's duties as a Computer
Specialist. Before the Labor Arbiter, EDI should have
provided a copy of the company policy, Gran's job
description, or any other document that would show
that the "Daily Activity Reports" were required for
submission by the employees, more particularly by a
Computer Specialist.
Even though EDI and/or ESI were merely the local
employment or recruitment agencies and not the
foreign employer, they should have adduced additional
evidence to convincingly show that Gran's employment
was validly and legally terminated. The burden
devolves not only upon the foreign-based employer but
also on the employment or recruitment agency for the
latter is not only an agent of the former, but is also
solidarily liable with the foreign principal for any
claims or liabilities arising from the dismissal of the
worker.48
Thus, petitioner failed to prove that Gran was
justifiably dismissed due to incompetence,
insubordination, or willful disobedience.
Petitioner also raised the issue that Prieto v. NLRC,49 as
used by the CA in its Decision, is not applicable to the
present case.
In Prieto, this Court ruled that "[i]t is presumed that
before their deployment, the petitioners were subjected
to trade tests required by law to be conducted by the
recruiting agency to insure employment of only
technically qualified workers for the foreign
principal."50 The CA, using the ruling in the said case,
ruled that Gran must have passed the test; otherwise, he
would not have been hired. Therefore, EDI was at fault
when it deployed Gran who was allegedly
"incompetent" for the job.
According to petitioner, the Prieto ruling is not
applicable because in the case at hand, Gran
misrepresented himself in his curriculum vitae as a
Computer Specialist; thus, he was not qualified for the
job for which he was hired.
We disagree.
The CA is correct in applying Prieto. The purpose of
the required trade test is to weed out incompetent
applicants from the pool of available workers. It is
supposed to reveal applicants with false educational
backgrounds, and expose bogus qualifications. Since
EDI deployed Gran to Riyadh, it can be presumed that
Gran had passed the required trade test and that Gran is
qualified for the job. Even if there was no objective
trade test done by EDI, it was still EDI's responsibility
to subject Gran to a trade test; and its failure to do so
only weakened its position but should not in any way
prejudice Gran. In any case, the issue is rendered moot
and academic because Gran's incompetency is
unproved.
Fourth Issue: Gran was not Afforded Due Process
As discussed earlier, in the absence of proof of Saudi
laws, Philippine Labor laws and regulations shall
govern the relationship between Gran and EDI. Thus,
our laws and rules on the requisites of due process
relating to termination of employment shall apply.
Petitioner EDI claims that private respondent Gran was
afforded due process, since he was allowed to work and
improve his capabilities for five months prior to his
termination.51 EDI also claims that the requirements of
due process, as enunciated in Santos, Jr. v. NLRC,52 and
Malaya Shipping Services, Inc. v. NLRC,53 cited by the
CA in its Decision, were properly observed in the
present case.
This position is untenable.
In Agabon v. NLRC,54 this Court held that:
Procedurally, (1) if the dismissal is based on a just
cause under Article 282, the employer must give the
employee two written notices and a hearing or
opportunity to be heard if requested by the employee
before terminating the employment: a notice
specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing
or opportunity to be heard, a notice of the decision to
dismiss; and (2) if the dismissal is based on authorized
causes under Articles 283 and 284, the employer must
give the employee and the Department of Labor and
Employment written notices 30 days prior to the
effectivity of his separation.
Under the twin notice requirement, the employees must
be given two (2) notices before their employment could
be terminated: (1) a first notice to apprise the
employees of their fault, and (2) a second notice to
communicate to the employees that their employment
is being terminated. In between the first and second
notice, the employees should be given a hearing or
opportunity to defend themselves personally or by
counsel of their choice.55
A careful examination of the records revealed that,
indeed, OAB's manner of dismissing Gran fell short of
the two notice requirement. While it furnished Gran the
written notice informing him of his dismissal, it failed
to furnish Gran the written notice apprising him of the
charges against him, as prescribed by the Labor Code.56
Consequently, he was denied the opportunity to
respond to said notice. In addition, OAB did not
schedule a hearing or conference with Gran to defend
himself and adduce evidence in support of his defenses.
Moreover, the July 9, 1994 termination letter was
effective on the same day. This shows that OAB had
already condemned Gran to dismissal, even before
Gran was furnished the termination letter. It should also
be pointed out that OAB failed to give Gran the chance
to be heard and to defend himself with the assistance of
a representative in accordance with Article 277 of the
Labor Code. Clearly, there was no intention to provide
Gran with due process. Summing up, Gran was notified
and his employment arbitrarily terminated on the same
day, through the same letter, and for unjustified
grounds. Obviously, Gran was not afforded due
process.
Pursuant to the doctrine laid down in Agabon,57 an
employer is liable to pay nominal damages as
indemnity for violating the employee's right to statutory
due process. Since OAB was in breach of the due
process requirements under the Labor Code and its
regulations, OAB, ESI, and EDI, jointly and solidarily,
are liable to Gran in the amount of PhP 30,000.00 as
indemnity.
Fifth and Last Issue: Gran is Entitled to Backwages
We reiterate the rule that with regard to employees
hired for a fixed period of employment, in cases arising
before the effectivity of R.A. No. 804258 (Migrant
Workers and Overseas Filipinos Act) on August 25,
1995, that when the contract is for a fixed term and the
employees are dismissed without just cause, they are
entitled to the payment of their salaries corresponding
to the unexpired portion of their contract.59 On the other
hand, for cases arising after the effectivity of R.A. No.
8042, when the termination of employment is without
just, valid or authorized cause as defined by law or
contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest of
twelve percent (12%) per annum, plus his salaries for
the unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term
whichever is less.60
In the present case, the employment contract provides
that the employment contract shall be valid for a period
of two (2) years from the date the employee starts to
work with the employer.61 Gran arrived in Riyadh,
Saudi Arabia and started to work on February 7, 1994;62
hence, his employment contract is until February 7,
1996. Since he was illegally dismissed on July 9, 1994,
before the effectivity of R.A. No. 8042, he is therefore
entitled to backwages corresponding to the unexpired
portion of his contract, which was equivalent to USD
16,150.
Petitioner EDI questions the legality of the award of
backwages and mainly relies on the Declaration which
is claimed to have been freely and voluntarily executed
by Gran. The relevant portions of the Declaration are as
follows:
I, ELEAZAR GRAN (COMPUTER SPECIALIST)
AFTER RECEIVING MY FINAL SETTLEMENT
ON THIS DATE THE AMOUNT OF:
S.R. 2,948.00 (SAUDI RIYALS TWO THOUSAND
NINE
HUNDRED FORTY EIGHT ONLY)
REPRESENTING COMPLETE PAYMENT
(COMPENSATION) FOR THE SERVICES I
RENDERED TO OAB ESTABLISHMENT.
I HEREBY DECLARE THAT OAB EST. HAS NO
FINANCIAL OBLIGATION IN MY FAVOUR
AFTER RECEIVING THE ABOVE MENTIONED
AMOUNT IN CASH.
I STATE FURTHER THAT OAB EST. HAS NO
OBLIGATION TOWARDS ME IN WHATEVER
FORM.
I ATTEST TO THE TRUTHFULNESS OF THIS
STATEMENT BY AFFIXING MY SIGNATURE
VOLUNTARILY.
SIGNED.
ELEAZAR GRAN
Courts must undertake a meticulous and rigorous
review of quitclaims or waivers, more particularly those
executed by employees. This requirement was clearly
articulated by Chief Justice Artemio V. Panganiban in
Land and Housing Development Corporation v.
Esquillo:
Quitclaims, releases and other waivers of benefits
granted by laws or contracts in favor of workers should
be strictly scrutinized to protect the weak and the
disadvantaged. The waivers should be carefully
examined, in regard not only to the words and
terms used, but also the factual circumstances
under which they have been executed.63 (Emphasis
supplied.)
This Court had also outlined in Land and Housing
Development Corporation, citing Periquet v. NLRC,64
the parameters for valid compromise agreements,
waivers, and quitclaims:
Not all waivers and quitclaims are invalid as against
public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement, it is
binding on the parties and may not later be disowned
simply because of a change of mind. It is only where
there is clear proof that the waiver was wangled from
an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law
will step in to annul the questionable transaction. But
where it is shown that the person making the waiver
did so voluntarily, with full understanding of what
he was doing, and the consideration for the
quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking.
(Emphasis supplied.)
Is the waiver and quitclaim labeled a Declaration valid?
It is not.
The Court finds the waiver and quitclaim null and void
for the following reasons:
1. The salary paid to Gran upon his termination, in the
amount of SR 2,948.00, is unreasonably low. As
correctly pointed out by the court a quo, the payment of
SR 2,948.00 is even lower than his monthly salary of
SR 3,190.00 (USD 850.00). In addition, it is also very
much less than the USD 16,150.00 which is the amount
Gran is legally entitled to get from petitioner EDI as
backwages.
2. The Declaration reveals that the payment of SR
2,948.00 is actually the payment for Gran's salary for
the services he rendered to OAB as Computer
Specialist. If the Declaration is a quitclaim, then the
consideration should be much much more than the
monthly salary of SR 3,190.00 (USD 850.00)—
although possibly less than the estimated Gran's salaries
for the remaining duration of his contract and other
benefits as employee of OAB. A quitclaim will
understandably be lower than the sum total of the
amounts and benefits that can possibly be awarded to
employees or to be earned for the remainder of the
contract period since it is a compromise where the
employees will have to forfeit a certain portion of the
amounts they are claiming in exchange for the early
payment of a compromise amount. The court may
however step in when such amount is unconscionably
low or unreasonable although the employee voluntarily
agreed to it. In the case of the Declaration, the amount
is unreasonably small compared to the future wages of
Gran.
3. The factual circumstances surrounding the execution
of the Declaration would show that Gran did not
voluntarily and freely execute the document. Consider
the following chronology of events:
a. On July 9, 1994, Gran received a copy of his letter of
termination;
b. On July 10, 1994, Gran was instructed to depart
Saudi Arabia and required to pay his plane ticket;65
c. On July 11, 1994, he signed the Declaration;
d. On July 12, 1994, Gran departed from Riyadh, Saudi
Arabia; and
e. On July 21, 1994, Gran filed the Complaint before
the NLRC.
The foregoing events readily reveal that Gran was
"forced" to sign the Declaration and constrained to
receive the amount of SR 2,948.00 even if it was against
his will—since he was told on July 10, 1994 to leave
Riyadh on July 12, 1994. He had no other choice but to
sign the Declaration as he needed the amount of SR
2,948.00 for the payment of his ticket. He could have
entertained some apprehensions as to the status of his
stay or safety in Saudi Arabia if he would not sign the
quitclaim.
4. The court a quo is correct in its finding that the
Declaration is a contract of adhesion which should be
construed against the employer, OAB. An adhesion
contract is contrary to public policy as it leaves the
weaker party—the employee—in a "take-it-or-leave-it"
situation. Certainly, the employer is being unjust to the
employee as there is no meaningful choice on the part
of the employee while the terms are unreasonably
favorable to the employer.66
Thus, the Declaration purporting to be a quitclaim and
waiver is unenforceable under Philippine laws in the
absence of proof of the applicable law of Saudi Arabia.
In order to prevent disputes on the validity and
enforceability of quitclaims and waivers of employees
under Philippine laws, said agreements should contain
the following:
1. A fixed amount as full and final compromise
settlement;
2. The benefits of the employees if possible with the
corresponding amounts, which the employees are
giving up in consideration of the fixed compromise
amount;
3. A statement that the employer has clearly explained
to the employee in English, Filipino, or in the dialect
known to the employees—that by signing the waiver or
quitclaim, they are forfeiting or relinquishing their right
to receive the benefits which are due them under the
law; and
4. A statement that the employees signed and executed
the document voluntarily, and had fully understood the
contents of the document and that their consent was
freely given without any threat, violence, duress,
intimidation, or undue influence exerted on their
person.
It is advisable that the stipulations be made in English
and Tagalog or in the dialect known to the employee.
There should be two (2) witnesses to the execution of
the quitclaim who must also sign the quitclaim. The
document should be subscribed and sworn to under oath
preferably before any administering official of the
Department of Labor and Employment or its regional
office, the Bureau of Labor Relations, the NLRC or a
labor attaché in a foreign country. Such official shall
assist the parties regarding the execution of the
quitclaim and waiver.67 This compromise settlement
becomes final and binding under Article 227 of the
Labor Code which provides that:
[A]ny compromise settlement voluntarily agreed upon
with the assistance of the Bureau of Labor Relations or
the regional office of the DOLE, shall be final and
binding upon the parties and the NLRC or any court
"shall not assume jurisdiction over issues involved
therein except in case of non-compliance thereof or if
there is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or coercion.
It is made clear that the foregoing rules on quitclaim or
waiver shall apply only to labor contracts of OFWs in
the absence of proof of the laws of the foreign country
agreed upon to govern said contracts. Otherwise, the
foreign laws shall apply.
WHEREFORE, the petition is DENIED. The October
18, 2000 Decision in CA-G.R. SP No. 56120 of the
Court of Appeals affirming the January 15, 1999
Decision and September 30, 1999 Resolution of the
NLRC
is AFFIRMED with the MODIFICATION that
petitioner EDI-Staffbuilders International, Inc. shall
pay the amount of PhP 30,000.00 to respondent Gran as
nominal damages for non-compliance with statutory
due process.
No costs.
SO ORDERED.
Quisumbing, Carpio, Tinga, Nachura, JJ., concur.
9) Willamette Iron and Steel Works vs. Muzzal May
21, 1935
G.R. No. L-42538 May 21, 1935
WILLAMETTE IRON & STEEL WORKS,
plaintiff-appellee,
vs.
A.H. MUZZAL, defendant-appellant.
This is an appeal from a decision of the Court of First
Instance of Zamboanga, the dispositive part of which
reads:
In view of the considerations above stated, judgment
is hereby entered in favor of the plaintiff, ordering the
defendant, for the first cause of action, to pay to
plaintiff the sum of P2,837.34, with interest thereon at
the rate of 6 per cent per annum from March 11, 1929,
until paid, and to pay also the amount of P1,590.63, for
the second cause of action, with interest thereon at 7
per cent per annum from April 8, 1929, until paid. The
defendant is further ordered to pay the amount of P500
as reasonable attorney's fees in prosecuting this action,
and to pay the costs of these proceedings.
This case involves the liability of the defendant, a
former resident of the State of California, now residing
in the Philippine Islands, for obligations contracted by
a California corporation of which he was a stockholder
at the time said obligations were contracted with the
plaintiff-appellee in this case.
The section of the Civil Code of California under which
the plaintiff seeks to recover reads:
SEC. 322. Each stockholder of a corporation is
individually and personally liable for such proportion
of all its debts and liabilities contracted or incurred
during the time he was a stockholder as the amount of
stock or shares owned by him bears to the whole of the
subscribed capital stock or shares of the corporation.
Any creditor of the corporation may institute joint or
several actions against any of its stockholders, for the
proportion of his claim payable by each, and in such
action the court must (1) ascertain the proportion of the
claim or debt for which each defendant is liable, and
(2) a several judgment must be rendered against each,
in conformity therewith. If any stockholder pays his
proportion of any debt due from the corporation,
incurred while he was such stockholder, he is relieved
from any further personal liability for such debt, and if
an action has been brought against him upon such debt,
it must be dismissed, as to him, upon his paying the
costs, or such proportion thereof as may be properly
chargeable against him. The liability of each
stockholder is determined by the amount of stock or
shares owned by him at the time the debt or liability
was incurred; and such liability is not released by any
subsequent transfer of stock.
The defendant-appellant makes the following
assignments of error:
I. The lower court erred in holding that the defendant
was the holder of 1,432 shares of the capital stock of
the Meyer-Muzzal Company.
II. The lower court erred in finding that plaintiff has
proven the existence of the foreign law involved in this
action.
III. The lower court erred in enforcing the law of
California.
IV. The lower court erred in rendering judgment
against the defendant.
As to the first assignment of error the witness Stanley
H. Hermann, a certified public accountant, testified that
he knows that the Meyer-Muzzal Company is a
corporation and further testified as follows:
I became acquainted with the corporation by reason of
being employed by it in October, November and
December of 1929 as a certified public accountant and
auditor to personally examine the company's books of
account, stock and other records of the company for
the purpose of certifying, if possible, to the correctness
of a statement of the financial condition of the
company on March 31, 1929.
xxx xxx xxx
8. Please state, if you know, whether or not one A.H.
Muzzal was a stockholder of Meyer-Muzzal Company
on November 5, 1928 and December 22, 1928, and if
he was, please state the number and value of the shares
of capital stock of Meyer-Muzzal Company
subscribed and owned by said A.H. Muzzal on
November 5, 1928 and December 22, 1928?
A. Yes, Mr. A.H. Muzzal was a stockholder of the
Meyer-Muzzal Company on the dates specified.
Fourteen hundred thirty-three shares of the capital
stock of Meyer-Muzzal Company of the par value of
$10 each were subscribed and owned by said A.H.
Muzzal on November 5th, 1928 and on December
22nd, 1928, and said shares were issued to and
standing in the name of A. H. Muzzal on the books of
said company at said times.
9. If, by reason of the loss, destruction and/or
disappearance of the stock and other corporate records
of the Meyer-Muzzal Company since the time you had
occasion to examine them, you have been unable to
make reference thereto in answering the questions
asked of you in this deposition, please answer each and
all of said questions by reference to any documents or
working sheets which you may be prepared upon the
occasion of your examining and/or auditing the books
of account, stock and other records of the Meyer-
Muzzal Company.
A. By reference to my working papers which I made
at the time I examined the books of account and stock
records of Meyer-Muzzal Company in October,
November, December, 1929, and which working
papers are in my possession, I find and can state
accordingly that these working papers show what the
stock and other records of said Meyer-Muzzal
Company recorded in regard to the matters contained
in questions No. 6, No. 7 and No. 8 and I can state
accordingly from my examination of said records and
by reference to my working papers that I know who
the stockholders of Meyer-Muzzal company were; that
the amount of the subscribed capital stock of said
Meyer-Muzzal Company on said dates was 5,000
shares of the par value of $10 each, and that A.H.
Muzzal was a stockholder of the Meyer-Muzzal
Company on the dates specified and that fourteen
hundred thirty-three shares of the capital stock of
Meyer-Muzzal Company of the par value of $10 each
were subscribed and owned by A.H. Muzzal on
November 5, 1928 and on December 22nd, 1928 and
said shares were issued to and standing in the name of
A.H. Muzzal on the books of said company at said
times.
The above sufficiently establishes the fact that the
defendant was the owner of 1,433 shares of stock of the
corporation Meyer-Muzzal Company when it
contracted the obligations alleged in the complaint.
As to the second assignment of error Mr. Arthur W.
Bolton, an attorney-at-law of San Francisco, California,
since the year 1918, under oath, quoted verbatim
section 322 of the California Civil Code and stated that
said section was in force at the time the obligations of
the defendant to the plaintiff were incurred, i. e., on
November 5, 1928 and December 22, 1928. This
evidence sufficiently established the fact that the
section in question was the law of the State of
California on the above dates. A reading of sections 300
and 301 of our Code of Civil Procedure will convince
one that these sections do not exclude the presentation
of other competent evidence to prove the existence of a
foreign law.
"The foreign law is a matter of fact ... You ask the
witness what the law is; he may from his recollection,
or on producing and referring to books, say what it is."
(Lord Campbell concurring in an opinion of Lord Chief
Justice Denman in a well known English case where a
witness was called upon to prove the Roman laws of
marriage and was permitted to testify, though he
referred to a book containing the decrees of the Council
of Trent as controlling, Jones on Evidence, Second
Edition, Volume 4, pages 3148-3152.) Aside from the
testimony of Attorney Bolton Ragland's Annotated
Civil Code of California was presented as evidence.
This book contains that State's Civil Code as adopted
March 21, 1872, with the subsequent official statute
amendments to and including the year 1929.
In the third and fourth assignments of error the
appellant argues that since the law of California, as to
the liability of stockholders of a corporation, is different
from and inconsistent with the Philippine Corporation
Law the courts here should not impose liability
provided in that law upon a resident of these Islands
who is a stockholder of a California corporation. The
herein defendant is chargeable with notice of the law of
California as to the liability of stockholders for debt of
a corporation proportionate to their stock holdings, in
view of the fact that he was one of the incorporators of
the Meyer-Muzzal Company in the year 1924 and was
still a stockholder in that company in the year 1928.
Exhibit 10 of the plaintiff is a certified company of the
articles of incorporation of Meyer-Muzzal Company in
which it appears that that company was incorporated on
August 22, 1924, and that the incorporators were A.H.
Muzzal, Leo W. Meyer and James Rolph, Jr., "all of
whom are residents and citizens of the State of
California." The defendant cannot now escape liability
by alleging that the California law is unjust and
different from the inconsistent with the Philippine
Corporation Law.
The judgment of the trial court is affirmed with costs in
both instances against the defendant-appellant.
Malcolm, Abad Santos, Hull, Vickers, and Diaz, JJ.,
concur.
10) Hong Kong and Shanghai Banking Corp vs. Sherman
et. al. August 11, 1989
G.R. No. 72494 August 11, 1989
HONGKONG AND SHANGHAI BANKING
CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ
and THE INTERMEDIATE APPELLATE COURT,
respondents.
This is a petition for review on certiorari of the
decision of the Intermediate Appellate Court (now
Court of Appeals) dated August 2, 1985, which
reversed the order of the Regional Trial Court
dated February 28,1985 denying the Motion to
Dismiss filed by private respondents Jack Robert
Sherman and Deodato Reloj.
A complaint for collection of a sum of money (pp.
49-52, Rollo) was filed by petitioner Hongkong and
Shanghai Banking Corporation (hereinafter
referred to as petitioner BANK) against private
respondents Jack Robert Sherman and Deodato
Reloj, docketed as Civil Case No. Q-42850 before
the Regional Trial Court of Quezon City, Branch
84.
It appears that sometime in 1981, Eastern Book
Supply Service PTE, Ltd. (hereinafter referred to
as COMPANY), a company incorporated in
Singapore applied with, and was granted by, the
Singapore branch of petitioner BANK an overdraft
facility in the maximum amount of Singapore
dollars 200,000.00 (which amount was
subsequently increased to Singapore dollars
375,000.00) with interest at 3% over petitioner
BANK prime rate, payable monthly, on amounts
due under said overdraft facility; as a security for
the repayment by the COMPANY of sums
advanced by petitioner BANK to it through the
aforesaid overdraft facility, on October 7, 1982,
both private respondents and a certain Robin de
Clive Lowe, all of whom were directors of the
COMPANY at such time, executed a Joint and
Several Guarantee (p. 53, Rollo) in favor of
petitioner BANK whereby private respondents and
Lowe agreed to pay, jointly and severally, on
demand all sums owed by the COMPANY to
petitioner BANK under the aforestated overdraft
facility.
The Joint and Several Guarantee provides, inter
alia, that:
This guarantee and all rights, obligations and
liabilities arising hereunder shall be construed and
determined under and may be enforced in
accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts of
Singapore shall have jurisdiction over all disputes
arising under this guarantee. ... (p. 33-A, Rollo).
The COMPANY failed to pay its obligation. Thus,
petitioner BANK demanded payment of the
obligation from private respondents, conformably
with the provisions of the Joint and Several
Guarantee. Inasmuch as the private respondents
still failed to pay, petitioner BANK filed the above-
mentioned complaint.
On December 14,1984, private respondents filed
a motion to dismiss (pp 54-56, Rollo) which was
opposed by petitioner BANK (pp. 58-62, Rollo).
Acting on the motion, the trial court issued an order
dated February 28, 1985 (pp, 64-65, Rollo), which
read as follows:
In a Motion to Dismiss filed on December 14,
1984, the defendants seek the dismissal of the
complaint on two grounds, namely:
1. That the court has no jurisdiction over the
subject matter of the complaint; and
2. That the court has no jurisdiction over the
persons of the defendants.
In the light of the Opposition thereto filed by
plaintiff, the Court finds no merit in the motion. "On
the first ground, defendants claim that by virtue of
the provision in the Guarantee (the actionable
document) which reads —
This guarantee and all rights, obligations and
liabilities arising hereunder shall be construed
and determined under and may be enforced in
accordance with the laws of the Republic of
Singapore. We hereby agree that the courts in
Singapore shall have jurisdiction over all
disputes arising under this guarantee,
the Court has no jurisdiction over the subject
matter of the case. The Court finds and
concludes otherwise. There is nothing in the
Guarantee which says that the courts of
Singapore shall have jurisdiction to the
exclusion of the courts of other countries or
nations. Also, it has long been established in
law and jurisprudence that jurisdiction of courts
is fixed by law; it cannot be conferred by the will,
submission or consent of the parties.
On the second ground, it is asserted that
defendant Robert' , Sherman is not a citizen nor
a resident of the Philippines. This argument
holds no water. Jurisdiction over the persons of
defendants is acquired by service of summons
and copy of the complaint on them. There has
been a valid service of summons on both
defendants and in fact the same is admitted
when said defendants filed a 'Motion for
Extension of Time to File Responsive Pleading
on December 5, 1984.
WHEREFORE, the Motion to Dismiss is hereby
DENIED.
SO ORDERED.
A motion for reconsideration of the said order was
filed by private respondents which was, however,
denied (p. 66, Rollo).
Private respondents then filed before the
respondent Intermediate Appellate Court (now
Court of Appeals) a petition for prohibition with
preliminary injunction and/or prayer for a
restraining order (pp. 39-48, Rollo). On August 2,
1985, the respondent Court rendered a decision
(p. 37, Rollo), the dispositive portion of which
reads:
WHEREFORE, the petition for prohibition with
preliminary injuction is hereby GRANTED. The
respondent Court is enjoined from taking further
cognizance of the case and to dismiss the same
for filing with the proper court of Singapore which
is the proper forum. No costs.
SO ORDERED.
The motion for reconsideration was denied (p. 38,
Rollo), hence, the present petition.
The main issue is whether or not Philippine courts
have jurisdiction over the suit.
The controversy stems from the interpretation of a
provision in the Joint and Several Guarantee, to
wit:
(14) This guarantee and all rights, obligations and
liabilites arising hereunder shall be construed and
determined under and may be enforced in
accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts in
Singapore shall have jurisdiction over all disputes
arising under this guarantee. ... (p. 53-A, Rollo)
In rendering the decision in favor of private
respondents, the Court of Appeals made, the
following observations (pp. 35-36, Rollo):
There are significant aspects of the case to which
our attention is invited. The loan was obtained by
Eastern Book Service PTE, Ltd., a company
incorporated in Singapore. The loan was granted
by the Singapore Branch of Hongkong and
Shanghai Banking Corporation. The Joint and
Several Guarantee was also concluded in
Singapore. The loan was in Singaporean dollars
and the repayment thereof also in the same
currency. The transaction, to say the least, took
place in Singporean setting in which the law of that
country is the measure by which that relationship
of the parties will be governed.
xxx xxx xxx
Contrary to the position taken by respondents, the
guarantee agreement compliance that any
litigation will be before the courts of Singapore and
that the rights and obligations of the parties shall
be construed and determined in accordance with
the laws of the Republic of Singapore. A closer
examination of paragraph 14 of the Guarantee
Agreement upon which the motion to dismiss is
based, employs in clear and unmistakeable (sic)
terms the word 'shall' which under statutory
construction is mandatory.
Thus it was ruled that:
... the word 'shall' is imperative, operating to
impose a duty which may be enforced (Dizon vs.
Encarnacion, 9 SCRA 714).lâwphî1.ñèt
There is nothing more imperative and restrictive
than what the agreement categorically commands
that 'all rights, obligations, and liabilities arising
hereunder shall be construed and determined
under and may be enforced in accordance with the
laws of the Republic of Singapore.'
While it is true that "the transaction took place in
Singaporean setting" and that the Joint and
Several Guarantee contains a choice-of-forum
clause, the very essence of due process dictates
that the stipulation that "[t]his guarantee and all
rights, obligations and liabilities arising hereunder
shall be construed and determined under and may
be enforced in accordance with the laws of the
Republic of Singapore. We hereby agree that the
Courts in Singapore shall have jurisdiction over all
disputes arising under this guarantee" be liberally
construed. One basic principle underlies all rules
of jurisdiction in International Law: a State does
not have jurisdiction in the absence of some
reasonable basis for exercising it, whether the
proceedings are in rem quasi in rem or in
personam. To be reasonable, the jurisdiction must
be based on some minimum contacts that will not
offend traditional notions of fair play and
substantial justice (J. Salonga, Private
International Law, 1981, p. 46). Indeed, as
pointed-out by petitioner BANK at the outset, the
instant case presents a very odd situation. In the
ordinary habits of life, anyone would be disinclined
to litigate before a foreign tribunal, with more
reason as a defendant. However, in this case,
private respondents are Philippine residents (a
fact which was not disputed by them) who would
rather face a complaint against them before a
foreign court and in the process incur considerable
expenses, not to mention inconvenience, than to
have a Philippine court try and resolve the case.
Private respondents' stance is hardly
comprehensible, unless their ultimate intent is to
evade, or at least delay, the payment of a just
obligation.
The defense of private respondents that the
complaint should have been filed in Singapore is
based merely on technicality. They did not even
claim, much less prove, that the filing of the action
here will cause them any unnecessary trouble,
damage, or expense. On the other hand, there is
no showing that petitioner BANK filed the action
here just to harass private respondents.
In the case of Polytrade Corporation vs. Blanco,
G.R. No. L-27033, October 31, 1969, 30 SCRA
187, it was ruled:
... An accurate reading, however, of the
stipulation, 'The parties agree to sue and be sued
in the Courts of Manila,' does not preclude the
filing of suits in the residence of plaintiff or
defendant. The plain meaning is that the parties
merely consented to be sued in Manila. Qualifying
or restrictive words which would indicate that
Manila and Manila alone is the venue are totally
absent therefrom. We cannot read into that clause
that plaintiff and defendant bound themselves to
file suits with respect to the last two transactions
in question only or exclusively in Manila. For, that
agreement did not change or transfer venue. It
simply is permissive. The parties solely agreed to
add the courts of Manila as tribunals to which they
may resort. They did not waive their right to pursue
remedy in the courts specifically mentioned in
Section 2(b) of Rule 4. Renuntiatio non
praesumitur.
This ruling was reiterated in the case of Neville Y.
Lamis Ents., et al. v. Lagamon, etc., et al., G.R.
No. 57250, October 30, 1981, 108 SCRA 740,
where the stipulation was "[i]n case of litigation,
jurisdiction shall be vested in the Court of Davao
City." We held:
Anent the claim that Davao City had been
stipulated as the venue, suffice it to say that a
stipulation as to venue does not preclude the
filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, Rules of
Court, in the absence of qualifying or restrictive
words in the agreement which would indicate that
the place named is the only venue agreed upon
by the parties.
Applying the foregoing to the case at bar, the
parties did not thereby stipulate that only the
courts of Singapore, to the exclusion of all the rest,
has jurisdiction. Neither did the clause in question
operate to divest Philippine courts of jurisdiction.
In International Law, jurisdiction is often defined as
the light of a State to exercise authority over
persons and things within its boundaries subject to
certain exceptions. Thus, a State does not assume
jurisdiction over travelling sovereigns,
ambassadors and diplomatic representatives of
other States, and foreign military units stationed in
or marching through State territory with the
permission of the latter's authorities. This
authority, which finds its source in the concept of
sovereignty, is exclusive within and throughout the
domain of the State. A State is competent to take
hold of any judicial matter it sees fit by making its
courts and agencies assume jurisdiction over all
kinds of cases brought before them (J. Salonga,
Private International Law, 1981, pp. 37-
38).lâwphî1.ñèt
As regards the issue on improper venue, petitioner
BANK avers that the objection to improper venue
has been waived. However, We agree with the
ruling of the respondent Court that:
While in the main, the motion to dismiss fails to
categorically use with exactitude the words
'improper venue' it can be perceived from the
general thrust and context of the motion that what
is meant is improper venue, The use of the word
'jurisdiction' was merely an attempt to copy-cat
the same word employed in the guarantee
agreement but conveys the concept of venue.
Brushing aside all technicalities, it would appear
that jurisdiction was used loosely as to be
synonymous with venue. It is in this spirit that this
Court must view the motion to dismiss. ... (p. 35,
Rollo).
At any rate, this issue is now of no moment
because We hold that venue here was properly
laid for the same reasons discussed above.
The respondent Court likewise ruled that (pp. 36-
37, Rollo):
... In a conflict problem, a court will simply refuse
to entertain the case if it is not authorized by law
to exercise jurisdiction. And even if it is so
authorized, it may still refuse to entertain the case
by applying the principle of forum non
conveniens. ...
However, whether a suit should be entertained or
dismissed on the basis of the principle of forum
non conveniens depends largely upon the facts of Narvasa, Cruz, Gancayco and Griñ;o-Aquino, JJ.,
the particular case and is addressed to the sound concur.
discretion of the trial court (J. Salonga, Private
International Law, 1981, p. 49).lâwphî1.ñèt Thus,
the respondent Court should not have relied on
such principle.

Although the Joint and Several Guarantee

prepared by petitioner BANK is a contract of
adhesion and that consequently, it cannot be
permitted to take a stand contrary to the
stipulations of the contract, substantial bases exist
for petitioner Bank's choice of forum, as discussed
earlier.

Lastly, private respondents allege that neither the

petitioner based at Hongkong nor its Philippine
branch is involved in the transaction sued upon.
This is a vain attempt on their part to further thwart
the proceedings below inasmuch as well-known is
the rule that a defendant cannot plead any
defense that has not been interposed in the court
below.

ACCORDINGLY, the decision of the respondent

Court is hereby REVERSED and the decision of
the Regional Trial Court is REINSTATED, with
costs against private respondents. This decision is
immediately executory.

SO ORDERED.