INTRODUCTION

1. Hilton v. Guyot, 159 U.S. 113 (1835)

RULE:

Comity is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good
will, upon the other. But it is the recognition which one nation allows within its territory to the legislative,
executive or judicial acts of another nation, having due regard both to international duty and convenience,
and to the rights of its own citizens or of other persons who are under the protection of its laws.

FACTS:

Plaintiff Guyot, an administrator of a French firm, sued defendants Libbey and Hilton, who were
U.S. citizens doing business in Paris, France, in a French court under a contract claim. Defendants
appeared and litigated the merits of the case, alleging fraud on the part of plaintiffs, and sought an
injunction from bringing suit, but the court would not admit evidence and entered a directed verdict for
plaintiff. The judgment was affirmed in a French appeals court. Plaintiff Guyot sought to enforce the
French judgment in the district court of New York, which, without retrial on the merits, directed a verdict
for plaintiffs in the amount a French court had awarded. Libbey and Hilton sought review in the United
States Supreme Court.

ISSUE:

Did the comity of the United States require the court to give conclusive effect to the judgments of the
courts of France?

ANSWER:

No

CONCLUSION:

The United States Supreme Court found that comity was reciprocal. Because France did not
recognize final judgments of the United States and would try such judgments anew, French judgments
would be given the same treatment. Thus, the comity of the United States did not require the court to give
conclusive effect to the judgments of the courts of France. Defendants could receive a new trial.
2. Phil. Export and Foreign Loan Guarantee Corp., v. V.P. Eusebio
Construction, Inc., G.R. No. 140047, July 13, 2004

FACTS:
A service contract was entered into by respondent VPECI, a Filipino
construction firm with the Iraqi Government for the construction of the
Institute of Physical Therapy-Medical Center in Baghdad, Iraq
The Iraqi Government required the contractors to submit (1) a
performance bond of and (2) an advance payment bond. To comply with
these requirements,the respondents applied for the issuance of a
guarantee with petitioner Philguarantee, a government financial entity.
The petitioner sent to the respondents separate letters demanding
full payment of the amount it paid to the Iraqi Government as a
Performance Guarantee plus accruing interest, penalty charges, and 10%
attorney’s fees pursuant to their joint and solidary obligations under the
deed of undertaking and surety bond. When the respondents failed to
pay, the petitioner filed on 9 July 1991 a civil case for collection of a sum
of money against the respondents before the RTC of Makati City.
The trial court ruled against Philguarantee and held that the latter
had no valid cause of action against the respondents. It opined that the
guarantee which was executed for a specific period, had already lapsed
or expired. There was no valid renewal or extension of the guarantee for
failure of the petitioner to secure respondents’ express consent thereto.
On appeal Court of Appeals affirmed the trial court’s decision,
ratiocinating as follows: The successive renewals/extensions of the
guarantees in fact, was prompted by delays, not solely attributable to the
contractors, and such extension understandably allowed by the project
owner which had not anyway complied with its contractual commitment
to tender 75% of payment in US Dollars, and which still retained overdue
amounts collectible by VPECI.

ISSUE:What law should be applied in determining whether the

respondent contractor has defaulted in the performance of its obligations
under the service contract that would justify resort to the guaranty?

HELD:
The laws of Iraq. 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 lexcontractus 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.
It must be noted that the service contract between SOB and VPECI
contains no express choice of the law that would govern it. In the United
States and Europe, the two rules that now seem to have emerged as
“kings of the hill” are (1) the parties may choose the governing law; and
(2) in the absence of such a choice, the applicable law is that of the State
that “has the most significant relationship to the transaction and the
parties.”
In this case the laws of Iraq bear substantial connection to the
transaction, since one of the parties is the Iraqi Government and the
place of performance is in Iraq. Hence, the issue of whether respondent
VPECI defaulted in its obligations may be determined by the laws of Iraq.
However, since that foreign law was not properly pleaded or proved, the
presumption of identity or similarity, otherwise known as the processual
presumption, comes into play. Where foreign law is not pleaded or, even
if pleaded, is not proved, the presumption is that foreign law is the same
as ours.

3. Northwest Orient Airlines, Inc., v. CA, G.R. No. 112573, February 9, 1995

FACTS:  

Unable to settle the case amicably, the case was tried on the merits. After the plaintiff rested its case, defendant on April 21,
1989, filed a Motion for Judgment on a Demurrer to Evidence based on two grounds:
(1) the foreign judgment sought to be enforced is null and void for want of jurisdiction and (2) the said judgment is contrary to
Philippine law and public policy and rendered without due process of law. Plaintiff filed its opposition after which the court  a
quo rendered the now assailed decision dated June 21, 1989 granting the demurrer motion and dismissing the complaint
(Decision, pp. 376-378, Records). In granting the demurrer motion, the trial court held that

Northwest Airlines and Sharp, through its Japan branch, entered into an

International Passenger Sales Agency Agreement, whereby the former authorized the
latter to sell its air transportation tickets.Unable to remit the proceeds of the ticket sales
made by defendant on behalf of the plaintiff under the said agreement, plaintiff sued
defendant in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales,
with claim for damages.
After the two attempts of service were unsuccessful, the judge of the Tokyo
District Court decided to have the complaint and the writs of summons served at the
head office of the defendant in Manila. Then the Supreme Court of Japan serve the
summons through diplomatic channels upon the defendant’s head office in Manila.
 On August 28, 1980, defendant received from Deputy Balingit the writ of
summons. Despite receipt of the same, defendant failed to appear at the scheduled
hearing. Thus, the Tokyo Court proceeded to hear the plaintiff’s complaint and,
rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195
Yen and damages for delay. Defendant  received from Deputy Sheriff Balingit copy of
the judgment. Defendant not having appealed the judgment, the same became final and
executory.
Plaintiff was unable to execute the decision in Japan, hence, a suit for
enforcement of the judgment was filed by plaintiff before the Regional Trial Court of
Manila Branch 54.

Defendant filed its answer averring that the judgment of the Japanese Court: (1)
the foreign judgment sought to be enforced is null and void for want of jurisdiction and
(2) the said judgment is contrary to Philippine law and public policy and rendered
without due process of law.

ISSUE:
Whether a Japanese court can acquire jurisdiction over a Philippine Corporation
doing business in Japan by serving summons through diplomatic channels on the
Philippine corporation at its principal office in Manila after prior attempts to serve
summons in Japan had failed.

HELD:

YES,

A foreign judgment is presumed to be valid and binding in the country from which
it comes, until the contrary is shown. It is also proper to presume the regularity of the
proceedings and the giving of due notice therein. 6

Under Section 50, Rule 39 of the Rules of Court, a judgment in an action  in
personam of a tribunal of a foreign country having jurisdiction to pronounce the same is
presumptive evidence of a right as between the parties and their successors-in-interest
by a subsequent title. The judgment may, however, be assailed by evidence of want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere,
enjoys the presumption that it was acting in the lawful exercise of jurisdiction and has
regularly performed its official duty.

Consequently, the party attacking a foreign judgment has the burden of overcoming the
presumption of its validity. 7 Being the party challenging the judgment rendered by the
Japanese court, SHARP had the duty to demonstrate the invalidity of such judgment. In
an attempt to discharge that burden, it contends that the extraterritorial service of
summons effected at its home office in the Philippines was not only ineffectual but also
void, and the Japanese Court did not, therefore acquire jurisdiction over it.
 It is settled that matters of remedy and procedure such as those relating to the
service of process upon a defendant are governed by the lex fori or the internal law of
the forum.8 In this case, it is the procedural law of Japan where the judgment was
rendered that determines the validity of the extraterritorial service of process on
SHARP.

As to what this law is is a question of fact, not of law. It may not be taken judicial
notice of and must be pleaded and proved like any other fact. 9 Sections 24 and 25, Rule
132 of the Rules of Court provide that it may be evidenced by an official publication or
by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to
present evidence as to what that Japanese procedural law is and to show that under it,
the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of
validity and regularity of the service of summons and the decision thereafter rendered
by the Japanese court must stand.

4. SAUDI ARABIAN AIRLINES VS. COURT OF APPEAL G.R. No. 122191 (October 8,
1998)
FACTS:

Milagros Morada was working as a stewardess for SAUDIA Arabian Airlines. In 1990,
while she and some co-workers were in a lay-over in Jakarta, Indonesia, an Arab co-
worker tried to rape her in a hotel room. Fortunately, a roomboy heard her cry for help
and two of her Arab co-workers were arrested and detained in Indonesia. Later,
SAUDIA Airlines re-assigned her to work in their Manila office. While working in Manila,
SAUDIA Airlines advised her to meet with a SAUDIA Airlines officer in Saudi. She did
but to her surprise, she was brought to a Saudi court where she was interrogated and
eventually sentenced to 5 months imprisonment and 289 lashes; she allegedly violated
Muslim customs by partying with males. The Prince of Makkah got wind of her
conviction and the Prince determined that she was wrongfully convicted hence the
Prince absolved her and sent her back to the Philippines. SAUDIA Airlines later on
dismissed Morada. Morada then sued SAUDIA Airlines for damages under Article 19
and 21 of the Civil Code. SAUDIA Airlines filed a motion to dismiss on the ground that
the RTC has no jurisdiction over the case because the applicable law should be the law
of Saudi Arabia. SAUDIA Airlines also prayed for other reliefs under the premises.

ISSUE: 
Whether SAUDIA Airlines’ contention is correct.

HELD: 
No. Firstly, the RTC has acquired jurisdiction over SAUDIA Airlines when the latter filed
a motion to dismiss with petition for other reliefs. The asking for other reliefs effectively
asked the court to make a determination of SAUDIA Airlines’s rights hence a
submission to the court’s jurisdiction.

Secondly, the RTC has acquired jurisdiction over the case because as alleged in the
complaint of Morada, she is bringing the suit for damages under the provisions of our
Civil Law and not of the Arabian Law. Morada then has the right to file it in the QC RTC
because under the Rules of Court, a plaintiff may elect whether to file an action in
personam (case at bar) in the place where she resides or where the defendant resides.
Obviously, it is well within her right to file the case here because if she’ll file it in Saudi
Arabia, it will be very disadvantageous for her (and of course, again, Philippine Civil
Law is the law invoked).

Thirdly, one important test factor to determine where to file a case, if there is a foreign
element involved, is the so called “locus actus” or where an act has been done. In the
case at bar, Morada was already working in Manila when she was summoned by her
superior to go to Saudi Arabia to meet with a SAUDIA Airlines officer. She was not
informed that she was going to appear in a court trial. Clearly, she was defrauded into
appearing before a court trial which led to her wrongful conviction. The act of
defrauding, which is tortuous, was committed in Manila and this led to her humiliation,
misery, and suffering. And applying the torts principle in a conflicts case, the SC finds
that the Philippines could be said as a situs of the tort (the place where the alleged
tortious conduct took place).

5. GUERRERO’S TRANSPORT SERVICES, INC. v. BLAYLOCK TRANSPORTATION SERVICES

EMPLOYEES ASSOCIATION-KILUSAN (BTEA-KILUSAN), LABOR ARBITER FRANCISCO M.
DE LOS REYES and JOSE CRUZ

DOCTRINE
A treaty has 2 aspects — as an international agreement between states, and as municipal
law for the people of each state to observe. As part of the municipal law, the aforesaid
provision of the treaty enters into and forms part of the contract between Guerrero and the
US Naval Base authorities. In view of said stipulation, the new contractor (Guerrero) is,
therefore, bound to give “priority” to the employment of the qualified employees of the
previous contractor (Blaylock). It is obviously in recognition of such obligation that
Guerrero entered into the aforementioned Compromise Agreement.

FACTS
In 1972, the US Naval Base authorities in Subic conducted a public bidding for a 5-year
contract for the right to operate and/or manage the transportation services inside the
naval base which was won by Santiago Guerrero, over Concepcion Blayblock, the then
incumbent concessionaire doing business under the name of Blayblock Transport Services
Blayblock. Blayblock’s 395 employees are members of the union BTEA-KILUSAN (the
Union).

Guererro refused to employ the members of the Union. Thus, the Union filed a complaint
w/ the NLRC against Guerrero to compel it to employ its members, pursuant to Art. 1, Sec. 2
of the RP-US Base Agreement. The case was dismissed by the NLRC upon Guerrero’s MTD
on jurisdictional grounds, there being no employer-employee relationship between the
parties. Upon appeal, the Sec. of Labor remanded the case to the NLRC. The NLRC issued a
Resolution ordering Guererro to “absorb all complainants who filed their applications on or
before the deadline” set by Guerrero, except those who may have derogatory records w/
the US Naval Authorities in Subic. The Sec. of Labor affirmed.

Guerrero claims that it substantially complied w/ the decision of the Sec. of Labor affirming
the NLRC Resolution, & that any non-compliance was attributable to the individual
complainants who failed to submit themselves for processing & examination. The Labor
Arbiter ordered the reinstatement of 129 individuals. The Union filed a Motion for Issuance
of Writ of Execution. The order wasn’t appealed so it was declared final & executory

Subsequently, the parties arrived at a Compromise Agreement wherein they agreed to

submit to the Sec. of Labor the determination of members of the Union who shall be
reinstated by Guerrero, w/c determination shall be final. The agreement is deemed to have
superseded the Resolution of the NLRC.

ISSUE
W/N the said members of the Union were entitled to be reinstated by Guerrero.
W/N the Compromse Agreement supersedes the order of Labor Arbiter

RULING
YES. Pursuant to Sec. 6 of Art. I of the RP-US Labor Agreement, the US Armed Forces
undertook, consistent w/ military requirements, “to provide security for employment, and,
in the event certain services are contracted out, the US Armed Forces shall require the
contractor or concessioner to give priority consideration to affected employees for
employment.”

A treaty has 2 aspects — as an international agreement between states, and as municipal

law for the people of each state to observe. As part of the municipal law, the aforesaid
provision of the treaty enters into and forms part of the contract between Guerrero and the
US Naval Base authorities. In view of said stipulation, the new contractor (Guerrero) is,
therefore, bound to give “priority” to the employment of the qualified employees of the
previous contractor (Blaylock). It is obviously in recognition of such obligation that
Guerrero entered into the aforementioned Compromise Agreement.

YES. Under the Compromise Agreement, the parties agreed to submit to the Sec. of Labor
the determination as to who of the members of the Union shall be absorbed or employed by
Guerrero, and that such determination shall be considered as final. The Sec. of Labor issued
an Order directing the NLRC, through Labor Arbiter Francisco de los Reyes, to implement
the absorption of the 175 members into Guerrero’s Transport Services, subject to the
following conditions:
a) that they were bona fide employees of the Blaylock Transport Service at the time its
concession expired; and
b) that they should pass final screening and approval by the appropriate authorities of the
U.S. Naval Base concerned.

Considering that the Compromise Agreement of the parties is more than a mere contract
and has the force and effect of any other judgment, it is, therefore, conclusive upon the
parties and their privies. For it is settled that a compromise has, upon the parties, the effect
and authority of res judicata and is enforceable by execution upon approval by the court.

6. Northern Pacific R. Co vs. Babcock, 154 U.S 190

7. Hong Kong and Shanghai Banking Corp vs. Sheman, 176 SCRA 331 (1989)
FACTS:
Eastern Book Supply Service PTE, Ltd., (Eastern) a company incorporated in Singapore applied
w/, & was granted by the Singapore branch of HSBC. As a security for the repayment by Eastern
of sums advanced by HSBC to it through the overdraft facility, in 1982, Jack Sherman and other
directors of Eastern, executed a Joint and Several Guarantee in favor of HSBC whereby they
agreed to pay, jointly and severally, on demand all sums owed by Eastern to HSBC under the
overdraft facility. The Joint and Several Guarantee provides 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.”
Eastern failed to pay its obligation. Thus, HSBC demanded payment of the obligation from
Sherman &Reloj, conformably w/ the provisions of the Joint and Several Guarantee. Inasmuch
as Sherman &Reloj still failed to pay, HSBC filed a complaint for collection of a sum of money
against them. Sherman &Reloj filed a motion to dismiss on the grounds that (1) the court has
no jurisdiction over the subject matter of the complaint, and (2) the court has no jurisdiction
over the person of the defendants.

ISSUE:W/N Philippine courts should have jurisdiction over the suit.

HELD
YES. 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 "this guarantee and all rights, obligations & liabilities arising
hereunder shall be construed & determined under & may be enforced in accordance w/ the
laws of the Republic of Singapore. 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.
In International Law, jurisdiction is often defined as the light of a State to exercise authority
over persons and things w/in 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 w/
the permission of the latter's authorities. This authority, which finds its source in the concept of
sovereignty, is exclusive w/in 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.