U.S.
Supreme Court
Hilton v. Guyot, 159 U.S. 113 (1895)
Syllabus
A citizen and resident of this country who has his principal place of business here but has an agent in a
foreign country and is accustomed to purchase and store large quantities of goods there, and, in a suit
brought against him by a citizen and in a court of that country, appears and defends with the sole object
of preventing his property within the jurisdiction, but not in the custody of that court, from being taken in
satisfaction of any judgment that may be recovered against him there cannot, in an action brought against
him in this country upon such a judgment, impeach it for want of jurisdiction of his person.
The admission at the trial in a court of a foreign country, according to its law and practice, of testimony not
under oath and without opportunity of cross-examination, and of documents with which the defendant had
no connection and which by our law would not be admissible against him, is not of itself a sufficient ground
for impeaching the judgment of that court in an action brought upon it in this country.
When an action is brought in a court of this country by a citizen of a foreign country against one of our own
citizens to recover a sum of money adjudged by a court of that country to be due from the defendant to
the plaintiff, and the foreign judgment appears to have been rendered by a competent court, having
jurisdiction of the cause and of the parties, and upon due allegations and proofs and opportunity to defend
against them, and its proceedings are according to the course of a civilized jurisprudence, and are stated
in a clear and formal record, the judgment is prima facie evidence, at least, of the truth of the matter
adjudged, and the judgment is conclusive upon the merits tried in the foreign court unless some special
ground is shown for impeaching it, as by showing that it was affected by fraud or prejudice or that, by the
principles of international law and by the comity of our own country, it is not entitled to full credit and
credit.
A judgment for a sum of money, rendered by a court of a foreign country, having jurisdiction of the cause
and of the parties, in a suit brought by one of its citizens against one of ours, is prima facie evidence only,
and not conclusive of the merits of the claim in an action brought here upon the judgment if by the law of
the foreign country, as in France, judgments of our own courts are not recognized as conclusive.
The first of these two cases was an action at law, brought December 18, 1885, in the Circuit Court of the
United States for the Southern District of New York, by Gustave Bertin Guyot, as official liquidator of the
firm of Charles Fortin & Co., and by the surviving members of that firm, all aliens and citizens of the Republic
of France, against Henry Hilton and William Libbey, citizens of the United States and of the State of New
York and trading as copartners in the cities of New York and Paris and elsewhere under the firm name of
A. T. Stewart & Co. The action was upon a judgment recovered in a French court at Paris, in the Republic
of France, by the firm of Charles Fortin & Co., all of whose members were French citizens, against Hilton &
Libbey, trading as copartners, as aforesaid, and citizens of the United States and of the State of New York.
The complaint alleged that in 1886 and since, during the time of all the transactions included in the
judgment sued on, Hilton and Libbey, as successors to Alexander T. Stewart and Libbey, under the firm
name of A. T. Stewart & Co., carried on a general business as merchants in the Cities of New York and Paris
and elsewhere, and maintained a regular store and place of business at Paris; that during the same time,
Charles Fortin & Co. carried on the manufacture and sale of gloves at Paris, and the two firms had there
large dealings in that business, and controversies arose in the adjustment of accounts between them.
The complaint further alleged that between March 1, 1879, and December 1, 1882, five suits were brought
by Fortin & Co. against Stewart & Co. for sums alleged to be due, and three suits by Stewart & Co. against
Fortin & Co., in the Tribunal of Commerce of the Department of the Seine, a judicial tribunal or court
organized and existing under the laws of France, sitting at Paris and having jurisdiction of suits and
controversies between merchants or traders growing out of commercial dealings between them; that
Stewart & Co. appeared by their authorized attorneys in all those suits, and that, after full hearing before
an arbitrator appointed by that court and before the court itself, and after all the suits had been consolidated
by the court, final judgment was rendered on January 20, 1883, that Fortin & Co. recover of Stewart & Co.
various sums, arising out of the dealings between them, amounting to 660,847 francs, with interest, and
dismissed part of Fortin & Co.'s claim.
The complaint further alleged that appeals were taken by both parties from that judgment to the Court of
Appeal of Paris, Third Section, an appellate court of record organized and existing under the laws of the
Republic of France and having jurisdiction of appeals from the final judgments of the Tribunal of Commerce
of the Department of the Seine, where the amount in dispute exceeded the sum of 1,500 francs, and that
the said Court of Appeal, by a final judgment rendered March 19, 1884, and remaining of record in the
office of its clerk at Paris, after hearing the several parties by their counsel, and upon full consideration of
the merits, dismissed the appeal of the defendants, confirmed the judgment of the lower court in favor of
the plaintiffs, and ordered, upon the plaintiffs' appeal, that they recover the additional sum of 152,528
francs, with 182,849 francs for interest on all the claims allowed, and 12,559 francs for costs and expenses.
The complaint further alleged that Guyot had been duly appointed by the Tribunal of Commerce of the
Department of the Seine official liquidator of the firm of Forth & Co., with full powers, according to law and
commercial usage, for the verification and realization of its property, both real and personal, and to collect
and cause to be executed the judgments aforesaid.
The complaint further alleged that the judgment of the Court of Appeals of Paris, and the judgment of the
Tribunal of Commerce, as modified by the judgment of the appellate court, still remain in full force and
effect;
"that the said courts respectively had jurisdiction of the subject matter of the controversies so submitted
to them, and of the parties, the said defendants having intervened, by their attorneys and counsel, and
applied for affirmative relief in both courts; that the plaintiffs have hitherto been unable to collect the said
judgments or any part thereof, by reason of the absence of the said defendants, they having given up their
business in Paris prior to the recovery of the said judgment on appeal, and having left no property within
the jurisdiction of the Republic of France out of which the said judgments might be made;"
and that there are still justly due and owing from the defendants to the plaintiffs upon those said judgments
certain sums, specified in the complaint, and amounting in all to 1,008,783 francs in the currency of the
Republic of France, equivalent to $195,122.47.
The defendants, in their answer, set forth in detail the original contracts and transactions in France between
the parties and the subsequent dealings between them modifying those contracts, and alleged that the
plaintiffs had no just claim against the defendants, but that, on the contrary, the defendants, upon a just
settlement of the accounts, were entitled to recover large sums from the plaintiffs.
The answer admitted the proceedings and judgments in the French courts and that the defendants gave up
their business in France before the judgment on appeal, and had no property within the jurisdiction of
France out of which that judgment could be collected.
The answer further alleged that the Tribunal of Commerce of the Department of the Seine was a tribunal
whose judges were merchants, ship captains, stockbrokers, and persons engaged in commercial pursuits,
and of which Charles Fortin had been a member until shortly before the commencement of the litigation.
The answer further alleged that in the original suits brought against the defendants by Fortin & Co., the
citations were left at their storehouse in Paris; that they were then residents and citizens of the State of
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New York, and neither of them at that time, or within four years before, had been within, or resident or
domiciled within, the jurisdiction of that tribunal or owed any allegiance to France, but that they were the
owners of property situated in that country which would by the law of France have been liable to seizure if
they did not appear in that tribunal, and that they unwillingly, and solely for the purpose of protecting that
property, authorized and caused an agent to appear for them in those proceedings, and that the suits
brought by them against Fortin & Co. were brought for the same purpose, and in order to make a proper
defense, and to establish counterclaims arising out of the transactions between the parties, and to compel
the production and inspection of Fortin & Co.'s books, and that they sought no other affirmative relief in
that tribunal.
The answer further alleged that, pending that litigation, the defendants discovered gross frauds in the
accounts of Fourtin & Co., that the arbitrator and the tribunal declined to compel Fortin & Co. to produce
their books and papers for inspection, and that, if they had been produced, the judgment would not have
been obtained against the defendants.
The answer further alleged that without any fault or negligence on the part of the defendants, there was
not a full and fair trial of the controversies before the arbitrator, in that no witness was sworn or affirmed;
in that Charles Fortin was permitted to make, and did make, statements not under oath containing many
falsehoods; in that the privilege of cross-examination of Fortin and other persons who made statements
before the arbitrator was denied to the defendants, and in that extracts from printed newspapers, the
knowledge of which was not brought home to the defendants, and letters and other communications in
writing between Fortin & Co. and third persons, to which the defendants were neither privy nor party, were
received by the arbitrator; that without such improper evidence, the judgment would not have been
obtained, and that the arbitrator was deceived and misled by the false and fraudulent accounts introduced
by Fortin & Co. and by the hearsay testimony given, without the solemnity of an oath and without cross-
examination, and by the fraudulent suppression of the books and papers.
The answer further alleged that Fortin & Co. made up their statements and accounts falsely and
fraudulently, and with intent to deceive the defendants and the arbitrator and the said courts of France,
and those courts were deceived and misled thereby; that owing to the fraudulent suppression of the books
and papers of Fortin & Co. upon the trial and the false statements of Fortin regarding matters involved in
the controversy, the arbitrator and the courts of France
"were deceived and misled in regard to the merits of the controversies pending before them, and
wrongfully decided against said Stewart & Co., as hereinbefore stated; that said judgment, hereinbefore
mentioned, is fraudulent, and based upon false and fraudulent accounts and statements, and is erroneous
in fact and in law, and is void; that the trial hereinbefore mentioned was not conducted according to the
usages and practice of the common law, and the allegations and proofs given by said Fortin & Co., upon
which said judgment is founded, would not be competent or admissible in any court or tribunal of the
United States, in any suit between the same parties involving the same subject matter, and it is contrary
to natural justice and public policy that the said judgment should be enforced against a citizen of the
United States, and that, if there had been a full and fair trial upon the merits of the controversies so
pending before said tribunals, no judgment would have been obtained against said Stewart & Co."
"Defendants, further answering, allege that it is contrary to natural justice that the judgment hereinbefore
mentioned should be enforced without an examination of the merits thereof; that by the laws of the
Republic of France, to-wit, article 181 [121] of the Royal Ordinance of June 15, 1629, it is provided
namely:"
"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and sovereignties, for
any cause whatever shall give rise to no lien or execution in our Kingdom. Thus, the contracts shall
stand for simple promises, and, notwithstanding such judgments, our subjects against whom they have
been rendered may contest their rights anew before our own judges."
"And it is further provided by the laws of France, by article 546 of the Code de Procedure Civile, as
follows:"
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" Judgments rendered by foreign tribunals shall be capable of execution in France only in the manner
and in the cases set forth by articles 2123 and 2128 of the Civil Code."
"And it is further provided by the laws of France, by article 2128 [2123] of the Code de Procedure Civile
[Civil Code]:"
" A lien cannot, in like manner, arise from judgments rendered in any foreign country, save only as
they have been declared in force by a French tribunal, without prejudice, however, to provisions to the
contrary, contained in public laws and treaties."
"[And by article 2128 of that Code: 'Contracts entered into in a foreign country cannot give a lien upon
property in France if there are no provisions contrary to this principle in public laws or in treaties.']"
"That the construction given to said statutes by the judicial tribunals of France is such that no comity is
displayed towards the judgments of tribunals of foreign countries against the citizens of France, when
sued upon in said courts of France, and the merits of the controversies upon which the said judgments
are based are examined anew, unless a treaty to the contrary effect exists between the said Republic of
France and the country in which such judgment is obtained. That no treaty exists between the said
Republic of France and the United States, by the terms or effect of which the judgments of either country
are prevented from being examined anew upon the merits, when sued upon in the courts of the country
other than that in which it is obtained. That the tribunals of the Republic of France give no force and
effect, within the jurisdiction of the said country, to the duly rendered judgments of courts of competent
jurisdiction of the United States against citizens of France, after proper personal service of the process of
said courts is made thereon in this country."
The answer further set up, by way of counterclaim and in detail, various matters arising out of the dealings
between the parties, and alleged that none of the plaintiffs had since 1881 been residents of the State of
New York, or within the jurisdiction of that state, but the defendants were, and always had been, residents
of that state.
The answer concluded by demanding that the plaintiffs' complaint be dismissed, and that the defendants
have judgment against them upon the counterclaims, amounting to $102,942.91.
The plaintiffs filed a replication to so much of the answer as made counterclaims, denying its allegations
and setting up in bar thereof the judgment sued on.
The defendants, on June 22, 1888, filed a bill in equity against the plaintiffs setting forth the same matters
as in their answer to the action at law and praying for a discovery and for an injunction against the
prosecution of the action. To that bill a plea was filed setting up the French judgments, and upon a hearing,
the bill was dismissed. 42 F. 249. From the decree dismissing the bill an appeal was taken, which is the
second case now before this Court.
The action at law afterwards came on for trial by a jury, and the plaintiffs put in the records of the
proceedings and judgments in the French courts, and evidence that the jurisdiction of those courts was as
alleged in the complaint and that the practice followed and the method of examining the witnesses were
according to the French law, and also proved the title of Guyot as liquidator.
It was admitted by both parties that for several years prior to 1876, the firm of Alexander T. Stewart & Co.,
composed of Stewart and Libbey, conducted their business as merchants in the City of New York, with
branches in other cities of America and Europe; that both partners were citizens and residents of the City
and State of New York during the entire period mentioned in the complaint, and that in April, 1876, Stewart
died, and Hilton and Libbey formed a partnership to continue the business under the same firm name, and
became the owners of all the property and rights of the old firm.
The defendants made numerous offers of evidence in support of all the specific allegations of fact in their
answer, including the allegations as to the law and comity of France. The plaintiffs, in their brief filed in this
Court, admitted that most of these offers
"were offers to prove matters in support of the defenses and counterclaims set up by the defendants in
the cases tried before the French courts, and which, or most of which, would have been relevant and
competent if the plaintiffs in error are not concluded by the result of those litigations, and have now the
right to try those issues, either on the ground that the French judgments are only prima facie evidence
of the correctness of those judgments, or on the ground that the case is within the exception of a
judgment obtained by fraud."
The defendants, in order to show that they should not be concluded by having appeared and litigated in
the suits brought against them by the plaintiffs in the French courts, offered to prove that they were
residents and citizens of the State of New York, and neither of them had been, within four years prior to
the commencement of those suits, domiciled or resident within the jurisdiction of those courts; that they
had a purchasing agent and a storehouse in Paris, but only as a means or facility to aid in the transaction
of their principal business, which was in New York, and they were never otherwise engaged in business in
France; that neither of them owed allegiance to France, but they were the owners of property there which
would, according to the laws of France, have been liable to seizure if they had not appeared to answer in
those suits; that they unwillingly, and solely for the purpose of protecting their property within the
jurisdiction of the French tribunal, authorized an agent to appear, and he did appear in the proceedings
before it, and that their motion to compel an inspection of the plaintiffs' books, as well as the suits brought
by the defendants in France, were necessary by way of defense or counterclaim to the suits there brought
by the plaintiffs against them.
Among the matters which the defendants alleged and offered to prove in order to show that the French
judgments were procured by fraud were that Fortin & Co., with intent to deceive and defraud the
defendants, and the arbitrator and the courts of France, entered in their books, and presented to the
defendants, and to the French courts, accounts bearing upon the transactions in controversy which were
false and fraudulent, and contained excessive and fraudulent charges against the defendants in various
particulars, specified; that the defendants made due application to the Tribunal of Commerce to compel
Fortin & Co. to allow their account books and letter books to be inspected by the defendants, and the
application was opposed by Fortin & Co., and denied by the tribunal; that the discovery and inspection of
those books were necessary to determine the truth of the controversies between the parties; that before
the Tribunal of Commerce, Charles Fortin was permitted to and did give in evidence statements not under
oath relating to the merits of the controversies there pending, and falsely represented that a certain written
contract made in 1873 between Stewart & Co. and Fortin & Co. concerning their dealings was not intended
by the parties to be operative according to its terms, and in support of that false representation made
statements as to admissions by Stewart in a private conversation with him, and that the defendants could
not deny those statements, because Stewart was dead, and they were not protected from the effect of
Fortin's statements by the privilege of cross-examining him under oath, and that the French judgments
were based upon false and fraudulent accounts presented and statements made by Fortin & Co. before the
Tribunal of Commerce during the trial before it.
The records of the judgments of the French courts, put in evidence by the plaintiffs, showed that all the
matters now relied on to show fraud were contested in and considered by those courts.
The plaintiffs objected to all the evidence offered by the defendants on the grounds that the matters offered
to be proved were irrelevant, immaterial, and incompetent; that in respect to them the defendants were
concluded by the judgment sued on and given in evidence, and that none of those matters, if proved, would
be a defense to this action upon that judgment.
The court declined to admit any of the evidence so offered by the defendants, and directed a verdict for the
plaintiffs in the sum of $277,775.44, being the amount of the French judgment and interest. The
defendants, having duly excepted to the rulings and direction of the court, sued out a writ of error.
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The writ of error in the action at law and the appeal in the suit in equity were argued together in this Court
in January, 1894, and, by direction of the Court, were reargued in April, 1894, before a full Bench.
MR. JUSTICE GRAY, after stating the case, delivered the opinion of the Court.
These two cases -- the one at law and the other in equity -- of Hilton v. Guyot, and the case of Ritchie v.
McMullen, which has been under advisement at the same time, present important questions relating to the
force and effect of foreign judgments not hitherto adjudicated by this Court, which have been argued with
great learning and ability and which require for their satisfactory determination a full consideration of the
authorities. To avoid confusion in indicating the parties, it will be convenient first to take the case at law
of Hilton v. Guyot.
International law, in its widest and most comprehensive sense -- including not only questions of right
between nations, governed by what has been appropriately called the "law of nations," but also questions
arising under what is usually called "private international law," or the "conflict of laws," and concerning the
rights of persons within the territory and dominion of one nation by reason of acts, private or public, done
within the dominions of another nation -- is part of our law, and must be ascertained and administered by
the courts of justice as often as such questions are presented in litigation between man and man, duly
submitted to their determination.
The most certain guide, no doubt, for the decision of such questions is a treaty or a statute of this country.
But when, as is the case here, there is no written law upon the subject, the duty still rests upon the judicial
tribunals of ascertaining and declaring what the law is, whenever it becomes necessary to do so in order to
determine the rights of parties to suits regularly brought before them. In doing this, the courts must obtain
such aid as they can from judicial decisions, from the works of jurists and commentators, and from the acts
and usages of civilized nations.
No law has any effect, of its own force, beyond the limits of the sovereignty from which its authority is
derived. The extent to which the law of one nation, as put in force within its territory, whether by executive
order, by legislative act, or by judicial decree shall be allowed to operate within the dominion of another
nation depends upon what our greatest jurists have been content to call "the comity of nations." Although
the phrase has been often criticized, no satisfactory substitute has been suggested.
"Comity," in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere
courtesy and goodwill, 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 was are under the protection of
its laws.
MR. JUSTICE Story, in his Commentaries on the Conflict of Laws, treating of the question in what
department of the government of any state, in the absence of any clear declaration of the sovereign will,
resides the authority to determine how far the laws of a foreign state shall have effect, and observing that
this differs in different states according to the organization of the departments of the government of each,
says:
"In England and America, the courts of justice have hitherto exercised the same authority in the most
ample manner, and the legislatures have in no instance (it is believed) in either country interfered to
provide any positive regulations. The common law of both countries has been expanded to meet the
exigencies of the times as they have arisen, and so far as the practice of nations, or the jus gentium
privatum, has been supposed to furnish any general principle, it has been followed out."
Afterwards, speaking of the difficulty of applying the positive rules laid down by the Continental jurists, he
says that "there is indeed great truth" in these remarks of Mr. Justice Porter, speaking for the Supreme
Court of Louisiana:
 "They have attempted to go too far to define and fix that which cannot, in the nature of things, be defined reciprocally carried into execution, under certain regulations and restrictions, which differ in different
and fixed. They seem to have forgotten that they wrote on a question which touched the comity of countries."
nations, and that that comity is, and ever must be, uncertain; that it must necessarily depend on a variety
of circumstances which cannot be reduced to any certain rule; that no nation will suffer the laws of Chancellor Kent says: "The effect to be given to foreign judgments is altogether a matter of comity in cases
another to interfere with her own to the injury of her citizens; that whether they do or not must depend where it is not regulated by treaty." 2 Kent Com. (6th ed.) 120.
on the condition of the country in which the foreign law is sought to be enforced, the particular nature of
her legislation, her policy, and the character of her institutions; that in the conflict of laws it must often
In order to appreciate the weight of the various authorities cited at the bar, it is important to distinguish
be a matter of doubt which should prevail, and that, whenever a doubt does exist, the court which decides
different kinds of judgments. Every foreign judgment, of whatever nature, in order to be entitled to any
will prefer the laws of its own country to that of the stranger."
effect, must have been rendered by a court having jurisdiction of the cause, and upon regular proceedings,
and due notice. In alluding to different kinds of judgments, therefore, such jurisdiction, proceedings, and
Again, Mr. Justice Story says: notice will be assumed. It will also be assumed that they are untainted by fraud, the effect of which will be
"It has been thought by some jurists that the term comity is not sufficiently expressive of the obligation considered later.
of nations to give effect to foreign laws when they are not prejudicial to their own rights and interests.
And it has been suggested that the doctrine rests on a deeper foundation; that it is not so much a matter
A judgment in rem, adjudicating the title to a ship or other movable property within the custody of the
of comity or courtesy as a matter of paramount moral duty. Now, assuming that such a moral duty does
court, is treated as valid everywhere. As said by Chief Justice Marshall:
exist, it is clearly one of imperfect obligation, like that of beneficence, humanity, and charity. Every nation
"The sentence of a competent court proceeding in rem is conclusive with respect to the thing itself, and
must be the final judge for itself not only of the nature and extent of the duty, but of the occasions on
operates as an absolute change of the property. By such sentence, the right of the former owner is lost
which its exercise may be justly demanded."
and a complete title given to the person who claims under the decree. No court of coordinate jurisdiction
can examine the sentence. The question, therefore, respecting its conformity to general or municipal law
And after further discussion of the matter, be concludes: can never arise, for no coordinate tribunal is capable of making the inquiry."
"There is, then, not only no impropriety in the use of the phrase 'comity of nations,' but it is the most
appropriate phrase to express the true foundation and extent of the obligation of the laws of one nation
Williams v. Armroyd, 7 Cranch 423, 11 U. S. 432. The most common illustrations of this are decrees of
within the territories of another."
courts of admiralty and prize, which proceed upon principles of international law. Croudson v. Leonard, 4
Cranch 434; Williams v. Armroyd, above cited; Ludlow v. Dale, 1 Johns.Cas. 16. But the same rule applies
Chief Justice Taney, likewise, speaking for this Court, while Mr. Justice Story was a member of it, and to judgments in rem under municipal law.
largely adopting his words, said:
"It is needless to enumerate here the instances in which, by the general practice of civilized countries,
A judgment affecting the status of persons, such as a decree confirming or dissolving a marriage, is
the laws of the one will, by the comity of nations, be recognized and executed in another where the rights
recognized as valid in every country unless contrary to the policy of its own law. It was of a foreign sentence
of individuals are concerned. . . . The comity thus extended to other nations is no impeachment of
of divorce that Lord Chancellor Nottingham, in the House of Lords, in 1678, in Cottington's Case, above
sovereignty. It is the voluntary act of the nation by which it is offered, and is inadmissible when contrary
cited, said:
to its policy, or prejudicial to its interests. But it contributes so largely to promote justice between
"It is against the law of nations not to give credit to the judgments and sentences of foreign countries till
individuals, and to produce a friendly intercourse between the sovereignties to which they belong, that
they be reversed by the law, and according to the form, of those countries wherein they were given, for
courts of justice have continually acted upon it as a part of the voluntary law of nations. . . . It is not the
what right hath one kingdom to reverse the judgment of another? And how can we refuse to let a sentence
comity of the courts, but the comity of the nation, which is administered and ascertained in the same
take place till it be reversed? And what confusion would follow in Christendom if they should serve us so
way, and guided by the same reasoning, by which all other principles of municipal law are ascertained
abroad, and give no credit to our sentences."
and guided."

Other judgments, not strictly in rem, under which a person has been compelled to pay money, are so far
Mr. Wheaton says:
conclusive that the justice of the payment cannot be impeached in another country, so as to compel him
"All the effect which foreign laws can have in the territory of a state depends absolutely on the express
to pay it again. For instance, a judgment in foreign attachment is conclusive, as between the parties, of the
or tacit consent of that state. . . . The express consent of a state to the application of foreign laws within
right to the property or money attached. Story on Conflict of Laws (2d ed.) § 592a. And if, on the dissolution
its territory is given by acts passed by its legislative authority, or by treaties concluded with other states.
of a partnership, one partner promises to indemnify the other against the debts of the partnership, a
Its tacit consent is manifested by the decisions of its judicial and administrative authorities, as well as by
judgment for such a debt, under which the latter has been compelled to pay it, is conclusive evidence of
the writings of its publicists. There is no obligation recognized by legislators, public authorities, and
the debt in a suit by him to recover the amount upon the promise of indemnity. It was of such a judgment
publicists to regard foreign laws; but their application is admitted only from considerations of utility and
and in such a suit that Lord Nottingham said:
the mutual convenience of states, ex commitate, ob reciprocam utilitatem."
"Let the plaintiff receive back so much of the money brought into court as may be adequate to the sum
paid on the sentence for custom, the justice whereof is not examinable here."
Wheaton's International Law (8th ed.) §§ 78, 79.
"No sovereign is bound, unless by special compact, to execute within his dominions a judgment rendered
Other foreign judgments which have been held conclusive of the matter adjudged were judgments
by the tribunals of another state, and if execution be sought by suit upon the judgment or otherwise, the
discharging obligations contracted in the foreign country between citizens or residents thereof.
tribunal in which the suit is brought, or from which execution is sought, is on principle at liberty to
examine into the merits of such judgment, and to give effect to it or not, as may be found just and
equitable. The general comity, utility, and convenience of nations have, however, established a usage In that case, bills of exchange drawn in London were negotiated, endorsed, and accepted at Leghorn, in
among most civilized states by which the final judgments of foreign courts of competent jurisdiction are Italy, by the law of which an acceptance became void if the drawer failed without leaving effects in the
acceptor's hands. The acceptor accordingly, having received advices that the drawer had failed before the

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acceptances, brought a suit at Leghorn against the last endorsees to be discharged of his acceptances, paid
the money into court, and obtained a sentence there by which the acceptances were vacated as against
those endorsees, and all the endorsers and negotiators of the bills, and the money deposited was returned
to him. Being afterwards sued at law in England by subsequent holders of the bills, he applied to the Court
of Chancery, and obtained a perpetual injunction. Lord Chancellor King, as reported by Strange,
"was clearly of opinion that this cause was to be determined according to the local laws of the place where
the bill was negotiated, and, the plaintiff's acceptance of the bill having been vacated and declared void
by a court of competent jurisdiction, he thought that sentence was conclusive, and bound the Court of
Chancery here;"
as reported in Viner, that "the court at Leghorn had jurisdiction of the thing and of the persons;" and, as
reported by Mosely, that though
"the last endorsees had the sole property of the bills, and were therefore made the only parties to the
suit at Leghorn, yet the sentence made the acceptance void against the now defendants and all others."
It is doubtful, at the least, whether such a sentence was entitled to the effect given to it by Lord Chancellor
King.
The remark of Lord Hardwicke, arguendo, as Chief Justice, in Boucher v. Lawson (1734) that
"the reason gone upon by Lord Chancellor King, in the case of Burroughs v. Jamineau, was certainly right
that where any court, whether foreign or domestic, that has the proper jurisdiction of the cases makes a
determination, it is conclusive to all other courts,"
evidently had reference, as the context shows, to judgments of a court having jurisdiction of the thing, and
did not touch the effect of an executory judgment for a debt. Cas.temp.Hardw. 85, 89; Cunningham 144,
148.
In former times, foreign decrees in admiralty in personam were executed, even by imprisonment of the
defendant, by the court of admiralty in England, upon letters rogatory from the foreign sovereign, without
a new suit. Its right to do so was recognized by the court of King's Bench in 1607 in a case of habeas
corpus, cited by the plaintiffs, and reported as follows:
"If a man of Frizeland sues an Englishman in Frizeland before the governor there, and there recovers
against him a certain sum, upon which the Englishman, not having sufficient to satisfy it, comes into
England, upon which the governor sends his letters missive into England, omnes magistratus infra
regnum Angliae rogans, to make execution of the said judgment, the judge of the admiralty may execute
this judgment by imprisonment of the party, and he shall not be delivered by the common law, for this
is by the law of nations that the justice of one nation should be aiding to the justice of another nation,
and for one to execute the judgment of the other, and the law of England takes notice of this law, and
the judge of the admiralty is the proper magistrate for this purpose, for he only hath the execution of the
civil law within the realm. Pasch. 5 Jac.B.R., Weir's Case, resolved upon a habeas corpus and remanded."
1 Rol.Ab. p. 530, pl. 12; 6 Vin.Ab. p. 512, pl. 12. But the only question there raised or decided was of the
power of the English court of admiralty, and not of the conclusiveness of the foreign sentence, and in later
times the mode of enforcing a foreign decree in admiralty is by a new libel.
in his own country, as is the case now before us, presents a more difficult question, upon which there has
been some diversity of opinion.
Early in the last century, it was settled in England that a foreign judgment on a debt was considered not
like a judgment of a domestic court of record, as a record or a specialty, a lawful consideration for which
was conclusively presumed, but as a simple contract only.
This clearly appears in Dupleix v. De Roven (1705), where one of two merchants in France recovered a
judgment there against the other for a sum of money, which not being paid, he brought a suit in chancery
in England for a discovery of assets and satisfaction of the debt, and the defendant pleaded the statute of
limitations of six years, and prevailed, Lord Keeper Cowper saying:
"Although the plaintiff obtained a judgment or sentence in France, yet here the debt must be considered
as a debt by simple contract. The plaintiff can maintain no action here but an indebitatus assumpsit or
an insimul computassent, so that the statute of limitations is pleadable in this case."
In Otway v. Ramsay (1736), in the King's Bench, Lord Hardwicke treated it as worthy of consideration
"what credit is to be given by one court to the courts of another nation, proceeding both by the same rules
of law," and said: "It is very desirable in such case that the judgment given in one kingdom should be
considered as res judicata in another." But it was held that debt would not lie in Ireland upon an English
judgment, because "Ireland must be considered as a provincial kingdom, part of the dominions of the crown
of England, but no part of the realm," and an action of debt on a judgment was local. 4 B. & C. 414-416,
note; s.c., 14 Vin.Ab. 569, pl.;, 2 Stra. 1090.
A decision of Lord Hardwicke as Chancellor was mentioned in Walker v. Witter (1778), 1 Doug. 1, 6, by
Lord Mansfield, who said:
"He recollected a case of a decree on the chancery side in one of the courts of great sessions in Wales,
from which there was an appeal to the House of Lords, and the decree affirmed there. Afterwards, a bill
was filed in the Court of Chancery, on the foundation of the decree so affirmed, and Lord Hardwicke
thought himself entitled to examine into the justice of the decision of the House of Lords, because the
original decree was in the court of Wales, whose decisions were clearly liable to be examined."
And in Galbraith v. Neville (1789), 1 Doug. 6, note, Mr. Justice Buller said:
"I have often heard Lord Mansfield repeat what was said by Lord Hardwicke in the case alluded to from
Wales, and the ground of his lordship's opinion was this: when you call for my assistance to carry into
effect the decision of some other tribunal, you shall not have it if it appears that you are in the wrong,
and it was on that account that he said he would examine into the propriety of the decree."
The case before Lord Hardwicke mentioned by Lord Mansfield would appear (notwithstanding the doubt of
its authenticity expressed by Lord Kenyon in Galbraith v. Neville) to have been a suit to recover a legacy,
briefly reported, with references to Lord Hardwicke's note book, and to the original record, as Morgan v.
Morgan (1737-1738), West.Ch. 181, 597; s.c., 1 Atk. 53, 408.

In Gage v. Bulkeley (1744), briefly reported in 3 Atk. 215, cited by the plaintiffs, a plea of a foreign sentence
The extraterritorial effect of judgments in personam at law or in equity may differ according to the parties
in a commissary court in France was overruled by Lord Hardwicke, saying: "It is the most proper case to
to the cause. A judgment of that kind between two citizens or residents of the country, and thereby subject
stand for an answer, with liberty to except, that I ever met with." His reasons are fully stated in two other
to the jurisdiction in which it is rendered, may be held conclusive as between them everywhere. So if a
reports of the case. According to one of them, at the opening of the argument, he said:
foreigner invokes the jurisdiction by bringing an action against a citizen, both may be held bound by a
"Can a sentence or judgment pronounced by a foreign jurisdiction be pleaded in this Kingdom to a demand
judgment in favor of either, and if a citizen sues a foreigner and judgment is rendered in favor of the latter,
for the same thing in any court of justice here? I always thought it could not, because every sentence,
both may be held equally bound. Ricardo v. Garcias, 12 Cl. & Fin. 368; The Griefswald, Swabey 430,
having its authority from the sovereign in whose dominions it is given, cannot bind the jurisdiction of
435; Barber v. Lamb, 8 C.B. (N.S.) 95; Lea v. Deakin, 11 Bissell 23.
foreign courts, who own not the same authority, and have a different sovereign, and are only bound by
judicial sentence given under the same sovereign power by which they themselves act. . . . But though
The effect to which a judgment, purely executory, rendered in favor of a citizen or resident of the country, a foreign sentence cannot be used by way of plea in the courts here, yet it may be taken advantage of in
in a suit there brought by him against a foreigner, may be entitled in an action thereon against the latter the way of evidence. . . . You cannot in this Kingdom maintain debt upon judgment obtained for money

5
 in a foreign jurisdiction, but you may on assumpsit in nature of debt, upon a simple contract, and give
the judgment in evidence, and have a verdict, so that the distinction seems to be, where such foreign
sentence is used as a plea to bind the courts here as a judgment, and when it is made use of in evidence
as binding the justice of the case only."
And afterwards, in giving his decision, he said:
"The first question is whether the subject matter of the plea is good. The second is whether it is well
pleaded. The first question depends upon this: whether the sentence or judgment of a foreign court can
be used by way of plea in a court of justice in England, and no authority, either at law or in equity, has
been produced to show that it may be pleaded, and therefore I shall be very cautious how I establish
such a precedent. . . . It is true such sentence is an evidence which may affect the right of this demand
when the cause comes to be heard, but if it is no plea in a court of law to bind their jurisdiction, I do not
see why it should be so here."
In Roach v. Garvan (1748), where an infant ward of the Court of Chancery had been married in France by
her guardian to his son before a French court, and the son "petitioned for a decree for cohabitation with his
wife, and to have some money out of the bank," Lord Hardwicke said, as to the validity of the marriage:
"It has been argued to be valid, from being established by the sentence of a court in France having proper
jurisdiction, and it is true that, if so, it is conclusive, whether in a foreign court or not, from the law of
nations in such cases; otherwise, the rights of mankind would be very precarious and uncertain. But the
question is whether this is a proper sentence, in a proper cause, and between proper parties, of which it is
impossible to judge without looking further into the proceedings, this being rather the execution of the
sentence than the sentence itself."
And after observing upon the competency of the French tribunal and pointing out that restitution of conjugal
rights was within the jurisdiction of the ecclesiastical court, and not of the Court of Chancery, he added:
"Much less will I order any money out of the bank to be given him." 1 Ves.Sen. 157, 159. He thus clearly
recognized the difference between admitting the effect of a foreign judgment as adjudicating the status of
persons and executing a foreign judgment by enforcing a claim for money.
These decisions of Lord Hardwicke demonstrate that, in his opinion, whenever the question was of giving
effect to a foreign judgment for money in a suit in England between the parties, it did not have the weight
of a domestic judgment, and could not be considered as a bar or as conclusive, but only as evidence of the
same weight as a simple contract, and the propriety and justice of the judgment might be examined.
In Sinclair v. Fraser (1771), the appellant, having as attorney in Jamaica made large advances for his
constituent in Scotland and having been superseded in office, brought an action before the Supreme Court
of Jamaica, and, after appearance, obtained judgment against him, and afterwards brought an action
against him in Scotland upon that judgment. The Court of Session determined that the plaintiff was bound
to prove before it the ground, nature, and extent of the demand on which the judgment in Jamaica was
obtained, and therefore gave judgment against him. But the House of Lords (in which, as remarked by one
reporter, Lord Mansfield was then the presiding spirit, acting in concert with or for the Lord Chancellor in
disposing of the Scotch appeals)
"ordered and declared that the judgment of the Supreme Court of Jamaica ought to be received as
evidence prima facie of the debt, and that it lies upon the defendant to impeach the justice thereof or to
show the same to have been irregularly obtained,"
and therefore reversed the judgment of the Court of Session. 2 Paton ix, 253; s.c., 6 Morison Dict.Dec.
4542; 1 Doug. 5, note.
Accordingly, in Crawford v. Witten (1773), a declaration in assumpsit, in an action in England upon a
judgment recovered in the Mayor's Court of Calcutta, in Bengal, without showing the cause of action there,
was held good on demurrer. Lord Mansfield considered the case perfectly clear. Mr. Justice Aston, according
6
to one report, said: "The declaration is sufficient. We are not to suppose it an unlawful debt," and, according
to another report:
"They admitted the assumpsit by their demurrer. When an action comes properly before any court, it
must be determined by the laws which govern the country in which the action accrued."
And Mr. Justice Ashurst said: "I have often known assumpsit brought on judgments in foreign courts. The
judgment is a sufficient consideration to support the implied promise."
In Walker v. Witter (1778), an action of debt was brought in England upon a judgment recovered in
Jamacia. The defendant pleaded nil debet and nul tiel record. Judgment was given for the plaintiff, Lord
Mansfield saying:
"The plea of nul tiel record was improper. Though the plaintiffs had called the judgment a record, yet, by
the additional words in the declaration, it was clear they did not mean that sort of record to which implicit
faith is given by the courts of Westminster Hall. They had not misled the court nor the defendant, for
they spoke of it as a court of record in Jamaica. The question was brought to a narrow point, for it was
admitted on the part of the defendant that indebitatus assumpsit would have lain, and on the part of the
plaintiff that the judgment was only prima facie evidence of the debt. That being so, the judgment was
not a specialty, but the debt only a simple contract debt, for assumpsit will not lie on a specialty. The
difficulty in the case had arisen from not fixing accurately what a court of record is in the eye of the law.
That description is confined properly to certain courts in England, and their judgments cannot be
controverted. Foreign courts, and courts in England not of record, have not that privilege, nor the courts
in Wales, etc. But the doctrine in the case of Sinclair v. Fraser was unquestionable. Foreign judgments
are a ground of action everywhere, but they are examinable."
Justices Willes, Ashurst, and Buller concurred, the two latter saying that wherever indebitatus
assumpsit will lie, debt will also lie. 1 Doug. 1, 5, 6.
In Herbert v. Cook (1782), again, in an action of debt upon a judgment of an inferior English court, not a
court of record, Lord Mansfield said that it was "like a foreign judgment, and not conclusive evidence of the
debt." Willes 36, note.
In Galbraith v. Neville (1789), upon a motion for a new trial after verdict for the plaintiff in an action of
debt on a judgment of the Supreme Court of Jamaica, Lord Kenyon expressed "very serious doubts
concerning the doctrine laid down in Walker v. Witter that foreign judgments are not binding on the parties
here." But Mr. Justice Buller said:
"The doctrine which was laid down in Sinclair v. Fraser has always been considered as the true line ever
since -- namely that the foreign judgment shall be prima facie evidence of the debt, and conclusive till it
be impeached by the other party. . . . As to actions of this sort, see how far the court could go if what
was said in Walker v. Witter were departed from. It was there held that the foreign judgment was only
to be taken to be right prima facie -- that is, we will allow the same force to a foreign judgment that we
do to those of our own courts not of record. But if the matter were carried further, we should give them
more credit; we should give them equal force with those of courts of record here. Now a foreign judgment
has never been considered as a record. It cannot be declared on as such, and a plea of nul tiel record, in
such a case, is a mere nullity. How then can it have the same obligatory force? In short, the result is this:
that it is prima facie evidence of the justice of the demand in an action of assumpsit, having no more
credit than is given to every species of written agreement, viz., that it shall be considered as good till it
is impeached."
1 Doug. 6, note. And the court afterwards unanimously refused the new trial, because,
"without entering into the question how far a foreign judgment was impeachable, it was at all events
clear that it was prima facie evidence of the debt, and they were of opinion that no evidence had been
adduced to impeach this."
In Messing v. Massareene (1791), the plaintiff, having obtained a judgment against the defendants in a
French court, brought an action of assumpsit upon it in England, and, the defendants having suffered a
default, moved for a reference to a master, and for a final judgment on his report, without executing a writ
of inquiry. The motion was denied, Lord Kenyon saying: "This is an attempt to carry the rule further than
has yet been done, and, as there is no instance of the kind, I am not disposed to make a precedent for it,"
and Mr. Justice Buller saying: "Though debt will lie here on a foreign judgment, the defendant may go into
the consideration of it." 4 T.R. 493.
In Bayley v. Edwards (1792), the judicial committee of the Privy Council, upon appeal from Jamaica, held
that a suit in equity pending in England was not a good plea in bar to a subsequent bill in Jamaica for the
same matter, and Lord Camden said:
"In Gage v. Bulkeley [evidently referring to the full report in Ridgeway, above quoted, which had been
cited by counsel], Lord Hardwicke's reasons go a great way to show the true effect of foreign sentences
in this country, and all the cases show that foreign sentences are not conclusive bars here, but only
evidence of the demand."
In Phillips v. Hunter (1795), the House of Lords, in accordance with the opinion of the majority of the judges
consulted and against that of Chief Justice Eyre, decided that a creditor of an English bankrupt, who had
obtained payment of his debt by foreign attachment in Pennsylvania, was liable to an action for the money
by the assignees in bankruptcy in England. But it was agreed on all hands that the judgment in Pennsylvania
and payment under it were conclusive as between the garnishee and the plaintiff in that suit, and the
distinction between the effect of a foreign judgment which vests title, and of one which only declares that
a certain sum of money is due, was clearly stated by Chief Justice Eyre as follows:
"This judgment against the garnishee in the court of Pennsylvania was recovered properly or improperly.
If, notwithstanding the bankruptcy, the debt remained liable to an attachment according to the laws of
that country, the judgment was proper; if, according to the laws of that country, the property in the debt
was divested out of the bankrupt debtor and vested in his assignees, the judgment was improper. But
this was a question to be decided, in the cause instituted in Pennsylvania, by the courts of that country,
and not by us. We cannot examine their judgment, and if we could, we have not the means of doing it in
this case. It is not stated upon this record, nor can we take notice, what the law of Pennsylvania is upon
this subject. If we had the means, we could not examine a judgment of a court in a foreign state, brought
before us in this manner."
"It is in one way only that the sentence or judgment of a court of a foreign state is examinable in our courts,
and that is when the party who claims the benefit of it applies to our courts to enforce it. When it is thus
voluntarily submitted to our jurisdiction, we treat it not as obligatory to the extent to which it would be
obligatory, perhaps, in the country in which it was pronounced, nor as obligatory to the extent to which, by
our law, sentences and judgments are obligatory not as conclusive, but as matter in pais, as
consideration prima facie sufficient to raise a promise. We examine it as we do all other considerations or
promises, and for that purpose we receive evidence of what the law of the foreign state is, and whether
the judgment is warranted by that law."
In Wright v. Simpson (1802), Lord Chancellor Eldon said:
"Natural law requires the courts of this country to give credit to those of another for the inclination and
power to do justice, but not if that presumption is proved to be ill founded in that transaction which is
the subject of it, and if it appears in evidence that persons suing under similar circumstances neither had
met, nor could meet, with justice, that fact cannot be immaterial as an answer to the presumption."
Under Lord Ellenborough, the distinction between a suit on a foreign judgment in favor of the plaintiff
against the defendant, and a suit to recover money which the plaintiff had been compelled to pay under a
judgment abroad, was clearly maintained.
In Buchanan v. Rucker (1808), in assumpsit upon a judgment rendered in the Island of Tobago, the
defendant pleaded non assumpsit and prevailed because it appeared that he was not a resident of the
7
island, and was neither personally served with process nor came in to defend, and the only notice was,
according to the practice of the court, by nailing up a copy of the declaration at the courthouse door. It was
argued that "the presumption was in favor of a foreign judgment, as well as of a judgment obtained in one
of the courts of this country," to which Lord Ellenborough answered:
"That may be so if the judgment appears, on the face of it, consistent with reason and justice, but it is
contrary to the first principles of reason and justice that, either in civil or criminal proceedings, a man
should be condemned before he is heard. . . . There might be such glaring injustice on the face of a
foreign judgment, or it might have a vice rendering it so ludicrous, that it could not raise an assumpsit,
and, if submitted to the jurisdiction of the courts of this country, could not be enforced."
In Hall v. Odber (1809), in assumpsit upon a judgment obtained in Canada, with other counts on the original
debt, Lord Ellenborough and Justices Grose, Le Blanc, and Bayley agreed that a foreign judgment was not
to be considered as having the same force as a domestic judgment, but only that of a simple contract
between the parties, and did not merge the original cause of action, but was only evidence of the debt, and
therefore assumpsit would lie, either upon the judgment or upon the original cause of action. 11 East 118.
In Tarleton v. Tarleton (1815), on the other hand, the action was brought upon a covenant of indemnity in
an agreement for dissolution of a partnership to recover a sum which the plaintiff had been compelled to
pay under a decision in a suit between the parties in the Island of Grenada. Such was the case of which
Lord Ellenborough, affirming his own ruling at the trial, said:
"I thought that I did not sit at nisi prius to try a writ of error in this case upon the proceedings in the
court abroad. The defendant had notice of the proceedings, and should have appeared and made his
defense. The plaintiff, by this neglect, has been obliged to pay the money in order to avoid a
sequestration."
The distinction was clearly brought out by Mr. Justice Bayley, who said: "As between the parties to the suit,
the justice of it might be again litigated, but as against a stranger it cannot.� 4 M. & S. 20, 22-23.
In Harris v. Saunders (1825), Chief Justice Abbott (afterwards Lord Tenterden) and his associates, upon
the authority of Otway v. Ramsay, above cited, held that even since the Act of Union of 39 & 40 Geo. III.
c. 67, assumpsit would lie in England upon a judgment recovered in Ireland, because such a judgment
could not be considered a specialty debt in England. 4 B. & C. 411, 6 D. & R. 471.
The English cases above referred to have been stated with the more particularity and detail, because they
directly bear upon the question what was the English law, being then our own law, before the Declaration
of Independence? They demonstrate that, by that law as generally understood, and as declared by
Hardwicke, Mansfield, Buller, Camden, Eyre, and Ellenborough, and doubted by Kenyon only, a judgment
recovered in a foreign country for a sum of money, when sued upon in England, was only prima
facie evidence of the demand, and subject to be examined and impeached. The law of England since it has
become to us a foreign country will be considered afterwards.
The law upon this subject as understood in the United States at the time of their separation from the mother
country was clearly set forth by Chief Justice Parsons, speaking for the Supreme Judicial Court of
Massachusetts in 1813, and by Mr. Justice Story in his Commentaries on the Constitution of the United
States, published in 1833. Both those eminent jurists declared that, by the law of England, the general rule
was that foreign judgments were only prima facie evidence of the matter which they purported to decide,
and that, by the common law before the American Revolution, all the courts of the several colonies and
states were deemed foreign to each other, and consequently judgments rendered by any one of them were
considered as foreign judgments, and their merits reexaminable in another colony not only as to the
jurisdiction of the court which pronounced them, but also as to the merits of the controversy, to the extent
to which they were understood to be reexaminable in England. And they noted that in order to remove that
inconvenience, statutes had been passed in Massachusetts, and in some of the other colonies, by which
judgments rendered by a court of competent jurisdiction in a neighboring colony could not be
impeached. Bissell v. Briggs, 9 Mass. 462, 464-465; Mass.Stat. 1773-74, c. 16; 5 Prov.Laws, 323, 369;
Story on the Constitution (1st ed.) §§ 1301, 1302; (4th ed.) §§ 1306, 1307.
It was because of that condition of the law as between the American colonies and states that the United
States, at the very beginning of their existence as a nation, ordained that full faith and credit should be
given to the judgments of one of the states of the Union in the courts of another of those states.
By the articles of confederation of 1777, Art. 4, § 3, "full faith and credit shall be given, in each of these
states, to the records, acts and judicial proceedings of the courts and magistrates of every other state." 1
Stat. 4. By the Constitution of the United States, Article IV, § 1,
"Full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every
other state, and the Congress may by general laws prescribe the manner in which such acts, records and
proceedings shall be proved, and the effect thereof."
And the first Congress of the United States under the Constitution, after prescribing the manner in which
the records and judicial proceedings of the courts of any state should be authenticated and proved, enacted
that
"the said records and judicial proceedings, authenticated as aforesaid, shall have such faith and credit
given to them in every court within the United States as they have by law or usage in the courts of the
state from whence the said records are or shall be taken."
The effect of these provisions of the Constitution and laws of the United States was at first a subject of
diverse opinions not only in the courts of the several states, but also in the circuit courts of the United
States; Mr. Justice Cushing, Mr. Justice Wilson, and Mr. Justice Washington, holding that judgments of the
courts of a state had the same effect throughout the Union as within that state, but Chief Justice Marshall
(if accurately reported) being of opinion that they were not entitled to conclusive effect, and that their
consideration might be impeached.
The decisions of this Court have clearly recognized that judgments of a foreign state are prima
facie evidence only, and that, but for these constitutional and legislative provisions, judgments of a state
of the Union, when sued upon in another state, would have no greater effect.
In Croudson v. Leonard (1808), in which this Court held that the sentence of a foreign court of admiralty in
rem condemning a vessel for breach of blockade was conclusive evidence of that fact in an action on a
policy of insurance, Mr. Justice Washington, after speaking of the conclusiveness of domestic judgments
generally, said:
"The judgment of a foreign court is equally conclusive, except in the single instance where the party
claiming the benefit of it applies to the courts in England to enforce it, in which case only the judgment
is prima facie evidence. But it is to be remarked that in such a case, the judgment is no more conclusive
as to the right it establishes than as to the fact it decides."
In Mills v. Duryee (1813), in which it was established that, by virtue of the Constitution and laws of the
United States, the judgment of a court of one of the states was conclusive evidence, in every court within
the United States, of the matter adjudged, and therefore nul tiel record, and not nil debet, was a proper
plea to an action brought in a court of the United States in the District of Columbia upon a judgment
recovered in a court of the State of New York, this Court, speaking by Mr. Justice Story, said:
"The pleadings in an action are governed by the dignity of the instrument on which it is founded. If it be
a record conclusive between the parties, it cannot be denied but by the plea of nul tiel record, and when
Congress gave the effect of a record to the judgment it gave all the collateral consequences. . . . Were
the construction contended for by the plaintiff in error to prevail, that judgments of the state courts ought
to be considered prima facie evidence only, this clause in the Constitution would be utterly unimportant
and illusory. The common law would give such judgments precisely the same effect."
8
In Hampton v. McConnell (1818), the point decided in Mills v. Duryee was again adjudged, without further
discussion, in an opinion delivered by Chief Justice Marshall. 16 U. S. 3 Wheat. 234.
The obiter dictum of Mr. Justice Livingston in Hopkins v. Lee (1821), 6 Wheat. 109, 19 U. S. 114, repeated
by Mr. Justice Daniel in Pennington v. Gibson (1853), 16 How. 65, 57 U. S. 78, as to the general effect of
foreign judgments, has no important bearing upon the case before us.
In McElmoyle v. Cohen (1839), Mr. Justice Wayne, discussing the effect of the act of Congress of 1790,
said that
"the adjudications of the English courts have now established the rule to be that foreign judgments
are prima facie evidence of the right and matter they purport to decide."
In D'Arcy v. Ketchum (1850), in which this Court held that the provisions of the Constitution and laws of
the United States gave no effect in one state to judgments rendered in another state by a court having no
jurisdiction of the cause or of the parties, Mr. Justice Catron said:
"In construing the act of 1790, the law as it stood when the act was passed must enter into that
construction, so that the existing defect in the old law may be seen and its remedy by the act of Congress
comprehended. Now it was most reasonable, on general principles of comity and justice, that among
states and their citizens united as ours are, judgments rendered in one should bind citizens of other states
where defendants had been served with process or voluntarily made defense. As these judgments,
however, were only prima facie evidence, and subject to be inquired into by plea when sued on in another
state, Congress saw proper to remedy the evil and to provide that such inquiry and double defense should
not be allowed. To this extent, it is declared in the case of Mills v. Duryee, Congress has gone in altering
the old rule."
In Christmas v. Russell (1866), in which this Court decided that because of the Constitution and laws of the
United States, a judgment of a court of one state of the Union, when sued upon in a court of another, could
not be shown to have been procured by fraud, Mr. Justice Clifford, in delivering the opinion, after stating
that under the rules of the common law a domestic judgment rendered in a court of competent jurisdiction
could not be collaterally impeached or called in question, said:
"Common law rules placed foreign judgments upon a different footing, and those rules remain, as a
general remark, unchanged to the present time. Under these rules, a foreign judgment was prima
facie evidence of the debt, and it was open to examination, not only to show that the court in which it
was rendered had no jurisdiction of the subject matter, but also to show that the judgment was
fraudulently obtained."
In Bischoff v. Wethered (1869), in an action on an English judgment rendered without notice to the
defendant other than by service on him in this country, this Court, speaking by Mr. Justice Bradley, held
that the proceeding in England
"was wholly without jurisdiction of the person, and whatever validity it may have in England, by virtue of
statute law, against property of the defendant there situate, it can have no validity here, even of a prima
facie character."
In Hanley v. Donoghue (1885), 116 U. S. 1, 116 U. S. 4, and in Wisconsin v. Pelican Ins. Co. (1888), 127
U. S. 265, 127 U. S. 292, it was said that judgments recovered in one state of the Union, when proved in
the courts of another, differed from judgments recovered in a foreign country in no other respect than in
not being reexaminable on their merits nor impeachable for fraud in obtaining them if rendered by a court
having jurisdiction of the cause and of the parties.
But neither in those cases nor in any other has this Court hitherto been called upon to determine how far
foreign judgments may be reexamined upon their merits, or be impeached for fraud in obtaining them.
In the courts of the several states it was long recognized and assumed as undoubted and indisputable that
by our law, as by the law of England, foreign judgments for debts were not conclusive, but only prima
facie evidence of the matter adjudged. Some of the cases are collected in the margin. *
In the leading case of Bissell v. Briggs, above cited, Chief Justice Parsons said:
"A foreign judgment may be produced here by a party to it either to justify himself by the execution of
that judgment in the country in which it was rendered or to obtain the execution of it from our courts. .
. . If the foreign court rendering the judgment had jurisdiction of the cause, yet the courts here will not
execute the judgment, without first allowing an inquiry into its merits. The judgment of a foreign court
therefore is by our laws considered only as presumptive evidence of a debt, or as prima facie evidence
of a sufficient consideration of a promise, where such court had jurisdiction of the cause, and if an action
of debt be sued on any such judgment, nil debet is the general issue, or if it be made the consideration
of a promise, the general issue is non assumpsit. On these issues the defendant may impeach the justice
of the judgment by evidence relative to that point. On these issues, the defendant may also, by proper
evidence, prove that the judgment was rendered by a foreign court which had no jurisdiction, and if his
evidence be sufficient for this purpose, he has no occasion to impeach the justice of the judgment."
In a less known case, decided in 1815 but not published until 1879, the reasons for this view were forcibly
stated by Chief Justice Jeremiah Smith, speaking for the Supreme Court of New Hampshire, as follows:
"The respect which is due to judgments, sentences, and decrees of courts in a foreign state by the law of
nations seems to be the same which is due to those of our own courts. Hence, the decree of an admiralty
court abroad is equally conclusive with decrees of our admiralty courts. Indeed, both courts proceed by
the same rule, are governed by the same law -- the maritime law of nations, Coll.Jurid. 100, which is the
universal law of nations except where treaties alter it."
"The same comity is not extended to judgments or decrees which may be founded on the municipal laws
of the state in which they are pronounced. Independent states do not choose to adopt such decisions
without examination. These laws and regulations may be unjust, partial to citizens, and against
foreigners. They may operate injustice to our citizens, whom we are bound to protect. They may be, and
the decisions of courts founded on them, just cause of complaint against the supreme power of the state
where rendered. To adopt them is not merely saying that the courts have decided correctly on the law,
but it is approbating the law itself. Wherever, then, the court may have proceeded on municipal law, the
rule is that the judgments are not conclusive evidence of debt, but prima facie evidence only. The
proceedings have not the conclusive quality which is annexed to the records or proceedings of our own
courts, where we approve both of the rule and of the judges who interpret and apply it. A foreign judgment
may be impeached. Defendant may show that it is unjust, or that it was irregularly or unduly obtained.
Doug. 5, note."
From this review of the authorities, it clearly appears that at the time of the separation of this country from
England, the general rule was fully established that foreign judgments in personam were prima
facie evidence only, and not conclusive of the merits of the controversy between the parties. But the extent
and limits of the application of that rule do not appear to have been much discussed or defined with any
approach to exactness in England or America until the matter was taken up by Chancellor Kent and by Mr.
Justice Story.
In Taylor v. Bryden (1811), an action of assumpsit brought in the Supreme Court of the State of New York
on a judgment obtained in the State of Maryland against the defendant as endorser of a bill of exchange,
and which was treated as a foreign judgment, so far as concerned its effect in New York (the decision of
this Court to the contrary in Mills v. Duryee, 7 Cranch 481, not having yet been made), Chief Justice Kent
said:
"The judgment in Maryland is presumptive evidence of a just demand, and it was incumbent upon the
defendant, if he would obstruct the execution of the judgment here, to show by positive proof that it was
irregularly or unduly obtained. . . . To try over again, as of course, every matter of fact which had been
9
duly decided by a competent tribunal would be disregarding the comity which we justly owe to the courts
of other states, and would be carrying the doctrine of reexamination to an oppressive extent. It would be
the same as granting a new trial in every case and upon every question of fact. Suppose a recovery in
another state, or in any foreign court, in an action for a tort, as for an assault and battery, false
imprisonment, slander, etc., and the defendant was duly summoned and appeared, and made his
defense, and the trial was conducted orderly and properly, according to the rules of a civilized
jurisprudence, is every such case to be tried again here on the merits? I much doubt whether the rule
can ever go to this length. The general language of the books is that the defendant must impeach the
judgment by showing affirmatively that it was unjust by being irregularly or unfairly procured."
But the case was decided upon the ground that the defendant had done no more than raise a doubt of the
correctness of the judgment sued on. 8 Johns. 173, 177, 178.
Chancellor Kent afterwards, treating of the same subject in the first edition of his Commentaries (1827),
put the right to impeach a foreign judgment somewhat more broadly, saying:
"No sovereign is obliged to execute within his dominion a sentence rendered out of it, and if execution
be sought by a suit upon the judgment or otherwise, he is at liberty, in his courts of justice, to examine
into the merits of such judgment [for the effect to be given to foreign judgments is altogether a matter
of comity in cases where it is not regulated by treaty]. In the former case [of a suit to enforce a foreign
judgment], the rule is that the foreign judgment is to be received in the first instance as prima
facie evidence of the debt, and it lies on the defendant to impeach the justice of it or to show that it was
irregularly and unduly obtained. This was the principle declared and settled by the House of Lords in 1771
in the case of Sinclair v. Fraser upon an appeal from the Court of Cession in Scotland."
In the second edition (1832), he inserted the passages above printed in brackets, and in a note to the
fourth edition (1840), after citing recent conflicting opinions in Great Britain, and referring to Mr. Justice
Story's reasoning in his Commentaries on the Conflict of Laws, § 607, in favor of the conclusiveness of
foreign judgments, he added:
"And that is certainly the more convenient and the safest rule, and the most consistent with sound
principle, except in cases in which the court which pronounced the judgment has not due jurisdiction of
the case, or of the defendant, or the proceeding was in fraud, or founded in palpable mistake or
irregularity, or bad by the law of the rei judicatae, and in all such cases, the justice of the judgment ought
to be impeached."
Mr. Justice Story, in his Commentaries on the Conflict of Laws, first published in 1834, after reviewing many
English authorities, said: "The present inclination of the English courts seems to be to sustain the
conclusiveness of foreign judgments," to which, in the second edition, in 1841, he added: "Although
certainly there yet remains no inconsiderable diversity of opinion among the learned judges of the different
tribunals." § 606.
He then proceeded to state his own view of the subject on principle, saying:
"It is indeed very difficult to perceive what could be done if a different doctrine were maintainable to the
full extent of opening all the evidence and merits of the cause anew on a suit upon the foreign judgment.
Some of the witnesses may be since dead; some of the vouchers may be lost or destroyed. The merits
of the cause, as formerly before the court upon the whole evidence, may have been decidedly in favor of
the judgment; upon a partial possession of the original evidence, they may now appear otherwise.
Suppose a case purely sounding in damages, such as an action for an assault, for slander, for conversion
of property, for a malicious prosecution, or for a criminal conversation; is the defendant to be at liberty
to retry the whole merits, and to make out, if he can, a new case upon new evidence? Or is the court to
review the former decision, like a Court of Appeal, upon the old evidence? In a case of covenant, or of
debt, or of a breach of contract, are all the circumstances to be reexamined anew? If they are, by what
laws and rules of evidence and principles of justice is the validity of the original judgment to be tried? Is
the court to open the judgment, and to proceed ex aequo et bono? Or is it to administer strict law, and
stand to the doctrines of the local administration of justice? Is it to act upon the rules of evidence
 acknowledged in its own jurisprudence, or upon those of the foreign jurisprudence? These and many
more questions might be put to show the intrinsic difficulties of the subject. Indeed, the rule that the
judgment is to be prima facie evidence for the plain tiff would be a mere delusion if the defendant might
still question it by opening all or any of the original merits on his side, for under such circumstances it
would be equivalent to granting a new trial. It is easy to understand that the defendant may be at liberty
to impeach the original justice of the judgment by showing that the court had no jurisdiction, or that he
never had any notice of the suit, or that it was procured by fraud, or that upon its face it is founded in
mistake, or that it is irregular and bad by the local law, fori rei judicatae. To such an extent, the doctrine
is intelligible and practicable. Beyond this, the right to impugn the judgment is in legal effect the right to
retry the merits of the original cause at large, and to put the defendant upon proving those merits."
He then observed:
"The general doctrine maintained in the American courts in relation to foreign judgments certainly is that
they are prima facie evidence, but that they are impeachable. But how far and to what extent this doctrine
is to be carried does not seem to be definitely settled. It has been declared that the jurisdiction of the
court, and its power over the parties and the things in controversy, may be inquired into, and that the
judgment may be impeached for fraud. Beyond this, no definite lines have as yet been drawn."
After stating the effect of the Constitution of the United States and referring to the opinions of some foreign
jurists, and to the law of France, which allows the merits of foreign judgments to be examined, Mr. Justice
Story concluded his treatment of the subject as follows:
"It is difficult to ascertain what the prevailing rule is in regard to foreign judgments in some of the other
nations of continental Europe -- whether they are deemed conclusive evidence or only prima
facie evidence. Holland seems at all times, upon the general principle of reciprocity, to have given great
weight to foreign judgments and in many cases, if not in all cases, to have given to them a weight equal
to that given to domestic judgments, wherever the like rule of reciprocity with regard to Dutch judgments
has been adopted by the foreign country whose judgment is brought under review. This is certainly a
very reasonable rule, and may perhaps hereafter work itself firmly into the structure of international
jurisprudence."
In Bradstreet v. Neptune Ins. Co. (1839), in the Circuit Court of the United States for the District of
Massachusetts, Mr. Justice Story said:
"If a civilized nation seeks to have the sentences of its own courts held of any validity elsewhere, they
ought to have a just regard to the rights and usages of other civilized nations and the principles of public
and national law in the administration of justice."
In Burnham v. Webster (1845), in an action of assumpsit upon a promissory note, brought in the Circuit
Court of the United States for the District of Maine, the defendant pleaded a former judgment in the Province
of New Brunswick in his favor in an action there brought by the plaintiff. The plaintiff replied that the note
was withdrawn from that suit, by consent of parties and leave of the court, before verdict and judgment,
and the defendant demurred to the replication. Judge Ware, in overruling the demurrer, said:
"Whatever difference of opinion there may be as to the binding force of foreign judgments, all agree that
they are not entitled to the same authority as the judgments of domestic courts of general jurisdiction.
They are but evidence of what they purport to decide, and liable to be controlled by counter evidence,
and do not, like domestic judgments, import absolute verity and remain incontrovertible and conclusive
until reversed."
And he added that if the question stood entirely clear from authority, he should be of opinion that the
plaintiff could not be allowed to deny the validity of the proceedings of a court whose authority he had
invoked. 2 Ware, 236, 239-241.
At a subsequent trial of that case before a jury, (1846) 1 Woodb. & Min. 172, the defendant proved the
judgment in New Brunswick. The plaintiff then offered to prove the facts stated in his replication, and that
any entry on the record of the judgment in New Brunswick concerning this note was therefore by mistake
10
or inadventure. This evidence was excluded, and a verdict taken for the plaintiff, subject to the opinion of
the court. Mr. Justice Woodbury, in granting a new trial, delivered a thoughtful and discriminating opinion
upon the effect of foreign judgments, from which the following passages are taken:
"They do, like domestic ones, operate conclusively, ex proprio vigore, within the governments in which
they are rendered, but not elsewhere. When offered and considered elsewhere, they are, ex
commitate, treated with respect, according to the nature of the judgment and the character of the tribunal
which rendered it and the reciprocal mode, if any, in which that government treats our judgments, and
according to the party offering it, whether having sought or assented to it voluntarily or not, so as to give
it in some degree the force of a contract, and hence to be respected elsewhere by analogy according to
the lex loci contractus. With these views I would go to the whole extent of the cases decided by Lords
Mansfield and Buller, and where the foreign judgment is not in rem, as it is in admiralty, having the
subject matter before the court, and acting on that, rather than the parties, I would consider it only prima
facie evidence as between the parties to it."
"By returning to that rule, we are enabled to give parties at times most needed and most substantial
relief, such as in judgments abroad against them without notice, or without a hearing on the merits, or
by accident or mistake of facts, as here, or on rules of evidence and rules of law they never assented to,
being foreigners and their contracts made elsewhere but happening to be traveling through a foreign
jurisdiction and being compelled in invitum to litigate there."
"Nor would I permit the prima facie force of the foreign judgment to go far if the court was one of a
barbarous or semi-barbarous government, and acting on no established principles of civilized
jurisprudence, and not resorted to willingly by both parties, or both not inhabitants and citizens of the
country. Nor can much comity be asked for the judgments of another nation which, like France, pays no
respect to those of other countries except, as before remarked, on the principle of the parties belonging
there or assenting to a trial there."
"On the other hand, by considering a judgment abroad as only prima facie valid, I would not allow the
plaintiff abroad, who had sought it there, to avoid it, unless for accident or mistake, as here, because, in
other respects, having been sought there by him voluntarily, it does not lie in his mouth to complain of
it. Nor would I in any case permit the whole merits of the judgment recovered abroad to be put in evidence
as a matter of course, but, being prima facie correct, the party impugning it, and desiring a hearing of
its merits, must show first, specifically, some objection to the judgment's reaching the merits, and tending
to prove they had not been acted on, or [as?] by showing there was no jurisdiction in the court, or no
notice, or some accident or mistake, or fraud which prevented a full defense, and has entered into the
judgment, or that the court either did not decide at all on the merits or was a tribunal not acting in
conformity to any set of legal principles, and was not willingly recognized by the party as suitable for
adjudicating on the merits. After matters like these are proved, I can see no danger, but rather great
safety, in the administration of justice in permitting to every party before us at least one fair opportunity
to have the merits of his case fully considered, and one fair adjudication upon them before he is estopped
forever."
In De Brimont v. Penniman (1873), in the Circuit Court of the United States for the Southern District of
New York, Judge Woodruff said:
"The principle on which foreign judgments receive any recognition from our courts is one of comity. It
does not require, but rather forbids, it where such a recognition works a direct violation of the policy of
our laws, and does violence to what we deem the rights of our citizens."
And he declined to maintain an action against a citizen of the United States, whose daughter had been
married in France to a French citizen, upon a decree of a French court requiring the defendant, then resident
in France and duly served with process there, to pay an annuity to his son-in-law. 10 Blatchford 436, 441.
Mr. Justice Story and Chancellor Kent, as appears by the passages above quoted from their Commentaries,
concurred in the opinion that, in a suit upon a foreign judgment, the whole merits of the case could not as
matter of course be reexamined anew, but that the defendant was at liberty to impeach the judgment not
only by showing that the court had no jurisdiction of the case or of the defendant, but also by showing that
it was procured by fraud, or was founded on clear mistake or irregularity, or was bad by the law of the
place where it was rendered. Story on Conflict of Laws § 607; 2 Kent Com. (6th ed.) 120.
The word "mistake" was evidently used by Story and Kent in this connection not in its wider meaning of
error in judgment, whether upon the law or upon the facts, but in the stricter sense of misapprehension or
oversight, and as equivalent to what, in Burnham v. Webster, before cited, Mr. Justice Woodbury spoke of
as "some objection to the judgment's reaching the merits, and tending to prove that they had not been
acted on," "some accident or mistake," or "that the court did not decide at all on the merits." 1 Woodb. &
Min. 180.
The suggestion that a foreign judgment might be impeached for error in law of the country in which it was
rendered is hardly consistent with the statement of Chief Justice Marshall, when, speaking of the disposition
of this Court to adopt the construction given to the laws of a state by its own courts, he said:
"This course is founded on the principle, supposed to be universally recognized, that the judicial
department of every government, where such department exists, is the appropriate organ for construing
the legislative acts of that government. Thus, no court in the universe which professed to be governed
by principle would, we presume, undertake to say that the courts of Great Britain or of France or of any
other nation had misunderstood their own statutes, and therefore erect itself into a tribunal which should
correct such misunderstanding. We receive the construction given by the courts of the nation as the true
sense of the law, and feel ourselves no more at liberty to depart from that construction than to depart
from the words of the statute."
In recent times, foreign judgments rendered within the dominions of the English Crown and under the law
of England, after a trial on the merits, and no want of jurisdiction and no fraud or mistake being shown or
offered to be shown, have been treated as conclusive by the highest courts of New York, Maine, and
Illinois. Lazier v. Westcott (1862), 26 N.Y. 146, 150; Dunstan v. Higgins (1893), 138 N.Y. 70, 74; Rankin
v. Goddard (1866), 54 Me. 28, and (1868) 55 Me. 389; Baker v. Palmer (1876), 83 Ill. 568. In two early
cases in Ohio, it was said that foreign judgments were conclusive unless shown to have been obtained by
fraud. Lake Bank v. Harding (1832), 5 Ohio 545, 547; Anderson v. Anderson (1837), 8 Ohio 108, 110. But
in a later case in that state, it was said that they were only prima facie evidence of indebtedness. Pelton v.
Platner (1844), 13 Ohio, 209, 217. In Jones v. Jamison (1860), 15 La.Ann. 35, the decision was only that,
by virtue of the statutes of Louisiana, a foreign judgment merged the original cause of action as against
the plaintiff.
The result of the modern decisions in England, after much diversity, not to say vacillation, of opinion does
not greatly differ (so far as concerns the aspects in which the English courts have been called upon to
consider the subject) from the conclusions of Chancellor Kent and of Justices Story and Woodbury.
At one time it was held that, in an action brought in England upon a judgment obtained by the plaintiff in
a foreign country, the judgment must be assumed to be according to the law of that country unless the
contrary was clearly proved, manifestly implying that proof on that point was competent. Becquet v.
MacCarthy (1831), 2 B. & Ad. 951, 957; Alivon v. Furnival (1834), 1 Cr., M. & R. 277, 293, 4 Tyrwh. 751,
768.
Lord Brougham, in the House of Lords, as well as Chief Justice Tindal and Chief Justice Wilde (afterwards
Lord Chancellor Truro) and their associates, in the Common Bench, considered it to be well settled that an
Irish or colonial judgment or a foreign judgment was not, like a judgment of a domestic court of record,
conclusive evidence, but only, like a simple contract, prima facie evidence of a debt. Houlditch v.
Donegal (1834), 8 Bligh N.R. 301, 342, 346, 2 Cl. & Fin. 470, 476-479; Don v. Lippmann (1837), 5 Cl. &
11
Fin. 1, 20-22; Smith v. Nicolls (1839), 7 Scott 147, 166-170, 5 Bing.N.C. 208, 220-224, 7 Dowl. 282; Bank
of Australasia v. Harding (1850), 9 C.B. 661, 686-687.
On the other hand, Vice Chancellor Shadwell, upon an imperfect review of the early cases, expressed the
opinion that a foreign judgment was conclusive. Martin v. Nicolls (1830), 3 Sim. 458.
Like opinions were expressed by Lord Denman, speaking for the Court of Queen's Bench, and by Vice
Chancellor Wigram, in cases of Irish or colonial judgments, which were subject to direct appellate review
in England. Ferguson v. Mahon (1839), 11 Ad. & El. 179, 183, 3 Per. & Dav. 143, 146; Henderson v.
Henderson (1844), 6 Q.B. 288, 298, 299; Henderson v. Henderson (1843), 3 Hare 100, 118.
In Bank v. Nias (1851), in an action upon an Australian judgment, pleas that the original promises were
not made, and that those promises, if made, were obtained by fraud, were held bad on demurrer. Lord
Campbell, in delivering judgment, referred to Story on the Conflict of Laws, and adopted substantially his
course of reasoning in § 607, above quoted, with regard to foreign judgments. But he distinctly put the
decision upon the ground that the defendant might have appealed to the Judicial Committee of the Privy
Council, and thus have procured a review of the colonial judgment, and he took the precaution to say:
"How far it would be permitted to a defendant to impeach the competency or the integrity of a foreign
court from which there was no appeal it is unnecessary here to inquire."
The English courts, however, have since treated that decision as establishing that a judgment of any
competent foreign court could not, in an action upon it, be questioned either because that court had
mistaken its own law or because it had come to an erroneous conclusion upon the facts. In Meyer v.
Ralli (1876), a judgment in rem, rendered by a French court of competent jurisdiction, was held to be
reexaminable upon the merits solely because it was admitted by the parties, in the special case upon which
the cause was submitted to the English court, to be manifestly erroneous in regard to the law of France. 1
C.P.D. 358.
In view of the recent decisions in England, it is somewhat remarkable that, by the Indian Code of Civil
Procedure of 1877,
"no foreign judgment [which is defined as a judgment of 'a civil tribunal beyond the limits of British India,
and not having authority in British India, nor established by the governor general in council'] shall operate
as a bar to a suit in British India, . . . if it appears on the face of the proceeding to be founded on an
incorrect view of international law,"
or "if it is, in the opinion of the court before which it is produced, contrary to natural justice." Piggott on
Foreign Judgments (2d ed.) 380, 381.
It was formerly understood in England that a foreign judgment was not conclusive if it appeared upon its
face to be founded on a mistake or disregard of English law.
In Simpson v. Fogo (1860), 1 Johns. & Hem. 18, and (1862) 1 Hem. & Mil. 195, Vice Chancellor Wood
(afterwards Lord Hatherley) refused to give effect to a judgment in personam of a court in Louisiana, which
had declined to recognize the title of a mortgagee of an English ship under the English law. In delivering
judgment upon demurrer, he said:
"The State of Louisiana may deal as it pleases with foreign law; but if it asks courts of this country to
respect its law, it must be on a footing of paying a like respect to ours. Any comity between the courts
of two nations holding such opposite doctrines as to the authority of the lex loci is impossible. While the
courts of Louisiana refuse to recognize a title acquired here, which is valid according to our law, and hand
over to their own citizens property so acquired, they cannot at the same time expect us to defer to a rule
of their law which we are no more bound to respect than a law that any title of foreigners should be
disregarded in favor of citizens of Louisiana. The answer to such a demand must be that a country which
pays so little regard to our laws as to set aside a paramount title acquired here must not expect at our
hands any greater regard for the title so acquired by the citizens of that country."
1 Johns. & Hem. 28, 29. And upon motion for a decree, he elaborated the same view, beginning by saying: depend upon what he termed "that which is loosely called comity,'" but upon the saying of Baron Parke,
"Whether this judgment does so err or not against the recognized principles of what has been commonly above quoted, and consequently
called the comity of nations by refusing to regard the law of the country where the title to the ship was
acquired is one of the points which I have to consider," "that anything which negatives the existence of that legal obligation or excuses the defendant from the
and concluding that it was "so contrary to law, and to what is required by the comity of nations" that he performance of it must form a good defense to the action."
must disregard it. 1 Hem. & Mil. 222-247. See also Liverpool Co. v. Hunter (1867), L.R. 4 Eq. 62, 68, and
(1868) L.R. 3 Ch. 479, 484.
But the theory that a foreign judgment imposes or creates a duty or obligation is a remnant of the ancient
fiction, assumed by Blackstone, saying that
In Scott v. Pilkington (1862), Chief Justice Cockburn treated it as an open question whether a judgment "upon showing the judgment once obtained still in full force and yet unsatisfied, the law immediately
recovered in New York for a debt could be impeached on the ground that the record showed that the foreign implies that, by the original contract of society, the defendant hath contracted a debt and is bound to pay
court ought to have decided the case according to English law, and had either disregarded the comity of it."
nations by refusing to apply the English law or erred in its view of English law. 2 B. & S. 11, 42. In Castrique
v. Imrie (1870), the French judgment which was adjudged not to be impeachable for error in law, French
3 Bl.Com. 160. That fiction which embraced judgments upon default or for torts cannot convert a transaction
or English, was, as the House of Lords construed it, a judgment in rem, under which the ship to which the
wanting the assent of parties into one which necessarily implies it. Louisiana v. New Orleans, 109 U. S.
plaintiff in England claimed title had been sold. L.R. 4 H.L. 414. In Godard v. Gray (1870), shortly
285, 109 U. S. 288. While the theory in question may help to explain rules of pleading which originated
afterwards, in which the court of Queen's Bench held that a judgment in personam of a French court could
while the fiction was believed in, it is hardly a sufficient guide at the present day in dealing with questions
not be impeached because it had put a construction erroneous, according to English law, upon an English
of international law, public or private, and of the comity of our own country, and of foreign nations. It might
contract, the decision was put by Justices Blackburn and Mellor upon the ground that it did not appear that
be safer to adopt the maxim applied to foreign judgments by Chief Justice Weston, speaking for the
the foreign court had "knowingly and perversely disregarded the rights given by the English law," and by
Supreme Judicial Court of Maine, judicium redditur in invitum, or, as given by Lord Coke, in praesumptione
Justice Hannen solely upon the ground that the defendant did not appear to have brought the English law
legis judicium redditur in invitum. Jordan v. Robinson (1838), 15 Me. 167, 168; Co.Litt. 248b.
to the knowledge of the foreign court. L.R. 6 Q.B. 139, 149, 154. In Messina v. Petrococchino (1872), Sir
Robert Phillimore, delivering judgment in the Privy Council, said: "A foreign judgment of a competent court
may, indeed, be impeached if it carries on the face of it a manifest error." L.R. 4 P.C. 144, 157. In Russell v. Smyth, above cited, Baron Parke took the precaution of adding: "Nor need we say how far the
judgment of a court of competent jurisdiction, in the absence of fraud, is conclusive upon the parties." 9
M. & W. 819. He could hardly have contemplated erecting a rule of local procedure into a canon of private
The result of the English decisions therefore would seem to be that a foreign judgment in personam may
international law, and a substitute for "the comity of nations," on which, in an earlier case, he had himself
be impeached for a manifest and willful disregard of the law of England.
relied as the ground for enforcing in England a right created by a law of a foreign country. Alivon v.
Furnival, 1 Cr., M. & R. 277, 296, 4 Tyrwh. 751, 771.
Lord Abinger, Baron Parke, and Baron Alderson were wont to say that the judgment of a foreign court of
competent jurisdiction for a sum certain created a duty or legal obligation to pay that sum; or, in Baron
In Abouloff v. Oppenheimer (1882), Lord Coleridge and Lord Justice Brett carefully avoided adopting the
Parke's words, that the principle on which the judgments of foreign and colonial courts are supported and
theory of a legal obligation to pay a foreign judgment as the test in determining how far such a judgment
enforced was
might be impeached. 10 Q.B.D. 295, 300, 305. In Hawksford v. Giffard (1886), in the Privy Council, on
"that where a court of competent jurisdiction has adjudicated a certain sum to be due from one person
appeal from the Royal Court of Jersey, Lord Herschell said:
to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment
"This action is brought upon an English judgment which, until a judgment was obtained in Jersey, was in
may be maintained."
that country no more than evidence of a debt."

But this was said in explaining why, by the technical rules of pleading, an action of assumpsit or of debt
12 App.Cas. 122, 126. In Nouvion v. Freeman (1889), in the House of Lords, Lord Herschell, while he
would lie upon a foreign judgment, and had no reference to the question how far such a judgment was
referred to the reliance placed by counsel on the saying of Baron Parke, did not treat a foreign judgment
conclusive of the matter adjudged. At common law, an action of debt would lie on a debt appearing by a
as creating or imposing a new obligation, but only as declaring and establishing that a debt or obligation
record or by any other specialty, such as a contract under seal, and would also lie for a definite sum of
existed. His words were:
money due by simple contract. Assumpsit would not lie upon a record or other specialty, but would lie upon
"The principle upon which I think our enforcement of foreign judgments must proceed is this, that in a
any other contract, whether expressed by the party or implied by law. In an action upon a record, or upon
court of competent jurisdiction, where according to its established procedure, the whole merits of the
a contract under seal, a lawful consideration was conclusively presumed to exist, and could not be denied,
case were open at all events, to the parties, however much they may have failed to take advantage of
but in an action, whether in debt or in assumpsit, upon a simple contract, express or implied, the
them, or may have waived any of their rights, a final adjudication has been given that a debt or obligation
consideration was open to inquiry. A foreign judgment was not considered, like a judgment of a domestic
exists which cannot thereafter in that court be disputed, and can only be questioned in an appeal to a
court of record, as a record or specialty. The form of action, therefore, upon a foreign judgment was not in
higher tribunal. In such a case, it may well be said that, giving credit to the courts of another country,
debt, grounded upon a record or a specialty, but was either in debt, as for a definite sum of money due by
we are prepared to take the fact that such adjudication has been made as establishing the existence of
simple contract, or in assumpsit upon such a contract. A foreign judgment, being a security of no higher
the debt or obligation."
nature than the original cause of action, did not merge that cause of action. The plaintiff might sue either
on the judgment or on the original cause of action, and in either form of suit the foreign judgment was only
evidence of a liability equivalent to a simple contract, and was therefore liable to be controlled by such And Lord Bramwell said:
competent evidence as the nature of the case admitted. "How can it be said that there is a legal obligation on the part of a man to pay a debt who has a right to
say, 'I owe none, and no judgment has established against me that I do?' I cannot see."

Mr. Justice Blackburn, indeed, in determining how far a foreign judgment could be impeached either for
error in law or for want of jurisdiction, expressed the opinion that the effect of such a judgment did not

12
The foreign judgment in that case was allowed no force, for want of finally establishing the existence of a
debt. 15 App.Cas. 1, 9-10, 14.
In view of all the authorities upon the subject and of the trend of judicial opinion in this country and in
England, following the lead of Kent and Story, we are satisfied that where there has been opportunity for
a full and fair trial abroad before a court of competent jurisdiction, conducting the trial upon regular
proceedings, after due citation or voluntary appearance of the defendant and under a system of
jurisprudence likely to secure an impartial administration of justice between the citizens of its own country
and those of other countries, and there is nothing to show either prejudice in the court or in the system of
laws under which it was sitting, or fraud in procuring the judgment, or any other special reason why the
comity of this nation should not allow it full effect, the merits of the case should not, in an action brought
in this country upon the judgment, be tried afresh, as on a new trial or an appeal, upon the mere assertion
of the party that the judgment was erroneous in law or in fact. The defendants therefore cannot be
permitted upon that general ground to contest the validity or the effect of the judgment sued on.
But they have sought to impeach that judgment upon several other grounds which require separate
consideration.
It is objected that the appearance and litigation of the defendants in the French tribunals were not
voluntary, but by legal compulsion, and therefore that the French courts never acquired such jurisdiction
over the defendants that they should be held bound by the judgment.
Upon the question what should be considered such a voluntary appearance as to amount to a submission
to the jurisdiction of a foreign court, there has been some difference of opinion in England.
In General Steam Navigation Co. v. Guillou (1843), in an action at law to recover damages to the plaintiffs'
ship by a collision with the defendant's ship through the negligence of the master and crew of the latter,
the defendant pleaded a judgment by which a French court, in a suit brought by him and after the plaintiffs
had been cited, had appeared, and had asserted fault on this defendant's part, had adjudged that it was
the ship of these plaintiffs, and not that of this defendant, which was in fault. It was not shown or suggested
that the ship of these plaintiffs was in the custody or possession of the French court. Yet Baron Parke,
delivering a considered judgment of the Court of Exchequer (Lord Abinger and Barons Alderson and Rolfe
concurring), expressed a decided opinion that the pleas were bad in substance, for these reasons:
"They do not state that the plaintiffs were French subjects, or resident or even present in France, when
the suit began, so as to be bound, by reason of allegiance or domicile or temporary presence, by a
decision of a French court, and they did not select the tribunal and sue as plaintiffs, in any of which cases
the determination might have possibly bound them. They were mere strangers, who put forward the
negligence of the defendant as an answer, in an adverse suit in a foreign country, whose laws they were
under no obligation to obey."
But it is now settled in England that while an appearance by the defendant in a court of a foreign country,
for the purpose of protecting his property already in the possession of that court, may not be deemed a
voluntary appearance, yet an appearance solely for the purpose of protecting other property in that country
from seizure is considered as a voluntary appearance. De Cosse Brissac v. Rathbone (1861), 6 H. & N. 301,
20 Law Journal (N.S.) Exch. 238; Schibsby v. Westenholz (1870), L.R. 6 Q.B. 155, 162; Voinet v.
Barrett (1885), Cab. & El. 554, 54 Law Journal (N.S.) Q.B. 521, and 55 Law Journal (N.S.) Q.B. 39.
The present case is not one of a person traveling through or casually found in a foreign country. The
defendants, although they were not citizens or residents of France, but were citizens and residents of the
State of New York, and their principal place of business was in the City of New York, yet had a storehouse
and an agent in Paris, and were accustomed to purchase large quantities of goods there, although they did
not make sales in France. Under such circumstances, evidence that their sole object in appearing and
carrying on the litigation in the French courts was to prevent property in their storehouse at Paris, belonging
13
to them, and within the jurisdiction, but not in the custody, of those courts from being taken in satisfaction
of any judgment that might be recovered against them would not, according to our law, show that those
courts did not acquire jurisdiction of the persons of the defendants.
It is next objected that in those courts, one of the plaintiffs was permitted to testify not under oath, and
was not subjected to cross-examination by the opposite party, and that the defendants were therefore
deprived of safeguards which are by our law considered essential to secure honesty and to detect fraud in
a witness, and also that documents and papers were admitted in evidence with which the defendants had
no connection and which would not be admissible under our own system of jurisprudence. But it having
been shown by the plaintiffs, and hardly denied by the defendants, that the practice followed and the
method of examining witnesses were according to the laws of France, we are not prepared to hold that the
fact that the procedure in these respects differed from that of our own courts is, of itself, a sufficient ground
for impeaching the foreign judgment.
It is also contended that a part of the plaintiffs' claim is affected by one of the contracts between the parties
having been made in violation of the revenue laws of the United States, requiring goods to be invoiced at
their actual market value. Rev.Stat. § 2854. It may be assumed that, as the courts of a country will not
enforce contracts made abroad in evasion or fraud of its own laws, so they will not enforce a foreign
judgment upon such a contract. Armstrong v. Toler, 11 Wheat. 258; De Brimont v. Penniman, 10 Blatchford
436; Lang v. Holbrook, Crabbe 179; Story on Conflict of Laws §§ 244, 246; Wharton's Conflict of Laws, §
656. But as this point does not affect the whole claim in this case, it is sufficient for present purposes to
say that there does not appear to have been any distinct offer to prove that the invoice value of any of the
goods sold by the plaintiffs to the defendants was agreed between them to be or was in fact lower than the
actual market value of the goods.
It must however always be kept in mind that it is the paramount duty of the court before which any suit is
brought to see to it that the parties have had a fair and impartial trial before a final decision is rendered
against either party.
When an action is brought in a court of this country by a citizen of a foreign country against one of our own
citizens to recover a sum of money adjudged by a court of that country to be due from the defendant to
the plaintiff, and the foreign judgment appears to have been rendered by a competent court, having
jurisdiction of the cause and of the parties, and upon due allegations and proofs and opportunity to defend
against them, and its proceedings are according to the course of a civilized jurisprudence, and are stated
in a clear and formal record, the judgment is prima facie evidence, at least, of the truth of the matter
adjudged, and it should be held conclusive upon the merits tried in the foreign court unless some special
ground is shown for impeaching the judgment, as by showing that it was affected by fraud or prejudice or
that, by the principles of international law and by the comity of our own country, it should not be given full
credit and effect.
There is no doubt that both in this country, as appears by the authorities already cited, and in England, a
foreign judgment may be impeached for fraud.
Shortly before the Declaration of Independence, the House of Lords, upon the trial of the Duchess of
Kingston for bigamy, put to the judges the question whether -- assuming a sentence of the ecclesiastical
court against a marriage, in a suit for jactitation of marriage, to be conclusive evidence so as to prevent
the counsel for the crown from proving the marriage upon an indictment for polygame -- "the counsel for
the crown may be admitted to avoid the effect of such sentence by proving the same to have been obtained
by fraud or collusion." Chief Justice De Grey, delivering the opinion of the judges, which was adopted by
the House of Lords, answering this question in the affirmative, said:
"But if it was a direct and decisive sentence upon the point, and, as it stands, to be admitted as conclusive
evidence upon the court, and not to be impeached from within, yet, like all other acts of the highest
judicial authority, it is impeachable from without. Although it is not permitted to show that the court was
mistaken, it may be shown that they were misled. Fraud is an intrinsic collateral act, which vitiates the
 most solemn proceedings of courts of justice. Lord Coke says it avoids all judicial acts, ecclesiastical or
temporal."
All the subsequent English authorities concur in holding that any foreign judgment, whether in rem or in
personam, may be impeached upon the ground that it was fraudulently obtained.
Under what circumstances this may be done does not appear to have ever been the subject of judicial
investigation in this country.
It has often, indeed, been declared by this Court that the fraud which entitles a party to impeach the
judgment of one of our own tribunals must be fraud extrinsic to the matter tried in the cause, and not
merely consist in false and fraudulent documents or testimony submitted to that tribunal, and the truth of
which was contested before it and passed upon by it. United States v. Throckmorton, 98 U. S. 61, 98 U. S.
65-66; Vance v. Burbank, 101 U. S. 514, 101 U. S. 519; Steel v. Smelting Co., 106 U. S. 447, 106 U. S.
453; Moffat v. United States, 115 U. S. 24, 115 U. S. 32; United States v. Minor, 114 U. S. 233, 114 U. S.
242. And in one English case, where a ship had been sold under a foreign judgment, the like restriction
upon impeaching that judgment for fraud was suggested, but the decision was finally put upon the ground
that the judicial sale passed the title to the ship. Cammell v. Sewell (1858-60), 3 H. & N. 617, 646, 5 H. &
N. 728, 729, 742.
But it is now established in England by well considered and strongly reasoned decisions of the Court of
Appeal that foreign judgments may be impeached if procured by false and fraudulent representations and
testimony of the plaintiff, even if the same question of fraud was presented to and decided by the foreign
court.
In Abouloff v. Oppenheimer (1882), the plaintiff had recovered a judgment at Tiflis, in Russia, ordering the
defendants to return certain goods, or to pay their value. The defendants appealed to a higher Russian
court, which confirmed the judgment and ordered the defendants to pay, besides the sum awarded below,
an additional sum for costs and expenses. In an action in the English High Court of Justice upon those
judgments, the defendants pleaded that they were obtained by the gross fraud of the plaintiff in fraudulently
representing to the Russian courts that the goods in question were not in her possession when the suit was
commenced, and when the judgment was given, and during the whole time the suit was pending, and by
fraudulently concealing from those courts the fact that those goods, as the fact was and as she well knew,
were in her actual possession. A demurrer to this plea was overruled and judgment entered for the
defendants. And that judgment was affirmed in the Court of Appeal by Lord Chief Justice Coleridge, Lord
Justice Baggallay, and Lord Justice Brett, all of whom delivered concurring opinions, the grounds of which
sufficiently appear in the opinion delivered by Lord Justice Brett (since Lord Esher, M.R.), who said:
"With regard to an action brought upon a foreign judgment, the whole doctrine as to fraud is English, and
is to be applied in an action purely English. I am prepared to hold, according to the judgment of the
House of Lords adopting the proposition laid down by De Grey, C.J., that if the judgment upon which the
action is brought was procured from the foreign court by the successful fraud of the party who is seeking
to enforce it, the action in the English court will not lie. This proposition is absolute and without any
limitation, and as the Lord Chief Justice has pointed out, is founded on the doctrine that no party in an
English court shall be able to take advantage of his own wrongful act or, as it may be stated in other
language, that no obligation can be enforced in an English court of justice which has been procured by
the fraud of the person relying upon it as an obligation. . . . I will assume that in the suit in the Russian
courts, the plaintiff's fraud was alleged by the defendants, and that they gave evidence in support of the
charge. I will assume even that the defendants gave the very same evidence which they propose to
adduce in this action. Nevertheless the defendants will not be debarred at the trial of this action from
making the same charge of fraud and from adducing the same evidence in support of it, and if the High
Court of Justice is satisfied that the allegations of the defendants are true and that the fraud was
committed, the defendants will be entitled to succeed in the present action. It has been contended that
the same issue ought not to be tried in an English court which was tried in the Russian courts, but I agree
that the question whether the Russian courts were deceived never could be an issue in the action tried
14
before them. . . . In the present case, we have had to consider the question fully, and according to the
best opinion which I can form, fraud committed by a party to a suit for the purpose of deceiving a foreign
court is a defense to an action in this country founded upon the judgment of that foreign court. It seems
to me that if we were to accede to the argument for the plaintiff, the result would be that a plausible
deceiver would succeed, whereas a deceiver who is not plausible would fail. I cannot think that plausible
fraud ought to be upheld in any court of justice in England. I accept the whole doctrine, without any
limitation, that whenever a foreign judgment has been obtained by the fraud of the party relying upon it,
it cannot be maintained in the courts of this country, and further that nothing ought to persuade an
English court to enforce a judgment against one party which has been obtained by the fraud of the other
party to the suit in the foreign court."
The same view was affirmed and acted on in the same court by Lords Justices Lindley and Bowen in Vadala
v. Lawes (1890), 25 Q.B.D. 310, 317-320, and by Lord Esher and Lord Justice Lopes in Crozat v.
Brogden [1894] 2 Q.B. 30, 34-35.
In the case at bar, the defendants offered to prove in much detail that the plaintiffs presented to the French
court of first instance and to the arbitrator appointed by that court, and upon whose report its judgment
was largely based, false and fraudulent statements and accounts against the defendants by which the
arbitrator and the French courts were deceived and misled, and their judgments were based upon such
false and fraudulent statements and accounts. This offer, if satisfactorily proved, would, according to the
decisions of the English Court of Appeal in Abouloff v. Oppenheimer, Vadala v. Lawes, and Crozat v.
Brogden, above cited, be a sufficient ground for impeaching the foreign judgment and examining into the
merits of the original claim.
But whether those decisions can be followed in regard to foreign judgments, consistently with our own
decisions as to impeaching domestic judgments for fraud, it is unnecessary in this case to determine,
because there is a distinct and independent ground upon which we are satisfied that the comity of our
nation does not require us to give conclusive effect to the judgments of the courts of France, and that
ground is the want of reciprocity on the part of France as to the effect to be given to the judgments of this
and other foreign countries.
In France, the royal ordinance of June 15, 1629, art. 121, provided as follows:
"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and sovereignties for any
cause whatever shall have no lien or execution in our kingdom. Thus, the contracts shall stand for simple
promises, and, notwithstanding the judgments, our subjects against whom they have been rendered may
contest their rights anew before our judges."
"Judgments rendered by foreign tribunals, and acts acknowledged before foreign officers, shall not be
capable of execution in France except in the manner and in the cases provided by articles 2123 and 2128
of the Civil Code,"
which are as follows: by article 2123,
"A lien cannot arise from judgments rendered in a foreign country except so far as they have been
declared executory by a French tribunal, without prejudice to provisions to the contrary which may
exist in public laws and treaties."
By article 2128,
"Contracts entered into in a foreign country cannot give a lien upon property in France if there are no
provisions contrary to this principle in public laws or in treaties."
The defendants in their answer cited the above provisions of the statutes of France, and alleged, and at the
trial offered to prove, that by the construction given to these statutes by the judicial tribunals of France,
when the judgments of tribunals of foreign countries against the citizens of France are sued upon in the
courts of France, the merits of the controversies upon which those judgments are based are examined
anew, unless a treaty to the contrary effect exists between the Republic of France and the country in which
such judgment is obtained (which is not the case between the Republic of France and the United States),
and that the tribunals of the Republic of France give no force and effect, within the jurisdiction of that
country, to the judgments duly rendered by courts of competent jurisdiction of the United States against
citizens of France after proper personal service of the process of those courts has been made thereon in
this country. We are of opinion that this evidence should have been admitted.
In Odwin v. Forbes (1817), President Henry, in the Court of Demerara, which was governed by the Dutch
law and was, as he remarked, "a tribunal foreign to and independent of that of England," sustained a plea
of an English certificate in bankruptcy, upon these grounds:
"It is a principle of their law, and laid down particularly in the ordinances of Amsterdam, . . . that the
same law shall be exercised towards foreigners in Amsterdam as is exercised with respect to citizens of
that state in other countries, and upon this principle of reciprocity, which is not confined to the City of
Amsterdam, but pervades the Dutch laws, they have always given effect to the laws of that country which
has exercised the same comity and indulgence in admitting theirs; . . . that the Dutch bankrupt laws
proceed on the same principles as those of the English; that the English tribunals give effect to the Dutch
bankrupt laws, and that, on the principle of reciprocity and mutual comity, the Dutch tribunals, according
to their own ordinances, are bound to give effect to the English bankrupt laws when duly proved, unless
there is any express law or ordinance prohibiting their admission."
And his judgment was affirmed in the Privy Council on appeal. Case of Odwin v. Forbes, pp. 89, 159-161,
173-176; (1817) Buck Bankr.Cas. 57, 64.
President Henry, at page 76 of his Treatise on Foreign Law, published as a preface to his report of that
case, said:
"This comity in giving effect to the judgments of other tribunals is generally exercised by states under
the same sovereign, on the ground that he is the fountain of justice in each, though of independent
jurisdiction, and it has also been exercised in different states of Europe with respect to foreign judgments,
particularly in the Dutch states, who are accustomed by the principle of reciprocity to give effect in their
territories to the judgments of foreign states which show the same comity to theirs; but the tribunals of
France and England have never exercised this comity to the degree that those of Holland have, but always
required a fresh action to be brought, in which the foreign judgment may be given in evidence. As this is
a matter of positive law and internal policy in each state, no opinion need be given. Besides, it is a mere
question of comity, and perhaps it might be neither politic nor prudent, in two such great states, to give
indiscriminate effect to the judgment of each other's tribunals, however the practice might be proper or
convenient in federal states or those under the same sovereign."
It was that statement which appears to have called forth the observations of Mr. Justice Story, already
cited:
"Holland seems at all times, upon the general principle of reciprocity, to have given great weight to
foreign judgments, and in many cases, if not in all cases, to have given to them a weight equal to that
given to domestic judgments wherever the like rule of reciprocity with regard to Dutch judgments has
been adopted by the foreign country whose judgment is brought under review. This is certainly a very
reasonable rule, and may perhaps hereafter work itself firmly into the structure of international
jurisprudence."
This rule, though never either affirmed or denied by express adjudication in England or America, has been
indicated, more or less distinctly, in several of the authorities already cited.
Lord Hardwicke threw out a suggestion that the credit to be given by one court to the judgment of a foreign
court might well be affected by "their proceeding both by the same rules of law." Otway v. Ramsay, 4 B. &
C. 414-416, note.
15
Lord Eldon, after saying that "natural law" (evidently intending the law of nations) "requires the courts of
this country to give credit to those of another for the inclination and power to do justice," added that
"if it appears in evidence that persons suing under similar circumstances neither had met nor could meet
with justice, that fact cannot be immaterial as an answer to the presumption."
Lord Brougham, presiding as lord Chancellor in the House of Lords, said:
"The law, in the course of procedure abroad, sometimes differs so mainly from ours in the principles upon
which it is bottomed that it would seem a strong thing to hold that our courts were bound conclusively to
give execution to the sentence of foreign courts when, for aught we know, there is not anyone of those
things which are reckoned the elements or the corner stones of the due administration of justice present
to the procedure in these foreign courts."
Chief Justice Smith, of New Hampshire, in giving reasons why foreign judgments or decrees, founded on
the municipal laws of the state in which they are pronounced, are not conclusive evidence of debt, but prima
facie evidence only, said:
"These laws and regulations may be unjust, partial to citizens, and against foreigners; they may operate
injustice to our citizens, whom we are bound to protect; they may be, and the decisions of courts founded
on them, just cause of complaint against the supreme power of the state where rendered. To adopt them
is not merely saying that the courts have decided correctly on the law, but it is approbating the law itself."
Mr. Justice Story said:
"If a civilized nation seeks to have the sentences of its own courts of any validity elsewhere, they ought
to have a just regard to the rights and usages of other civilized nations, and the principles of public and
national law in the administration of justice."
Mr. Justice Woodbury said that judgments in personam, rendered under a foreign government,
"are, ex commitate, treated with respect according to the nature of the judgment and the character of
the tribunal which rendered it and the reciprocal mode, if any, in which that government treats our
judgments,"
and added "nor can much comity be asked for the judgments of another nation which, like France, pays no
respect to those of other countries." Burnham v. Webster, 1 Woodb. & Min. 172, 175, 179.
Mr. Justice Cooley said: "True comity is equality. We should demand nothing more and concede nothing
less." McEwan v. Zimmer, 38 Mich. 765, 769.
Mr. Wheaton said:
"There is no obligation recognized by legislators, public authorities, and publicists to regard foreign laws,
but their application is admitted only from considerations of utility and the mutual convenience of states
-- ex commitate, ob reciprocam utilitatem."
"The general comity, utility, and convenience of nations have, however, established a usage among most
civilized states by which the final judgments of foreign courts of competent jurisdiction are reciprocally
carried into execution."
Since Story, Kent, and Wheaton wrote their commentaries, many books and essays have been published
upon the subject of the effect to be allowed by the courts of one country to the judgments of another, with
references to the statutes and decisions in various countries. Among the principal ones are Foelix, Droit
International Prive (4th ed., by Demangeat, 1866) lib. 2, tits. 7, 8; Moreau, Effets Internationaux des
Jugements (1884); Piggott, on Foreign Judgments (2d ed., 1884); Constant, De l'Execution des Jugements
Etrangers (2d ed., 1890), giving the text of the articles of most of the modern codes upon the subject, and
of French treaties with Italian, German, and Swiss states, and numerous papers in Clunet's Journal de Droit
International Prive, established in 1874 and continued to the present time. For the reasons stated at the
outset of this opinion, we have not thought it important to state the conflicting theories of continental
commentators and essayists as to what each may think the law ought to be, but have referred to their
works only for evidence of authoritative declarations, legislative or judicial, of what the law is.
By the law of France, settled by a series of uniform decisions of the Court of Cassation, the highest judicial
tribunal, for more than half a century, no foreign judgment can be rendered executory in France without a
review of the judgment au fond (to the bottom), including the whole merits of the cause of action on which
the judgment rests. Pardessus, Droit Commercial § 1488; Bard, Precis de Droit International (1883) nos.
234-239; Story on Conflict of Laws §§ 615-617; Pigggott 452; Westllake on Private International Law (3d
ed., 1890) 350.
A leading case was decided by the Court of Cassation on April 19, 1819, and was as follows: a contract of
partnership was made between Holker, a French merchant, and Parker, a citizen of the United States.
Afterwards, and before the partnership accounts were settled, Parker came to France, and Holker sued him
in the Tribunal of Commerce of Paris. Parker excepted on the ground that he was a foreigner, not domiciled
in France, and obtained a judgment, affirmed on appeal, remitting the matter to the American courts -
- obtint son renvoi devant les tribunaux Americains. Holker then sued Parker in the Circuit Court of the
United States for the District of Massachusetts, and in 1814 obtained a judgment there ordering Parker to
pay him $529,949. One branch of the controversy had been brought before this Court in 1813. Holker v.
Parker, 7 Cranch 436. Holker, not being able to obtain execution of that judgment in America because
Parker had no property there and continued to reside in Paris, obtained from a French judge an order
declaring the judgment executory. Upon Parker's application to nullify the proceeding, the Royal Court of
Paris, reversing the judgment of a lower court, set aside that order, assigning these reasons:
"Considering that judgments rendered by foreign courts have neither effect nor authority in France; that
this rule is doubtless more particularly applicable in favor of Frenchmen, to whom the King and his officers
owe a special protection, but that the principle is absolute, and may be invoked by all persons, without
distinction, being founded on the independence of states; that the ordinance of 1629, in the beginning of
its article 121, lays down the principle in its generality when it says that judgments rendered in foreign
kingdoms and sovereignties for any cause whatever shall have no execution in the Kingdom of France,
and that the Civil Code, art. 2123, gives to this principle the same latitude when it declares that a lien
cannot result from judgments rendered in a foreign country, except so far as they have been declared
executory by a French tribunal -- which is not a matter of mere form, like the granting in past times of
a pareatis from one department to another for judgments rendered within the Kingdom, but which
assumes, on the part of the French tribunals, a cognizance of the cause, and a full examination of the
justice of the judgment presented for execution, as reason demands, and that this has always been
practiced in France, according to the testimony of our ancient authorities; that there may result from this
an inconvenience where the debtor, as is asserted to have happened in the present case, removes his
property and his person to France, while keeping his domicile in his native country; that it is for the
creditor to be watchful, but that no consideration can impair a principle on which rests the sovereignty of
governments, and which, whatever be the case, must preserve its whole force."
The court therefore adjudged that, before the tribunal of first instance, Holker should state the grounds of
his action, to be contested by Parker, and to be determined by the court upon cognizance of the whole
cause. That judgment was confirmed, upon deliberate consideration, by the Court of Cassation, for the
reasons that the ordinance of 1629 enacted, in absolute terms and without exception, that foreign
judgments should not have execution in France; that it was only by the Civil Code and the Code of Civil
Procedure that the French tribunals had been authorized to declare them executory; that therefore the
ordinance of 1629 had no application; that the articles of the Codes referred to did not authorize the courts
to declare judgments rendered in a foreign country executory in France without examination; that such an
authorization would be as contrary to the institution of the courts as would be the award or the refusal of
execution arbitrarily and at will, would impeach the right of sovereignty of the French government, and was
not in the intention of the legislature, and that the Codes made no distinction between different judgments
rendered in a foreign country, and permitted the judges to declare them all executory, and therefore those
judgments, whether against a Frenchman or against a foreigner, were subject to examination on the
merits. Holker v. Parker, Merlin, Questions do Droit, Jugement, § 14, No. 2.
16
The Court of Cassation has ever since constantly affirmed the same view. Moreau, No. 106, note, citing
many decisions; Clunet, 1882, p. 166. In Clunet, 1894, p. 913, note, it is said to be
"settled by judicial decisions -- il est de jurisprudence -- that the French courts are bound, in the absence
of special diplomatic treaties, to proceed to the revision on the whole merits -- au fond -- of foreign
judgments, execution of which is demanded of them,"
citing, among other cases, a decision of the Court of Cassation on February 2, 1892, by which it was
expressly held to result from the articles of the Codes above cited
"that judgments rendered in favor of a foreigner against a Frenchman, by a foreign court, are subject,
when execution of them is demanded in France, to the revision of the French tribunals which have the
right and the duty to examine them, both as to the form and as to the merits."
In Belgium the Code of Civil Procedure of 1876 provides that if a treaty on the basis of reciprocity be in
existence between Belgium and the country in which the foreign judgment has been given, the examination
of the judgment in the Belgian courts shall bear only upon the questions whether it "contains nothing
contrary to public order, to the principles of the Belgian public order;" whether, by the law of the country
in which it was rendered, it has the force of res judicata; whether the copy is duly authenticated; whether
the defendant's rights have been duly respected, and whether the foreign court is not the only competent
court, by reason of the nationality of the plaintiff. Where, as is the case between Belgium and France, there
is no such treaty, the Belgian Court of Cassation holds that the foreign judgment may be reexamined upon
the merits. Constant, 111, 116; Moreau, No. 189; Clunet, 1887, p. 217; 1888, p. 837; Piggott 439. And in
a very recent case, the Civil Tribunal of Brussels held that,
"considering that the right of revision is an emanation of the right of sovereignty; that it proceeds from
the emporium, and that as such it is within the domain of public law; that from that principle it manifestly
follows that, if the legislature does not recognize executory force in foreign judgments where there exists
no treaty upon the basis of reciprocity, it cannot belong to the parties to substitute their will for that of
the legislature by arrogating to themselves the power of delegating to the foreign judge a portion of
sovereignty."
In Holland, the effect given to foreign judgments has always depended upon reciprocity, but whether by
reason of Dutch ordinances only or of general principles of jurisprudence does not clearly appear.
In Denmark, the courts appear to require reciprocity to be shown before they will execute a foreign
judgment. Foelix, Nos. 328, 345; Clunet, 1891, p. 987; Westlale, ubi sup. In Norway, the courts reexamine
the merits of all foreign judgments, even of those of Sweden. Foelix, No. 401; Piggott, 504, 505; Clunet,
1892, p. 296. In Sweden, the principle of reciprocity has prevailed from very ancient times. The courts give
no effect to foreign judgments unless upon that principle, and it is doubtful whether they will even then
unless reciprocity is secured by treaty with the country in which the judgment was rendered.
In the empire of Germany, as formerly in the states which now form part of that empire, the judgments of
those states are mutually executed, and the principle of reciprocity prevails as to the judgments of other
countries. Foelix, Nos. 328, 331, 333-341; Moreau, Nos. 178, 179; Vierhaus, in Piggott, 460-474;
Westlake, ubi sup. By the German Code of 1877,
"compulsory execution of the judgment of a foreign court cannot take place unless its admissibility has
been declared by a judgment of exequatur; . . . the judgment of exequatur is to be rendered without
examining whether the decision is conformable to law;"
but it is not to be granted "if reciprocity is not guaranteed." Constant, 79-81; Piggott, 466. The
Reichsgericht, or imperial court, in a case reported in full in Piggott, has held that an English judgment
cannot be executed in Germany, because, the court said, the German courts, by the Code, when they
execute foreign judgments at all, are "bound to the unqualified recognition of the legal validity of the
judgments of foreign courts," and
"it is therefore an essential requirement of reciprocity that the law of the foreign state should recognize
in an equal degree the legal validity of the judgments of German courts, which are to be enforced by its
courts, and that an examination of their legality, both as regards the material justice of the decision as
to matters of fact or law, and with respect to matters of procedure, should neither be required as a
 condition of their execution, by the court ex officio, nor be allowed by the admission of pleas which might
lead to it."
In Switzerland, by the federal Constitution, civil judgments in one canton are executory throughout the
republic. As to foreign judgments, there is no federal law, each canton having its own law upon the subject.
But civil judgments in one canton are executory other cantons, foreign judgments are executed according
to the rule of reciprocity only. Constant, 193-204; Piggott, 505-516; Clunet, 1887, p. 762; Westlake, ubi
sup. The law upon this subject has been clearly stated by Brocher, President of the Court of Cassation of
Geneva and professor of law in the university there. In his Nouveau Traite de Droit International Prive
(1876) § 174, treating of the question whether "it might not be convenient that states should execute,
without reviewing their merits, judgments rendered on the territory of each of them respectively," he says:
"It would certainly be advantageous for the parties interested to avoid the delays, the conflicts, the
differences of opinion, and the expenses resulting from the necessity of obtaining a new judgment in each
locality where they should seek execution. There might thence arise for each sovereignty a juridical or
moral obligation to lend a strong hand to foreign judgments. But would not such an advantage be
counterbalanced, and often surpassed, by the dangers that might arise from that mode of proceeding?
There is here, we believe, a question of reciprocal appreciation and confidence. One must at the outset
inquire whether the administration of the foreign judiciary, whose judgments it is sought to execute without
verifying their merits, presents sufficient guaranties. If the propriety of such an execution be admitted,
there is ground for making it the object of diplomatic treaties. That form alone can guaranty the realization
of a proper reciprocity. It furnishes, moreover, to each state the means of acting upon the judicial
organization and procedure of other states."
In an article in the Journal, after a review of the Swiss decisions, he recognizes and asserts that "it comes
within the competency of each canton to do what seems to it proper in such matters." Clunet, 1879, pp.
88, 94. And in a later treatise he says:
"We cannot admit that the recognition of a state as sovereign ought necessarily to have as a consequence
the obligation of respecting and executing the judicial decisions rendered by its tribunals. In strict right,
the authority of such acts does not extend beyond the frontier. Each sovereignty possesses in particular,
and more or less in private, the territory subject to its power. No other can exercise there an act of its
authority. This territorial independence finds itself, in principle, directly included in the very act by which
one nation recognizes a foreign state as a sovereign; but there cannot result therefrom a promise to
adopt, and to cause to be executed upon the national territory, judgments rendered by the officials of
the foreign state, whoever they may be. That would be an abdication of its own sovereignty, and would
bind it in such sort as to make it an accomplice in acts often injurious, and in some cases even criminal.
Such obligations suppose a reciprocal confidence. They are not undertaken, moreover, except upon
certain conditions, and by means of a system of regulations intended to prevent or to lessen the dangers
which might result from them."
In Russia, by the Code of 1864, "the judgments of foreign tribunals shall be rendered executory according
to the rules established by reciprocal treaties and conventions," and where no rules have been established
by such treaties, are to be "put in execution in the empire only after authorization granted by the courts of
the empire," and
"in deciding upon demands of this kind the courts do not examine into the foundation of the dispute
adjudged by the foreign tribunals, but decide only whether the judgment does not contain dispositions
which are contrary to the public order, or which are not permitted by the laws of the empire."
Constant, 183-185. Yet a chamber of the Senate of St. Petersburg, sitting as a Court of Cassation, and the
highest judicial tribunal of the empire in civil matters, has declined to execute a French judgment upon the
grounds that, by the settled law of Russia,
"it is a principle in the Russian empire that only the decisions of the authorities to whom jurisdiction has
been delegated by the sovereign power have legal value by themselves and of full right,"
17
and that, "in all questions of international law, reciprocity must be observed and maintained as a
fundamental principle." Adam v. Schipoff, Clunet, 1884, pp. 45, 46, 134. And Professor Englemann, of the
Russian University of Dorpat, in an able essay, explaining that and other Russian decisions, takes the
following view of them:
"The execution of a treaty is not the only proof of reciprocity. . . . It is necessary to commit the
ascertainment of the existence of reciprocity to the judicial tribunals, for the same reasons for which
there is conferred upon them the right to settle all questions incident to the cause to be adjudged. The
existence of reciprocity between two states ought to be proved in the same manner as all the positive
facts of the case. . . . It is true that the principle of reciprocity is a principle not of right, but of policy, yet
the basis of the principle of all regular and real policy is also the fundamental principle of right, and the
point of departure of all legal order -- the suum cuique. This last principle comprehends right, reciprocity,
utility, and reciprocity is the application of right to policy. . . . Let this principle be applied wherever there
is the least guaranty or even a probability of reciprocity, and the cognizance of this question be committed
to the judicial tribunals, and one will arrive at important results, which, on their side, will touch the desired
end -- international accord. But for this it is indispensable that the application of this principle should be
entrusted to judicial tribunals, accustomed to decide affairs according to right, and not to administrative
authorities, which look above all to utility, and are accustomed to be moved by political reasons,
intentions, and even passions."
Clunet, 1884, pp. 120-122. But it would seem that no foreign judgment will be executed in Russia unless
reciprocity is secured by treaty. Clunet, 1884, pp. 46, 113, 139, 140, 602.
In Poland, the provisions of the Russian Code are in force, and the Court of Appeal of Warsaw has decided
that where there is no treaty, the judgments of a foreign country cannot be executed, because
"in admitting a contrary conclusion, there would be impugned one of the cardinal principles of
international relations, namely the principle of reciprocity, according to which each state recognizes
juridical rights and relations, originating or established in another country, only in the measure in which
the latter, in its turn, does not disregard the rights and relations existing in the former."
In Roumania, it is provided by Code that
"judicial decisions rendered in foreign countries cannot be executed in Roumania except in the same
manner in which Roumanian judgments are executed in the country in question, and provided they are
declared executory by competent Roumanian judges,"
and this article seems to be held to require legislative reciprocity.
In Bulgaria, by a resolution of the supreme court in 1881,
"the Bulgarian judges should, as a general rule, abstain from entering upon the merits of the foreign
judgment. They ought only to inquire whether the judgment submitted to then does not contain
dispositions contrary to the public order and to the Bulgarian laws."
Constant, 129, 130; Clunet, 1886, p. 570. This resolution closely follows the terms of the Russian Code,
which, as has been seen, has not precluded applying the principle of reciprocity.
In Austria, the rule of reciprocity does not rest upon any treaty or legislative enactment, but has been long
established, by imperial decrees and judicial decisions, upon general principles of jurisprudence. Foelix, No.
331; Constant, 100-108; Moreau, No. 185; Weiss, Traite de Droit International (1886) 950; Clunet, 1891,
p. 1003; 1894, p. (1886) 980; Clunet, 1891, p. 1003; 1894, p. 908; Piggott, 434. In Hungary, the same
principles were always followed as in Austria, and reciprocity has been made a condition by a law of 1880.
Constant, 109; Moreau, No. 186, and note; Piggott, 436; Weiss, ubi sup.
In Italy, before it was united into one kingdom, each state had its own rules. In Tuscany and in Modena, in
the absence of treaty, the whole merits were reviewed. In Parma, as by the French ordinance of 1629, the
foreign judgment was subject to fundamental revision if against a subject of Parma. In Naples, the Code
and the decisions followed those of France. In Sardinia, the written laws required above all the condition of
reciprocity, and if that condition was not fulfilled, the foreign judgment was reexaminable in all respects.
Fiore, Effetti Internazionali delle Sentenze (1875) 40-44; Moreau, No. 204. In the papal states, by a decree
of the Pope in 1820,
"the exequatur shall not be granted, except so far as the judgments rendered in the states of his Holiness
shall enjoy the same favor in the foreign countries; this reciprocity is presumed if there is no particular
reason to doubt it."
Toullier, Droit Civil, lib. 3, tit. 3, c. 6, § 3, No. 93. And see Foelix, No. 343; Westlake, ubi sup. In the
Kingdom of Italy, by the Code of Procedure of 1865,
"executory force is given to the judgments of foreign judicial authorities by the Court of Appeal in whose
jurisdiction they are to be executed, by obtaining a judgment on an exequatur in which the court examines
(a) if the judgment has been pronounced by a competent judicial authority; (b) if it has been pronounced,
the parties being regularly cited; (c) if the parties have been legally represented or legally defaulted; (d)
if the judgment contains dispositions contrary to public order or to the internal public law of the realm."
Constant, 157. In 1874, the Court of Cassation of Turin,
"considering that in international relations is admitted the principle of reciprocity, as that which has its
foundation in the natural reason of equality of treatment, and in default thereof opens the way to the
exercise of the right of retaliation,"
and that the French courts examine the merits of Italian judgments before allowing their execution in
France, decided that the Italian courts of appeal, when asked to execute a French judgment, ought not only
to inquire into the competency of the foreign court, but also to review the merits and the justice of the
controversy. Levi v. Pitre, in Rossi, Execuzione delle Sentenze Straniere (1st ed. 1875) 70, 284, and in
Clunet, 1879, p. 295. Some commentators, however, while admitting that decision to be most authoritative,
have insisted that it is unsound, and opposed to other Italian decisions, to which we have not access.
Rossi, ubi sup. (2d ed. 1890) 92; Fiore, 142-143; Clunet, 1878, p. 237; Clunet, 1879, pp. 296, 305; Piggott,
483; Constant, 161.
In the principality of Monaco, foreign judgments are not executory, except by virtue of a special ordinance
of the prince, upon a report of the Advocate General. Constant, 169; Piggott, 488.
In Spain, formerly, foreign judgments do not appear to have been executed at all. Foelix, No. 398; Moreau,
No. 197; Silvela, in Clunet, 1881, p. 20. But by the Code of 1855, revised in 1881 without change in this
respect,
"judgments pronounced in foreign countries shall have in Spain the force that the respective treaties
given them; if there are no special treaties with the nation in which they have been rendered, they shall
have the same force that is given by the laws of that nation to Spanish executory judgments; if the
judgment to be executed proceeds from a nation by whose jurisprudence effect is not given to the
judgments pronounced by Spanish tribunals, it shall have no force in Spain,"
and
"application for the execution of judgments pronounced in foreign countries shall be made to the Supreme
Tribunal of Justice, which, after examining an authorized translation of the foreign judgment, and after
hearing the party against whom it is directed and the public minister, shall decide whether it ought or
ought not to be executed."
Constant, 141-142; Piggott, 499-500. A case in which the Supreme Court of Spain in 1880 ordered
execution of a French judgment after reviewing its merits is reported in Clunet, 1881, p. 365. In another
case, in 1888, the same court, after hearing the parties and the public minister, ordered execution of a
Mexican judgment. The public minister, in his demand for its execution, said:
"Our law of civil procedure, inspired, to a certain point, by the modern theories of international law which,
recognizing among civilized nations a true community of right, and considering mankind as a whole, in
which nations occupy a position identical with that of individuals towards society, gives authority in Spain
to executory judgments rendered by foreign tribunals, even in the absence of special treaty, provided
18
that those countries do not proscribe the execution there of our judgments, and under certain conditions,
which, if they limit the principle, are inspired by the wish of protecting our sovereignty and by the supreme
exigencies of justice. When nothing appears either for or against as to the authority of the judgments of
our courts in the foreign country, one should not put an obstacle to the fulfillment, in our country, of
judgments emanating from other nations, especially when the question is of a country which, by its
historic origin, its language, its literature, and by almost the identity of its customs, its usages, and its
social institutions, has so great a connection with our own, which obliges us to maintain with it the most
intimate relations of friendship and courtesy."
And he pointed out that Mexico, by its Code, had adopted reciprocity as a fundamental principle. Among
the reasons assigned by the court for ordering the Mexican judgment to be executed was that "there exists
in Mexico no precedent of jurisprudence which refuses execution to judgments rendered by the Spanish
tribunals." Clunet, 1891, pp. 288-292.
In Portugal, foreign judgments, whether against a Portuguese or against a foreigner, are held to be
reviewable upon the merits before granting execution thereof. Foelix, No. 399; Clunet, 1875, pp. 54, 448;
Moreau, No. 217; Constant, 176-180; Westlake, ubi sup.
In Greece, by the provisions of the Code of 1834, foreign judgments both parties to which are foreigners
are enforced without examination of their merits, but if one of the parties is a Greek, they are not enforced
if found contradictory to the facts proved or if they are contrary to the prohibitive laws of Greece. Foelix,
No. 396; Constant, 151, 152; Moreau, No. 202; Saripolos, in Clunet, 1880, p. 173; Piggott, 475.
In Egypt, under the influence of European jurisprudence, the Code of Civil Procedure has made reciprocity
a condition upon which foreign judgments are executed. Constant, 136; Clunet, 1887, pp. 98, 228; 1889,
p. 322.
In Cuba and in Porto Rico, the Codes of Civil Procedure are based upon the Spanish Code of 1855. Piggott,
435, 503. In Hayti, the Code reenacts the provisions of the French Code. Constant, 153; Moreau, No. 203;
Piggott, 460.
In Mexico, the system of reciprocity has been adopted by the Code of 1884 as the governing principle.
Constant, 168; Clunet, 1891, p. 290.
The rule of reciprocity likewise appears to have generally prevailed in South America. In Peru, foreign
judgments do not appear to be executed without examining the merits unless when reciprocity is secured
by treaty. Clunet, 1879, pp. 266, 267; Piggott, 548. In Chili, there appears to have been no legislation
upon the subject, but, according to a decision of the Supreme Court of Santiago in 1886, "the Chilian
tribunals should not award an exequatur, except upon decisions in correct form, and also reserving the
general principle of reciprocity." Clunet, 1889, p. 135; Constant, 131-132.
In Brazil, foreign judgments are not executed unless because of the country in which they were rendered
admitting the principle of reciprocity or because of a placet of the government of Brazil, which may be
awarded according to the circumstances of the case. Constant, 124, and note; Moreau, No. 192; Piggott,
543-546; Westlake, ubi sup. In the Argentine Republic, the principle of reciprocity was maintained by the
courts, and was affirmed by the Code of 1878 as a condition sine qua non of the execution of foreign
judgments, but has perhaps been modified by later legislation. Moreau, No. 218; Palomeque, in Clunet,
1887, pp. 539-558.
It appears, therefore, that there is hardly a civilized nation on either continent which by its general law
allows conclusive effect to an executory foreign judgment for the recovery of money. In France and in a
few smaller states -- Norway, Portugal, Greece, Monaco, and Hayti -- the merits of the controversy are
reviewed as of course, allowing to the foreign judgment, at the most, no more effect than of being prima
facie evidence of the justice of the claim. In the great majority of the countries on the continent of Europe
-- in Belgium, Holland, Denmark, Sweden, Germany, in many cantons of Switzerland, in Russia and Poland,
in Roumania, in Austria and Hungary (perhaps in Italy), and in Spain -- as well as in Egypt, in Mexico, and
in a great part of South America, the judgment rendered in a foreign country is allowed the same effect
only as the courts of that country allow to the judgments of the country in which the judgment in question
is sought to be executed.
The prediction of Mr. Justice Story (in § 618 of his Commentaries on the Conflict of Laws, already cited)
has thus been fulfilled, and the rule of reciprocity has worked itself firmly into the structure of international
jurisprudence.
The reasonable, if not the necessary, conclusion appears to us to be that judgments rendered in France, or
in any other foreign country by the laws of which our own judgments are reviewable upon the merits are
not entitled to full credit and conclusive effect when sued upon in this country, but are prima facie evidence
only of the justice of the plaintiffs' claim.
In holding such a judgment, for want of reciprocity, not to be conclusive evidence of the merits of the claim,
we do not proceed upon any theory of retaliation upon one person by reason of injustice done to another,
but upon the broad ground that international law is founded upon mutuality and reciprocity, and that by
the principles of international law recognized in most civilized nations, and by the comity of our own country,
which it is our judicial duty to known and to declare, the judgment is not entitled to be considered
conclusive.
By our law at the time of the adoption of the Constitution, a foreign judgment was considered as prima
facie evidence, and not conclusive. There is no statute of the United States, and no treaty of the United
States with France or with any other nation, which has changed that law or has made any provision upon
the subject. It is not to be supposed that if any statute or treaty had been or should be made, it would
recognize as conclusive the judgments of any country which did not give like effect to our own judgments.
In the absence of statute or treaty, it appears to us equally unwarrantable to assume that the comity of
the United States requires anything more.
If we should hold this judgment to be conclusive, we should allow it an effect to which, supposing the
defendants' offers to be sustained by actual proof, it would, in the absence of a special treaty, be entitled
in hardly any other country in Christendom except the country in which it was rendered. If the judgment
had been rendered in this country, or in any other outside of the jurisdiction of France, the French courts
would not have executed or enforced it except after examining into its merits. The very judgment now sued
on would be held inconclusive in almost any other country than France. In England and in the colonies
subject to the law of England, the fraud alleged in its procurement would be a sufficient ground for
disregarding it. In the courts of nearly every other nation, it would be subject to reexamination either
merely because it was a foreign judgment or because judgments of that nation would be reexaminable in
the courts of France.
For these reasons, in the action at law, the Judgment is reversed, and the cause remanded to the circuit
court, with directions to set aside the verdict and to order a new trial.
For the same reasons, in the suit in equity between these parties, the foreign judgment is not a bar, and
therefore the Decree dismissing the bill is reversed the plea adjudged bad, and the cause remanded to the
circuit court for further proceedings not inconsistent with this opinion.
19
WILLIAM F. GEMPERLE, plaintiff-appellant,
vs.
HELEN SCHENKER and PAUL SCHENKER as her husband, defendants-appellees.
Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First Instance of Rizal
dismissing this case for lack of jurisdiction over the person of defendant Paul Schenker and for want of
cause of action against his wife and co-defendant, Helen Schenker said Paul Schenker "being in no position
to be joined with her as party defendant, because he is beyond the reach of the magistracy of the Philippine
courts."
The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as Schenker — acting
through his wife and attorney-in-fact, Helen Schenker — herein-after referred to as Mrs. Schenker — filed
with the Court of First Instance of Rizal, a complaint — which was docketed as Civil Case No. Q-2796 thereof
— against herein plaintiff William F. Gemperle, for the enforcement of Schenker's allegedly initial
subscription to the shares of stock of the Philippines-Swiss Trading Co., Inc. and the exercise of his alleged
pre-emptive rights to the then unissued original capital stock of said corporation and the increase thereof,
as well as for an accounting and damages. Alleging that, in connection with said complaint, Mrs. Schenker
had caused to be published some allegations thereof and other matters, which were impertinent, irrelevant
and immaterial to said case No. Q-2796, aside from being false and derogatory to the reputation, good
name and credit of Gemperle, "with the only purpose of attacking" his" honesty, integrity and reputation"
and of bringing him "into public hatred, discredit, disrepute and contempt as a man and a businessman",
Gemperle commenced the present action against the Schenkers for the recovery of P300,000 as damages,
P30,000 as attorney's fees, and costs, in addition to praying for a judgment ordering Mrs. Schenker "to
retract in writing the said defamatory expressions". In due course, thereafter, the lower court, rendered
the decision above referred to. A reconsiderating thereof having been denied, Gemperle interposed the
present appeal.
The first question for determination therein is whether or not the lower court had acquired jurisdiction over
the person of Schenker. Admittedly, he, a Swiss citizen, residing in Zurich, Switzerland, has not been
actually served with summons in the Philippines, although the summons address to him and Mrs. Schenker
had been served personally upon her in the Philippines. It is urged by plaintiff that jurisdiction over the
person of Schenker has been secured through voluntary appearance on his part, he not having made a
special appearance to assail the jurisdiction over his person, and an answer having been filed in this case,
stating that "the defendants, by counsel, answering the plaintiff's complaint, respectfully aver", which is
allegedly a general appearance amounting to a submission to the jurisdiction of the court, confirmed,
according to plaintiff, by a P225,000 counterclaim for damages set up in said answer; but this counterclaim
was set up by Mrs. Schenker alone, not including her husband. Moreover, said answer contained several
affirmative defenses, one of which was lack of jurisdiction over the person of Schenker, thus negating the
alleged waiver of this defense. Nevertheless, We hold that the lower court had acquired jurisdiction over
said defendant, through service of the summons addressed to him upon Mrs. Schenker, it appearing from
said answer that she is the representative and attorney-in-fact of her husband aforementioned civil case
No. Q-2796, which apparently was filed at her behest, in her aforementioned representative capacity. In
other words, Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so that
she was, also, empowered to represent him in suits filed against him, particularly in a case, like the of the
one at bar, which is consequence of the action brought by her on his behalf.
Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is premised upon the alleged
lack of jurisdiction over the person of Schenker, which cannot be sustained, it follows that the conclusion
drawn therefore from is, likewise, untenable.
Wherefore, the decision appealed from should be, is hereby, reversed, and the case remanded to the lower
court for proceedings, with the costs of this instance defendants-appellees. It is so ordered.
Pennoyer v. Neff, 95 U.S. 714 (1878)
Pennoyer v. Neff
Syllabus
1. A statute of Oregon, after providing for service of summons upon parties or their representatives,
personally or at their residence, declares that, when service cannot be thus made, and the defendant, after
due diligence, cannot be found within the State, and
"that fact appears, by affidavit, to the satisfaction of the court or judge thereof, and it, in like manner,
appears that a cause of action exists against the defendant, or that he is a proper party to an action
relating to real property in the State, such court or judge may grant an order that the service be made
by publication of summons . . . when the defendant is not a resident of the State, but has property
therein, and the court has jurisdiction of the subject of the action,"
-- the order to designate a newspaper of the county where the action is commenced in which the
publication shall be made -- and that proof of such publication shall be "the affidavit of the printer, or
his foreman, or his principal clerk."
Held, that defects in the affidavit for the order can only be taken advantage of on appeal, or by some other
direct proceeding, and cannot be urged to impeach the judgment collaterally, and that the provision as to
proof of the publication is satisfied when the affidavit is made by the editor of the paper.
2. A personal judgment is without any validity if it be rendered by a State court in an action upon a money
demand against a nonresident of the State who was served by a publication of summons, but upon whom
no personal service of process within the State was made, and who did not appear; and no title to property
passes by a sale under an execution issued upon such a judgment.
3. The State, having within her territory property of a nonresident, may hold and appropriate it to satisfy
the claims of her citizens against him, and her tribunals may inquire into his obligations to the extent
necessary to control the disposition of that property. If he has no property in the State, there is nothing
upon which her tribunals can adjudicate.
4. Substituted service by publication, or in any other authorized form, is sufficient to inform a nonresident
of the object of proceedings taken where property is once brought under the control of the court by seizure
or some equivalent act, but where the suit is brought to determine his personal rights and obligations, that
is, where it is merely in personam, such service upon him is ineffectual for any purpose.
5. Process from the tribunals of one State cannot run into another State and summon a party there
domiciled to respond to proceedings against him, and publication of process or of notice within the State in
which the tribunal sits cannot create any greater obligation upon him to appear. Process sent to him out of
the State, and process published within it, are equally unavailing in proceedings to establish his personal
liability.
6. Except in cases affecting the personal status of the plaintiff, and in those wherein that mode of service
may be considered to have been assented to in advance, the substituted service of process by publication
allowed by the law of Oregon and by similar laws in other States where actions are brought against
nonresidents is effectual only where, in connection with process against the person for commencing the
action, property in the State is brought under the control of the court and subjected to its disposition by
process adapted to that purpose, or where the judgment is sought as a means of reaching such property
or affecting some interest therein; in other words, where the action is in the nature of a proceeding in rem.
20
7. Whilst the courts of the United States are not foreign tribunals in their relations to the State courts, they
are tribunals of a different sovereignty, and are bound to give a judgment of a State court only the same
faith and credit to which it is entitled in the courts of another State.
8. The term "due process of law," when applied to judicial proceedings, means a course of legal proceedings
according to those rules and principles which have been established by our jurisprudence for the protection
and enforcement of private rights. To give such proceedings any validity, there must be a competent
tribunal to pass upon their subject matter, and if that involves merely a determination of the personal
liability of the defendant, he must be brought within its jurisdiction by service of process within the State,
or by his voluntary appearance.
This action was brought by Neff against Pennoyer for the recovery of a tract of land situated in Multnomah
County, Oregon. Pennoyer, in his answer, denied Neff's title and right to possession, and set up a title in
himself.
By consent of parties, and in pursuance of their written stipulation filed in the case, the cause was tried by
the court, and a special verdict given, upon which judgment was rendered in favor of Neff; whereupon
Pennoyer sued out this writ of error.
The parties respectively claimed title as follows: Neff under a patent issued to him by the United States,
March 19, 1866; and Pennoyer by virtue of a sale made by the sheriff of said county, under an execution
sued out upon a judgment against Neff, rendered Feb. 19, 1866, by the Circuit Court for said county, in an
action wherein he was defendant and J. H. Mitchell was plaintiff. Neff was then a nonresident of Oregon.
In Mitchell v. Neff, jurisdiction of Neff was obtained by service of summons by publication. Pennoyer offered
in evidence duly certified copies of the complaint, summons, order for publication of summons, affidavit of
service by publication, and the judgment in that case, to the introduction of which papers the plaintiff
objected because, 1, said judgment is in personam, and appears to have been given without the
appearance of the defendant in the action or personal service of the summons upon him, and while he was
a nonresident of the State, and is, therefore, void; 2, said judgment is not in rem, and therefore constitutes
no basis of title in the defendant; 3, said copies of complaint, &c., do not show jurisdiction to give the
judgment alleged, either in rem or personam; and, 4, it appears from said papers that no proof of service
by publication was ever made, the affidavit thereof being made by the "editor" of the "Pacific Christian
Advocate," and not by "the printer, or his foreman or principal clerk." The court admitted the evidence
subject to the objections.
The finding of the court in regard to the facts bearing upon the asserted jurisdiction of the State court is as
follows: --
That, on Nov. 13, 1865, Mitchell applied to said Circuit Court, upon his own affidavit of that date, for an
order allowing the service of the summons in said action to be made upon Neff by publication thereof,
whereupon said court made said order, in the words following:
"Now, at this day, comes the plaintiff in his proper person, and by his attorneys, Mitchell and Dolph,
and files affidavit of plaintiff, and motion for an order of publication of summons, as follows, to wit:"
"Now comes the plaintiff, by his attorneys, and upon the affidavit of plaintiff, herewith filed, moves the
court for an order of publication of summons against defendant, as required by law, he being a
nonresident;"
"and it appearing to the satisfaction of the court that the defendant cannot, after due diligence, be found
in this State, and that he is a nonresident thereof, that his place of residence is unknown to plaintiff, and
cannot, with reasonable diligence, be ascertained by him, and that the plaintiff has a cause of action of
action against defendant, and that defendant has property in this county and State, it is ordered and
adjudged by the court that service of the summons in this action be made by publication for six weeks
 successively in the 'Pacific Christian Advocate,' a weekly newspaper published in Multnomah County,
Oregon, and this action is continued for such service."
That the affidavit of plaintiff, referred to in said order, is in the words following:
"I, J. H. Mitchell, being first duly sworn, say that the defendant, Marcus Neff, is a nonresident of this
State; that he resides somewhere in the State of California, at what place affiant knows not, and he
cannot be found in this State; that plaintiff has a just cause of action against defendant for a money
demand on account; that this court has jurisdiction of such action; that the defendant has property in
this county and State."
That the complaint in said action was verified and filed on Nov. 3, 1865, and contained facts tending to
prove that, at that date, said Mitchell had a cause of action against said Neff for services as an attorney,
performed "between Jan. 1, 1862, and May 15, 1863." That the entry of judgment in said action contained
the following averments:
"And it appearing to the court that the defendant was, at the time of the commencement of this action,
and ever since has been, a nonresident of this State; and it further appearing that he has property in this
State, and that defendant had notice of the pendency of this action by publication of the summons for
six successive weeks in the 'Pacific Christian Advocate,' a weekly newspaper of general circulation
published in Multnomah County, State of Oregon, the last issue of which was more than twenty days
before the first day of this term."
That the affidavit showing the publication of the summons in the "Advocate" aforesaid was made as stated
therein by the "editor" of that paper. That said complaint, summons, affidavit of Mitchell and of the "editor"
of the "Advocate" aforesaid, and entry of judgment, were in the judgment roll, made up by the clerk in the
case, but the order for publication of the summons aforesaid was not placed in said roll by said clerk, but
remains on the files of said court; and that, when said court made said order for publication, and gave said
judgment against Neff, the only evidence it had before it to prove the facts necessary to give it jurisdiction
therefor, and particularly to authorize it to find and state that Neff's residence was unknown to Mitchell,
and could not, with reasonable diligence, be ascertained by him, and that Neff had notice of the pendency
of said action by the publication of the summons as aforesaid, was, so far as appears by the said roll and
the records and files of the said court, the said complaint and affidavits of Mitchell and the editor of the
"Advocate."
The statute of Oregon at the time of the commencement of the suit against Neff was as follows: --
"SECT. 55. When service of the summons cannot be made as prescribed in the last preceding section,
and the defendant, after due diligence, cannot be found within the State, and when that fact appears, by
affidavit, to the satisfaction of the court or judge thereof, or justice in an action in a justice's court, and
it also appears that a cause of action exists against the defendant, or that he is a proper party to an
action relating to real property in this State, such court or judge or justice may grant an order that the
service be made by publication of summons in either of the following cases: . . ."
"3. When the defendant is not a resident of the State, but has property therein, and the court has
jurisdiction of the subject of the action."
"SECT. 56. The order shall direct the publication to be made in a newspaper published in the county
where the action is commenced, and, if no newspaper be published in the county, then in a newspaper
to be designated as most likely to give notice to the person to be served, and for such length of time as
may be deemed reasonable, not less than once a week for six weeks. In case of publication, the court or
judge shall also direct a copy of the summons and complaint to be forthwith deposited in the post office,
directed to the defendant, at his place of residence, unless it shall appear that such residence is neither
known to the party making the application, nor can, with reasonable diligence, be ascertained by him.
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When publication is ordered, personal service of a copy of the summons and complaint out of the State
shall be equivalent to publication and deposit in the post office. In either case, the defendant shall appear
and answer by the first day of the term following the expiration of the time prescribed in the order for
publication; and, if he does not, judgment may be taken against him for want thereof. In case of personal
service out of the State, the summons shall specify the time prescribed in the order for publication."
"SECT. 57. The defendant against whom publication is ordered, or his personal representatives, on
application and sufficient cause shown, at any time before judgment, shall be allowed to defend the
action; and the defendant against whom publication is ordered, or his representatives, may in like
manner, upon good cause shown, and upon such terms as may be proper, be allowed to defend after
judgment, and within one year after the entry of such judgment, on such terms as may be just; and, if
the defence be successful, and the judgment or any part thereof have been collected or otherwise
enforced, such restitution may thereupon be compelled as the court shall direct. But the title to property
sold upon execution issued on such judgment to a purchaser in good faith shall not be thereby affected."
"SECT. 60. Proof of the service of summons shall be, in case of publication, the affidavit of the printer,
or his foreman, or his principal clerk, showing the same."
MR. JUSTICE FIELD delivered the opinion of the court.
This is an action to recover the possession of a tract of land, of the alleged value of $15,000, situated in
the State of Oregon. The plaintiff asserts title to the premises by a patent of the United States issued to
him in 1866, under the act of Congress of Sept. 27, 1850, usually known as the Donation Law of Oregon.
The defendant claims to have acquired the premises under a sheriff's deed, made upon a sale of the
property on execution issued upon a judgment recovered against the plaintiff in one of the circuit courts of
the State. The case turns upon the validity of this judgment.
It appears from the record that the judgment was rendered in February, 1866, in favor of J. H. Mitchell, for
less than $300, including costs, in an action brought by him upon a demand for services as an attorney;
that, at the time the action was commenced and the judgment rendered, the defendant therein, the plaintiff
here, was a nonresident of the State; that he was not personally served with process, and did not appear
therein; and that the judgment was entered upon his default in not answering the complaint, upon a
constructive service of summons by publication.
The Code of Oregon provides for such service when an action is brought against a nonresident and absent
defendant who has property within the State. It also provides, where the action is for the recovery of money
or damages, for the attachment of the property of the nonresident. And it also declares that no natural
person is subject to the jurisdiction of a court of the State
"unless he appear in the court, or be found within the State, or be a resident thereof, or have property
therein; and, in the last case, only to the extent of such property at the time the jurisdiction attached."
Construing this latter provision to mean that, in an action for money or damages where a defendant does
not appear in the court, and is not found within the State, and is not a resident thereof, but has property
therein, the jurisdiction of the court extends only over such property, the declaration expresses a principle
of general, if not universal, law. The authority of every tribunal is necessarily restricted by the territorial
limits of the State in which it is established. Any attempt to exercise authority beyond those limits would
be deemed in every other forum, as has been said by this Court, an illegitimate assumption of power, and
be resisted as mere abuse. D'Arcy v. Ketchum et al., 11 How. 165. In the case against the plaintiff, the
property here in controversy sold under the judgment rendered was not attached, nor in any way brought
under the jurisdiction of the court. Its first connection with the case was caused by a levy of the execution.
It was not, therefore, disposed of pursuant to any adjudication, but only in enforcement of a personal
judgment, having no relation to the property, rendered against a nonresident without service of process
upon him in the action or his appearance therein. The court below did not consider that an attachment of
the property was essential to its jurisdiction or to the validity of the sale, but held that the judgment was
invalid from defects in the affidavit upon which the order of publication was obtained and in the affidavit by
which the publication was proved.
There is some difference of opinion among the members of this Court as to the rulings upon these alleged
defects. The majority are of opinion that, inasmuch as the statute requires, for an order of publication, that
certain facts shall appear by affidavit to the satisfaction of the court or judge, defects in such affidavit can
only be taken advantage of on appeal, or by some other direct proceeding, and cannot be urged to impeach
the judgment collaterally. The majority of the court are also of opinion that the provision of the statute
requiring proof of the publication in a newspaper to be made by the "affidavit of the printer, or his foreman,
or his principal clerk" is satisfied when the affidavit is made by the editor of the paper. The term "printer,"
in their judgment, is there used not to indicate the person who sets up the type -- he does not usually have
a foreman or clerks -- it is rather used as synonymous with publisher. The Supreme Court of New York so
held in one case; observing that, for the purpose of making the required proof, publishers were "within the
spirit of the statute." Bunce v. Reed, 16 Barb. (N. Y.) 350. And, following this ruling, the Supreme Court of
California held that an affidavit made by a "publisher and proprietor" was sufficient. Sharp v. Daugney, 33
Cal. 512. The term "editor," as used when the statute of New York was passed, from which the Oregon law
is borrowed, usually included not only the person who wrote or selected the articles for publication, but the
person who published the paper and put it into circulation. Webster, in an early edition of his Dictionary,
gives as one of the definitions of an editor, a person "who superintends the publication of a newspaper." It
is principally since that time that the business of an editor has been separated from that of a publisher and
printer, and has become an independent profession.
If, therefore, we were confined to the rulings of the court below upon the defects in the affidavits mentioned,
we should be unable to uphold its decision. But it was also contended in that court, and is insisted upon
here, that the judgment in the State court against the plaintiff was void for want of personal service of
process on him, or of his appearance in the action in which it was rendered and that the premises in
controversy could not be subjected to the payment of the demand of a resident creditor except by a
proceeding in rem, that is, by a direct proceeding against the property for that purpose. If these positions
are sound, the ruling of the Circuit Court as to the invalidity of that judgment must be sustained
notwithstanding our dissent from the reasons upon which it was made. And that they are sound would
seem to follow from two well established principles of public law respecting the jurisdiction of an
independent State over persons and property. The several States of the Union are not, it is true, in every
respect independent, many of the right and powers which originally belonged to them being now vested in
the government created by the Constitution. But, except as restrained and limited by that instrument, they
possess and exercise the authority of independent States, and the principles of public law to which we have
referred are applicable to them. One of these principles is that every State possesses exclusive jurisdiction
and sovereignty over persons and property within its territory. As a consequence, every State has the
power to determine for itself the civil status and capacities of its inhabitants; to prescribe the subjects upon
which they may contract, the forms and solemnities with which their contracts shall be executed, the rights
and obligations arising from them, and the mode in which their validity shall be determined and their
obligations enforced; and also the regulate the manner and conditions upon which property situated within
such territory, both personal and real, may be acquired, enjoyed, and transferred. The other principle of
public law referred to follows from the one mentioned; that is, that no State can exercise direct jurisdiction
and authority over persons or property without its territory. Story, Confl. Laws, c. 2; Wheat. Int. Law, pt.
2, c. 2. The several States are of equal dignity and authority, and the independence of one implies the
exclusion of power from all others. And so it is laid down by jurists as an elementary principle that the laws
of one State have no operation outside of its territory except so far as is allowed by comity, and that no
tribunal established by it can extend its process beyond that territory so as to subject either persons or
property to its decisions. "Any exertion of authority of this sort beyond this limit," says Story, "is a mere
nullity, and incapable of binding such persons or property in any other tribunals." Story, Confl.Laws, sect.
539.
22
But as contracts made in one State may be enforceable only in another State, and property may be held
by nonresidents, the exercise of the jurisdiction which every State is admitted to possess over persons and
property within its own territory will often affect persons and property without it. To any influence exerted
in this way by a State affecting persons resident or property situated elsewhere, no objection can be justly
taken; whilst any direct exertion of authority upon them, in an attempt to give ex-territorial operation to
its laws, or to enforce an ex-territorial jurisdiction by its tribunals, would be deemed an encroachment upon
the independence of the State in which the persons are domiciled or the property is situated, and be resisted
as usurpation.
Thus the State, through its tribunals, may compel persons domiciled within its limits to execute, in
pursuance of their contracts respecting property elsewhere situated, instruments in such form and with
such solemnities as to transfer the title, so far as such formalities can be complied with; and the exercise
of this jurisdiction in no manner interferes with the supreme control over the property by the State within
which it is situated.
So the State, through its tribunals, may subject property situated within its limits owned by nonresidents
to the payment of the demand of its own citizens against them, and the exercise of this jurisdiction in no
respect infringes upon the sovereignty of the State where the owners are domiciled. Every State owes
protection to its own citizens, and, when nonresidents deal with them, it is a legitimate and just exercise
of authority to hold and appropriate any property owned by such nonresidents to satisfy the claims of its
citizens. It is in virtue of the State's jurisdiction over the property of the nonresident situated within its
limits that its tribunals can inquire into that nonresident's obligations to its own citizens, and the inquiry
can then be carried only to the extent necessary to control the disposition of the property. If the nonresident
have no property in the State, there is nothing upon which the tribunals can adjudicate.
These views are not new. They have been frequently expressed, with more or less distinctness, in opinions
of eminent judges, and have been carried into adjudications in numerous cases. Thus, in Picquet v. Swan, 5
Mas. 35, Mr. Justice Story said:--
"Where a party is within a territory, he may justly be subjected to its process, and bound personally by
the judgment pronounced on such process against him. Where he is not within such territory, and is not
personally subject to its laws, if, on account of his supposed or actual property being within the territory,
process by the local laws may, by attachment, go to compel his appearance, and, for his default to appear,
judgment may be pronounced against him, such a judgment must, upon general principles, be deemed
only to bind him to the extent of such property, and cannot have the effect of a conclusive judgment in
personam, for the plain reason, that, except so far as the property is concerned, it is a judgment coram
non judice."
And in Boswell's Lessee v. Otis, 9 How. 336, where the title of the plaintiff in ejectment was acquired on a
sheriff's sale under a money decree rendered upon publication of notice against nonresidents, in a suit
brought to enforce a contract relating to land, Mr. Justice McLean said:--
"Jurisdiction is acquired in one of two modes: first, as against the person of the defendant by the service
of process; or, secondly, by a procedure against the property of the defendant within the jurisdiction of
the court. In the latter case, the defendant is not personally bound by the judgment beyond the property
in question. And it is immaterial whether the proceeding against the property be by an attachment or bill
in chancery. It must be substantially a proceeding in rem."
These citations are not made as authoritative expositions of the law, for the language was perhaps not
essential to the decision of the cases in which it was used, but as expressions of the opinion of eminent
jurists. But in Cooper v. Reynolds, reported in the 10th of Wallace, it was essential to the disposition of the
case to declare the effect of a personal action against an absent party, without the jurisdiction of the court,
not served with process or voluntarily submitting to the tribunal, when it was sought to subject his property
to the payment of a demand of a resident complainant; and, in the opinion there delivered, we have a clear
statement of the law as to the efficacy of such actions, and the jurisdiction of the court over them. In that
case, the action was for damages for alleged false imprisonment of the plaintiff; and, upon his affidavit that
the defendants had fled from the State, or had absconded or concealed themselves so that the ordinary
process of law could not reach them, a writ of attachment was sued out against their property. Publication
was ordered by the court, giving notice to them to appear and plead, answer or demur, or that the action
would be taken as confessed and proceeded in ex parte as to them. Publication was had, but they made
default, and judgment was entered against them, and the attached property was sold under it. The
purchaser having been put into possession of the property, the original owner brought ejectment for its
recovery. In considering the character of the proceeding, the Court, speaking through Mr. Justice Miller,
said:--
"Its essential purpose or nature is to establish, by the judgment of the court, a demand or claim against
the defendant, and subject his property lying within the territorial jurisdiction of the court to the payment
of that demand. But the plaintiff is met at the commencement of his proceedings by the fact that the
defendant is not within the territorial jurisdiction, and cannot be served with any process by which he can
be brought personally within the power of the court. For this difficulty, the statute has provided a remedy.
It says that, upon affidavit's being made of that fact, a writ of attachment may be issued and levied on
any of the defendant's property, and a publication may be made warning him to appear; and that
thereafter the court may proceed in the case, whether he appears or not. If the defendant appears, the
cause becomes mainly a suit in personam, with the added incident that the property attached remains
liable, under the control of the court, to answer to any demand which may be established against the
defendant by the final judgment of the court. But if there is no appearance of the defendant, and no
service of process on him, the case becomes in its essential nature a proceeding in rem, the only effect
of which is to subject the property attached to the payment of the demand which the court may find to
be due to the plaintiff. That such is the nature of this proceeding in this latter class of cases is clearly
evinced by two well established propositions: first, the judgment of the court, though in form a personal
judgment against the defendant, has no effect beyond the property attached in that suit. No general
execution can be issued for any balance unpaid after the attached property is exhausted. No suit can be
maintained on such a judgment in the same court, or in any other; nor can it be used as evidence in any
other proceeding not affecting the attached property; nor could the costs in that proceeding be collected
of defendant out of any other property than that attached in the suit. Second, the court in such a suit
cannot proceed unless the officer finds some property of defendant on which to levy the writ of
attachment. A return that none can be found is the end of the case, and deprives the court of further
jurisdiction, though the publication may have been duly made and proven in court."
The fact that the defendants in that case had fled from the State, or had concealed themselves, so as not
to be reached by the ordinary process of the court, and were not nonresidents, was not made a point in
the decision. The opinion treated them as being without the territorial jurisdiction of the court, and the
grounds and extent of its authority over persons and property thus situated were considered when they
were not brought within its jurisdiction by personal service or voluntary appearance.
The writer of the present opinion considered that some of the objections to the preliminary proceedings in
the attachment suit were well taken, and therefore dissented from the judgment of the Court, but, to the
doctrine declared in the above citation, he agreed, and he may add that it received the approval of all the
judges. It is the only doctrine consistent with proper protection to citizens of other States. If, without
personal service, judgments in personam, obtained ex parte against nonresidents and absent parties, upon
mere publication of process, which, in the great majority of cases, would never be seen by the parties
interested, could be upheld and enforced, they would be the constant instruments of fraud and oppression.
Judgments for all sorts of claims upon contracts and for torts, real or pretended, would be thus obtained,
under which property would be seized, when the evidence of the transactions upon which they were
founded, if they ever had any existence, had perished.
Substituted service by publication, or in any other authorized form, may be sufficient to inform parties of
the object of proceedings taken where property is once brought under the control of the court by seizure
or some equivalent act. The law assumes that property is always in the possession of its owner, in person
or by agent, and it proceeds upon the theory that its seizure will inform him not only that it is taken into
23
the custody of the court, but that he must look to any proceedings authorized by law upon such seizure for
its condemnation and sale. Such service may also be sufficient in cases where the object of the action is to
reach and dispose of property in the State, or of some interest therein, by enforcing a contract or a lien
respecting the same, or to partition it among different owners, or, when the public is a party, to condemn
and appropriate it for a public purpose. In other words, such service may answer in all actions which are
substantially proceedings in rem. But where the entire object of the action is to determine the personal
rights and obligations of the defendants, that is, where the suit is merely in personam, constructive service
in this form upon a nonresident is ineffectual for any purpose. Process from the tribunals of one State
cannot run into another State, and summon parties there domiciled to leave its territory and respond to
proceedings against them. Publication of process or notice within the State where the tribunal sits cannot
create any greater obligation upon the nonresident to appear. Process sent to him out of the State, and
process published within it, are equally unavailing in proceedings to establish his personal liability.
The want of authority of the tribunals of a State to adjudicate upon the obligations of nonresidents, where
they have no property within its limits, is not denied by the court below: but the position is assumed, that,
where they have property within the State, it is immaterial whether the property is in the first instance
brought under the control of the court by attachment or some other equivalent act, and afterwards applied
by its judgment to the satisfaction of demands against its owner; or such demands be first established in
a personal action, and the property of the nonresident be afterwards seized and sold on execution. But the
answer to this position has already been given in the statement that the jurisdiction of the court to inquire
into and determine his obligations at all is only incidental to its jurisdiction over the property. Its jurisdiction
in that respect cannot be made to depend upon facts to be ascertained after it has tried the cause and
rendered the judgment. If the judgment be previously void, it will not become valid by the subsequent
discovery of property of the defendant, or by his subsequent acquisition of it. The judgment, if void when
rendered, will always remain void; it cannot occupy the doubtful position of being valid if property be found,
and void if there be none. Even if the position assumed were confined to cases where the nonresident
defendant possessed property in the State at the commencement of the action, it would still make the
validity of the proceedings and judgment depend upon the question whether, before the levy of the
execution, the defendant had or had not disposed of the property. If, before the levy, the property should
be sold, then, according to this position, the judgment would not be binding. This doctrine would introduce
a new element of uncertainty in judicial proceedings. The contrary is the law: the validity of every judgment
depends upon the jurisdiction of the court before it is rendered, not upon what may occur subsequently.
In Webster v. Reid, reported in 11th of Howard, the plaintiff claimed title to land sold under judgments
recovered in suits brought in a territorial court of Iowa, upon publication of notice under a law of the
territory, without service of process; and the court said:
"These suits were not a proceeding in rem against the land, but were in personam against the owners of
it. Whether they all resided within the territory or not does not appear, nor is it a matter of any
importance. No person is required to answer in a suit on whom process has not been served, or whose
property has not been attached. In this case, there was no personal notice, nor an attachment or other
proceeding against the land, until after the judgments. The judgments, therefore, are nullities, and did
not authorize the executions on which the land was sold. "
The force and effect of judgments rendered against nonresidents without personal service of process upon
them, or their voluntary appearance, have been the subject of frequent consideration in the courts of the
United States and of the several States, as attempts have been made to enforce such judgments in States
other than those in which they were rendered, under the provision of the Constitution requiring that "full
faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every
other State;" and the act of Congress providing for the mode of authenticating such acts, records, and
proceedings, and declaring that, when thus authenticated,
"they shall have such faith and credit given to them in every court within the United States as they have
by law or usage in the courts of the State from which they are or shall or taken."
In the earlier cases, it was supposed that the act gave to all judgments the same effect in other States
which they had by law in the State where rendered. But this view was afterwards qualified so as to make
the act applicable only when the court rendering the judgment had jurisdiction of the parties and of the held that over the property within the State the court had jurisdiction by the attachment, but had none
subject matter, and not to preclude an inquiry into the jurisdiction of the court in which the judgment was over his person, and that any determination of his liability, except so far as was necessary for the disposition
rendered, or the right of the State itself to exercise authority over the person or the subject of the property, was invalid.
matter. M'Elmoyle v. Cohen, 13 Pet. 312. In the case of D'Arcy v. Ketchum, reported in the 11th of Howard,
this view is stated with great clearness. That was an action in the Circuit Court of the United States for
In Kilbourn v. Woodworth, 5 Johns. (N.Y.) 37, an action of debt was brought in New York upon a personal
Louisiana, brought upon a judgment rendered in New York under a State statute, against two joint debtors,
judgment recovered in Massachusetts. The defendant in that judgment was not served with process, and
only one of whom had been served with process, the other being a nonresident of the State. The Circuit
the suit was commenced by the attachment of a bedstead belonging to the defendant, accompanied with a
Court held the judgment conclusive and binding upon the nonresident not served with process, but this
summons to appear, served on his wife after she had left her place in Massachusetts. The court held that
Court reversed its decision, observing, that it was a familiar rule that countries foreign to our own
the attachment bound only the property attached as a proceeding in rem, and that it could not bind the
disregarded a judgment merely against the person, where the defendant had not been served with process
defendant, observing, that to bind a defendant personally when he was never personally summoned or had
nor had a day in court; that national comity was never thus extended; that the proceeding was deemed an
notice of the proceeding would be contrary to the first principles of justice, repeating the language in that
illegitimate assumption of power, and resisted as mere abuse; that no faith and credit or force and effect
respect of Chief Justice DeGrey, used in the case of Fisher v. Lane, 3 Wils. 297, in 1772. See also Borden
had been given to such judgments by any State of the Union, so far as known; and that the State courts
v. Fitch, 15 Johns. (N. Y.) 121, and the cases there cited, and Harris v. Hardeman et al., 14 How. 334. To
had uniformly, and in many instances, held them to be void. "The international law," said the court,
the same purport, decisions are found in all the State courts. In several of the cases, the decision has been
"as it existed among the States in 1790, was that a judgment rendered in one State, assuming to bind
accompanied with the observation that a personal judgment thus recovered has no binding force without
the person of a citizen of another, was void within the foreign State, when the defendant had not been
the State in which it is rendered, implying that, in such State, it may be valid and binding. But if the court
served with process or voluntarily made defence, because neither the legislative jurisdiction nor that of
has no jurisdiction over the person of the defendant by reason of his nonresidence, and consequently no
courts of justice had binding force."
authority to pass upon his personal rights and obligations; if the whole proceeding, without service upon
him or his appearance, is coram non judice and void; if to hold a defendant bound by such a judgment is
And the Court held that the act of Congress did not intend to declare a new rule, or to embrace judicial contrary to the first principles of justice -- it is difficult to see how the judgment can legitimately have any
records of this description. As was stated in a subsequent case, the doctrine of this Court is that the act force within the State. The language used can be justified only on the ground that there was no mode of
"was not designed to displace that principle of natural justice which requires a person to have notice of a directly reviewing such judgment or impeaching its validity within the State where rendered, and that
suit before he can be conclusively bound by its result, nor those rules of public law which protect persons therefore it could be called in question only when its enforcement was elsewhere attempted. In later cases,
and property within one State from the exercise of jurisdiction over them by another." this language is repeated with less frequency than formerly, it beginning to be considered, as it always
ought to have been, that a judgment which can be treated in any State of this Union as contrary to the first
principles of justice, and as an absolute nullity, because rendered without any jurisdiction of the tribunal
This whole subject has been very fully and learnedly considered in the recent case of Thompson v.
over the party, is not entitled to any respect in the State where rendered. Smith v. McCutchen, 38 Mo.
Whitman, 18 Wall. 457, where all the authorities are carefully reviewed and distinguished, and the
415; Darrance v. Preston, 18 Iowa, 396; Hakes v. Shupe, 27 id. 465; Mitchell's Administrator v. Gray, 18
conclusion above stated is not only reaffirmed, but the doctrine is asserted that the record of a judgment
Ind. 123.
rendered in another State may be contradicted as to the facts necessary to give the court jurisdiction
against its recital of their existence. In all the cases brought in the State and Federal courts, where attempts
have been made under the act of Congress to give effect in one State to personal judgments rendered in Be that as it may, the courts of the United States are not required to give effect to judgments of this
another State against nonresidents, without service upon them, or upon substituted service by publication, character when any right is claimed under them. Whilst they are not foreign tribunals in their relations to
or in some other form, it has been held, without an exception, so far as we are aware, that such judgments the State courts, they are tribunals of a different sovereignty, exercising a distinct and independent
were without any binding force except as to property, or interests in property, within the State, to reach jurisdiction, and are bound to give to the judgments of the State courts only the same faith and credit
and affect which was the object of the action in which the judgment was rendered, and which property was which the courts of another State are bound to give to them.
brought under control of the court in connection with the process against the person. The proceeding in
such cases, though in the form of a personal action, has been uniformly treated, where service was not
Since the adoption of the Fourteenth Amendment to the Federal Constitution, the validity of such judgments
obtained, and the party did not voluntarily appear, as effectual and binding merely as a proceeding in
may be directly questioned, and their enforcement in the State resisted, on the ground that proceedings in
rem, and as having no operation beyond the disposition of the property, or some interest therein. And the
a court of justice to determine the personal rights and obligations of parties over whom that court has no
reason assigned for this conclusion has been that which we have already stated -- that the tribunals of one
jurisdiction do not constitute due process of law. Whatever difficulty may be experienced in giving to those
State have no jurisdiction over persons beyond its limits, and can inquire only into their obligations to its
terms a definition which will embrace every permissible exertion of power affecting private rights, and
citizens when exercising its conceded jurisdiction over their property within its limits. In Bissell v.
exclude such as is forbidden, there can be no doubt of their meaning when applied to judicial proceedings.
Briggs, decided by the Supreme Court of Massachusetts as early as 1813, the law is stated substantially in
They then mean a course of legal proceedings according to those rules and principles which have been
conformity with these views. In that case, the court considered at length the effect of the constitutional
established in our systems of jurisprudence for the protection and enforcement of private rights. To give
provision, and the act of Congress mentioned, and after stating that, in order to entitle the judgment
such proceedings any validity, there must be a tribunal competent by its constitution -- that is, by the law
rendered in any court of the United States to the full faith and credit mentioned in the Constitution, the
of its creation -- to pass upon the subject matter of the suit; and if that involves merely a determination of
court must have had jurisdiction not only of the cause, but of the parties, it proceeded to illustrate its
the personal liability of the defendant, he must be brought within its jurisdiction by service of process within
position by observing, that, where a debtor living in one State has goods, effects, and credits in another,
the State, or his voluntary appearance.
his creditor living in the other State may have the property attached pursuant to its laws, and, on recovering
judgment, have the property applied to its satisfaction, and that the party in whose hands the property was
would be protected by the judgment in the State of the debtor against a suit for it, because the court Except in cases affecting the personal status of the plaintiff and cases in which that mode of service may
rendering the judgment had jurisdiction to that extent; but that, if the property attached were insufficient be considered to have been assented to in advance, as hereinafter mentioned, the substituted service of
to satisfy the judgment, and the creditor should sue on that judgment in the State of the debtor, he would process by publication, allowed by the law of Oregon and by similar laws in other States, where actions are
fail because the defendant was not amenable to the court rendering the judgment. In other words, it was brought against nonresidents, is effectual only where, in connection with process against the person for

24
commencing the action, property in the State is brought under the control of the court, and subjected to
its disposition by process adapted to that purpose, or where the judgment is sought as a means of reaching
such property or affecting some interest therein; in other words, where the action is in the nature of a
proceeding in rem. As stated by Cooley in his Treatise on Constitutional Limitations 405, for any other
purpose than to subject the property of a nonresident to valid claims against him in the State, "due process
of law would require appearance or personal service before the defendant could be personally bound by
any judgment rendered."
See also The Lafayette Insurance Co. v. French et al., 18 How. 404, and Gillespie v. Commercial Mutual
Marine Insurance Co., 12 Gray (Mass.), 201. Nor do we doubt that a State, on creating corporations or
other institutions for pecuniary or charitable purposes, may provide a mode in which their conduct may be
investigated, their obligations enforced, or their charters revoked, which shall require other than personal
service upon their officers or members. Parties becoming members of such corporations or institutions
would hold their interest subject to the conditions prescribed by law. Copin v. Adamson, Law Rep. 9 Ex.
345.

It is true that, in a strict sense, a proceeding in rem is one taken directly against property, and has for its
object the disposition of the property, without reference to the title of individual claimants; but, in a larger
and more general sense, the terms are applied to actions between parties where the direct object is to
reach and dispose of property owned by them, or of some interest therein. Such are cases commenced by
attachment against the property of debtors, or instituted to partition real estate, foreclose a mortgage, or
enforce a lien. So far as they affect property in the State, they are substantially proceedings in rem in the
broader sense which we have mentioned.
In the present case, there is no feature of this kind, and consequently no consideration of what would be
the effect of such legislation in enforcing the contract of a nonresident can arise. The question here respects
only the validity of a money judgment rendered in one State in an action upon a simple contract against
the resident of another without service of process upon him or his appearance therein.
Judgment affirmed.

It is hardly necessary to observe that, in all we have said, we have had reference to proceedings in courts
of first instance, and to their jurisdiction, and not to proceedings in an appellate tribunal to review the
action of such courts. The latter may be taken upon such notice, personal or constructive, as the State
creating the tribunal may provide. They are considered as rather a continuation of the original litigation
than the commencement of a new action. Nations et al. v. Johnson et al., 24 How. 195.

It follows from the views expressed that the personal judgment recovered in the State court of Oregon
against the plaintiff herein, then a nonresident of the State, was without any validity, and did not authorize
a sale of the property in controversy.

To prevent any misapplication of the views expressed in this opinion, it is proper to observe that we do not
mean to assert by anything we have said that a State may not authorize proceedings to determine the
status of one of its citizens towards a nonresident which would be binding within the State, though made
without service of process or personal notice to the nonresident. The jurisdiction which every State
possesses to determine the civil status and capacities of all its inhabitants involves authority to prescribe
the conditions on which proceedings affecting them may be commenced and carried on within its territory.
The State, for example, has absolute right to prescribe the conditions upon which the marriage relation
between its own citizens shall be created, and the causes for which it may be dissolved. One of the parties
guilty of acts for which, by the law of the State, a dissolution may be granted may have removed to a State
where no dissolution is permitted. The complaining party would, therefore, fail if a divorce were sought in
the State of the defendant; and if application could not be made to the tribunals of the complainant's
domicile in such case, and proceedings be there instituted without personal service of process or personal
notice to the offending party, the injured citizen would be without redress. Bish. Marr. and Div., sect. 156.

Neither do we mean to assert that a State may not require a nonresident entering into a partnership or
association within its limits, or making contracts enforceable there, to appoint an agent or representative
in the State to receive service of process and notice in legal proceedings instituted with respect to such
partnership, association, or contracts, or to designate a place where such service may be made and notice
given, and provide, upon their failure, to make such appointment or to designate such place that service
may be made upon a public officer designated for that purpose, or in some other prescribed way, and that
judgments rendered upon such service may not be binding upon the nonresidents both within and without
the State. As was said by the Court of Exchequer in Vallee v. Dumergue, 4 Exch. 290,

"It is not contrary to natural justice that a man who has agreed to receive a particular mode of notification
of legal proceedings should be bound by a judgment in which that particular mode of notification has been
followed, even though he may not have actual notice of them."

25
U.S. Supreme Court
International Shoe v. State of Washington, 326 U.S. 310 (1945)
International Shoe v. State of Washington
Syllabus
Activities within a State of salesmen in the employ of a foreign corporation, exhibiting samples of
merchandise and soliciting orders from prospective buyers to be accepted or rejected by the corporation at
a point outside the State, were systematic and continuous, and resulted in a large volume of interstate
business. A statute of the State requires employers to pay into the state unemployment compensation fund
a specified percentage of the wages paid for the services of employees within the State.
Held:
1. In view of 26 U.S.C. § 1606(a) , providing that no person shall be relieved from compliance with a
state law requiring payments to an unemployment fund on the ground that he is engaged in interstate
commerce, the fact that the corporation is engaged in interstate commerce does not relieve it from
liability for payments to the state unemployment compensation fund. P. 326 U. S. 315.
2. The activities in behalf of the corporation render it amenable to suit in courts of the State to recover
payments due to the state unemployment compensation fund. P. 326 U. S. 320.
(a) The activities in question established between the State and the corporation sufficient contacts or ties
to make it reasonable and just, and in conformity to the due process requirements of the Fourteenth
Amendment, for the State to enforce against the corporation an obligation arising out of such activities.
P. 326 U. S. 320.
(b) In such a suit to recover payments due to the unemployment compensation fund, service of process
upon one of the corporation's salesmen within the State, and notice sent by registered mail to the
corporation at its home office, satisfies the requirements of due process. P. 326 U. S. 320.
3. The tax imposed by the state unemployment compensation statute -- construed by the state court, in
its application to the corporation, as a tax on the privilege of employing salesmen within the State -- does
not violate the due process clause of the Fourteenth Amendment. P. 326 U. S. 321.
2 Wash. 2d 146, 154 P.2d 801, affirmed.
APPEAL from a judgment upholding the constitutionality of a state unemployment compensation statute as
applied to the appellant corporation.
MR. CHIEF JUSTICE STONE delivered the opinion of the Court.
The questions for decision are (1) whether, within the limitations of the due process clause of the Fourteenth
Amendment, appellant, a Delaware corporation, has, by its activities in the State of Washington, rendered
itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state
unemployment compensation fund exacted by state statutes, Washington Unemployment Compensation
Act, Washington Revised Statutes, § 9998-103a through § 9998-123a, 1941 Supp., and (2) whether the
state can exact those contributions consistently with the due process clause of the Fourteenth Amendment.
The statutes in question set up a comprehensive scheme of unemployment compensation, the costs of
which are defrayed by contributions required to be made by employers to a state unemployment
compensation fund.
The contributions are a specified percentage of the wages payable annually by each employer for his
employees' services in the state. The assessment and collection of the contributions and the fund are
administered by appellees. Section 14(c) of the Act (Wash.Rev.Stat., 1941 Supp., § 9998-114c) authorizes
appellee Commissioner to issue an order and notice of assessment of delinquent contributions upon
26
prescribed personal service of the notice upon the employer if found within the state, or, if not so found,
by mailing the notice to the employer by registered mail at his last known address. That section also
authorizes the Commissioner to collect the assessment by distraint if it is not paid within ten days after
service of the notice. By §§ 14e and 6b, the order of assessment may be administratively reviewed by an
appeal tribunal within the office of unemployment upon petition of the employer, and this determination is,
by § 6i, made subject to judicial review on questions of law by the state Superior Court, with further right
of appeal in the state Supreme Court, as in other civil cases.
In this case, notice of assessment for the years in question was personally served upon a sales solicitor
employed by appellant in the State of Washington, and a copy of the notice was mailed by registered mail
to appellant at its address in St. Louis, Missouri. Appellant appeared specially before the office of
unemployment, and moved to set aside the order and notice of assessment on the ground that the service
upon appellant's salesman was not proper service upon appellant; that appellant was not a corporation of
the State of Washington, and was not doing business within the state; that it had no agent within the state
upon whom service could be made; and that appellant is not an employer, and does not furnish employment
within the meaning of the statute.
The motion was heard on evidence and a stipulation of facts by the appeal tribunal, which denied the motion
and ruled that appellee Commissioner was entitled to recover the unpaid contributions. That action was
affirmed by the Commissioner; both the Superior Court and the Supreme Court affirmed. 22 Wash. 2d 146,
154 P.2d 801. Appellant in each of these courts assailed the statute as applied, as a violation of the due
process clause of the Fourteenth Amendment, and as imposing a constitutionally prohibited burden on
interstate commerce. The cause comes here on appeal under § 237(a) of the Judicial Code, 28 U.S.C. §
344(a), appellant assigning as error that the challenged statutes, as applied, infringe the due process clause
of the Fourteenth Amendment and the commerce clause.
The facts, as found by the appeal tribunal and accepted by the state Superior Court and Supreme Court,
are not in dispute. Appellant is a Delaware corporation, having its principal place of business in St. Louis,
Missouri, and is engaged in the manufacture and sale of shoes and other footwear. It maintains places of
business in several states other than Washington, at which its manufacturing is carried on and from which
its merchandise is distributed interstate through several sales units or branches located outside the State
of Washington.
Appellant has no office in Washington, and makes no contracts either for sale or purchase of merchandise
there. It maintains no stock of merchandise in that state, and makes there no deliveries of goods in
intrastate commerce. During the years from 1937 to 1940, now in question, appellant employed eleven to
thirteen salesmen under direct supervision and control of sales managers located in St. Louis. These
salesmen resided in Washington; their principal activities were confined to that state, and they were
compensated by commissions based upon the amount of their sales. The commissions for each year totaled
more than $31,000. Appellant supplies its salesmen with a line of samples, each consisting of one shoe of
a pair, which they display to prospective purchasers. On occasion, they rent permanent sample rooms, for
exhibiting samples, in business buildings, or rent rooms in hotels or business buildings temporarily for that
purpose. The cost of such rentals is reimbursed by appellant.
The authority of the salesmen is limited to exhibiting their samples and soliciting orders from prospective
buyers, at prices and on terms fixed by appellant. The salesmen transmit the orders to appellant's office in
St. Louis for acceptance or rejection, and, when accepted, the merchandise for filling the orders is shipped
f.o.b. from points outside Washington to the purchasers within the state. All the merchandise shipped into
Washington is invoiced at the place of shipment, from which collections are made. No salesman has
authority to enter into contracts or to make collections.
The Supreme Court of Washington was of opinion that the regular and systematic solicitation of orders in
the state by appellant's salesmen, resulting in a continuous flow of appellant's product into the state, was
sufficient to constitute doing business in the state so as to make appellant amenable to suit in its courts.
But it was also of opinion that there were sufficient additional activities shown to bring the case within the
rule, frequently stated, that solicitation within a state by the agents of a foreign corporation plus some
additional activities there are sufficient to render the corporation amenable to suit brought in the courts of
the state to enforce an obligation arising out of its activities there. The court found such additional activities
in the salesmen's display of samples sometimes in permanent display rooms, and the salesmen's residence
within the state, continued over a period of years, all resulting in a substantial volume of merchandise
regularly shipped by appellant to purchasers within the state. The court also held that the statute, as
applied, did not invade the constitutional power of Congress to regulate interstate commerce, and did not
impose a prohibited burden on such commerce.
Appellant's argument, renewed here, that the statute imposes an unconstitutional burden on interstate
commerce need not detain us. For 53 Stat. 1391, 26 U.S.C. § 1606(a) provides that
"No person required under a State law to make payments to an unemployment fund shall be relieved
from compliance therewith on the ground that he is engaged in interstate or foreign commerce, or that
the State law does not distinguish between employees engaged in interstate or foreign commerce and
those engaged in intrastate commerce."
It is no longer debatable that Congress, in the exercise of the commerce power, may authorize the states,
in specified ways, to regulate interstate commerce or impose burdens upon it.
Appellant also insists that its activities within the state were not sufficient to manifest its "presence" there,
and that, in its absence, the state courts were without jurisdiction, that, consequently, it was a denial of
due process for the state to subject appellant to suit. It refers to those cases in which it was said that the
mere solicitation of orders for the purchase of goods within a state, to be accepted without the state and
filled by shipment of the purchased goods interstate, does not render the corporation seller amenable to
suit within the state. And appellant further argues that, since it was not present within the state, it is a
denial of due process to subject it to taxation or other money exaction. It thus denies the power of the
state to lay the tax or to subject appellant to a suit for its collection.
Historically, the jurisdiction of courts to render judgment in personam is grounded on their de facto power
over the defendant's person. Hence, his presence within the territorial jurisdiction of a court was
prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U. S. 714, 95 U. S.
733. But now that the capias ad respondendum has given way to personal service of summons or other
form of notice, due process requires only that, in order to subject a defendant to a judgment in personam, if
he be not present within the territory of the forum, he have certain minimum contacts with it such that the
maintenance of the suit does not offend "traditional notions of fair play and substantial justice."
Since the corporate personality is a fiction, although a fiction intended to be acted upon as though it were
a fact, Klein v. Board of Supervisors, 282 U. S. 19, 282 U. S. 24, it is clear that, unlike an individual, its
"presence" without, as well as within, the state of its origin can be manifested only by activities carried on
in its behalf by those who are authorized to act for it. To say that the corporation is so far "present" there
as to satisfy due process requirements, for purposes of taxation or the maintenance of suits against it in
the courts of the state, is to beg the question to be decided. For the terms "present" or "presence" are used
merely to symbolize those activities of the corporation's agent within the state which courts will deem to
be sufficient to satisfy the demands of due process. L. Hand, J., in Hutchinson v. Chase & Gilbert, 45 F.2d
139, 141. Those demands may be met by such contacts of the corporation with the state of the forum as
make it reasonable, in the context of our federal system of government, to require the corporation to defend
the particular suit which is brought there. An "estimate of the inconveniences" which would result to the
corporation from a trial away from its "home" or principal place of business is relevant in this
connection. Hutchinson v. Chase & Gilbert, supra, 141.
"Presence" in the state in this sense has never been doubted when the activities of the corporation there
have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no
consent to be sued or authorization to an agent to accept service of process has been given. Conversely,
27
it has been generally recognized that the casual presence of the corporate agent, or even his conduct of
single or isolated items of activities in a state in the corporation's behalf, are not enough to subject it to
suit on causes of action unconnected with the activities there. St. Clair v. Cox, supra, 106 U. S. 359, 106
U. S. 360; Old Wayne Life Assn. v. McDonough, 204 U. S. 8, 204 U. S. 21; Frene v. Louisville Cement Co.,
supra, 515, and cases cited. To require the corporation in such circumstances to defend the suit away from
its home or other jurisdiction where it carries on more substantial activities has been thought to lay too
great and unreasonable a burden on the corporation to comport with due process.
While it has been held, in cases on which appellant relies, that continuous activity of some sorts within a
state is not enough to support the demand that the corporation be amenable to suits unrelated to that
activity, there have been instances in which the continuous corporate operations within a state were
thought so substantial and of such a nature as to justify suit against it on causes of action arising from
dealings entirely distinct from those activities.
Finally, although the commission of some single or occasional acts of the corporate agent in a state sufficient
to impose an obligation or liability on the corporation has not been thought to confer upon the state
authority to enforce it, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U. S. 516, other such acts, because
of their nature and quality and the circumstances of their commission, may be deemed sufficient to render
the corporation liable to suit. Cf. Kane v. New Jersey, 242 U. S. 160; Hess v. Pawloski, supra; Young v.
Masci, supra. True, some of the decisions holding the corporation amenable to suit have been supported
by resort to the legal fiction that it has given its consent to service and suit, consent being implied from its
presence in the state through the acts of its authorized agents. But, more realistically, it may be said that
those authorized acts were of such a nature as to justify the fiction.
It is evident that the criteria by which we mark the boundary line between those activities which justify the
subjection of a corporation to suit and those which do not cannot be simply mechanical or quantitative. The
test is not merely, as has sometimes been suggested, whether the activity, which the corporation has seen
fit to procure through its agents in another state, is a little more or a little less. Whether due process is
satisfied must depend, rather, upon the quality and nature of the activity in relation to the fair and orderly
administration of the laws which it was the purpose of the due process clause to insure. That clause does
not contemplate that a state may make binding a judgment in personam against an individual or corporate
defendant with which the state has no contacts, ties, or relations.
But, to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys
the benefits and protection of the laws of that state. The exercise of that privilege may give rise to
obligations, and, so far as those obligations arise out of or are connected with the activities within the state,
a procedure which requires the corporation to respond to a suit brought to enforce them can, in most
instances, hardly be said to be undue.
Applying these standards, the activities carried on in behalf of appellant in the State of Washington were
neither irregular nor casual. They were systematic and continuous throughout the years in question. They
resulted in a large volume of interstate business, in the course of which appellant received the benefits and
protection of the laws of the state, including the right to resort to the courts for the enforcement of its
rights. The obligation which is here sued upon arose out of those very activities. It is evident that these
operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just,
according to our traditional conception of fair play and substantial justice, to permit the state to enforce
the obligations which appellant has incurred there. Hence, we cannot say that the maintenance of the
present suit in the State of Washington involves an unreasonable or undue procedure.
We are likewise unable to conclude that the service of the process within the state upon an agent whose
activities establish appellant's "presence" there was not sufficient notice of the suit, or that the suit was so
unrelated to those activities as to make the agent an inappropriate vehicle for communicating the notice.
It is enough that appellant has established such contacts with the state that the particular form of
substituted service adopted there gives reasonable assurance that the notice will be actual. Nor can we
say that the mailing of the notice of suit to appellant by registered mail at its home office was not reasonably
calculated to apprise appellant of the suit.
Only a word need be said of appellant's liability for the demanded contributions to the state unemployment
fund. The Supreme Court of Washington, construing and applying the statute, has held that it imposes a
tax on the privilege of employing appellant's salesmen within the state measured by a percentage of the
wages, here, the commissions payable to the salesmen. This construction we accept for purposes of
determining the constitutional validity of the statute. The right to employ labor has been deemed an
appropriate subject of taxation in this country and England, both before and since the adoption of the
Constitution. Steward Machine Co. v. Davis, 301 U. S. 548, 301 U. S. 579, et seq. And such a tax imposed
upon the employer for unemployment benefits is within the constitutional power of the states.
Appellant having rendered itself amenable to suit upon obligations arising out of the activities of its
salesmen in Washington, the state may maintain the present suit in personam to collect the tax laid upon
the exercise of the privilege of employing appellant's salesmen within the state. For Washington has made
one of those activities which, taken together, establish appellant's "presence" there for purposes of suit the
taxable event by which the state brings appellant within the reach of its taxing power. The state thus has
constitutional power to lay the tax and to subject appellant to a suit to recover it. The activities which
establish its "presence" subject it alike to taxation by the state and to suit to recover the tax.
Affirmed.
28
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)
Mullane v. Central Hanover Bank & Trust Co.
APPEAL FROM THE COURT OF APPEALS OF NEW YORK
Syllabus
A trust company in New York which had exclusive management and control of a common trust fund
established by it under §100-c of the New York Banking Law petitioned under that section for a judicial
settlement of accounts which would be binding and conclusive as to any matter set forth therein upon
everyone having any interest in the common fund or in any participating trust. In this common fund, the
trust company had invested assets of numerous small trusts of which it was trustee and of which some of
the beneficiaries were residents, and some nonresidents, of the State. The only notice of this petition given
beneficiaries was by publication in a local newspaper pursuant to §100-c(12).
Held:
1. Whether such a proceeding for settlement of accounts be technically in personam, in rem, or quasi in
rem, the interest of each state in providing means to close trusts that exist by the grace of its laws and
are administered under the supervision of its courts is such as to establish beyond doubt the right of its
courts to determine the interests of all claimants, resident or nonresident, provided its procedure accords
full opportunity to appear and be heard. Pp. 339 U. S. 311-313.
2. The statutory notice by publication is sufficient as to any beneficiaries whose interests or addresses
are unknown to the trustee, since there are no other means of giving them notice which are both
practicable and more effective. Pp. 339 U. S. 313-318.
3. Such notice by publication is not sufficient under the Fourteenth Amendment as a basis for adjudication
depriving of substantial property rights known persons whose whereabouts are also known, since it is not
impracticable to make serious efforts to notify them at least by ordinary mail to their addresses on record
with the trust company. Pp. 339 U. S. 318-320.
299 N.Y. 697, 87 N.E.2d 73, reversed.
Overruling objections to the statutory notice to beneficiaries by publication authorized by §100-c of the
New York Banking Law, a New York Surrogate's Court entered a final decree accepting an accounting of the
trustee of a common trust fund established pursuant to that section. On appeal to this
Court, reversed, p. 339 U. S. 320.
Mr. Justice JACKSON delivered the opinion of the Court.
This controversy questions the constitutional sufficiency of notice to beneficiaries on judicial settlement of
accounts by the trustee of a common trust fund established under the New York Banking Law, Consol.Laws,
c. 2. The New York Court of Appeals considered and overruled objections that the statutory notice
contravenes requirements of the Fourteenth Amendment, and that, by allowance of the account,
beneficiaries were deprived of property without due process of law. 299 N.Y. 697, 87 N.E.2d 73. The case
is here on appeal under 28 U.S.C. § 1257.
Common trust fund legislation is addressed to a problem appropriate for state action. Mounting overheads
have made administration of small trusts undesirable to corporate trustees. In order that donors and
testators of moderately sized trusts may not be denied the service of corporate fiduciaries, the District of
Columbia and some thirty states other than New York have permitted pooling small trust estates into one
fund for investment administration. * The income, capital gains, losses and expenses of the collective trust
are shared by the constituent trusts in proportion to their contribution. By this plan, diversification of risk
and economy of management can be extended to those whose capital standing alone would not obtain such
advantage.
Statutory authorization for the establishment of such common trust funds is provided in the New York
Banking Law, § 100-c, c. 687, L.1937, as amended by c. 602, L.1943 and c. 158, L.1944. Under this Act,
a trust company may, with approval of the State Banking Board, establish a common fund and, within
prescribed limits, invest therein the assets of an unlimited number of estates, trusts or other funds of which
it is trustee. Each participating trust shares ratably in the common fund, but exclusive management and
control is in the trust company as trustee, and neither a fiduciary nor any beneficiary of a participating trust
is deemed to have ownership in any particular asset or investment of this common fund. The trust company
must keep fund assets separate from its own, and, in its fiduciary capacity, may not deal with itself or any
affiliate. Provisions are made for accountings twelve to fifteen months after the establishment of a fund,
and triennially thereafter. The decree, in each such judicial settlement of accounts, is made binding and
conclusive as to any matter set forth in the account upon everyone having any interest in the common fund
or in any participating estate, trust or fund.
In January, 1946, Central Hanover Bank and Trust Company established a common trust fund in accordance
with these provisions, and, in March, 1947, it petitioned the Surrogate's Court for settlement of its first
account as common trustee. During the accounting period, a total of 113 trusts, approximately half inter
vivos and half testamentary, participated in the common trust fund, the gross capital of which was nearly
three million dollars. The record does not show the number or residence of the beneficiaries, but they were
many, and it is clear that some of them were not residents of the State of New York.
The only notice given beneficiaries of this specific application was by publication in a local newspaper in
strict compliance with the minimum requirements of N.Y.Banking Law § 100-c(12):
"After filing such petition [for judicial settlement of its account], the petitioner shall cause to be issued
by the court in which the petition is filed and shall publish not less than once in each week for four
successive weeks in a newspaper to be designated by the court, a notice or citation addressed generally,
without naming them, to all parties interested in such common trust fund and in such estates, trusts or
funds mentioned in the petition, all of which may be described in the notice or citation only in the manner
set forth in said petition and without setting forth the residence of any such decedent or donor of any
such estate, trust or fund."
Thus, the only notice required, and the only one given, was by newspaper publication setting forth merely
the name and address of the trust company, the name and the date of establishment of the common trust
fund, and a list of all participating estates, trusts or funds.
At the time the first investment in the common fund was made on behalf of each participating estate;
however, the trust company, pursuant to the requirements of § 100-c(9), had notified by mail each person
of full age and sound mind whose name and address was then known to it and who was
"entitled to share in the income therefrom . . . (or) . . . who would be entitled to share in the principal if
the event upon which such estate, trust or fund will become distributable should have occurred at the
time of sending such notice."
Included in the notice was a copy of those provisions of the Act relating to the sending of the notice itself
and to the judicial settlement of common trust fund accounts.
Upon the filing of the petition for the settlement of accounts, appellant was, by order of the court pursuant
to § 100-c(12), appointed special guardian and attorney for all persons known or unknown not otherwise
appearing who had or might thereafter have any interest in the income of the common trust fund, and
appellee Vaughan was appointed to represent those similarly interested in the principal. There were no
other appearances on behalf of anyone interested in either interest or principal.
29
Appellant appeared specially, objecting that notice and the statutory provisions for notice to beneficiaries
were inadequate to afford due process under the Fourteenth Amendment, and therefore that the court was
without jurisdiction to render a final and binding decree. Appellant's objections were entertained and
overruled, the Surrogate holding that the notice required and given was sufficient. 75 N.Y.S.2d 397. A final
decree accepting the accounts has been entered, affirmed by the Appellate Division of the Supreme
Court, In re Central Hanover Bank & Trust Co., 275 App.Div. 769, 88 N.Y.S.2d 907, and by the Court of
Appeals of the State of New York, 299 N.Y. 697, 87 N.E.2d 73.
The effect of this decree, as held below, is to settle "all questions respecting the management of the
common fund." We understand that every right which beneficiaries would otherwise have against the trust
company, either as trustee of the common fund or as trustee of any individual trust, for improper
management of the common trust fund during the period covered by the accounting is sealed and wholly
terminated by the decree.
We are met at the outset with a challenge to the power of the State -- the right of its courts to adjudicate
at all as against those beneficiaries who reside without the State of New York. It is contended that the
proceeding is one in personam, in that the decree affects neither title to nor possession of any res, but
adjudges only personal rights of the beneficiaries to surcharge their trustee for negligence or breach of
trust. Accordingly, it is said, under the strict doctrine of Pennoyer v. Neff, 95 U. S. 714, the Surrogate is
without jurisdiction as to nonresidents upon whom personal service of process was not made.
Distinctions between actions in rem and those in personam are ancient, and originally expressed in
procedural terms what seems really to have been a distinction in the substantive law of property under a
system quite unlike our own. Buckland and McNair, Roman Law and Common Law, 66; Burdick, Principles
of Roman Law and Their Relation to Modern Law, 298. The legal recognition and rise in economic importance
of incorporeal or intangible forms of property have upset the ancient simplicity of property law and the
clarity of its distinctions, while new forms of proceedings have confused the old procedural classification.
American courts have sometimes classed certain actions as in rem because personal service of process was
not required, and, at other times, have held personal service of process not required because the action
was in rem. See cases collected in Freeman on Judgments, §§ 1517 et seq. (5th ed.).
Judicial proceedings to settle fiduciary accounts have been sometimes termed in rem, or, more
indefinitely, quasi in rem, or more vaguely still, "in the nature of a proceeding in rem." It is not readily
apparent how the courts of New York did or would classify the present proceeding, which has some
characteristics, and is wanting in some features of, proceedings both in rem and in personam. But, in any
event, we think that the requirements of the Fourteenth Amendment to the Federal Constitution do not
depend upon a classification for which the standards are so elusive and confused generally, and which,
being primarily for state courts to define, may and do vary from state to state. Without disparaging the
usefulness of distinctions between actions in rem and those in personam in many branches of law, or on
other issues, or the reasoning which underlies them, we do not rest the power of the State to resort to
constructive service in this proceeding upon how its courts or this Court may regard this historic antithesis.
It is sufficient to observe that, whatever the technical definition of its chosen procedure, the interest of
each state in providing means to close trusts that exist by the grace of its laws and are administered under
the supervision of its courts is so insistent and rooted in custom as to establish beyond doubt the right of
its courts to determine the interests of all claimants, resident or nonresident, provided its procedure accords
full opportunity to appear and be heard.
Quite different from the question of a state's power to discharge trustees is that of the opportunity it must
give beneficiaries to contest. Many controversies have raged about the cryptic and abstract words of the
Due Process Clause, but there can be no doubt that, at a minimum, they require that deprivation of life,
liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the
nature of the case.
In two ways, this proceeding does or may deprive beneficiaries of property. It may cut off their rights to
have the trustee answer for negligent or illegal impairments of their interests. Also, their interests are
presumably subject to diminution in the proceeding by allowance of fees and expenses to one who, in their
names but without their knowledge, may conduct a fruitless or uncompensatory contest. Certainly the
proceeding is one in which they may be deprived of property rights and hence notice and hearing must
measure up to the standards of due process.
Personal service of written notice within the jurisdiction is the classic form of notice always adequate in any
type of proceeding. But the vital interest of the State in bringing any issues as to its fiduciaries to a final
settlement can be served only if interests or claims of individuals who are outside of the State can somehow
be determined. A construction of the Due Process Clause which would place impossible or impractical
obstacles in the way could not be justified.
Against this interest of the State, we must balance the individual interest sought to be protected by the
Fourteenth Amendment. This is defined by our holding that "[t]he fundamental requisite of due process of
law is the opportunity to be heard." Grannis v. Ordean, 234 U. S. 385, 234 U. S. 394. This right to be heard
has little reality or worth unless one is informed that the matter is pending and can choose for himself
whether to appear or default, acquiesce or contest.
The Court has not committed itself to any formula achieving a balance between these interests in a
particular proceeding or determining when constructive notice may be utilized, or what test it must meet.
Personal service has not, in all circumstances, been regarded as indispensable to the process due to
residents, and it has more often been held unnecessary as to nonresidents. We disturb none of the
established rules on these subjects. No decision constitutes a controlling, or even a very illuminating,
precedent for the case before us. But a few general principles stand out in the books.
An elementary and fundamental requirement of due process in any proceeding which is to be accorded
finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their objections. The notice must be of
such nature as reasonably to convey the required information, Grannis v. Ordean, supra, and it must afford
a reasonable time for those interested to make their appearance. But if, with due regard for the practicalities
and peculiarities of the case, these conditions are reasonably met, the constitutional requirements are
satisfied.
"The criterion is not the possibility of conceivable injury, but the just and reasonable character of the
requirements, having reference to the subject with which the statute deals."
But when notice is a person's due, process which is a mere gesture is not due process. The means employed
must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.
The reasonableness, and hence the constitutional validity of, any chosen method may be defended on the
ground that it is, in itself, reasonably certain to inform those affected, compare Hess v. Pawloski, 274 U. S.
352, with Wuchter v. Pizzutti, 276 U. S. 13, or, where conditions do not reasonably permit such notice, that
the form chosen is not substantially less likely to bring home notice than other of the feasible and customary
substitutes.
It would be idle to pretend that publication alone, as prescribed here, is a reliable means of acquainting
interested parties of the fact that their rights are before the courts. It is not an accident that the greater
number of cases reaching this Court on the question of adequacy of notice have been concerned with
actions founded on process constructively served through local newspapers. Chance alone brings to the
attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper,
and, if he makes his home outside the area of the newspaper's normal circulation, the odds that the
information will never reach him are large indeed. The chance of actual notice is further reduced when, as
here, the notice required does not even name those whose attention it is supposed to attract, and does not
30
inform acquaintances who might call it to attention. In weighing its sufficiency on the basis of equivalence
with actual notice, we are unable to regard this as more than a feint.
Nor is publication here reinforced by steps likely to attract the parties' attention to the proceeding. It is true
that publication traditionally has been acceptable as notification supplemental to other action which, in
itself, may reasonably be expected to convey a warning. The ways of an owner with tangible property are
such that he usually arranges means to learn of any direct attack upon his possessory or proprietary rights.
Hence, libel of a ship, attachment of a chattel or entry upon real estate in the name of law may reasonably
be expected to come promptly to the owner's attention. When the state within which the owner has located
such property seizes it for some reason, publication or posting affords an additional measure of notification.
A state may indulge the assumption that one who has left tangible property in the state either has
abandoned it, in which case proceedings against it deprive him of nothing, cf.
"It is the part of common prudence for all those who have any interest in [a thing] to guard that interest
by persons who are in a situation to protect it."
In the case before us, there is, of course, no abandonment. On the other hand, these beneficiaries do have
a resident fiduciary as caretaker of their interest in this property. But it is their caretaker who, in the
accounting, becomes their adversary. Their trustee is released from giving notice of jeopardy, and no one
else is expected to do so. Not even the special guardian is required or apparently expected to communicate
with his ward and client, and, of course, if such a duty were merely transferred from the trustee to the
guardian, economy would not be served and more likely the cost would be increased.
This Court has not hesitated to approve of resort to publication as a customary substitute in another class
of cases where it is not reasonably possible or practicable to give more adequate warning. Thus, it has been
recognized that, in the case of persons missing or unknown, employment of an indirect, and even a probably
futile, means of notification is all that the situation permits, and creates no constitutional bar to a final
decree foreclosing their rights.
Those beneficiaries represented by appellant whose interests or whereabouts could not, with due diligence,
be ascertained come clearly within this category. As to them, the statutory notice is sufficient. However
great the odds that publication will never reach the eyes of such unknown parties, it is not in the typical
case, much more likely to fail than any of the choices open to legislators endeavoring to prescribe the best
notice practicable.
Nor do we consider it unreasonable for the State to dispense with more certain notice to those beneficiaries
whose interests are either conjectural or future or, although they could be discovered upon investigation,
do not, in due course of business, come to knowledge of the common trustee. Whatever searches might be
required in another situation under ordinary standards of diligence, in view of the character of the
proceedings and the nature of the interests here involved, we think them unnecessary. We recognize the
practical difficulties and costs that would be attendant on frequent investigations into the status of great
numbers of beneficiaries, many of whose interests in the common fund are so remote as to be ephemeral,
and we have no doubt that such impracticable and extended searches are not required in the name of due
process. The expense of keeping informed from day to day of substitutions among even current income
beneficiaries and presumptive remaindermen, to say nothing of the far greater number of contingent
beneficiaries, would impose a severe burden on the plan, and would likely dissipate its advantages. These
are practical matters in which we should be reluctant to disturb the judgment of the state authorities.
Accordingly we overrule appellant's constitutional objections to published notice insofar as they are urged
on behalf of any beneficiaries whose interests or addresses are unknown to the trustee.
As to known present beneficiaries of known place of residence, however, notice by publication stands on a
different footing. Exceptions in the name of necessity do not sweep away the rule that, within the limits of
practicability, notice must be such as is reasonably calculated to reach interested parties. Where the names
and post office addresses of those affected by a proceeding are at hand, the reasons disappear for resort
to means less likely than the mails to apprise them of its pendency.
The trustee has on its books the names and addresses of the income beneficiaries represented by appellant,
and we find no tenable ground for dispensing with a serious effort to inform them personally of the
accounting, at least by ordinary mail to the record addresses. Cf. Wuchter v. Pizzutti, supra. Certainly
sending them a copy of the statute months, and perhaps years, in advance does not answer this purpose.
The trustee periodically remits their income to them, and we think that they might reasonably expect that,
with or apart from their remittances, word might come to them personally that steps were being taken
affecting their interests.
We need not weigh contentions that a requirement of personal service of citation on even the large number
of known resident or nonresident beneficiaries would, by reasons of delay, if not of expense, seriously
interfere with the proper administration of the fund. Of course, personal service, even without the
jurisdiction of the issuing authority, serves the end of actual and personal notice, whatever power of
compulsion it might lack. However, no such service is required under the circumstances. This type of trust
presupposes a large number of small interests. The individual interest does not stand alone, but is identical
with that of a class. The rights of each in the integrity of the fund, and the fidelity of the trustee, are shared
by many other beneficiaries. Therefore, notice reasonably certain to reach most of those interested in
objecting is likely to safeguard the interests of all, since any objections sustained would inure to the benefit
of all. We think that, under such circumstances, reasonable risks that notice might not actually reach every
beneficiary are justifiable.
"Now and then, an extraordinary case may turn up, but constitutional law, like other mortal contrivances,
has to take some chances, and, in the great majority of instances, no doubt, justice will be done."
The statutory notice to known beneficiaries is inadequate not because, in fact, it fails to reach everyone,
but because, under the circumstances, it is not reasonably calculated to reach those who could easily be
informed by other means at hand. However it may have been in former times, the mails today are
recognized as an efficient and inexpensive means of communication. Moreover, the fact that the trust
company has been able to give mailed notice to known beneficiaries at the time the common trust fund
was established is persuasive that postal notification at the time of accounting would not seriously burden
the plan.
In some situations, the law requires greater precautions in its proceedings than the business world accepts
for its own purposes. In few, if any, will it be satisfied with less. Certainly it is instructive, in determining
the reasonableness of the impersonal broadcast notification here used, to ask whether it would satisfy a
prudent man of business, counting his pennies but finding it in his interest to convey information to many
persons whose names and addresses are in his files. We are not satisfied that it would. Publication may
theoretically be available for all the world to see, but it is too much, in our day, to suppose that each or
any individual beneficiary does or could examine all that is published to see if something may be tucked
away in it that affects his property interests. We have before indicated, in reference to notice by publication,
that "Great caution should be used not to let fiction deny the fair play that can be secured only by a pretty
close adhesion to fact." McDonald v. Mabee, 243 U. S. 90, 243 U. S. 91.
We hold the notice of judicial settlement of accounts required by the New York Banking Law § 100-c(12) is
incompatible with the requirements of the Fourteenth Amendment as a basis for adjudication depriving
known persons whose whereabouts are also known of substantial property rights. Accordingly, the
judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.
Reversed.
31
Shaffer v. Heitner, 433 U.S. 186 (1977)
Shaffer v. Heitner
APPEAL FROM THE SUPREME COURT OF DELAWARE
Syllabus
Appellee, a nonresident of Delaware, filed a shareholder's derivative suit in a Delaware Chancery Court,
naming as defendants a corporation and its subsidiary, as well as 28 present or former corporate officers
or directors, alleging that the individual defendants had violated their duties to the corporation by causing
it and its subsidiary to engage in actions (which occurred in Oregon) that resulted in corporate liability for
substantial damages in a private antitrust suit and a large fine in a criminal contempt action.
Simultaneously, appellee, pursuant to Del.Code Ann., Tit. 10, § 366 (1975), filed a motion for sequestration
of the Delaware property of the individual defendants, all nonresidents of Delaware, accompanied by an
affidavit identifying the property to be sequestered as stock, options, warrants, and various corporate rights
of the defendants. A sequestration order was issued pursuant to which shares and options belonging to 21
defendants (appellants) were "seized" and "stop transfer" orders were placed on the corporate books.
Appellants entered a special appearance to quash service of process and to vacate the sequestration order,
contending that the ex parte sequestration procedure did not accord them due process; that the property
seized was not capable of attachment in Delaware; and that they did not have sufficient contacts with
Delaware to sustain jurisdiction of that State's courts under the rule of International Shoe Co. v.
Washington, 326 U. S. 310. In that case, the Court (after noting that the historical basis of in
personam jurisdiction was a court's power over the defendant's person, making his presence within the
court's territorial jurisdiction a prerequisite to its rendition of a personally binding judgment against
him, Pennoyer v. Neff, 95 U. S. 714) held that that power was no longer the central concern, and that
"due process requires only that, in order to subject a defendant to a judgment in personam, if he be not
present within the territory of the forum, he have certain minimum contacts with it such that the
maintenance of the suit does not offend 'traditional notions of fair play and substantial justice'"
(and thus the focus shifted to the relationship among the defendant, the forum, and the litigation, rather
than the mutually exclusive sovereignty of the States on which the rules of Pennoyer had rested). The Court
of Chancery, rejecting appellants' arguments, upheld the § 366 procedure of compelling the personal
appearance of a nonresident defendant to answer and defend a suit brought against him in a court of equity,
which is accomplished by the appointment of a sequestrator to seize and hold the property of the
nonresident located in Delaware subject to court order, with release of the property being made upon the
defendant's entry of a general appearance. The court held that the limitation on the purpose and length of
time for which sequestered property is held comported with due process, and that the statutory situs of the
stock (under a provision making Delaware the situs of ownership of the capital stock of all corporations
existing under the laws of that State) provided a sufficient basis for the exercise of quasi in rem jurisdiction
by a Delaware court. The Delaware Supreme Court affirmed, concluding that International Shoe raised no
constitutional barrier to the sequestration procedure because
"jurisdiction under § 366 remains . . . quasi in rem founded on the presence of capital stock [in Delaware],
not on prior contact by defendants with this forum."
Held:
1. Whether or not a State can assert jurisdiction over a nonresident must be evaluated according to the
minimum contacts standard of International Shoe Co. v. Washington, supra. Pp. 433 U. S. 207-212.
(a) In order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to
justify exercising "jurisdiction over the interests of persons in the thing." The presence of property in a
State may bear upon the existence of jurisdiction by providing contacts among the forum State, the
defendant, and the litigation, as for example, when claims to the property itself are the source of the
underlying controversy between the plaintiff and defendant, where it would be unusual for the State
where the property is located not to have jurisdiction. Pp. 433 U. S. 207-208.
 (b) But where, as in the instant quasi in rem action, the property now serving as the basis for state
court jurisdiction is completely unrelated to the plaintiff's cause of action, the presence of the property
alone, i.e., absent other ties among the defendant, the State, and the litigation, would not support the
State's jurisdiction. Pp. 433 U. S. 208-209.
(c) Though the primary rationale for treating the presence of property alone as a basis for jurisdiction
is to prevent a wrongdoer from avoiding payment of his obligations by removal of his assets to a place
where he is not subject to an in personam suit, that is an insufficient justification for recognizing
jurisdiction without regard to whether the property is in the State for that purpose. Moreover, the
availability of attachment procedures and the protection of the Full Faith and Credit Clause also militate
against that rationale. Pp. 433 U. S. 209-210.
(d) The fairness standard of International Shoe can be easily applied in the vast majority of cases.
P. 433 U. S. 211.
(e) Though jurisdiction based solely on the presence of property in a State has had a long history,
"traditional notions of fair play and substantial justice" can be as readily offended by the perpetuation
of ancient forms that are no longer justified as by the adoption of new procedures that do not comport
with the basic values of our constitutional heritage. Cf. Sniadach v. Family Finance Corp, 395 U. S.
337, 395 U. S. 340; Wolf v. Colorado, 338 U. S. 25, 338 U. S. 27. Pp. 433 U. S. 211-212.
2. Delaware's assertion of jurisdiction over appellants, based solely as it is on the statutory presence of
appellants' property in Delaware, violates the Due Process Clause, which "does not contemplate that a
state may make binding a judgment . . . against an individual or corporate defendant with which the
state has no contacts, ties, or relations."
(a) Appellants' holdings in the corporation, which are not the subject matter of this litigation and are
unrelated to the underlying cause of action, do not provide contacts with Delaware sufficient to support
jurisdiction of that State's courts over appellants. P. 433 U. S. 213.
(b) Nor is Delaware state court jurisdiction supported by that State's interest in supervising the
management of a Delaware corporation and defining the obligations of its officers and directors, since
Delaware bases jurisdiction not on appellants' status as corporate fiduciaries, but on the presence of
their property in the State. Moreover, sequestration has been available in any suit against a
nonresident, whether against corporate fiduciaries or not. Pp. 433 U. S. 213-215.
(c) Though it may be appropriate for Delaware law to govern the obligations of appellants to the
corporation and stockholders, this does not mean that appellants have "purposefully avail[ed
themselves] of the privilege of conducting activities within the forum State," Hanson v. Denckla, 357
U. S. 235, 357 U.S. 253. Appellants, who were not required to acquire interests in the corporation in
order to hold their positions, did not, by acquiring those interests, surrender their right to be brought
to judgment in the States in which they had "minimum contacts." Pp. 433 U. S. 215-216.
361 A.2d 225, reversed.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
The controversy in this case concerns the constitutionality of a Delaware statute that allows a court of that
State to take jurisdiction of a lawsuit by sequestering any property of the defendant that happens to be
located in Delaware. Appellants contend that the sequestration statute as applied in this case violates the
Due Process Clause of the Fourteenth Amendment both because it permits the state courts to exercise
jurisdiction despite the absence of sufficient contacts among the defendants, the litigation, and the State
of Delaware and because it authorizes the deprivation of defendants' property without providing adequate
procedural safeguards. We find it necessary to consider only the first of these contentions.
I
Appellee Heitner, a nonresident of Delaware, is the owner of one share of stock in the Greyhound Corp., a
business incorporated under the laws of Delaware with its principal place of business in Phoenix, Ariz. On
May 22, 1974, he filed a shareholder's derivative suit in the Court of Chancery for New Castle County, Del.,
32
in which he named as defendants Greyhound, its wholly owned subsidiary Greyhound Lines, Inc., [Footnote
1] and 28 present or former officers or directors of one or both of the corporations. In essence, Heitner
alleged that the individual defendants had violated their duties to Greyhound by causing it and its subsidiary
to engage in actions that resulted in the corporation's being held liable for substantial damages in a private
antitrust suit [Footnote 2] and a large fine in a criminal contempt action. [Footnote 3] The activities which
led to these penalties took place in Oregon.
Simultaneously with his complaint, Heitner filed a motion for an order of sequestration of the Delaware
property of the individual defendants pursuant to Del.Code Ann., Tit. 10, § 366 (1975). [Footnote 4] This
motion was accompanied by a supporting affidavit of counsel which stated that the individual defendants
were nonresidents of Delaware. The affidavit identified the property to be sequestered as
"common stock, 3% Second Cumulative Preferenced Stock and stock unit credits of the Defendant
Greyhound Corporation, a Delaware corporation, as well as all options and all warrants to purchase said
stock issued to said individual Defendants and all contractural [sic] obligations, all rights, debts or credits
due or accrued to or for the benefit of any of the said Defendants under any type of written agreement,
contract or other legal instrument of any kind whatever between any of the individual Defendants and
said corporation."
The requested sequestration order was signed the day the motion was filed. [Footnote 5] Pursuant to that
order, the sequestrator [Footnote 6] "seized" approximately 82,000 shares of Greyhound common stock
belonging to 19 of the defendants, [Footnote 7] and options belonging to another 2 defendants. [Footnote
8] These seizures were accomplished by placing "stop transfer" orders or their equivalents on the books of
the Greyhound Corp. So far as the record shows, none of the certificates representing the seized property
was physically present in Delaware. The stock was considered to be in Delaware, and so subject to seizure,
by virtue of Del.Code Ann., Tit. 8, § 169 (1975), which makes Delaware the situs of ownership of all stock
in Delaware corporations. [Footnote 9]
All 28 defendants were notified of the initiation of the suit by certified mail directed to their last known
addresses and by publication in a New Castle County newspaper. The 21 defendants whose property was
seized (hereafter referred to as appellants) responded by entering a special appearance for the purpose of
moving to quash service of process and to vacate the sequestration order. They contended that the ex
parte sequestration procedure did not accord them due process of law, and that the property seized was
not capable of attachment in Delaware. In addition, appellants asserted that, under the rule of International
Shoe Co. v. Washington, 326 U. S. 310 (1945), they did not have sufficient contacts with Delaware to
sustain the jurisdiction of that State's courts.
The Court of Chancery rejected these arguments in a letter opinion which emphasized the purpose of the
Delaware sequestration procedure:
"The primary purpose of 'sequestration' as authorized by 10 Del.C. § 366 is not to secure possession of
property pending a trial between resident debtors and creditors on the issue of who has the right to retain
it. On the contrary, as here employed, 'sequestration' is a process used to compel the personal
appearance of a nonresident defendant to answer and defend a suit brought against him in a court of
equity. Sands v. Lefcourt Realty Corp., Del.Super., 117 A.2d 365 (1955). It is accomplished by the
appointment of a sequestrator by this Court to seize and hold property of the nonresident located in this
State subject to further Court order. If the defendant enters a general appearance, the sequestered
property is routinely released, unless the plaintiff makes special application to continue its seizure, in
which event the plaintiff has the burden of proof and persuasion."
App. 75-76. This limitation on the purpose and length of time for which sequestered property is held, the
court concluded, rendered inapplicable the due process requirements enunciated. The court also found no
state law or federal constitutional barrier to the sequestrator's reliance on Del.Code Ann., Tit. 8, § 169
(1975). App. 76-79. Finally, the court held that the statutory Delaware situs of the stock provided a
sufficient basis for the exercise of quasi in rem jurisdiction by a Delaware court. Id. at 85-87.
On appeal, the Delaware Supreme Court affirmed the judgment of the Court of Chancery. Greyhound Corp.
v. Heitner, 361 A.2d 225 (1976). Most of the Supreme Court's opinion was devoted to rejecting appellants'
contention that the sequestration procedure is inconsistent with the due process analysis developed in
the Sniadach line of cases. The court based its rejection of that argument in part on its agreement with the
Court of Chancery that the purpose of the sequestration procedure is to compel the appearance of the
defendant, a purpose not involved in the Sniadach cases. The court also relied on what it considered the
ancient origins of the sequestration procedure and approval of that procedure in the opinions of this Court,
[Footnote 10] Delaware's interest in asserting jurisdiction to adjudicate claims of mismanagement of a
Delaware corporation, and the safeguards for defendants that it found in the Delaware statute. 361 A.2d
at 230-236.
Appellants' claim that the Delaware courts did not have jurisdiction to adjudicate this action received much
more cursory treatment. The court's analysis of the jurisdictional issue is contained in two paragraphs:
"There are significant constitutional questions at issue here, but we say at once that we do not deem the
rule of International Shoe to be one of them. . . . The reason, of course, is that jurisdiction under § 366
remains . . . quasi in rem founded on the presence of capital stock here, not on prior contact by
defendants with this forum. Under 8 Del. C. § 169 the 'situs of the ownership of the capital stock of all
corporations existing under the laws of this State . . . [is] in this State,' and that provides the initial basis
for jurisdiction. Delaware may constitutionally establish situs of such shares here, . . . it has done so and
the presence thereof provides the foundation for § 366 in this case. . . . On this issue, we agree with the
analysis made and the conclusion reached by Judge Stapleton in U.S. Industries, Inc. v.
Gregg, D.Del., 348 F. Supp. 1004 (1972). [Footnote 11]"
"We hold that seizure of the Greyhound shares is not invalid because plaintiff has failed to meet the prior
contacts tests of International Shoe."
We noted probable jurisdiction. 429 U.S. 813. [Footnote 12] We reverse.
II
The Delaware courts rejected appellants' jurisdictional challenge by noting that this suit was brought as
a quasi in rem proceeding. Since quasi in rem jurisdiction is traditionally based on attachment or seizure of
property present in the jurisdiction, not on contacts between the defendant and the State, the courts
considered appellants' claimed lack of contacts with Delaware to be unimportant. This categorical analysis
assumes the continued soundness of the conceptual structure founded on the century-old case of Pennoyer
v. Neff, 95 U. S. 714 (1878).
Pennoyer was an ejectment action brought in federal court under the diversity jurisdiction. Pennoyer, the
defendant in that action, held the land under a deed purchased in a sheriff's sale conducted to realize on a
judgment for attorney's fees obtained against Neff in a previous action by one Mitchell. At the time of
Mitchell's suit in an Oregon State court, Neff was a nonresident of Oregon. An Oregon statute allowed
service by publication on nonresidents who had property in the State, [Footnote 13] and Mitchell had used
that procedure to bring Neff before the court. The United States Circuit Court for the District of Oregon, in
which Neff brought his ejectment action, refused to recognize the validity of the judgment against Neff in
Mitchell's suit, and accordingly awarded the land to Neff. [Footnote 14] This Court affirmed.
Mr. Justice Field's opinion for the Court focused on the territorial limits of the States' judicial powers.
Although recognizing that the States are not truly independent sovereigns, Mr. Justice Field found that their
jurisdiction was defined by the "principles of public law" that regulate the relationships among independent
nations. The first of those principles was "that every State possesses exclusive jurisdiction and sovereignty
over persons and property within its territory." The second was "that no State can exercise direct jurisdiction
and authority over persons or property without its territory." Id. at 95 U. S. 722. Thus, "in virtue of the
33
State's jurisdiction over the property of the nonresident situated within its limits," the state courts "can
inquire into that nonresident's obligations to its own citizens . . . to the extent necessary to control the
disposition of the property." Id. at 95 U. S. 723. The Court recognized that, if the conclusions of that inquiry
were adverse to the nonresident property owner, his interest in the property would be
affected. Ibid. Similarly, if the defendant consented to the jurisdiction of the state courts or was personally
served within the State, a judgment could affect his interest in property outside the State. But any attempt
"directly" to assert extraterritorial jurisdiction over persons or property would offend sister States and
exceed the inherent limits of the State's power. A judgment resulting from such an attempt, Mr. Justice
Field concluded, was not only unenforceable in other States, [Footnote 15] but was also void in the
rendering State because it had been obtained in violation of the Due Process Clause of the Fourteenth
Amendment. Id. at 95 U. S. 732-733.
This analysis led to the conclusion that Mitchell's judgment against Neff could not be validly based on the
State's power over persons within its borders, because Neff had not been personally served in Oregon, nor
had he consensually appeared before the Oregon court. The Court reasoned that, even if Neff had received
personal notice of the action, service of process outside the State would have been ineffectual, since the
State's power was limited by its territorial boundaries. Moreover, the Court held, the action could not be
sustained on the basis of the State's power over property within its borders because that property had not
been brought before the court by attachment or any other procedure prior to judgment. [Footnote 16]
Since the judgment which authorized the sheriff's sale was therefore invalid, the sale transferred no title.
Neff regained his land.
From our perspective, the importance of Pennoyer is not its result, but the fact that its principles and
corollaries derived from them became the basic elements of the constitutional doctrine governing state
court jurisdiction. See, e.g., Hazard, A General Theory of State Court Jurisdiction, 1965 Sup.Ct.Rev. 241
(hereafter Hazard). As we have noted, under Pennoyer, state authority to adjudicate was based on the
jurisdiction's power over either persons or property. This fundamental concept is embodied in the very
vocabulary which we use to describe judgments. If a court's jurisdiction is based on its authority over the
defendant's person, the action and judgment are denominated "in personam," and can impose a personal
obligation on the defendant in favor of the plaintiff. If jurisdiction is based on the court's power over property
within its territory, the action is called "in rem" or "quasi in rem." The effect of a judgment in such a case
is limited to the property that supports jurisdiction, and does not impose a personal liability on the property
owner, since he is not before the court. [Footnote 17] In Pennoyer's terms, the owner is affected only
"indirectly" by an in rem judgment adverse to his interest in the property subject to the court's disposition.
By concluding that "[t]he authority of every tribunal is necessarily restricted by the territorial limits of the
State in which it is established," 95 U.S. at 95 U. S. 720, Pennoyer sharply limited the availability of in
personam jurisdiction over defendants not resident in the forum State. If a nonresident defendant could
not be found in a State, he could not be sued there. On the other hand, since the State in which property
was located was considered to have exclusive sovereignty over that property, in rem actions could proceed
regardless of the owner's location. Indeed, since a State's process could not reach beyond its borders, this
Court held after Pennoyer that due process did not require any effort to give a property owner personal
notice that his property was involved in an in rem proceeding. See, e.g., Ballard v. Hunter, 204 U. S.
241 (1907); Arndt v. Griggs, 134 U. S. 316 (1890); Huling v. Kaw Valley R. Co., 130 U. S. 559 (1889).
The Pennoyer rules generally favored nonresident defendants by making them harder to sue. This
advantage was reduced, however, by the ability of a resident plaintiff to satisfy a claim against a nonresident
defendant by bringing into court any property of the defendant located in the plaintiff's State. See,
e.g., Zammit, Quasi-In-Rem Jurisdiction: Outmoded and Unconstitutional?, 49 St. John's L.Rev. 668, 670
(1975). For example, in the well known case of Harris v. Balk, 198 U. S. 215 (1905), Epstein, a resident of
Maryland, had a claim against Balk, a resident of North Carolina. Harris, another North Carolina resident,
owed money to Balk. When Harris happened to visit Maryland, Epstein garnished his debt to Balk. Harris
did not contest the debt to Balk, and paid it to Epstein's North Carolina attorney. When Balk later sued
Harris in North Carolina, this Court held that the Full Faith and Credit Clause, U.S.Const., Art. IV, § 1,
required that Harris' payment to Epstein be treated as a discharge of his debt to Balk. This Court reasoned
that the debt Harris owed Balk was an intangible form of property belonging to Balk, and that the location whether there have been "such contacts of the corporation with the state of the forum as make it
of that property traveled with the debtor. By obtaining personal jurisdiction over Harris, Epstein had reasonable, in the context of our federal system of government, to require the corporation to defend the
"arrested" his debt to Balk, 198 U.S. at 198 U. S. 223, and brought it into the Maryland Court. Under the particular suit which is brought there."
structure established by Pennoyer, Epstein was then entitled to proceed against that debt to vindicate his
claim against Balk, even though Balk himself was not subject to the jurisdiction of a Maryland tribunal.
Mechanical or quantitative evaluations of the defendant's activities in the forum could not resolve the
[Footnote 18] See also e.g., Louisville & N. R. Co. v. Deer, 200 U. S. 176 (1906); Steele v. G. D. Searle &
question of reasonableness:
Co., 483 F.2d 339 (CA5 1973), cert. denied, 415 U.S. 958 (1974).
"Whether due process is satisfied must depend rather upon the quality and nature of the activity in
relation to the fair and orderly administration of the laws which it was the purpose of the due process
Pennoyer itself recognized that its rigid categories, even as blurred by the kind of action typified clause to insure. That clause does not contemplate that a state may make binding a judgment in
by Harris, could not accommodate some necessary litigation. Accordingly, Mr. Justice Field's opinion personam against an individual or corporate defendant with which the state has no contacts, ties, or
carefully noted that cases involving the personal status of the plaintiff, such as divorce actions, could be relations."
adjudicated in the plaintiff's home State even though the defendant could not be served within that State.
95 U.S. at 95 U. S. 733-735. Similarly, the opinion approved the practice of considering a foreign
Id. at 326 U. S. 319. [Footnote 19] Thus, the relationship among the defendant, the forum, and the
corporation doing business in a State to have consented to being sued in that State. Id. at 95 U. S. 735-
litigation, rather than the mutually exclusive sovereignty of the States on which the rules of Pennoyer rest,
736; See Lafayette Ins. Co. v. French, 18 How. 404 (1856). This basis for in personam jurisdiction over
became the central concern of the inquiry into personal jurisdiction. [Footnote 20] The immediate effect of
foreign corporations was later supplemented by the doctrine that a corporation doing business in a State
this departure from Pennoyer's conceptual apparatus was to increase the ability of the state courts to obtain
could be deemed "present" in the State, and so subject to service of process under the rule
personal jurisdiction over nonresident defendants.
of Pennoyer. See, e.g., International Harvester Co. v. Kentucky, 234 U. S. 579 (1914); Philadelphia &
Reading R. Co. v. McKibbin, 243 U. S. 264 (1917). See generally Note, Developments in the Law, State-
Court Jurisdiction, 73 Harv.L.Rev. 909, 919-923 (1960) (hereafter Developments). No equally dramatic change has occurred in the law governing jurisdiction in rem. There have, however,
been intimations that the collapse of the in personam wing of Pennoyer has not left that decision
unweakened as a foundation for in rem jurisdiction. Well-reasoned lower court opinions have questioned
The advent of automobiles, with the concomitant increase in the incidence of individuals causing injury in
the proposition that the presence of property in a State gives that State jurisdiction to adjudicate rights to
States where they were not subject to in personam actions under Pennoyer, required further moderation
the property regardless of the relationship of the underlying dispute and the property owner to the
of the territorial limits on jurisdictional power. This modification, like the accommodation to the realities of
forum. The overwhelming majority of commentators have also rejected Pennoyer's premise that a
interstate corporate activities, was accomplished by use of a legal fiction that left the conceptual structure
proceeding "against" property is not a proceeding against the owners of that property. Accordingly, they
established in Pennoyer theoretically unaltered. Cf. Olberding v. Illinois Central R. Co., 346 U. S. 338, 346
urge that the "traditional notions of fair play and substantial justice" that govern a State's power to
U. S. 340-341 (1953). The fiction used was that the out-of-state motorist, who it was assumed could be
adjudicate in personam should also govern its power to adjudicate personal rights to property located in
excluded altogether from the State's highways, had, by using those highways, appointed a designated state
the State.
official as his agent to accept process. See Hess v. Pawloski, 274 U. S. 352 (1927). Since the motorist's
"agent" could be personally served within the State, the state courts could obtain in personam jurisdiction
over the nonresident driver. Although this Court has not addressed this argument directly, we have held that property cannot be
subjected to a court's judgment unless reasonable and appropriate efforts have been made to give the
property owners actual notice of the action. This conclusion recognizes, contrary to Pennoyer, that an
The motorists' consent theory was easy to administer, since it required only a finding that the out-of-state
adverse judgment in rem directly affects the property owner by divesting him of his rights in the property
driver had used the State's roads. By contrast, both the fictions of implied consent to service on the part
before the court. Schroeder v. City of New York, supra at 371 U. S. 213; cf. Continental Grain Co. v. Barge
of a foreign corporation and of corporate presence required a finding that the corporation was "doing
FBL-585, 364 U. S. 19 (1960) (separate actions against barge and barge owner are one "civil action" for
business" in the forum State. Defining the criteria for making that finding and deciding whether they were
purpose of transfer under 28 U.S.C. § 1404(a)). Moreover, in Mullane, we held that Fourteenth Amendment
met absorbed much judicial energy. See, e.g., International Shoe Co. v. Washington, 326 U.S. at 326 U.
rights cannot depend on the classification of an action as in rem or in personam, since that is "a
S. 317-319. While the essentially quantitative tests which emerged from these cases purported simply to
classification for which the standards are so elusive and confused generally, and which, being primarily for
identify circumstances under which presence or consent could be attributed to the corporation, it became
state courts to define, may and do vary from state to state."
clear that they were, in fact, attempting to ascertain "what dealings make it just to subject a foreign
corporation to local suit." Hutchinson v. Chase & Gilbert, 45 F.2d 139, 141 (CA2 1930) (L. Hand, J.).
In International Shoe, we acknowledged that fact. It is clear, therefore, that the law of state court jurisdiction no longer stands securely on the foundation
established in Pennoyer. [Footnote 21] We think that the time is ripe to consider whether the standard of
fairness and substantial justice set forth in International Shoe should be held to govern actions in rem as
The question in International Shoe was whether the corporation was subject to the judicial and taxing
well as in personam.
jurisdiction of Washington. Mr. Chief Justice Stone's opinion for the Court began its analysis of that question
by noting that the historical basis of in personam jurisdiction was a court's power over the defendant's
person. That power, however, was no longer the central concern: III
"But now that the capias ad respondendum has given way to personal service of summons or other form
of notice, due process requires only that in order to subject a defendant to a judgment in personam, if The case for applying to jurisdiction in rem the same test of "fair play and substantial justice" as governs
he be not present within the territory of the forum, he have certain minimum contacts with it such that assertions of jurisdiction in personam is simple and straightforward. It is premised on recognition that
the maintenance of the suit does not offend 'traditional notions of fair play and substantial "[t]he phrase, judicial jurisdiction over a thing,' is a customary elliptical way of referring to jurisdiction over
justice.' Milliken v. Meyer, 311 U. S. 457, 311 U. S. 463." Thus, the inquiry into the State's jurisdiction the interests of persons in a thing." Restatement (Second) of Conflict of Laws § 56, Introductory Note
over a foreign corporation appropriately focused not on whether the corporation was "present," but on (1971) (hereafter Restatement). [Footnote 22] This recognition leads to the conclusion that, in order to

34
justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising
"jurisdiction over the interests of persons in a thing." [Footnote 23] The standard for determining whether
an exercise of jurisdiction over the interests of persons is consistent with the Due Process Clause is the
minimum contacts standard elucidated in International Shoe.
This argument, of course, does not ignore the fact that the presence of property in a State may bear on
the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation.
For example, when claims to the property itself are the source of the underlying controversy between the
plaintiff and the defendant, [Footnote 24] it would be unusual for the State where the property is located
not to have jurisdiction. In such cases, the defendant's claim to property located in the State would normally
[Footnote 25] indicate that he expected to benefit from the State's protection of his interest. [Footnote 26]
The State's strong interests in assuring the marketability of property within its borders [Footnote 27] and
in providing a procedure for peaceful resolution of disputes about the possession of that property would
also support jurisdiction, as would the likelihood that important records and witnesses will be found in the
State. [Footnote 28] The presence of property may also favor jurisdiction in cases, such as suits for injury
suffered on the land of an absentee owner, where the defendant's ownership of the property is conceded,
but the cause of action is otherwise related to rights and duties growing out of that ownership. [Footnote
29]
It appears, therefore, that jurisdiction over many types of actions which now are or might be brought in
rem would not be affected by a holding that any assertion of state court jurisdiction must satisfy
the International Shoe standard. [Footnote 30] For the type of quasi in rem action typified by Harris v.
Balk and the present case, however, accepting the proposed analysis would result in significant change.
These are cases where the property which now serves as the basis for state court jurisdiction is completely
unrelated to the plaintiff's cause of action. Thus, although the presence of the defendant's property in a
State might suggest the existence of other ties among the defendant, the State, and the litigation, the
presence of the property alone would not support the State's jurisdiction. If those other ties did not exist,
cases over which the State is now thought to have jurisdiction could not be brought in that forum.
Since acceptance of the International Shoe test would most affect this class of cases, we examine the
arguments against adopting that standard as they relate to this category of litigation. [Footnote 31] Before
doing so, however, we note that this type of case also presents the clearest illustration of the argument in
favor of assessing assertions of jurisdiction by a single standard. For in cases such as Harris and this one,
the only role played by the property is to provide the basis for bringing the defendant into court. [Footnote
32] Indeed, the express purpose of the Delaware sequestration procedure is to compel the defendant to
enter a personal appearance. [Footnote 33] In such cases, if a direct assertion of personal jurisdiction over
the defendant would violate the Constitution, it would seem that an indirect assertion of that jurisdiction
should be equally impermissible.
The primary rationale for treating the presence of property as a sufficient basis for jurisdiction to adjudicate
claims over which the State would not have jurisdiction if International Shoe applied is that a wrongdoe
"should not be able to avoid payment of his obligations by the expedient of removing his assets to a place
where he is not subject to an in personam suit."
Restatement § 66, Comment a. Accord, Developments 955. This justification, however, does not explain
why jurisdiction should be recognized without regard to whether the property is present in the State because
of an effort to avoid the owner's obligations. Nor does it support jurisdiction to adjudicate the underlying
claim. At most, it suggests that a State in which property is located should have jurisdiction to attach that
property, by use of proper procedures, [Footnote 34] as security for a judgment being sought in a forum
where the litigation can be maintained consistently with International Shoe. See, e.g., Von Mehren &
Trautman 1178; Hazard 284-285; Beale, supra, n 18, at 123-124. Moreover, we know of nothing to justify
the assumption that a debtor can avoid paying his obligations by removing his property to a State in which
35
his creditor cannot obtain personal jurisdiction over him. [Footnote 35] The Full Faith and Credit Clause,
after all, makes the valid in personam judgment of one State enforceable in all other States. [Footnote 36]
It might also be suggested that allowing in rem jurisdiction avoids the uncertainty inherent in
the International Shoe standard and assures a plaintiff of a forum. [Footnote 37] See Folk &
Moyer, supra, n 10, at 749, 767. We believe, however, that the fairness standard of International Shoe can
be easily applied in the vast majority of cases. Moreover, when the existence of jurisdiction in a particular
forum under International Shoe is unclear, the cost of simplifying the litigation by avoiding the jurisdictional
question may be the sacrifice of "fair play and substantial justice." That cost is too high.
We are left, then, to consider the significance of the long history of jurisdiction based solely on the presence
of property in a State. Although the theory that territorial power is both essential to and sufficient for
jurisdiction has been undermined, we have never held that the presence of property in a State does not
automatically confer jurisdiction over the owner's interest in that property. [Footnote 38] This history must
be considered as supporting the proposition that jurisdiction based solely on the presence of property
satisfies the demands of due process, cf. Ownbey v. Morgan, 256 U. S. 94, 256 U. S. 111 (1921), but it is
not decisive. "[T]raditional notions of fair play and substantial justice" can be as readily offended by the
perpetuation of ancient forms that are no longer justified as by the adoption of new procedures that are
inconsistent with the basic values of our constitutional heritage. Cf. Sniadach v. Family Finance Corp., 395
U.S. at 395 U. S. 340; Wolf v. Colorado, 338 U. S. 25, 338 U. S. 27 (1949). The fiction that an assertion
of jurisdiction over property is anything but an assertion of jurisdiction over the owner of the property
supports an ancient form without substantial modern justification. Its continued acceptance would serve
only to allow state court jurisdiction that is fundamentally unfair to the defendant.
We therefore conclude that all assertions of state court jurisdiction must be evaluated according to the
standards set forth in International Shoe and its progeny. [Footnote 39]
IV
The Delaware courts based their assertion of jurisdiction in this case solely on the statutory presence of
appellants' property in Delaware. Yet that property is not the subject matter of this litigation, nor is the
underlying cause of action related to the property. Appellants' holdings in Greyhound do not, therefore,
provide contacts with Delaware sufficient to support the jurisdiction of that State's courts over appellants.
If it exists, that jurisdiction must have some other foundation. [Footnote 40]
Appellee Heitner did not allege, and does not now claim, that appellants have ever set foot in Delaware.
Nor does he identify any act related to his cause of action as having taken place in Delaware. Nevertheless,
he contends that appellants' positions as directors and officers of a corporation chartered in Delaware
[Footnote 41] provide sufficient "contacts, ties, or relations," International Shoe Co. v. Washington, 326
U.S. at 326 U. S. 319, with that State to give its courts jurisdiction over appellants in this stockholder's
derivative action. This argument is based primarily on what Heitner asserts to be the strong interest of
Delaware in supervising the management of a Delaware corporation. That interest is said to derive from
the role of Delaware law in establishing the corporation and defining the obligations owed to it by its officers
and directors. In order to protect this interest, appellee concludes, Delaware's courts must have jurisdiction
over corporate fiduciaries such as appellants.
This argument is undercut by the failure of the Delaware Legislature to assert the state interest appellee
finds so compelling. Delaware law bases jurisdiction not on appellants' status as corporate fiduciaries, but
rather on the presence of their property in the State. Although the sequestration procedure used here may
be most frequently used in derivative suits against officers and directors, Hughes Tool Co. v. Fawcett
Publications, Inc., 290 A.2d 693, 695 (Del.Ch.1972), the authorizing statute evinces no specific concern
with such actions. Sequestration can be used in any suit against a nonresident, [Footnote 42] see, e.g.,
U.S. Industries, Inc. v. Gregg, 540 F.2d 142 (CA3 1976), cert. pending, No. 76-359 (breach of
contract); Hughes Tool Co. v. Fawcett Publications, Inc., supra, (same), and reaches corporate fiduciaries
only if they happen to own interests in a Delaware corporation, or other property in the State. But as
Heitner's failure to secure jurisdiction over seven of the defendants named in his complaint demonstrates,
there is no necessary relationship between holding a position as a corporate fiduciary and owning stock or
other interests in the corporation. [Footnote 43] If Delaware perceived its interest in securing jurisdiction
over corporate fiduciaries to be as great as Heitner suggests, we would expect it to have enacted a statute
more clearly designed to protect that interest. Moreover, even if Heitner's assessment of the importance of
Delaware's interest is accepted, his argument fails to demonstrate that Delaware is a fair forum for this
litigation. The interest appellee has identified may support the application of Delaware law to resolve any
controversy over appellants' actions in their capacities as officers and directors. [Footnote 44] But we have
rejected the argument that, if a State's law can properly be applied to a dispute, its courts necessarily have
jurisdiction over the parties to that dispute.
"[The State] does not acquire . . . jurisdiction by being the 'center of gravity' of the controversy, or the
most convenient location for litigation. The issue is personal jurisdiction, not choice of law. It is resolved in
this case by considering the acts of the [appellants]."
Hanson v. Denckla, 357 U. S. 235, 357 U. S. 254 (1958). [Footnote 45] Appellee suggests that, by
accepting positions as officers or directors of a Delaware corporation, appellants performed the acts
required by Hanson v. Denckla. He notes that Delaware law provides substantial benefits to corporate
officers and directors, [Footnote 46] and that these benefits were, at least in part, the incentive for
appellants to assume their positions. It is, he says, "only fair and just" to require appellants, in return for
these benefits, to respond in the State of Delaware when they are accused of misusing their power. Brief
for Appellee 15.
But, like Heitner's first argument, this line of reasoning establishes only that it is appropriate for Delaware
law to govern the obligations of appellants to Greyhound and its stockholders. It does not demonstrate that
appellants have "purposefully avail[ed themselves] of the privilege of conducting activities within the forum
State," Hanson v. Denckla, supra at 357 U.S. 253, in a way that would justify bringing them before a
Delaware tribunal. Appellants have simply had nothing to do with the State of Delaware. Moreover,
appellants had no reason to expect to be haled before a Delaware court. Delaware, unlike some States,
[Footnote 47] has not enacted a statute that treats acceptance of a directorship as consent to jurisdiction
in the State. And "[i]t strains reason . . . to suggest that anyone buying securities in a corporation formed
in Delaware 'impliedly consents' to subject himself to Delaware's . . . jurisdiction on any cause of action."
Folk & Moyer, supra, n 10, at 785. Appellants, who were not required to acquire interests in Greyhound in
order to hold their positions, did not, by acquiring those interests, surrender their right to be brought to
judgment only in States with which they had had "minimum contacts."
The Due Process Clause "does not contemplate that a state may make binding a judgment . . . against an
individual or corporate defendant with which the state has no contacts, ties, or relations."
International Shoe Co. v. Washington, 326 U.S. at 326 U. S. 319. Delaware's assertion of jurisdiction over
appellants in this case is inconsistent with that constitutional limitation on state power. The judgment of
the Delaware Supreme Court must, therefore, be reversed.
36
G.R. No. 47517 June 27, 1941
IDONAH SLADE PERKINS, petitioner,
vs.
MAMERTO ROXAS, ET AL., respondents.
On July 5, 1938, the respondent Eugene Arthur Perkins, filed a complaint in the Court of First Instance of
Manila against the Benguet Consolidated Mining Company for the recovery of the sum of P71,379.90,
consisting of dividends which have been declared and made payable on 52,874 shares of stock registered
in his name, payment of which was being withheld by the company, and for the recognition of his right to
the control and disposal of said shares, to the exclusion of all others. To the complaint, the company filed
its answer, alleging, by way of defense, that the withholding of plaintiff's right to the disposal and control
of the shares was due to certain demands made with respect to said shares by the petitioner herein. Idonah
Slade Perkins, and by one George H. Engelhard. The answer prays that the adverse claimants be made
parties to the action and served with notice thereof by publication, and that thereafter all such parties be
required to interplead and settle the rights among themselves.
On September 5, 1938, the trial court ordered the respondent, Eugene Arthur Perkins, to include in his
complaint as parties defendants petitioner, Idonah Slade Perkins, and George H. Engelhard. The complaint
was accordingly amended and in addition to the relief prayed for in the original complaint, respondent
Perkins prayed that petitioner Idonah Slade Perkins and George H. Engelhard be adjudged without interest
in the shares of stock in question and excluded from any claim they assert thereon. Thereafter, summons
by publication were served upon the non-resident defendants, Idonah Slade Perkins and George H.
Engelhard, pursuant to the order of the trial court. On December 9, 1938, Engelhard filed his answer to the
amended complaint, and on January 8, 1940, petitioner's objection to the court's jurisdiction over her
person having been overruled by the trial court and by this court in G. R. No. 46831, petitioner filed her
answer with a cross-complaint in which she sets up a judgment allegedly obtained by her against
respondent, Eugene Arthur Perkins, from the Supreme Court of the State of New York, wherein it is declared
that she is the sole legal owner and entitled to the possession and control of the shares of stock in question
together with all the cash dividends declared thereon by the Benguet Consolidated Mining Company, and
prays for various affirmative reliefs against the respondent. To the answer and cross-complaint thus filed,
the respondent, Eugene Arthur Perkins, filed a reply and an answer in which he sets up several defenses
to the enforcement in this jurisdiction of the judgment of the Supreme Court of the State of New York above
alluded to. Instead of demurring to the reply on either of the two grounds specified in section 100 of the
Code of Civil Procedure, petitioner, Idonah Slade Perkins, on June 5, 1940, filed a demurrer thereto on the
ground that "the court has no jurisdiction of the subject of the action," because the alleged judgment of
the Supreme Court of the State of New York is res judicata.
Petitioner's demurrer having been overruled, she now filed in this court a petition entitled "Certiorari,
Prohibition and Mandamus," alleging that "the respondent judge is about to and will render judgment in the
above-mentioned case disregarding the constitutional rights of this petitioner; contrary to and annulling
the final, subsisting, valid judgment rendered and entered in this petitioner's favor by the courts of the
State of New York, ... which decision is res judicata on all the questions constituting the subject matter of
civil case No. 53317, of the Court of First Instance of Manila; and which New York judgment the Court of
First Instance of Manila is without jurisdiction to annul, amend, reverse, or modify in any respect
whatsoever"; and praying that the order of the respondent judge overruling the demurrer be annulled, and
that he and his successors be permanently prohibited from taking any action on the case, except to dismiss
the same.
The only question here to be determined, therefore, is whether or not, in view of the alleged judgment
entered in favor of the petitioner by the Supreme Court of New York, and which is claimed by her to be res
judicata on all questions raised by the respondent, Eugene Arthur Perkins, in civil case No. 53317 of the
Court of First Instace of Manila, the local court has jurisdiction over the subject matter of the action in the
said case. By jurisdiction over the subject matter is meant the nature of the cause of action and of the relief
sought, and this is conferred by the sovereign authority which organizes the court, and is to be sought for
in general nature of its powers, or in authority specially conferred. In the present case, the amended
complaint filed by the respondent, Eugene Arthur Perkins, in the court below alleged the ownership in
himself of the conjugal partnership between him and his wife, Idonah Slade Perkins; that the petitioner,
Idonah Slade Perkins, and George H. Engelhard assert claims to and interests in the said stock adverse to
Eugene Arthur Perkins; that such claims are invalid, unfounded, and made only for the purpose of vexing,
hindering and delaying Eugene Arthur Perkins in the exercise of the lawful control over and use of said
shares and dividends accorded to him and by law and by previous orders and decrees of this court; and the
said amended complaint prays, inter alia, "that defendant Benguet Consolidated Mining Company be
required and ordered to recognize the right of the plaintiff to the control and disposal of said shares so
standing in his name to the exclusion of all others; that the additional defendants, Idonah Slade Perkins
and George H. Engelhard, be each held to have no interest or claim in the subject matter of the controversy
between plaintiff and defendant Benguet Consolidated Mining Company, or in or under the judgment to be
rendered herein and that by said judgment they, and each of them be excluded therefrom; and that the
plaintiff be awarded the costs of this suit and general relief." The respondent's action, therefore, calls for
the adjudication of title to certain shares of stock of the Benguet Consolidated Mining Company, and the
granting of affirmative reliefs, which fall within the general jurisdiction of the Court of First Instance of
Manila. (Vide: sec. 146, et seq., Adm. Code, as amended by Commonwealth Act No. 145; sec. 56, Act No.
136, as amended by Act No. 400.)
The petitioner expresses the fear that the respondent judge may render judgment "annulling the final,
subsisting, valid judgment rendered and entered in this petitioner's favor by the courts of the State of New
York, ... which decision is res judicata on all the questions constituting the subject matter of civil case No.
53317," and argues on the assumption that the respondent judge is without jurisdiction to take cognizance
of the cause. Whether or not the respondent judge in the course of the proceedings will give validity and
efficacy to the New York judgment set up by the petitioner in her cross-complaint is a question that goes
to the merits of the controversy and relates to the rights of the parties as between each other, and not to
the jurisdiction or power of the court. The test of jurisdiction is whether or not the tribunal has power to
enter upon the inquiry, not whether its conclusion in the course of it is right or wrong. If its decision is
erroneous, its judgment case be reversed on appeal; but its determination of the question, which the
petitioner here anticipates and seeks to prevent, is the exercise by that court — and the rightful exercise
— of its jurisdiction.
The petition is, therefore, hereby denied, with costs against the petitioner. So ordered.

Similarly, the Court of First Instance of Manila is empowered to adjudicate the several demands contained
in petitioner's cross-complaint. The cross-complaint sets up a judgment allegedly recovered by Idonah
Slade Perkins against Eugene Arthur Perkins in the Supreme Court of New York and by way of relief prays:
(1) Judgment against the plaintiff Eugene Arthur Perkins in the sum of one hundred eighty-five thousand
and four hundred dollars ($185,400), representing cash dividends paid to him by defendant Benguet
Consolidated Mining Co. from February, 1930, up to and including the dividend of March 30, 1937.
(2) That plaintiff Eugene Arthur Perkins be required to deliver to this defendant the certificates
representing the 48,000 shares of capital stock of Benguet Consolidated Mining Co. issued as a stock
dividend on the 24,000 shares owned by this defendant as described in the judgment Exhibit 1-A.
(3) That this defendant recover under that judgment Exhibit 1-A interest upon the amount of each cash
dividend referred to in that judgment received by plaintiff Eugene Arthur Perkins from February, 1930,
to and including the dividend of March 30, 1937, from the date of payment of each of such dividends at
the rate of 7 per cent per annum until paid.
(4) That this defendant recover of plaintiff her costs and disbursements in that New York action amounting
to the sum of one thousand five hundred eighty-four and 20/00 dollars ($1,584.20), and the further sum
of two thousand dollars ($2,000) granted her in that judgment Exhibit 1-A as an extra allowance, together
with interest.
(5) For an order directing an execution to be issued in favor of this defendant and against the plaintiff for
amounts sufficient to satisfy the New York judgment Exhibit 1-A in its entirety, and against the plaintiff
and the defendant Benguet Consolidated Mining Co. for such other amounts prayed for herein as this
court may find to be due and payable by each of them; and ordering them to comply with all other orders
which this court may issue in favor of the defendant in this case.
(6) For the costs of this action, and
(7) For such other relief as may be appropriate and proper in the premises.

In other words, Idonah Slade Perkins in her cross-complaint brought suit against Eugene Arthur Perkins
and the Benguet Consolidated Mining Company upon the alleged judgment of the Supreme Court of the
State of New York and asked the court below to render judgment enforcing that New York judgment, and
to issue execution thereon. This is a form of action recognized by section 309 of the Code of Civil Procedure
(now section 47, Rule 39, Rules of Court) and which falls within the general jurisdiction of the Court of First
Instance of Manila, to adjudicate, settled and determine.

37
HEINE
v.
NEW YORK LIFE INS. CO.
No. 10465.
District Court, D. Oregon.
December 1, 1930.
BEAN, District Judge.
This is one of a series of cases pending in this court against the New York Life Insurance Company and the
Guardian Insurance Company, each of which is a New York corporation, to recover on some two hundred
and forty life insurance policies made and issued by the defendants in Germany, in favor of German citizens
and subjects, and payable in German marks. The policies of the New York Life Insurance Company were
issued prior to August 1, 1914, and those of the Guardian prior to May 1, 1918. As a condition to their right
to do business in Germany, the insurance companies were required to and did submit to the supervision
and control of the German insurance officials, to invest the reserves arising from German policies in German
securities, and to establish, and they do now maintain, an office in that country with a resident
representative or agent upon whom service of process can be made.
The actions now pending are brought and prosecuted in the name of, or as assignee of the insured by,
certain parties in the United States and Germany, under an irrevocable power of attorney, by which they
are authorized and empowered to sue for, collect, receive, and receipt for all sums due or owing under the
policies, or compromise the same in consideration of an assignment and transfer to them of the undivided
25 per cent. interest in the policies and all rights accruing thereunder.
None of the parties to the litigation are residents or inhabitants of this district. The plaintiffs reside in, and
are citizens of, the republic of Germany. The defendants are corporations organized and existing under the
laws of New York, with their principal offices in that state, with statutory agents in Oregon, upon whom
service can be made. None of the causes of action arose here, nor do any of the material witnesses reside
in the district, nor are any of the records of the defendant companies pertaining to the policies in suit in
the district, but such records are either at the home office in New York or at their offices in Germany. The
courts of Germany and New York are open and functioning and competent to take jurisdiction of the
controversies, and service can be made upon the defendants in either of such jurisdictions. To require the
defendants to defend the actions in this district would impose upon them great and unnecessary
inconvenience and expense, and probably compel them to produce here (three thousand miles from their
home office) numerous records, books, and papers, all of which are in daily use by it in taking care of
current business.
In addition, it would no doubt consume months of the time of this court to try and dispose of these cases,
thus necessarily disarranging the calendar, resulting in delay, inconvenience, and expense to other litigants
who are entitled to invoke its jurisdiction.
Under these circumstances, the defendants, while conceding that the court has jurisdiction of the person
and subject-matter, urges that it should refuse, in its discretion, to exercise such jurisdiction.
I unhesitatingly concur in this view, for, as said by Mr. Justice Holmes in Cuba Railroad Co. v. Crosby, 222
U.S. 473, 32 S. Ct. 132, 133, 56 L. Ed. 274, 38 L. R. A. (N. S.) 40: "It should be remembered that parties
do not enter into civil relations in foreign jurisdictions in reliance upon our courts. They could not complain
if our courts refused to meddle with their affairs, and remitted them to the place that established and would
38
enforce their rights. * * * The only just ground for complaint would be if their rights and liabilities, when
enforced by our courts, should be measured by a different rule from that under which the parties dealt."
*427 It is apparent that the plaintiffs are seeking by these actions to impose on the defendants a liability
under a different rule than "that under which the parties dealt."
The courts of Germany have ruled that any person seeking to recover on a civil contract made in Germany
prior to August, 1924, and payable in marks, can only recover on the basis provided in the monetary law
of 1924. Manifestly the plaintiffs are not proceeding on any such theory.
It is argued by the plaintiffs that, because the court has jurisdiction of the subject-matter and the parties,
it has no discretion, but should proceed with the case, regardless of where the cause of action arose, or the
law by which it is controlled, or the residence or convenience of the parties and witnesses, or the difficulty
the court would encounter in attempting to interpret and enforce a foreign contract, or the interference
with the other business of the court. But that is a matter resting in its discretion. It may retain jurisdiction,
or it may, in the exercise of a sound discretion, decline to do so, as the circumstances suggest. The courts
have repeatedly refused, in their discretion, to entertain jurisdiction of causes of action arising in a foreign
jurisdiction, where both parties are nonresidents of the forum.
As said by Mr. Justice Bradley in The Belgenland, 114 U.S. 355, 5 S. Ct. 860, 864, 29 L. Ed. 152:
"Circumstances often exist which render it inexpedient for the court to take jurisdiction of controversies
between foreigners in cases not arising in the country of the forum; as, where they are governed by the
laws of the country to which the parties belong, and there is no difficulty in a resort to its courts; or where
they have agreed to resort to no other tribunals * * * not on the ground that it has not jurisdiction, but
that, from motives of convenience, or international comity, it will use its discretion whether to exercise
jurisdiction or not."
These, in my judgment, are cases of that kind. They are actions brought on causes of action arising in
Germany. The contract of insurance was made and to be paid there and in German currency. It is to be
construed and given effect according to the laws of the place where it was made. 22 Am. & Eng. Ency. of
Law (2d Ed.) 1350. The courts of this country are established and maintained primarily to determine
controversies between its own citizens and those having business there, and manifestly the court may
protect itself against a flood of litigation over contracts made and to be performed in a foreign country,
where the parties and witnesses are nonresidents of the forum, and no reason exists why the liability, if
any, cannot be enforced in the courts of the country where the cause of action arose, or in the state where
the defendant was organized and has its principal offices. True, the courts of New York have declined to
exercise jurisdiction over actions brought on insurance policies similar to those in suit. Higgins v. N. Y. Ins.
Co., 220 App. Div. 760, 222 N.Y.S. 819, and Von Nessen-Stone v. N. Y. Life Ins. Co.[1] But that affords no
reason why this court should do so. It is to me unthinkable that residents and citizens of Germany may
import bodily into this court numerous actions against a nonresident defendant, on contracts made and
payable in Germany, and insist as a matter of right that, because it has obtained jurisdiction of the
defendant by service of its statutory agent, the taxpayers, citizens, and residents of the district having
business in the court should stand aside and wait the conclusion of the case, where, as here, the courts of
Germany and of the home state of the defendant are open and functioning.
Judge Tucker, in the state court of Multnomah county, in an able and well-considered opinion in a case
brought on one of the German policies (Kahn v. New York), reached the same conclusion.
Motion allowed.
In re UNION CARBIDE CORPORATION GAS PLANT DISASTER AT BHOPAL, INDIA IN DECEMBER, On September 24, 1985, pursuant to the Bhopal Act, the Central Government of India framed a "scheme"
1984. for the Registration and Processing of Claims arising out of the disaster. According to the Union of
India's *845 counsel, over 487,000 claims have been filed in India pursuant to the "scheme."
Misc. No. 21-38 (JFK).

United States District Court, S.D. New York. There presently are 145 actions filed in the United States District Court for the Southern District of New
May 12, 1986. York under the Judicial Panel for Multidistrict Litigation's order of February 6, 1985, involving approximately
200,000 plaintiffs.
*844 OPINION and ORDER
Before this Court is a motion by the defendant Union Carbide Corporation ("Union Carbide") to dismiss the
KEENAN, District Judge:
consolidated action on the grounds of forum non conveniens.

FACTUAL BACKGROUND
DISCUSSION
On the night of December 2-3, 1984 the most tragic industrial disaster in history occurred in the city of
The doctrine of forum non conveniens allows a court to decline jurisdiction, even when jurisdiction is
Bhopal, state of Madhya Pradesh, Union of India. Located there was a chemical plant owned and operated
authorized by a general venue statute. In support of its position that the consolidated action before the
by Union Carbide India Limited ("UCIL"). The plant, situated in the northern sector of the city, had numerous
Court should be transferred to a more convenient forum within the Union of India pursuant to this doctrine,
hutments adjacent to it on its southern side which were occupied by impoverished squatters. UCIL
Union Carbide relies on the United States Supreme Court's decisions in Gulf Oil Corp. v. Gilbert, 330 U.S.
manufactured the pesticides Sevin and Temik at the Bhopal plant at the request of, and with the approval
501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947) and Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S. Ct. 252,
of, the Government of India. (Affidavit of John MacDonald ("MacDonald Aff.") at 2). UCIL was incorporated
70 L. Ed. 2d 419 (1981). The plaintiffs cite numerous other lower United States federal court cases in their
under Indian law in 1934. 50.9% of its stock is owned by the defendant, Union Carbide Corporation, a New
briefs and seek to distinguish the Supreme Court's decisions from this case. Of course, Gilbert and Piper are
York corporation. (MacDonald Aff. at 1). Methyl isocyanate (MIC), a highly toxic gas, is an ingredient in the
the touchstones in sorting out and examining the contentions of both sides to this motion on the various
production of both Sevin and Temik. On the night of the tragedy MIC leaked from the plant in substantial
factors bearing on convenience.
quantities for reasons not yet determined.

Piper teaches a straightforward formulation of the doctrine of forum non conveniens. A district court is
The prevailing winds on the early morning of December 3, 1984 were from Northwest to Southeast. They
advised to determine first whether the proposed alternative forum is "adequate." This inquiry should
blew the deadly gas into the overpopulated hutments adjacent to the plant and into the most densely
proceed in the order followed below. Then, as a matter within its "sound discretion," Piper at 257, 102 S.
occupied parts of the city. The results were horrendous. Estimates of deaths directly attributable to the leak
Ct. at 266, the district court should consider relevant public and private interest factors, and reasonably
range as high as 2,100. No one is sure exactly how many perished. Over 200,000 people suffered
balance those factors, in order to determine whether dismissal is favored. This Court will approach the
injuriessome serious and permanent some mild and temporary. Livestock were killed and crops damaged.
various concerns in the same direct manner in which Piper and Gilbert set them out.
Businesses were interrupted.

At this juncture, it would be appropriate to discuss the presumptions on a forum non conveniens motion.
On December 7, 1984 the first lawsuit was filed by American lawyers in the United States on behalf of
In Piper, the Court discussed its earlier finding in Koster v. Lumbermens Mutual Casualty Co., 330 U.S.
thousands of Indians. Dawani et al. v. Union Carbide Corp., S.D.W.Va. (84-2479). Since then 144 additional
518, 67 S. Ct. 828, 91 L. Ed. 1067 (1947), which suggested that a plaintiff's choice of forum was entitled
actions have been commenced in federal courts in the United States. The actions have all been joined and
to great deference when the forum chosen was the home of the plaintiff. This presumption was based on
assigned by the Judicial Panel on Multidistrict Litigation to the Southern District of New York by order of
the fact that the choice of the home forum indicated a reasonable assumption that the choice was
February 6, 1985, 601 F. Supp. 1035.
convenient. Koster at 524, 67 S. Ct. at 831. Conversely, the Piper Court found:
When the plaintiff is foreign, however, this assumption is much less reasonable. Because the central
The individual federal court complaints have been superseded by a consolidated complaint filed on June 28, purpose of any forum non conveniens inquiry is to ensure that the trial is convenient, a foreign plaintiff's
1985. choice deserves less deference.

In the case now before the Court, in which the plaintiffs, including the Union of India, are foreign, and share
The Indian Government on March 29, 1985 enacted legislation, the Bhopal Gas Leak Disaster (Processing
a home forum which is not the instant forum, the assumption that this forum is convenient is not completely
of Claims) Act (21 of 1985) ("Bhopal Act"), providing that the Government of India has the exclusive right
reasonable. The foreign plaintiffs' choice of the United States forum "deserves less deference" than would
to represent Indian plaintiffs in India and elsewhere in connection with the tragedy. Pursuant to the Bhopal
be accorded a United States citizen's choice. This Court will apply the presumption in favor of plaintiffs'
Act, the Union of India, on April 8, 1985, filed a complaint with this Court setting forth claims for relief
choice of forum with "less than maximum force." Piper at 261, 102 S. Ct. at 268. See note 23 at 864, infra.
similar to those in the consolidated complaint of June 28, 1985.

1. Preliminary Considerations.
By order of April 25, 1985 this Court established a Plaintiffs' Executive Committee, comprised of F. Lee
Bailey and Stanley M. Chesley, Esqs., who represented individual plaintiffs and Michael V. Ciresi, Esq.,
"At the outset of any forum non conveniens inquiry, the court must determine whether there exists an
whose firm represents the Union of India. Jack S. Hoffinger, Esq., who represents individual plaintiffs, was
alternative forum." Piper at 254, n. 22, 102 S. Ct. at 265, n. 22. The elements of that inquiry are set forth
appointed liaison counsel for the Plaintiffs' Executive Committee. [1]
in Piper. First, the Court said, "[o]rdinarily, this requirement will be satisfied when the defendant is
`amenable to process' in the other jurisdiction." Piper at 254, n. 22, *846 102 S. Ct. at 265, n. 22,

39
quoting Gilbert 330 U.S. at 506-507, 67 S. Ct. at 842. Gilbert states that the doctrine of forum non Beyond this initial test, plaintiffs and amicus curiae[4] argue that the Indian legal system is inadequate to
conveniens "presupposes at least two forums in which the defendant is amenable to process." handle the Bhopal litigation. In support of this position, plaintiffs have submitted the affidavit of Professor
Marc S. Galanter of the University of Wisconsin Law School. Professor Galanter's credentials are impressive;
he was a Fulbright Scholar at the Faculty of Law of Delhi University and specializes in South Asian Studies
Extending the limited inquiry of Gilbert, the Piper Court delved into the relevance of the substantive and
at the University of Wisconsin Law School. He is not, however, admitted to practice in India and the Court
procedural differences in law which would be applied in the event a case was transferred on the grounds
views his opinions concerning the Indian legal system, its judiciary and bar as far less persuasive than
of forum non conveniens. The Piper Court determined that it was theoretically inconsistent with the
those of N.A. Palkhivala and J.B. Dadachanji, each of whom has been admitted to practice in India for over
underlying doctrine of forum non conveniens, as well as grossly impractical, to consider the impact of the
40 years. Both are Senior Advocates before the Supreme Court of India. Mr. Palkhivala served as Indian
putative transferee forum's law on the plaintiff in its decision on a forum non conveniens motion: "[I]f
Ambassador to the United States from 1977 to 1979, and has represented the Indian government on three
conclusive or substantial weight were given to the possibility of a change in law, the forum non
occasions before international tribunals.
conveniens doctrine would become virtually useless." Piper 454 U.S. at 250, 102 S. Ct. at 263.[2]

Although the outcome of this analysis, given the rule of Piper regarding change in law, seems self-evident,
The Court listed numerous practical considerations which led to its conclusion that an unfavorable change
the Court will review plaintiffs' argument on the inadequacy of the Indian forum out of deference to the
in law for plaintiff was not a relevant factor in the forum analysis. First, the Court observed that if the
plaintiffs.
chance of a change in law were given substantial weight, choice of law questions would "become extremely
important." Piper at 251, 102 S. Ct. at 263. U.S. courts would "have to compare the rights, remedies, and
procedures available" within the two proposed alternative forums, to determine whether a disadvantageous A. Innovation in the Indian Judicial System.
change in law would occur upon transfer. Id. Since "[t]he doctrine of forum non conveniens, however, is
designed in part to help courts avoid conducting complex exercises in comparative law," the change in law Professor Galanter describes the Indian common law legal system, inherited from the British, in terms of
analysis would subvert the doctrine itself. Id. Thus, a court engaged in the inquiry regarding the existence its similarity to that of other common law systems. He compares the system favorably to that of the United
and adequacy of an alternative forum should not hinge its decision on an unfavorable change in law. [3] States or Great Britain in terms of the appellate structure, the rule of stare decisis, the role of the judiciary
as "guardian of [India's] democratic structure and protector of citizens' rights." (Galanter Aff., at 6-12)
before pointing to its ostensible deficiencies. According to Professor Galanter, India's legal system "was
Another practical concern relating to the "change in law" inquiry was discussed by the Piper court. Based
imposed on it" during the period of colonial rule. (Galanter Aff. at 11). Galanter argues that "Indian legal
on the liberality of United States federal law as compared to much foreign law with respect to availability
institutions still reflect their colonial origins," (Galanter Aff. at 12), in terms of the lack of broadbased
of strict liability for tort, malleable and diverse choice of law rules among the 50 states, availability of jury
legislative activity, inaccessibility of legal information and legal services, burdensome court filing fees and
trials, contingent fee arrangements and extensive discovery provisions, the Court observed that a change
limited innovativeness with reference to legal practice and education. (Galanter Aff. at 12).
of forum might frequently involve an unfavorable change of law for foreign plaintiffs suing American
defendants. Piper at 252, n. 18, 102 S. Ct. at 264, n. 18. Consequently, if the unfavorable change in law
were a major factor in the analysis: On the question of innovativeness, Mr. Palkhivala responds with numerous examples of novel treatment of
[T]he American courts, which are already extremely attractive to foreign plaintiffs, would become even complex legal issues by the Indian Judiciary.[5] In the words of the former ambassador of India to the United
more attractive. The flow of litigation into the United States would increase and further congest already States, "a legal system is not *848 a structure of fossils but is a living organism which grows through the
crowded courts. judicial process and statutory enactments." (Palkhavala Aff. at 3). The examples cited by defendant's
experts suggest a developed and independent judiciary. Plaintiffs present no evidence to bolster their
At the point, however, where the possible change in law would provide "no remedy at all" to plaintiff, a contention that the Indian legal system has not sufficiently emerged from its colonial heritage to display
court may conclude that no adequate alternative exists. As the Piper Court observed, it did not hold that: the innovativeness which the Bhopal litigation would demand. Their claim in this regard is not compelling.
[T]he possibility of an unfavorable change in law should never be a relevant consideration in a forum non
conveniens inquiry. Of course, if the remedy provided by the alternative forum is so clearly inadequate
B. Endemic Delays in the Indian Legal System.
or unsatisfactory that it is no remedy at all, the unfavorable change in law may be given substantial
weight; the district court may conclude that dismissal would not be in the interests of justice. Galanter discusses the problems of delay and backlog in Indian courts. Indeed, it appears that India has
approximately one-tenth the number of judges, per citizen, as the United States, [6] and that postponements
Piper at 254, 102 S. Ct. at 265 (emphasis in original) (footnote omitted). Thus, while it *847 is not a
and high caseloads are widespread. Galanter urges that the backlog is a result of Indian procedural law,
"major factor" in the analysis, a court must at least consider the effect on plaintiffs of a change in law upon
which allows for adjournments in mid-hearing, and for multiple interlocutory and final appeals. Numerous
transfer.
appeals and "[c]onsiderable delay [are] caused by the tendency of courts to avoid the decision of all the
matters in issue in a suit, on the ground that the suit could be disposed of on a preliminary point." (Galanter
To a great extent, the plaintiffs in this case argue that Indian courts do not offer an adequate forum for Aff. at 17; 18-20, 21, quoting Indian Law Commission, 54th Report (1973) pp. 12-13).
this litigation by virtue of the relative "procedural and discovery deficiencies [which] would thwart the
victims' quest for" justice. (Memorandum in Opposition by Plaintiffs' Executive Committee ("Memo in Opp.")
This Court acknowledges that delays and backlog exist in Indian courts, but United States courts are subject
at 2). The defendant disputes this contention.
to delays and backlog, too. See Remarks of Honorable Warren E. Burger, Chief Justice, Supreme Court of
the United States, 100 F.R.D. 499, 534 (1983).
Plaintiffs' preliminary concern, regarding defendant's amenability to process in the alternative forum, is
more than sufficiently met in the instant case. Union Carbide has unequivocally acknowledged that it is
However, as Mr. Palkhivala states, while delays in the Indian legal system are a fact of judicial life in the
subject to the jurisdiction of the courts of India (Defendant's Memorandum in Reply filed December 20,
proposed alternative forum, there is no reason to assume that the Bhopal litigation will be treated in
1985 ("Reply Memo") at 8); (oral argument January 3, 1986, transcript at 29, comment of Bud Holman,
ordinary fashion.
counsel for Union Carbide). Union Carbide is definitely amenable to process in India.

40
The Bhopal tragedy has already been approached with imagination in India. Demonstrating the creativity
and flexibility of the Indian system, the Parliament of India has passed the Bhopal Act in order to deal with
the cases arising from the sad events of December 3, 1984. The Bhopal Act permits the cases to be treated
"speedily, effectively, equitably and to the best advantage of the claimants." (Palkhivala Aff. at 11).
Mr. Dadachanji refers to another Indian case which arose from a gas leak in New Delhi. The Chief Justice
and another Justice of the Supreme Court of India ordered the presiding court to expedite adjudication of
claims. MC Mehta v. Union of India. (Dadachanji Aff. at 11 and Annexure A thereto). In another instance,
the Indian Supreme Court directed the High Court to hear a given matter on a daily basis, and set a deadline
for delivering judgment (Dadachanji Aff. at 11 and Annexure B thereto). Other means of coping with delay
are appointment of special tribunals by the Government of India (Dadachanji Aff. at 12 and Annexure C
thereto), and assignment of daily hearing duties to a single special judge, otherwise unburdened, to hear
a special matter. (Dadachanji Aff. at 11). This Court is persuaded, by the example of the Bhopal Act itself
and other cases where special measures to expedite were taken by the Indian judiciary, that the most
significant, urgent and extensive litigation ever to arise from a single event could be handled through special
judicial accommodation in India, if required.
C. Procedural and Practical Capacity of Indian Courts.
Plaintiffs contend that the Indian legal system lacks the wherewithal to allow it "to deal effectively and
expeditiously" with the issues raised in this lawsuit. (Memo in Opp. p. 53).
Plaintiffs urge that Indian practitioners emphasize oral skills rather than written briefs. They allegedly lack
specialization, practical investigative techniques and coordination into partnerships. These factors, *849 it
is argued, limit the Indian bar's ability to handle the Bhopal litigation. As Mr. Dadachanji indicates, Indian
lawyers have competently dealt with complex technology transfers, suggesting capability within the
technological and scientific areas of legal practice, if not "specialization." (Dadachanji Aff. at 8). Moreover,
Indian attorneys use experts, when necessary. As to investigative ability, Mr. Dadachanji persuasively
points out that the Central Bureau of Investigation ("CBI") of the Union of India is well equipped to handle
factual inquiry, as is the Commission of Enquiry constituted by the state of Madhya Pradesh. (Dadachanji
Aff. at 8). While Indian attorneys may not customarily join into large law firms, and as Mr. Palkhivala states,
are limited by present Indian law to partnerships of no more than twenty, this alone or even in concert with
other factors does not establish the inadequacy of the Indian legal system. (Palkhivala Aff. at 8). There is
no reason the Indian legislature could not provide for the expansion of lawfirms, if such a choice is required.
In any event, this Court is not convinced that the size of a law firm has that much to do with the quality of
legal service provided. Many small firms in this country perform work at least on a par with the largest
firms. Bigger is not necessarily better.
Moreover, since the Union of India purports to represent all the claimants, it is likely that if the case were
transferred to India, the Attorney General or Solicitor General of India and the Advocate General of Madhya
Pradesh, with attendant staffs, would represent the claimants. The Indian bar appears more than capable
of shouldering the litigation if it should be transferred to India. (Palkhivala Aff. at 9).
Next, plaintiffs and Professor Galanter argue that the substantive tort law of India is not sufficiently
developed to accommodate the Bhopal claims. Plaintiffs trace the lack of sophistication in Indian tort law
to the presence of court fees for litigants as inhibiting the filing of civil suits. Though the filing fees may
have had historical significance, they are irrelevant here. Professor Galanter acknowledges that court fees
may be waived for "poor parties or for specific classes of litigants." (Galanter Aff. at 28). In fact, filing fees
have been waived for claimants in India in the Bhopal litigation already begun there.
Professor Galanter asserts that India lacks codified tort law, has little reported case law in the tort field to
serve as precedent, and has no tort law relating to disputes arising out of complex product or design liability.
(Galanter Aff. at 30-36). As an illustration of the paucity of Indian tort law, Professor Galanter states that
41
a search through the All-India Reports for the span from 1914 to 1965 revealed only 613 tort cases
reported. (Galanter Aff. at 32). Mr. Dadachanji responds that tort law is sparsely reported in India due to
frequent settlement of such cases, lack of appeal to higher courts, and the publication of tort cases in
specialized journals other than the All-India Reports. (Dadachanji Aff. at 16-17; Palkhivala Aff. at 10). In
addition, tort law has been codified in numerous Indian statutes. (Dadachanji Aff. at 16-17).
As Professor Galanter himself states, "the major categories of tort, their elements, the [theories] of liability,
defenses, respondeat superior, the theories of damagesare all familiar." (Galanter Aff. at 37). What is
different, Galanter asserts, is the complete absence of tort law relating to high technology or complex
manufacturing processes. This is of no moment with respect to the adequacy of the Indian courts. With the
groundwork of tort doctrine adopted from the common law and the precedential weight awarded British
cases, as well as Indian ones, it is obvious that a well-developed base of tort doctrine exists to provide a
guide to Indian courts presiding over the Bhopal litigation. In any event, much tort law applied in American
cases involving complex technology has its source in legal principles first enunciated in Victorian
England. See, e.g., Rylands v. Fletcher, 1868, L.R. 3 H.L. 330. As Mr. Palkhivala stated in his affidavit:
*850 The plant itself was the product of highly complex technology, but complexity of the technology
cannot be equated with complexity of legal issues. The principles of liability and damages involved in the
Bhopal cases are all well established in India. The complexity is not in the nature or determination of
legal issues but in the application of the law to the events which took place in Bhopal. Well settled law is
to be applied to an unusual occurrence.
Plaintiffs next assert that India lacks certain procedural devices which are essential to the adjudication of
complex cases, the absence of which prevent India from providing an adequate alternative forum. They
urge that Indian pre-trial discovery is inadequate and that therefore India is an inadequate alternative
forum. Professor Galanter states that the only forms of discovery available in India are written
interrogatories, inspection of documents, and requests for admissions. Parties alone are subject to
discovery. Third-party witnesses need not submit to discovery. Discovery may be directed to admissible
evidence only, not material likely to lead to relevant or admissible material, as in the courts of the United
States. Parties are not compelled to provide what will be actual proof at trial as part of discovery.
These limits on discovery are adopted from the British system. Similar discovery tools are used in Great
Britain today. This Court finds that their application would perhaps, however, limit the victims' access to
sources of proof. Therefore, pursuant to its equitable powers, the Court directs that the defendant consent
to submit to the broad discovery afforded by the United States Federal Rules of Civil Procedure if or when
an Indian court sits in judgment or presides over pretrial proceedings in the Bhopal litigation. [7] Any
dismissal of the action now before this Court is thus conditioned on defendant's consent to submit to
discovery on the American model, even after transfer to another jurisdiction.
The ostensible lack of devices for third-party impleader or for organizing complex cases under the law of
the state of Madhya Pradesh are two other procedural deficiencies which plaintiffs assert preclude a finding
that India offers an adequate alternative forum. Assuming for the moment that, upon appropriate transfer,
the Bhopal litigation would be adjudicated by the local district court in Bhopal, and that the law of Madhya
Pradesh would be applied, this Court is still not moved by plaintiffs' argument regarding impleader or
complex litigation.
Although no specific provision in the Indian Code of Civil Procedure permits the impleading of third-parties
from whom contribution is sought, other provisions in the Code do provide for impleader. As both parties
to this motion state, Order 1, Rule 10(2) of the Indian Code of Civil Procedure "allows the court to add
additional parties if the presence of those parties is `necessary in order to enable the Court effectively and
completely to adjudicate upon and settle all questions involved in the suit.'" (Galanter Aff. at 60; Dadachanji
Aff. at 18). Professor Galanter posits that a joint tortfeasor would not be considered a necessary party, and
would not be joined. Defendant's expert, conversely, asserts that a party can be added to prevent
multiplicity of suits and conflicts of decisions. Thus, Mr. Dadachanji argues, defendants would be able to
seek contribution from third-parties if joinder would prevent repetitive litigation or inconsistency. Moreover,
the broad provision of inherent powers to aid the ends of justice, as codified at Section 151 of the Indian
Code of Civil Procedure would prevent an ultimate miscarriage of *851 justice in the area of impleader.
(Dadachanji Aff. at 19).[8]
The absence of procedures or mechanisms within the Indian judiciary to handle complex litigation is
presented as support for plaintiffs' position regarding the non-existence of an adequate alternative forum.
Professor Galanter asserts, for example, that Indian judges do not promote settlements. The point is wholly
irrelevant to the question of whether an adequate alternative forum exists. In any event, this Court has
labored hard and long to promote settlement between the parties for over a year, to no avail. It would
appear that settlement, although desirable for many reasons, including conservation of attorneys' fees and
costs of litigation, preservation of judicial resources, and speed of resolution, is unlikely regardless of the
level of activism of the presiding judge.
Plaintiffs' next contention is that since no class action procedure exists in India expeditious litigation of the
Bhopal suits would be impossible. As with all of plaintiffs' other arguments, this purported deficiency does
not constitute "no remedy" at all. Professor Galanter himself acknowledges that Order 1, Rule 8 of the
Indian Code of Civil Procedure provides a mechanism for "representative" suits, "where there are numerous
persons having the same interest in one suit." (Galanter Aff. at 54). Even if the current state of Indian law
regarding "representative" suits involves application of the mechanism to pre-existing groups such as
religious sects or associations, there is no reason to conclude that the Indian legislature, capable of enacting
the Bhopal Act, would not see its way to enacting a specific law for class actions. In addition, it does not
appear on the face of Order 1, Rule 8 that the "representative" suit is expressly limited to preexisting
groups. The Indian district court could adopt the rule for use in a newly created class of injured, whose
members all have "the same interest" in establishing the liability of the defendant. An Indian court has law
available to create a representative class, or perhaps a few different representative classes. The "scheme"
for registration and processing of claims, see supra, at 4, could perform the task of evaluating the specific
amounts of claims. Moreover, Mr. Dadachanji gives at least three examples where Indian courts have
consolidated suits pursuant to their inherent power under Section 151 of the Indian Code of Civil Procedure.
In at least one case, such consolidation allegedly occurred without consent of the parties. (Dadachanji Aff.
at 9). The absence of a rule for class actions which is identical to the American rule does not lead to the
conclusion that India is not an adequate alternative forum.
Final points regarding the asserted inadequacies of Indian procedure involve unavailability of juries or
contingent fee arrangements in India. Plaintiffs do not press these arguments, but Mr. Palkhivala touches
upon them. They are easily disposed of. The absence of juries in civil cases is a feature of many civil law
jurisdictions, and of the United Kingdom. Piper at 252, n. 18, 102 S. Ct. at 264, n. 18 and citations therein.
Furthermore, contingency fees are not found in most foreign jurisdictions. Piper at 252, n. 18, 102 S. Ct.
at 264, n. 18. In any event, the lack of contingency fees is not an insurmountable barrier to filing claims in
India, as demonstrated by the fact that more than 4,000 suits have been filed by victims of the Bhopal gas
leak in India, already. According to Mr. Palkhivala, moreover, well-known lawyers have been known to
serve clients without charging any fees. (Palkhivala Aff. at 8).
Plaintiffs' final contention as to the inadequacy of the Indian forum is that a judgment rendered by an Indian
court cannot be enforced in the United States without *852 resort to further extensive litigation.
Conversely, plaintiffs assert, Indian law provides res judicata effect to foreign judgments, and precludes
plaintiffs from bringing a suit on the same cause of action in India. (Galanter Aff. at 63-65). Mr. Dadachanji
disputes this description of the Indian law of res judicata. He asserts that the pendency, or even final
disposition, of an action in a foreign court does not prevent plaintiffs from suing in India upon the original
cause of action. Plaintiffs would not be limited, Mr. Dadachanji argues, to an Indian action to enforce the
foreign judgment. (Dadachanji Aff. at 19-20). In addition, he states that an Indian court, before ordering
that a foreign judgment be given effect, would seek to establish whether the foreign court had failed to
apply Indian law, or misapplied Indian law. (Dadachanji Aff. at 20).
42
The possibility of non-enforcement of a foreign judgment by courts of either country leads this Court to
conclude that the issue must be addressed at this time. Since it is defendant Union Carbide which, perhaps
ironically, argues for the sophistication of the Indian legal system in seeking a dismissal on grounds of forum
non conveniens, and plaintiffs, including the Indian Government, which state a strong preference for the
American legal system, it would appear that both parties have indicated a willingness to abide by a
judgment of the foreign nation whose forum each seeks to visit. Thus, this Court conditions the grant of a
dismissal on forum non conveniens grounds on Union Carbide's agreement to be bound by the judgment of
its preferred tribunal, located in India, and to satisfy any judgment rendered by the Indian court, and
affirmed on appeal in India. Absent such consent to abide by and to "make good" on a foreign judgment,
without challenge except for concerns relating to minimal due process, the motion to dismiss now under
consideration will not be granted. The preference of both parties to play ball on a distant field will be taken
to its limit, with each party being ordered to be bound by the decision of the respective foreign referees.
To sum up the discussion to this point, the Court determines that the Indian legal system provides an
adequate alternative forum for the Bhopal litigation. Far from exhibiting a tendency to be so "inadequate
or unsatisfactory" as to provide "no remedy at all," the courts of India appear to be well up to the task of
handling this case. Any unfavorable change in law for plaintiffs which might be suffered upon transfer to
the Indian courts, will, by the rule of Piper, not be given "substantial weight." Differences between the two
legal systems, even if they inure to plaintiffs' detriment, do not suggest that India is not an adequate
alternative forum. As Mr. Palkhivala asserts with some dignity, "[w]hile it is true to say that the Indian
system today is different in some respects from the American system, it is wholly untrue to say that it is
deficient or inadequate. Difference is not to be equated with deficiency." (Palkhivala Aff. at 4). Piper at 254,
102 S. Ct. at 265. The inquiry now turns to a weighing of the public and private interest factors.
2. Private Interest Concerns.
The Gilbert Court set forth a list of considerations which affect the interests of the specific litigants to an
action, and which should be weighed in making a forum non conveniens determination. The so-called
private interest factors, along with public interest factors discussed below, were not intended to be rigidly
applied. As the Court stated in Piper, "[E]ach case turns on its facts." If central emphasis were placed on
any one factor, the forum non conveniens doctrine would lose much of the flexibility that makes it so
valuable.
Piper at 249-50, 102 S. Ct. at 263. Recognizing that "[p]articularly with respect to the question of relative
ease of access to sources of proof," "the private interests point in both directions," the Supreme Court
nevertheless upheld a district court's decision to dismiss a case in favor of the relative convenience of a
forum in Scotland. Piper at 257, 102 S. Ct. at 267. By contrast, this Court finds that the private
interests *853 point strongly one way. As in Piper, it appears that the burdensome effect of a trial in this
forum supports a finding that the private interest factors in this case weigh strongly in favor of dismissal.
A. Sources of Proof.
The first example of a private interest consideration discussed in Gilbert is "relative ease of access to
sources of proof." As stated, the analysis of this issue must hinge on the facts. Limited discovery on the
issue of forum non conveniens has taken place, pursuant to the Court's order of August 14, 1985. [9] The
Court can therefore proceed to discuss this question.
Union Carbide argues that virtually all of the evidence which will be relevant at a trial in this case is located
in India. Union Carbide's position is that almost all records relating to liability, and without exception, all
records relevant to damages, are to be found in and around Bhopal. On the liability question Union Carbide
asserts that the Bhopal plant was managed and operated entirely by Indian nationals, who were employed
by UCIL. (Affidavit of Warren J. Woomer, formerly Works Manager of the Bhopal plant ("Woomer Aff.") at
2). Defendant asserts that the Bhopal plant is part of UCIL's Agricultural Products Division, which has been
a separate division of UCIL for at least 15 years, and that the plant had "limited contact" with UCIL's
Bombay headquarters, and almost no contact with the United States. (Woomer Aff. at 4, 32). Woomer
claims to have been the last American employed by UCIL. He departed from Bhopal in 1982. (Woomer Aff.
at 2).
Woomer describes the structure and organization of the Bhopal facility at the time of the accident. The
plant had seven operating units, each headed by a manager or department head, each an Indian
national.[10] The managers or department heads each reported either directly to the plant's General Works
Manager, or to one of three Assistant Works Managers. (Woomer Aff. at 6). Each of these is also an Indian
national. Three of the operating units which at this very early stage of inquiry into liability appear to have
been potentially involved in the MIC leak are the Carbon Monoxide, MIC/Phosgene and Carbamoylation
units. (Woomer Aff. at 7-10). The Carbon Monoxide and MIC/Phosgene units together employed 63
employees, all Indian nationals. (Woomer Aff. at 9). The Carbamoylation unit employed 99 Indian nationals.
(Woomer Aff. at 10). Mr. Woomer states that an inquiry into the cause of the accident would require
interviews with at least those employees who were on duty at the Bhopal facility "immediately prior or after
the accident;" Mr. Woomer asserts that there are 193 employees, all Indians, who must be interviewed.
(Woomer Aff. at 58).[11]
In addition to the seven operating units, the Bhopal plant contained seven functional departments which
serviced operations.[12] The seven heads of the units reported within the plant much as the department
heads did.
The maintenance unit was apparently subdivided into departments including Instrumentation, Mechanical
Maintenance, both part of the Agricultural Chemical Maintenance unit, which employed 171 people in total,
and Plant Engineering and Formulation Maintenance, which employed 46 people. (Woomer Aff. at 11-12).
In *854 addition, the Utilities and Electrical department employed 195 people. (Woomer Aff. at 13).
According to Mr. Woomer, the various maintenance organizations performed repairs on equipment,
provided engineering support, fabricated certain equipment, salvaged other portions, and controlled
utilities, temperatures and pressures throughout the plant. (Woomer Aff. at 11-14).
Moreover, according to Mr. Woomer, these UCIL departments also kept daily, weekly and monthly records
of plant operations, many of which were purportedly seized by the CBI and selected for copying by CBI
immediately after the accident.[13] The records and reports of the various maintenance units would likely
be relevant to the question of liability at trial.
Of the additional functional units, it is possible that Quality Control, with 54 employees, Purchasing, with
53, or Stores may have been directly involved in the disaster by virtue of their participation in analyzing
plant output, procuring raw materials for the chemical processes of the plant, and maintaining spare parts
and certain chemicals. (Woomer Aff. at 14-19). Thus, the records and reports of these three departments
may be necessary to an investigation of liability. While examination of members of the Works Office
department and Industrial Relations department would likely be less directly useful, information regarding
plant budgets and employee histories might be of relevance. Of great importance are the records and
reports of the Safety/Medical department, which was responsible for daily auditing of safety performance
in all departments, training and testing on safety rules, maintaining safety statistics and planning and
implementing safety drills. (Woomer Aff. at 22-23). The 31 Indian employees of this department worked
with the Central Safety Committee of the plant, whose members were drawn from plant management, and
the Departmental Safety Committees. Operating units were required to monitor plant safety mechanisms
weekly, and to keep monthly checklists. (Holman Aff. # 2 at 9). The Central Safety Committee met monthly,
as did the Departmental Safety Committees. (Woomer Aff. at 39). The MIC Unit held monthly safety
committee meetings, for example, and issued monthly reports. (Woomer Aff. at 41). Quarterly "Measures
of Performance" reviews also covered safety issues, and were required of each operating unit. (Woomer
Aff. at 40). Certainly, interviews of the plant personnel involved in safety reports and audits would be
particularly relevant to the investigation of the disaster.
43
Plaintiffs refer to three occasions upon which Union Carbide, not UCIL, employees conducted safety audits
at the Bhopal plant. As defendant correctly argues, these three events constitute a very small fraction of
the thousands of safety audits conducted at the Bhopal facility. The three audits, moreover, were conducted
in 1979, the fall of 1980 and in May of 1982, many years prior to the accident which is the subject of this
lawsuit. (Plaintiffs' Memo in Opp. at 25).[14]
Two accidents which occurred previously at the Bhopal plant might also be of relevance to the liability
inquiry in this litigation. On December 24, 1981, a phosgene gas leak killed a UCIL maintenance
worker. *855 Reports of the fatality were sent to Union Carbide management in the United States.
(Woomer Deposition, Exs. 30 and 31). Plaintiffs assert that the accident report called for increased training
in Bhopal by United States employees of Union Carbide's Institute, West Virginia, plant. Defendant states
that the responsibility for remedying problems in the Bhopal plant rested with the plant itself, and that
Union Carbide did not make any recommendations, and was involved only to the extent of receiving a copy
of the report which called for its involvement in further training. (Woomer Aff. at 41).
The second accident at Bhopal prior to the disaster of December, 1984 took place on February 9, 1982,
when a pump seal, perhaps improperly used, failed. (Memo in Opp. at 24; Woomer Aff. at 41). Many
employees were injured, and at least 25 were hospitalized. Plaintiffs discuss the fact that Robert Oldford,
president of Union Carbide Agricultural Products Company ("UCAPC") a wholly-owned subsidiary of Union
Carbide headquartered in the United States, was in Bhopal at the time of the February 1982 leak. (Memo
in Opp. at 24). Union Carbide asserts that Mr. Oldford was visiting UCIL's Research and Development
Centre, located several miles from the Bhopal plant for an unrelated purpose, and was only coincidentally
in Bhopal when the leak occurred. To the extent that this presence in India in 1982 has any significance,
Mr. Oldford, and any other United States employees of Union Carbide who conducted safety audits in Bhopal
or were present when accidents occurred there, may be flown to Bhopal for testimony or discovery.
In addition to safety data, two other types of proof may be relevant to a trial of this case on the merits.
Information regarding plant design, commissioning and start-up may bear upon the liability question.
Information pertinent to employee training should also have significance.
Leaving aside the question of whether the Government of India or UCIL chose the site and product of the
Bhopal plant, the Court will evaluate the facts which bear on the issue of relevant records. The findings
below concern the location of proof only, and bear solely upon the forum non conveniens motion. The Court
expressly declines to make findings as to actual liability at this stage of the litigation.
Plaintiffs and defendant agree that in 1973 Union Carbide entered into two agreements with UCIL which
were entitled "Design Transfer Agreement" and "Technical Service Agreement." According to plaintiffs,
Union Carbide, pursuant to the Design Transfer Agreement, provided a process design to UCIL, the
"detailing [of which] was undertaken in India." (Memo in Opp. at 17). The process design package consisted
of the basic plan of the factory, which was to be fleshed out in the detailing phase. Plaintiffs state that at
least nine Union Carbide technicians travelled to India to monitor the progress of the project. Union Carbide
also allegedly assigned a "key engineer," John Couvaras, to serve as UCIL Bhopal project manager. Mr.
Couvaras allegedly "assumed responsibility for virtually every aspect of the detailing of the process design,"
and approved detail reports of "not only UCIL but also independent contractors, including Humphreys &
Glasgow Consultants Private Ltd. and Power Gas Limited" of Bombay, India. (Memo in Opp. at 17-20).[15]
Plaintiffs also claim that "[n]o change of any substance was made from Union Carbide's design during the
detailing phase." Plaintiffs note that only "one portion" of the process design work provided to UCIL by
Union Carbide was not used. (Memo in Opp. at 20). In effect, plaintiffs seek to establish that Union Carbide
was the creator of the design used in the Bhopal plant, and directed UCIL's relatively minor detailing
program. They urge that for the most *856 part relevant proof on this point is located in the United States.
Defendant seeks to refute this contention, with notable success. Turning first to the affidavit of Robert C.
Brown, who describes himself as "chief negotiator for Union Carbide Corporation in connection with the two
agreements it entered into with ... UCIL in November, 1973," the Court is struck by the assertion that the
two agreements were negotiated at "arms-length" pursuant to Union Carbide corporate policy, and that the
Union of India mandated that the Government retain "specific control over the terms of any agreements
UCIL made with foreign companies such as Union Carbide Corporation." (Brown Aff. at 3-4).[16]
Mr. Brown alleges that the Letter of Intent issued by the Union of India in March 1972, pursuant to which
construction and design of the plant were allowed to ensue provided, inter alia, that:
(2) [F]oreign collaboration and import of equipment be settled to the satisfaction of the Government.
Mr. Brown claims, on personal information, that UCIL told him that Union Carbide would not be allowed to
be involved in the Bhopal project beyond the provision of process design packages. (Brown Aff. at 5). The
Design Transfer Agreement indicates that Union Carbide's duty under the Agreement was to provide process
design packages, and that UCIL, not Union Carbide, would be responsible to "detail design, erect and
commission the plant." (Defendant's Ex. 4, § 4.1). Union Carbide, accordingly, issued limiting warranties
with respect to the design packages, detailing of which it would not be involved with. (Brown Aff. at 7, Ex.
4, §§ 4.1, 12.3).
The nature of UCIL's detail design work is discussed in the affidavit of Ranjit K. Dutta, who has held various
positions at UCIL and UCAPC. From 1973 through 1976, Mr. Dutta was employed as General Manager of
the Agricultural Products Division of UCIL. (Dutta Aff. at 2).
Mr. Dutta asserts that the Bhopal facility was built by UCIL over the eight years from 1972 to 1980. (Dutta
Aff. at 8). He asserts that Union Carbide's role in the project was "narrow", and limited to providing "certain
process design packages for certain parts of the plant." (Dutta Aff. at 9). He continues, stating:
Once it did that, it had no further design or engineering role,
and that:
[T]he process design packages which Union Carbide Corporation provided are nothing more than
summary design starting points.... They set forth only the general parameters.... A plant cannot be
constructed from a process design package. The detail design comprises approximately 80 percent of the
sum of the man hours involved in the design of any project and transposes the general process design
parameters into an actual design which can be used for purchasing equipment and actual construction.
According to Mr. Dutta, during the five years between the date upon which Union Carbide submitted process
designs, and the date upon which the plant started-up, there were only four visits to Bhopal by Union
Carbide process design engineers. (Dutta Aff. at 14). In contrast, he asserts that ten to fifteen UCIL
engineers, working primarily out of Bombay, were involved in design detailing. (Dutta Aff. at 16). These
UCIL engineers oversaw the 55 to 60 Indian engineers *857 employed by the Bombay engineering firm
which performed the detail design work. This firm, Humphreys and Glasgow, submitted designs and
drawings to the UCIL engineers for approval. Corrected drawings were returned by UCIL to Humphreys and
Glasgow for changes, and sent back to UCIL for final approval. (Dutta Aff. at 19-24).[17] Mr. Dutta alleges
that "at no time were Union Carbide Corporation engineering personnel from the United States involved in
approving the detail design or drawings prepared upon which construction was based. Nor did they receive
notices of changes made." (Dutta Aff. at 24).
Mr. Dutta expressly states that the MIC storage tank and monitoring instrumentation were fabricated or
supplied by two named Indian sub-contractors. The vent gas scrubber is alleged to have been fabricated in
the Bhopal plant shop. (Dutta Aff. at 25).
Of the 12,000 pages of documents purportedly seized by the CBI regarding design and construction of the
Bhopal plant, an asserted 2,000 are design reports of Humphreys and Glasgow, UCIL or other contractors.
Defendant claims that blueprints and calculations comprise another 1,700 pages of documents held by the
44
CBI. Five thousand pages of contractors' files, including specifications and contracts are asserted to be in
India. In addition, Union Carbide claims that blueprints and diagrams may not reflect final design changes
as incorporated into the actual plant, and that the detail design engineers' testimony will be needed to
determine the configuration of the actual plant.[18] (Holman Aff. # 2 at 15-16).
One final point bearing on the information regarding liability is contained in the affidavit of Edward Munoz,
at a relevant time the General Manager of UCIL's Agricultural Products Division. He later acted as Managing
Director of UCIL. Mr. Munoz has submitted an affidavit in which he states that Union Carbide decided to
store MIC in large quantities at the Bhopal plant, despite Mr. Munoz' warnings that MIC should be stored
only in small amounts because of safety. (Memo in Opp. at 15-16; Munoz Aff.). Mr. Dutta, for defendant,
asserts that there was never any issue of token storage of MIC at Bhopal, as Mr. Munoz states, and that
there is no truth to Mr. Munoz' assertion that he was involved in the storage issue. (Dutta Aff. at
30).[19]*858 The Court cannot make any determination as to the conflicting affidavits before it. This
question, which involves credibility concerns, is left for later in the litigation. To the extent that this
particular matter bears upon the relative ease of access to sources of proof, Mr. Munoz and Mr. Dutta both
may be called to testify at trial or discovery. Mr. Dutta's home is in Bhopal. (Dutta Aff. at 1). The Court is
not aware of the whereabouts of Mr. Munoz at this time. Either of the two could travel to either alternative
forum.
In addition to design and safety records, material regarding training of Bhopal personnel is likely to be
relevant to the question of liability. Plaintiffs state that Warren Woomer supervised the training of UCIL
personnel at Union Carbide's Institute, West Virginia plant. According to plaintiffs, 40 UCIL employees were
transported to Institute's MIC facility for lengthy training. (Memo in Opp. at 22). Mr. Woomer states in reply
that the 40 employees thus trained represented a fraction of the over 1,000 employees who were trained
exclusively in Bhopal. (Woomer Aff. at 43). In addition, Mr. Woomer asserts that the training at Institute
was pursuant to an arms-length agreement, that UCIL selected the parties to be trained, and that UCIL
paid Union Carbide for the training. (Woomer Aff. at 43). Moreover, Mr. Woomer's description of the training
provided at Bhopal suggests that each of the plant's employees had lengthy cumulative training, of which
the Institute training was but a very small portion. (Woomer Aff. at 46). Personnel records, in any event,
are located in Bhopal. (Holman Aff. # 2 at 4).
The briefs and affidavits contain considerable discussion on the matter of commissioning and start-up of
the Bhopal plant. The Court need not resolve the question of who was responsible for these aspects of plant
operation. However, the Court determines that the manual regarding start-up was prepared by Indian
nationals employed by UCIL. (Woomer Aff. at 48).
In the aggregate, it appears to the Court that most of the documentary evidence concerning design,
training, safety and start-up, in other words, matters bearing on liability, is to be found in India. Much of
the material may be held by the Indian CBI. Material located in this country, such as process design
packages and training records of the 40 UCIL employees trained at Institute, constitutes a smaller portion
of the bulk of the pertinent data than that found in India. Moreover, while records in this country are in
English, a language understood in the courts of India, certain of the records in India are in Hindi or other
Indian languages, as well as in English. (Holman Aff. # 2 at 12). The Indian language documents would
have to be translated to be of use in the United States. The reverse is not true. It is evident to the Court
that records concerning the design, manufacture and operation of the Bhopal plant are relatively more
accessible in India than in the United States, and that fewer translation problems would face an Indian
court than an American court. Since Union Carbide has been directed to submit to discovery in India
pursuant to the liberal grant of the American Federal Rules of Civil Procedure, and this opinion is conditioned
upon such submission, any records sought by plaintiffs must be made available to them in India. The private
interest factor of relative ease of access to sources of proof bearing on liability favors dismissal of the
consolidated case.[20] The Indian *859 Government is asserted to have been involved in safety, licensing
and other matters relating to liability. Records relating thereto are located in India, as are the records
seized by the CBI. Although plaintiffs state that all such records could and would be made available to this
Court, it would be easier to review them in India. Transmittal and translation problems would thereby be
avoided.
B. Access to Witnesses.
Gilbert teaches a second important consideration under the heading of private interests, the "availability of
compulsory process for attendance of willing, and the cost of obtaining attendance of unwilling,
witnesses." Gilbert, 330 U.S. at 508, 67 S. Ct. at 843. As discussed in detail above, most witnesses whose
testimony would relate to questions of causation and liability are in India. Engineers from UCIL and
Humphreys and Glasgow and other subcontractors, of whom there are hundreds, are located in India. Shift
employees from the possibly malfunctioning units, safety monitoring personnel, those responsible for
training, safety auditing, procurement, compliance with regulations and other operations might be required
to testify. More than likely, many of these potential witnesses do not speak English, and would require
translators. Many of the witnesses are not parties to this litigation. Therefore, as the Court of Appeals for
the Second Circuit has stated in the context of a forum non conveniens motion:
In fact, the plaintiffs' cases on liability will depend in large measure upon the knowledge and activities of
such witnesses as the employees of [companies] who are not parties to this litigation, but who directly
participated in the events which gave rise to it. The United States District Court in New York, however,
has no power to subpoena any of these witnesses. It is unlikely that many would be willing to travel to
New York to testify; and the cost, in any event, would be prohibitively great.
Fitzgerald v. Texaco, 521 F.2d 448, 451-52 (2d Cir. 1975), cert. denied, 423 U.S. 1052, 96 S. Ct. 781, 46
L. Ed. 2d 641 (1976) (footnote omitted). In contrast, the relatively few witnesses who reside in the United
States are primarily employed by Union Carbide. As employees of a party they would probably be subject
to the subpoena power of Indian courts. Transportation costs would also be lower, since fewer people would
have to make the journey to testify.
The presence of the Indian Government in this action is also of critical importance on this motion. Plaintiffs
assert that "all necessary officials and employees of the Central Government will voluntarily comply with
requests to attend trial." (Memo in Opp. at 70; Answer to No. 124 of Defendant's First Requests for
Admission, Exhibit 55). This statement does not provide for attendance by officials of Madhya Pradesh or
the Bhopal municipality, whom Union Carbide indicates might be impleaded as third-party defendants. As
witnesses only, these officials would not be subject to this Court's subpoena power. As third-party
defendants, they might be immune from suit in the United States by the terms of the Foreign Sovereign
Immunities Act, 28 U.S.C. § 1602 et seq. State and city officials might also lack sufficient contacts with this
district to allow this Court to exercise personal jurisdiction over them.
While Union Carbide might be deprived of testimony of witnesses or even potential third-parties if this
action were to proceed in this forum, no such problem would exist if litigation went forward in India.
The unavailability of compulsory process for Indian non-party witnesses, of whom *860 there are many,
such as would ensure their presence at a trial in this country, the high cost of transporting the large number
of Indian nationals to the United States, as well as the need to translate their testimony should they appear,
all support the argument favoring dismissal of this action on forum non conveniens grounds. The private
interest concerns regarding witnesses emphasize the logic of defendant's position. Relatively fewer
witnesses reside in the United States than in India. Almost all of the witnesses located in this country are
employees of defendant, and would be subject to compulsory process in India as a result. Transportation
costs for the relative few would not compare to the alternate costs of transporting hundreds of Indian
witnesses. Since English is widely spoken in India, less translation would be required for foreign witnesses
in India than in the converse situation. Should this case be tried in India, fewer obstacles to calling state
and local officials as witnesses or parties would face the defendant. The Court determines that this private
interest factor weighs in favor of dismissal.
45
C. Possibility of View.
The third private interest factor articulated in Gilbert is the ease of arranging for a view of the premises
around which the litigation centers. Plaintiffs assert that the notion that a jury view of the plant and environs
is necessary is "simply preposterous." (Memo in Opp. at 71). Plaintiffs note that a viewing of the premises
is rarely conducted in products liability cases, since videotapes, pictures, diagrams, schematics and models
are more instructive than an actual view. (Memo in Opp. at 71). A viewing of the plant and hutments would
probably not be of utmost importance in determining liability, and this consideration is not afforded great
weight on this motion.
However, the instant case is not identical to the product design defect case cited by plaintiffs, in which a
district court judge determined that "the present appearance of the defendants' facilities may or may not
be relevant to production which occurred" in the period in which the allegedly violative manufacture
occurred. Hodson v. A.H. Robins Co., Inc., 528 F. Supp. 809, 822 (E.D.Va.1981), aff'd, 715 F.2d 142 (4th
Cir. 1983). In the instant case, the site of the accident was sealed after the leak, and the present condition
of the plant might be relevant to a finding of liability. A viewing may not be necessary, but conceivably
could be called for later in the litigation. An Indian court is in a far better position than this Court to direct
and supervise such a viewing should one ever be required. This consideration, though minor, also weighs
in favor of dismissal.
In summary, then, the private interest factors weigh greatly in favor of dismissal on grounds of forum non
conveniens. Since the "balance is strongly in favor of the defendant" and foreign plaintiffs' choice of a
foreign forum is given less than maximum deference, the Court determines that dismissal is favored at this
point in the inquiry. Gilbert 330 U.S. at 508, 67 S. Ct. at 843.
3. Public Interest Concerns.
The Gilbert Court articulated certain factors which affected the interests of non-parties to a litigation to be
considered in the context of the doctrine of forum non conveniens. These public interest concerns were held
to be relevant to a court's determination of whether to dismiss on these grounds. The Supreme Court
expressly identified a few factors:
Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being
handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community
which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason
for holding the trial in their view and reach rather than in remote parts of the country where they can
learn of it by report only. There is a local interest in having localized controversies decided at home.
There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with
the state law that must govern the case, rather than *861 having a court in some other forum untangle
problems in conflict of laws, and in law foreign to itself.
Gilbert at 508-09, 67 S. Ct. at 843. The Court will consider these various factors in turn, as well as others
discussed by the parties and amicus curiae.
A. Administrative Difficulties.
As is evident from the discussion thus far, the mere size of the Bhopal case, with its multitude of witnesses
and documents to be transported and translated, obviously creates administrative problems.
There can be no doubt that the Bhopal litigation will take its toll on any court which sits in judgment on it.
This Court sits in one of the busiest districts in the country, and finds, as a matter within its experience,
that this is a "congested center" of litigation as described in Gilbert at 508. The burden which would be
imposed should litigation continue here was aptly described by the Court of Appeals for the Second Circuit
in Schertenlieb v. Traum, 589 F.2d 1156 (2d Cir.1978). Reviewing a district judge's ruling for dismissal on
the grounds of forum non conveniens, the Second Circuit observed that "were it not for the somewhat
unusual fact that it is the forum resident who seeks dismissal, we would have to say very little regarding
the exercise of Judge Metzner's discretion in dismissing this case." Schertenlieb at 1164. In affirming the
ruling for dismissal, the Court of Appeals asked the rhetorical question:
If litigation is in a clearly inconvenient forum, why should defendant and the court be burdened with its
continuing there, if an alternative forum now exists so that plaintiff will not be without a remedy?
This Court has already determined that because of the location of the preponderance of the evidence in
India, and the difficulty of transporting documents and witnesses to this forum, this district is clearly an
inconvenient forum for the litigation. An alternative forum is seen to exist in India. This Court feels that the
answer to the Schertenlieb question is clear.
A district judge in this district, in Domingo v. States Marine Lines, 340 F. Supp. 811 (S.D.N.Y.1972)
evaluated the administrative concerns of the Southern District of New York, relevant to this Court today, a
full fourteen years later. The Domingo court stated:
It is scarcely necessary to dwell on the fact that this Court is the most heavily burdened Federal District
Court in the country. The Civil Calendar grows more congested all the time. The priority now properly
given to the disposition of criminal cases tends to increase this congestion.
******
I see no reason why this Court, with its heavy burdens and responsibilities, should be burdened with
cases like these which, from every point of view, should be tried in the courts of the nation where all the
relevant events occurred and whose citizens are primarily involved. Certainly, this district and the
Metropolitan area in which it is situated have no conceivable relation to this litigation except for the fact
that the defendant happens to be doing business here.
Domingo at 816.
B. The Interests of India and the United States.
Plaintiffs, and especially amicus curiae emphasize this point of argument in opposition to the motion to
dismiss. Concerned with the asserted possibility of developing a "double-standard" of liability for
multinational corporations, plaintiffs urge that American courts should administer justice to the victims of
the Bhopal disaster as they would to potential American victims of industrial accidents. The public interest
is served, plaintiffs and amicus argue, when United States corporations assume responsibility for accidents
occurring on foreign soil. "To abandon that responsibility," amicus asserts, "would both injure our standing
in the world community and betray the spirit of fairness inherent in the American character." (Amicus Brief
at 4). The specific American interests allegedly to be served by this Court's retention of the case include
the opportunity of creating precedent which will "bind all American multinationals henceforward,"
(Amicus Brief at 20); promotion of "international cooperation," (Amicus Brief at 22-23); avoidance of an
asserted "double standard" of liability, and the prevention of "economic blackmail of hazardous industries
which would extract concessions on health and environmental standards as the price of continuing
operations in the United States." (Amicus Brief at 20). An additional American public interest ostensibly to
be served by retention of the litigation in this forum is advanced by plaintiffs themselves. They assert that
the deterrent effect of this case can be distinguished from the situation in Piper, where the Court rejected
the argument that "American citizens have an interest in ensuring that American manufacturers are
deterred from producing defective products, and that additional deterrence might be obtained if Piper and
[its co-defendant] were tried in the United States, where they could be sued on the basis of both negligence
and strict liability." Piper 454 U.S. at 260, 102 S. Ct. at 268. The Court stated that:
[T]he incremental deterrence that would be gained if this trial were held in an American court is likely to
be insignificant. The American interest in this accident is simply not sufficient to justify the enormous
commitment of judicial time and resources that would inevitably be required if the case were to be tried
here.

The defendant in this case, involved as it appears to have been in the process design phase of the plant's Piper at 260-61, 102 S. Ct. at 268. According to plaintiffs, the potential for greater deterrence in this case
construction, may have a slightly less tenuous connection to this forum than a corporation which is merely is "self-evident."
doing business here. Certain business conducted in New York, or in corporate headquarters in Danbury,
Connecticut, may have been directly related to development or operation of the UCIL facility in Bhopal.
*863 The opposing interest of India is argued to be ill-served by sending this litigation to India. Pointing
However, almost "all the relevant events" leading to and following from the accident occurred in India.
to the fact that the Union of India chose this forum, plaintiffs state that there can be "no question as to the
Indian citizens are primarily involved in the case, both as witnesses and claimants. The substantial
public interest of India." (Memo in Opp. at 91). Union Carbide's statements regarding the interests of India
administrative weight of this case should be centered on a court with the most significant contacts with the
in this litigation are summarily dismissed by the plaintiffs, who state that "Union Carbide, whose actions
event. Thus, a court in Bhopal, rather than New York, should bear the load.
caused the suffering of an entire city, has no standing to assert this belated concern for the welfare of the
Indian populace." (Memo in Opp. at 91).
*862 In addition to the burden on the court system, continuation of this litigation in this forum would tax
the time and resources of citizens directly. Trial in this case will no doubt be lengthy. An assigned jury
Union Carbide, not surprisingly, argues that the public interest of the United States in this litigation is very
would be compelled to sit for many months of proof. Because of the large number of Indian language-
slight, and that India's interest is great. In the main, the Court agrees with the defendant.
speaking witnesses, the jurors would be required to endure continual translations which would double the
length of trial. The burden on the jurors themselves, and on their families, employers and communities
would be considerable. The need for translation would be avoided if trial were to be held in Bhopal. As noted, Robert C. Brown states in his affidavit on behalf of Union Carbide that the Indian Government
preserved the right to approve foreign collaboration and import of equipment to be used in connection with
the plant. See supra at 856. In addition, Mr. Brown quoted excerpts from the 1972 Letter of Intent entered
Clearly, the administrative costs of this litigation are astounding and significant. Despite its deep concern
into by the Union of India and UCIL, one term of which required that "the purchase of only such design and
for the victims of the tragedy, this Court is persuaded by a recent relevant decision of the New York State
consultancy services from abroad as are not available within the country" would be allowed. (Brown Aff. at
Court of Appeals. In the opinion in Islamic Republic of Iran v. Pahlavi, 62 N.Y.2d 474, 478 N.Y.S.2d 597,
6). Ranjit K. Dutta states that the Indian Government, in a process of "Indianization," restricted the amount
467 N.E.2d 245 (1984), cert. denied, ___ U.S. ___, 105 S. Ct. 783, 83 L. Ed. 2d 778 (1985), with reference
of foreign materials and foreign consultants' time which could be contributed to the project, and mandated
to a decision discussing actions brought in New York by the Iranian Government against the Shah and his
the use of Indian materials and experts whenever possible. (Dutta Aff. at 35). In an alleged ongoing attempt
wife, the Court of Appeals stated that:
to minimize foreign exchange losses through imports, the Union of India insisted on approving equipment
[T]he taxpayers of this State should not be compelled to assume the heavy financial burden attributable
to be purchased abroad, through the mechanism of a "capital goods license." (Dutta Aff. at 48-50).
to the cost of administering the litigation contemplated when their interest in the suit and the connection
of its subject matter ... is so ephemeral.
The Indian Government, through its Ministry of Petroleum and Chemicals, allegedly required information
Islamic Republic at 483, 478 N.Y.S.2d 597, 467 N.E.2d 245 (citations omitted). Administrative concerns from UCIL regarding all aspects of the Bhopal facility during construction in 1972 and 1973, including
weigh against retention of this case. "information on toxicity" of chemicals. (Dutta Aff. at 44). The Ministry required progress reports throughout
the course of the construction project. These reports were required by the Secretariat for Industrial

46
Approvals, the Director General of Technical Development and the Director of Industries of Madhya Pradesh.
(Dutta Aff. at 45). Moreover, UCIL was ultimately required to obtain numerous licenses during development,
construction and operation of the facility. (Dutta Aff. at 46). The list of licenses obtained fills five pages. [21]
The Indian Government regulated the Bhopal plant indirectly under a series of environmental laws, enforced
by numerous agencies, much as the Occupational Safety and Health Administration, the Environmental
Protection Agency and state and local agencies regulate the chemical industry in the United States. (Dutta
Aff. at 53-56). Emissions from the facility were monitored by a state water pollution board, for example.
(Dutta Aff. at 64). In addition, state officials periodically inspected the fully-constructed plant.[22] (Dutta
Aff. at 56). A detailed inquiry into the plant's operations was conducted by the Indian Government in the
aftermath of the December, 1981 fatality at the MIC unit and the February, 1982 incident involving a pump
seal. (Dutta Aff. at 58-62). Numerous federal, state and local commissions, obviously, investigated the
most tragic incident of all, the MIC leak of December, 1984.
The recital above demonstrates the immense interest of various Indian governmental agencies in the
creation, operation, *864 licensing and regulation, and investigation of the plant. Thus, regardless of the
extent of Union Carbide's own involvement in the UCIL plant in Bhopal, or even of its asserted "control"
over the plant, the facility was within the sphere of regulation of Indian laws and agencies, at all levels.
The comments of the Court of Appeals for the Sixth Circuit with respect to its decision to dismiss a products
liability action on forum non conveniens grounds seem particularly apposite. In In re Richardson-Merrell,
Inc., 545 F. Supp. 1130 (S.D.Ohio 1982), modified sub. nom. Dowling v. Richardson-Merrell Inc., 727 F.2d
608 (6th Cir.1984), the court reviewed a dismissal involving an action brought by a number of plaintiffs,
all of whom were citizens of Great Britain. [23] Defendant in the action was a drug company which had
developed and tested a drug in the United States which was manufactured and marketed in England. The
suit was brought against the American parent, not the British subsidiary, for injuries allegedly resulting
from ingestion of the offending drug in England and Scotland. The district court, in dismissing the case,
stated that:
This action involves the safety of drugs manufactured in the United Kingdom and sold to its citizens
pursuant to licenses issued by that government. The interest of the United Kingdom is overwhelmingly
apparent. New York, and Ohio [the United States forums] for that matter, have a minimal interest in the
safety of products which are manufactured, regulated and sold abroad by foreign entities, even though
development or testing occurred in this country.
In re Richardson-Merrell, Inc., 545 F. Supp. at 1135 (footnote omitted). The Sixth Circuit confirmed this
view of the public interests, stating:
The interest of the United Kingdom in this litigation is great. The drug was manufactured under a British
license by British companies and was marketed and prescribed in the United Kingdom. The alleged injuries
took place in England and Scotland and the plaintiffs are citizens and residents of those countries. When
a regulated industry, such as pharmaceuticals in this case and passenger aircraft operations in Piper
Aircraft, is involved, the country where the injury occurs has a particularly strong interest in product
liability litigation.... Though no single factor should be determinative in ruling on a forum non
conveniens motion, the nature of the product and its status as regulated or not must be considered.
The Indian government, which regulated the Bhopal facility, has an extensive and deep interest in ensuring
that its standards for safety are complied with. As regulators, the Indian government and individual citizens
even have an interest in knowing whether extant regulations are adequate. This Court, sitting in a foreign
country, has considered the extent of regulation by Indian agencies of the Bhopal plant. It finds that this is
not the appropriate tribunal to determine whether the Indian regulations were breached, or whether the
laws themselves were sufficient to protect Indian citizens from harm. It would be sadly paternalistic, if not
misguided, of this Court to attempt to evaluate the regulations and standards imposed in a foreign country.
As another district court stated in the context of a drug product liability action brought by foreign plaintiffs
in this country,
*865 Each government must weigh the merits of permitting the drug's use.... Each makes its own
determination as to the standards of degree of safety and duty of care.... This balancing of the overall
47
benefits to be derived from a product's use with the risk of harm associated with that use is peculiarly
suited to a forum of the country in which the product is to be used.... The United States should not impose
its own view of the safety, warning, and duty of care required of drugs sold in the United States upon a
foreign country when those same drugs are sold in that country.
Harrison v. Wyeth Laboratories, 510 F. Supp. 1, 4 (E.D.Pa.1980), aff'd mem., 676 F.2d 685 (3d Cir.1982).
India no doubt evaluated its need for a pesticide plant against the risks inherent in such development. Its
conclusions regarding "[q]uestions as to the safety of [products] marketed" or manufactured in India were
"properly the concern of that country." Harrison at 4 (emphasis omitted). This is particularly true where,
as here, the interests of the regulators were possibly drastically different from concerns of American
regulators. The Court is well aware of the moral danger of creating the "double-standard" feared by plaintiffs
and amicus curiae. However, when an industry is as regulated as the chemical industry is in India, the
failure to acknowledge inherent differences in the aims and concerns of Indian, as compared to American
citizens would be naive, and unfair to defendant. The district court in Harrison considered the hypothetical
instance in which a products liability action arising out of an Indian accident would be brought in the United
States. The court speculated as follows:
The impropriety of [applying American standards of product safety and care] would be even more clearly
seen if the foreign country involved was, for example, India, a country with a vastly different standard of
living, wealth, resources, level of health care and services, values, morals and beliefs than our own. Most
significantly, our two societies must deal with entirely different and highly complex problems of population
growth and control. Faced with different needs, problems and resources in our example India may, in
balancing the pros and cons ... give different weight to various factors than would our society.... Should
we impose our standards upon them in spite of such differences? We think not.
Harrison at 4-5. This Court, too, thinks that it should avoid imposing characteristically American values on
Indian concerns.
The Indian interest in creating standards of care, enforcing them or even extending them, and of protecting
its citizens from ill-use is significantly stronger than the local interest in deterring multinationals from
exporting allegedly dangerous technology. The supposed "blackmail" effect of dismissal by which plaintiffs
are troubled is not a significant interest of the American population, either. Surely, there will be no relaxing
of regulatory standards by the responsible legislators of the United States as a response to lower standards
abroad.[24] Other concerns than bald fear of potential liability, such as convenience or tax benefits, bear on
decisions regarding where to locate a plant. Moreover, the purported public interest of seizing this chance
to create new law is no real interest at all. This Court would exceed its authority were it to rule otherwise
when restraint was in order.
The Court concludes that the public interest of India in this litigation far outweighs the public interest of the
United States. This litigation offers a developing nation the opportunity to vindicate the suffering of its own
people within the framework of *866 a legitimate legal system. This interest is of paramount
importance.[25]
C. The Applicable Law.
Gilbert and Piper explicitly acknowledge that the need of an American court to apply foreign law is an
appropriate concern on a forum non conveniens motion, and can in fact point toward dismissal. Gilbert, 330
U.S. at 509, 67 S. Ct. at 843; Piper, 454 U.S. at 260, 102 S. Ct. at 268. Especially when, as here, all other
factors favor dismissal, the need to apply foreign law is a significant consideration on this type of
motion. Piper at 260, n. 29, 102 S. Ct. at 268, n. 29. A federal court is bound to apply the choice of law
rules of the state in which an action was originally brought; even upon transfer to a different district, "the
transferee district court must be obligated to apply the state law that would have been applied if there had
been no change of venue." Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S. Ct. 805, 821, 11 L. Ed. 2d 945
(1964). Thus, this Court, sitting over a multidistrict litigation, must apply the various choice of law rules of
the states in which the actions now consolidated before it were brought.[26] Rather than undertake the task
of evaluating the choice of law rules of each state separately, the Court will treat the choice of law doctrine in and to pass judgment on behalf of its own people would be to revive a history of subservience and
toto. The "governmental interest" analysis, employed by many jurisdictions, requires a court to look to the subjugation from which India has emerged. India and its people can and must vindicate their claims before
question of which state has the most compelling interest in the outcome of the case. India's interest in the the independent and legitimate judiciary created there since the Independence of 1947.
outcome of the litigation exceeds America's, see supra at 44-58. The lex loci delicti analysis used in other
jurisdictions indicates that the law of the state where the tort occurred should be applied. The place in
This Court defers to the adequacy and ability of the courts of India. Their interest in the sad events of
which the tort occurred was, to a very great extent, India. Other states apply the "most significant
December 2-3, 1984 at the UCIL plant in the City of Bhopal, State of Madhya Pradesh, Union of India, is
relationship" test, or "weight of contacts" test, which evaluate in which state most of the events constituting
not subject to question or challenge. The availability of the probative, relevant, material and necessary
the tort occurred. The contacts with India with respect to all phases of plant construction, operation,
evidence to Indian courts is obvious and has been demonstrated in this opinion.
malfunction and subsequent injuries are greater in number than those with the United States. Thus, under
any one of these three doctrines, it is likely that Indian law will emerge as the operative law. An Indian
court, therefore, would be better able to apply the controlling law than would this United States Court, or Therefore, the consolidated case is dismissed on the grounds of forum non conveniens under the following
a jury working with it. This public interest factor also weighs in favor of dismissal on the grounds of forum conditions:
non conveniens. 1. Union Carbide shall consent to submit to the jurisdiction of the courts of India, and shall continue to
waive defenses based upon the statute of limitations;
2. Union Carbide shall agree to satisfy any judgment rendered against it by an Indian court, and if
CONCLUSION
applicable, upheld by an appellate court in that country, where such judgment and affirmance comport
with the minimal requirements of due process;
It is difficult to imagine how a greater tragedy could occur to a peacetime population than the deadly gas
3. Union Carbide shall be subject to discovery under the model of the United States Federal Rules of Civil
leak in Bhopal on the night of December 2-3, 1984. The survivors of the dead victims, the injured and
Procedure after appropriate demand by plaintiffs.
others who suffered, or may in the future suffer due to the disaster, are entitled to compensation. This
Court is firmly convinced that the Indian legal system is in a far better position than the American courts
to determine the cause of the tragic event and thereby fix liability. Further, the Indian courts have greater
access to all the information needed to arrive at the amount of the compensation to be awarded the victims.

The presence in India of the overwhelming majority of the witnesses and evidence, both documentary and
real, would by itself suggest that India is the most convenient forum for this consolidated case. The
additional presence in India of all but the less than handful of claimants underscores the convenience of
holding trial in India. All of the private interest factors described in Piper and Gilbert weigh heavily
toward *867 dismissal of this case on the grounds of forum non conveniens.

The public interest factors set forth in Piper and Gilbert also favor dismissal. The administrative burden of
this immense litigation would unfairly tax this or any American tribunal. The cost to American taxpayers of
supporting the litigation in the United States would be excessive. When another, adequate and more
convenient forum so clearly exists, there is no reason to press the United States judiciary to the limits of
its capacity. No American interest in the outcome of this litigation outweighs the interest of India in applying
Indian law and Indian values to the task of resolving this case.

The Bhopal plant was regulated by Indian agencies. The Union of India has a very strong interest in the
aftermath of the accident which affected its citizens on its own soil. Perhaps Indian regulations were ignored
or contravened. India may wish to determine whether the regulations imposed on the chemical industry
within its boundaries were sufficiently stringent. The Indian interests far outweigh the interests of citizens
of the United States in the litigation.

Plaintiffs, including the Union of India, have argued that the courts of India are not up to the task of
conducting the Bhopal litigation. They assert that the Indian judiciary has yet to reach full maturity due to
the restraints placed upon it by British colonial rulers who shaped the Indian legal system to meet their
own ends. Plaintiffs allege that the Indian justice system has not yet cast off the burden of colonialism to
meet the emerging needs of a democratic people.

The Court thus finds itself faced with a paradox. In the Court's view, to retain the litigation in this forum,
as plaintiffs request, would be yet another example of imperialism, another situation in which an established
sovereign inflicted its rules, its standards and values on a developing nation. This Court declines to play
such a role. The Union of India is a world power in 1986, and its courts have the proven capacity to mete
out fair and equal justice. To deprive the Indian judiciary of this opportunity to stand tall before the world

48
In the matter Estate of Edward Randolph Hix, deceased. Reference has been made by the parties to a divorce purported to have been awarded Edward Randolph
A.W. FLUEMER, petitioner-appellant, Hix from Annie Cousins Hix on October 8, 1925, in the State of West specific pronouncements on the validity
vs. or validity of this alleged divorce.
ANNIE COUSHING HIX, oppositor-appellee.

For all of the foregoing, the judgment appealed from will be affirmed, with the costs of this instance against
The special administrator of the estate of Edward Randolph Hix appeals from a decision of Judge of First the appellant.
Instance Tuason denying the probate of the document alleged to by the last will and testament of the
deceased. Appellee is not authorized to carry on this appeal. We think, however, that the appellant, who
appears to have been the moving party in these proceedings, was a "person interested in the allowance or
disallowance of a will by a Court of First Instance," and so should be permitted to appeal to the Supreme
Court from the disallowance of the will (Code of Civil Procedure, sec. 781, as amended; Villanueva vs. De
Leon [1925], 42 Phil., 780).

It is theory of the petitioner that the alleged will was executed in Elkins, West Virginia, on November 3,
1925, by Hix who had his residence in that jurisdiction, and that the laws of West Verginia Code, Annotated,
by Hogg, Charles E., vol. 2, 1914, p. 1690, and as certified to by the Director of the National Library. But
this was far from a compliance with the law. The laws of a foreign jurisdiction do not prove themselves in
our courts. the courts of the Philippine Islands are not authorized to take American Union. Such laws must
be proved as facts. (In re Estate of Johnson [1918], 39 Phil., 156.) Here the requirements of the law were
not met. There was no was printed or published under the authority of the State of West Virginia, as
provided in section 300 of the Code of Civil Procedure. Nor was the extract from the law attested by the
certificate of the officer having charge of the original, under the sale of the State of West Virginia, as
provided in section 301 of the Code of Civil Procedure. No evidence was introduced to show that the extract
from the laws of West Virginia was in force at the time the alleged will was executed.

In addition, the due execution of the will was not established. The only evidence on this point is to be found
in the testimony of the petitioner. Aside from this, there was nothing to indicate that the will was
acknowledged by the testator in the presence of two competent witnesses, of that these witnesses
subscribed the will in the presence of the testator and of each other as the law of West Virginia seems to
require. On the supposition that the witnesses to the will reside without the Philippine Islands, it would then
the duty of the petitioner to prove execution by some other means (Code of Civil Procedure, sec. 633.)

It was also necessary for the petitioner to prove that the testator had his domicile in West Virginia and not
establish this fact consisted of the recitals in the CATHY will and the testimony of the petitioner. Also in
beginning administration proceedings orginally in the Philippine Islands, the petitioner violated his own
theory by attempting to have the principal administration in the Philippine Islands.

While the appeal pending submission in this court, the attorney for the appellant presented an unverified
petition asking the court to accept as part of the evidence the documents attached to the petition. One of
these documents discloses that a paper writing purporting to be the was presented for probate on June 8,
1929, to the clerk of Randolph Country, State of West Virginia, in vacation, and was duly proven by the
oaths of Dana Wamsley and Joseph L. MAdden, the subscribing witnesses thereto , and ordered to be
recorded and filed. It was shown by another document that, in vacation, on June 8, 1929, the clerk of court
of Randolph Country, West Virginia, appointed Claude W. Maxwell as administrator, cum testamento
annexo, of the estate of Edward Randolph Hix, deceased. In this connection, it is to be noted that the
application for the probate of the will in the Philippines was filed on February 20, 1929, while the
proceedings in West Virginia appear to have been initiated on June 8, 1929. These facts are strongly
indicative of an intention to make the Philippines the principal administration and West Virginia the ancillary
administration. However this may be, no attempt has been made to comply with Civil Procedure, for no
hearing on the question of the allowance of a will said to have been proved and allowed in West Virginia
has been requested. There is no showing that the deceased left any property at any place other than the
Philippine Islands and no contention that he left any in West Virginia.

49
G.R. No. L-12105 January 30, 1960
TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-appellee,
vs.
MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA BOHANAN, oppositors-
appellants.
Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose, presiding, dismissing
the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the project of partition
submitted by the executor and approving the said project.
On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to probate
a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. In the said order,
the court made the following findings:
According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of
that state, or at least a citizen of California where some of his properties are located. This contention in
untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely
temporary, and he continued and remained to be a citizen of the United States and of the state of his
pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the
United States depended upon his personal intent or desire, and he selected Nevada as his homicide and
therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or
permanent residence for him. That is his exclusive personal right.
Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the
United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in
accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the
Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and
upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking
the prescribed oath, it may enter upon the execution and performance of its trust. (pp. 26-27, R.O.A.).
It does not appear that the order granting probate was ever questions on appeal. The executor filed a
project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the
following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank
of Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George
Bohanan, which consists of several mining companies; (2) the other half of the residuary estate to the
testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in
the same amount of cash and of shares of mining stock similar to those given to testator's grandson; (3)
legacies of P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia
Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00;
Katherine Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;
It will be seen from the above that out of the total estate (after deducting administration expenses) of
P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of
several mining companies and to his brother and sister the same amount. To his children he gave a legacy
of only P6,000 each, or a total of P12,000.
The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions
disposing of the estate in the manner above indicated, claiming that they have been deprived of the
legitimate that the laws of the form concede to them.
50
The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be entitled
to received. The will has not given her any share in the estate left by the testator. It is argued that it was
error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino wife
Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the case
of Querubin vs. Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil.,
852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to
recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a
citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate
to his wife. Section 9905 of Nevada Compiled Laws of 1925 provides:
Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her
estate, real and personal, the same being chargeable with the payment of the testator's debts.
Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's
estafa had already been passed upon adversely against her in an order dated June 19, 1955, (pp. 155-159,
Vol II Records, Court of First Instance), which had become final, as Magdalena C. Bohanan does not appear
to have appealed therefrom to question its validity. On December 16, 1953, the said former wife filed a
motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in the
conjugal property, (See pp. 294-297, Vol. I, Record, Court of First Instance), and the court in its said error
found that there exists no community property owned by the decedent and his former wife at the time the
decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact
contained therein, i.e. that there was no community property acquired by the testator and Magdalena C.
Bohanan during their converture.
Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on January
30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C.
Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since
no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the
court below had already found that there was no conjugal property between the testator and Magdalena C.
Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator.
The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received
legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate
which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is
the failure old the testator to give his children two-thirds of the estate left by him at the time of his death,
in accordance with the laws of the forum valid?
The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides
that successional rights to personal property are to be earned by the national law of the person whose
succession is in question. Says the law on this point:
Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the
extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the
national law of the person whose succession is in question, whatever may be the nature of the property
and the country in which it is found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16,
new Civil Code.)
In the proceedings for the probate of the will, it was found out and it was decided that the testator was a
citizen of the State of Nevada because he had selected this as his domicile and his permanent residence.
(See Decision dated April 24, 1950, supra). So the question at issue is whether the estementary
dispositions, especially hose for the children which are short of the legitime given them by the Civil Code
of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his
properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). It does not appear that at time of
the hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was
the executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the
form and manner provided for by our Rules, which are as follows:
SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for
any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having
the legal custody of he 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. . . . (Rule 123).
We have, however, consulted the records of the case in the court below and we have found that during the
hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share,
the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by appellant's
(herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II, and t.s.n. pp. 24-44, Records, Court of First
Instance). Again said laws presented by the counsel for the executor and admitted by the Court as Exhibit
"B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo (se Records, Court of
First Instance, Vol. 1).
In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the
laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the
pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken
judicial notice of by us, without proof of such law having been offered at the hearing of the project of
partition.
As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be
governed by the national law of the testator, and as it has been decided and it is not disputed that the
national law of the testator is that of the State of Nevada, already indicated above, which allows a testator
to dispose of all his property according to his will, as in the case at bar, the order of the court approving
the project of partition made in accordance with the testamentary provisions, must be, as it is hereby
affirmed, with costs against appellants.
51
Gray v. Gray
Opinion
Decided September 4, 1934.
If there is no ground of action in the sovereignty where a tort is alleged to have occurred, there is none
anywhere. Whatever would be a bar to an action for tort if brought in the state of its occurrence is a bar in
this state although the matter pleaded would not be a bar if the cause of action had arisen here. A New
Hampshire wife injured by the negligence of her husband while driving with him in Maine is barred from
recovery against him in this state because under Maine law a wife has no cause of action for negligence
against her husband. Persons having the status of husband and wife take that status with them into a sister
state but the incidents of that status are those prescribed by the law of the place where transactions take
place. The theory of a foreign vested right or obligatio as a test for the enforcement of an alleged foreign
tort is not based upon the idea that a sovereignty is under legal compulsion to recognize the foreign cause
of action but such recognition has resulted from the idea that it was the just and politic course to follow.
The foreign law is enforced because the law of the forum is that the foreign law shall govern the transactions
in question and thus for the purposes of the case the foreign law becomes the local law. Where no evidence
is presented that the lex loci includes the doctrine of renvoi the foreign domestic law should be applied; if
the doctrine of renvoi were a part of the foreign law the question whether it should be applied would demand
determination.
CASE, to recover damages for personal injuries alleged to have been caused by the defendant's negligence.
The parties are husband and wife, residents of New Hampshire and the accident happened in Maine.
The defendant filed a special plea that "Under the laws of said state of Maine, the plaintiff being the wife of
said defendant is barred from maintaining this action." The plaintiff's demurrer to this plea was overruled
by Sawyer, C. J., who transferred the case upon exception to that ruling.
I. "If there is no ground of action in the sovereignty where the tort is alleged to have occurred, there is
none anywhere. . . . To ascertain the rights resulting from acts done or omitted, attention must be paid to
the circumstances under which the events took place; and one of the governing circumstances is the law
of the place which characterizes the act. . . . In like manner, when a right is claimed upon acts occurring in
another country, courts look to the law of that country, not to extend the binding force of a foreign law
beyond the territorial limits of the sovereignty to which it belongs, but to ascertain whether the right claimed
exists or not. It is not the foreign law, but the rights acquired under it, which are enforced by the courts of
another country; and this is true whether the question be one of contract, tort, or status."
"If there is a conflict between the lex loci and the lex fori, the former governs in torts the same as in
contracts, in respect to the legal effect and incidents of acts. . . . Therefore, whatever would be a defence
to this action if it had been brought in the state of Maine is a defence here, although it would not be if the
cause of action had arisen in this state." Beacham v. Portsmouth Bridge, 68 N.H. 382.
For more than a hundred years this theory of the law has been followed in this state, whenever there has
been occasion to apply it, or any part of it.
It has the final approval of the American Law Institute, Restatement, Conflict of Laws, s. 382 et seq. It is
supported by all our eminent text writers upon the subject. Story, Conflict of Laws, s. 558; Dicey, Conflict
of Laws, 21; Beale, Conflict of Laws, 112; Goodrich, Conflict of Laws, 189; Wharton, Conflict of Laws, s.
478 b; Minor, Conflict of Laws, s. 194. The American decisions are almost uniformly to the same effect.
They are collected in 12 C. J. 452, and cross references. In three recent cases the precise question here
involved has been decided adversely to the plaintiff.
Against this array of authority it is strenuously argued that the decided cases are distinguishable; that much
which has been said is dicta; that the theory is contrary to the English law, unsound in principle, unworkable
in many situations and criticized by a group of present day writers.
It is true that none of our decisions involve the precise facts here presented, but several of them are
indistinguishable in principle. In Beacham v. Portsmouth Bridge, 68 N.H. 382, the defendant was a
wrongdoer, and by New Hampshire law the plaintiff was free from contributory fault. But since by Maine
law his driving contrary to the Sunday law barred a recovery, he had no remedy here for an accident
happening there.
In Lee v. Chamberlin, 84 N.H. 182, Richards v. Richards, 86 N.H. 273 and Blanchette v. Sargent, ante, 15
the defendants were held not to be accountable for ordinary negligence towards guest passengers, although
they would be by the law of this state. The different law as to the incidents attaching to their status in
Massachusetts and Vermont was held to determine the rights of the parties as to events occurring in those
jurisdictions.
In Precourt v. Driscoll, 85 N.H. 280, the plaintiff was called upon to prove her own freedom from fault, in
accordance with the law of Vermont, although by New Hampshire law she would have made a case by
merely showing the defendant's negligence.
It is sought to distinguish the present case upon the ground that the act complained of was a delict, in the
sense that it was not made innocent by Maine law; and the only reason a recovery could not be had in
Maine is the spousal relation of the parties. As the parties are residents of New Hampshire, where spousal
incapacity to sue has been abolished, it is argued that the wife's complaint for acts done in Maine may be
brought into this state and suit upon it maintained here.
The argument fails to distinguish between status and the incidents which local law attaches to the status.
The parties are husband and wife. That status they took with them into Maine. But the incidents of that
status are those prescribed by the law of the place where transactions take place. As before pointed out,
this rule has frequently been applied in tort actions where other relations were involved.
The guest passenger in an automobile remains such after crossing the state line into Massachusetts. But
his recovery here for injuries caused by his host's ordinary negligence depends upon which side of the state
line the accident occurred. If it happened in Massachusetts, there could be no recovery, even though the
parties are residents here and the suit is in this jurisdiction.
Every argument urged in favor of this plaintiff is applicable to these decided cases. The defendant's act is
a delict by the lex loci. It would have been actionable if committed here; and, as to persons in general, it
is actionable there. But because of the particular relation of the parties, the law there is that there is no
cause of action in the special instance. The plaintiff fails here, as those plaintiffs failed, because there is no
cause of action at the place where the acts complained of were done.
It should be observed that much of the plaintiff's argument is based upon the assertion that inability to
recover in Maine is merely because suits between husband and wife are forbidden. Hence it is urged that
recovery may be had by resort to a jurisdiction where such suits are allowed. But an examination of the
Maine law shows that the rule is much broader. The theory adopted there is not merely that there is a
prohibition of suit, but that the acts complained of do not give rise to any cause of action. There has been
no breach of legal duty.
A suit for false imprisonment during coverture was brought by a divorced wife against her former husband.
The court said: "The theory upon which the present action is sought to be maintained is, that coverture
52
merely suspends and does not destroy the remedy of the wife against her husband. But the error in the
proposition is the supposition that a cause of action or a right of action ever exists in such a case. There is
not only no civil remedy but there is no civil right, during coverture, to be redressed at any time. There is,
therefore, nothing to be suspended. Divorce cannot make that a cause of action which was not a cause of
action before divorce. The legal character of an act of violence by husband upon wife and of the
consequences that flow from it, is fixed by the condition of the parties at the time the act is done. If there
be no cause of action at the time, there never can be any." Abbott v. Abbott, 67 Me. 304, 306, cited with
approval in Sacknoff v. Sacknoff, 131 Me. 280. In the latter case a wife was denied recovery from the
employer of her husband for injuries caused by the negligence of that employee.
II. The claim that the American rule is opposed to the practice in England is well founded. But the English
law upon the subject is by no means clearly defined. All that is here claimed for it is that in a suit for a
foreign tort recovery may be had according to English law, unless the lex loci has made the act complained
of innocent. This seems to be a splitting of the rule of accountability. The foreign law is noted and applied,
in so far as treating the act as innocent is concerned; but if that obstacle is passed, the English law is then
used, or may be, to supplement the foreign and give a cause of action. This theory never attained any
recognition in this country. "No case in this country has been found where recovery in tort has been allowed
for what was not the basis of an action by the lex loci delicti." Goodrich, Conflict of Laws, 190.
III. Much objection has been made, both by some recent writers and in argument here, against any theory
of vested right or obligatio. If such theory were based upon the idea that a sovereignty is under legal
compulsion to recognize the foreign cause of action, there might be force in the argument. While the
proposition may sometimes have been stated in that extreme form, the common theory is that such
recognition has resulted from the idea that it was the just and politic course to follow. It has been developed
under the impulses of neighborliness and orderliness. It has become an accepted rule precisely as liability
for negligence, once unknown, became a part of the common law.
Wrong theories for the rule may have been advanced. But the destruction of such men of straw does not
affect the validity of the line of procedure they were supposed to defend. It stands upon its own intrinsic
merits. No one denies that the parties may have vested rights, or obligations, in the jurisdiction where the
transaction occurred. But because another sovereignty adopts the rule that it will enforce the right or deny
recovery as the event would be according to the lex loci, it by no means follows that it is the law of the
forum that such course is obligatory upon such sovereignty.
In reaching the conclusions stated in Beacham v. Portsmouth Bridge, 68 N.H. 382, it was not deemed
essential to enter into a discussion of the territoriality of law, of the concept of it spatially, or of the claims
of parties as vested rights, accrued in a foreign jurisdiction. The situation was a practical one. The problem
was "one of judicial expediency" (Saloshin v. Houle, 85 N.H. 126, 130). Forty odd separate jurisdictions
had given rise to pressing questions as to how rights and wrongs originating in one should be dealt with in
another. A few simple ideas were sufficient to indicate the course to be taken. Local conduct should be
governed by local law. Rules of conduct have no force to regulate acts done outside the jurisdiction which
made the rules, save as their operation is enforced by control over parties found within the jurisdiction. In
the great majority of cases complaints of conduct are adjusted in the jurisdiction where the conduct took
place. It is desirable that the remedy be the same, wherever the action is brought.
IV. It is contended that there is unpardonable inconsistency in enforcing foreign rights, whether of
prosecution or defence, and at the same time declaring that the foreign law is not in force here. The ground
has been gone over many times. The local law is that the foreign rights will be enforced. What those rights
are depends upon the facts, and a part of the facts consists in the law under which the transactions took
place.
But if it is still insisted that a proper designation of the process is that we thus enforce foreign law (Saloshin they show that the whole theory of applying the lex loci is unsound and should therefore be abandoned,
v. Houle, 85 N.H. 126), it does not affect the soundness of the procedure. We enforce the foreign law and actions for foreign torts should be decided according to local law.
because it is our law that the foreign law shall govern the transactions in question. "For the purposes of the
case the foreign law becomes the local law." Saloshin v. Houle, supra, 130. It has been concluded that it
One answer to this is that the rule that the lex loci shall apply is so firmly established that it should be
shall so govern for the reasons before stated. This is not importing foreign law. It is only giving to it the
followed, unless very grave defects therein call for reform. We see no such defects. Whether it should
legitimate effect upon transactions occurring where it is in force. The logical alternative is not found in the
include renvoi or not is a matter to be decided when a case arises which presents that question. In the
application of local law to a foreign transaction, but in a refusal to deal with that transaction at all. If it is
instant case there is no occasion to go further than to inquire whether the obstacle proposed is insuperable.
to be justiciable here, it should be upon the basis of what it is there.
If it does not appear to be so, we need not be apprehensive that adherence to the present line of procedure
will unduly embarrass the court of the future when called upon to decide the propounded problem.
The other view, that to some indefinite degree our law should govern the foreign transaction, would export
our law into foreign territory. The reasonable conclusion which has been reached is that there should be
It is undoubtedly true that following the doctrine of renvoi to a logical extreme can, in some situations,
neither export nor import, that, generally speaking, the law is territorial, conceived of spatially as governing
result in an endless reference back and forth. The dilemma thus presented is something of an answer to
within the jurisdiction, and creating there rights and obligations which will be respected and enforced
the theorists who justify the application of the lex loci upon the idea of a vested right. The writers relied
elsewhere. Judge Cardozo sums the matter up in a sentence. "The plaintiff owns something and we help
upon by the plaintiff have used it largely for this limited purpose. They recognize the desirability of a general
him to get it."
application of the lex loci in actions for torts. Their quarrel has been with the theory of those who would
account for such procedure upon the basis of a vested right or obligatio.
V. The critics of the American rule affect to find much inconsistency in the suggested refusal (Goodrich,
Conflict of Laws, 24; Am. Law Inst., Restat., Conflict of Laws, s. 7) to follow the lex loci as to the applicability
Once the doctrine of obligatio is disregarded, and recognition of the lex loci is put upon its true foundation,
of foreign law to local transactions. The proposition advanced here is that if by the lex loci the plaintiff could
there is no difficulty. The lex loci is applied because this is deemed to be the sensible course to pursue.
recover there if he would have that right by the law of his domicil, though not if domesticated, he should
When a point is reached where further application is futile and ridiculous the process is cut short.
recover in other jurisdictions, if they profess to apply the lex loci. This is upon the theory that the whole or
none of the lex loci should be applied.
No rule or set of rules has yet been devised which will make the conflict of laws a logical whole. There are
places where logic has to give way to evident facts. In these places horse sense has prevailed over the
It being the rule in some jurisdictions that in a suit by a non-resident upon a cause arising locally his
deductions of the schoolmen. It should continue to do so.
capacity to sue will be determined by looking to the law of his domicil rather than to the local law, it is
urged that this feature (called the doctrine of renvoi) should be treated the same as the rest of the lex loci.
If that law looks beyond local limitations to broader or otherwise different rules of the party's domicil, it is Whether, upon the issue of applying foreign law we should follow our own views entirely, or adopt those
argued that the same course should be followed by the court in another jurisdiction when called upon to expressed in the lex loci which are pertinent, is, like most of the questions involved in this case, a matter
adjudicate disputes which arose under such circumstances. That is, in determining the applicability of of what is sound policy. That problem will no doubt be solved in the future, and some definite rules will be
foreign law, the court should be governed by that foreign law as to the applicability of foreign law. This idea evolved, as there have been already on the main issue of following the lex loci.
is urged as calling for the recognition of renvoi under such circumstances. It has not as yet met with judicial
approval. As before stated, there is no occasion here to determine whether we should apply a Maine doctrine of
renvoi, since there is no evidence that such a doctrine exists.
We do not understand it is claimed that the doctrine of renvoi ought to be adopted. One of the authors
upon whose reasoning the plaintiff relies says: "The renvoi doctrine is, therefore, no part of the Conflict of VI. The novel complaint is made that the foregoing conclusions upon the application of the lex loci set up
Laws of the United States. Its introduction into our law would be most unfortunate on account of the fixed rules. The proposal is that instead thereof the whole matter be left to the discretion of the court to
uncertainty and confusion to which it would give rise in the administration of justice and its demoralizing apply either the foreign or the domestic law to the individual case as "reason, justice and expediency"
effect upon the future development of the Conflict of Laws." The Renvoi Theory (Lorenzen), 10 Col. Law require. That might well be taken as the guide for determining what should be done in the first stages of
Rev. 344. It is advanced in argument here as a feature of existing law, in some foreign jurisdictions, and the development of the law. But as the law progresses definite rules are evolved in the course of the
its recognition where existing is urged as a logical part of the vested right theory, and as showing that, frequent application of those tests. That is the situation here. It has become settled that reason, justice
thus encumbered, that theory should be rejected. It is unnecessary to determine the validity of the and expediency require that causes of action for foreign torts be dealt with as hereinbefore indicated.
argument. If its soundness were assumed, and recognition of renvoi should be treated as a part of our rule
applying the lex loci, there would be two sufficient answers here. The plea demurred to states "that under
the laws of the State of Maine, the plaintiff being the wife of said defendant is barred from maintaining this Exception overruled.
action." This leaves no room for speculation upon the matter. Beyond this, it is conceded in the plaintiff's
argument that there is no decision in Maine bearing upon the doctrine of renvoi. Nor is there any claim that
it is a part of a generally prevailing common-law doctrine. If the matter were open for consideration, the
plaintiff would fail for lack of proof that the doctrine prevails in Maine.

But it will be said that these conclusions do not meet the whole issue. The argument that consideration of
renvoi should be a part of any theory of applying the lex loci, and that the theory thus embarrassed is
unworkable, has not been answered. The conclusion sought to be drawn from these propositions is that

53
Auten v. Auten
In this action to recover installments allegedly due for support and maintenance under a separation
agreement executed in this state in 1933, the wife's complaint has been dismissed, on motion for summary
judgment, upon the ground that her institution of an action for separation in England constituted a
repudiation and a rescission of the agreement under New York law. Determination of the appeal, involving
as it does a question of conflict of laws, requires examination of the facts disclosed by the papers before
us.
Married in England in 1917, Mr. and Mrs. Auten continued to live there with their two children until 1931.
In that year, according to plaintiff, defendant deserted her, came to this country and, in the following year,
obtained a Mexican divorce and proceeded to "marry" another woman. Unable to come to terms with the
ocean between them, plaintiff made a trip to New York City to see and talk to defendant about adjustment
of their differences. The outcome was the separation agreement of June, 1933, upon which the present
action is predicated. It obligated the husband to pay to a trustee, for the "account of" the wife, who was to
return to England, the sum of £ 50 a month for the support of herself and the children. In addition, the
agreement provided that the parties were to continue to live separate and apart, that neither should sue
"in any action relating to their separation" and that the wife should not "cause any complaint to be lodged
against * * * [the husband], in any jurisdiction, by reason of the said alleged divorce or remarriage".
Immediately after the agreement was signed, plaintiff returned to England, where she has since lived with
her children, and it is alleged by her — but disputed by defendant — that the latter is also domiciled in that
country. Be that as it may, defendant failed to live up to his agreement, making but a few payments under
it, with the result that plaintiff was left more or less destitute in England with the children. About a year
after the agreement had been executed, in August of 1934, plaintiff filed a petition for separation in an
English court, charging defendant with adultery. Defendant was served in New York with process in that
suit on December 4, 1936, and, in July, 1938, an order was entered requiring defendant to pay alimony
pendente lite. This English action — which, we are told never proceeded to trial — was instituted upon
advice of English counsel that it "was the only method" by which she "could collect money" from defendant;
it was done, plaintiff expressly declares, to "enable" her "to enforce" the separation agreement, and not
with any thought or intention of repudiating it.
The years passed, and in 1947, having realized nothing as a result of the English action and little by reason
of the New York separation agreement, plaintiff brought the present suit to recover the sum of $26,564,
which represents the amount allegedly due her, under the agreement, from January 1, 1935 to September
1, 1947.
In his answer, defendant admitted making the agreement, but, by way of a separate defense — one of
several — claimed that plaintiff's institution of the separation suit in England operated as a repudiation of
the agreement and effected a forfeiture of her right to any payments under it. Following a motion by the
wife for summary judgment and a cross motion by the husband for like relief, the court at Special Term
granted the husband's cross motion and dismissed the complaint. The Appellate Division affirmed, with
leave to the wife, however, to serve an amended complaint, asserting any cause of action which accrued
prior to the date of the commencement of the English suit. The ensuing judgment, dismissing all of the
wife's claims which accrued subsequent to that date, is a final judgment of modification, and the wife's
appeal therefrom is properly before us as of right.
Both of the courts below, concluding that New York law was to be applied, held that under such law plaintiff's
commencement of the English action and the award of temporary alimony constituted a rescission and
repudiation of the separation agreement, requiring dismissal of the complaint. Whether that is the law of
this state, or whether something more must be shown to effect a repudiation of the agreement (cf. Hettich
v. Hettich, 304 N.Y. 8, 13-14; Woods v. Bard, 285 N.Y. 11; Butler v. Butler, 206 App. Div. 214), need not
detain us, since in our view it is the law of England, not that of New York, which is here controlling.
54
Choosing the law to be applied to a contractual transaction with elements in different jurisdictions is a
matter not free from difficulty. The New York decisions evidence a number of different approaches to the
question.
Most of the cases rely upon the generally accepted rules that "All matters bearing upon the execution, the
interpretation and the validity of contracts * * * are determined by the law of the place where the contract
is made", while "All matters connected with its performance * * * are regulated by the law of the place
where the contract, by its terms, is to be performed." What constitutes a breach of the contract and what
circumstances excuse a breach are considered matters of performance, governable, within this rule, by the
law of the place of performance.
Many cases appear to treat these rules as conclusive. Others consider controlling the intention of the parties
and treat the general rules merely as presumptions or guideposts, to be considered along with all the other
circumstances. And still other decisions, including the most recent one in this court, have resorted to a
method — first employed to rationalize the results achieved by the courts in decided cases (see Barber Co.
v. Hughes, 223 Ind. 570, 586) — which has come to be called the "center of gravity" or the "grouping of
contacts" theory of the conflict of laws. Under this theory, the courts, instead of regarding as conclusive
the parties' intention or the place of making or performance, lay emphasis rather upon the law of the place
"which has the most significant contacts with the matter in dispute".
Although this "grouping of contacts" theory may, perhaps, afford less certainty and predictability than the
rigid general rules (see Note, op. cit., 3 Utah L. Rev. 490, 498), the merit of its approach is that it gives to
the place "having the most interest in the problem" paramount control over the legal issues arising out of
a particular factual context, thus allowing the forum to apply the policy of the jurisdiction "most intimately
concerned with the outcome of [the] particular litigation" (3 Utah L. Rev., pp. 498-499). Moreover, by
stressing the significant contacts, it enables the court, not only to reflect the relative interests of the several
jurisdictions involved (see Vanston Committee v. Green, 329 U.S. 156, 161-162), but also to give effect to
the probable intention of the parties and consideration to "whether one rule or the other produces the best
practical result".
Turning to the case before us, examination of the respective contacts with New York and England compels
the conclusion that it is English law which must be applied to determine the impact and effect to be given
the wife's institution of the separation suit. It hardly needs stating that it is England which has all the truly
significant contacts, while this state's sole nexus with the matter in dispute — entirely fortuitous, at that —
is that it is the place where the agreement was made and where the trustee, to whom the moneys were in
the first instance to be paid, had his office. The agreement effected a separation between British subjects,
who had been married in England, had children there and lived there as a family for fourteen years. It
involved a husband who, according to the papers before us, had willfully deserted and abandoned his wife
and children in England and was in the United States, when the agreement was signed, merely on a
temporary visa. And it concerned an English wife who came to this country at that time because it was the
only way she could see her husband to discuss their differences. The sole purpose of her trip to New York
was to get defendant to agree to the support of his family, and she returned to England immediately after
the agreement was executed. While the moneys were to be paid through the medium of a New York trustee,
such payments were "for account of" the wife and children, who, it was thoroughly understood, were to live
in England. The agreement is instinct with that understanding; not only does it speak in terms of English
currency in providing for payments to the wife, not only does it recite that the first payment be made to
her "immediately before sailing for England", but it specifies that the husband may visit the children "if he
should go to England".
Our decision in Rennie v. Rennie ( 287 N.Y. 86) casts no light on the problem. The court did not there
consider whether it is the law of the place where the separation agreement was made or of the jurisdiction
where the separation suit or other judicial proceeding was brought which determines the effect that such
action may have upon the agreement.
In short, then, the agreement determined and fixed the marital responsibilities of an English husband and
father and provided for the support and maintenance of the allegedly abandoned wife and children who
were to remain in England. It merely substituted the arrangements arrived at by voluntary agreement of
the parties for the duties and responsibilities of support that would otherwise attach by English law. There
is no question that England has the greatest concern in prescribing and governing those obligations, and in
securing to the wife and children essential support and maintenance. And the paramount interest of that
country is not affected by the fact that the parties separate and provide for such support by a voluntary
agreement. It is still England, as the jurisdiction of marital domicile and the place where the wife and
children were to be, that has the greatest concern in defining and regulating the rights and duties existing
under that agreement, and, specifically, in determining the circumstances that effect a termination or
repudiation of the agreement.
Nor could the parties have expected or believed that any law other than England's would govern the effect
of the wife's institution of a separation action. It is most unlikely that the wife could have intended to
subject her rights under English law to the law of a jurisdiction several thousand miles distant, with which
she had not the slightest familiarity. On the contrary, since it was known that she was returning to England
to live, both parties necessarily realized that any action which she took, whether in accordance with the
agreement or in violation of it, would have to occur in England. If any thought was given to the matter at
all, it was that the law of the place where she and the children would be should determine the effect of acts
performed by her.
It is, perhaps, not inappropriate to note that, even if we were not to place our emphasis on the law of the
place with the most significant contacts, but were instead simply to apply the rule that matters of
performance and breach are governed by the law of the place of performance, the same result would follow.
Whether or not there was a repudiation, essentially a form of breach (see Restatement, Contracts, § 318;
4 Corbin on Contracts [1951], § 954, pp. 829-834), is also to be determined by the law of the place of
performance (cf. Wester v. Casein Co. of America, 206 N.Y. 506; Restatement, Conflict of Laws, § 370,
Caveat), and that place, so far as the wife's performance is concerned, is England. Whatever she had to do
under the agreement — "live separate and apart from" her husband, "maintain, educate and support" the
children and refrain from bringing "any action relating to [the] separation" — was to be done in England.
True, the husband's payments were to be made to a New York trustee for forwarding to plaintiff in England,
but that is of no consequence in this case. It might be, if the question before us involved the manner or
effect of payment to the trustee, but that is not the problem; we are here concerned only with the effect
of the wife's performance. (Cf. Zwirn v. Galento, supra, 288 N.Y. 428, 433.)
Since, then, the law of England must be applied, and since, at the very least, an issue exists as to whether
the courts of that country treat the commencement of a separation action as a repudiation of an earlier-
made separation agreement, summary judgment should not have been granted.
In point of fact, the English lawyers, whose affidavits have been submitted by plaintiff, unequivocally opine
that the institution of a separation suit and the award of alimony pendente lite did not, under the law of
England, constitute a repudiation of the separation agreement or bar the present action to recover amounts
due under it.
As to defendant's further contention that, in any event, plaintiff's commencement of the English action
amounted to a material breach of her covenant not to sue, barring recovery upon the agreement, we need
but say that this question, too, must be governed by English law, and for the same reasons already set
forth.
The judgment of the Appellate Division and that of Special Term insofar as they dismiss the complaint
should be reversed, with costs in all courts, and the matter remitted for further proceedings in accordance
with this opinion.
55
Haag v. Barnes
This appeal is concerned with the effect in New York of an agreement made in another State for the support
of a child born out of wedlock.
The complainant Dorothy Haag alleges that in 1947 she moved from Minnesota and took up residence in
New York City and that since then she has been a resident of this State. The defendant Norman Barnes,
on the other hand, is now and was, during the period involved in this litigation, a resident of Illinois.
According to the statements contained in the complainant's affidavits, she met the defendant in the spring
of 1954 in New York. She was a law secretary and had been hired by the defendant through an agency to
do work for him while he was in New York on one of his business trips. The relationship between the man
and the girl soon "ripened into friendship" and, on the basis of representations that he loved her and
planned to divorce his wife and marry her, she was "importuned" into having sexual relations with him.
The complainant further alleges that she became pregnant as a result of having sexual relations with the
defendant and that, upon being informed of this, he asked her to move to Illinois to be near him. She
refused and, instead, went to live in California with her sister to await the birth of her child. Fearing that
the defendant was losing interest in her, however, she returned to Chicago before the child was born and,
upon attempting to communicate with the defendant, was referred to his attorney. The latter told Dorothy
to choose a hospital in Chicago, which she did, and the baby was born there in December, 1955, the
defendant paying the expenses.
Shortly after the birth of the child, her attempts to see the defendant in New York failed and she was
advised by his attorney to return to Chicago in order that an agreement might be made for the support of
her and her child. Returning to that city, she procured an attorney, recommended by a friend in New York,
and signed an agreement on January 12, 1956. The agreement provides, in pertinent part, as follows:
1. It recites payment to the complainant by the defendant of $2,000 between September, 1955 and
January, 1956 and a willingness on his part to support her child in the future, on condition that such
payments "shall not constitute an admission" that he is the child's father;
2. The defendant promises to pay $50 a week and $75 a month, i.e., a total of $275 a month, "continuing
while [the child] is alive and until she attains the age of sixteen years";
3. The complainant agrees "to properly support, maintain, educate, and care for [the child]";
4. The complainant agrees to keep the child in Illinois for at least two years, except if she marries within
that period;
5. The complainant "remise[s], release[s] and forever discharge[s] NORMAN BARNES * * * from all
manner of actions * * * which [she] now has against [him] or ever had or which she * * * hereafter can,
shall or may have, for, upon or by reason of any matter, cause or thing whatsoever * * * including * * *
the support of [the child]"; and
6. The parties agree that their agreement "shall in all respects be interpreted, construed and governed
by the laws of the State of Illinois".
Shortly after the agreement was signed, the complainant received permission, pursuant to one of its
provisions, to live in California where she remained for two years. She then returned to New York where
she and her child have ever since been supported by the defendant in full compliance with the terms of his
agreement. In fact, he has provided sums far in excess of his agreement; all told, we were informed on
oral argument, the defendant has paid the complainant some $30,000.
The present proceeding was instituted in 1959 by the service of a complaint and the defendant was
thereafter arrested pursuant to section 64 of the New York City Criminal Courts Act. A motion, made by the
defendant, to dismiss the proceeding was granted by the Court of Special Sessions and the resulting order
was affirmed by the Appellate Division.
The ground urged for dismissal was that the parties had entered into an agreement providing for the support
of the child which has been fully performed; that in this agreement the complainant relinquished the right
to bring any action for the support of the child; and that, in any event, the action is precluded by the laws
of the State of Illinois which, the parties expressly agreed, would govern their rights under the agreement.
In opposition, the complainant contended that New York, not Illinois, law applies; that the agreement in
question is not a sufficient basis for a motion to dismiss under either section 63 of the New York City
Criminal Courts Act or section 121 of the Domestic Relations Law, since both of these provisions provide
that "An agreement or compromise made by the mother * * * shall be binding only when the court shall
have determined that adequate provision has been made"; and that, even were the Illinois law to apply,
it does not bar the present proceeding.
As to the question of public policy, we would emphasize that the issue is not whether the New York statute
reflects a different public policy from that of the Illinois statute, but rather whether enforcement of the
particular agreement before us under Illinois law represents an affront to our public policy. (Cf. Loucks v.
Standard Oil Co., 224 N.Y. 99, 111; Mertz v. Mertz, 271 N.Y. 466, 471; Restatement 2d, Conflict of Laws,
Tentative Draft No. 6, § 332a, comment g.) It is settled that the New York Paternity Law requires something
more than the provision of "the bare necessities otherwise required to be supplied by the community", that,
"although providing for indemnification of the community, [it] is chiefly concerned with the welfare of the
child". (See Schaschlo v. Taishoff, 2 N.Y.2d 408, 411.) In our judgment, enforcement of the support
agreement in this case under Illinois law and the refusal to allow its provisions to be reopened in the present
proceeding does not do violence to this policy.

The motion to dismiss was properly granted; the complainant may not upset a support agreement which is
itself perfectly consistent with the public policy of this State, which was entered into in Illinois with the
understanding that it would be governed by the laws of that State and which constitutes a bar to a suit for
further support under Illinois law.
The complainant is correct in her position that, since the agreement was not court approved, it may not be
held to be a bar to her suit under New York internal law. On the other hand, it is clear that the agreement
is a bar under the internal law of Illinois since it provides, in the language of that State's statute, for a "sum
not less than eight hundred dollars". The simple question before us, therefore, is whether the law of New
York or of Illinois applies.
As matter of fact, the agreement before us clearly goes beyond "indemnification of the community" and
the provision of "bare necessities". Whether we read it as a whole, or look only to the financial provisions
concerned ($275 a month until the child reaches the age of 16), we must conclude that "the welfare of the
child" is fully protected. (See Rhyne v. Katleman, 285 App. Div. 114 0, affg. 206 Misc. 202 [$10,000 lump
sum held sufficient].) The public policy of this State having been satisfied, there is no reason why we should
not enforce the provisions of the parties' support agreement under Illinois law and treat the agreement as
a bar to the present action for support.
The order of the Appellate Division should be affirmed.

The traditional view was that the law governing a contract is to be determined by the intention of the
parties. The more modern view is that "the courts, instead of regarding as conclusive the parties' intention
or the place of making or performance, lay emphasis rather upon the law of the place `which has the most
significant contacts with the matter in dispute'". (See Auten v. Auten, 308 N.Y. 155, 160; see, also, Rubin
v. Irving Trust Co., 305 N.Y. 288, 305.) Whichever of these views one applies in this case, however, the
answer is the same, namely, that Illinois law applies.

The agreement, in so many words, recites that it "shall in all respects be interpreted, construed and
governed by the laws of the State of Illinois" and, since it was also drawn and signed by the complainant
in Illinois, the traditional conflicts rule would, without doubt, treat these factors as conclusive and result in
applying Illinois law. But, even if the parties' intention and the place of the making of the contract are not
given decisive effect, they are nevertheless to be given heavy weight in determining which jurisdiction
"`has the most significant contacts with the matter in dispute'". ( Auten v. Auten, 308 N.Y. 155, 160,
supra.) And, when these important factors are taken together with other of the "significant contacts" in the
case, they likewise point to Illinois law. Among these other Illinois contacts are the following: (1) both
parties are designated in the agreement as being "of Chicago, Illinois", and the defendant's place of business
is and always has been in Illinois; (2) the child was born in Illinois; (3) the persons designated to act as
agents for the principals (except for a third alternate) are Illinois residents, as are the attorneys for both
parties who drew the agreement; and (4) all contributions for support always have been, and still are being,
made from Chicago.

Contrasted with these Illinois contacts, the New York contacts are of far less weight and significance. Chief
among these is the fact that child and mother presently live in New York and that part of the "liaison" took
place in New York. When these contacts are measured against the parties' clearly expressed intention to
have their agreement governed by Illinois law and the more numerous and more substantial Illinois
contacts, it may not be gainsaid that the "center of gravity" of this agreement is Illinois and that, absent
compelling public policy to the contrary (see Straus Co. v. Canadian Pacific Ry. Co., 254 N.Y. 407, 414),
Illinois law should apply.

56
Georgia W. Babcock, Appellant,
v termed the "center of gravity" or "grouping of contacts" theory of the conflict of laws. "Under this theory,"
Mabel B. Jackson, as Executrix of William H. Jackson, Deceased, Respondent.
On Friday, September 16, 1960, Miss Georgia Babcock and her friends, Mr. and Mrs. William Jackson, all
residents of Rochester, left that city in Mr. Jackson's automobile, Miss Babcock as guest, for a week-end
trip to Canada. Some hours later, as Mr. Jackson was driving in the Province of Ontario, he apparently lost
control of the car; it went off the highway into an adjacent stone wall, and Miss Babcock was seriously
injured. Upon her return to this State, she brought [*477] the present action against William Jackson,
alleging negligence on his part in operating his automobile. [1]
At the time of the accident, there was in force in Ontario a statute providing that "the owner or driver of a
motor vehicle, other than a vehicle operated in the business of carrying passengers for compensation, is
not liable for any loss or damage resulting from bodily injury to, or the death of any person being carried
in * * * the motor vehicle" (Highway Traffic Act of Province of Ontario [Ontario Rev. Stat. (1960), ch. 172],
§105, subd. [2]). Even though no such bar is recognized under this State's substantive law of torts (see,
e.g., Higgins v. Mason, 255 N. Y. 104, 108; Nelson v. Nygren, 259 N. Y. 71), the defendant moved to
dismiss the complaint on the ground that the law of the place where the accident occurred governs and
that Ontario's guest statute bars recovery. The court at Special Term, agreeing with the defendant, granted
the motion and the Appellate Division, over a strong dissent by Justice Halpern, affirmed the judgment of
dismissal without opinion.
The question presented is simply drawn. Shall the law of the place of the tort [2] invariably govern the
availability of relief for the tort or shall the applicable choice of law rule also reflect a consideration of other
factors which are relevant to the purposes served by the enforcement or denial of the remedy?
The traditional choice of law rule, embodied in the original Restatement of Conflict of Laws (§ 384), and
until recently unquestioningly followed in this court, has been that the substantive rights and liabilities
arising out of a tortious occurrence are determinable by the law of the place of the tort. It had its conceptual
foundation in the vested rights doctrine, namely, that a right to recover for a foreign tort owes its creation
to the law of the [*478] jurisdiction where the injury occurred and depends for its existence and extent
solely on such law. Although espoused by such great figures as Justice Holmes (see Slater v. Mexican Nat.
R. R. Co., 194 U. S. 120) and Professor Beale (2 Conflict of Laws [1935], pp. 1286-1292), the vested rights
doctrine has long since been discredited because it fails to take account of underlying policy considerations
in evaluating the significance to be ascribed to the circumstance that an act had a foreign situs in
determining the rights and liabilities which arise out of that act. [3]"The vice of the vested rights theory",
it has been aptly stated, "is that it affects to decide concrete cases upon generalities which do not state the
practical considerations involved". (Yntema, The Hornbook Method and the Conflict of Laws, 37 Yale L. J.
468, 482-483.) More particularly, as applied to torts, the theory ignores the interest which jurisdictions
other than that where the tort occurred may have in the resolution of particular issues. It is for this very
reason that, despite the advantages of certainty, ease of application and predictability which it affords (see
Cheatham and Reese, Choice of the Applicable Law, 52 Col. L. Rev. 959, 976), there has in recent years
been increasing criticism of the traditional rule by commentators [4]and a judicial trend towards its
abandonment or modification. [5][*479]
Significantly, it was dissatisfaction with "the mechanical formulae of the conflicts of law" (Vanston
Committee v. Green, 329 U. S. 156, 162) which led to judicial departure from similarly inflexible choice of
law rules in the field of contracts, grounded, like the torts rule, on the vested rights doctrine. According to
those traditional rules, matters bearing upon the execution, interpretation and validity of a contract were
determinable by the internal law of the place where the contract was made, while matters connected with
their performance were regulated by the internal law of the place where the contract was to be performed.
57
In Auten v. Auten (308 N. Y. 155), however, this court abandoned such rules and applied what has been
we declared in the Auten case, "the courts, instead of regarding as conclusive the parties' intention or the
place of making or performance, lay emphasis rather upon the law of the place 'which has the most
significant contacts with the matter in dispute' " (308 N. Y., at p. 160). The "center of gravity" rule of Auten
has not only been applied in other cases in this State, [6]as well as in other jurisdictions, [7]but has
supplanted the prior rigid and set contract rules in the most current draft of the Restatement of Conflict of
Laws. (See Restatement, Second, Conflict of Laws, § 332b [Tentative Draft No. 6, 1960].)
Realization of the unjust and anomalous results which may ensue from application of the traditional rule in
tort cases has also prompted judicial search for a more satisfactory alternative in that area. In the much
discussed case of Kilberg v. Northeast Airlines (9 N Y 2d 34), this court declined to apply the law of the
place of the tort as respects the issue of the quantum of the recovery in a death action arising out of an
airplane crash, [*480] where the decedent had been a New York resident and his relationship with the
defendant airline had originated in this State. In his opinion for the court, Chief Judge Desmond described,
with force and logic, the shortcomings of the traditional rule (9 N Y 2d, at p. 39):
"Modern conditions make it unjust and anomalous to subject the traveling citizen of this State to the varying
laws of other States through and over which they move. * * * An air traveler from New York may in a flight
of a few hours' duration pass through * * * commonwealths [limiting death damage awards]. His plane
may meet with disaster in a State he never intended to cross but into which the plane has flown because
of bad weather or other unexpected developments, or an airplane's catastrophic descent may begin in one
State and end in another. The place of injury becomes entirely fortuitous. Our courts should if possible
provide protection for our own State's people against unfair and anachronistic treatment of the lawsuits
which result from these disasters."
The emphasis in Kilberg was plainly that the merely fortuitous circumstance that the wrong and injury
occurred in Massachusetts did not give that State a controlling concern or interest in the amount of the tort
recovery as against the competing interest of New York in providing its residents or users of transportation
facilities there originating with full compensation for wrongful death. Although the Kilberg case did not
expressly adopt the "center of gravity" theory, its weighing of the contacts or interests of the respective
jurisdictions to determine their bearing on the issue of the extent of the recovery is consistent with that
approach. (See Leflar, Conflict of Laws, 1961 Ann. Sur. Amer. Law, 29, 45.)
The same judicial disposition is also reflected in a variety of other decisions, some of recent date, others of
earlier origin, relating to workmen's compensation, [8]tortious occurrences aristing [*481] out of a
contract, [9]issues affecting the survival of a tort right of action [10]and intrafamilial immunity from tort
[11]and situations involving a form of statutory liability. [12]These numerous cases differ in many ways
but they are all similar in two important respects. First, by one rationale or another, they rejected the
inexorable application of the law of the place of the tort where that place has no reasonable or relevant
interest in the particular issue involved. And, second, in each of these cases the courts, after examining
the particular circumstances presented, applied the law of some jurisdiction other than the place of the tort
because it had a more compelling interest in the application of its law to the legal issue involved.
The "center of gravity" or "grouping of contacts" doctrine adopted by this court in conflicts cases involving
contracts impresses us as likewise affording the appropriate approach for accommodating the competing
interests in tort cases with multi-State contacts. Justice, fairness and "the best practical result" (Swift &
Co. v. Bankers Trust Co., 280 N. Y. 135, 141, supra) may best be achieved by giving controlling effect to
the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties,
has the greatest concern with the specific issue raised in the litigation. The merit of such a rule is that "it
gives to the place 'having the most interest in the problem' paramount control over the legal issues arising
out of a particular factual context" and thereby allows the forum to apply "the policy of the jurisdiction
'most [*482] intimately concerned with the outcome of [the] particular litigation.' "
Such, indeed, is the approach adopted in the most recent revision of the Conflict of Laws Restatement in
the field of torts. According to the principles there set out, "The local law of the state which has the most
significant relationship with the occurrence and with the parties determines their rights and liabilities in
tort" (Restatement, Second, Conflict of Laws, § 379[1]; also Introductory Note to Topic 1 of Chapter 9, p.
3 [Tentative Draft No. 8, 1963]), and the relative importance of the relationships or contacts of the
respective jurisdictions is to be evaluated in the light of "the issues, the character of the tort and the
relevant purposes of the tort rules involved" (§ 379[2], [3]).
Comparison of the relative "contacts" and "interests" of New York and Ontario in this litigation, vis-a-vis
the issue here presented, makes it clear that the concern of New York is unquestionably the greater and
more direct and that the interest of Ontario is at best minimal. The present action involves injuries sustained
by a New York guest as the result of the negligence of a New York host in the operation of an automobile,
garaged, licensed and undoubtedly insured in New York, in the course of a week-end journey which began
and was to end there. In sharp contrast, Ontario's sole relationship with the occurrence is the purely
adventitious circumstance that the accident occurred there.
New York's policy of requiring a tort-feasor to compensate his guest for injuries caused by his negligence
cannot be doubted — as attested by the fact that the Legislature of this State has repeatedly refused to
enact a statute denying or limiting recovery in such cases (see, e.g., 1930 Sen. Int. No. 339, Pr. No. 349;
1935 Sen. Int. No. 168, Pr. No. 170; 1960 Sen. Int. No. 3662, Pr. No. 3967) — and our courts have neither
reason nor warrant for departing from that policy simply because the accident, solely affecting New York
residents and arising out of the operation of a New York based automobile, happened beyond its borders.
Per contra, Ontario has no conceivable interest in denying a remedy to a New York guest against his New
York host for injuries suffered in Ontario by reason of conduct which was tortious under Ontario law. The
object of Ontario's guest statute, it has been said, is "to prevent the fraudulent assertion [*483] of claims
by passengers, in collusion with the drivers, against insurance companies" (Survey of Canadian Legislation,
1 U. Toronto L. J. 358, 366) and, quite obviously, the fraudulent claims intended to be prevented by the
statute are those asserted against Ontario defendants and their insurance carriers, not New York defendants
and their insurance carriers. Whether New York defendants are imposed upon or their insurers defrauded
by a New York plaintiff is scarcely a valid legislative concern of Ontario simply because the accident occurred
there, any more so than if the accident had happened in some other jurisdiction.
It is hardly necessary to say that Ontario's interest is quite different from what it would have been had the
issue related to the manner in which the defendant had been driving his car at the time of the accident.
Where the defendant's exercise of due care in the operation of his automobile is in issue, the jurisdiction in
which the allegedly wrongful conduct occurred will usually have a predominant, if not exclusive, concern.
In such a case, it is appropriate to look to the law of the place of the tort so as to give effect to that
jurisdiction's interest in regulating conduct within its borders, and it would be almost unthinkable to seek
the applicable rule in the law of some other place.
The issue here, however, is not whether the defendant offended against a rule of the road prescribed by
Ontario for motorists generally or whether he violated some standard of conduct imposed by that
jurisdiction, but rather whether the plaintiff, because she was a guest in the defendant's automobile, is
barred from recovering damages for a wrong concededly committed. As to that issue, it is New York, the
place where the parties resided, where their guest- host relationship arose and where the trip began and
was to end, rather than Ontario, the place of the fortuitous occurrence of the accident, which has the
dominant contacts and the superior claim for application of its law. Although the rightness or wrongness of
defendant's conduct may depend upon the law of the particular jurisdiction through which the automobile
passes, the rights and liabilities of the parties which stem from their guest-host relationship should remain
constant and not vary and shift as the automobile proceeds from place to place. Indeed, such a result, we
note, [*484] accords with "the interests of the host in procuring liability insurance adequate under the
applicable law, and the interests of his insurer in reasonable calculability of the premium." (Ehrenzweig,
Guest Statutes in the Conflict of Laws, 69 Yale L. J. 595, 603.)
58
Although the traditional rule has in the past been applied by this court in giving controlling effect to the
guest statute of the foreign jurisdiction in which the accident occurred (see, e.g., Smith v. Clute, 277 N. Y.
407; Kerfoot v. Kelley, 294 N. Y. 288; Naphtali v. Lafazan, 8 N Y 2d 1097, affg. 8 A D 2d 22), it is not amiss
to point out that the question here posed was neither raised nor considered in those cases and that the
question has never been presented in so stark a manner as in the case before us with a statute so unique
as Ontario's. [13]Be that as it may, however, reconsideration of the inflexible traditional rule persuades us,
as already indicated, that, in failing to take into account essential policy considerations and objectives, its
application may lead to unjust and anomalous results. This being so, the rule, formulated as it was by the
courts, should be discarded.
In conclusion, then, there is no reason why all issues arising out of a tort claim must be resolved by
reference to the law of the same jurisdiction. Where the issue involves standards of conduct, it is more than
likely that it is the law of the place of the tort which will be controlling but the disposition of other issues
must turn, as does the issue of the standard of conduct itself, on the law of the jurisdiction which has the
strongest interest in the resolution of the particular issue presented. [*485]
The judgment appealed from should be reversed, with costs, and the motion to dismiss the complaint
denied.
VAN VOORHIS, J. (Dissenting).
The decision about to be made of this appeal changes the established law of this State, one of the most
recent decisions the other way being Kaufman v. American Youth Hostels (5 N Y 2d 1016), where all of the
"significant contacts" were with New York State except the mountain which plaintiff's intestate was climbing
when she met her death. The defense of immunity of a charitable corporation under the Oregon law, where
the accident occurred, was inapplicable under the law of New York where the defendant corporation was
organized and staffed, and plaintiff and his intestate resided. Nevertheless the court declined to strike that
defense from the answer, based upon Oregon law. Concerning, as it did, solely the status of the defendant
corporation, Kaufman v. American Youth Hostels presented a stronger case for the application of New York
law than does the present. The case of Auten v. Auten (308 N. Y. 155), involving a separation agreement
between English people and providing for the support of a wife and children to continue to live in England,
accomplished no such revolution in the law as the present appeal. Auten v. Auten dealt with contracts, the
agreement was held to be governed by the law of the country where it was mainly to be performed, which
had previously been the law, and the salient expressions "center of gravity", "grouping of contacts", and
similar catchwords were employed as a shorthand reference to the reconciliation of such rigid concepts in
the conflict of laws as the formulae making applicable the place where the contract was signed or where it
was to be performed — rules which themselves were occasionally in conflict with one another. In the course
of the opinion it was stated that "even if we were not to place our emphasis on the law of the place with
the most significant contacts, but were instead simply to apply the rule that matters of performance and
breach are governed by the law of the place of performance, the same result would follow" (308 N. Y., p.
163). The decision in Auten v. Auten rationalized and rendered more workable the existing law of contracts.
The name "grouping of contacts" was simply a label to identify the rationalization of existing decisions on
the conflict of laws in [*486] contract cases which were technically inconsistent, in some instances. The
difference between the present case and Auten v. Auten is that Auten did not materially change the law,
but sought to formulate what had previously been decided. The present case makes substantial changes in
the law of torts. The expressions "center of gravity", "grouping of contacts," and "significant contacts" are
catchwords which were not employed to define and are inadequate to define a principle of law, and were
neither applied to nor are they applicable in the realm of torts.
Any idea is without foundation that cases such as the present render more uniform the laws of torts in the
several States of the United States. Attempts to make the law or public policy of New York State prevail
over the laws and policies of other States where citizens of New York State are concerned are simply a form
of extraterritoriality which can be turned against us wherever actions are brought in the courts of New York
which involve citizens of other States. This is no substitute for uniform State laws or for obtaining uniformity
by covering the subject by Federal law. Undoubtedly ease of travel and communication, and the increase
in interstate business have rendered more awkward discrepancies between the laws of the States in many
respects. But this is not a condition to be cured by introducing or extending principles of extraterritoriality,
as though we were living in the days of the Roman or British Empire, when the concepts were formed that
the rights of a Roman or an Englishman were so significant that they must be enforced throughout the
world even where they were otherwise unlikely to be honored by "lesser breeds without the law." Importing
the principles of extraterritoriality into the conflicts of laws between the States of the United States can
only make confusion worse confounded. If extraterritoriality is to be the criterion, what would happen, for
example, in case of an automobile accident where some of the passengers came from or were picked up in
States or countries where causes of action against the driver were prohibited, others where gross negligence
needed to be shown, some, perhaps, from States where contributory negligence and others where
comparative negligence prevailed? In the majority opinion it is said that "Where the defendant's exercise
of due care in the operation of his automobile is in issue, the jurisdiction in which the allegedly wrongful
conduct occurred [*487] will usually have a predominant, if not exclusive, concern." This is hardly
consistent with the statement in the footnote that gross negligence would not need to be established in an
action by a passenger if the accident occurred in a State whose statute so required. If the status of the
passenger as a New Yorker would prevent the operation of a statute in a sister State or neighboring country
which granted immunity to the driver in suits by passengers, it is said that it would also prevent the
operation of a statute which instead of granting immunity permits recovery only in case of gross negligence.
There are passenger statutes or common-law decisions requiring gross negligence or its substantial
equivalent to be shown in 29 States. One wonders what would happen if contributory negligence were
eliminated as a defense by statute in another jurisdiction? Or if comparative negligence were established
as the rule in the other State?
In my view there is no overriding consideration of public policy which justifies or directs this change in the
established rule or renders necessary or advisable the confusion which such a change will introduce.
59
G.R. No. L-35694 December 23, 1933
ALLISON G. GIBBS, petitioner-appelle,
vs.
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, oppositor-appellant.
THE REGISTER OF DEEDS OF THE CITY OF MANILA, respondent-appellant.
This is an appeal from a final order of the Court of First Instance of Manila, requiring the register of deeds
of the City of Manila to cancel certificates of title Nos. 20880, 28336 and 28331, covering lands located in
the City of Manila, Philippine Islands, and issue in lieu thereof new certificates of transfer of title in favor of
Allison D. Gibbs without requiring him to present any document showing that the succession tax due under
Article XI of Chapter 40 of the Administrative Code has been paid.
The said order of the court of March 10, 1931, recites that the parcels of land covered by said certificates
of title formerly belonged to the conjugal partnership of Allison D. Gibbs and Eva Johnson Gibbs; that the
latter died intestate in Palo Alto, California, on November 28, 1929; that at the time of her death she and
her husband were citizens of the State of California and domiciled therein.
It appears further from said order that Allison D. Gibbs was appointed administrator of the state of his said
deceased wife in case No. 36795 in the same court, entitled "In the Matter of the Intestate Estate of Eva
Johnson Gibbs, Deceased"; that in said intestate proceedings, the said Allison D. Gibbs, on September
22,1930, filed an ex parte petition in which he alleged "that the parcels of land hereunder described belong
to the conjugal partnership of your petitioner and his wife, Eva Johnson Gibbs", describing in detail the
three facts here involved; and further alleging that his said wife, a citizen and resident of California, died
on November 28,1929; that in accordance with the law of California, the community property of spouses
who are citizens of California, upon the death of the wife previous to that of the husband, belongs absolutely
to the surviving husband without administration; that the conjugal partnership of Allison D. Gibbs and Eva
Johnson Gibbs, deceased, has no obligations or debts and no one will be prejudiced by adjucating said
parcels of land (and seventeen others not here involved) to be the absolute property of the said Allison D.
Gibbs as sole owner. The court granted said petition and on September 22, 1930, entered a decree
adjucating the said Allison D. Gibbs to be the sole and absolute owner of said lands, applying section 1401
of the Civil Code of California. Gibbs presented this decree to the register of deeds of Manila and demanded
that the latter issue to him a "transfer certificate of title".
Section 1547 of Article XI of Chapter 40 of the Administrative Code provides in part that:
Registers of deeds shall not register in the registry of property any document transferring real property
or real rights therein or any chattel mortgage, by way of gifts mortis causa, legacy or inheritance, unless
the payment of the tax fixed in this article and actually due thereon shall be shown. And they shall
immediately notify the Collector of Internal Revenue or the corresponding provincial treasurer of the non
payment of the tax discovered by them. . . .
Acting upon the authority of said section, the register of deeds of the City of Manila, declined to accept as
binding said decree of court of September 22,1930, and refused to register the transfer of title of the said
conjugal property to Allison D. Gibbs, on the ground that the corresponding inheritance tax had not been
paid. Thereupon, under date of December 26, 1930, Allison D. Gibbs filed in the said court a petition for an
order requiring the said register of deeds "to issue the corresponding titles" to the petitioner without
requiring previous payment of any inheritance tax. After due hearing of the parties, the court reaffirmed
said order of September 22, 1930, and entered the order of March 10, 1931, which is under review on this
appeal.
On January 3, 1933, this court remanded the case to the court of origin for new trial upon additional
evidence in regard to the pertinent law of California in force at the time of the death of Mrs. Gibbs, also
authorizing the introduction of evidence with reference to the dates of the acquisition of the property should, therefore, resort to the law of California, the nationality and domicile of Mrs. Gibbs, to ascertain
involved in this suit and with reference to the California law in force at the time of such acquisition. The the norm which would be applied here as law were there any question as to her status.
case is now before us with the supplementary evidence.

But the appellant's chief argument and the sole basis of the lower court's decision rests upon the second
For the purposes of this case, we shall consider the following facts as established by the evidence or the paragraph of article 10 of the Civil Code which is as follows:
admissions of the parties: Allison D. Gibbs has been continuously, since the year 1902, a citizen of the Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the
State of California and domiciled therein; that he and Eva Johnson Gibbs were married at Columbus, Ohio, amount of the successional rights and the intrinsic validity of their provisions, shall be regulated by the
in July 1906; that there was no antenuptial marriage contract between the parties; that during the existence national law of the person whose succession is in question, whatever may be the nature of the property
of said marriage the spouses acquired the following lands, among others, in the Philippine Islands, as or the country in which it may be situated.
conjugal property:lawphil.net
1. A parcel of land in the City of Manila represented by transfer certificate of title No. 20880, dated March
In construing the above language we are met at the outset with some difficulty by the expression "the
16, 1920, and registered in the name of "Allison D. Gibbs casado con Eva Johnson Gibbs".
national law of the person whose succession is in question", by reason of the rather anomalous political
2. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28336, dated May
status of the Philippine Islands. (Cf. Manresa, vol. 1, Codigo Civil, pp. 103, 104.) We encountered no
14, 1927, in which it is certified "that spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in
difficulty in applying article 10 in the case of a citizen of Turkey. (Miciano vs. Brimo, 50 Phil., 867.) Having
fee simple" of the land therein described.
regard to the practical autonomy of the Philippine Islands, as above stated, we have concluded that if article
3. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28331, dated April
10 is applicable and the estate in question is that of a deceased American citizen, the succession shall be
6, 1927, which it states "that Allison D. Gibbs married to Eva Johnson Gibbs" is the owner of the land
regulated in accordance with the norms of the State of his domicile in the United States. (Cf. Babcock
described therein; that said Eva Johnson Gibbs died intestate on November 28, 1929, living surviving her
Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate of Johnson, 39 Phil., 156, 166.)
her husband, the appellee, and two sons, Allison J. Gibbs , now age 25 and Finley J. Gibbs, now aged 22,
as her sole heirs of law.
The trial court found that under the law of California, upon the death of the wife, the entire community
property without administration belongs to the surviving husband; that he is the absolute owner of all the
Article XI of Chapter 40 of the Administrative Code entitled "Tax on inheritances, legacies and other
community property from the moment of the death of his wife, not by virtue of succession or by virtue of
acquisitions mortis causa" provides in section 1536 that "Every transmission by virtue of inheritance ... of
her death, but by virtue of the fact that when the death of the wife precedes that of the husband he acquires
real property ... shall be subject to the following tax." It results that the question for determination in this
the community property, not as an heir or as the beneficiary of his deceased wife, but because she never
case is as follows: Was Eva Johnson Gibbs at the time of her death the owner of a descendible interest in
had more than an inchoate interest or expentancy which is extinguished upon her death. Quoting the case
the Philippine lands above-mentioned?
of Estate of Klumpke (167 Cal., 415, 419), the court said: "The decisions under this section (1401 Civil
Code of California) are uniform to the effect that the husband does not take the community property upon
The appellee contends that the law of California should determine the nature and extent of the title, if any, the death of the wife by succession, but that he holds it all from the moment of her death as though
that vested in Eva Johnson Gibbs under the three certificates of title Nos. 20880, 28336 and 28331 above required by himself. ... It never belonged to the estate of the deceased wife."
referred to, citing article 9 of the Civil Code. But that, even if the nature and extent of her title under said
certificates be governed by the law of the Philippine Islands, the laws of California govern the succession
The argument of the appellee apparently leads to this dilemma: If he takes nothing by succession from his
to such title, citing the second paragraph of article 10 of the Civil Code.
deceased wife, how can the second paragraph of article 10 be invoked? Can the appellee be heard to say
that there is a legal succession under the law of the Philippine Islands and no legal succession under the
Article 9 of the Civil Code is as follows: law of California? It seems clear that the second paragraph of article 10 applies only when a legal or
The laws relating to family rights and duties, or to the status, condition, and legal capacity of persons, testamentary succession has taken place in the Philippines and in accordance with the law of the Philippine
are binding upon Spaniards even though they reside in a foreign country." It is argued that the conjugal Islands; and the foreign law is consulted only in regard to the order of succession or the extent of the
right of the California wife in community real estate in the Philippine Islands is a personal right and must, successional rights; in other words, the second paragraph of article 10 can be invoked only when the
therefore, be settled by the law governing her personal status, that is, the law of California. But our deceased was vested with a descendible interest in property within the jurisdiction of the Philippine Islands.
attention has not been called to any law of California that incapacitates a married woman from acquiring
or holding land in a foreign jurisdiction in accordance with the lex rei sitae. There is not the slightest
In the case of Clarke vs. Clarke (178 U. S., 186, 191; 44 Law ed., 1028, 1031), the court said:
doubt that a California married woman can acquire title to land in a common law jurisdiction like the State
It is principle firmly established that to the law of the state in which the land is situated we must look for
of Illinois or the District of Columbia, subject to the common-law estate by the courtesy which would vest
the rules which govern its descent, alienation, and transfer, and for the effect and construction of wills
in her husband. Nor is there any doubt that if a California husband acquired land in such a jurisdiction his
and other conveyances. (United States vs. Crosby, 7 Cranch, 115; 3 L. ed., 287; Clark vs. Graham, 6
wife would be vested with the common law right of dower, the prerequisite conditions obtaining. Article
Wheat., 577; 5 L. ed., 334; McGoon vs. Scales, 9 Wall., 23; 19 L. ed., 545; Brine vs. Hartford F. Ins.
9 of the Civil Code treats of purely personal relations and status and capacity for juristic acts, the rules
Co., 96 U. S., 627; 24 L. ed., 858.)" (See also Estate of Lloyd, 175 Cal., 704, 705.) This fundamental
relating to property, both personal and real, being governed by article 10 of the Civil Code. Furthermore,
principle is stated in the first paragraph of article 10 of our Civil Code as follows: "Personal property is
article 9, by its very terms, is applicable only to "Spaniards" (now, by construction, to citizens of the
subject to the laws of the nation of the owner thereof; real property to the laws of the country in which
Philippine Islands).
it is situated.

The Organic Act of the Philippine Islands (Act of Congress, August 29, 1916, known as the "Jones Law")
It is stated in 5 Cal. Jur., 478:
as regards the determination of private rights, grants practical autonomy to the Government of the
In accord with the rule that real property is subject to the lex rei sitae, the respective rights of husband
Philippine Islands. This Government, therefore, may apply the principles and rules of private international
and wife in such property, in the absence of an antenuptial contract, are determined by the law of the
law (conflicts of laws) on the same footing as an organized territory or state of the United States. We

60
 place where the property is situated, irrespective of the domicile of the parties or to the place where the
marriage was celebrated. (See also Saul vs. His Creditors, 5 Martin [N. S.], 569; 16 Am. Dec., 212 [La.];
Heidenheimer vs. Loring, 26 S. W., 99 [Texas].)
Under this broad principle, the nature and extent of the title which vested in Mrs. Gibbs at the time of the
acquisition of the community lands here in question must be determined in accordance with the lex rei
sitae.
It is admitted that the Philippine lands here in question were acquired as community property of the
conjugal partnership of the appellee and his wife. Under the law of the Philippine Islands, she was vested
of a title equal to that of her husband. Article 1407 of the Civil Code provides:
All the property of the spouses shall be deemed partnership property in the absence of proof that it
belongs exclusively to the husband or to the wife. Article 1395 provides:
"The conjugal partnership shall be governed by the rules of law applicable to the contract of partnership in
all matters in which such rules do not conflict with the express provisions of this chapter." Article 1414
provides that "the husband may dispose by will of his half only of the property of the conjugal partnership."
Article 1426 provides that upon dissolution of the conjugal partnership and after inventory and liquidation,
"the net remainder of the partnership property shall be divided share and share alike between the husband
and wife, or their respective heirs." Under the provisions of the Civil Code and the jurisprudence prevailing
here, the wife, upon the acquisition of any conjugal property, becomes immediately vested with an interest
and title therein equal to that of her husband, subject to the power of management and disposition which
the law vests in the husband. Immediately upon her death, if there are no obligations of the decedent, as
is true in the present case, her share in the conjugal property is transmitted to her heirs by succession.
(Articles 657, 659, 661, Civil Code; cf. also Coronel vs. Ona, 33 Phil., 456, 469.)
It results that the wife of the appellee was, by the law of the Philippine Islands, vested of a descendible
interest, equal to that of her husband, in the Philippine lands covered by certificates of title Nos. 20880,
28336 and 28331, from the date of their acquisition to the date of her death. That appellee himself believed
that his wife was vested of such a title and interest in manifest from the second of said certificates, No.
28336, dated May 14, 1927, introduced by him in evidence, in which it is certified that "the spouses Allison
D. Gibbs and Eva Johnson Gibbs are the owners in fee simple of the conjugal lands therein described."
The descendible interest of Eva Johnson Gibbs in the lands aforesaid was transmitted to her heirs by virtue
of inheritance and this transmission plainly falls within the language of section 1536 of Article XI of Chapter
40 of the Administrative Code which levies a tax on inheritances. (Cf. Re Estate of Majot, 199 N. Y., 29; 92
N. E., 402; 29 L. R. A. [N. S.], 780.) It is unnecessary in this proceeding to determine the "order of
succession" or the "extent of the successional rights" (article 10, Civil Code, supra) which would be
regulated by section 1386 of the Civil Code of California which was in effect at the time of the death of Mrs.
Gibbs.
The record does not show what the proper amount of the inheritance tax in this case would be nor that the
appellee (petitioner below) in any way challenged the power of the Government to levy an inheritance tax
or the validity of the statute under which the register of deeds refused to issue a certificate of transfer
reciting that the appellee is the exclusive owner of the Philippine lands included in the three certificates of
title here involved.
The judgment of the court below of March 10, 1931, is reversed with directions to dismiss the petition,
without special pronouncement as to the costs.
61
Grant v. McAuliffe , 41 Cal.2d 859
OPINION
On December 17, 1949, plaintiffs W. R. Grant and R. M. Manchester were riding west on United States
Highway 66 in an automobile owned and driven by plaintiff D. O. Jensen. Defendant's decedent, W. W.
Pullen, was driving his automobile east on the same highway. The two automobiles collided at a point
approximately 15 miles east of Flagstaff, Arizona. Jensen's automobile was badly damaged, and Jensen,
Grant, and Manchester suffered personal injuries. Nineteen days later, on January 5, 1950, Pullen died as
a result of injuries received in the collision. Defendant McAuliffe was appointed administrator of his estate
and letters testamentary were issued by the Superior Court of Plumas County. All three plaintiffs, as well
as Pullen, were residents of California at the time of the collision. After the appointment of defendant, each
plaintiff presented his claim for damages. Defendant rejected all three claims, and on December 14, 1950,
each plaintiff filed an action against the estate of Pullen to recover damages for the injuries caused by the
alleged negligence of the decedent. Defendant filed a general demurrer and a motion to abate each of the
complaints. The trial court entered an order granting the motion in each case. Each plaintiff has appealed.
The appeals are [41 Cal.2d 862] based on the same ground and have therefore been consolidated.
The basic question is whether plaintiffs' causes of action against Pullen survived his death and are
maintainable against his estate. The statutes of this state provide that causes of action for negligent torts
survive the death of the tort feasor and can be maintained against the administrator or executor of his
estate. (Civ. Code, § 956; Code Civ. Proc., § 385; Prob. Code, §§ 573, 574.) Defendant contends, however,
that the survival of a cause of action is a matter of substantive law, and that the courts of this state must
apply the law of Arizona governing survival of causes of action. There is no provision for survival of causes
of action in the statutes of Arizona, although there is a provision that in the event of the death of a party
to a pending proceeding his personal representative can be substituted as a party to the action (Arizona
Code, 1939, § 21-534), if the cause of action survives. (Arizona Code, 1939, § 21-530.) The Supreme Court
of Arizona has held that if a tort action has not been commenced before the death of the tort feasor a plea
in abatement must be sustained.
[1] Thus, the answer to the question whether the causes of action against Pullen survived and are
maintainable against his estate depends on whether Arizona or California law applies. In actions on torts
occurring abroad, the courts of this state determine the substantive matters inherent in the cause of action
by adopting as their own the law of the place where the tortious acts occurred, unless it is contrary to the
public policy of this state. (Loranger v. Nadeau, 215 Cal. 362 [10 P.2d 63, 84 A.L.R. 1264].) [2] "[N]o court
can enforce any law but that of its own sovereign, and, when a suitor comes to a jurisdiction foreign to the
place of the tort, he can only invoke an obligation recognized by that sovereign. A foreign sovereign under
civilized law imposes an obligation of its own as nearly homologous as possible to that arising in the place
where the tort occurs." (Learned Hand, J., in Guinness v. Miller, 291 F. 769, 770.) [3] But the forum does
not adopt as its own the procedural law of the place where the tortious acts occur. It must, therefore, be
determined whether survival of causes of action is procedural or substantive for conflict of laws purposes.
This question is one of first impression in this state. The precedents in other jurisdictions are conflicting. In
many cases it has been held that the survival of a cause of action is a matter of substance and that the law
of the place where the tortious acts occurred must be applied to determine the question. The Restatement
of the Conflict of Laws, section 390, is in accord. It should be noted, however, that the majority of the
foregoing cases were decided after drafts of the Restatement were first circulated in 1929. Before that time,
it appears that the weight of authority was that survival of causes of action is procedural and governed by
the domestic law of the forum. Many of the cases, decided both before and after the Restatement, holding
that survival is substantive and must be determined by the law of the place where the tortious acts occurred,
confused the problems involved in survival of causes of action with those involved in causes of action for
wrongful death. (See, for example, the precedents on which the courts relied in Hyde v. Wabash, St. L. &
Pac. Ry. Co., supra, 61 Iowa 441; Orr v. Ahern, supra, 107 Conn. 174; and Ormsby v. Chase, supra, 290
U.S. 387.) The problems are not analogous. (See Schumacher, "Rights of Action Under Death and Survival
Statutes," 23 Mich.L.Rev. 114, 116-117, 124-125.) [4] A cause of action for wrongful death is statutory. It
is a new cause of action vested in the widow or next of kin, and arises on the death of the injured person.
Before his death, the injured person himself has a separate and distinct cause of action and, if it survives,
the same cause of action can be enforced by the personal representative of the deceased against the tort
feasor. [5] The survival statutes do not create a new cause of action, as do the wrongful death statutes.
They merely prevent the abatement of the cause of action of the injured person, and provide for its
enforcement by or against the personal representative of the deceased. [6] They are analogous to statutes
of limitation, which [41 Cal.2d 865] are procedural for conflict of laws purposes and are governed by the
domestic law of the forum. [7] Thus, a cause of action arising in another state, by the laws of which an
action cannot be maintained thereon because of lapse of time, can be enforced in California by a citizen of
this state, if he has held the cause of action from the time it accrued.
administration of estates by the local Legislature and avoids the problems involved in determining the
administrator's amenability to suit under the laws of other states. [14] The common law doctrine actio
personalis moritur cum persona had its origin in a penal concept of tort liability. (See Prosser, Law of Torts
950-951; Pollock, The Law of Torts (10th ed.) 64, 68.) Today, tort liabilities of the sort involved in these
actions are regarded as compensatory. [15] When, as in the present case, all of the parties were residents
of this state, and the estate of the deceased tort feasor is being administered in this state, plaintiff's right
to prosecute their causes of action is governed by the laws of this state relating to administration of estates.
The orders granting defendant's motions to abate are reversed, and the causes remanded for further
proceedings.

Defendant contends, however, that the characterization of survival of causes of action as substantive or
procedural is foreclosed by Cort v. Steen, 36 Cal.2d 437, 442 [224 P.2d 723], where it was held that the
California survival statutes were substantive and therefore did not apply retroactively. The problem in the
present proceeding, however, is not whether the survival statutes apply retroactively, but whether they are
substantive or procedural for purposes of conflict of laws. [8] " 'Substance' and 'procedure' ... are not legal
concepts of invariable content", and a statute or other rule of law will be characterized as substantive or
procedural according to the nature of the problem for which a characterization must be made.

[9] Defendant also contends that a distinction must be drawn between survival of causes of action and
revival of actions, and that the former are substantive but the latter procedural. On the basis of this
distinction, defendant concludes that many of the cases cited above as holding that survival is procedural
and is governed by the domestic law of the forum do not support this position, since they involved problems
of "revival" rather than "survival." The distinction urged by defendant is not a valid one. Most of the statutes
involved in the cases cited provided for the "revival" of a pending proceeding by or against the personal
representative of a party thereto should he die while the action is still [41 Cal.2d 866] pending. But in most
"revival" statutes, substitution of a personal representative in place of a deceased party is expressly
conditioned on the survival of the cause of action itself. fn. 1 [10] If the cause of action dies with the tort
feasor, a pending proceeding must be abated. A personal representative cannot be substituted in the place
of a deceased party unless the cause of action is still subsisting. In cases where this substitution has
occurred, the courts have looked to the domestic law of the forum to determine whether the cause of action
survives as well as to determine whether the personal representative can be substituted as a party to the
action. Defendant's contention would require the courts to look to their local statutes to determine "revival"
and to the law of the place where the tort occurred to determine "survival," but we have found no case in
which this procedure was followed.

Since we find no compelling weight of authority for either alternative, we are free to make a choice on the
merits. [11] We have concluded that survival of causes of action should be governed by the law of the
forum. [12] Survival is not an essential part of the cause of action itself but relates to the procedures
available for the enforcement of the legal claim for damages. Basically the question is one of the
administration of decedents' estates, which is a purely local proceeding. The problem here is whether the
causes of action that these plaintiffs had against Pullen before his death survive as liabilities of his estate.
Section 573 of the Probate Code provides that "all actions founded ... upon any liability for physical injury,
death or injury to property, may be maintained by or against executors and administrators in all cases in
which the cause of action ... is one which would not abate upon the death of their respective testators or
intestates. ..." Civil Code, section 956, provides that [41 Cal.2d 867] "A thing in action arising out of a
wrong which results in physical injury to the person ... shall not abate by reason of the death of the
wrongdoer ...," and causes of action for damage to property are maintainable against executors and
administrators under section 574 of the Probate Code. Decedent's estate is located in this state, and letters
of administration were issued to defendant by the courts of this state. [13] The responsibilities of defendant,
as administrator of Pullen's estate, for injuries inflicted by Pullen before his death are governed by the laws
of this state. This approach has been followed in a number of well-reasoned cases. It retains control of the

62
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.
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
63
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.
On July 3, 1984, POEA Administrator, upon motion of 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.
64
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).
65
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:
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, or by change in the type of
construction 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.

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 11. BONUS
by respondent-appellant AIBC for its accredited foreign principal, Brown & Root, on various dates from A bonus of 20% (for offshore work) of gross income will be accrued and payable only upon satisfactory
1975 to 1983. They were all deployed at various projects undertaken by Brown & Root in several countries completion of this contract.
in the Middle East, such as Saudi Arabia, Libya, United Arab Emirates and Bahrain, as well as in Southeast
Asia, in Indonesia and Malaysia.
12. OFFDAY PAY

Having been officially processed as overseas contract workers by the Philippine Government, all the
The seventh day of the week shall be observed as a day of rest with 8 hours regular pay. If work is
individual complainants signed standard overseas employment contracts (Records, Vols. 25-32.
performed on this day, all hours work shall be paid at the premium rate. However, this offday pay
Hereafter, reference to the records would be sparingly made, considering their chaotic arrangement) with
provision is applicable only when the laws of the Host Country require payments for rest day.
AIBC before their departure from the Philippines. These overseas employment contracts invariably
contained the following relevant terms and conditions.
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
PART B —
known as the Labour Law for the Private Sector (Records, Vol. 18). This decree took effect on August
(1) Employment Position Classification :—————————
16, 1976. Some of the provisions of Amiri Decree No. 23 that are relevant to the claims of the
(Code) :—————————
complainants-appellants are as follows (italics supplied only for emphasis):
(2) Company Employment Status :—————————
Art. 79: . . . A worker shall receive payment for each extra hour equivalent to his wage entitlement
(3) Date of Employment to Commence on :—————————
increased by a minimum of twenty-five per centum thereof for hours worked during the day; and by
(4) Basic Working Hours Per Week :—————————
a minimum of fifty per centum thereof for hours worked during the night which shall be deemed to
(5) Basic Working Hours Per Month :—————————
being from seven o'clock in the evening until seven o'clock in the morning. . . .
(6) Basic Hourly Rate :—————————
Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
(7) Overtime Rate Per Hour :—————————
. . . an employer may require a worker, with his consent, to work on his weekly day of rest if
(8) Projected Period of Service
circumstances so require and in respect of which an additional sum equivalent to 150% of his
(Subject to C(1) of this [sic]) :—————————
normal wage shall be paid to him. . . .
Months and/or
Art. 81: . . . When conditions of work require the worker to work on any official holiday, he shall
Job Completion
be paid an additional sum equivalent to 150% of his normal wage.
xxx xxx xxx
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
3. HOURS OF WORK AND COMPENSATION not less than 28 days after five continuous years of service.
a) The Employee is employed at the hourly rate and overtime rate as set out in Part B of this A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his
Document. service in that year.
b) The hours of work shall be those set forth by the Employer, and Employer may, at his sole option, Art. 107: A contract of employment made for a period of indefinite duration may be terminated by
change or adjust such hours as maybe deemed necessary from time to time. 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

66
 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);
67
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 Attorney's Lien
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
On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike out the joint manifestations and
nonetheless, the basis for granting said damages was not established;
motions of AIBC and BRII dated September 2 and 11, 1992, claiming that all the claimants who entered
(4) that the claims for salaries corresponding to the unexpired portion of their contract may be allowed
into the compromise agreements subject of said manifestations and motions were his clients and that Atty.
if filed within the three-year prescriptive period;
Florante M. de Castro had no right to represent them in said agreements. He also claimed that the claimants
(5) that the allegation that complainants were prematurely repatriated prior to the expiration of their
were paid less than the award given them by NLRC; that Atty. De Castro collected additional attorney's
overseas contract was not established; and
fees on top of the 25% which he was entitled to receive; and that the consent of the claimants to the
(6) that the POEA Administrator has no jurisdiction over the complaint for the suspension or cancellation
compromise agreements and quitclaims were procured by fraud (G.R. No. 104776, Rollo, pp. 838-810). In
of the AIBC's recruitment license and the cancellation of the accreditation of BRII.
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).
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-
On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim to Enforce Attorney's Lien," alleging that
555. Instead of dismissing POEA Case No. (L) 86-65-460, the POEA just resolved the corresponding claims
the claimants who entered into compromise agreements with AIBC and BRII with the assistance of Atty.
in POEA Case No. (L) 84-06-555. In other words, the POEA did not pass upon the same claims twice.
De Castro, had all signed a retainer agreement with his law firm (G.R. No. 104776, Rollo, pp. 623-624;
838-1535).
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).
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).

68
 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:
69
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:
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
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.
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 In article XIII on Social Justice and Human Rights, the 1987 Constitution provides:
rule (G.R. No. 104776, Rollo, pp. 45-46). 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.

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. 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.
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). 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:
As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as
(1) Upon a written contract;
service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the
(2) Upon an obligation created by law;
laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of
(3) Upon a judgment.
the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).

NLRC, on the other hand, believes that the applicable provision is Article 291 of the Labor Code of the
A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either
Philippines, which in pertinent part provides:
as procedural or substantive, depending on the characterization given such a law.
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
Thus in Bournias v. Atlantic Maritime Company, supra, the American court applied the statute of limitations they shall be forever barred.
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
The case of Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 70 SCRA 244 (1976)
Panama, it has to give way to the law of the forum on prescription of actions.
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
However, the characterization of a statute into a procedural or substantive law becomes irrelevant when agreements and not the Eight-Hour Labor Law.
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
As noted by the Court: "That is precisely why petitioners did not make any reference as to the computation
statute" directs the state of the forum to apply the foreign statute of limitations to the pending claims based
for overtime work under the Eight-Hour Labor Law (Secs. 3 and 4, CA No. 494) and instead insisted that
on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing statutes," one
work computation provided in the collective bargaining agreements between the parties be observed. Since
form provides that an action barred by the laws of the place where it accrued, will not be enforced in the
the claim for pay differentials is primarily anchored on the written contracts between the litigants, the ten-
forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153
year prescriptive period provided by Art. 1144(1) of the New Civil Code should govern."
[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 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, . . . .
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 The court further explained:
of the Code of Civil Procedure (Paras, Philippine Conflict of Laws 104 [7th ed.]). 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
In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as
not so much because of Commonwealth Act No. 444, as amended but because the claim is demandable
it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.
right of the employees, by reason of the above-mentioned collective bargaining agreement.

The courts of the forum will not enforce any foreign claim obnoxious to the forum's public policy (Canadian
Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for filing "actions to enforce any
Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce the one-
cause of action under said law." On the other hand, Article 291 of the Labor Code of the Philippines provides
year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would
the prescriptive period for filing "money claims arising from employer-employee relations." The claims in
contravene the public policy on the protection to labor.
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.
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 contention of the POEA Administrator, that the three-year prescriptive period under Article 291 of the
The state affirms labor as a primary social economic force. It shall protect the rights of workers and
Labor Code of the Philippines applies only to money claims specifically recoverable under said Code, does
promote their welfare (Sec. 18).

70
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.
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,
71
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
72
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
73
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."
74
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.
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"
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).
WHEREFORE, all the three petitions are DISMISSED.
Haumschild v. Continental Casualty Co.
Action by the plaintiff Jacquelyn Haumschild against the defendants Le Roy Gleason, Continental Casualty
Company, and others to recover damages for personal injuries sustained as a result of a motor vehicle
accident.
The plaintiff and Gleason were married in Lincoln county, Wisconsin, on November 17, 1956, and lived
together as wife and husband until some time in March, 1957. During all of such time Gleason assumed in
good faith that the marriage was valid. On March 10, 1958, such marriage was annulled by decree of the
circuit court for Milwaukee county. At all times material to the instant action for personal injuries both the
plaintiff and Gleason have had their domicile in Wisconsin.
On December 19, 1956, the plaintiff was injured while riding in a motor truck being driven by Gleason, her
then supposed husband. Such accident occurred in California, and the instant action is the outgrowth of
such accident. In addition to Gleason and the insurer of the vehicle, the two owners of the truck were also
joined as defendants.
The defendants moved for summary judgment dismissing the action on the grounds that under California
law one spouse is immune from suit in tort by the other spouse, and that the plaintiff by her conduct is
estopped to assert the invalidity of her marriage to Gleason. The circuit court granted defendants' motion
and judgment was entered on August 26, 1958, dismissing the action. The plaintiff has appealed therefrom.
CURRIE, J.
This appeal presents a conflict-of-laws problem with respect to interspousal liability for tort growing out of
an automobile accident. Which law controls, that of the state of the forum, the state of the place of wrong,
or the state of domicile? Wisconsin is both the state of the forum and of the domicile while California is the
state where the alleged wrong was committed. Under Wisconsin law a wife may sue her husband in tort.
Under California law she cannot. Peters v. Peters (1909), 156 Cal. 32, 103 P. 219; Cubbison v.
Cubbison (1946), 73 Cal.App.2d 437, 166 P.2d 387; and Paulus v. Bauder (1951), 106 Cal.App.2d
589, 235 P.2d 422.
This court was first faced with this question in Buckeye v. Buckeye (1931), 203 Wis. 248, 234 N.W. 342.
In that case Wisconsin was the state of the forum and domicile, while Illinois was the state of the place of
wrong. It was there held that the law governing the creation and extent of tort liability is that of the place
where the tort was committed, citing Goodrich, Conflict of Laws (1st ed.), p. 188, sec. 92. From this premise
it was further held that interspousal immunity from tort liability necessarily is governed by the law of the
place of injury. This principle of conflict of laws has been consistently applied in all subsequent interspousal
actions in automobile accident cases except the recent case of Bodenhagen v. Farmers Mut. Ins.
Co. (1958), 5 Wis.2d 306, 92 N.W.2d 759, 95 N.W.2d 822, hereinafter discussed.
The case of Jaeger v. Jaeger (1952), 262 Wis. 14, 53 N.W.2d 740, sometimes has been mistakenly interpreted as
holding that the law of the domicile applied. However, as explained in Hansen v. Hansen (1956), 274 Wis. 262,
264, 80 N.W.2d 230, the law of Arizona, the place of wrong, was actually applied, but because the Arizona Married
Women's Act was similar to that of Wisconsin and the Arizona courts had not construed the same with reference to
tort liability, we presumed the Arizona judicial interpretation of such act would be the same as that of Wisconsin.
The discussion in the Jaeger Case with reference to the law of domicile was confined to the community-property
issue and must be so interpreted.
The principle enunciated in the Buckeye Case and followed in subsequent Wisconsin cases, that the law of
the place of wrong controls as to whether one spouse is immune from suit in tort by the other, is the
prevailing view in the majority of jurisdictions in this country. Anno. 22 A.L.R.2d 1248, 1251-1253, entitled,
75
"Conflict of laws as to right of action between husband and wife or parent and child." It is also the rule
adopted in Restatement, Conflict of Laws, p. 457, sec. 378, and p. 470, sec. 384 (2). However, criticism of
the rule of the Buckeye Case, by legal writers, some of them recognized authorities in the field of conflict
of laws, and recent decisions by the courts of California, New Jersey, and Pennsylvania, have caused us to
re-examine the question afresh.
In 1942, Prof. Walter Wheeler Cook of the Northwestern University Law School faculty published his book
entitled, "The Logical and Legal Bases of the Conflict of Laws." It was his conclusion that the law of the
domicile, and not the place of wrong, should be applied in determining whether a wife had capacity to sue
her husband in tort. Pages 248 to 250 and 345 to 346 of text. Also, in 1942, Max Rheinstein in an article
in 41 Michigan Law Review, 83, 97, advocated that the law of domicile should be applied in conflict-of-laws
situations to determine whether there is an immunity for tort grounded on family relationship. Ernst Rabel,
in his "The Conflict of Laws: A Comparative Study" (1945), pp. 322, 323, pointed out that in the civil-law
countries of western Europe prohibitions, which exclude lawsuits in tort between husband and wife, are
considered part of family law and, therefore, the law of the domicile governs and not the law of the place
of wrong.
The most-comprehensive treatment of the problem that we have discovered is the excellent 30-page article
in 15 University of Pittsburgh Law Review, 397, entitled, "Interspousal Liability for Automobile Accidents in
the Conflict of Laws: Law and Reason versus the Restatement," by Alan W. Ford, published in 1954. The
article contains a careful analysis of the American cases on the subject commencing with our own Buckeye
Case. The author's conclusion is stated as follows (p. 423):
"The lex fori and the lex loci delicti rules have already been criticized as inadequate. Between them, these
two rules encompass all of the American cases. To find a more-desirable alternative we must, therefore,
go beyond those cases. The foreign experience, briefly discussed above, is a useful starting point. As that
experience suggests, there is some logic in separating questions of status and tort, in determining the
incidents of the marital relationship by the family law, and the problems of tort by the law of torts. If a
conflicts problem is involved, there is no reason why both questions should be determined by the law of
torts. Instead, the two questions should remain separate, and problems of status or capacity could be
referred, by an appropriate conflicts rule, to the law of the place of the domicile."
Ford, in his article, cited four cases of interspousal immunity in which American courts have refused to
apply the law of the place of wrong to an automobile accident situation but instead applied their own law
of the forumIn all four cases one spouse sued the other in the state of domicile where there existed the
immunity from suit in tort in a situation where the accident had occurred in a state which had abolished
the immunity. The decisions were based on the ground that the public policy of the forum state forbade
one spouse suing the other in tort. The holdings in these four cases are highly significant because they are
inconsistent in result with the theory that the injured spouse possessed a vested right in the cause of action
which had accrued in the state where the alleged negligence occurred. Furthermore these cases are
authority for the principle that public policy may be a controlling factor to be considered by the court of the
forum state in determining which law it will apply in resolving a conflict-of-laws problem. This factor of
public policy is also acknowledged in Restatement, Conflict of Laws, pp. 9, 10, sec. 5, comment b.
Conversely, after New York had abolished the immunity, it refused to hold that it offended the public policy of the
forum state to apply the law of the state of wrong and deny recovery where the state in which the accident occurred
still preserved the immunity.
The first case to break the ice and flatly hold that the law of domicile should be applied in determining
whether there existed an immunity from suit for tort based upon family relationship is Emery v.
Emery (1955), 45 Cal.2d 421, 289 P.2d 218. In that case two unemancipated minor sisters sued their
unemancipated minor brother and their father to recover for injuries sustained in an automobile accident
that occurred in the state of Idaho, the complaint alleging wilful misconduct in order to come within the
provisions of the Idaho "guest" statute. All parties were domiciled in California. The opinion by Mr. Justice
TRAYNOR recognized that the California court, in passing on the question of whether an unemancipated
minor child may sue the parent or an unemancipated brother, had a choice to apply the law of the place of
wrong, of the forum, or of the domicile. It was held that the immunity issue was not a question of tort but
one of capacity to sue and be sued, and rejected the law of the place of injury as "both fortuitous and
irrelevant." In deciding whether to apply the law of the forum, or the law of the domicile, the opinion stated
this conclusion ( 45 Cal.2d 428, 289 P.2d 222):
"Although tort actions between members of the same family will ordinarily be brought in the state of the
family domicile, the courts of another state will in some cases be a more convenient forum, and thus the
question arises whether the choice-of-law rule should be expressed in terms of the law of the forum or
that of the domicile. We think that disabilities to sue and immunities from suit because of a family
relationship are more properly determined by reference to the law of the state of the family domicile.
That state has the primary responsibility for establishing and regulating the incidents of the family
relationship and it is the only state in which the parties can, by participation in the legislative processes,
effect a change in those incidents. Moreover, it is undesirable that the rights, duties, disabilities, and
immunities conferred or imposed by the family relationship should constantly change as members of the
family cross state boundaries during temporary absences from their home."
Since the decision in Emery v. Emery, supra, two other courts have held that, when a court is confronted
with a conflict-of-laws problem in order to resolve an issue of whether there is an immunity from suit for
tort based upon a family relationship, the law to be applied is that of the domicile state. Koplik v. C. P.
Trucking Corp. (1958), 27 N.J. 1, 141 A.2d 34; and Pittman v. Deiter (1957), 10 Pa. D. C. 2d 360. The
conclusion reached by the New Jersey supreme court in the Koplik Case, after first having rejected the law
of the place of injury as applicable to the immunity question, is stated succinctly as follows ( 27 N.J. 11,
141 A.2d 40):
"As a final word on the subject, we hold the view that even where an actual conflict-of-laws problem is
directly presented, it is sensible and logical to have disabilities to sue and immunities from suit arising
from the family relationship determined by reference to the law of the state of the family domicile when
the suit is brought in that state. Otherwise, the lex loci will be permitted to interfere seriously with a
status and a policy which the state of residence is primarily interested in maintaining." (Citing Emery v.
Emery, supra, and Ford's article in 15 University of Pittsburgh Law Review.)
Among recent law-review articles and notes approving the holding of one or more of the afore-cited three
cases, which have held that immunity from suit based on family relationship is a matter of family law rather
than tort law and should be governed by the law of the domicile, are: 31 Temple Law Quarterly, 117, 4
Wayne Law Review, 79, and 33 Indiana Law Journal, 297. All were published in 1958.
The two reasons most often advanced for the common-law rule, that one spouse may not sue the other,
are the ancient concept that husband and wife constitute in law but one person., and that to permit such
suits will be to foment family discord and strife. The Married Women's Acts of the various states have
effectively destroyed the "one person" concept thereby leaving as the other remaining reason for the
immunity the objective of preventing family discord. This is also the justification usually advanced for
denying an unemancipated child the capacity to sue a parent, brother, or sister. Clearly this policy reason
for denying the capacity to sue more properly lies within the sphere of family law, where domicile usually
controls the law to be applied, than it does tort law, where the place of injury generally determines the
substantive law which will govern. In making a choice between the law of the domicile and the law of the
forum, in those situations where the action is not brought in the state of the domicile, the afore-quoted
persuasive arguments advanced by the California and New Jersey courts in Emery v. Emery, supra,
and Koplik v. C. P. Trucking Corp., supra, in favor of applying the law of domicile to decide any issue of
incapacity to sue based upon family relationship, seem unanswerable.
Rather persuasive arguments were advanced before this court in the recent case of Schwenkhoff v. Farmers Mut.
Automobile Ins. Co. (1959), 6 Wis.2d 44, 93 N.W.2d 867, that other policy considerations require that such
immunity be abolished. However, in the opinion it was pointed out that the 1957 legislature had rejected a bill which
would have abolished the immunity, and that the problem was one for the legislature rather than the court.
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We are convinced that, from both the standpoint of public policy and logic, the proper solution of the
conflict-of-laws problem, in cases similar to the instant action, is to hold that the law of the domicile is the
one that ought to be applied in determining any issue of incapacity to sue based upon family relationship.
However, in order to adopt such a conflict-of-laws rule it will be necessary to overrule at least six prior
decisions of this court, and to partially overrule two others. If it ever is proper for a court to depart
from stare decisis, we scarcely can perceive of a more-justifiable situation in which to do so. In the first
place, the rule being discarded is one lying in the field of conflict of laws as applied to torts so that there
can hardly have been any action taken by the parties in reliance upon it. Secondly, strong reasons of public
policy exist for supplanting such rule by a better one which does not unnecessarily discriminate against the
citizens of our own state.
The most-compelling argument against taking such step is that it departs from the rule of the Restatement,
and disturbs the sought-after ideal of establishing some uniformity in the conflict-of-laws field. However,
as well appears from the cases hereinbefore cited, there is a clearly discernible trend away from the rule of
the Restatement in so far as it requires that the law of the place of wrong is to be applied in determining
questions of incapacity to sue based on family status. Furthermore, it must be recognized that, in the field
of the conflict of laws, absolutes should not be made the goal at the sacrifice of progress in furtherance of
sound public policy. The American Law Institute is now engaged in redrafting a revised Restatement of
Conflict of Laws. In such work of revision the question of whether the law of the domicile, rather than the
law of the place of wrong, should be applied, in resolving an issue of interfamily immunity from suit in tort,
will undoubtedly receive consideration.
After most careful deliberation, it is our considered judgment that this court should adopt the rule that,
whenever the courts of this state are confronted with a conflict-of-laws problem as to which law governs
the capacity of one spouse to sue the other in tort, the law to be applied is that of the state of domicile.
We, therefore, expressly overrule the cases of Buckeye v. Buckeye, supra; but we disapprove of the holding
therein that the law of place of injury controlled the issue of interspousal immunity.
It is interesting to note that, if the rule now adopted had been applied in the first six cited overruled
automobile accident cases, the result in four of such cases would have been to hold that there was no
interspousal immunity from suit, because the parties were domiciled in Wisconsin. Only in Forbes v. Forbes,
supra, and Bourestom v. Bourestom, supra, would immunity from suit have been found to exist if the law
of the domicile, as interpreted by this court, had been applied to such issue.
The Forbes Case is the only one of the eight where the place of wrong was Wisconsin. The parties were
nonresidents domiciled in Illinois. For the reasons hereinbefore set forth, it is apparent that Illinois rather
than Wisconsin was the state most concerned with the policy considerations of whether the plaintiff wife
had capacity to sue her husband. Furthermore, the plaintiff in the Forbes Case would not have fared worse
in Wisconsin than she would have in the state of domicile.
The Bourestom Case involved "forum shopping" which ought to be discouraged rather than tolerated. There
Oklahoma was the state of injury, Minnesota the state of domicile, and Wisconsin the state of forum. The
adoption of the new rule would not in theory close the doors of our courts to a nonresident spouse in such
a situation instituting suit in Wisconsin. However, the defendant spouse might have a good defense in bar
if he pleaded, and proved, the true state of domicile, and took the proper steps to bring before the trial
court the law of such state granting the immunity.
Perhaps a word of caution should be sounded to the effect that the instant decision should not be interpreted
as a rejection by this court of the general rule that ordinarily the substantive rights of parties to an action
in tort are to be determined in the light of the law of the place of wrong. This decision merely holds that
incapacity to sue because of marital status presents a question of family law rather than tort law.
Earlier in this opinion we made a brief reference to our recent decision in Bodenhagen v. Farmers Mut. Ins.
Co. In that case a wife domiciled in Wisconsin instituted suit against the insurer of her husband's automobile
to recover for injuries sustained in an automobile accident occurring in Illinois as a result of the alleged
negligence of the husband. We first looked to Illinois law to determine whether a cause of action existed in
favor of the plaintiff wife. The Illinois law was interpreted by us as holding that its interspousal immunity
against suit in tort barred only the remedy and not the cause of action, and, therefore, Wisconsin, as the
forum state, would not apply such law. A motion for rehearing was filed subsequent to our original decision
and the brief filed in support thereof caused this court to grant a rehearing. The reason for so doing was
that we entertained grave doubt as to whether we had reached the right conclusion in holding that under
Illinois law the interspousal immunity to suit in tort was procedural and not substantive. Because of the
result reached in the instant appeal we now find it unnecessary to pass on such last-mentioned point. In
an opinion this day handed down in such rehearing in the Bodenhagen Case we have affirmed the original
result, but have grounded the same upon the principle herein adopted, i.e., that the law of domicile
controls the issue of interspousal immunity.

The concurring opinion by Mr. Justice FAIRCHILD protests that we should not adopt the conflict-of-laws
rule, that interspousal immunity to suit in tort should be determined by the law of the domicile, because
this was not urged in the briefs or arguments of counsel. However, appellant's brief did cite and
summarize Emery v. Emery, supra, and on the oral argument appellant's counsel also cited Koplik v. C. P.
Trucking Corp., supra, in which two cases such rule was adopted by the California and New Jersey courts.
While the appellant's counsel did not request that we overrule Buckeye v. Buckeye, supra, and the
subsequent Wisconsin cases dealing with this particular conflict-of-laws problem, he did specifically seek to
have this court apply California's conflict-of-laws principle, that the law of the domicile is determinative of
interspousal capacity to sue, to this particular case. However, to do so would violate the well-recognized
principle of conflict of laws that, where the substantive law of another state is applied, there necessarily
must be excluded such foreign state's law of conflict of laws.

While Griswold in such article written in 1938 himself advocates the application of the renvoi doctrine in a case like
the instant one, he concedes that the overwhelming weight of authority is contra. Cook, in his "The Logical and
Legal Bases of the Conflict of Laws," pp. 248-250, expressly rejects Griswold's proposed solution and recommends
instead the adoption of the conflict-of-laws principle that the law of the domicile should be applied in the first
instance to a question of interspousal immunity to suit in tort.

The reason why the authorities on conflict of laws almost universally reject the renvoi doctrine (permitting
a court of the forum state to apply the conflict-of-laws principle of a foreign state) is that it is likely to
result in the court pursuing a course equivalent to a never-ending circle. For example, in the instant case,
if the Buckeye v. Buckeye line of Wisconsin cases is to be followed, the Wisconsin court first looks to the
law of California to see whether a wife can sue her husband in tort. California substantive law holds that
she cannot. However, California has adopted a conflict-of-laws principle that holds that the law of the
domicile determines such question. Applying such principle the court is referred back to Wisconsin law
because Wisconsin is the state of domicile. Again the court applies Wisconsin law and, under the prior
holdings of the Buckeye v. Buckeye line of authorities, would have to again refer to California law because
such line of cases does not recognize that the law of domicile has anything to do with interspousal immunity,
but holds that the law of the state of injury controls.

Wisconsin certainly should not adopt the much-criticized renvoi principle in order not to overrule
the Buckeye v. Buckeye line of cases, and still permit the plaintiff to recover. Such a result we believe would
contribute far more to produce chaos in the field of conflict of laws than to overrule the Buckeye v. Buckeye
line of cases and adopt a principle the soundness of which has been commended by so many reputable
authorities.

By the Court. — Judgment reversed, and cause remanded for further proceedings not inconsistent with this
opinion.

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