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18081 March 3, 1922 FACTS Cheong Boo, a native of China, died intestate in Zamboanga, Philippine Islands and left property worth nearly P100,000. The estate of the deceased was claimed by Cheong Seng Gee, an alleged legitimate child by a marriage contracted by Cheong Boo with Tan Dit in China in 1895. On the other hand, Mora Adong, the alleged lawful wife of the deceased who married him in 1896 in Basilan, Philippine Islands, and her daughters are also claiming as heirs of the decedent. The conflicting claims to the estate were ventilated in the Court of First Instance of Zamboanga. The trial judge reached the conclusion that the proof of the marriage of Tan Dit to the decedent was not sufficient. Cheong Seng Gee should share in the estate as a natural child. On the other hand, the trial judge reached the conclusion that the marriage between the Mora Adong and the deceased had been adequately proved, but, under the laws of the Philippine Islands, it could not be held to be a lawful marriage; thus, the daughters Payang and Rosalia would inherit as natural children. The order of the trial judge, following these conclusions, was that there should be a partition of the property of the deceased Cheong Boo between the natural children, Cheong Seng Gee, Payang, and Rosalia. Thus, both parties appealed. ISSUES 1. W/N the marriage between Tan Dit and the decedent is valid. 2. W/N the marriage between Mora and the decedent is valid considering that it is a Mohammedan marriage. RULING As to the first issue: The Court ruled that to establish a valid foreign marriage pursuant to this comity provision, it is first necessary to prove before the courts of the Islands the existence of the foreign law as a question of fact, and it is then necessary to prove the alleged foreign marriage by convincing evidence. In this case, the proof presented in Court did not sustain the validity of the marriage of Tan Bit and the decedent. The Court noted a strong inclination on the part of the Chinese witnesses, especially the brother of Cheong Boo, to protect the interests of the alleged son, Cheong Seng Gee, by overstepping the limits of truthfulness. The Court also noted that reliable witnesses stated that in the year 1895, when Cheong Boo was supposed to have been in China, he was in reality in Jolo, in the Philippine Islands. We are not disposed to disturb this appreciation of fact by the trial court. The immigration documents only go to show the relation of parent and child existing between the deceased Cheong Boo and his son Cheong Seng Gee and do not establish the marriage between the deceased and the mother of Cheong Seng Gee. Also, in the case at bar, there is no competent testimony as to what the laws of China in the Province of Amoy concerning marriage were in 1895. As in the Encarnacion case, there is lacking proof so clear, strong, and unequivocal as to produce a moral conviction of the existence of the alleged prior Chinese marriage. Substitute twenty-three years for forty years and the two cases are the same. Lastly, as to the testamentary rights of Cheong Seng Gee as an acknowledged natural child, such was not pronounced as an error since the oppositors failed to assigned it as an error and merely kept silence. As to the second issue: Yes. Marriage may be solemnized by either a judge of any court inferior to the Supreme Court, justice of the peace, or priest or minister of the Gospel of any denomination . . ." "Priest," according to the lexicographers, means one especially consecrated to the service of a divinity and considered as the medium through whom worship, prayer, sacrifice, or other service is to be offered to the being worshipped, and pardon, blessing, deliverance, etc., obtained by the worshipper, as a priest of Baal or of Jehovah; a Buddhist priest. "Minister of the Gospel" means all clergymen of every denomination and faith. A "denomination" is a religious sect having a particular name. A Mohammedan Iman is a "priest or minister of the Gospel," and Mohammedanism is a "denomination," within the meaning of the Marriage Law. Next, "No particular form for the ceremony of marriage is required, but the parties must declare, in the presence of the person solemnizing the marriage, that they take each other as husband and wife." The law is quite correct in affirming that no precise ceremonial is indispensable requisite for the creation of the marriage contract. The two essentials of a valid marriage are capacity and consent. The latter element may be inferred from the ceremony performed, the acts of the parties, and habit or repute. In this instance, there is no question of capacity. Nor do we think there can exist any doubt as to consent. While it is true that during the Mohammedan ceremony, the remarks of the priest were addressed more to the elders than to the participants, it is likewise true that the Chinaman and the Mora woman did in fact take each other to be husband and wife and did thereafter live together as husband and wife. In the case, it was shown by evidence that the decedent was married to the Mora Adong according to the ceremonies prescribed by the book on marriage of the Koran, by the Mohammedan Iman (priest) Habubakar. That a marriage ceremony took place is established by one of the parties to the marriage, the Mora Adong, by the Iman who solemnized the marriage, and by other eyewitnesses, one of whom was the father of the bride, and another, the chief of the rancheria, now a municipal councilor. The groom complied with Quranic law by giving to the bride a dowry of P250 in money and P250 in goods. From the marriage day until the death of Cheong Boo, twenty-three years later, the Chinaman and the Mora Adong cohabited as husband and wife. To them were born five children, two of whom, Payang and Rosalia, are living. Both in his relations with Mora Adong and with third persons during his lifetime, Cheong Boo treated Adong as his lawful wife. He admitted this relationship in several private and public documents. Thus, when different legal documents were executed, including decrees of registration, Cheong Boo stated that he was married to the Mora Adong while as late as 1918, he gave written consent to the marriage of his minor daughter, Payang. Thus, the Court ruled that the marriage was valid. The law of the Philippine Islands has long recognized the right of the people to the free exercise of religion. Various responsible officials have so oft announced the purpose of the Government not to interfere with the customs of the Moros, especially their religious customs. CAYETANO LIM AND MARCIANO LIM, v. THE INSULAR COLLECTOR OF CUSTOMS G.R. No. L-11759 March 16, 1917 FACTS & ISSUE The real question raised on this appeal is whether the Insular Collector of Customs may lawfully deny entry into the

Philippine Islands to two children aged 8 and 14 years, respectively, under and by authority of the Chinese Immigration, Laws, it appearing that the children arrived at the Port of Manila accompanied by and in the custody of their mother, a Filipino woman; that they were born in China, out of lawful wedlock; and that their father was a Chinese person. RULING The Court by analogous reasoning to that upon which the Supreme Court of the United States held that the wives and minor children of Chinese merchants domiciled in the United States may enter that country without certificates, these children must be held to be entitled to enter the Philippine Islands with their mother, for the purpose of taking up their residence here with her, it appearing that she is natural guardian, entitled to their custody and charged with their maintenance and education. (U. S. vs. Gue Lim, 176 U. S. 459.) The court is not aware of any Chinese law which differentiates the status of infant children, born out of lawful wedlock, from that of similar children under the laws in force in the Philippine Islands. Thus the court assumes that in China as well as in the Philippine Islands such children have the right to look to their mother for their maintenance and education, and that she is entitled to their custody and control in fulfilling the obligations towards them which are imposed upon her, not only by the natural impulses of love and affection, but also by the express mandate of the law. The court is of the opinion that the Chinese Immigration Laws should not be construed so as to exclude infant children of a Filipino mother, born out of lawful wedlock, seeking entrance to the Philippine Islands for the purpose of taking up their residence with her in her native land. We conclude, therefore, that, it appearing that the respondent Collector of Customs is detaining the petitioners under an erroneous construction of the immigration laws, and it appearing from the facts disclosed by the administrative proceedings that these children are entitled to admission into the Philippine Islands, the order entered in the court below should be reversed, and in lieu thereof an order should be entered directing the discharge of these children from the custody of the Insular Collector of Customs, with the costs in both instances, de officio. HASEGAWA v. KITAMURA 538 SCRA 26 (2007) FACTS Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing technical and management support in the infrastructure projects national permanently residing in the Philippines. The agreement provides that Kitamaru was to extend professional services to Nippon for a year. Nippon assigned Kitamaru to work as the project manager of the Southern Tagalog Access Road (STAR) project. When the STAR project was near completion, DPWH engaged the consultancy services of Nippon, this time for the detailed engineering & construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. Kitamaru was named as the project manger in the contract. Hasegawa, Nippons general manager for its International Division, informed Kitamaru that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up to the substantial completion of the STAR Project. Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted that Kitamarus contract was for a fixed term that had expired. Kitamaru then filed for specific performance & damages w/ the RTC of Lipa City. Nippon filed a MTD. Nippons contention: The ICA had been perfected in Japan & executed by & between Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The claim for improper pre-termination of Kitamarus ICA could only be heard & ventilated in the proper courts of Japan following the principles of lex loci celebrationis & lex contractus. The RTC denied the motion to dismiss. The CA ruled hat the principle of lex loci celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in issue. It held that the RTC was correct in applying the principle of lex loci solutionis. ISSUE W/N the subject matter jurisdiction of Philippine courts in civil cases for specific performance & damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the state of the most significant relationship rule, or forum non conveniens. RULING NO. In the judicial resolution of conflicts problems, 3 consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Jurisdiction & choice of law are 2 distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law w/c will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for one do not always provide the necessary significant contacts for the other. The question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment. In this case, only the 1st phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff/petitioner, over the defendant/respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing w/c is the subject of the litigation. In assailing the trial court's jurisdiction herein, Nippon is actually referring to subject matter jurisdiction. Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority w/c establishes and organizes the court. It is given only by law and in the manner prescribed by law. It is further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim, the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims. In the instant case, Nippon, in its MTD, does not claim that the RTC is not properly vested by law w/ jurisdiction to hear the subject controversy for a civil case for specific performance & damages is one not capable of pecuniary estimation & is properly cognizable by the RTC of Lipa City. What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci celebrationis and lex contractus, and the state of the most significant relationship rule. The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the law of the place of the ceremony or the law of the place where a contract is made. The doctrine of lex contractus or lex loci contractus means the law of the place where a contract is executed or to be performed. It controls the nature, construction, and validity of the contract and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly. Under the state of the most significant relationship rule, to ascertain what state law to apply to a dispute, the court should determine which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties. This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved. Since these 3 principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the 2nd phase, the choice of law. They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for. Further, Nippons premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, 1 st there should exist a conflict of laws situation requiring the application of the conflict of laws rules. Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of such law must be pleaded and proved. It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are 3 alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or apply the law of some other State or States. The courts power to hear cases and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by foreign sovereigns. Neither can the other ground raised, forum non conveniens, be used to deprive the RTC of its jurisdiction. 1st, it is not a proper basis for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include it as a ground. 2nd, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the RTC. In this case, the RTC decided to assume jurisdiction. 3rd, the propriety of dismissing a case based on this principle requires a factual determination; hence, this conflicts principle is more properly considered a matter of defense. RAYTHEON INTERNATIONAL, INC., v. STOCKTON ROUZIE 546 SCRA 555 February 26, 2008 FACTS Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing under the laws of the State of Connecticut, & Stockton Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired Rouzie as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. Rouzie secured a service contract w/ the Rep. of Phil. On behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption & mudflows. Subsequently, Rouzie filed before the NLRC a suit against BMSI and Rust International (Rust) for alleged nonpayment of commissions, illegal termination, & breach of employment contract. The Labor Arbiter ordered BMSI & Rust to pay Rouzies money claims. Upon appeal, the NLRC reversed & dismissed Rouzies complaint on the ground of lack of jurisdiction. Later on, Rouzie filed an action for damages before the RTC of La Union (where he was a resident) against Raytheon International. There he reiterated that he was not paid the commissions due him from the Pinatubo dredging project w/c he secured on behalf of BMSI. The complaint also averred that BMSI, RUST and Raytheon had combined & functioned as 1 company. Raytheon sought the dismissal of the complaint on the grounds of failure to state a cause of action & forum non conveniens & prayed for damages by way of compulsory counterclaim. The RTC denied Raytheons motion. The CA affirmed. Raytheons contention: The written contract between Rouzie & BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute, namely that the parties & witnesses involved are American corporations & citizens & the evidence to be presented is located outside the Philippines, that renders our local courts inconvenient forums. The foreign elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens. ISSUES (a) W/N the RTC had jurisdiction. (b) W/N the complaint should be dismissed on the ground of forum non conveniens. RULING (a) YES. On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed. Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law & by the material allegations in the complaint, irrespective of w/nthe plaintiff is entitled to recover all or some of the claims or reliefs sought therein. The case file was an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are w/in the jurisdiction of the RTC. As regards jurisdiction over the parties, the RTC acquired jurisdiction over Rouzi upon the filing of the complaint. On the other hand, jurisdiction over the person of Raytheon was acquired by its voluntary appearance in court. That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction & choice of law are 2 distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The choice of law stipulation will become relevant only when the

substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court. (b) NO. Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from seeking remedies elsewhere. Raytheons averments of the foreign elements are not sufficient to oust the RTC of its jurisdiction over the case and the parties involved. Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is w/c the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the courts desistance. MANILA HOTEL v. NLRC 343 SCRA 1 (2000) FACTS Marcelo Santos was employed as a printer in a printing press in Oman when he received a job offer from Palace Hotel in China for the same position and a higher pay. Santos remained in correspondence with Palace Hotel while he was still in employed in Oman. After negotiations, Santos accepted the offer and signed the contract with Palace Hotel (while still in Oman). His contract provided that he will receive a monthly salary of $900 and the employment contract should last for two years. After he resigned from his Oman job, he went back to the Philippines. Thereafter, he left for China. When Santos arrived in China, he signed an amended employment agreement (terms were not stated in the case), and the agreement was also signed by Mr. Schmidt of Palace Hotel and noted by the VP of Manila Hotel International Company Limited (MHICL). Santos commenced employment immediately. After a short vacation leave, Santos returned to Palace Hotel and he was informed that he was going to be terminated due to business reverses suffered by the company. After a month, he was indeed terminated and all his benefits were paid to him. When Santos came back to the Philippines, he filed a suit in the NLRC, naming Manila Hotel Corporation (MHC) and MHICL as defendants. To clarify the relationship of Palace Hotel and MHICL and MHC:


Incorpora tor of


Trains personnel of

Palace Hotel

The NLRC awarded damages to Santos, but MHC and MHICL assailed NLRCs jurisdiction over the case. ISSUE Did the NLRC have jurisdiction over the case at bar? RULING No. The main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the Philippines has with the case is that Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here. The employment contract. Respondent Santos was hired directly by the Palace Hotel, a foreign employer, through correspondence sent to the Sultanate of Oman, where respondent Santos was then employed. He was hired without the intervention of the POEA or any authorized recruitment agency of the government. Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort to; (2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine court has or is likely to have power to enforce its decision. The conditions are unavailing in the case at bar. NLRCs jurisdiction fails because of the following reasons: 1. Not Convenient. NLRC is not a convenient forum given that all the incidents of the case from the time of recruitment, to employment to dismissal occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines. Neither are they "doing business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and Mr. Henk are non-residents of the Philippines. No power to determine applicable law or determine the proper facts. Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made). Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of took place in Beijing, People's Republic of China. The NLRC was not in a position to determine whether the Tiannamen Square incident truly adversely affected operations of the Palace Hotel as to justify respondent Santos' retrenchment. 3. Principle of effectiveness, no power to execute decision. Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel. The Palace Hotel is a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person was not acquired.


This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither Philippine courts do not have power over an employment contract executed in a foreign country. If Santos were an "overseas contract worker", a Philippine forum, specifically the POEA, not the NLRC, would protect him. He is not an "overseas contract worker" a fact which he admits with conviction. PHILSEC. INVESTMENT v. CA 274 SCRA 102 (1997) FACTS

Ducat obtained two separate loans from Ayala and Philsec in the sum of $2.5M secured by shares of stock owned by Ducat. In order to facilitate the payment of the loans, 1488 Inc. undertook the obligation to pay by virtue of a Warranty Deed with a Vendors Lien. Through the latter, 1488 Inc. sold to Athona Holdings (Athona) a parcel of land in Texas while Philsec and Ayala extended a $2.5M loan to Athona to partially cover the value of the $2.8M lot. Athona executed a promissory note in favour of 1488 Inc. worth $.3M to complete the payment for the lot. After all these transactions, Ducat was released by Philsec and Ayala of his loan. Athona thereafter failed to pay the $.3M promissory note. 1488 Inc. sued Athona, Philsec and Ayala for the payment of the $.3M. The case was filed in Texas. While the Texas case was pending, Philsec filed a complaint to recover a sum of money with damages in a Makati RTC against Ducat. Ducat, on the other hand, filed and was granted a motion to dismiss on the basis of litis pendentia and forum non conveniens. The trial court also held that it had no jurisdiction over 1488 Inc. because the action was neither in rem nor quasi in rem, accompanied by the fact that the said defendant was a nonresident. The Court of Appeals affirmed the decision. ISSUES

1. 2.

Does a judgment in a US court bar actions to be instituted in Philippine courts? (i.e. Can the foreign judgment constitute res judicata?) Did CA err in dismissing the case based on the principle of forum non conveniens?


It depends. The foreign judgment cannot be given the effect of res judicata without giving the adverse party an opportunity to impeach it on grounds stated in Rule 39, 50 of the Rules of Court, to wit: want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. While this Court has given the effect of res judicata to foreign judgments in several cases, it was after the parties opposed to the judgment had been given ample opportunity to repel them on grounds allowed under the law. It is not necessary for this purpose to initiate a separate action or proceeding for enforcement of the foreign judgment. What is essential is that there is opportunity to challenge the foreign judgment, in order for the court to properly determine its efficacy. This is because in this jurisdiction, with respect to actions in personam, as distinguished from actions in rem, a foreign judgment merely constitutes prima facie evidence of the justness of the claim of a party and, as such, is subject to proof to the contrary. In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the judgment of the U.S. court as basis for declaring it res judicata or conclusive of the rights of private respondents. The proceedings in the trial court were summary. Neither the trial court nor the appellate court was even furnished copies of the pleadings in the U.S. court or apprised of the evidence presented thereat, to assure a proper determination of whether the issues then being litigated in the U.S. court were exactly the issues raised in this case such that the judgment that might be rendered would constitute res judicata.


Yes. First, a motion to dismiss is limited to the grounds under Rule 16, 1, which does not include forum non conveniens. The propriety of dismissing a case based on this principle requires a factual determination, hence, it is more properly considered a matter of defense. Second, while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the courts desistance. In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by private respondents in connection with the motion to dismiss. It failed to consider that Philsec is a domestic corporation and Ducat is a Filipino, and that it was the extinguishment of the latters debt which was the object of the transaction under litigation. The trial court arbitrarily dismissed the case even after finding that Ducat was not a party in the U.S. case. PIONEER CONCRETE PHILIPPINES v. TODARO 254 SCRA 153 June 8, 2007

FACTS Antonio D. Todaro (Todaro) filed with the RTC of Makati City, a complaint for Sum of Money and Damages with Preliminary Attachment against Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings, Inc. (PPHI), John G. McDonald (McDonald) and Philip J. Klepzig (Klepzig). Todaro alleged that PIL is a corporation duly organized and existing under the laws of Australia and is principally engaged in the ready-mix concrete and concrete aggregates business; PPHI is the company established by PIL to own and hold the stocks of its operating company in the Philippines; PCPI is the company established by PIL to undertake its business of ready-mix concrete, concrete aggregates and quarrying operations in the Philippines; McDonald is the Chief Executive of the Hongkong office of PIL; and, Klepzig is the President and Managing Director of PPHI and PCPI; Todaro has been the managing director of Betonval Readyconcrete, Inc. (Betonval), a company engaged in pre-mixed concrete and concrete aggregate production; he resigned from Betonval in February 1996; in May 1996, PIL contacted Todaro and asked him if he was available to join them in connection with their intention to establish a ready-mix concrete plant and other related operations in the Philippines; Todaro informed PIL of his availability and interest to join them; subsequently, PIL and Todaro came to an agreement wherein the former consented to engage the services of the latter as a consultant for two to three months, after which, he would be employed as the manager of PIL's ready-mix concrete operations should the company decide to invest in the Philippines; subsequently, PIL started its operations in the Philippines; however, it refused to comply with its undertaking to employ Todaro on a permanent basis. Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss the complaint on the grounds that the complaint states no cause of action, that the RTC has no jurisdiction over the subject matter of the complaint, as the same is within the jurisdiction of the NLRC, and that the complaint should be dismissed on the basis of the doctrine of forum non conveniens. RTC dismissed the MTD which was affirmed by the CA. ISSUE W/N the RTC should have dismissed the case on the basis of forum non conveniens due to a presence of a foreign element RULING NO. Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. In the case of Communication Materials and Design, Inc. vs. Court of Appeals, this Court held that "xxx [a] Philippine Court may assume jurisdiction over the case if it

chooses to do so; provided, that the following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is likely to have power to enforce its decision." The doctrine of forum non conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground. This Court further ruled that while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the courts desistance; and that the propriety of dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is more properly considered a matter of defense. Note: the case was also being dismissed on the ground that there was no cause of action but SC held that there was cause of action, to sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite or uncertain. And it was also argued in this case that jurisdiction is with the NLRC and not with the RTC. SC held it was with RTC, SC has consistently held that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the RTC that has jurisdiction. LAUREANO V. CA 324 SCRA 414 (2000) FACTS Laureano, Director of Flight Operations and Chief Pilot of Air Manila, applied for employment with Singapore Airlines [herein private respondent] through its Area Manager in Manila. He was then accepted. Sometime in 1982, Singapore Airline, hit by a recession, initiated cost-cutting measures. Seventeen (17) expatriate captains in the Airbus fleet were found in excess of the defendant's requirement. Consequently, defendant informed its expatriate pilots including plaintiff of the situation and advised them to take advance leaves. Realizing that the recession would not be for a short time, defendant decided to terminate its excess. It did not, however, immediately terminate it's A-300 pilots. It reviewed their qualifications for possible promotion to the B-747 fleet. Among the 17 excess Airbus pilots reviewed, twelve were found qualified. Unfortunately, Laureano was not one of the twelve. Laureano instituted a case for illegal dismissal before the Labor Arbiter. Singapore Airline moved to dismiss on jurisdictional grounds. Before said motion was resolved, the complaint was withdrawn. Thereafter, Laureano filed the instant case for damages due to illegal termination of contract of services before the RTC. CA reversed the decision of the RTC, it held that the action has already prescribe, the prescriptive period was 4 years and action was filed beyond the prescriptive period. ISSUES (a) W/N Philippine law must be applied and not Singaporean law. (b) W/N action has already prescribe. RULING (a) Philippine law must be applied. SC quoted the findings of the RTC, it says: "Neither can the Court determine whether the termination of the plaintiff is legal under the Singapore Laws because of the defendant's failure to show which specific laws of Singapore Laws apply to this case. As substantially discussed in the preceding paragraphs, the Philippine Courts do not take judicial notice of the laws of Singapore. The defendant that claims the applicability of the Singapore Laws to this case has the burden of proof. The defendant has failed to do so. Therefore, the Philippine law should be applied." Also Respondent Court of Appeals acquired jurisdiction when defendant filed its appeal before said court. On this matter, respondent court was correct when it barred defendant-appellant below from raising further the issue of jurisdiction. (b) YES. Neither Article 1144 nor Article 1146 of the Civil Code is here pertinent. What is applicable is Article 291 of the Labor Code. n the light of Article 291, aforecited, we agree with the appellate court's conclusion that petitioner's action for damages due to illegal termination filed again on January 8, 1987 or more than four (4) years after the effective date of his dismissal on November 1, 1982 has already prescribed. Where the money claim was based on a written contract, the Collective Bargaining Agreement, the Court held that the language of Art. 291 of the Labor Code does not limit its application only to 'money claims specifically recoverable under said Code' but covers all money claims arising from an employee-employer relations"

WILD VALLEY SHIPPING CO., LTD. v. COURT OF APPEALS and PHILIPPINE PRESIDENT LINES INC. 342 SCRA 213 October 6, 2000 FACTS Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore. Upon the completion of the loading and when the vessel was ready to leave port, Mr. Ezzar del Valle Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour authorities in Puerto Ordaz to navigate the Philippine Roxas through the Orinoco River. He was asked to pilot the said vessel on February 11, 1988 boarding it that night at 11:00 p.m. Captain of the Philippine Roxas, Captain Nicandro Colon, was at the bridge together with the pilot Vasquez, the vessel's third mate, and a helmsman when the vessel left the port at 1:40 a.m. on February 12, 1988. Captain Colon left the bridge when the vessel was under way. The Philippine Roxas experienced some vibrations. It was then that the watch officer called the master to the bridge. At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River, thus obstructing the ingress and egress of vessels. As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day. Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of Manila against Philippine President Lines, Inc. and Pioneer Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the

form of unearned profits, and interest. The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley Shipping Co., Ltd. The dispositive portion thereof reads as follows: Both parties appealed: the petitioner appealing the non-award of interest with the private respondent questioning the decision on the merits of the case. After the requisite pleadings had been filed, the Court of Appeals judgment is reversed ISSUE Whether or not Venezuelan law is applicable to the case at bar RULING It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. A distinction is to be made as to the manner of proving a written and an unwritten law. The former falls under Section 24, Rule 132 of the Rules of Court, as amended, the entire provision of which is quoted hereunder. Where the foreign law sought to be proved is "unwritten," the oral testimony of expert witnesses is admissible, as are printed and published books of reports of decisions of the courts of the country concerned if proved to be commonly admitted in such courts. Section 24 of Rule 132 of the Rules of Court, as amended, provides: "Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office." (Underscoring supplied) The court has interpreted Section 25 (now Section 24) to include competent evidence like the testimony of a witness to prove the existence of a written foreign law. For a copy of a foreign public document to be admissible, the following requisites are mandatory: (1) It must be attested by the officer having legal custody of the records or by his deputy; and (2) It must be accompanied by a certificate by a secretary of the embassy or legation, consul general, consul, vice consular or consular agent or foreign service officer, and with the seal of his office. The latter requirement is not a mere technicality but is intended to justify the giving of full faith and credit to the genuineness of a document in a foreign country. It is not enough that the Gaceta Oficial, or a book published by the Ministerio de Comunicaciones of Venezuela, was presented as evidence with Captain Monzon attesting it. It is also required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain Monzon, who attested the documents, is the officer who had legal custody of those records made by a secretary of the embassy or legation, consul general, consul, vice consul or consular agent or by any officer in the foreign service of the Philippines stationed in Venezuela, and authenticated by the seal of his office accompanying the copy of the public document. No such certificate could be found in the records of the case. With respect to proof of written laws, parol proof is objectionable, for the written law itself is the best evidence. According to the weight of authority, when a foreign statute is involved, the best evidence rule requires that it be proved by a duly authenticated copy of the statute. There being no contractual obligation, the private respondent is obliged to give only the diligence required of a good father of a family in accordance with the provisions of Article 1173 of the New Civil Code, thus: The law does provide that the master can countermand or overrule the order or command of the harbor pilot on board. The master of the Philippine Roxas deemed it best not to order him (the pilot) to stop the vessel, mayhap, because the latter had assured him that they were navigating normally before the grounding of the vessel. Moreover, the pilot had admitted that on account of his experience he was very familiar with the configuration of the river as well as the course headings, and that he does not even refer to river charts when navigating the Orinoco River. AUGUSTO BENEDICTO SANTOS III v. NORTHWEST ORIENT AIRLINES and COURT OF APPEALS 210 SCRA 256 JUNE 23 1992 FACTS This case involves the Proper interpretation of Article 28(1) of the Warsaw Convention, reading as follows: Art. 28. (1) An action for damage must be brought at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or of his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination. The petitioner is a minor and a resident of the Philippines purchased from NOA a round-trip ticket in San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20, 1986. No date was specified for his return to San Francisco. On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco airport for his scheduled departure to Manila. Despite a previous confirmation and re-confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. He therefore had to be wait-listed. Petitioner sued NOA for damages in the RTC. NOA moved to dismiss the complaint on the ground of lack of jurisdiction. it contended that the complaint could be instituted only in the territory of one of the High Contracting Parties, before: 1. the court of the domicile of the carrier; 2. the court of its principal place of business; 3. the court where it has a place of business through which the contract had been made; 4. the court of the place of destination.

The private respondent contended that the Philippines was not its domicile nor was this its principal place of business. Neither was the petitioner's ticket issued in this country nor was his destination Manila but San Francisco in the United States. ISSUE (1) The constitutionality of Article 28(1) of the Warsaw Convention; and (2) The jurisdiction of Philippine courts over the case. RULING On the issue of Constitutionality: The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules Relating to International Transportation by Air, otherwise known as the Warsaw Convention. It took effect on February 13, 1933. The Convention was concurred in by the Senate, through its Resolution No. 19, on May 16, 1950. The Philippine instrument of accession was signed by President Elpidio Quirino on October 13, 1950, and was deposited with the Polish government on November 9, 1950. The Convention became applicable to the Philippines on February 9, 1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201, declaring our formal adherence thereto. "to the end that the same and every article and clause thereof may be observed and fulfilled in good faith by the Republic of the Philippines and the citizens thereof." The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country. On the issue of Jurisdiction: By its own terms, the Convention applies to all international transportation of persons performed by aircraft for hire. International transportation is defined in paragraph (2) of Article 1 as follows: (2) For the purposes of this convention, the expression "international transportation" shall mean any transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or a transshipment, are situated [either] within the territories of two High Contracting Parties . . . Since the flight involved in the case at bar is international, the same being from the United States to the Philippines and back to the United States, it is subject to the provisions of the Warsaw Convention, including Article 28(1), which enumerates the four places where an action for damages may be brought. Whether Article 28(1) refers to jurisdiction or only to venue is a question over which authorities are sharply divided. While the petitioner cites several cases holding that Article 28(1) refers to venue rather than jurisdiction, there are later cases cited by the private respondent supporting the conclusion that the provision is jurisdictional. In other words, where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept. Jurisdiction in the international sense must be established in accordance with Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular court must be established pursuant to the applicable domestic law. Only after the question of which court has jurisdiction is determined will the issue of venue be taken up. This second question shall be governed by the law of the court to which the case is submitted. Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article 28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business where the contract was made, and the place of destination, the article clearly meant that these three other places were not comprehended in the term "domicile." NATIONAL RENTAL v. SZUKHENT 375 U.S. 311 (1964) FACTS Petitioner, a corporation with its principal place of business in New York, sued respondents, residents of Michigan, in New York, claiming that respondents had defaulted in payments due under a farm equipment lease. The last paragraph of the contract provided that "the Lessee hereby designates Florence Weinberg as agent for the purpose of accepting service of any process within the State of New York." The respondents were not acquainted with Florence Weinberg, and she had not expressly undertaken to transmit notice to them. The Marshal delivered two copies of the summons and complaint to Florence Weinberg. That same day she mailed the summons and complaint to the respondents, together with a letter stating that the documents had been served upon her as the respondents' agent. The petitioner itself also notified the respondents by certified mail of the service of process upon Florence Weinberg. The District Court quashed service of the summons and complaint, holding that, although Florence Weinberg had promptly notified the respondents of the service of process and mailed copies of the summons and complaint to them, the lease agreement itself had not explicitly required her to do so, and there was therefore a "failure of the agency arrangement to achieve intrinsic and continuing reality." The Court of Appeals affirmed. ISSUE Whether the person upon whom the summons and complaint were served was "an agent authorized by appointment" to receive the same, so as to subject the respondents to the jurisdiction of the federal court in New York RULING Yes. We need not and do not in this case reach the situation where no personal notice has been given to the defendant. Since the respondents did in fact receive complete and timely notice of the lawsuit pending against them, no due process claim has been made. The question presented here is whether a party to a private contract may appoint an agent to receive service of process within the meaning of Federal Rule of Civil Procedure 4 (d) (1), where the agent is not personally known to the party, and where the agent has not expressly undertaken to transmit notice to the party. The purpose underlying the contractual provision here at issue seems clear. The clause was inserted by the petitioner and agreed to by the respondents in order to assure that any litigation under the lease should be conducted in the State of New York. Florence Weinberg's prompt acceptance and transmittal to the respondents of the summons and complaint pursuant to the

authorization was itself sufficient to validate the agency, even though there was no explicit previous promise on her part to do so. We deal here with a Federal Rule, applicable to federal courts in all 50 States. But even if we were to assume that this uniform federal standard should give way to contrary local policies, there is no relevant concept of state law which would invalidate the agency here at issue. In Michigan, where the respondents reside, the statute which validates service of process under the circumstances present in this case contains no provision requiring that the appointed agent expressly undertake to notify the principal of the service of process. Similarly, New York law, which it was agreed should be applicable to the lease provisions, does not require any such express promise by the agent in order to create a valid agency for receipt of process. It is argued, finally, that the agency sought to be created in this case was invalid because Florence Weinberg may have had a conflict of interest. This argument is based upon the fact that she was not personally known to the respondents at the time of her appointment and upon a suggestion in the record that she may be related to an officer of the petitioner corporation. But such a contention ignores the narrowly limited nature of the agency here involved. Florence Weinberg was appointed the respondents' agent for the single purpose of receiving service of process. An agent with authority so limited can in no meaningful sense be deemed to have had an interest antagonistic to the respondents, since both the petitioner and the respondents had an equal interest in assuring that, in the event of litigation, the latter be given that adequate and timely notice which is a prerequisite to a valid judgment. Dissent: The record on the motion to quash shows that the Szukhents had never had any dealings with Mrs. Weinberg, their supposed agent. They had never met, seen, or heard of her. She did not sign the lease, was not a party to it, received no compensation from the Szukhents, and undertook no obligation to them. In fact, she was handpicked by the New York company to accept service of process in any suits that might thereafter be filed by the company. Only after this suit was brought was it reluctantly revealed that Mrs. Weinberg was in truth the wife of one of the company's officers. I disagree with that holding, believing that: (1) Whether Mrs. Weinberg was a valid agent upon whom service could validly be effected under Rule 4 (d) (1) should be determined under New York law and that we should accept the holdings of the federal district judge and the Court of Appeals sitting in New York that under that State's law the purported appointment of Mrs. Weinberg was invalid and ineffective. No federal statute has undertaken to regulate the sort of agency transaction here involved. It is to the law of New York - the State where this action was brought in federal court, the place where the contract was deemed by the parties to have been made, and the State the law of which was specified as determining rights and liabilities under the contract - that we should turn to test the validity of the appointment. I agree with the district judge that this agency is invalid under the laws of New York. The highest state court that has passed on the question has held that, because of New York statutes, the designation by a nonresident of New York of an agent to receive service of process is ineffective; the court, in denying an order for interpleader, held that only residents of New York can make such an appointment, and even then only in compliance with the terms of the controlling statute.; (2) if, however, Rule 4 (d) (1) is to be read as calling upon us to formulate a new federal definition of agency for purposes of service of process, I think our formulation should exclude Mrs. Weinberg from the category of an "agent authorized by appointment . . . to receive service of process." If Rule 4 (d) (1) is to be read as requiring this Court to formulate new federal standards of agency to be resolved in each case as a federal question, rather than as leaving the question to state law, I think the standards we formulate should clearly and unequivocally denounce as invalid any alleged service of process on nonresidents based on purported agency contracts having no more substance than that naming Mrs. Weinberg. State courts in general quite properly refuse to uphold service of process on an agent who, though otherwise competent, has interests antagonistic to those of the person he is meant to represent. INTERNATIONAL SHOE CO. v. WASHINGTON 326 U.S. 310 (1945) FACTS 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 11 to 13 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 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 appellants 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 appellants salesmen, resulting in a continuous flow of appellants 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 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 salesmens display of samples sometimes in permanent display rooms, and the salesmens residence within the state, continued over a period of years, all resulting in substantial volume of merchandise regularly shipped by appellant to purchasers within the state. 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.... 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.

ISSUES 1. Does the Washington court have jurisdiction over International Shoe? 2. Does International Shoe have presence in Washington? RULING Historically, the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendants person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. 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 should 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, 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 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 corporations agent within the state which courts will deem to be sufficient to satisfy the demands of due process. Those demands may be met by such contacts of the corporation with the state of the forum as to make it reasonable, in the context of the 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. 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, 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 corporations behalf are not enough to subject it to suit on cause of action unconnected with the activities. 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. 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. We are likewise unable to conclude that the service of the process within the state upon an agent whose activities establish appellants 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. Appellant having rendered itself amendable 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 appellants salesmen within the state. For Washington has made one of those activities, which taken together establish appellants presence there for purposes of suit, the taxable event by which the sate brings appellant within the reach of its taxing power. The stat 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.

PERKINS v. BENGUET CONSOLIDATED MINING 342 US 437, 72 S. Ct. 413 96 (1952) FACTS Perkins, a non-resident of Ohio, filed two in personam cases in an Ohio court. Among those he sued is Benguest Consolidated (Benguet), a sociedad anima organized in the Philippines where it owns and operates gold and silver mines. Perkins sued to collect an amount in dividends and damages she claimed to be due her as a stockholder of Benguet. Benguet has been carrying on in Ohio a continuous and systematic, but limited, part of its general business. Its president, while engaged in doing such business in Ohio, has been served with summons in this proceeding. Benguet, for its part, sought to quash the summons served upon their president. The courts have sustained the motions to quash. ISSUE Whether the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States precludes Ohio from subjecting a foreign corporation to the jurisdiction of its courts in this action in personam RULING No. Ohio is free to decline or take jurisdiction over the corporation. To begin with, Benguet is a foreign corporation according to Ohio law. The Federal Constitution does not compel Ohio to open its courts to such a case, even though Ohio permits a complainant to maintain a proceeding in personam in its courts against a properly served nonresident natural person to enforce a cause of action which does not arise out of anything done within the State. As a matter of federal due process, the business done by the corporation in Ohio was sufficiently substantial and of such a nature as to permit Ohio to entertain the cause of action against it, though the cause of action arose from activities entirely distinct from its activities in Ohio. MCGEE v. INTERNATIONAL LIFE INSURANCE 355 US 220 (1957)

FACTS Lulu McGee, was the mother of Lowell Franklin who purchased a life insurance policy from Arizona-based Empire Mutual Insurance Company that named McGee as the beneficiary. In 1948, International Life Insurance Co. ("International"), a Texas corporation, agreed to assume Empire's insurance obligations. International mailed a reinsurance certificate to the Franklin in California, offering to insure him according to the terms of the Empire policy. Franklin accepted the offer and paid premiums from California until his death in 1950. When Franklin's mother tried to collect on the policy, the insurance company refused to pay, claiming Franklin had committed suicide. McGee brought suit in California, and sought to enforce it in Texas. The Texas Court, however, refused to enforce the judgment by the California Court for the collection of the proceeds of the life insurance policy. Note that International had conducted no other business in California except for this one policy. ISSUE Can California exercise jurisdiction over a International, whose contacts with that state are limited to a single act or contract? RULING Yes. A state may exercise jurisdiction over a party whose contacts with that state consist of only a single act, provided that that act is what gave rise to the claim for which jurisdiction is being sought, and was deliberately directed toward the state. The court relied on the fact that the suit was based on "substantial connection" with California, particularly the facts that the contract was delivered to McGee's son while he was a resident of California, International continued to maintain a financial relationship with McGee's son by collecting his premium payments, and that the policy holder was a resident of the state when he died. The court also gave weight to California's interest in protecting its residents as consumers of insurance policies, and validated the long arm statute which gave the California courts their power of jurisdiction over out of state companies by declaring that California had a "manifest interest in providing effective means of redress for its residents. WORLDWIDE VOLKSWAGEN CORPORATION v. CHARLES WOODSON 444 U.S. 286 (1980) FACTS Spouses Harry and Kay Robinson, residents of New York, who had purchased a car from Seaway Volkswagen, a retailer in New York, brought a suit against the retailer and its wholesale distributor, in the District Court for Creek county, Oklahoma. The Robinsons claimed that the injuries which they suffered in a car accident in Oklahoma were caused by the defective design and placement of their automobiles gas tank and fuel system. Seaway Volkswagen and Worldwide Volkswagen both incorporated and doing business in New York, asserted that Oklahomas exercise of jurisdiction over them would violate the limitations on state jurisdiction imposed by the due process clause. Seaway and Worldwide Volkswagen sought a writ of prohibition in the Supreme Court of Oklahoma to prevent the trial judge from exercising in personam jurisdiction over them. The writ was denied on the ground that personal jurisdiction was authorized by Oklahomas long-arm statute allowing an Oklahoma courts exercise of in personam jurisdiction over a tortfeasor who causes injury in Oklahoma by an act or omission outside Oklahoma if he regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in Oklahoma. ISSUE W/N Oklahoma has jurisdiction over the controversy? NONE RULING As has long been settled, and as we reaffirm today, a state court may exercise personal jurisdiction over a non-resident defendant only as long as there exist minimum contacts between the defendant and the forum state. The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system. The protection against inconvenient litigation is typically described in terms of reasonableness or fairness. We have said that the defendants contacts with the forum State must be such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. Thus, the Due Process Clause does not contemplate that a state may make binding a judgement in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations. Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum state is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgement. Apply these principles to the case at hand, we find in the record before us a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma. It is argued, however that because an automobile is mobile by its very design and purpose it was foreseeable that the Robinsons Audi would cause injury in Oklahoma. Yet foreseeability alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause. Because we find that petitioners have no contacts, ties or relations with the State of Oklahoma the judgement of the Supreme Court of Oklahoma is reversed.

CALDER v. JONES 465 U.S. 783 FACTS ISSUE RULING KEETON v. HUSTLER MAGAZINE, INC. 465 U.S. 770 (1984) FACTS Keeton (NY) brought a libel suit against Hustler Magazine (Ohio) in New Hampshire, alleging jurisdiction by reason of diversity of citizenship. Keetons only connection with New Hampshire is the circulation there of a magazine that she assists in producing. Hustler Magazines contacts with New Hampshire consist of monthly sales of some 10,000 to 15,000 copies of its nationally published magazine. ISSUE Whether or not New Hampshire has jurisdiction RULING YES. Hustler Magazines regular circulation of magazines in the forum State is sufficient to support an assertion of jurisdiction in a libel action based on the contents of the magazine. The fact that Keeton has very limited contacts in New Hampshire does not defeat jurisdiction, since a plaintiff is not required to have minimum contacts with the forum State before that State is permitted to assert personal jurisdiction over a non-resident defendant. Here, where Hustler Magazine has continuously and deliberately exploited the New Hampshire market, it must reasonably anticipate being haled into court there in a libel action based on the contents of its magazine, and since Hustler Magazine can be charged with knowledge of the single publication rule, it must anticipate that such a suit will seek nationwide damages. There is no unfairness in calling Hustler Magazine to answer for the contents of its national publication wherever a substantial number of copies are regularly sold and distributed. ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 480 U.S. 102 (1987) FACTS Asahi Metal Industry Co. was an international corporation based in Japan, which manufactured a valve used in the manufacture of motorcycle wheels. These valves were bought by Cheng Shin Rubber Industrial Co., a Taiwanese distributor. One of these valves was alleged to have failed, causing an accident in the State of California. As a result of the accident the driver of the motorcycle sustained serious injuries and his wife, who was riding on the motorcycle as a passenger, was killed. The accident victim sued Cheng Shin in a California state court, and Cheng Shin in turn filed a thirdparty complaint (impleader) seeking indemnification from Asahi. Asahi contested California's personal jurisdiction over Asahi, but the California courts found jurisdiction based on Asahi's alleged awareness of the international distribution of its products. Specifically, Asahi moved to quash Cheng Shin's summons. The California Superior Court and the California Supreme Court both denied the motion, leading Asahi to appeal to the United States Supreme Court. ISSUE Does Asahi have minimum contacts with California such that the exercise of personal jurisdiction would not offend traditional notions of fair play and substantive justice? NO RULING The Supreme Court applied a five-factor test in determining whether "traditional notions of fair play" would permit the assertion of in personam jurisdiction over a foreign (meaning out-of-state) defendant: 1. 2. 3. 4. 5. What is the burden on the defendant? What are the interests of the forum state in the litigation? What is the interest of the plaintiff in litigating the matter in that state? Does the allowance of jurisdiction serve interstate efficiency? Does the allowance of jurisdiction serve interstate policy interests?

The Court finds that fair play would be violated because: The burden on the defendant is severe because the corporation would have to travel from Japan to California and defend itself under the laws of a foreign country.

The plaintiff is not a California resident, and thus Californias interests in the case are diminished. California can enforce its interest in having safe products in its state indirectly by applying pressure to direct suppliers of goods to California, who in turn will apply commercial pressure to their suppliers. Cheng Shin has not shown that California is a more convenient forum than Japan or Taiwan in which to pursue its claim. Jurisdiction is not necessarily in the best interests of the other countries involved. Jurisdiction is not warranted by any international policy considerations, if they even exist.

Because an assertion of jurisdiction would disturb the "traditional notions of fair play and substantial justice," the decision of the California Supreme Court was reversed and the judgment of California Court of Appeal (California's intermediate appellate court) was effectively reinstated.


ISSUE RULING COMPUSERVE, INCORPORATED v. PATTERSON No. 95-3452, July 22, 1996 FACTS CompuServe is a computer information service headquartered in Columbus, Ohio. It contracts with individual subscribers, such as the defendant, to provide, inter alia, access to computing and information services via the Internet. Defendant, Richard Patterson, is a resident of Houston, Texas who claims never to have visited Ohio. He subscribed to CompuServe, and he also placed items of "shareware" on the CompuServe system for others to use and purchase. When he became a shareware "provider," Patterson entered into a "Shareware Registration Agreement" ("SRA") with CompuServe. The SRA incorporates by reference two other documents: the CompuServe Service Agreement ("Service Agreement") and the Rules of Operation, both of which are published on the CompuServe Information Service. Both the SRA and the Service Agreement expressly provide that they are entered into in Ohio, and the Service Agreement further provides that it is to "be governed by and construed in accordance with" Ohio law. The SRA asks a new shareware "provider" like Patterson to type "AGREE" at various points in the document, "[i]n recognition of your online agreement to all the above terms and conditions." Thus, Patterson's assent to the SRA was first manifested at his own computer in Texas, then transmitted to the CompuServe computer system in Ohio. From 1991 through 1994, Patterson electronically transmitted 32 master software files to CompuServe. These files were stored in CompuServe's system in Ohio, and they were displayed in different services for CompuServe subscribers, who could "download" them into their own computers and, if they chose to do so, pay for them. Patterson's software product was, apparently, a program designed to help people navigate their way around the larger Internet network. CompuServe began to market a similar product, however, with markings and names that Patterson took to be too similar to his own. Thus, in December of 1993, Patterson notified CompuServe (appropriately via "E-mail" message) that the terms "WinNAV," "Windows Navigator," and "FlashPoint Windows Navigator" were common law trademarks which he and his company owned. Patterson stated that CompuServe's marketing of its product infringed these trademarks, and otherwise constituted deceptive trade practices. CompuServe changed the name of its program, but Patterson continued to complain. After Patterson demanded at least $100,000 to settle his potential claims, CompuServe filed this declaratory judgment action in the federal district court for the Southern District of Ohio, relying on the court's diversity subject matter jurisdiction. Patterson responded pro se with a consolidated motion to dismiss on several grounds, including lack of personal jurisdiction. Patterson also submitted a supporting affidavit, in which he denied jurisdictional facts, including his having ever visited Ohio. ISSUE Did CompuServe make a prima facie showing that Patterson's contacts with Ohio, which have been almost entirely electronic in nature, are sufficient, under the Due Process Clause, to support the district court's exercise of personal jurisdiction over him? RULING Yes. Personal jurisdiction may be either general or specific in nature, depending on the nature of the contacts in a given case. In the instant case, because CompuServe bases its action on Patterson's act of sending his computer software to Ohio for sale on its service, CompuServe seeks to establish such specific personal jurisdiction over Patterson. The crucial federal constitutional inquiry is whether, given the facts of the case, the nonresident defendant has sufficient contacts with the forum state that the district court's exercise of jurisdiction would comport with "traditional notions of fair play and substantial justice." This court has employed three criteria to make this determination: First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum to make the exercise of jurisdiction over the defendant reasonable. "Purposeful availment" requirement: The question of whether a defendant has purposefully availed itself of the privilege of doing business in the forum state is "the sine qua non for in personam jurisdiction." The "purposeful availment" requirement is satisfied when the defendant's contacts with the forum state "proximately result from actions by the defendant himself that create a substantial connection' with the forum State," and when the defendant's conduct and connection with the forum are such that he "should reasonably anticipate being haled into court there." This requirement does not, however, mean that a defendant must be physically present in the forum state. There is no question that Patterson himself took actions that created a connection with Ohio in the instant case. He subscribed to CompuServe, and then he entered into the Shareware Registration Agreement when he loaded his software onto the CompuServe system for others to use and, perhaps, purchase. Once Patterson had done those two things, he was on notice that he had made contracts, to be governed by Ohio law, with an Ohio-based company. Then, he repeatedly sent his computer software, via electronic links, to the CompuServe system in Ohio, and he advertised that software on the CompuServe system. Moreover, he initiated the events that led to the filing of this suit by making demands of CompuServe via electronic and regular mail messages. The real question is whether these connections with Ohio are "substantial" enough that Patterson should reasonably have anticipated being haled into an Ohio court. Patterson entered into a written contract with CompuServe which provided for the application of Ohio law, and he then purposefully perpetuated the relationship with CompuServe via repeated communications with its system in Ohio. Patterson was a third-party provider of software who used CompuServe, which is located in Columbus, to market his wares in Ohio and elsewhere. This was a relationship intended to be ongoing in nature; it was not a "one-shot affair." Patterson sent software to CompuServe repeatedly for some three years, and the record indicates that he intended to continue marketing his software on CompuServe. Cause of action arising from Patterson's activities in Ohio Requirement: The cause of action in the instant case concerns allegations of trademark or trade name infringement and unfair competition. Patterson's contacts with Ohio are certainly related to the operative facts of that controversy. He used that system to advertise his software and sell it. The proceeds of those sales flowed to him through Ohio. It is uncontroverted that Patterson placed, marketed, and sold his software only on Ohio-based CompuServe. Thus, any common law trademark or trade name which Patterson might have in his product would arguably have been created in Ohio, and any violation of those alleged trademarks or trade names by CompuServe would have occurred, at least in part, in Ohio.

The reasonableness requirement: A court must consider several factors in this context, including "the burden on the defendant, the interest of the forum state, the plaintiff's interest in obtaining relief, and the interest of other states in securing the most efficient resolution of controversies." It may be burdensome for Patterson to defend a suit in Ohio, but he knew when he entered into the Shareware Registration Agreement with CompuServe that he was making a connection with Ohio, and presumably he hoped that connection would work to his benefit. Further, Ohio has a strong interest in resolving a dispute involving an Ohio company, which will involve the Ohio law on common law trademarks and trade names. CompuServe alleges that more than $10 million could be at stake in this case, and it also contends that this case will have a profound impact on its relationships with other "shareware" providers like Patterson, who also directed their activities toward Ohio-based CompuServe. RUSH vs. SAVCHUK 444 US 320 (1980) FACTS While a resident of Indiana, Savchuk was injured in an accident in Indiana while riding as a passenger in a car driven by Rush, also an Indiana resident. After moving to Minnesota, Savchuk commenced this action against Rush in a Minnesota state court, alleging negligence and seeking damages. As Rush had no contacts with Minnesota that would support in personam jurisdiction, Savchuk attempted to obtain quasi in rem jurisdiction by garnishing the contractual obligation of State Farm Mutual Automobile Insurance Co. (State Farm) to defend and indemnify Rush in connection with such a suit. State Farm, which does business in Minnesota, had insured the car, owned by Rush's father, under a liability insurance policy issued in Indiana. Rush was personally served in Indiana, and after State Farm's response to the garnishment summons asserted that it owed the Rush nothing, Savchuk moved the trial court for permission to file a supplemental complaint making the garnishee, State Farm, a party to the action. Rush and State Farm moved to dismiss the complaint for lack of jurisdiction over the defendant. ISSUE May Minnesota courts obtain jurisdiction over both Rush and State Farm by virtue of a quasi in rem jurisdiction? RULING No. A State may not constitutionally exercise quasi in rem jurisdiction over a defendant who has no forum contacts by attaching the contractual obligation of an insurer licensed to do business in the State to defend and indemnify him in connection with the suit. A State may exercise jurisdiction over an absent defendant only if the defendant has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. In determining whether a particular exercise of state court jurisdiction is consistent with due process, the inquiry must focus on "the relationship among the defendant, the forum, and the litigation." Here, the only affiliating circumstance offered to show a relationship among Rush, Minnesota, and this lawsuit is that Rush's insurance company does business in the State. However, the fictional presence in Minnesota of State Farm's policy obligation to defend and indemnify Rush -- derived from combining the legal fiction that assigns a situs to a debt, for garnishment purposes, wherever the debtor is found with the legal fiction that a corporation is "present," for jurisdictional purposes, wherever it does business -- cannot be deemed to give the State the power to determine Rush's liability for the out-of-state accident. The mere presence of property in a State does not establish a sufficient relationship between the owner of the property and the State to support the exercise of jurisdiction over an unrelated cause of action, and it cannot be said that the defendant engaged in any purposeful activity related to the forum that would make the exercise of jurisdiction fair, just, or reasonable merely because his insurer does business there. Nor does the policy provide significant contacts between the litigation and the forum, for the policy obligations pertain only to the conduct, not the substance, of the litigation. BANCO ESPANOL FILIPINO v. PALANCA 37 Phil 921 (1918) FACTS Engracio Palance Tanquinyeng y Limquingco mortgaged various parcels of real property in Manila to El Banco EspanolFilipino. Afterwards, Engracio returned to China and there he died without returning again to the Philippines. The mortgagor then instituted foreclosure proceeding but since defendant is a non-resident, it was necessary to give notice by publication. The Clerk of Court was also directed to send copy of the summons to the defendants last known address, which is in Amoy, China. It is not shown whether the Clerk complied with this requirement. Nevertheless, after publication in a newspaper of the City of Manila, the cause proceeded and judgment by default was rendered. The decision was likewise published and afterwards sale by public auction was held with the bank as the highest bidder. This sale was confirmed by the court. About seven years after the confirmation of this sale, a motion was made by Vicente Palanca, as administrator of the estate of the original defendant, wherein the applicant requested the court to set aside the order of default and the judgment, and to vacate all the proceedings subsequent thereto. The basis of this application was that the order of default and the judgment rendered thereon were void because the court had never acquired jurisdiction over the defendant or over the subject of the action. ISSUE Did the lower court acquire jurisdiction over the defendant and the subject matter of the action? RULING Yes. Jurisdiction may refer to (1) to the authority of the court to entertain a particular kind of action or to administer a particular kind of relief, or it may refer to the power of the court over the parties, or (2) over the property which is the subject to the litigation. Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his submission to its authority, or it is acquired by the coercive power of legal process exerted over the person. Jurisdiction over the property which is the subject of the litigation may result either from a seizure of the property under legal process, whereby it is brought into the actual custody of the law, or it may result from the institution of legal

proceedings wherein, under special provisions of law, the power of the court over the property is recognized and made effective. For properties the court may not physically take into custody, the court may exercise an in rem jurisdiction over such, at the instance of the person claiming to be the owner, in order to adjudicate the title of the owner against the world. The action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is expressed the idea that while it is not strictly speaking an action in rem yet it partakes of that nature and is substantially such. The action quasi in rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant, and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. The judgment entered in these proceedings is conclusive only between the parties. The action being quasi in rem, the court has acquired jurisdiction over the defendant and the subject matter. The failure of the clerk to mail the notice, if in fact he did so fail in his duty, is not an irregularity that amounts to a denial of due process of law and even if proved, would not avoid the judgment in this case. Notice was given by publication in a newspaper and this is the only form of notice which the law unconditionally requires. This is all that was absolutely necessary to sustain the proceedings. CARBALLO v. ENCARNACION 92 Phil. 974 (1952) FACTS In the Municipal Court of Manila, Mariano Ang filed a complaint against Antonio Carballo for the collection of P1,860.84. The corresponding summons was served upon defendant Carballo for appearance and trial on October 10, 1949. As counsel for him Atty. J. Gonzales entered his written appearance on October 12, 1949. On the same day said counsel filed a motion for postponement of the hearing for one month on the ground that he was sick, attaching a medical certificate to prove his illness. Hearing was postponed to October 14, 1949 at which time defendant asked for another postponement on the ground that his counsel was still sick. The hearing was again postponed to October 24, 1949. In said last two postponement of the hearing, the municipal court warned the defendant that the hearing could not wait until his counsel recovered from his illness, and that if said counsel could not attend the trial he should obtain the services of another lawyer. On the day set for hearing, namely, October 24, 1949, neither defendant nor his counsel appeared although there was a written manifestation of defendant's counsel requesting further postponement because he was still sick. At the request of plaintiff's counsel, defendant was declared in default. ISSUE W/N defendant Carballo defaulted in the municipal court of Manila? NO RULING True, he filed no answer, but his counsel filed a written appearance. In addition, said counsel filed a motion or manifestation asking for postponement of the hearing on the ground that he was ill. In the case of Flores vs. Zurbito, (37 Phil., 746), the Court held that an appearance in whatever form without expressly objecting to the jurisdiction of the court over the person, is a submission to the jurisdiction of the court over the person. It is, therefore, clear that petitioner Carballo made an appearance in the municipal court. Could he then be declared in default just because he filed no answer? The answer must be in the negative. In the case of Quinzan vs. Arellano,2 G.R. No. 4461, December 28, 1951, the Supreme Court said that in the justice of the peace court failure to appear, not failure to answer is the sole ground for default. What really happened in the municipal court was that the defendant though he filed no answer to the complaint, nevertheless, he made his appearance and in writing at that, but because of his failure and that of his counsel to appear on the date of the trial, a hearing ex-parte was held and judgment was rendered thereafter. The judgment, therefore, was not by default. So defendant Antonio Carballo had a right to appeal as in fact he appealed, and the Court of First Instance should not have declared the decision appealed from final and executory under the theory that it was not appealable. SANTOS vs. MONTESA, JR. 221 SCRA 15 (1993) FACTS ISSUE RULING WILLIAM F. GEMPERLE v. HELEN SCHENKER and PAUL G.R. No. L-18164 January 23, 1967 FACTS Paul Schenker, acting through his wife and attorney-in-fact (Helen Schenker) filed with the Court of First Instance of Rizal a complaint for the enforcement of Paul'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. Mrs. Schenker published some allegations thereof and other matters, which were impertinent, irrelevant and immaterial. Those allegations were 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 damages and attorneys fees and praying for a judgment ordering Mrs. Schenker "to retract in writing the said defamatory expressions". The lower court decided against Gemperle. Gemperle interposed an appeal alleging that the lower court has not acquired jurisdiction over the person of Paul Schenker. ISSUE W/n the lower court has acquired jurisdiction over the person of Paul Schenker considering the fact that he is a Swiss citizen residing in Zurich, Switzerland and 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.

RULING According to the Court, the lower court has acquired jurisdiction over the person of Paul Schenker. Jurisdiction over the person of Paul 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. Paul even set up a counterclaim for damages his answer. Although the counterclaim was set up by Mrs. Schenker alone, it is shown that she 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. ASIAVEST MERCHANT BANKERS (M) BERHAD v. COURT OF APPEALS and PHILIPPINE NATIONAL CONSTRUCTION CORPORATION G.R. No. 110263 July 20, 2001 FACTS Asiavest, a corporation organized under the laws of Malaysia, initiated a suit for collection against Philippine National Construction Corporation (PNCC before the High Court of Malaya in Kuala Lumpur for the recovery of the indemnity of the performance bond it had put up in favor of PNCC to guarantee the completion of the Felda Project and the nonpayment of the loan it extended to Asiavest-CDCP Sdn. Bhd. for the completion of Paloh Hanai and Kuantan By Pass; Project. The High Court of Malaya (Commercial Division) rendered judgment in favor of the Asiavest ordering PNCC to pay Asiavest the amount alleged plus interest. However, the judgment of the Malaysian Court was not acted upon by PNCC. Thus, a complaint was initiated by Asiavest before RTC Pasig for the enforcement of the Malaysian Courts judgment. PNCC sought for the dismissal of the complaint stating that the alleged judgment of the High Court of Malaya should be denied recognition or enforcement since on in face, it is tainted with want of jurisdiction, want of notice to private respondent, collusion and/or fraud, and there is a clear mistake of law or fact. RTC Pasig rendered against Asiavest.CA affirmed RTCs decision. ISSUE W/N PNCCs allegation is correct; Malaysian court has not acquired jurisdiction over PNCC. RULING Generally, in the absence of a special compact, no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of another country;13 however, the rules of comity, utility and convenience of nations have established a usage among civilized states by which final judgments of foreign courts of competent jurisdiction are reciprocally respected and rendered efficacious under certain conditions that may vary in different countries. In this jurisdiction, a valid judgment rendered by a foreign tribunal may be recognized insofar as the immediate parties and the underlying cause of action are concerned so long as it is convincingly shown that there has been an opportunity for a full and fair hearing before a court of competent jurisdiction; that the trial upon regular proceedings has been conducted, following due citation or voluntary appearance of the defendant and under a system of jurisprudence likely to secure an impartial administration of justice; and that there is nothing to indicate either a prejudice in court and in the system of laws under which it is sitting or fraud in procuring the judgment. Under Section 50(b),16 Rule 39 of the Revised Rules of Court, which was the governing law at the time the instant case was decided by the trial court and respondent appellate court, a judgment, against a person, of a tribunal of a foreign country having jurisdiction to pronounce the same is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. In addition, under Section 3(n), Rule 131 of the Revised Rules of Court, a court, whether in the Philippines or elsewhere, enjoys the presumption that it was acting in the lawful exercise of its jurisdiction. Hence, once the authenticity of the foreign judgment is proved, the party attacking a foreign judgment, is tasked with the burden of overcoming its presumptive validity. In the instant case, Asiavest sufficiently established the existence of the money judgment of the High Court of Malaya by the evidence it offered. Vinayak, presented as Asiavest's sole witness, testified to the effect that he is in active practice of the law profession in Malaysia and workedas legal assistant. He also testified that PNCC was sued by his client, Asiavest in Kuala Lumpur; that the writ of summons were served at the registered office of PNCC and was received by a financial planning officer of PNCC for Southeast Asia operations; that upon the filing of the case, certain persons of PNCC entered their conditional appearance questioning the regularity of the service of the writ of summons but subsequently withdrew the same when it realized that the writ was properly served; that because PNCC failed to file a statement of defense within two (2) weeks, Asiavest filed an application for summary judgment and submitted affidavits and documentary evidence in support of its claim; that the matter was then heard before the High Court of Kuala Lumpur in a series of dates where PNCC was represented by counsel; and that the end result of all these proceedings is the judgment sought to be enforced. Having proven these facts, the presumption of the Malaysian Courts decision is upheld. The burden to prove its invalidity now falls upon PNCC. PNCC failed to rebut such presumption. It relied solely on the testimony of its two (2) witnesses, an accountant and Executive Secretary and a member of the staff of the Corporate Secretariat Section of the Corporate Legal Division of PNCC, both of whom failed to shed light and amplify its defense or claim for non-enforcement of the foreign judgment against it. The recognition to be accorded a foreign judgment is not necessarily affected by the fact that the procedure in the courts of the country in which such judgment was rendered differs from that of the courts of the country in which the judgment is relied on. Ultimately, matters of remedy and procedure such as those relating to the service of summons or court process upon the defendant, the authority of counsel to appear and represent a defendant and the formal requirements in a decision are governed by the lex fori or the internal law of the forum,43 i.e., the law of Malaysia in this case. In this case, it is the procedural law of Malaysia where the judgment was rendered that determines the validity of the service of court process on private respondent as well as other matters raised by it. As to what the Malaysian procedural law is, remains a question of fact, not of law. It may not be taken judicial notice of and must be pleaded and proved like any other fact. Sections 24 and 25 of Rule 132 of the Revised Rules of Court provide that it may be evidenced by an official publication or by a duly attested or authenticated copy thereof. It was then incumbent upon PNCC to present evidence as to what that Malaysian procedural law is and to show that under it, the assailed service of summons upon a financial

officer of a corporation, as alleged by it, is invalid. It did not. Accordingly, the presumption of validity and regularity of service of summons and the decision thereafter rendered by the High Court of Malaya must stand. On the matter of alleged lack of authority of the law firm of Allen and Gledhill to represent PNCC, not only did the witnesses admit that the said law firm of Allen and Gledhill were its counsels in its transactions in Malaysia, but the fact that Asiavest offered in evidence relevant Malaysian jurisprudence to the effect that (a) it is not necessary under Malaysian law for counsel appearing before the Malaysian High Court to submit a special power of attorney authorizing him to represent a client before said court, (b) that counsel appearing before the Malaysian High Court has full authority to compromise the suit, and (c) that counsel appearing before the Malaysian High Court need not comply with certain prerequisites as required under Philippine law to appear and compromise judgments on behalf of their clients before said court. Furthermore, the conditional appearance by PNCC was in fact subsequently withdrawn when counsel realized that the writ was properly served. On the ground that collusion, fraud and, clear mistake of fact and law tainted the judgment of the High Court of Malaya, no clear evidence of the same was adduced or shown. Evidence is wanting on the alleged extrinsic fraud. Hence, such unsubstantiated allegation cannot give rise to liability therein. Lastly, there is no merit to the argument that the foreign judgment is not enforceable in view of the absence of any statement of facts and law upon which the award in favor of the petitioner was based. As aforestated, the lex fori or the internal law of the forum governs matters of remedy and procedure. Considering that under the procedural rules of the High Court of Malaya, a valid judgment may be rendered even without stating in the judgment every fact and law upon which the judgment is based, then the same must be accorded respect and the courts in the jurisdiction cannot invalidate the judgment of the foreign court simply because our rules provide otherwise.

REGNER v. LOGARTA 537 SCRA 277 FACTS Luis Regner had three daughters with his first wife, namely Cynthia, Teresa and Melinda (all of whom were based in California). The petitioner is Luis' second wife, Victoria Regner. During his lifetime, Luis acquired several properties, including the Cebu Country Club. Sometime in 1998, Luis executed a Deed of Donation in favor of respondents Cynthia and Teresa covering the country club. On 15 June 1999, Victoria filed a Complaint of Order for Declaration of Nullity of the Deed Donation with Prayer for Issuance of a Writ of Preliminary Injunction and Temporary Restraining against Cynthia and Teresa with the RTC. Victoria alleged in her complaint that: on 17 March 1997, Luis made a written declaration wherein he stated that due to his illness and forgetfulness, he would not sign any document without the knowledge of his lawyer, Atty. Francis Zosa. She averred that on 15 May 1998, when Luis was already very ill and no longer of sound and disposing mind, Cynthia and Teresa , conspired to make it appear that Luis donated to them said property. Since Luis no longer had the ability to write or affix his signature, Melinda, acting under the influence of her sisters, Cynthia and Teresa, fraudulently manipulated the hand of Luis so that he could affix his thumbmark on the assailed Deed of Donation Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family Clinic in Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to receive the summonses for her sisters and informed the sheriff that their lawyer, Atty. Francis Zosa, would be the one to receive the same. Upon her arrival in the Philippines, on 1 June 2000, Teresa was personally served the summons at Room 304, Regency Crest Condominium, Banilad, Cebu City. Subsequently, on 12 September 2002, Teresa filed a motion to dismiss the case because of petitioners failure to prosecute her action for an unreasonable length of time. Petitioner opposed the motion and filed her own motion to set the case for pre-trial, to which Teresa filed her rejoinder on the ground that their sister, Cynthia, an indispensable party, had not yet been served a summons. Thus, Teresa prayed for the dismissal of petitioners complaint, as the case would not proceed without Cynthias presence. ISSUE (1) Whether a co-donee is an indispensable party in an action to declare the nullity of the deed of donation, and (2)Whether delay in the service of summons upon one of the defendants constitutes failure to prosecute that would warrant dismissal of the complaint. RULING 1) YES. It takes no great degree of legal sophistication to realize that Cynthia and Teresa are indispensable parties to the civil case. Cynthia and Teresa allegedly derived their rights to the subject property by way of donation from their father Luis. The central thrust of the petitioners complaint in the civil case was that Luis could not have donated Proprietary Ownership Certificate No. 0272 to his daughters Cynthia and Teresa, as Luis was already very ill and no longer of sound and disposing mind at the time of donation on 15 May 1997. An indispensable party has been defined as follows: An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. Without the presence of indispensable parties, a judgment cannot attain finality. 2) YES. Being an action in personam, the general rule requires the personal service of summons on Cynthia within the Philippines, but this is not possible in the present case because Cynthia is a non-resident and is not found within the Philippines.

As Cynthia is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient. The third mode, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where Cynthia resides. Since in the case at bar, the service of summons upon Cynthia was not done by any of the authorized modes, the trial court was correct in dismissing petitioners complaint. As can be gleaned from the Sec 3 Rule 17 of the Rules of Civil Procedure, there are three instances when the complaint may be dismissed due to the plaintiff's fault: (1) if he fails to appear during a scheduled trial, especially on the date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for an unreasonable length of time; and (3) if he fails to comply with the rules or any order of the court. Considering the circumstances of the case, it can be concluded that the petitioner failed to prosecute the case for an unreasonable length of time. There is failure to prosecute when the plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial or when postponements in the past were due to the plaintiff's own making, intended to be dilatory or caused substantial prejudice on the part of the defendant. EUROPEAN RESOURCES AND TECHNOLOGIES INC. v. INGENIEUBURO BIRKHAHN + NOLTE, INGENIURGESELLSCHAFT MBH 435 SCRA 246 FACTS ISSUE RULING PIPER AIRCRAFT COMPANY vs. REYNO 454 US 235 (1981) FACTS A small commercial plane crashed in Scotland carrying five passengers and a pilot. All of whom were all killed. The decedents and heirs are all Scottish. The aircraft was manufactured in Pennsylvania by Piper Aircraft (Piper). The propellers were manufactured by Hartzell Propeller Inc. (Hartzell) in Ohio. The aircraft was owned and operated by UK companies. The British Department of Trade report found no evidence of defective equipment and indicated that pilot error may have contributed. A California probate court appointed Reyno administratrix of the estates of the five passengers. She did not know nor was she related to any of the decedents, she was merely the legal secretary to the attorney who filed this lawsuit. After her appointment, Reyno filed several wrongful-death suits against Piper and Hartzell in California for negligence. Reyno admitted the choice of the United States as a venue was more favorable to her case. After the filing of the case in California, the defendants Piper and Hartzell sought to transfer the case to Pennsylvania. When the case was transferred to Pennsylvania, both defendants filed and were granted motions to dismiss on the ground of forum non conveniens. On appeal, the dismissal was reversed with the appellate court opining that dismissal for forum non conveniens is never appropriate where the law of the alternative forum is less favorable to the plaintiff. ISSUES


Can the court dismiss the action on the ground of forum non conveniens by merely showing that the substantive law that would be applied in the alternative court is less favorable to the plaintiffs than that of the present court? Does the Gulf Oil vs. Gilbert case doctrine apply in the case at bar (i.e. Should the case be tried in Scotland instead of the United States when all the evidence and witnesses are in Scotland)?


No. The possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry. If conclusive or substantial weight were given to the possibility of a change in law, the forum non conveniens doctrine would become virtually useless. Jurisdiction and venue requirements are often easily satisfied. As a result, many plaintiffs are able to choose from among several forums. Ordinarily, these plaintiffs will select that forum whose choice-of-law rules are most advantageous. Thus, if the possibility of an unfavorable change in substantive law is given substantial weight in the forum non conveniens inquiry, dismissal would rarely be proper. Additionally, this would lead to other practical problems. At least where the foreign plaintiff named an American manufacturer as defendant, a court could not dismiss the case on grounds of forum non conveniens where dismissal might lead to an unfavorable change in law. The American courts, already very attractive to plaintiffs, would become even more attractive. The flow of litigation into the United States would increase and further congest already crowded courts. Yes. Under the Gilbert ruling, dismissal will ordinarily be appropriate where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice. Hence, the court's holding that the case would be better suited in Scotland was not unreasonable. First, because the majority of evidence was there and second, because the decedents were not able to properly implead the defendants. Also, Pennsylvania would not be a good venue because there would need to be two law standards the Pennsylvania law would apply to Piper and Scottish law would apply to Hartzell. A trial involving two sets of laws would be confusing to the jury. A lack of familiarity with Scottish law would also be confusing. Another powerful reason why Pennsylvania is a bad venue is that Scotland has a very strong interest in this litigation. There is "a local interest in having localized controversies decided at home."


The incremental deterrence that would be gained if this trial were held in 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 there.

GULF OIL v. GILBERT 330 US 501 (1947) FACTS Gilbert is a resident of Virginia, where he operated a public warehouse. One day, there was an explosion in the warehouse. Gilbert alleged that the explosion was caused by Gulf Oils negligent handling of gasoline. In view of said accusation, Gilbert brought an action in a court in New York City against Gulf Oil to recover damages for destruction of the Gilberts public warehouse and its contents in Virginia by fire resulting from Gulf Oil's negligence. Note that Gulf Oil was a Pennsylvania corporation qualified to do business in both Virginia and New York and it has designated agents in both states to receive summons. When sued in New York, the defendant, invoking the doctrine of forum non conveniens, claimed that the appropriate place for trial is Virginia, where the plaintiff lives and defendant does business, where all events in litigation took place, where most of the witnesses reside, and where both state and federal courts are available to plaintiff, and are able to obtain jurisdiction of the defendant. The New York Court dismissed the action on the ground of forum non conveniens. The appellate court, however, disagreed. ISSUE Whether or not the United States District Court has inherent power to dismiss a suit pursuant to the doctrine of forum non conveniens RULING Yes. The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. The federal law contains no such express criteria to guide the district court in exercising its power. There are, however, important considerations in the application of the doctrine-from the standpoint of litigants, are relative ease of access to sources of proof, availability of compulsory process for attendance of unwilling witnesses, cost of obtaining attendance of willing witnesses, possibility of view of the premises if that be appropriate, and all other practical problems that make trial of a case easy, expeditious, and inexpensive. Considerations of public interest in applying the doctrine include the undesirability of piling up litigation in congested centers, the burden of jury duty on people of a community having no relation to the litigation, the local interest in having localized controversies decided at home, and the unnecessary injection of problems in conflict of laws. In this case, the doctrine was properly applied. The Gilbert himself is not a resident of New York, nor did any event connected with the case take place there, nor does any witness with the possible exception of experts live there. The only reasons given by Gilbert in filing the case in New York are that the jury in Virginia may not be accustomed to cases where the damages sought for are as big as $400,000, and that the same jury may be influenced by the defendant in Virginia. Needless to say, these reasons did not persuade the New York Court to exercise its jurisdiction over Gilberts case. LUECK v. SUNSTRANDT No. 99-15961 January 8, 2001 FACTS Plaintiffs appeal the district court's dismissal of their suit on the basis of forum non conveniens. Plaintiffs, citizens of New Zealand, are victims of an airplane crash in New Zealand, on a New Zealand carrier. Plaintiffs allege that the radio altimeter of the Ground Proximity Warning System ("GPWS") malfunctioned during flight and was a causal factor of the accident. Defendants, the Canadian manufacturer of the aircraft and the American manufacturers of the GPWS and the radio altimeter, argued that New Zealand was an adequate alternative forum and that the public and private factors weighed in favor of dismissal. The district court agreed with Defendants. ISSUE W/N the district of Arizona has jurisdiction? YES BUT THE MORE CONVENIENT FORUM IS NEW ZEALAND HENCE DISMISSAL WAS PROPER RULING A district court has discretion to decline to exercise jurisdiction in a case where litigation in a foreign forum would be more convenient for the parties. In dismissing an action on forum non conveniens grounds the court must examine: (1) whether an adequate alternative forum exists, and (2) whether the balance of private and public interest factors favors dismissal. The defendant bears the burden of proving the existence of an adequate alternative forum. The Supreme Court has held that, where the plaintiff is a United States citizen, the defendant must satisfy a heavy burden of proof: A plaintiff's choice of forum is entitled to greater deference when the plaintiff has chosen the home forum. When the home forum has been chosen, it is reasonable to assume that this choice is convenient. When the plaintiff is foreign, however, the assumption is much less reasonable. ADEQUATE ALTERNATIVE FORUM The first requirement for a forum non conveniens dismissal is that an adequate alternative forum is available to the plaintiff. The Supreme Court has held that an alternative forum ordinarily exists when the defendant is amenable to service of process in the foreign forum. This threshold test is met here because Defendants have indicated that they are amenable to service of process in New Zealand. The foreign forum must provide the plaintiff with some remedy for his wrong in order for the alternative forum to be adequate. As with the other requirements of a forum non conveniens dismissal, the burden of showing the existence of an adequate alternative forum is the defendant's. However, it is only in "rare circumstances where the remedy provided by

the alternative forum is so clearly inadequate or unsatisfactory, that it is no remedy at all," that this requirement is not met. In Piper Aircraft, the Supreme Court held that a foreign country was not an inadequate forum merely because its laws offered the plaintiff a lesser remedy than he could expect to receive in the United States court system. In this case, Plaintiffs' attorney has candidly admitted that the impetus for the lawsuit is money: United States law offers Plaintiffs a greater potential remedy for their losses than New Zealand law. A jury trial in the United States on these facts could yield significantly higher awards to Plaintiffs than the compensation they will receive from the ACC. Under Piper Aircraft, however, it is clear that this argument fails. The effect of Piper Aircraft is that a foreign forum will be deemed adequate unless it offers no practical remedy for the plaintiff's complained of wrong. A New Zealand remedy is unquestionably available here. According to the complaint, the losses for which Plaintiffs seek compensation are their physical injuries sustained in the accident and the resulting loss of earnings. Plaintiffs do not dispute that they can file and have filed claims with the ACC for these losses; nor do they dispute that they have received compensation from the ACC for these losses. Although New Zealand law does not permit Plaintiffs to maintain this exact suit, New Zealand, through its no-fault accident compensation scheme, has provided and continues to provide a remedy for Plaintiffs' losses. Plaintiffs have not shown that this type of administrative remedy is so inadequate that it is tantamount to no remedy at all. The forum non conveniens analysis does not look to the precise source of the plaintiff's remedy, so we will not require the alternative forum to offer a judicial remedy. BALANCE OF PUBLIC AND PRIVATE FACTORS Ordinarily, a plaintiff's choice of forum will not be disturbed unless the "private interest" and the "public interest" factors strongly favor trial in a foreign country. We have further held that a foreign plaintiff's choice of forum merits less deference than that of a plaintiff who resides in the selected forum, and the showing required for dismissal is reduced. "If the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court, dismissal is proper." 1. The Private Interest Factors

Courts consider the following private interest factors: (1) (2) (3) (4) (5) (7) the residence of the parties and the witnesses; the forum's convenience to the litigants; access to physical evidence and other sources of proof; whether unwilling witnesses can be compelled to testify; the cost of bringing witnesses to trial; (6) the enforce ability of the judgment; and "all other practical problems that make trial of a case easy, expeditious and inexpensive."

The district court should look to any or all of the above factors which are relevant to the case before it, giving appropriate weight to each. It should consider them together in arriving at a balanced conclusion. Plaintiffs and Defendants each find a different forum to be more convenient because each party focuses on different evidence and witnesses. Plaintiffs focus on the evidence relating to the testing of the radio altimeter and GPWS, which occurred in the United States, so they argue Arizona is a more convenient forum. Defendants, on the other hand, focus on the evidence relating to the crash itself and Plaintiffs' ongoing medical care, so they contend that New Zealand is a more convenient forum. 2. The Public Interest Factors

Courts consider the following public interest factors: (1) (2) (3) (4) (5) local interest of lawsuit; the court's familiarity with governing law; burden on local courts and juries; congestion in the court; and the costs of resolving a dispute unrelated to this forum.

The public interest factors weigh against maintenance of this action in Arizona. None of the remaining plaintiffs are citizens or residents of the United States. One of the defendants is a citizen of the chosen forum: Honeywell, which manufactured the radio altimeter in issue. The citizens of Arizona certainly have an interest in the manufacturing of defective products by corporations located in their forum. However, this interest is slight compared to the time and resources the district court in Arizona would expend if it were to retain jurisdiction over this dispute. Furthermore, the interest in New Zealand regarding this suit is extremely high. The crash involved a New Zealand airline carrying New Zealand passengers. The accident and its aftermath, including the accident investigation, the post-investigation activity, and the various legal proceedings including an ongoing criminal probe, have all received significant attention by the local media. Because the local interest in this lawsuit is comparatively low, the citizens of Arizona should not be forced to bear the burden of this dispute.


304 U.S. 64 (1938) FACTS Tompkins, a citizen of Pennsylvania, was injured on a dark night by a passing freight train of the Erie Railroad Company while walking along its right of way at Hughestown in that State. He claimed that the accident occurred through negligence in the operation, or maintenance, of the train. He was rightfully on the premises as licensee because on a commonly used beaten footpath which ran for a short distance alongside the tracks, and that he was struck by something which looked like a door projecting from one of the moving cars. To enforce that claim, he brought an action in the federal court for southern New York, which had jurisdiction because the company is a corporation of that State. It denied liability, and the case was tried by a jury. The Erie insisted that its duty to Tompkins was no greater than that owed to a trespasser. It contended, among other things, that its duty to Tompkins, and hence its liability, should be determined in accordance with the Pennsylvania law; that, under the law of Pennsylvania, as declared by its highest court, persons who use pathways along the railroad right of way -- that is, a longitudinal pathway, as distinguished from a crossing -- are to be deemed trespassers, and that the railroad is not liable for injuries to undiscovered trespassers resulting from its negligence unless it be wanton or willful. Tompkins denied the applicability of such rule since there was no statute of the State on the subject. The railroad's duty and liability is to be determined in federal courts as a matter of general law. The trial judge refused to rule that the applicable law precluded recovery and awarded a sum of money. The Circuit Trial Court affirmed the decision of the trial court. Eries had contended that application of the Pennsylvania rule was required by 34 of the Federal Judiciary Act which provides: "The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply." ISSUE W/n such rule of Pennsylvania is required and should be considered by the Court in deciding the present case. RULING The subject doctrine in this case is that of Swift v. Tyson. The case stated that a federal court exercising jurisdiction over such a case on the ground of diversity of citizenship, is not free to treat this question as one of so-called "general law," but must apply the state law as declared by the highest state court. In deciding the present case, first, the Court held that federal courts exercising jurisdiction on the ground of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law of the State as declared by its highest court; that they are free to exercise an independent judgment as to what the common law of the State is -- or should be. The statute is merely declarative of the rule which would exist in the absence of the statute." The federal courts assumed, in the broad field of "general law," the power to declare rules of decision which Congress was confessedly without power to enact as statutes. Second, the Court ruled that the application of Swift v. Tyson doctrine prevented uniformity. Diversity of citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state courts against those not citizens of the State. Swift v. Tyson introduced grave discrimination by noncitizens against citizens. It made rights enjoyed under the unwritten "general law" vary according to whether enforcement was sought in the state or in the federal court, and the privilege of selecting the court in which the right should be determined was conferred upon the noncitizen. Thus, the doctrine rendered impossible equal protection of the law. In attempting to promote uniformity of law throughout the United States, the doctrine had prevented uniformity in the administration of the law of the State. Third, except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State. And whether the law of the State shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a State, whether they be local in their nature or "general," be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts. Thus, in the present case, the Circuit Court of Appeals ruled that the question of liability is one of general law, and on that ground declined to decide the issue of state law. The Court holds this was error, the judgment is reversed and the case remanded to it for further proceedings in conformity with Courts opinion an examination of the applicability of the said Pennsylvania law should be considered. K.K. SHELL SEKIYU OSAKA HATSUBAISHO and FU HING OIL CO., LTD. vs. THE HONORABLE COURT OF APPEALS, ATLANTIC VENUS CO., S.A., and THE VESSEL M/V "ESTELLA G.R. Nos. 90306-07 July 30, 1990 FACTS Kumagai Kaiun Kaisha, Ltd. (Kumagai), a corporation formed and existing under the laws of Japan, filed a complaint for the collection of a sum of money with preliminary attachment before RTC Manila against Atlantic Venus Co., S.A. ("Atlantic"), a corporation registered in Panama, the vessel MV Estella and Crestamonte Shipping Corporation ("Crestamonte"), a Philippine corporation. Atlantic is the owner of the MV Estella. Manila alleged that Crestamonte, as bareboat charterer and operator of the MV Estella, appointed N.S. Shipping Corporation ("NSS"), a Japanese corporation, as its general agent in Japan. The appointment was formalized in an Agency Agreement. NSS in turn appointed Kumagai as its local agent in Osaka, Japan. Kumagai supplied the MV Estella with supplies and services but despite repeated demands Crestamonte failed to pay the amounts due. NSS and Keihin Narasaki Corporation (Keihin) filed complaints-in-intervention. Fu Hing Oil Co., Ltd. (Fu Hing"), a corporation organized in Hong Kong and not doing business in the Philippines, filed a motion for leave to intervene with an attached complaint-in-intervention, alleging that Fu Hing supplied marine diesel oil/fuel to the MV Estella and incurred barge expenses for the total sum of One Hundred Fifty-two Thousand Four Hundred Twelve Dollars and Fifty-Six Cents (US$152,412.56) but such has remained unpaid despite demand and that the claim constitutes a maritime lien. The issuance of a writ of attachment was also prayed for. K.K. Shell Sekiyu Osaka Hatsubaisho (K.K. Shell"), a corporation organized in Japan and not doing business in the Philippines, likewise filed a motion to intervene with an attached complaint-in-intervention, alleging that upon request of NSS, Crestamonte's general agent in Japan, K.K. Shell provided and supplied marine diesel oil/fuel to the W Estella at the ports of Tokyo and Mutsure in Japan and that despite previous demands Crestamonte has failed to pay the amounts of Sixteen Thousand Nine Hundred Ninety-Six Dollars and Ninety- Six Cents (US$16,996.96) and One Million Yen (Y1,000,000.00) and that K.K. Shell's claim constitutes a maritime lien on the MV Estella. The complaint-in-intervention sought the issuance of a writ of preliminary attachment. The trial court allowed the intervention of Fu Hing and K.K. Shell.

Writs of preliminary attachment were issued and upon the posting of the counter-bonds, writs of attachment were discharged. Atlantic and MV Estella moved to dismiss the complaints-in-intervention and Atlantic filed a petition in the Court of Appeals against the trial court judge, Kumagai, NSS and Keihin seeking the annulment of the orders of the trial court. the Court of Appeals annulled the orders of the trial court and directed it to cease and desist from proceeding with the case. According to the Court of Appeals, Fu Hing and K.K. Shell were not suppliers but sub-agents of NSS, hence they were bound by the Agency Agreement between Crestamonte and NSS. The trial court should have disallowed their motions to intervene. ISSUE 1. 2. RULING As to the first issue: No express reference to the contracting of sub-agents or the applicability of the terms of the agreement, particularly the choice-of-forum clause, to sub-agents is made in the text of the agreement. What the contract clearly states are NSS' principal duties, i.e., that it shall provide for the necessary services required for the husbanding of Crestamonte's vessels in Japanese ports (section 2.0) and shall be responsible for fixing southbound cargoes with revenues sufficient to cover ordinary expenses (section 3.0) Moreover, the complaint-in-intervention filed by K.K. Shell merely alleges that it provided and supplied the MV Estella with marine diesel oil/fuel, upon request of NSS who was acting for and as duly appointed agent of Crestamonte. There is no basis for the CA to state that K.K. Shell admitted in its intervention that it was appointed as local agent/sub-agent or representatives by NSS by virtue of said Agency Agreement. The CA was erroneously referring to another case involving another ship in another court. Thus, additional evidence must be given to establish such allegation. As to the second issue: Atlantic and MV Estella are invoking the doctrine of forum non conveniens to be a valid ground for the dismissal of K.K. Shellss complaint-in-intervention. K.K. Shell, in turn, argued by invoking its right as maritime lienholder under Presidential Decree No. 1521, the Ship Mortgage Decree of 1978. SEC. 21. Maritime Lien for Necessaries; person entitled to such lien-Any person furnishing repairs, supplies, to wage, use of dry dock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall be necessary to allege or prove that credit was given to the vessel. However, in order to invoke this, it must be established that the credit was extended to the vessel itself. In other words, considering the dearth of evidence due to the fact that the private respondents have yet to file their answer in the proceedings below and trial on the merits is still to be conducted, whether or not petitioners are indeed maritime lienholders and as such may enforce the lien against the MV Estella are matters that still have to be established. Neither are we ready to rule on the private respondents' invocation of the doctrine of forum non conveniens, as the exact nature of the relationship of the parties is still to be established. We leave this matter to the sound discretion of the trial court judge who is in the best position to decide such. It was clearly reversible error on the. part of the Court of Appeals to annul the trial court's orders, insofar as K.K. Shell is concerned, and order the trial court to cease and desist from proceeding with Civil Case No. 87-38930. There are still numerous material facts to be established in order to arrive at a conclusion as to the true nature of the relationship between Crestamonte and K.K. Shell and between NSS and K.K. Shell. The best recourse would have been to allow the trial court to proceed with Civil Case No. 87-38930 and consider whatever defenses may be raised by private respondents after they have filed their answer and evidence to support their conflicting claims has been presented. The Court of Appeals, however, substituted its judgment for that of the trial court and decided the merits of the case, even in the absence of evidence, on the pretext of reviewing an interlocutory order. COMMUNICATIONS MATERIALS DESIGN v. CA GR No. 102223 August 22, 1996 FACTS ISSUE RULING ISLAMIC REPUBLIC OF IRAN v. PAHLAVI 62 NY 2d. 474 (1984) FACTS Plaintiff, the Islamic Republic of Iran, brings this action against Iran's former ruler, Shah Mohammed Reza Pahlavi, and his wife, Empress Farah Diba Pahlavi. It alleges in its complaint that defendants accepted bribes and misappropriated, embezzled or converted 35 billion dollars in Iranian funds in breach of their fiduciary duty to the Iranian people and it seeks to recover those funds and 20 billion dollars in exemplary damages. It asks the court to impress a constructive trust on defendants' assets located throughout the world, for an accounting of all moneys and property received by the defendants from the government of Iran, and for other incidental relief. The action was commenced in November, 1979 by substituted service on the Shah made at New York Hospital where he was undergoing cancer therapy. The Empress was personally served at the same time at the New York residence of the Shah's sister. Thereafter, defendants moved to dismiss the complaint alleging that it raised nonjusticiable political questions, that the court lacked personal jurisdiction due to defective service of process on them and that the complaint should be dismissed on grounds of forum non conveniens. ISSUE W/N the dismissal of the case by the New York court was proper? YES RULING Special Term granted defendants' motion based on forum non conveniens, concluding that the parties had no connection W/n Fu Hing and K.K. Shell should be allowed to intervene. W/n the doctrine of forum non conveniens may be invoked.

with New York other than a claim that the Shah had deposited funds in New York banks, a claim which it found insufficient under the circumstances to justify the court in retaining jurisdiction.The common-law doctrine of forum non conveniens, also articulated in CPLR 327(a), which permits a court to stay or dismiss [an action] where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere. In a motion to dismiss on the ground of forum non conveniens, the burden is on a defendant challenging the forum to demonstrate relevant private or public interest factors which militate against accepting the litigation here. A divided Appellate Division affirmed. The Court of Appeals dismissed the appeal as against defendant Mohammed Reza Pahlavi, and affirmed the order of the Appellate Division as against defendant Farah Diba Pahlavi, holding, in an opinion by Judge Simons, that the courts below did not abuse their discretion as a matter of law in dismissing the action on the ground of forum non conveniens since the record does not demonstrate a substantial nexus between New York State and plaintiff's cause of action, even though there may be no other forum in which plaintiff can obtain the relief it seeks; and that the provisions of the January, 1981 agreements between the United States and Iran, commonly known as the Algerian Accords, did not require reversal. MACSHANNON v. ROCKWARE GLASS LTD. 1987 A.C. 795 at 819 FACTS McShannon is a Scottish man. He was injured in an industrial accident at a factory in Scotland owned by the defendants who were a company with head office in England. London based solicitors acting on behalf of the plaintiff and his trade union advised the bringing of proceedings in London on the grounds that the procedure might be quicker and the damages larger. The evidence indicated that medical testimony was equally available in Scotland and that the differences in costs between the two systems were minimal. An application was made to stay the proceedings in London DOCTRINE It was in this case that the English courts really came to adopt and formulate the doctrine of forum non conveniens. It was decided in this case that to obtain a stay in proceedings a defendant would have to show that there was another jurisdictional forum to which it was amendable and in which justice could be done between the parties at substantially less convenience and expense. Additionally, the decision stated that any stay should not deprive the plaintiff of a legitimate personal or juridical advantage. This case moved away from the previous test that litigation should be classified as vexatious or oppressive before a stay could be granted. SUMITOMO BANK LTD v. KARTIKA RATNA THAHIR & ORS SUMMONS NO. 308 OF 1976 SINGAPORE *I couldnt find this case! Sorry -Erman KARTIKA RATNA THAHIR v. PT PERTAMBANGAN MINYAK DAN GAS BUM NEGARA CIVIL APPEAL NO. 204 OF 1992 AUGUST 25, 1994 SINGAPORE FACTS The husband of Petitioner worked as the assistant to the president of the respondent corporation, an Indonesian state enterprise, which was engaged in construction projects and developments of a steel factory. The husband was paid a lot in US dollar. The husband went to Singapore with the petitioner, who is the second wife of the husband. The husband then opened a joint account in Singapore in his name and petitioner. All the money he earned from Respondent were then transferred to the Singaporean bank. The husband died. This led to a messy series of events. The sons of the deceased husband from his first wife were claiming the money from the Singaporean bank and asked the bank to freeze the account since it was part of the estate of the deceased husband. The petitioner joins in the mess by saying that since the bank account was a joint account she was entitled to withdraw the money from the account. The Respondent enters the mess by claiming that part of the money which the deceased husband deposited in the Singaporean bank account is actually owned by the Respondent corporation since some of the money were bribes received by the deceased which is owned by the respondent. ISSUE Which law would apply to the respondent? Singaporean or Indonesian law? RULING This is a conflict of laws issue and the question is which of the two systems of law, Singapore law or Indonesian law, governs the determination of the claim of Pertamina. It is important to set out the following passage in Dicey & Morris which states the scope of r 201(2)(a): Although the obligation to restore an unjust benefit does not arise from a contract, it may, and very frequently does, arise in connection with a contract. This is the case where a party seeks to recover money paid pursuant to an ineffective contract, eg by reason of a total failure of consideration or as a repayment of money paid under an illegal contract or where he claims a quantum meruit for work done or services rendered under a contract which turned out to be void. In all these and similar cases, it is submitted that the existence and the scope of the obligation to restore the benefit are governed by the law which governs the contract, or by what would have been the governing law of the contract, if it had been validly concluded. It is clearly not possible to say that recovery of bribes falls within the category of recovery of money paid pursuant to an ineffective contract or that it constitutes a similar case. It is clear from the judgment that the basis or origin of the claim lay in the fact that equity regarded the giving of a bribe as a constructive fraud on the part of the giver, and as the bribed agent was necessarily a party to the bribery, it follows that the receiving of the bribe was equally a constructive fraud on the part of the bribed agent. In our opinion, the principals remedies against the briber and the bribed agent have no contractual origin or connection. In our opinion, the basis of this claim is equity. In so far as the bribed agent is concerned, in equity it is unconscionable for him to retain the bribe and he is obliged to hand it over to the principal. We agree with the trial judge that, in this case, the obligation to restore the bribes does not arise in connection with the contract and that it falls within r 201(2)(c). Accordingly, in our judgment, it is governed by Singapore law.

THE RAINBOW JOY [2005] 3 SLR 719; [2005] SGCA 36 FACTS The appellant is a Philippine national, who signed on board the vessel as a second engineer. The respondent is a onevessel Panamanian company, and the vessel was flying the Hong Kong flag. The appellants contract of employment was set out in two documents. These documents are the POEA contract and a document entitled Agreement and Lists of Crew, the latter document was required under Hong Kong law. While holding the ladder for the chief engineer who was fixing something, glass shattered from what the chief engineer was fixing and a shard of glass hit the right eye of the appellant. After receiving medical treatment, the appellant filed a case for damages before the NLRC and an admiralty court in Singapore. The Singapore trial court dismissed the case on the ground of forum non conveniens. Appellant contends that such ground is inadmissible since the NLRC was not a regular court but a special tribunal and that even if forum non conveniens would be applied, the judge should not have stayed the case in favour of the Philippines since the defendant did not have a real defence to claim. ISSUE W/N the dismissal of the case was proper on the ground of forum non conveniens? YES RULING First Contention: NLRC is not a court of law The argument of the appellant before us was that the doctrine could only come into play if the alternative forum in another country is a court of law and not when it is a special tribunal. In the present case, the stay was made not in favour of an ordinary Philippine court but the NLRC, or the labour arbitrators of the Philippines. The appellant quite rightly pointed out that the doctrine of forum non conveniens is based on the principle of comity between nations. We would emphasise that, in this context, the comity is between nations, not between courts of law of nations. Each country has the sole prerogative of determining how all disputes, or particular disputes, should be resolved and it is within its sovereign rights to lay down the process by which disputes should be resolved. An ordinary court of law would normally be the forum. But each country is free to create special forums for all disputes, or a particular type of dispute, and it is not for any other country to question why the former country should prescribe such unusual dispute resolution mechanisms or procedures. Indeed, the notion of comity will be subverted if the forum of one country does not give credence to an alternative forum which has been created and accorded adjudication powers by another country. In our opinion, the critical question is not so much the label attached to the forum but its competence. The question to ask is: is the forum competent to try the dispute in that country? It is pertinent to note that Lord Goff in Spiliada said that the court, when confronted with an application for a stay on the ground of forum non conveniens must determine whether there is some other available forum, having competent jurisdiction, which is more appropriate for the trial of the action. We would observe that no authority has been cited by the appellant in support of his assertion that the doctrine only applies where the alternative forum is a court of law. On the other hand, the respondent brought to our attention authorities from Canada and the United States, which held that an action could be stayed in favour of a foreign forum which was not an ordinary court of law. The first argument of appellant must fail Second contention: No defence It is settled law that where a party seeks to bring an action in our courts in breach of an exclusive jurisdiction clause, he must show strong cause why the court should exercise its discretion in his favour and assist him in breaching his promise to bring the action in the contractual forum. What is strong cause and what are the circumstances the courts would take into account were set out in The El Amria case as follows: The court in exercising its discretion should grant the stay and give effect to the agreement between the parties unless strong cause is shown by the plaintiff for not doing so. To put it in other words the plaintiff must show exceptional circumstances amounting to strong cause for him to succeed in resisting an application for a stay by the defendant. In exercising its discretion the court should take into account all the circumstances of the particular case. In particular, the court may have regard to the following matters, where they arise: (a) In what country the evidence on the issues of fact is situated or more readily available, and the effect of that on the relative convenience and expense of trial as between the Singapore and foreign courts. (b) Whether the law of the foreign court applies and, if so, whether it differs from Singapore law in any material respects. (c) With what country either party is connected and, if so, how closely. (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would: (i) (ii) (iii) (iv) be deprived of security for their claim; be unable to enforce any judgment obtained; be faced with a time-bar not applicable here; or for political, racial, religious or other reasons be unlikely to get a fair trial.

Admittedly, while the circumstances which the court should take into account in determining whether an action commenced in Singapore should not be stayed in spite of an exclusive jurisdiction clause are, to some extent, similar to those which the court would take into consideration in determining whether the action should be stayed on the ground of forum non conveniens, they are not the same. In weighing the balance of convenience under the doctrine of forum non conveniens, the issue of whether there is a defence to the claim is not a relevant consideration as the court should not be required to go into the merits. This is because the juridical basis of a stay based on forum non conveniens is different from that of a stay based on an exclusive jurisdiction clause. Under the doctrine of forum non conveniens, the object is in determining which forum is the more appropriate forum. On the other hand, for a party to be excused from his commitment to the exclusive jurisdiction clause he must show exceptional circumstances, and the averment that the defendant has no defence to the claim could constitute exceptional circumstances to enable the court to excuse the plaintiff from complying with the jurisdictional clause.

In any event, we could not see how the appellant could seriously contend that its common law claim in tort could be determined without a trial. Obviously, evidence would be required to show the scope and responsibility of the appellants work on board the vessel, the training he received, the nature of the repair job, whether the appellant had been briefed on the repair to be undertaken and what were the standard safety measures which the appellant ought to have taken. Indeed, there was evidence to suggest that it was the appellants duty to brief the workers under him on safety requirements. Moreover, there is a further claim in negligence based on the allegation that the respondent had failed to provide the appellant with urgent medical treatment. In addition, there is also the question as to whether the current state of his right eye was caused by his own default in refusing to go for a corneal transplant as recommended by the Philippine ophthalmologist. It is clear that if this case were to proceed in Singapore, the trial judge would have to address both the issues of liability and the appropriate quantum of damages. It would not be an open and shut case. Conclusion In the circumstances of this case, it was quite clear to us that the judge was correct in holding that the Philippines would be the more appropriate forum to determine the claim. Nothing material in the case linked it to Singapore. The only link the appellant had with Singapore was the fact that he joined the vessel in Singapore and that he returned to the Philippines via Singapore. However, these circumstances were wholly irrelevant to the claim. Neither was the fact that the writ was served on the vessel in Singapore of any real relevance. Moreover, no security was obtained in Singapore. What is more material are these. First, the entire crew of the vessel, including the appellant, are Filipino and presumably reside in that country. Second, the medical witnesses will also be from the Philippines, other than the ophthalmologist from Yangon, whose evidence may or may not even be necessary. Third, the employment contract is governed by Philippine law. The Philippines has specifically enacted laws to protect its citizens who are serving on foreign vessels. Hong Kong law will only come into the picture if it is shown to be more advantageous to the appellant and this has not been shown as yet. Fourth, the hearing of the claim in the Philippines will also avoid the need for having interpretation, especially for those lower rank staff, if any, who may be able to speak only in Tagalog. Fifth, a performance bond has been furnished by Cleene Maritime to the Filipino authorities. Sixth, the respondent has also agreed to submit to the jurisdiction of the Philippines. To our mind, the case has overwhelming connection with the Philippines. Thus the appeal had to be dismissed. In re UNION CARBIDE CORPORATION GAS PLANT DISASTER AT BHOPAL, INDIA IN DECEMBER, 1984. v. UNION CARBIDE CORPORATION, Decided Jan. 14, 1987 FACTS The accident occurred on the night of December 2-3, 1984, when winds blew the deadly gas from the plant operated by UCIL into densely occupied parts of the city of Bhopal. UCIL is incorporated under the laws of India. The company is engaged in the manufacture of a variety of products, including chemicals, plastics, fertilizers and insecticides, at 14 plants in India and employs over 9,000 Indian citizens. It is managed and operated entirely by Indians in India. Four days after the Bhopal accident, the first of some 145 purported class actions in federal district courts in the United States was commenced on behalf of victims of the disaster. On January 2, 1985, the Judicial Panel on Multidistrict Litigation assigned the actions to the Southern District of New York where they became the subject of a consolidated complaint. In the meantime, on March 29, 1985, India enacted the Bhopal Gas Leak Disaster (Processing of Claims) Act, granting to its government, the UOI, the exclusive right to represent the victims in India or elsewhere. Thereupon the UOI, purporting to act in the capacity of parens patriae, and with retainers executed by many of the victims filed a complaint in the Southern District of New York . The cause of action is similar to the purported class action complaints already filed by individuals in the United States. The UOIs decision to bring suit in the United States was attributed to the fact that, although numerous lawsuits had been instituted by victims in India against UCIL, the Indian courts did not have jurisdiction over UCC, the parent company, which is a defendant in the United States actions. The actions in India asserted claims not only against UCIL but also against the UOI, the State of Madhya Pradesh, and the Municipality of Bhopal, and were consolidated in the District Court of Bhopal. Judge Keenan appointed a three-person Executive Committee to represent all plaintiffs in the pre-trial proceedings. It consisted of two lawyers representing the individual plaintiffs and one representing the UOI. UCC moved to dismiss the complaints on grounds of forum non conveniens, lack of standing to bring the actions in the United States, and their purported attorneys lack of authority to represent them. After several months of discovery related to forum non conveniens, [FN1] the individual plaintiffs and the UOI opposed UCC’s motion. After hearing argument, the district court, in a thoroughly reasoned 63-page opinion granted the motion, dismissing the lawsuits before it on condition that UCC: (1) consent to the jurisdiction of the courts of India and continue to waive defenses based on the statute of limitations, (2) agree to satisfy any judgment rendered by an Indian court against it and upheld on appeal, provided the judgment and affirmance comport with the minimal requirements of due process; and (3) be subject to discovery under the Federal Rules of Civil Procedure of the United States. Judge Keenan, however, dismissed the case on the ground of forum non conveniens. He stated that although the Indian system might limit the victims; access to sources of proof, the Court has no authority to bind the plaintiffs (victims) to American discovery rules. Also, proof to be offered at trial would be derived from interviews of these witnesses in India and study of the records located there to determine whether the accident was caused by negligence on the part of the management or employees in the operation of the plant, by fault in its design, or by sabotage. In short, India has greater ease of access to the proof than does the United States. The records are almost entirely in Hindi or other Indian languages, understandable to an Indian court without translation. The witnesses for the most part do not speak English but Indian languages understood by an Indian court but not by an American court. These witnesses could be required to appear in an Indian court but not in a court of the United States. Although witnesses in the United States could not be subpoenaed to appear in India, they are comparatively few in number and most are employed by UCC which, as a party, would produce them in India, with lower overall transportation costs than if the parties were to attempt to bring hundreds of Indian witnesses to the United States. Lastly, Judge Keenan properly concluded that an Indian court would be in a better position to direct and supervise a viewing of the Bhopal plant, which was sealed after the accident. Such a viewing could be of help to a court in determining liability issues. The district court concluded that the public interest concerns, like the private ones, also weigh heavily in favor of India as

the situs for trial and disposition of the cases. The accident and all relevant events occurred in India. The victims, over 200,000 in number, are citizens of India and located there. The witnesses are almost entirely Indian citizens. The Union of India has a greater interest than does the United States in facilitating the trial and adjudication of the victims claims. Despite the contentions of plaintiffs and amici that it would be in the public interest to avoid a double standard; by requiring an American parent corporation (UCC) to submit to the jurisdiction of American courts, India has a stronger countervailing interest in adjudicating the claims in its courts according to its standards rather than having American values and standards of care imposed upon it. Lastly, India has considered the plant to be an Indian one and the disaster to be an Indian problem. It therefore has a deep interest in ensuring compliance with its safety standards. The victims continue to oppose the dismissal.Upon argument on appeal, plaintiffs principal contentions in favor of retention of the cases by the district court are that deference to the plaintiffs; choice of forum has been inadequate, that the Indian courts are insufficiently equipped for the task, that UCC has its principal place of business here, that the most probative evidence regarding negligence and causation is to be found here, that federal courts are much better equipped through experience and procedures to handle such complex actions efficiently than are Indian courts, and that a transfer of the cases to India will jeopardize a $350 million settlement being negotiated by plaintiffs counsel. ISSUE W/N the it is the district court of the United States and not the Indian Court that has jurisdiction over the victims claims. RULING The forum non conveniens determination is committed to the sound discretion of the trial court. It may be reversed only when there has been a clear abuse of discretion; where the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference. Having reviewed Judge Keenans detailed decision, in which he thoroughly considered the comparative adequacy of the forums and the public and private interests involved, we are satisfied that there was no abuse of discretion in his granting dismissal of the action. Little or no deference can be paid to the plaintiffs; choice of a United States forum when all but a few of the 200,000 plaintiffs are Indian citizens located in India who, according to the UOI, have revoked the authorizations of American counsel to represent them here and have substituted the UOI, which now prefers Indian courts. The finding of our district court, after exhaustive analysis of the evidence, that the Indian courts provide a reasonably adequate alternative forum cannot be labelled clearly erroneous or an abuse of discretion. Although basic design programs were prepared in the United States and some assistance furnished to UCIL at the outset of the 10-year period during which the Bhopal plant was constructed, the proof bearing on the issues to be tried is almost entirely located in India. This includes the principal witnesses and documents bearing on the development and construction of the plant, the detailed designs, the implementation of plans, the operation and regulation of the plant, its safety precautions, the facts with respect to the accident itself, and the deaths and injuries attributable to the accident. UCC contends that Indian courts, while providing an adequate alternative forum, do not observe due process standards that would be required as a matter of course in this country. As evidence of this apprehension it points to the haste with which the Indian court in Bhopal issued a temporary order freezing its assets throughout the world and the possibility of serious prejudice to it if the UOI is permitted to have the double and conflicting status of both plaintiff and co-defendant in the Indian court proceedings. It argues that we should protect it against such denial of due process by authorizing Judge Keenan to retain the authority, after forum non conveniens dismissal of the cases here, to monitor the Indian court proceedings and be available on call to rectify in some undefined way any abuses of UCC’s right to due process as they might occur in India. The US district courts jurisdiction is limited to proceedings before it in this country. Once it dismisses those proceedings on grounds of forum non conveniens it ceases to have any further jurisdiction over the matter unless and until a proceeding may someday be brought to enforce here a final and conclusive Indian money judgment. Nor could we, even if we attempted to retain some sort of supervisory jurisdiction, impose our due process requirements upon Indian courts, which are governed by their laws, not ours. The concept of shared jurisdictions is both illusory and unrealistic. The parties cannot simultaneously submit to both jurisdictions the resolution of the pre-trial and trial issues when there is only one consolidated case pending in one court. Any denial by the Indian courts of due process can be raised by UCC as a defense to the plaintiffs; later attempt to enforce a resulting judgment against UCC in this country. The Court also stated that once the plaintiffs they should succeed in obtaining an Indian judgment against UCC, they may enforce it against UCC in the United States. Lastly, it is important to note that basic justice dictates that both sides be treated equally, with each having equal access to the evidence in the possession or under the control of the other. Application of this fundamental principle in the present case is especially appropriate since the UOI, as the sovereign government of India, is expected to be a party to the Indian litigation, possibly on both sides. FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers Bank of the Philippines) and MERCURIO RIVERA vs. COURT OF APPEALS, CARLOS EJERCITO, in substitution of DEMETRIO DEMETRIA, and JOSE JANOLO, G.R. No. 115849 January 24, 1996 FACTS In the course of its banking operations, Producer Bank of the Philippines acquired six parcels of land with a total area of 101 hectares located at Don Jose, Sta. Rose, Laguna. The property used to be owned by BYME Investment and Development Corporation which had them mortgaged with the bank as collateral for a loan. The original plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to purchase the property and thus initiated negotiations for that purpose. In the early part of August 1987, Demetrio and Jose, upon the suggestion of BYME investment's legal counsel, met with Mercurio Rivera, Manager of the Property Management Department of the defendant bank. The meeting was held pursuant to Demetrios and Joses plan to buy the property. After the meeting, plaintiff Janolo, following the advice of Mercurio, made a formal purchase offer to the bank through a letter. The offer to buy was accepted by the bank. Then, the conservator of the bank (which has been placed under conservatorship by the Central Bank since 1984) was replaced by an Acting Conservator in the person of defendant Leonida T. Encarnacion. Mercurio wrote Demetrio the a letter stating that the land to be purchased is under study yet as of this time by the newly created committee for submission to the newly designated Acting Conservator of the bank. What thereafter transpired was a series of demands by the Demetrio and Jose for compliance by the bank with what was considered as a perfected contract of sale, which demands were in one form or another refused by the bank. Demetrio and

Jose, through a letter to defendant Mercurio, already tendered payment of the amount of P5.5 million "pursuant to (our) perfected sale agreement." The Bank refused to receive both the payment and the letter. Instead, the parcels of land involved in the transaction were advertised by the bank for sale to any interested buyer. Demetrio and Jose demanded the execution by the bank of the documents on what was considered as a "perfected agreement" through another letter. The Bank acknowledged the receipt of the letter but remained adamant in its position. Demetrio and Jose, through counsel, made a final demand for compliance by the bank with its obligations under the considered perfected contract of sale. The Bank filed a reply repudiating the authority of Mercurio and claimed that his dealings with the Demetrio and Jose, particularly his counter-offer of P5.5 Million are unauthorized or illegal; thus, there is no perfected contract of sale. On that basis, the Bank justified the refusal of the tenders of payment and the noncompliance with the obligations under what the Demetrio and Jose considered to be a perfected contract of sale. Other major stockholders of the Bank filed a motion to intervene as a derivative suit with the Regional Trial Court of Makati against the plaintiffs "to declare any perfected sale of the property as unenforceable and to stop Ejercito from enforcing or implementing the sale In his answer, Janolo argued that the Second Case was barred by litis pendentia by virtue of the case then pending in the Court of Appeals. During the pre-trial conference in the Second Case, plaintiffs filed a Motion for Leave of Court to Dismiss the Case Without Prejudice. "The Bank opposed this motion on the ground, among others, that plaintiff's act of forum shopping justifies the dismissal of both cases, with prejudice. The Bank, in its memorandum, averred that this motion is still pending in the Makati RTC. Allegations of parties: The Bank vigorously argues that in spite of this verification, petitioners (Demetrio, Jose, etc.) are guilty of actual forum shopping because the instant petition pending before this Court involves "identical parties or interests represented, rights asserted and reliefs sought (as that) currently pending before the Regional Trial Court, Makati Branch 134 in the Second Case. In fact, the issues in the two cases are so interwined that a judgement or resolution in either case will constitute res judicata in the other." On the other hand, petitioners explain that there is no forum-shopping because: 1) In the earlier or "First Case" from which this proceeding arose, the Bank was impleaded as a defendant, whereas in the "Second Case" (assuming the Bank is the real party in interest in a derivative suit), it was plaintiff; 2) "The derivative suit is not properly a suit for and in behalf of the corporation under the circumstances"; 3) Although the CERTIFICATION/VERIFICATION (supra) signed by the Bank president and attached to the Petition identifies the action as a "derivative suit," it "does not mean that it is one" and "(t)hat is a legal question for the courts to decide"; 4) Petitioners did not hide the Second Case at they mentioned it in the said VERIFICATION/CERTIFICATION. ISSUE W/n there is forum shopping committed in the case. RULING To begin with, forum-shopping originated as a concept in private international law, where non-resident litigants are given the option to choose the forum or place wherein to bring their suit for various reasons or excuses, including to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. To combat these less than honorable excuses, the principle of forum non conveniens was developed whereby a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most "convenient" or available forum and the parties are not precluded from seeking remedies elsewhere. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in the courts but also in connection with litigations commenced in the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling. This is specially so, as in this case, where the court in which the second suit was brought, has no jurisdiction. The test to determine whether there is forum shopping or not is identity of parties, or at least such parties as represent the same interests in both actions, as well as identity of rights asserted and relief prayed for, the relief being founded on the same facts, and the identity on the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party is successful, amount to res adjudicata in the action under consideration: all the requisites, in fine, of auter action pendant. Consequently, where a litigant (or one representing the same interest or person) sues the same party against whom another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are still pending, the defense of litis pendencia in one case is bar to the others; and, a final judgment in one would constitute res judicata and thus would cause the dismissal of the rest. In either case, forum shopping could be cited by the other party as a ground to ask for summary dismissal of the two (or more) complaints or petitions, and for imposition of the other sanctions, which are direct contempt of court, criminal prosecution, and disciplinary action against the erring lawyer. Very simply stated, the original complaint in the court a quo which gave rise to the instant petition was filed by the buyer (herein private respondent and his predecessors-in-interest) against the seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand, the complaint in the Second Case seeks to declare such purported sale involving the same real property "as unenforceable as against the Bank", which is the petitioner herein. In other words, in the Second Case, the majority stockholders, in representation of the Bank, are seeking to accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the objective or the relief being sought, though worded differently, is the same, namely, to enable the petitioner Bank to escape from the obligation to sell the property to respondent. In the instant case, firstly, they are not suing in their personal capacities, for they have no direct personal interest in the matter in controversy. They are not principally or even subsidiarily liable; much less are they direct parties in the assailed contract of sale; and Secondly, the allegations of the complaint in the Second Case show that the stockholders are bringing a "derivative suit". In the caption itself, petitioners claim to have brought suit "for and in behalf of the Producers Bank of the Philippines". Indeed, this is the very essence of a derivative suit. The suit was filed not by the minority shareholders, but by Henry Co et al., who not only own, hold or control over 80% of the outstanding capital stock, but also constitute the majority in the Board of Directors of petitioner Bank. That being so, then they really represent the Bank. So, whether they sued

"derivatively" or directly, there is undeniably an identity of interests/entity represented. Shareholders, whether suing as the majority in direct actions or as the minority in a derivative suit, cannot be allowed to trifle with court processes, particularly where, as in this case, the corporation itself has not been remiss in vigorously prosecuting or defending corporate causes and in using and applying remedies available to it. To rule otherwise would be to encourage corporate litigants to use their shareholders as fronts to circumvent the stringent rules against forum shopping. Finally, petitioner Bank argued that there cannot be any forum shopping, even assuming arguendo that there is identity of parties, causes of action and reliefs sought, "because it (the Bank) was the defendant in the (first) case while it was the plaintiff in the other (Second Case)", Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or to grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issue. In this case, this is exactly the problem: a decision recognizing the perfection and directing the enforcement of the contract of sale will directly conflict with a possible decision in the Second Case barring the parties front enforcing or implementing the said sale. Indeed, a final decision in one would constitute res judicata in the other. The foregoing conclusion finding the existence of forum-shopping notwithstanding, the only sanction possible now is the dismissal of both cases with prejudice, as the other sanctions cannot be imposed because petitioners' present counsel entered their appearance only during the proceedings in this Court, and the Petition's VERIFICATION/CERTIFICATION contained sufficient allegations as to the pendency of the Second Case to show good faith in observing Circular 28-91. The Lawyers who filed the Second Case are not before us; thus the rudiments of due process prevent us from motu propio imposing disciplinary measures against them in this Decision. WING ON COMPANY vs. SYYAP 64 O.G. 8311 (1967) FACTS In 1948, Wing On Company, a foreign partnership based in New York contracted with Syyap Co., Inc. thru its agent, Murray Kein in New York. They negotiated for the purchase of clothing material under a verbal agreement that Syyap would pay Wing On the value thereof after the sale of goods by Syyap and that the profits would be divided between them. Wing On shipped to Syyap clothing materials worth $22,246.04. Syyap was able to pay Wing On only $3,530.04 leaving a balance of $18,716. Syyap failed to settle the debt or account for and divide the profits. The court rendered judgment in favour of Wing On and ordered defendant to pay the balance and attorneys fee and make an accounting of profits realized. Syyap contends that: 1) the court a quo had no jurisdiction to try the case because Wing On is not licensed to do business in the Philippines and therefore, had no legal capacity to sue; and 2) the trial court should have declined jurisdiction pursuant to the principle of forum non conveniens. ISSUE W/N the trial court had jurisdiction? RULING We believe that the facts surrounding the present case do not warrant the application of any recognized rules of Private International Law. It is a well-established practice in the application of the principle of forum non conveniens that unless the balance is strongly in favour of the defendant, the plaintiffs choice of forum should rarely be disturbed, and that, furthermore, the consideration of inadequacy to enforce the judgment, which is one of the important factors to be considered in the application of said principle, would precisely constitute a problem to the plaintiff if the local courts decline to assume jurisdiction on the basis of said principle, considering that the defendant is a resident of the Philippines. It is true that the agreement in question involving the purchase of clothing materials was entered into in New York, USA. The goods, however, were delivered to, and received and sold by the defendant in this jurisdiction. Considering that, as above-stated, the Wing On Company of New York may sue in Philippine courts in connection with the transaction in question and, considering, further that the present suit arising from said transaction is in the nature of a personal action, the case may be commenced and tried where the defendant resides or may be found, or where the plaintiff resides, at the election of the plaintiff. Consequently, a venue in the instant case was not improperly laid and the court a quo did not err in taking cognizance of the case. HEINE vs. NEW YORK INSURANCE COMPANY 45 F2d 426 (1940) FACTS This is one of several cases brought against New York Life Insurance Company and the Guardian Insurance Company to recover on some two hundred and forty life insurance policies made and issued by the defendants in Germany, in favour of German citizens and payable in German marks. Defendants were incorporated in New York with statutory agents in Oregon, upon whom service of summons can be made. As a condition to the insurance companies right to do business in Germany, they were compelled to accede to the supervision and control of German insurance officials, to invest the proceeds arising from German policies in German securities, and to establish an office there with an agent upon whom service can be made. The actions are brought in the name of the insured parties in the United States and Germany for amounts due or owing under the policies. ISSUE May the court exercise discretion in deciding whether to retain or not to retain jurisdiction of a case where a court in another state has jurisdiction over the case by taking into consideration external factors? YES RULING 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 jurisdictions. 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 non-residents of the forum. The courts of this country (USA) 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, 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. MARJORIE E. GOODWINE v. THE SUPERIOR COURT OF LOS ANGELES COUNTY and DON F. GOODWINE (L.A. No. 28464. Supreme Court of California. Nov. 4, 1965.) FACTS This is a mandamus proceeding to compel the Superior Court of Los Angeles County to vacate an order dismissing a separate maintenance action and to compel such court to take jurisdiction of the action. The peremptory writ granted. Plaintiff, Marjorie E. Goodwine, began an action for separate maintenance against her husband, Don F. Goodwine. A writ of attachment was levied upon defendant's real property in the County of Los Angeles, giving the trial court quasi-in-rem jurisdiction. Plaintiff secured an order for service by publication based on an affidavit that defendant resided out of the state and defendant was personally served in Mexico. Defendant moved to quash and to dismiss the action, on the ground that the trial court was without jurisdiction. The trial court granted defendant's motion and dismissed the action. Plaintiff then filed this petition for a writ of mandate to compel the trial court to vacate its order dismissing the action. Plaintiff and defendant were married in Nevada and they lived in California until they moved to Mexico to live in retirement. Defendant obtained a resident's visa and became a domiciliary of Mexico. Plaintiff obtained a tourist visa because of local regulations, but she also intended to become a permanent resident of Mexico. Plaintiff then left defendant and went to Los Angeles to reside with her sister, allegedly because he treated plaintiff with extreme cruelty. Plaintiff then brought the action for separate maintenance. ISSUE W/N the court has jurisdiction? YES

RULING Defendant contends that the trial court has no jurisdiction in an action for separate maintenance when neither party is domiciled in the state. There is no merit in this contention. In an action for divorce, the domicile of one spouse within a State gives power to that State. The state in which one spouse is domiciled is deemed to have sufficient interest to terminate the marriage. In an action for separate maintenance, however, domicile is neither sufficient nor necessary for jurisdiction. An action for separate maintenance is essentially an action for support. Jurisdiction does not depend on domicile but on acquiring personal jurisdiction over the husband or quasi-in- rem jurisdiction over his property. Once quasi-in-rem jurisdiction is established, the court can award a money judgment to the extent of the defendant's interest in the property attached. Exercising jurisdiction in these cases does not encourage forum-shopping, since the court will not necessarily apply the substantive law of the forum under the applicable conflict of laws rules. Defendant contends that even if the trial court has quasi-in-rem jurisdiction, it properly refused to exercise it under the doctrine of forum non conveniens. The trial court, however, has not yet considered whether the doctrine of forum non conveniens applies to this case, since it treated defendant's motion as being for the sole purpose of objecting to the court's jurisdiction. Since the court has jurisdiction of the subject matter, it can now consider the applicability of that doctrine, which is accepted in this jurisdiction and applies to actions for support In determining the applicability of the doctrine, the court must consider the public interest as well as the private interests of the litigants. The court must consider such factors as the ease of access of proof, the availability and cost of obtaining witnesses, the possibility of harassment of the defendant in litigating in an inconvenient forum, the enforceability of the judgment, the burden on the community in litigating matters not of local concern, and the desirability of litigating local matters in local courts. Unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.. The trial court must in the first instance consider these factors in determining whether to apply the doctrine. Thus plaintiff alleges mistreatment throughout the marriage, both in California and in Mexico, and the trial court must ascertain the location of witnesses and other sources of proof. Moreover, the trial court must consider plaintiff's contention that she is domiciled in California. The trial court originally relied on defendant's affidavit that plaintiff was domiciled in Mexico, on the failure of plaintiff to file a counter affidavit, on the ambiguity of plaintiff's allegation of residence in her complaint, and on points and authorities submitted by the parties in deciding plaintiff was not a California domiciliary. On remand, plaintiff can submit further evidence of her domicile in this state. A determination that a plaintiff is domiciled here would ordinarily preclude granting the defendant's motion for dismissal on the ground of forum non conveniens. Let the peremptory writ issue as prayed.

FLEUMER vs. HIX 54 Phil. 610 (1930) FACTS Fleumer, the special administrator of the Estate of Edward R. Hix, appealed from the decision of the lower court denying probate of a document alleged to be the will of Hix. Fleumer, alleged that the will was executed in West Virginia on November 3, 1925 by Hix who was residing there and therefore, the laws of West Virginia should govern. He submitted a copy of section 3868 of Act 1882 as found in the West Virginia Code and certified by the Director of the National Library. ISSUE W/N the court should apply the West Virginia Code? NO RULING The laws of a foreign jurisdiction do not prove themselves in courts. The courts of the Philippine Islands are not authorized to take judicial notice of laws of the various States of the American Union. Such laws must be proved as facts. Here the requirements of the law were not met. There was no showing that the book from which an extract was taken 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 seal 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 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, or that these witnesses subscribed to 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 outside the Philippine Islands, it would then be the duty of the petitioner to prove execution by some other means.

PHILIPPINE TRUST CO. vs. BOHANAN 106 Phil. 997 (1960) FACTS In the order admitting to probate the will made by C.O. Bohanan, the CFI of Manila declared him to be a citizen of Nevada, U.S.A. The Philippine Trust Co., named as executor of the will, was ordered by the CFI of Manila in its order granting probate to enter upon the execution and performance of its trust. In a subsequent hearing of the proposed project of partition of the estate, Nevada law was not introduced. Magdalena Bohanan, widow and her two children questioned the validity of the will which gave to a grandson P90,819.67 of the P211,639 and one half of all shares of stock of several mining companies. He gave the same number of shares and the same amount in cash to his brother and sister. Only P6,000 was left to each of his children. ISSUE Which law will apply? RULING 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 governed 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. 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. So the question at issue is whether testamentary dispositions, especially those 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. It does not appear that at the time of the hearing of the project partition, the above-quoted provision was introduced in evidence, as it was the executors duty 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 attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. 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 appellants counsel. Again said law was presented by the counsel for the executor and admitted by the Court during the hearing of the case on January 23, 1950. 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 the pertinent law of Nevada 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 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 affirmed. PRISCILLA C. MIJARES, ET AL. vs. HON. SANTIAGO JAVIER RANADA, and the ESTATE OF FERDINAND E. MARCOS

G.R. No. 139325 April 12, 2005 FACTS In 1991, a complaint was filed with the District Court of Hawaii, against the Estate of former Philippine President Ferdinand E. Marcos. The action was brought forth by ten Filipino citizens who each alleged having suffered human rights abuses such as arbitrary detention, torture and rape in the hands of police or military forces during the Marcos regime. The Alien Tort Act was invoked as basis for the US District Court's jurisdiction over the complaint, as it involved a suit by aliens for tortious violations of international law. These plaintiffs brought the action on their own behalf and on behalf of a class of similarly situated individuals (numbering around 10,000), particularly consisting of all current civilian citizens of the Philippines, their heirs and beneficiaries, who between 1972 and 1987 were tortured, summarily executed or had disappeared while in the custody of military or paramilitary groups. In 1995, the US District Court awarded a total of $1,964,005,859.90 to the plaintiffs. The judgement was affirmed by the US Court of Appeals. The Marcos Estate did not appeal the decision to the US Supreme Court. In 1997, the present petitioners filed a Complaint with the Makati RTC for the enforcement of the foreign judgment. The Marcos Estate filed a motion to dismiss, raising, among others, the non-payment of the correct filing fees. It alleged that petitioners had only paid Four Hundred Ten Pesos (P410.00) as docket and filing fees, notwithstanding the fact that they sought to enforce a monetary amount of damages in the amount of over Two and a Quarter Billion US Dollars (US$2.25 Billion). In response, the petitioners claimed that an action for the enforcement of a foreign judgment is not capable of pecuniary estimation; hence, a filing fee of only P410.00 (now P600.00). Judge Ranada dismissed the complaint without prejudice, saying that the action was capable of pecuniary estimation and that the proper docket fees to be paid amounted to 472 million. He also denied the motion for reconsideration. Thus, petitioners filed a Petition for Certiorari under Rule 65 assailing the orders of Judge Ranada. Petitioners argue that their action is incapable of pecuniary estimation as the subject matter of the suit is the enforcement of a foreign judgment, and not an action for the collection of a sum of money or recovery of damages. They also invoke Section 11, Article III of the Bill of Rights of the Constitution, which provides that "Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty," a mandate which is essentially defeated by the required exorbitant filing fee. The filing fee of 472 million, as arrived at by the RTC, was characterized as indisputably unfair, inequitable, and unjust. ISSUE W/N the action is capable of pecuniary estimation. How much should the plaintiffs pay as docket fees? RULING The action is CAPABLE OF PECUNIARY ESTIMATION, but the plaintiffs ended up paying the correct amount as docket fees. Rule 141 of the Rules of Court
SEC. 7. Clerk of Regional Trial Court.(a) For filing an action or a permissive counterclaim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc., complaint, or a complaint in intervention, and for all clerical services in the same time, if the total sum claimed, exclusive of interest, or the started value of the property in litigation, is: (a corresponding docket fee is given for a certain range in the amount of the sum claimed) (b) For filing: 1. Actions where the value of the subject matter cannot be estimated --- P 600.00 2. Special civil actions except judicial foreclosure which shall be governed by paragraph (a) above --P 600.00 3. All other actions not involving property --P 600.00 SEC. 48. Effect of foreign judgments. The effect of a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment is as follows: (a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing; (b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title; In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Judge Ranada opined that the subject matter of the complaint was indeed capable of pecuniary estimation, as it involved a

judgment rendered by a foreign court ordering the payment of definite sums of money, allowing for easy determination of the value of the foreign judgment. Section 7(a) of Rule 141 of the Rules of Civil Procedure relied upon by Judge Ranada prescribes a corresponding filing fee based on total sum claimed for ordinary actions, permissive counterclaims, thirdparty, etc. complaints and complaints-in-interventions, and money claims against estates which are not based on judgment. The SC said Section 7(a) was not applicable because although the action was a claim against the estate of Marcos, it is one that is based on judgment, which in this case, was a foreign judgment. But the SC said that where the rule does not distinguish, ... The plaintiffs argue that the action falls under Section 7(b) (1) of Tule 141 matter cannot be estimated. The SC disagreed saying, actions where the value of the subject

This is an intriguing argument, but ultimately it is self-evident that while the subject matter of the action is undoubtedly the enforcement of a foreign judgment, the effect of a providential award would be the adjudication of a sum of money. Perhaps in theory, such an action is primarily for "the enforcement of the foreign judgment," but there is a certain obtuseness to that sort of argument since there is no denying that the enforcement of the foreign judgment will necessarily result in the award of a definite sum of money. So the SC was saying that even if the action filed by the plaintiffs is capable of pecuniary estimation, it cannot fall under Section 7(a) because it is based on a judgment. According to the SC, the case falls under Section 7(b)(3) --- other actions not involving property. As it turns out, the docket fees under this rule is the same as the one for cases not capable of pecuniary estimation so the plaintiffs ended up paying the correct amount as docket fees and the case SHOULD NOT have been dismissed. The SC also said (and I think this is the part that is related to Conflicts):

There is another consideration of supreme relevance in this case, one which should disabuse the notion that the doctrine affirmed in this decision is grounded solely on the letter of the procedural rule. We earlier adverted to the the internationally recognized policy of preclusion, as well as the principles of comity, utility and convenience of nations as the basis for the evolution of the rule calling for the recognition and enforcement of foreign judgments. The US Supreme Court in Hilton v. Guyot relied heavily on the concept of comity, as especially derived from the landmark treatise of Justice Story in his Commentaries on the Conflict of Laws of 1834. Yet the notion of "comity" has since been criticized as one "of dim contours" or suffering from a number of fallacies. Other conceptual bases for the recognition of foreign judgments have evolved such as the vested rights theory or the modern doctrine of obligation. xxx There is no obligatory rule derived from treaties or conventions that requires the Philippines to recognize foreign judgments, or allow a procedure for the enforcement thereof. However, generally accepted principles of international law, by virtue of the incorporation clause of the Constitution, form part of the laws of the land even if they do not derive from treaty obligations. The classical formulation in international law sees those customary rules accepted as binding result from the combination two elements: the established, widespread, and consistent practice on the part of States; and a psychological element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory by the existence of a rule of law requiring it. Aside from the widespread practice, it is indubitable that the procedure for recognition and enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted in various foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48, Rule 39 of the Rules of Court which has existed in its current form since the early 1900s. Certainly, the Philippine legal system has long ago accepted into its jurisprudence and procedural rules the viability of an action for enforcement of foreign judgment, as well as the requisites for such valid enforcement, as derived from internationally accepted doctrines. Again, there may be distinctions as to the rules adopted by each particular state, but they all prescind from the premise that there is a rule of law obliging states to allow for, however generally, the recognition and enforcement of a foreign judgment. The bare principle, to our mind, has attained the status of opinio juris in international practice. This is a significant proposition, as it acknowledges that the procedure and requisites outlined in Section 48, Rule 39 derive their efficacy not merely from the procedural rule, but by virtue of the incorporation clause of the Constitution. Rules of procedure are promulgated by the Supreme Court, and could very well be abrogated or revised by the high court itself. Yet the Supreme Court is obliged, as are all State components, to obey the laws of the land, including generally accepted principles of international law which form part thereof, such as those ensuring the qualified recognition and enforcement of foreign judgments. Thus, relative to the enforcement of foreign judgments in the Philippines, it emerges that there is a general right recognized within our body of laws, and affirmed by the Constitution, to seek recognition and enforcement of foreign judgments, as well as a right to defend against such enforcement on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. The preclusion of an action for enforcement of a foreign judgment in this country merely due to an exhorbitant assessment of docket fees is alien to generally accepted practices and principles in international law. Indeed, there are grave concerns in conditioning the amount of the filing fee on the pecuniary award or the value of the property subject of the foreign decision. Such pecuniary award will almost certainly be in foreign denomination, computed in accordance with the applicable laws and standards of the forum. The vagaries of inflation, as well as the relative low-income capacity of the Filipino, to date may very well translate into an award virtually unenforceable in this country, despite its integral validity, if the docket fees for the enforcement thereof were predicated on the amount of the award sought to be enforced. The theory adopted by respondent judge and the Marcos Estate may even lead to absurdities, such as if applied to an award involving real property situated in places such as the United States or Scandinavia where real property values are inexorably high. We cannot very well require that the filing fee be computed based on the value of the foreign property as determined by the standards of the country where it is located. BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD. v. COURT OF APPEALS, HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and AURELIO K. LITONJUA, JR. G.R. No. 120135 March 31, 2003 FACTS Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas, for brevity) filed a Complaint before the Regional Trial Court of Pasig against the Bank of America NT&SA and Bank of America International, Ltd. (defendant banks for brevity) alleging that: they were engaged in the shipping business; they owned two vessels: Don Aurelio and El Champion, through their wholly-owned corporations. They deposited their revenues from said business together with other funds with the branches of said banks in the United Kingdom and Hongkong up to 1979; with their business doing well, the defendant banks induced them to increase the number of their ships in operation, offering them easy loans to acquire said vessels; thereafter, the defendant banks acquired, through their (Litonjuas') corporations as the borrowers: (a) El Carrier; (b) El General; (c) El Challenger; and (d) El Conqueror; the vessels were registered in the names of their corporations; the operation and the funds derived therefrom were placed under the complete and exclusive control and disposition of the petitioners; and the possession the vessels was also placed by defendant banks in the hands of persons selected and designated by them (defendant banks). The Litonjuas claimed that defendant banks as trustees did not fully render an account of all the income derived from the operation of the vessels as well as of the proceeds of the subsequent foreclosure sale. Because of the breach of their fiduciary duties and/or negligence of the petitioners and/or the persons designated by them in the operation of private respondents' six vessels, the revenues derived from the operation of all the vessels declined drastically. The loans acquired for the purchase of the four additional vessels then matured and remained unpaid, prompting defendant banks to have all the six vessels, including the two vessels originally owned by the private respondents, foreclosed and sold at public auction to answer for the obligations incurred for and in behalf of the operation of the vessels. They (Litonjuas) lost sizeable amounts of their own personal funds equivalent to ten percent (10%) of the acquisition cost of the four vessels and were left with the unpaid balance of their loans with defendant banks. The Litonjuas prayed for the accounting of the revenues derived in the operation of the six vessels and of the proceeds of the sale thereof at the foreclosure proceedings instituted by petitioners; damages for breach of trust; exemplary damages and attorney's fees. Defendant banks filed a Motion to Dismiss on grounds of forum non conveniens and lack of cause of action against them. The trial court issued an Order denying the Motion to Dismiss. ISSUE

W/N the private respondents guilty of forum shopping because of the pendency of foreign action RULING Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. A Philippine Court may assume jurisdiction over the case if it chooses to do so; provided, that the following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is likely to have power to enforce its decision." Evidently, all these requisites are present in the instant case. That the doctrine of forum non conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground. This Court further ruled that while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the court's desistance; and that the propriety of dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is more properly considered a matter of defense. No. Forum shopping exists where the elements of litis pendentia are present and where a final judgment in one case will amount to res judicata in the other.49 Parenthetically, for litis pendentia to be a ground for the dismissal of an action there must be: (a) identity of the parties or at least such as to represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same acts; and (c) the identity in the two cases should be such that the judgment which may be rendered in one would, regardless of which party is successful, amount to res judicata in the other. In case at bar, not all the requirements for litis pendentia are present. While there may be identity of parties, notwithstanding the presence of other respondents,51 as well as the reversal in positions of plaintiffs and defendants52, still the other requirements necessary for litis pendentia were not shown by petitioner. It merely mentioned that civil cases were filed in Hongkong and England without however showing the identity of rights asserted and the reliefs sought for as well as the presence of the elements of res judicata should one of the cases be adjudged. The petitioners, by simply enumerating the civil actions instituted abroad involving the parties herein, failed to provide this Court with relevant and clear specifications that would show the presence of the above-quoted elements or requisites for res judicata. While it is true that the petitioners in their motion for reconsideration, after enumerating the various civil actions instituted abroad, did aver that "Copies of the foreign judgments are hereto attached and made integral parts hereof as Annexes 'B', 'C', 'D' and 'E'", they failed, wittingly or inadvertently, to include a single foreign judgment in their pleadings submitted to this Court as annexes to their petition. TRAVELERS HEALTH ASSN. v. VIRGINIA, 339 U.S. 643 (1950) FACTS The appellant Travellers Health Association was incorporated in Nebraska and its only office has been located in Omaha, from which it has conducted a mailorder health insurance business. New members pay an initiation fee and obligate themselves to pay periodic assessments at the Omaha office. The funds so collected are used for operating expenses and sick benefits to members. The appellant Pratt in Omaha mails solicitations to these prospects. He encloses blank applications which, if signed and returned to the home office with the required fee, usually result in election of applicants as members. Certificates are then mailed, subject to return within 10 days "if not satisfactory." Travelers has solicited Virginia members in this manner since 1904, and has caused many sick benefit claims to be investigated. Cease and desist proceedings were instituted by the State Corporation Commission against Travelers Health Association and against R. E. Pratt, as treasurer of the Association. Having received notice by registered mail only, they appeared "specially" for "the sole purpose of objecting to the alleged jurisdiction of the Commonwealth of Virginia and of its State Corporation Commission, and of moving to set aside and quash service of summons. The Commission, holding that the foregoing facts supported the state's power to act in 6 proceedings, overruled appellants' objection to jurisdiction and their motion to quash service. The Association and its treasurer were ordered to cease and desist from further solicitations or sales of certificates to Virginia residents "through medium of any advertisement from within or from without the State, and/or through the mails or otherwise, by intra- or inter-state communicationunless and until" it obtained authority in accordance with the "Blue Sky Law." This order was affirmed by the Virginia CA. Appellants Contention: All the activities of Travellers Health Assn take place in Nebraska, and that consequently Virginia has no power to reach them in cease and desist proceedings to enforce any part of its regulatory law. ISSUE W/N Virginia has the power to reach Travellers Health Assn. in cease and desist proceedings to enforce any part of its regulatory law - YES RULING The state has power to issue a "cease and desist order" enforcing at least that regulatory provision requiring the Association to accept service of process by Virginia claimants on the Secretary of the Commonwealth. It is well settled that when contracts are "executed and to be performed" in one state and the Association was not "doing business" in such state, it could not be sued in courts of such state unless "consent" to suits could be implied. However, where business activities reach out beyond one state and create continuing relationships and obligations with citizens of another state, courts need not resort to a fictional "consent" in order to sustain the jurisdiction of regulatory agencies in the latter state. In Osborn v. Ozlin, we recognized that a state has a legitimate interest in all insurance policies protecting its residents against risks, an interest which the state can protect even though the "state action may have repercussions beyond state lines. In International Shoe Co. v. Washington, this Court, after reviewing past cases, concluded: "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.'"

Measured by the principles of these cases, the contacts and ties of appellants with Virginia residents, together with that state's interest in faithful observance of the certificate obligations, justify subjecting appellants to cease and desist proceedings. The Association did not engage in mere isolated or short-lived transactions. Its insurance certificates, systematically and widely delivered in Virginia following solicitation based on recommendations of Virginians, create continuing obligations between the Association and each of the many certificate holders in the state. Appellants have caused claims for losses to be investigated and the Virginia courts were available to them in seeking to enforce obligations created by the group of certificates. Moreover, if Virginia is without power to require this Association to accept service of process on the Secretary of the Commonwealth, the only forum for injured certificate holders might be Nebraska. Health benefit claims are seldom so large that Virginia policyholders could afford the expense and trouble of a Nebraska law suit. In addition, suits on alleged losses can be more conveniently tried in Virginia where witnesses would most likely live and where claims for losses would presumably be investigated. Such factors have been given great weight in applying the doctrine of forum non conveniens. And prior decisions of this Court have referred to the unwisdom, unfairness and injustice of permitting policyholders to seek redress only in some distant state where the insurer is incorporated. The Due Process Clause does not forbid a state to protect its citizens from such injustice. There is, of course, one method by which claimants could recover from appellants in Virginia courts without the aid of substituted service of process: certificate holders in Virginia could all be garnished to the extent of their obligations to the Association. See Huron Corp. v. Lincoln Co. While such an indirect procedure would undeniably be more troublesome to claimants than the plan adopted by the state in its "Blue Sky Law," it would clearly be even more harassing to the Association and its Virginia members. Metaphysical concepts of "implied consent" and "presence" in a state should not be solidified into a constitutional barrier against Virginia's simple, direct and fair plan for service of process on the Secretary of the Commonwealth. Virginia's subjection of this Association to the jurisdiction of that State's Corporation Commission in a proceeding is consistent with "fair play and substantial justice," and is not offensive to the Due Process Clause. SCHMIDT vs. DRISCOLL HOTEL 249 Minn. 376, N.W. 2d 365 (1957) FACTS Minor, plaintiff Herbert Schmidt, through his mother and natural guardian, Matie Shmidt, sued Driscoll Hotel, Inc. doing business as the Hook-Em-Cow Bar and Cafe in South St. Paul, Minnesota, for damages alleged to have resulted from the defendants illegal sale of liquor to Johnson Sorrensen. As a result, Sorrensen became intoxicated in defendants bar so that shortly thereafter, plaintiff sustained injuries when an automobile driven by Sorrensen, in which the plaintiff was a passenger, turned over near Prescott, Wisconsin. Defendant moved to dismiss the action on the ground that the pleadings failed to state a claim against the defendant and that the court lacked jurisdiction. The trial court granted defendants motion, having determined that no penalty by way of collecting damages arose under the Minnesota Civil Damage Act, unless the illegal sale in the state was followed by an injury in the state- because the law does not provide extraterritorial effect. ISSUE W/N the dismissal of the case was proper? NO RULING It is defendants position that the action is governed by the law of torts and that, since the last act in the series of events for which plaintiff instituted his action occurred in Wisconsin, which has no Civil Damage Act similar to 340.95, the latter can have no application in determining plaintiffs rights or defendants liability. In support thereof defendant cites Restatement, Conflict of Laws, 377 and 378, which states: The place of wrong is in the state where the last event necessary to make an actor liable for an alleged tort takes place. The law of the place of wrong determines whether a person has sustained a legal injury. The allegations of the complaint by which we are bound for the purposes of this appeal make clear that the plaintiffs damages are the result of two distinct wrongs one committed by defendant in Minnesota when it sold Sorrenson intoxicating liquors and one committed by Sorrenson in Wisconsin when his negligence caused the car in which plaintiff was riding to turn over. It cannot be disputed that, had plaintiffs action been against Sorrenson for his negligence, his rights would be governed by the law of Wisconsin applicable in tort actions of this kind. But, even if at the time of the accident there had been in effect in Wisconsin a statute similar to 340.95, it is doubtful if it could be applied to ascertain plaintiffs rights against defendant since there is nothing here to support a claim that defendant ever consented to be bound by Wisconsin Law. It would follow that, if the principles expressed in 377 and 378, are held applicable to multistate fact situations like the present, then neither the laws of the state where the last event necessary to create tort liability took place nor the laws of the state where the liquor dealers violations of the liquor statutes occurred would afford an injured party any remedy against the offending liquor dealer for the injuries which resulted from his statutory violations. The result would be that here both the interest of Wisconsin in affording whatever remedies it deems proper for those injured there as the result of foreign violations of liquor laws and the interest of Minnesota in admonishing a liquor dealer whose violation of its statues was the cause of such injuries; and in providing for the injured party a remedy therefor under the Civil Damage Act would become ineffective. We feel that the principles in Restatement, Conflict of Laws 377 and 378, should not be held applicable to fact situations such as the present to bring about the result described and that a determination to the opposite effect would be more in conformity with principles of equity and justice. Here all parties involved were residents of Minnesota. Defendant was licensed under its laws and required to operate its establishment in compliance therewith. Its violation of the Minnesota statutes occurred here, and its wrongful conduct was within Minnesota when, as a result thereof, Sorrenson became intoxicated before leaving the establishment. The consequential harm to plaintiff, a Minnestoa citizen, accordingly should be compensated for under M.S.A. 340.95 which furnishes him a remedy against defendant for its wrongful acts. PENNOYER vs. NEFF

95 US 714 (1878) FACTS Mitchell, an Oregon lawyer, had won an Oregon default judgment against Neff for $300 in attorneys fees. Neff, who lived in California, had been served by publication in an Oregon newspaper. Neff owned land in Oregon, which Pennoyer acquired under a sheriffs deed in satisfaction of the judgment. Neff then sued Pennoyer in a federal court in Oregon to recover the land, contending that the sale was invalid because the state court had not acquired jurisdiction ISSUE W/N the sale of Neffs property by the Oregon court is valid? NO RULING If, without personal service judgments in personam obtained ex parte against non-residents 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 services 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 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 non-resident 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 non-residents, 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 non-resident be afterwards seized and sold on execution. 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 non-resident 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. MULLANE v. CENTRAL HANOVER BANK & TRUST CO 399 U.S. 306 (1950) Facts: Section 100c of the New York State Banking Law provided for the pooling of small trusts into a large common fund administered by a corporate fiduciary, with the income, expenses, and capital gains and losses shared by the constituent trusts in proportion to their contribution to the common fund. The purpose of this legislation (and similar laws in other states) was to provide corporate fiduciary services to modestly-sized trusts which would be too costly to manage individually, promoting economies of scale in the trust management industry and better risk management for smaller trusts. Central Hanover Bank & Trust Co. in New York City was the manager & trustee of one such common trust fund. The common trust fund at issue in this case was established on January 17, 1946, and 100c provided for an accounting of each fund to be undertaken twelve to fifteen months after the establishment of a fund, and then for every three years thereafter. In March of 1947, Central Hanover petitioned the New York Surrogate's Court for a settlement of its first account as common trustee. By this time there were approximately 113 trusts participating in the fund, about half inter vivos trusts and half testamentary trusts, with combined gross capital assets of nearly three million dollars. The only notice of the settlement proceedings required by 100c to be given the trusts beneficiaries was stated as follows: 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.

When the fund had just been started, however, Central Hanover had sent notice by mail of the future proceedings. Subsequent notice in the paper included only the name of the trust, the date of establishment and the estates in the trust. The names of beneficiaries were not included. Appellant Kenneth Mullane was appointed special guardian and attorney for those parties known or unknown who had any interest in the income of the fund, and James N. Vaughan was appointed to represent those parties with interest in the principal. Mullane appeared specially to object to the statutory provision for notice, claiming that it was inadequate to afford the due

process required by the Fourteenth Amendment. The Surrogate overruled Mullanes objections, and entered a decree accepting the accounting and terminating any rights the beneficiaries may have had against Central Hanover for mismanagement of the trust. The New York Supreme Court Appellate Division subsequently affirmed, as did the New York Court of Appeals. The U.S. Supreme Court then granted certiorari. ISSUE What are the constitutional requirements for notice of judicial proceedings to a potential party under the Fourteenth Amendment to the United States Constitution? HELD Justice Jackson began his examination of the issues of the case by discussing the nature of the jurisdiction which the Surrogates Court was exercising. He explained some of the differences in the service of process required in in rem, quasi in rem, and in personam actions. Mullane had argued that this was essentially an in personam action, and that under the doctrine announced in Pennoyer v. Neff, the Surrogate could not exercise jurisdiction on out-of-state residents upon whom personal service had not been made. Jackson did not explicitly determine what type of jurisdiction was being exercised here, but held that the Fourteenth Amendment applied to all of them regardless of how the state classified the action. The beneficiaries property rights were at stake here, and without proper notice, the right to be heard provided by the Fourteenth Amendment was of no practical consequence. Constructive service via newspaper publication, wrote Jackson, was an unreliable method of giving notice, because newspapers have limited circulation and even then, many people do not examine the legal notices, which are usually in small typeface on the back pages. In this case, the legal notice at issue did not even mention the names of the beneficiaries. Furthermore, under normal circumstances, property holders are directly aware of legal proceedings regarding their property, either directly or through a caretaker. But in this case, the caretaker was the beneficiaries adversary - the trustee itself - which could not be expected to give them reasonable notice, and the special guardian was also not required to give notice. Jackson held that notice must be reasonably calculated to inform known parties affected by the proceedings. Thus, 100c(12), the section of the statute which dealt with notice to beneficiaries, was unconstitutional. He further held that notice by publication was acceptable for missing or unknown parties, for those whose whereabouts could not be ascertained by due diligence, and for those whose future interests were too conjectural to be known with any certainty. However, Jackson noted that in many cases, notice to the known parties would help the information of the proceedings to reach those who were unknown by the trustee. Shaffer v. Heitner 433 U.S. 186 (1977) FACTS 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 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. 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, "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'". The Court rejected appellants arguments. 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." ISSUE W/N a State can assert jurisdiction over a nonresident must be evaluated according to the minimum contacts standard of International Shoe Co. v. Washington stating that the Due Process Clause affords protection against "judgments without notice." RULING The Court stated 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. 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. 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. 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." In relation to the case of International Shoe Co. v. Washington: (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. (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. (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. 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." LAZARO B. RAYRAY v. CHAE KYUNG LEE GR No. L-18176 October 26, 1966 FACTS ISSUE RULING FRENCH v. BANCO NACIONAL DE CUBA 295 NY 2d 422-423 1968 FACTS In 1957, Ritter, the assignor of respondent French, invested about $350,000 in a Cuban farm. At that time, the Cuban Government permitted foreign investors to turn the proceeds from their enterprises into American dollars, or other foreign currency, and exempted such proceeds from Cuba's tax on the exportation of money. In June, 1959, six months after the inception of the Castro regime, Ritter acquired eight such certificates, aggregating $150,000. On July 15, 1959, the Currency Stabilization Fund issued "Decision No. 346." Aimed at stopping the flow of foreign currency from Cuba and thereby preventing a situation "very dangerous" to that country. Decision also suspended "for the time being processing of" tax exemption certificates "until reorganization of the system of exemptions". The redemption of such outstanding certificates, according to the president of defendant bank, would have wiped out Cuba's dollar reserves. When, in December of 1959, Ritter tendered his certificates for redemption, together with the appropriate number of pesos, payment in American dollars was refused under the mandate of the Decision. The plaintiff, Ritter's assignee, brought the present action, late in 1960, in Supreme Court, New York County, and obtained a judgment against defendant bank in the amount of $150,000, with interest. A closely divided Appellate Division affirmed, rejecting the defendant's claims (1) that it was entitled to sovereign immunity from suit as an agency of the Cuban Government and (2) that the Decision in question "had the force of law" and was an act of the sovereign Government of Cuba to which our courts will not deny legal effect. ISSUES 1. Whether 2. Whether 3. Whether 4. Whether the defendant is entitled to sovereign immunity? NO the defendant may invoke the "act of state" doctrine? YES the Hickenlooper Amendment covers this case and bars application of the act of state doctrine? NO there was a violation of international law? NO

RULING 1. In view of the State Department's conclusion that the activities out of which the present action arose "were of a jure gestionis [commercial] * * * nature" and its position that immunity should not be granted in such cases, we must decline to accord the defendant sovereign immunity from suit. 2. It has long been settled, and recently reaffirmed that the courts in the United States will not inquire into the validity of the acts of a foreign government done within its own territory. As the Supreme Court stated "[e]very sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves." Our courts will not examine a foreign law to determine whether it was adopted in conformity with the internal procedures and requirements of the enacting state. The act of state doctrine, it has been well said, is not limited to situations in which "the foreign act is committed in a manner `colorably valid' under foreign law. It should make no difference whether the foreign act is, under local law, partially or wholly, technically or fundamentally, illegal. * * * So long as the act is the act of the foreign sovereign, it matters not how grossly the sovereign has transgressed its own laws. There is no basis whatever for the plaintiff's contention that the action dishonoring and repudiating the certificates held by Ritter was not an "act of state." Regardless of whether or not Decision No. 346 was published in the Official Gazette or otherwise complied with internal Cuban standards of regularity, it was issued by the Currency Stabilization Fund, an official instrumentality of the Cuban Government. Moreover, in compliance with that Decision or even if only in purported

compliance Banco Nacional, also an agency of the Cuban Government, refused and continues to refuse to exchange pesos for dollars as the certificates had required. These undisputed facts establish, as matter of law, that the breach of contract, of which the plaintiff complains, resulted from, and, indeed, itself constitutes, an act of state. Since it is thus apparent that there was an act of state, it follows unless the Hickenlooper Amendment requires the court not to apply the act of state doctrine that we are barred from all further inquiry in this case concerning Cuba's action and, in particular, from any inquiry that would test such action by the standards of international law or the public policy of this forum. The Government of Cuba, by its Decision No. 346, has actually done nothing more than enact an exchange control regulation similar to regulations enacted or promulgated by many other countries, including our own. In an area of international law where, for instance, there is a wide divergence "between the national interests of capital importing and capital exporting nations and between the social ideologies of those countries that favor state control of a considerable portion of the means of production and those that adhere to a free enterprise system", judicial restraint is surely indicated "It is difficult to imagine the courts of this country embarking on adjudication in an area which touches more sensitively the practical and ideological goals of the various members of the community of nations." Even if, therefore, we were to assume that the decision of the Cuban instrumentality here involved was contrary to our public policy, such considerations would not affect our determination. As the Supreme Court observed in the far harsher context of Sabbatino (pp. 436-437), "However offensive to the public policy of this country and its constituent States an expropriation of this kind may be, we conclude that both the national interest and progress toward the goal of establishing the rule of law among nations are best served by maintaining intact the act of state doctrine in this realm of its application." 3. In our view, the Hickenlooper Amendment is inapplicable. So far as relevant, the amendment declares that "no court in the United States shall decline on the ground of the federal act of state doctrine to make a determination on the merits giving effect to the principles of international law in a case in which a claim of title or other right to property is asserted by any party including a foreign state * * * based upon (or traced through) a confiscation or other taking * * * by an act of that state in violation of the principles of international law".The amendment applies only if there is a "claim of title or other right to property" and that claim is "based upon (or traced through) a confiscation or other taking" of such property. Ritter's loss is due not to a taking of property but, rather, to the breach of a promise upon which he had relied. What had happened and undoubtedly to Ritter's financial loss was that the Cuban law which governed the contract had been changed by the adoption of a government regulation which "suspended," perhaps permanently, the conversion of pesos into dollars. In the strictest sense, and within the terms of the statute we are construing, just as no one has "taken" the pesos from Ritter, so no one has "taken" the contract from him; it is still his or his assignee's to enforce, or attempt to enforce, as the present action bears witness. No other party claims to be possessed of the contract rights that Ritter had acquired. In short, the control of national currency and of foreign exchange is an essential governmental function; the state which coins money has "power to prevent its outflow 4. The Restatement finds no violation of international law in such a currency measure "if it is reasonably necessary in order to control the value of the currency or to protect the foreign exchange resources of the state" The present refusal of the Cuban Government to surrender American dollars in order to protect its dollar reserves, though harsh in its effect, would also seem to be within the limits of international legality. Conclusion: Actions complained of constituted an act of state; that, under the rule announced in Sabbatino, we are required to give effect to that act of state; and that, since the record before us establishes that there was no taking of property to which a claim of title or other right is asserted, the Hickenlooper Amendment does not apply to require us to disregard the act of state doctrine. Consequently, the plaintiff or her assignor may seek a remedy in this country only through diplomatic efforts by the United States and arrangements established by Congress for the protection of the interests of all American claimants againstCuba. HASSAN EL-FADL v. CENTRAL BANK OF JORDAN, et al. No. 94-7212 I February 6, 1996 FACTS Hassan El-Fadl, a Lebanese national, living in Jordan, alleges that he was employed by Petra International Banking Corporation (PIBC), a subsidiary in the District of Columbia of Petra Bank, a privately owned bank in Jordan. From 1982 to 1989 he was employed by PIBC in Jordan as manager of a regional office for Middle Eastern clients. He had signed a contract under which he "would be permanently employed for life as a senior manager of Petra International Banking Corporation." The defendants maintain that El-Fadl was employed by Petra Bank (not PIBC) as a senior manager with responsibility for currency and precious metals trading. In August 1989, the Central Bank of Jordan announced that it had uncovered widespread financial improprieties at Petra Bank and placed Petra Bank in receivership. Since then, Petra Bank has been run by a Liquidation Committee appointed by the Jordanian government. The Deputy Governor of the Central Bank, Michel Marto, was appointed to administer the liquidation of PIBC, and Marto came to the District of Columbia for that purpose. On September 14, 1989, El-Fadl was terminated by Marto and was subsequently arrested as part of the Jordanian authorities investigation of the Petra Bank scandal. El-Fadl alleges that the military police detained him for five days and tortured him, until he was released on bail. El-Fadl was prosecuted first in the Military Courts under Martial Law and then in the State Security Court, where he was "declared innocent" on April 9, 1992, which finding was affirmed by the Prime Minister on August 2, 1992. While the charges were pending, El-Fadl alleges that he was forbidden to leave Jordan. On July 30, 1993, El-Fadl filed suit in the District of Columbia, United States seeking to recover damages against PIBC for wrongful termination of employment as well as for various tort claims against several Jordanian institutions and officials: the Central Bank of Jordan, its Governor and Deputy Governor, and Petra Bank. The Central Bank of Jordan removed the case to federal district court pursuant to the Federal Sovereign Immunities Act (FSIA). The district court dismissed the complaint on the ground of immunity from suit under FISA and forum non conveniens because the petitioner had an available forum in the Jordanian courts. On appeal, El-Fadl abandoned his claim against the Central Bank but seeks to maintain his claim against Marto on the ground that he was acting in an individual capacity. ISSUE 1) W/N the Petitioner is entitled to initial discovery before dismissal of the case? W/N the dismissal on the ground of forum non conveniens was improper?


RULING Yes to both. The Court of Appeals reverse the dismissal of the claims against Petra Bank for lack of personal jurisdiction and remand to allow El-Fadl to conduct discovery of jurisdictional facts and reverse the dismissal of the claims against Petra Bank and PIBC on grounds of forum non conveniens, remanding for a finding whether Petra Bank and PIBC can show

that Jordan is an adequate alternative forum. First, it is imperative to point out that the appellate court declared that ElFadl's brief does not distinguish between "transacting business" under the long-arm statute and "doing business" for purposes of general jurisdiction. His reliance on the long-arm statute is misplaced because he has failed to show any connection between the alleged jurisdictional acts and the District of Columbia. Because El-Fadl's claims are not related to any of Petra Bank's general business contacts with the District of Columbia, they cannot confer specific jurisdiction under the long-arm statute. In spite of this the Court of Appeals stated that El-Fadl's brief presents both possible bases, general and specific, for personal jurisdiction over Petra Bank. Indeed, El-Fadl asserts, in his statement of issues presented, that "[t]he District Court erred ... in dismissing claims against a foreign defendant for lack of personal jurisdiction, prior to discovery or a hearing." At the very least, El-Fadl is entitled to discovery on this matter before it is decided. In other words, even though El-Fadl's present jurisdictional allegations are insufficient, he has sufficiently demonstrated that it is possible that he could supplement them through discovery. El-Fadl's request is for initial discovery, limited to jurisdictional facts. With regard to the issue of forum non conveniens, the appellate court maintained that in deciding a forum non conveniens motion, the district court must first establish that there is an adequate alternative forum: At the outset of any forum non conveniens inquiry, the court must determine whether there exists an alternative forum. Ordinarily, this requirement will be satisfied when the defendant is "amenable to process" in the other jurisdiction. In rare circumstances, however, where the remedy offered by the other forum is clearly unsatisfactory, the other forum may not be an adequate alternative, and the initial requirement may not be satisfied. Thus, for example, dismissal would not be appropriate where the alternative forum does not permit litigation of the subject matter of the dispute. To show the existence of an adequate alternative forum, the defendant "must provide enough information to enable the District Court" to evaluate the alternative forum. Because the defendant has the burden of establishing that an adequate alternative forum exists, this court will reverse when "the affidavit through which [the defendant] attempted to meet its burden contains substantial gaps."The amount of information that the defendant must provide, in supporting affidavits or other evidence, depends on the facts of the individual case. Accordingly, the defendant must provide more detailed information if the plaintiff provides evidence that controverts the defendant's evidence. PIBC and Petra Bank could not prove on the present record that Jordan was an adequate alternative forum. PIBC submitted an affidavit from a Jordanian attorney, Rami M. Al-Hadidi, who states that "Jordanian courts are open to El- Fadl to adjudicate these claims against the defendants." Al-Hadidi also explains that the Jordanian Civil Code recognizes various causes of action that El-Fadl has brought. Yet PIBC's expert fails to address various potentially dispositive provisions of Jordanian law that El- Fadl brought to the district court's attention. Given the gap in PIBC's expert's affidavit and the undeveloped state of the record on this issue, the district court erred in finding that PIBC or Petra Bank met its burden of showing that Jordan is an adequate alternative forum. REPUBLIC OF THE PHILIPPINES, et al v. PIMENTEL et al. UNITED STATES SUPREME COURT NO. 06-1204 FACTS ISSUE RULING

CREDIT SUISSE v. U.S.D.C 130 F3d 1342 FACTS In a previous case (Multi-District Litigation [MDL] case), the plaintiffs, who are human rights violation victims of Marcos, sought enforcement of judgment, which awarded them almost 2 Billion Dollars, against Credit Suisses (the Bank) branches in California. The district court denied the Banks motion to quash the execution.

However, the resolution of the district court was reversed. California law requires "personal service" of a notice of levy on a deposit account to be made at the branch or office of the financial institution at which the account is actually carried. Because none of the Estate's assets were held in deposit accounts located in California, the service of the notice of levy at the Banks' California offices was ineffective. The district court should have therefore granted the Banks' motions to vacate and quash the levies. Now, Rosales (one of the plaintiffs in the MDL case) filed the action directly against the banks seeking the following relief: (1) an injunction restraining the Banks from transferring or otherwise conveying any funds or assets held by the Banks on behalf of the Marcos Estate, except as ordered by the district court; and (2) a declaration that the Chinn assignment1 is valid and binding on the Banks. The Bank now interposes the defense, via motion to dismiss, that the granting of the Relief sought by Rosales will contravene the Act of State Doctrine. The motion was denied.

ISSUE Did the district court act correctly in denying the Banks motion to dismiss, saying that the act of state doctrine will not be violated in granting the relief sought by Rosales? RULING

1 The "Chinn assignment" is a document that purportedly assigns all right, title and interest of the Marcos Estate in any bank accounts
maintained in Switzerland to Robert A. Swift, "for the benefit of" the MDL plaintiffs. This assignment was signed by Walter Chinn, Clerk of the United States District Court for the District of Hawaii, at the direction of the district court as a contempt sanction against Marcos

The district court was wrong. Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves. Under this current view, an action will be barred only if: (1) there is an "official act of a foreign sovereign performed within its own territory"; and (2) "the relief sought or the defense interposed [in the action would require] a court in the United States to declare invalid the [foreign sovereign's] official act." Id. at 405, 110 S.Ct. at 704. In 1986, when Ferdinand E. Marcos left power, the Swiss Federal Council, the highest governing body in the Swiss Executive Branch, issued an Executive Order freezing all assets of the Marcos family that were held in Switzerland. The Federal Council, expecting the Philippine government to seek recovery of funds deposited by Marcos and his family in Switzerland, issued the freeze order to ensure that the funds did not disappear before the Philippine government had an opportunity to act. Shortly thereafter, the Philippine government formally requested, pursuant to the Swiss Federal Act on Mutual Assistance in Criminal Matters ("IMAC"), that the Government of Switzerland freeze all assets held in Switzerland that belonged to Marcos and his family pending the outcome of a criminal investigation and prosecution in the Philippines. The Philippine government also requested assistance in obtaining evidence about the amount and nature of the Marcos assets held in Switzerland and the circumstances under which such assets were deposited. After ensuring that the Philippine government's request complied with IMAC, the Swiss Federal Office of Police forwarded the request for assistance to the enforcement authorities of the cantons in which the Marcos bank accounts were maintained-Geneva, Fribourg and Zurich-with instructions to take provisional measures immediately. Pursuant to IMAC procedures which require the cantonal authorities to execute the instructions of the Swiss federal government, cantonal orders were immediately issued freezing all assets belonging directly or indirectly to Marcos and/or his family. These cantonal orders, which superseded the previously issued Executive Order, were appealed and affirmed by judgments of the Swiss Federal Supreme Court, the highest court in Switzerland. The cantonal freeze orders remain in effect today. Switzerland's act of issuing first the Executive Order and then the cantonal freeze orders pursuant to IMAC was "paradigmatically sovereign in nature; it is not [the type of act] that a private person can exercise." Callejo v. Bancomer, S.A., 764 F.2d 1101, 1116 (5th Cir.1985). The Executive and subsequent cantonal orders were, therefore, clearly an "official act of a foreign sovereign performed within its own territory." W.S. Kirkpatrick, 493 U.S. at 405, 110 S.Ct. at 704. In the Rosales action, the MDL plaintiffs seek relief including: (1) an injunction restraining the Banks from transferring or otherwise conveying any funds or assets held by the Banks on behalf of the Marcos Estate except as ordered by the district court; and (2) a declaration that the Chinn assignment is valid and binding on the Banks. Both of these forms of relief would not only require a United States court to question the validity of the freeze orders, but would also "render nugatory" Switzerland's attempts to render legal assistance to The Republic of the Philippines by protecting the Estate assets. See Callejo, 764 F.2d at 1116. The relief sought therefore violates the act of state doctrine, and the district court's refusal to dismiss the action was clearly erroneous as a matter of law. The injunction sought by the plaintiffs would compel the Banks to hold any assets of the Marcos Estate subject to the district court's further orders. It is clear that the district court plans on taking control of any Estate assets held by the Banks, even though those assets are currently frozen pursuant to official orders of Swiss authorities. Any order from the district court compelling the Banks to transfer or otherwise convey Estate assets would be in direct contravention of the Swiss freeze orders. Subjecting Estate assets held by the Banks to the district court's further orders would thus allow a United States court to question and, in fact, "declare invalid the official act of a foreign sovereign." W.S. Kirkpatrick, 493 U.S. at 405, 110 S.Ct. at 704. Issuance of the injunctive relief sought would therefore violate the act of state doctrine. A declaration by a United States court that the Chinn assignment is valid and binding on the Banks would also violate the act of state doctrine. The assignment purports to assign to Robert Swift, counsel for the MDL plaintiffs, all of the Estate's "right, title and interest in and to bank accounts maintained in Switzerland." The assignment directs entities having authority over such bank accounts "to perform all necessary acts to effect the transfer of the above bank accounts forthwith." A declaration that this assignment is valid and binding on the Banks would be a declaration that the Banks must transfer all Estate assets held by the Banks to Swift "forthwith." Such a declaration would not only contradict, and therefore declare invalid, the Swiss freeze orders, but would also require the Banks to disregard the Swiss orders. United States courts are "bound to respect the independence of every other sovereign State," including Switzerland. See Underhill, 168 U.S. at 252, 18 S.Ct. at 84. If the MDL plaintiffs want to contest the legality of the Swiss freeze orders, seek a declaration of the validity of the Chinn assignment as against the Banks, or seek an injunction compelling the Banks to turn over the assets, they should do so via the Swiss judicial system. See Miller v. United States, 955 F.Supp. 795, 798 (N.D.Ohio 1996). KIRKPATRICK INC. v. ENVIRONMENTAL TECTONICS CORP., INTL. 493 U.S. 400 FACTS ISSUE RULING

IN RE: PHILIPPINE NATIONAL BANK v. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII NO. 04-71843 FACTS This concerns the long-running dispute over the right to the assets of the estate of former Pres. Marcos. On the one side is a class of plaintiffs who obtained a large judgment in the federal district court in Hawaii against the Marcos estate for

human rights violations of the Marcos regime. On the other side is the Republic of the Philippines, which independently sought forfeiture of the Marcos estates assets. In an earlier case, the court dealt with the attempt of class plaintiffs to reach assets of the Marcos estate located in Swiss banks. The Swiss assets had been frozen by the Swiss govt at the request of the Republic. Class plaintiffs obtained an injunction from the district court requiring Swiss banks to hold the assets for their benefit. In this case, the Court held that the injunction violated the act of state doctrine and granted a writ of mandamus directing dismissal of the district courts order, and ordered the latter to refrain from taking any further action in any case involving the class plaintiffs and any Marcos assets. Thereafter, the Swiss govt released the Swiss funds for transfer to PNB pending determination of proper disposal of the Phil. Supreme Court wherein later it was subsequently held that the assets were forfeited to the Republic of the Philippines. The District Court then issued an order ruling that the Phil. SC had violated due process and that its judgment was entitled to deference. It then issued an Order to Show Cause against PNB requiring the bank to show why it should not be held in contempt for violating the courts injunction against transfer of assets by the estate. PNB filed the present petition for mandamus in this court, seeking to restrain the district court from enforcing its order. ISSUE Whether or not there was a violation of the act of state doctrine? YES RULING Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed by the sovereign powers as between themselves. The District Courts orders violated this principle. In order to obtain assets from PNB or to hold PNB in contempt for the transfer of assets to the Republic, the District Court necessarily held invalid the forfeiture judgment of the Philippine Supreme Court. Class plaintiffs argue that the doctrine is directed at the executive and legislative branches of foreign governments and does not apply to judicial decisions. However, Court held that although the act of state doctrine is normally inapplicable to court judgments arising from private litigation, there is no inflexible rule preventing a judgment sought by a foreign government from qualifying as an act of state. The judgment of the Phil. SC gave effect to the public interest of the Phil. Govt. The forfeiture action was not a mere dispute between the private parties, it was an action initiated by the Phil. Govt pursuant to its statutory mandate to recover property allegedly stolen from its treasury. The subject matter of the forfeiture thus qualifies for treatment as an act of state. Class plaintiffs also argue that the doctrine is inapplicable because the judgment of the Phil. SC did not concern matters within its own territory. Court held that the act of state doctrine is to be applied flexibly, with reference to underlying considerations. The fact that the escrow funds were deposited in Singapore does not preclude the application of the act of state doctrine. The underlying governmental interest of the Republic supports treatment of the judgment as an act of state. Court also held that mandamus is the proper remedy in this case. Four out of five Bauman factors (all except factor 4) favor issuance of the writ: (1) the party seeking the writ has no other adequate means to attain the relief she desires; (2) the petitioner will be damaged or prejudiced in a way not correctable on appeal; (3) the district courts order is clearly erroneous as a matter of law; (4) the district courts order is an oft-repeated error, or manifests a persistent disregard of the federal rules; (5) the district courts raises new and important problems, or issues of law of first impression. PENNHURST STATE SCHOOL & HOSPITAL vs. Terri Lee HALDERMAN 465 US 89 FACTS Respondent Halderman, a resident of petitioner Pennhurst State School and Hospital, a Pennsylvania institution for the care of the mentally retarded, brought a class action in Federal District Court against Pennhurst and various state and county officials (also petitioners). It was alleged that conditions at Pennhurst violated various federal constitutional and statutory rights of the class members as well as their rights under the Pennsylvania Mental Health and Mental Retardation Act of 1966 (MH/MR Act). Ultimately, the District Court awarded injunctive relief based in part on the MH/MR Act, which was held to provide a right to adequate habilitation. The Court of Appeals affirmed, holding that the MH/MR Act required the State to adopt the "least restrictive environment" approach for the care of the mentally retarded, and rejecting petitioners' argument that the Eleventh Amendment barred a federal court from considering this pendent state-law claim. The court reasoned that since that Amendment did not bar a federal court from granting prospective injunctive relief against state officials on the basis of federal claims, citing Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 the same result obtained with respect to a pendent state-law claim. RULING The Eleventh Amendment prohibited the District Court from ordering state officials to conform their conduct to state law. (a) The principle of sovereign immunity is a constitutional limitation on the federal judicial power established in Art. III of the Constitution. The Eleventh Amendment bars a suit against state officials when the State is the real, substantial party in interest, regardless of whether the suit seeks damages or injunctive relief. The Court in Ex parte Young, supra, recognized an important exception to this general rule: a suit challenging the federal constitutionality of a state official's action is not one against the State. (b) "That a State may not be sued without its consent is a fundamental rule of jurisprudence having so important a bearing upon the construction of the Constitution of the United States that it has become established by repeated decisions of this court that the entire judicial power granted by the Constitution does not embrace authority to entertain a suit brought by private parties against a State without consent given: not one brought by citizens of another State, or by citizens or subjects of a foreign State, because of the Eleventh Amendment; and not even one brought by its own citizens, because of the fundamental rule of which the Amendment is but an exemplification." (c) The Court has recognized an important exception to this general rule: a suit challenging the constitutionality of a state official's action is not one against the State. In Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662, this Court

recognized that the need to promote the supremacy of federal law that is the basis of Young must be accommodated to the constitutional immunity of the States. Thus, the Court declined to extend the Young doctrine to encompass retroactive relief, for to do so would effectively eliminate the States' constitutional immunity. Edelman's distinction between prospective and retroactive relief fulfilled Young' underlying purpose of vindicating the supreme authority of federal law while at the same time preserving to an important degree the States' constitutional immunity. But this need to reconcile competing interests is wholly absent when a plaintiff alleges that a state official has violated state law. In such a case the entire basis for the doctrine of Young and Edelman disappears. A federal court's grant of relief against state officials on the basis of state law, whether prospective or retroactive, does not vindicate the supreme authority of federal law. When a federal court instructs state officials on how to conform their conduct to state law, this conflicts directly with the principles of federalism that underlie the Eleventh Amendment. (d) The principle that a claim that state officials violated state law in carrying out their official responsibilities is a claim against the State that is protected by the Eleventh Amendment applies as well to state-law claims brought into federal court under pendent jurisdiction. LORD DAY & LORD, BARRET SMITH v. THE SOCIALIST REPUBLIC OF VIETNAM, SWISS REINSURANCE COMPANY, ASSURANCE GENERALES DE FRANCE and GROUPE DES MUTUELLES ALSACIENNES 134 F. Supp.2d 549 (S.D.N.Y. 2001) Plaintiff Lord Day & Lord (Lord Day"), a law firm in liquidation, brought this interpleader action to determine the entitlement of funds currently held in the possession of this Court. The Socialist Republic of Vietnam (Vietnam"), Swiss Reinsurance Company, Assurance Generales de France, and Groupe des Mutuelles Alsaciennes (collectively "Reinsurers") have all claimed such entitlement. Defendant Vietnam moves to dismiss the Reinsurers' Cross-Complaint for lack of jurisdiction. FACTS On December 6, 1970, a cargo of rice owned by the former Republic of Vietnam was lost during overseas transport when the ship carrying the cargo sustained a collision in the Panama Canal. The cargo was insured under Societe Vietnamenne D'Assurances et de Reassurances ("SOVAR"). SOVAR reimbursed the Vietnam and Tong Cuoc Tiep Te, the then "General Supply Agency" of the former Vietnam, its insured, for the full value of the loss. SOVAR obtained an assignment dated December 14, 1971 from its insured for all rights against third parties responsible for the loss. In turn, SOVAR was indemnified by the Reinsurers for a portion of the total cargo loss. Under Plaintiff Lord Days legal representation, SOVAR and Vietnam commenced a subrogation action in 1973 seeking recovery for the lost rice cargo against parties responsible for the loss. This action resulted in a settlement in 1975, where the Vietnam and Tong Cuoc Tiep Te were to obtain $548,364.56 from the Panama Canal Company. After the check was issued, Saigon fell to the armies of the Socialist Republic of Vietnam, and the United States subsequently banned all transfer of funds to the Vietnamese government and Vietnamese nationals. The settlement check was issued "Pay to the Order of: Lord Day & Lord, attorneys for Republic of Vietnam & Tong Cuoc Tiep Te / General Supply Agency. Prevented from transferring the settlement check to its Vietnamese clients, Plaintiff sought and was issued a License by the Federal Foreign Assets Control agency permitting placement of the funds into a blocked account, pursuant to the Trading With the Enemy Act. Plaintiff applied for a License in its role as "attorneys for Vietnam Assurance and Reassurance Co.," Plaintiff stated that it sought the license in order collect the unpaid judgment and for the purpose of making disbursements to attorneys related to the settlement and "to such other persons having an interest in the balance as may lawfully be paid." Upon issuance of the License, Plaintiff deposited the funds in the name of the Republic of Vietnam and Tong Cuoc Tiep Te in an interestbearing account with First National City Bank in New York. Effective March 6, 1995, the United States lifted the ban, thus allowing the settlement funds deposited by Plaintiff to be finally transferred. However, following the fall of Saigon, SOVAR had been effectively dissolved and nationalized in April 1975 by Vietnam, who discontinued its operations. Uncertain how to proceed, Plaintiff filed the instant Interpleader action. Plaintiff sought (1) that each of the Defendants interplead and settle among themselves their respective rights to the funds at issue; (2) enjoinment and restraint from Defendants making any claim against Plaintiff to turn over the funds and prosecuting any action for the recovery of the funds; (3) discharge from all liability in transfer and maintenance of the funds; and (4) fees and attorneys' costs. This Court granted Plaintiff relief on each of its requests. The Court also ordered Plaintiff to deposit the funds with the Clerk of this Court. The Reinsurers answered the Complaint and appeared as parties of interest with respect to the fund. Vietnams Answer asserts its right to the funds pursuant to an Executive Agreement and also asserts several affirmative defenses, including its right to immunity as a foreign sovereign under the Foreign Sovereign Immunities Act. The Reinsurers also filed a Cross-Complaint asserting entitlement to the funds. According to the Reinsurers, prior to SOVAR's dissolution and nationalization, the Reinsurers had an agreement with SOVAR to provide indemnity reinsurance covering a portion of the rice cargo loss, and also held approximately 30 percent of common stock in the corporation. The Reinsurers claim ownership of the funds by their status as reinsurers and shareholders before and during SOVAR's dissolution and nationalization. Vietnam filed the instant motion to dismiss the Reinsurers' Cross-Complaint pursuant to Federal Rules of Civil Procedure 12(b) and (c) on various grounds, including Vietnams asserted right to the funds as a matter of law pursuant to an Executive Agreement, lack of jurisdiction under the Federal Sovereign Immunities Act and the statute of limitations. ISSUE Whether or not the Reinsurers' Cross-Complaint should be dismissed for lack of jurisdiction. RULING Yes. EVEN IF: The Foreign Sovereign Immunities Act ("FSIA") provide the exclusive basis for federal subject matter and personal jurisdiction in suits involving foreign states. Sovereign entities are entitled to immunity from suit and federal courts lack jurisdiction unless a statutory exception applies. In its answer to the Interpleader Complaint, Vietnam waived its immunity agreeing to appear in response to Plaintiff's

interpleader action for the sole purpose of asserting its claim to the disputed funds. However, Vietnam explicitly reserved its rights as a foreign sovereign immune from jurisdiction in connection with any other claims. Vietnam claims immunity from all other claims to the funds because, it argues, any such claims require the court to consider alleged contractual relations between Vietnam and the Reinsurers. Effectively, Vietnam seeks to grant this Court jurisdiction solely for the purpose of awarding it the funds. This, Vietnam cannot do. The FSIA provides a counterclaim exception, which states that in any action brought by a foreign state, or in which a foreign state intervenes, in a court of the United States or of a State, the foreign state shall not be accorded immunity with respect to any counterclaim arising out of the transaction or occurrence that is the subject matter of the claim of the foreign state. Even if the counterclaim exception was inapplicable here, Vietnam has also waived its immunity to the extent necessary for the Court to determine title to the funds in its possession. Under the FSIA, the waiver exception permits federal courts to assert jurisdiction over a foreign sovereign that waives its immunity "either explicitly or by implication." DISMISSED BECAUSE OF PRESCRIPTION: The FSIA does not provide for a federal substantive law rule of decision but operates merely as a "pass-through" to state law principles. Thus, the Court will apply New York choice of law rules. New York's choice of law rules require application of the law of the forum with the greatest interest. New York requires that a foreign statute of limitations, if shorter than the New York statute, must be applied where a cause of action accrues outside of New York. Here, however, the parties agree that New York statutes of limitations apply and neither has raised alternate foreign limitations periods. Accordingly, in light of the parties' agreement, New York's interest in property held within this state, and the absence of conflicting law, the Court will apply the New York statute of limitations. The instant action raises challenging and novel statute of limitations questions. The parties agree that New York's six-year statute of limitations applies to each of the Reinsurers' three claims. The parties' dispute centers upon when each cause of action accrued and whether the limitations period was tolled during the war and/or while the assets were frozen. "While the question of when a cause of action accrues often proves to be difficult in particular applications, it is governed, in theory, by a simple principle: `A cause of action does not accrue until its enforcement becomes possible.'" A cause of action for reimbursement does not accrue until a payment constituting a "double recovery" is made. Lord Day, acting as an agent for Vietnam and SOVAR, received the settlement funds shortly after April 17, 1975 when the check was issued. Thus, SOVAR was in constructive receipt of the settlement funds as of April 1975. Lord Days receipt of the settlement payment thus created a "double recovery" for SOVAR (having received payment from both the Reinsurers and the Panama Canal Company). The Reinsurers suffered harm and had a right to reimbursement from that date forward as all of the elements to state a claim for reimbursement had accrued by April 1975. The Reinsurers argue that as each of their claims is against a country with which the United States was at war, the statute of limitations was tolled. Assuming arguendo that either of the tolling provision applies, the statute of limitations was tolled from April 1975 until hostilities with Vietnam ended. The Reinsurers assert that "hostilities," within the meaning of the statute, did not terminate until 1995 when the United States normalized relations with Vietnam and unblocked Vietnamese assets frozen in this country. While the United States reached a settlement of property claims and normalized diplomatic relations with Vietnam in 1995, military conflict between the two countries had long since ended. Absent a clear indication that the Legislature intended the term "hostilities" to encompass both diplomatic hostilities as well as military, the Court will not so interpret the statute. SARATOGA COUNTRY CHAMBER OF COMMERCE, IN. v. PATAKI 798 N.E. 2d 1047 (N.Y. 2003) FACTS ISSUE RULING

HELEN LIU vs. REPUBLIC OF CHINA No. 87-2976. FACTS Admiral Wong His-Ling (Wong), Director of the Defense Intelligence Bureau (DIB) of the Republic of China (ROC), complained about the Chinese people overseas who criticized the ROC after they had received favorable treatment in Taiwan. Wong used Henry Liu as an example of this type of "ungrateful" Chinese person. Chen Chi-li, a member of the Bamboo Union Gang, stated that such people should be "taught a lesson," and that he could be trusted with such an assignment. Wong agreed that Henry Liu should be "given a lesson" once the opportunity presented itself. Chen Chi-li recruited Wu and Tong to murder Liu. They shot and killed Henry Liu in Daly City, California. Wong, Chen Hu-men, and another DIB employee were convicted by ROC military courts of conspiracy for their part in the Henry Liu murder. In her complaint filed in the district court, Helen Liu (Liu) asserts that the ROC was involved in the conspiracy to kill Henry Liu. The ROC filed a motion based on the act of state doctrine to dismiss it as a party defendant. The district court denied it initially to give Liu a chance to establish that, based on the findings of the ROC courts, the ROC was liable under the doctrine of respondeat superior. The district court denied Liu's motion for partial summary judgment and granted the ROC's motion to dismiss it as a party defendant on act of state grounds. The district court held that Wong's act was not incidental to his duties as Director of the DIB, or reasonably foreseeable to the ROC. The district court also held that the act of state doctrine precluded an American court from piercing the findings of the ROC tribunals. The court found that the ROC decisions were "acts of state" because the judgments represented "an exercise of the ROC's jurisdiction to give effect to its public interests in assessing responsibility for the murder." ISSUE Whether or not there was subject matter jurisdiction over the ROC under the Foreign Sovereign Immunities Act of 1976 (FSIA), codified in part at 28 U.S.C. 1602-1611 (1982)? RULING Yes. The FSIA is "the sole basis for obtaining [subject matter] jurisdiction over a foreign state in our courts." Jurisprudence generally provides that foreign states are immune from suit in the United States except as provided in sections 1605 to

1607. Liu's allegations were sufficient to bring this suit within the tortuous activity exception of 28 U.S.C.A. 1605(a)(5)2. Liu sued for damages for the wrongful death of her husband which occurred within the United States. Section 1605(a)(5) removes immunity for torts committed either by a foreign state or its agents acting within the scope of their employment. Liu alleged both grounds: 1) that the ROC was involved in the conspiracy to kill Henry Liu; and 2) that Wong acted within the scope of his employment in ordering the assassination. Whether the ROC is liable under respondeat superior is crucial to the issue of the court's jurisdiction. Section 1606 of the FSIA provides: As to any claim for relief with respect to which a foreign state is not entitled to immunity under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances; but a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.... There are two choice of law questions that must be resolved prior to determining whether the ROC is liable under respondeat superior. First, we must decide the choice of law rule applicable to the respondeat superior issue determinative of jurisdiction under the FSIA. Second, assuming that we have jurisdiction under that Act, we must ascertain the law to be applied in determining whether the ROC is liable on the merits. California is the place where the injury occurred, and under the federal choice of law rule, its law will apply to the merits of the action unless the ROC has a more significant relationship to the tort and the parties. Although the ROC has some connection with the tort and the parties, we cannot say that it has the more significant relationship. California and the ROC have offsetting interests in the parties to this suit: Henry Liu was domiciled in California when he was killed, and the ROC and other ROC nationals are parties to the suit. California, however, has a significant interest in ensuring that its residents are compensated for torts committed against them, and in discouraging the commission of such torts within its borders. Consequently, based on the federal choice of law rule, California's law of respondeat superior will determine whether Wong's act was within the scope of his employment for purposes of jurisdiction under the FSIA and on the merits. Respondeat Superior Element: California has established a two-prong test to determine whether an employee is acting within the scope of employment. Generally, an employer will be liable for an employee's wrongful act if 1) the act was required or incident to the employee's duties or 2) the act was reasonably foreseeable to the employer. In this case, we find that Liu has established facts sufficient to meet the first prong of the test. The dispute between Liu and Wong arose out of Liu's dissatisfaction with Wong's performance as Director of the DIB. There is no evidence of any personal altercation unrelated to Wong's official duties. Even if we assume, despite the absence of evidence, that Wong acted partly out of a personal grudge "not engendered" by his employment as a high official in the ROC government, California courts have made clear that a "mixed motive" is sufficient to impose vicarious liability on the employer. Another factor present in this case is that Wong used the ROC facilities entrusted to him to help Chen Chi-li and Shuai prepare for the assassination. Wong sent both men to the DIB training school for four days, and provided them with a dossier on Liu prepared by the DIB. As the ROC correctly states, the mere use of facilities entrusted to the employee is insufficient to impose liability on the employer. When an employee, such as Wong, uses governmental authority in a mistaken attempt to benefit his employer by silencing an outspoken critic of the government, there is nothing inequitable about spreading the loss among all the beneficiaries of the government. Discretionary Function Element: The court hold that the discretionary function exception is inapplicable when an employee of a foreign government violates its own internal law. Act of State Doctrine: One factor we must consider is whether the foreign state was acting in the public interest. "When the state qua state acts in the public interest, its sovereignty is asserted. The courts must proceed cautiously to avoid an affront to that sovereignty." Another factor to be considered is the degree of international consensus regarding an activity. This is not the sort of case that is likely to hinder the Executive Branch in its formulation of foreign policy, or result in differing pronouncements on the same subject. Rather, this court would more likely embarrass the Executive Branch if we summarily invoked the act of state doctrine to bar an American citizen from litigating a wrongful death suit for a murder that occurred in the United States. To the credit of the ROC, rather than attempting to hide the sordid circumstances involved in Liu's assassination, it made an investigation and publicly brought to trial individuals involved, even including one in such a high position as Wong. Our decision merely applies California law to the facts as ascertained by the ROC courts. While the result may involve the financial responsibility of the ROC, it does not affront its sovereignty and can cause no more embarrassment than the exposures already made by the ROC courts. Because of our respondeat superior decision we need not decide whether or to what extent further inquiries might be made of ROC officials. Under these circumstances the act of state doctrine is not a bar to Liu's suit. PERKINS v. ROXAS G.R. No. 47517, June 27, 1941 FACTS The private 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 (ISP), and by one George H. Engelhard (GHE). Respondent amended his complaint to implede ISP and GHE as additional defendants. ISP filed an answer saying that there was a previous judgment in New York saying that she is the owner of the shares, and such is res judicata. Now, ISP files this petition for certiorari saying the respondent judge is about to and will render judgment in the

[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case--- (5) not otherwise encompassed in paragraph (2) above [commercial activities], in which money damages are sought against a foreign state for personal injury or death, ..., occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment.... This exception does not apply, however, to claims based upon the exercise of or failure to exercise a discretionary function.

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. ISSUE Whether or not the petition for certiorari will prosper? NO RULING 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. 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. 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 crosscomplaint 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. CALUAG v. PECSON 82 Phil. 8 (1948) FACTS ISSUE RULING FAR EAST INTERNATIONAL IMPORT and EXPORT CORPORATION v. NANKAI KOGYO CO. LTD. G.R. No. L13525 November 30, 1962 FACTS On December 26, 1956, the Far East International Import & Export Corporation, Far East for short, organized under Philippine Laws, entered into a Contract of Sale of Steel Scrap with the Nankai Kogyo Co., Ltd., Nankai organized under Japanese Laws with address at Osaka, Japan. The buyer sign in Japan and the seller in Manila, Philippines. The pertinent provisions of the agreement are represented below 1. Quantity: Approximately 5,000 (five thousand) metric tons 10% more or less. 10. Payments: BUYER shall establish an irrevocable without recourse Letter of Credit in the amount of U.S. $312,500.00 with China Banking Corp. in Manila, not later than 30 days upon receipt of SELLERS' confirmation about the availability of export permit, and shall be subject to the following terms and conditions: a. This Letter of Credit shall be drawable 90% of quantity been shipped uponpresentation of: xxx xxx xxx b. the remaining balance of 10% of the shipment shall be adjusted between BUYER and SELLER immediately after the discharge is completed at the port of destination, and shall be drawable by the SELLER upon presentation of: xxx xxx xxx

13. Force Majeure: the execution of this agrrement is subject to any and allGovernment restrictions prohibiting or penalizing in whole or in part theexport of Iron & Steel Scrap from the Philippines, and the Seller shall not be responsible for delay in or failure of shipment or delivery or delays in transportation due to force majeure, strikes, dfferences with workmen, accidents, fires, flood, mobilizations, wars, foreign wars, riots, revolutions, regulations and restrictions or to any conditions beyond thecontrol of the SELLER whether the nature herein stated or not. 14. Dispute: In case of disputes, Board of Arbitration may be formed in Japan. Decision by the board of Arbitration shall be final and binding on both BUYER AND SELLER. Upon perfection of the contract Nankai opened a letter for credit (No. 38/80049) with the China Banking Corporation. On March 15, 1957, only four (4) days before the expiration of the Far East licence, three (3) boats sent by Nankai arrived in the PhilippinesOn March 19, 1957, the expiration of the export license, only 1,058.6 metric tons of scrap steel was loaded on the SS Mina. The loading was accordingly stopped. On April 27, 1957, Nankai confirmed and acknowleged delivery of the 1,058.6 metric tons of steel scrap, but asked for damages amounting to $148,135.00 consisting of dead freight charges, damages, bank charges, phone and cable expenses. As repeated requests, both against the shipping agent and the buyers (Nankai), for the issuance of the of Bill Lading were ignored, Far East filed on May 16, 1957, the present complaint for Specific Performance, damages, a writ of preliminiry

mandatory injunction directed against Nankai and the shipping company, to issue and deliver to the plaintiff, a complete set of negotiable of Lading for the 1,058.6 metric tons of scrap and a writ of preliminary injunction against the China Banking Corporation and the Nankai to maintain the Letter Credit. The lower court issued on May 17, 1957 an ex parte writ of preliminary injunction, after Far East had posted a bond in the amount of P50,000.00. The lower court rendered judgment absolving, defendants Everett Steamship Company and China Banking Corporation from liability and denied the claim for damages, both actual and moral, of the parties; found that the question of jurisdiction over the person of defendant and the subject matter has become moot ISSUE Whether or not the trial court acquired jurisdiction over the subject matter and over the person of the defendantappellant? RULING Defendant contends that Philippine Courts have no jurisdiction to take cognizance of the case because the Nankai is not doing business in the islands; and that while it has entered into the transaction in question, same, however, does not constitute "doing business", so as to make it amenable to summons and subject it to the Court's jurisdiction. It bolstered this claim by a provision in the contract which provides that "In case of disputes, Board of Arbitration may be formed in Japan. Decision of the Board of Arbitration shall be final and binding on both BUYER and SELLER". SEC. 14. Service upon private foreign corporations. If the defendant is a foreign corporation, or a non-resident joint stock company or association, doing business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any officer or agent within the Philipines. (Rule 7). The above rule indicates three modes of effecting service of summons upon a private, foreign corporation, viz: (1) by serving upon the agent designated in accordance with law to accept service of summons; (2) if there is no resident agent, by service on the government cial designated by law to that effect; and (3) by serving on any officer or agent of said corporation with Philippines. The plaintiff complied with the third stated above, for it has been shown that Mr. Ishida, who personally signed the contract for the purchase of the scrap in question in behalf of the Nankai Kogyo, the Trade Manager of said Company, Mr. Tominaga the Chief of the Petroleum Section of the same company and Mr. Yoshida was the man-in-charge of the Import Section of the company's Tokyo Branch. All these three, including the first two who were served with Summons, were officers of the defendant company. It is true that the defendant entered a Special Appearance, wherein it contested the jurisdiction of the Philippines Courts to take cognizance of the case on grounds contained in the various pleadings presented by it. The motion to dismiss on the ground of lack of jurisdiction had been overruled because it did not appear indubitable. Subsequently, however, the defendant filed its Answer and invoked defenses and grounds for dismissal of complaint other than lack of jurisdiction. Even though the defendant objects to the jurisdiction of the court, if at thesame time he alleges any non-jurisdictional ground for dismissing the action, the Court acquires jurisdiction over him. Even though he does not intend to confer jurisdiction upon the court, his appearance for some other purpose than to object to the jurisdiction subjects him to jurisdiction of the court.Even though he does not wish to submit to the jurisdiction of the court, he cannot ask the court to act upon any question except the question of jurisdiction, without conferring jurisdiction upon the court. In the instant case, the testimony of Atty. Pablo Ocampo that appellant was doing business in the Philippines corroborated by no less than Nabuo Yoshida, one of appellant's officers, that he was sent to the Philippines by his company to look into the operation of mines, thereby revealing the defendant's desire to continue engaging in business here, after receiving the shipment of the iron under consideration, making the Philippines a base thereof. It is finally noted that when defendant's motion to dismiss in the Micronesian case was denied, it immediately brought the matter to this Court on Prohibition seeking to restrain the Workmen's Compensation mission from exercising jurisdiction over the controversy. In the present case, the defendant, while entering a Special Appearance to contest the jurisdiction of the Court, pursued its defense further by filing its Answer and going into trial.