3C COL Digests

3C | CONFLICT OF LAWS | ATTY.
ARIS GULAPA
CONFLICT OF LAWS CASE DIGESTS
ABACAN, CLA AGUILA, TRICIA ALCANTARA, FRANCIS ALCANTARA, REGINE ANDREI BAUTISTA, PEARL CHARISSE BELLO, CRISTINA MARIE CAMIA, GERARD MARTIN CARANDANG, NINA HERSCHELICA CARIO, MARIANNE CARINGAL, KRISTIA LORRAINE CHING, MARIA ADELA CLEMENTE, CHRISTINE CONSUNJI, PENNY DEVESA, VAN LEE ESPIRITU, DAYNE ESQUIVIAS, MA. CARMELA EVANGELISTA, CARLO FARCON, JOSE FLORINIO GARCIA, CESAR DOMINI GRAIDO, HELEN MAUREEN GRANTOZA, CAMILLE HABANA, GABRIEL HERNANDEZ, JASON
JALANDONI, JANINA NADENE KOGA, KEN LAIDAN, KRISTOFFER LAZARO, PHOEBE ANN LOMOTAN, JONATHAN JOSEPH LUCIDO, LE IRIS LUMANOG, ERLAINE MADAMBA, AYAH CRISTINA MAGPANTAY, REGINE EMPRESS MANUEL, KAREN KAYE MESINA, MARI JANINE EVAN PRESBITERO, JULIAN SANTOS RELLOSA, RASHY REYES, JOSEPH SANTOS, JJ SEVILLA, TONI LOU SOLIMAN, NELLAINE SOLLANO, MIKAELLA TUAZON, LARA KARINA YAO, AISLYN
3C 2012-2013 nd 2 SEMESTER
ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
3C | CONFLICT OF LAWS | ATTY. ARIS GULAPA
JURISDICTION AND CHOICE OF LAW

1. SWEET LINES INC. V. TEVES Facts: Respondents Atty. Leovigildo Tandog and Rogelio Tiro, bought tickets for Voyage 90 on December 31, 1971 at the branch office of petitioner, Sweet Lines Inc., a shipping company transporting inter-island passengers and cargoes, at Cagayan de Oro City. Tandog and Tiro were to board Sweet Lines vessel, M/S "Sweet Hope" bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel was not proceeding to Bohol (since many passengers were bound for Surigao), Tandog and Tiro, per advice, went to the branch office for proper relocation to M/S "Sweet Town". Because the said vessel was already filled to capacity, they were forced to agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." Tandog and Tiro alleged that they were exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits during the trip and that the tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and they were constrained to pay for other tickets. Hence, they sued Sweet Lines for damages and for breach of contract of carriage in the alleged sum of P10,000.00 before CFI of Misamis Oriental. Sweet Lines moved to dismiss the complaint on the ground of improper venue based on the condition printed at the back of the tickets: 14. It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu. The motion was denied. MR was filed but was also denied. Hence, this instant petition for prohibition for preliminary injunction, 'alleging that the respondent judge Teves has departed from the accepted and usual course of judicial preoceeding" and "had acted without or in excess or in error of his jurisdicton or in gross abuse of discretion. Issue: May a common carrier engaged in inter-island shipping stipulate thru a condition printed at the back of passage tickets to its vessels that any and all actions arising out of the contract of carriage should be filed only in a particular province or city, in this case the City of Cebu, to the exclusion of all others? [Claims of Sweet Lines: 1. Condition No. 14 is valid and enforceable, since Tandog and Tiro acceded to it when they purchased passage tickets at its Cagayan de Oro branch office and took its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol 2. The condition of the venue of actions in the City of Cebu is proper since venue may be validly waived 3. Condition No. 14 is unequivocal and mandatory, the words and phrases "any and all", "irrespective of where it is issued," and "shag" leave no doubt that the intention of Condition No. 14 is to fix the venue in the City of Cebu, to the exclusion of other places
4. The orders of the respondent Judge are an unwarranted departure from established jurisprudence governing the case; and that he acted without or in excess of his jurisdiction in is the orders complained of] [Claims of Tandog and Tiro: 1. Condition No. 14 is not valid, since the same is not an essential element of the contract of carriage, being in itself a different agreement which requires the mutual consent of the parties to it 2. They had no say in its preparation, the existence of which they could not refuse, hence, they had no choice but to pay for the tickets and to avail of Sweet Lines shipping facilities out of necessity 3. The carrier "has been exacting too much from the public by inserting impositions in the passage tickets too burdensome to bear," that the condition which was printed in fine letters is an imposition on the riding public and is not binding, citing - while venue of actions may be transferred from one province to another, such arrangement requires the "written agreement of the parties", not to be imposed unilaterally] Held: There was a valid contract of carriage entered into by Sweet Lines and Tandog and Tiro. Furthermore, the passage tickets are the best evidence thereof. All the essential elements of a valid contract (consent, cause or consideration and object) are present. Whenever a passenger boards a ship for transportation from one place to another, he is issued a ticket by the shipper, which has all the elements of a written contract: (1) the consent of the contracting parties manifested by the fact that the passenger boards the ship and the shipper consents or accepts him in the ship for transportation; (2) cause or consideration which is the fare paid by the passenger as stated in the ticket; (3) object, which is the transportation of the passenger from the place of departure to the place of destination which are stated in the ticket. However, in this case, with respect to the 14 conditions printed at the back of the passage tickets, these are commonly known as "contracts of adhesion," the validity and/or enforceability of which will have to be determined by the peculiar circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced. Generally, stipulations in a contract come about after deliberate drafting by the parties. However, there are certain contracts almost all the provisions of which have been drafted only by one party. Such contracts are called contracts of adhesion, because the only participation of the other party is the signing of his signature or his 'adhesion'. Insurance contracts, bills of lading, contracts of make of lots on the installment plan fall into this category. By the peculiar circumstances under which contracts of adhesion are entered into, in which the other party, in this case, the passengers, who are made to adhere thereto on the "take it or leave it" basis, certain guidelines in the determination of their validity and/or enforceability have been formulated for justice and fair play. In recognition of the character of contracts of this kind, the protection of the disadvantaged is expressly enjoined by the New Civil Code: Art. 24. In all contractual
property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the courts must be vigilant for his protection. In line with that, the court ruled that Condition No. 14 should be held as void and unenforceable for the following reasons: 1. Under circumstances obligation in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets. There is an acute shortage in inter-island vessels plying between the country's several islands, and with that, the facilities they offer leave much to be desired, thus, passengers literally scramble to whatever accommodations may be availed of, even through circuitous routes, and/or at the risk of their safety and this was precisely the experience of Tandog and Tiro. Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets for conditions that may be printed much charge them with having consented to the conditions, so printed, especially if there are a number of such conditions in fine print, as in this case. Also, it should also be stressed that companies are franchise holders of certificates of public convenience and therefore, posses a virtual monopoly over the business of transporting passengers between the ports covered by their franchise. This being so, shipping companies, like Sweet Lines, engaged in inter-island shipping, have a virtual monopoly of the business of transporting passengers and may thus dictate their terms of passage, leaving passengers with no choice but to buy their tickets and avail of their vessels and facilities. Lastly, bulk of those who board these inter-island vessels come from the low-income groups and are less literate, and who have little or no choice but to avail of petitioner's vessels. 2. Condition No. 14 subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable passengers from different places of the country who, under Condition No. 14, will have to file suits against Sweet Lines only in the City of Cebu. For, although venue may be changed or transferred from one province to another by agreement of the parties in writing, based on Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid where it practically negates the action of the claimants. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote the ends of justice. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will defeat the ends of justice. On the other hand, Sweet Lines has branches or offices in the respective ports of call
of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental will not cause inconvenience or prejudice Sweet Lines. Public policy is that principle of the law, which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good. Under this principle, the freedom of contract or private dealing is restricted by law for the good of the public. Petition for prohibition was dismissed. Separate Opinions BARREDO, J., concurring: Although, agreements regarding change of venue are enforceable, there may be instances where for equitable considerations and in the better interest of justice, a court may justify the laying of the venue in the place fixed by the rules instead of following written stipulation of the parties. I take it that the importance that a stipulation regarding change of the venue fixed by law entails is such that nothing less than mutually conscious agreement as to it must be what the rule means. 2. HSBC V. JACK ROBERT SHERMAN FACTS: A complaint for collection of a sum of money was filed by petitioner Hongkong and Shanghai Banking Corporation (BANK) against private respondents Jack Robert Sherman and Deodato Reloj, before the RTC QC. It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (COMPANY), a company incorporated in Singapore applied with, and was granted by, the Singapore branch of petitioner BANK an overdraft facility in the maximum amount of Singapore dollars 200,000.00 (which amount was subsequently increased to Singapore dollars 375,000.00) with interest at 3% over petitioner BANK prime rate, payable monthly, on amounts due under said overdraft facility; as a security for the repayment by the COMPANY of sums advanced by petitioner BANK to it through the aforesaid overdraft facility, on October 7, 1982, both private respondents and a certain Robin de Clive Lowe, all of whom were directors of the COMPANY at such time, executed a Joint and Several Guarantee in favor of petitioner BANK whereby private respondents and Lowe agreed to pay, jointly and severally, on demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft facility. (IMPT) The Joint and Several Guarantee provides that: This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts of Singapore shall have jurisdiction over all disputes arising under this guarantee. The COMPANY failed to pay its obligation. Thus, petitioner BANK demanded payment of the obligation from private respondents, conformably with the provisions of the Joint and Several Guarantee. Inasmuch as the private respondents still failed
to pay, petitioner BANK filed the above-mentioned complaint. On December 14,1984, private respondents filed a MTD on the ground of lack of jurisdiction over the SM and persons of the defendants. Acting on the motion, the trial court issued an order denying the MTD ruling that there is nothing in the Guarantee which says that the courts of Singapore shall have jurisdiction to the exclusion of the courts of other countries or nations and that jurisdiction over the persons of defendants is acquired by service of summons and copy of the complaint on them. There has been a valid service of summons on both defendants and in fact the same is admitted when said defendants filed a 'Motion for Extension of Time to File Responsive Pleading on December 5, 1984. MR was filed thereafter but still got denied. Private respondents then filed before CA a petition for prohibition with preliminary injunction and/or prayer for a restraining order. CA rendered a decision granting the injunction. ISSUE: W/N Philippine courts have jurisdiction over the suit. (YES) HELD: While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several Guarantee contains a choice-of-forum clause, the very essence of due process dictates that the stipulation that "[t]his guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts in Singapore shall have jurisdiction over all disputes arising under this guarantee" be liberally construed. One basic principle underlies all rules of jurisdiction in International Law: a State does not have jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on some minimum contacts that will not offend traditional notions of fair play and substantial justice. Indeed, as pointed-out by petitioner BANK at the outset, the instant case presents a very odd situation. In the ordinary habits of life, anyone would be disinclined to litigate before a foreign tribunal, with more reason as a defendant. However, in this case, private respondents are Philippine residents (a fact which was not disputed by them) who would rather face a complaint against them before a foreign court and in the process incur considerable expenses, not to mention inconvenience, than to have a Philippine court try and resolve the case. The defense of private respondents that the complaint should have been filed in Singapore is based merely on technicality. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed in or marching through State territory with the permission of the latter's authorities. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the State. A
State is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them. As regards the issue on improper venue, petitioner BANK avers that the objection to improper venue has been waived. However, We agree with the ruling of the respondent Court that: While in the main, the motion to dismiss fails to categorically use with exactitude the words 'improper venue' it can be perceived from the general thrust and context of the motion that what is meant is improper venue, The use of the word 'jurisdiction' was merely an attempt to copy-cat the same word employed in the guarantee agreement but conveys the concept of venue. At any rate, this issue is now of no moment because We hold that venue here was properly laid for the same reasons discussed above. The respondent Court likewise ruled that: In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum non conveniens .However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court Thus, the respondent Court should not have relied on such principle. Although the Joint and Several Guarantee prepared by petitioner BANK is a contract of adhesion and that consequently, it cannot be permitted to take a stand contrary to the stipulations of the contract, substantial bases exist for petitioner Bank's choice of forum, as discussed earlier. ACCORDINGLY, the decision of the respondent Court is hereby REVERSED and the decision of the Regional Trial Court is REINSTATED, with costs against private respondents. 3. BELLIS V. BELLIS FACTS: Amos Bellis was a citizen and resident of Texas at the time of his death. He executed a will in the Philippines, in which he directed that after all taxes, obligations, and expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner a) $240,000.00 to his first wife Mary Mallen b) $120,000.00 to his three illegitimate children Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis,or $40,000.00 each, and c) After foregoing the two items have been satisfied, the remainder shall go to his seven surviving children by his first and second wives. Maria Cristina Bellis and Miriam Palma Bellis, filed their respective oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased. The lower court issued an order overruling the oppositions and approving the executors final account, report and administration, and project of partition. Relying upon Article 16 of the Civil Code, it applied the national law of the decedent, which in this case is which did not provide for legitimes.
ISSUE: Whether or not such illegitimate children of Bellis be entitled to successional rights? HELD: The said illegitimate children are not entitled to their legitimes. Under Texas law, there are no legitimes. Even if the other will was executed in the Philippines, his national law, still, will govern the properties for succession even if it is stated in his testate that it shall be governed by the Philippine law. Article 16, Paragraph 2 of Civil code render applicable the national law of the decedent, in intestate and testamentary successions, with regard to four items: (a) the order of succession, (b) the amount of successional rights, (c) the intrinsic validity of provisions of will, and (d) the capacity to succeed. ART.16 Real property as well as personal property is subject to the law of the country to where it is situated.However, intestate and testamentary successions, both with respect to the order of successions and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. 4. TAYAG V. BENGUET CONSOLIDATED FACTS: Idonah Perkins died in New York and left stock certificates covering 32,000 shares of Benguet Consolidated under the possession of County Trust Co. of New York, the domiciliary administrator of the estate. Ancillary administration proceedings were instituted in Manila and Renato Tayag was later appointed as ancillary administrator. A dispute arose between the domiciliary and ancillary administrator as to who was entitled to the possession of the stock certificates. So that claims of Perkins local creditors could be satisfied, the lower court ordered the domiciliary administrator to surrender the stock certificates but the domiciliary refused to comply. This prompted the ancillary administrator to petition to the court that the stock certificates be considered lost and cancelled, and that Benguet be ordered to issue new certificates to it. The CFI granted the petition. From such order, Benguet Consolidated appealed contending that it cannot be declare lost because they are in actual existence and is in the possession of Country Trust in New York. ISSUE: Whether the lower court had the power to issue the questioned order? YES HELD: SC affirmed the Lower Court. The power of the ancillary administrator to gain control and possession of all the assets of the decedent within the jurisdiction of the Philippines is undisputed. The administration extends to all assets of the decedent within the state where it was granted and the administrator of one state has no power over assets in another state. The court has the authority to require that the ancillary administrators authority over the stock certificates be respected. Benguet Consolidated is a domestic corp subject
to the unrestricted jurisdiction of the local courts. Its shares of stocks are not immune from lawful court orders. The actual situs of shares of stock is in the Philippines, the corporation being domiciled here. Since the domiciliary persistently refuses to deliver that owned by the decedent to the ancillary, there was nothing arbitrary in considering them as lost and requiring issuance of new certificates in lieu thereof. Benguets contention that its by-laws should be followed requiring a final court resolution on ownership first before issuance of a new certificate is also without merit. There is no question of ownership since Country Trust did not even appeal. Even assuming it did, the command of a court decree prevails over a by-law. 5. PAKISTAN INTERNATIONAL AIRLINES V. OPLE FACTS: Pakistan Intl Airlines (PIA) executed 2 separate contracts of employments in Manila, one with Farrales and the other with Mamasig. The pertinent portions of the contract state that (1) the agreement is for a period of 3 years, but can be extended by the mutual consent of the parties; (2) notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying the EMPLOYEE wages equivalent to one month's salary; (3) this agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement. 1 year and 4 months before the expiration of the contracts of employment, PIA sent separate letters to Mamasig and Farrales, advising them that their services as flight stewardesses would be terminated. Farrales and Mamasig filed a complaint for illegal dismissal and non-payment of company benefits and bonuses. PIA contended that F & M were habitual absentees and had the habit of bringing in from abroad sizeable quantities of personal effects. ISSUE: WON the provision in the contract that the agreement shall be governed by the laws of Pakistan (first clause) and that only the courts of Karachi, Pakistan shall have jurisdiction over any controversy arising out of the agreement (second clause), may be given effect (NO) HELD: NO. The first clause cannot be invoked to prevent the application of Phil labor laws and regulations to the subject matter of the case. The ER-EE relationship between PIA and F&M is affected with public interest and the applicable Phil laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship. The second clause cannot also be invoked because the circumstances of the case shows multiple substantive contacts (no r) between Phil law and Phil courts on the one hand, and the relationship between the parties on the other: contract was executed and partially performed in the Phils., F&M are Filipino citizens and PIA is licensed to do business in the Phils., and F&M were based in the Phils. in between their flights. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the parties. The challenged portion of the employment agreement
cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law. As to the dismissal of Farrales & Mamasig: they were illegally dismissed and are entitled to 3 years backwages without qualification or deduction. PIAs right to procedural due process was observed as it was given the opportunity to submit a position paper and present evidence. Also, the provisions of the employment contract must not be contrary to law, morals, good customs, public order, public policy. The employment contract prevents security of tenure of F&M from accruing. 6. ZALAMEA V. COURT OF APPEALS FACTS: Petitioner-spouses Zalamea and their daughter purchased 3 airline tickets from the Manila agent of TransWorld Airlines for a flight to NY-LA. The tickets were at a discount of 75% and the daughter was a full fare. While in NY, they received a notice of the reconfirmation. On the appointed date, they checked in at 10am for their 11am flight but were placed on the waitlist. The daughter appeared as No.13 on the waitlist while the two Zalameas were listed as No. 34, showing a party of two. Out of the 42 names, the first 22 names were eventually allowed to board, including the father. The others werent able to fly. As it were, those holding full-fare tickets were given first priority. The father later discovered that he was holding his daughters full-fare ticket. Thos with discounted tickets were denied boarding. Even in the next flight to LA, the mother and daughter couldnt be accommodated because it was fully book. They were constrained to book in another flight and purchased 2 tickets from American Airlines at $918. In the Philippines, petitioners filed an action for damages based on breach of contract of air carriage before the RTC Makati. The RTC ordered the airline company to pay the ticket costs, as well as moral damages and attorneys fees. CA: Moral damages are recoverable only where there is fraud or bad faith (in a breach of contract of carriage). Since it is a matter of record that overbooking of flights is a common and accepted practice of airlines in the United States and is specifically allowed under the Code of Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be imputed on respondent TransWorld Airlines. TWA was remiss in not informing petitioners that the flight was overbooked. There was no bad faith in placing the petitioners in the waitlist along with 48 passengers. ISSUE: W/N there was bad faith on the part of TWA, considering that TWA contends that overbooking of flights is a common and accepted practice in the US HELD: Yes, there was fraud or bad faith. The US law or regulation allegedly authorizing overbooking has never been proved. Foreign laws do not prove themselves nor can the courts take judicial notice of them. Like any other fact, they must be alleged and proved. Written law 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 with a certificate that such officer has custody. The certificate may be made by a secretary of an 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. TWA relied solely on the statement of its customer service agent, Ms. Lather, in her deposition. Aside from such, there is no official publication of said code presented as evidence. Respondent courts finding that overbooking is allowed has no basis. Even if the claimed U.S. Code of Federal Regulations exist, the same isnt applicable in accordance with the principle of lex loci contractus which require that the law of the place where the airline ticket was issued should be applied by the court where the passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant airline. Since the tickets were sold and issued in the Philippines, the applicable law would be Philippine law. Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad faith in not informing its passengers beforehand that it could breach the contract of carriage even if they have confirmed tickets if there was overbooking. Respondent TWA should have incorporated stipulations on overbooking on the tickets issued or to properly inform its passengers about these policies so that the latter would be prepared for such eventuality or would have the choice to ride with another airline. TWA was also guilty of not informing its passengers of its alleged policy of giving less priority to discounted tickets. While the petitioners had checked in at the same time, and held confirmed tickets, yet, only one of them was allowed to board the plane ten minutes beforedeparture time because the full-fare ticket he was holding was given priority over discounted tickets. The other two petitioners were left behind. The Court ordered TWA to pay the $918 worth of tickets from American Airlines, 50k moral damages, 50k exemplary damages, 50k attys fees and the costs of suit. Notes: The tickets were sold and issued in the Philippines; thus, Philippine law is applicable, under the principled of lex loci contractus. 7. CADALIN V. POEA ADMINISTRATOR GENERAL RULE: A foreign procedural law will not be applied in the forum. EXCEPTION: When the country of the forum has a "borrowing statute," the country of the forum will apply the foreign statute of limitations. EXCEPTION TO THE EXCEPTION: The court of the forum will not enforce any foreign claim obnoxious to the forum's public policy. FACTS: On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit by filing an "Amended Complaint" with the Philippine Overseas Employment Administration (POEA) for money claims arising from their recruitment by AIBC and employment by BRII.
BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino workers for overseas employment on behalf of its foreign principals. The amended complaint principally sought the payment of the unexpired portion of the employment contracts, which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and Reserved Fund, interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits; refund of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the accreditation of BRII. EASIER FACTS: Cadalin et al. are overseas contract workers recruited by respondent-appellant AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975 to 1983. As such, they were all deployed at various projects in several countries in the Middle East as well as in Southeast Asia, in Indonesia and Malaysia. The case arose when their overseas employment contracts were terminated even before their expiration. Under Bahrain law, where some of the complainants were deployed, the prescriptive period for claims arising out of a contract of employment is one year. ISSUE: Whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law. HELD: AIBC and BRII, insisting that the actions on the claims have prescribed under the Amiri Decree No. 23 of 1976, argue that there is in force in the Philippines a "borrowing law," which is Section 48 of the Code of Civil Procedure and that where such kind of law exists, it takes precedence over the common- law conflicts rule (G.R. No. 104776, Rollo, pp. 45-46). First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law. Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the contract. (G.R. Nos. 105029-31, Rollo, p. 226). As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]). A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law.
Thus in Bournias v. Atlantic Maritime Company, supra, the American court applied the statute of limitations of New York, instead of the Panamanian law, after finding that there was no showing that the Panamanian law on prescription was intended to be substantive. Being considered merely a procedural law even in Panama, it has to give way to the law of the forum on prescription of actions. However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a "borrowing statute." Said statute has the practical effect of treating the foreign statute of limitation as one of substance (Goodrich, Conflict of Laws 152-153 [1938]). A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing statutes," one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippines Islands. Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedures as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws 104 [7th ed.]). In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. The courts of the forum will not enforce any foreign claim obnoxious to the forum's public policy (Canadian Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor. In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that: The state shall promote social justice in all phases of national development. (Sec. 10). The state affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare (Sec. 18). In article XIII on Social Justice and Human Rights, the 1987 Constitution provides: Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Having determined that the applicable law on prescription is the Philippine law, the next question is whether the prescriptive period governing the filing of the claims is
three years, as provided by the Labor Code or ten years, as provided by the Civil Code of the Philippines. The claimants are of the view that the applicable provision is Article 1144 of the Civil Code of the Philippines, which provides: The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. NLRC, on the other hand, believes that the applicable provision is Article 291 of the Labor Code of the Philippines, which in pertinent part provides: Money claims-all money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued, otherwise they shall be forever barred. 8. UNITED AIRLINES V. COURT OF APPEALS FACTS: Aniceto Fontanilla purchased from United Airlines, through the Philippine Travel Bureau in Manila three "Visit the U.S.A." tickets for himself, his wife and his minor son Mychal for four routes. All flights had been confirmed previously by United Airlines. The Fontanillas then proceeded to the US as planned. While there, Aniceto bought two additional coupons for his family at United's office in Washington Dulles Airport. After paying the penalty for rewriting their tickets, the Fontanillas were issued tickets with corresponding boarding passes with the words "CHECK-IN REQUIRED," set to leave from Los Angeles to San Francisco. The cause of the non-boarding of the Fontanillas at the LA airport is the bone of contention of this controversy. Aniceto's version is upon their arrival at the LA Airport for their flight, they proceeded to United's counter where they were attended by Linda. Linda examined their tickets, punched something into her computer and then told them that boarding would be in fifteen minutes. When the flight was called, the Fontanillas proceeded to the plane. To their surprise, the stewardess at the gate did not allow them to board the plane, as they had no assigned seat numbers. They were then directed to go back to the "check-in" counter where Linda subsequently informed them that the flight had been overbooked and asked them to wait. The Fontanillas tried to explain to Linda the special circumstances of their visit. However, Linda told them in arrogant manner, "So what, I can not do anything about it." Subsequently, three other passengers with Caucasian features were graciously allowed to baord, after the Fontanillas were told that the flight had been overbooked. The plane then took off with the Fontanillas baggage in tow, leaving them behind. The Fontanillas then complained to Linda, who in turn gave them an ugly stare and rudely uttered, "its not my fault. Its the fault of the company. Just sit down and wait." When Mr. Fontanilla reminded Linda of the inconvenience being caused to them, she bluntly retorted, "Who do you think you are? You lousy Flips are good for nothing beggars. You always ask for American aid." After which she remarked "Dont worry about your baggage. Anyway there is nothing in there. What are you doing here anyway? I will report you to immigration. You Filipinos should go home." Such rude statements were made in front of other people in the airport causing the Fontanillas
to suffer shame, humiliation and embarrassment. The chastening situation even caused the younger Fontanilla to break into tears. After some time, Linda, without any explanation, offered the Fontanillas $50.00 each. She simply said "Take it or leave it." This, the Fontanillas declined. The Fontanillas then proceeded to the United Airlines customer service counter to plead their case. The male employee at the counter reacted by shouting and left without saying anything. United Airlines has a different version of what occurred at the LA Airport. According to it, the Fontanillas did not initially go to the check-in counter to get their seat assignments for the flight. They instead proceeded to join the queue boarding the aircraft without first securing their seat assignments as required in their ticket and boarding passes. Having no seat assignments, the stewardess at the door of the plane instructed them to go to the check-in counter. When the Fontanillas proceeded to the check-in counter, Linda Allen, the United Airlines Customer Representative at the counter informed them that the flight was overbooked. She booked them on the next available flight and offered them denied boarding compensation. Linda vehemently denies uttering the derogatory and racist words attributed to her by the Fontanillas. The incident prompted the Fontanillas to file case for damages before the RTC of Makati however the latter dismissed the complaint. On appeal, the CA ruled in favor of the Fontanillas. Hence, United Airlines sought redress with the SC. ISSUE: Whether or not the CA erred in applying US laws in the case at bar? Yes HELD: The court held that the CA erred in applying the laws of the US as Philippine law is the applicable law. Although, the contract of carriage was to be performed in the US, the tickets were purchased through United's agent in Manila. It is true that the tickets were "rewritten" in Washington, D.C. however, such fact did not change the nature of the original contract of carriage entered into by the parties in Manila. According to the doctrine of lex loci contractus, as a general rule, the law of the place where a contract is made or entered into governs with respect to its nature and validity, obligation and interpretation. This has been said to be the rule even though the place where the contract was made is different from the place where it is to be performed, and particularly so, if the place of the making and the place of performance are the same. Hence, the court should apply the law of the place where the airline ticket was issued, when the passengers are residents and nationals of the forum and the ticket is issued in such State by the airline. 9. ASIAVEST MERCHANT BANKERS V. COURT OF APPEALS FACTS: Asiavest Merchant Bankers, a corporation organized under the laws of Malaysia, initiated a collection suit before the High Court of Malaya in Kuala Lumpur against Philippine National Construction Corporation (PNCC), a corporation duly incorporated and existing under Philippine laws. Asiavest sought to recover the indemnity of the performance bond it had put up in favor of PNCC to guarantee completion of the Felda Project and the non-payment of the loan it extended for the
completion of another project. The High Court of Malaya rendered judgment in favor of Asiavest and against PNCC, ordering the latter to pay the former. Following unsuccessful attempts to secure payment from PNCC under the judgment, Asiavest initiated a complaint before the RTC to enforce the judgment of the High Court of Malaya. PNCC moved to dismiss the case contending that the foreign judgment should be denied recognition or enforcement for want of jurisdiction, want of notice, collusion and/or fraud, and there is a clear mistake of law or fact. The RTC and CA dismissed the case. ISSUE: Whether the foreign judgment should be given recognition and enforcement in the Philippines. HELD: YES. 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; 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. A foreign judgment is presumed to be valid and binding in the country from which it comes, until a contrary showing, on the basis of a presumption of regularity of proceedings and the giving of due notice in the foreign forum. Under Section 50(b), 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. Having thus proven through evidence of the existence and authenticity of the foreign judgment, said foreign judgment enjoys presumptive validity and the burden then fell upon the party who disputes its validity, herein PNCC, to prove otherwise. PNCC failed to sufficiently discharge the burden that fell upon it to prove by clear and convincing evidence the grounds which it relied upon to prevent enforcement of
the Malaysian High Court judgment, namely, (a) that jurisdiction was not acquired by the Malaysian Court over the person of PNCC due to alleged improper service of summons upon PNCC and the alleged lack of authority of its counsel to appear and represent PNCC in the suit; (b) the foreign judgment is allegedly tainted by evident collusion, fraud and clear mistake of fact or law; and (c) not only were the requisites for enforcement or recognition allegedly not complied with but also that the Malaysian judgment is allegedly contrary to the Constitutional prescription that the every decision must state the facts and law on which it is based. The foregoing reasons or grounds relied upon by PNCC in preventing enforcement and recognition of the Malaysian judgment primarily refer to matters of remedy and procedure taken by the Malaysian High Court relative to the suit for collection initiated by petitioner. Needless to stress, 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, 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 PNCC 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. Fraud to hinder the enforcement within the jurisdiction of a foreign judgment must be extrinsic, i.e., fraud based on facts not controverted or resolved in the case where judgment is rendered, or that which would go to the jurisdiction of the court or would deprive the party against whom judgment is rendered a chance to defend the action to which he has a meritorious defense. Intrinsic fraud is one which goes to the very existence of the cause of action is deemed already adjudged, and it, therefore, cannot militate against the recognition or enforcement of the foreign judgment. 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,
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then the same must be accorded respect and the courts in this jurisdiction cannot invalidate the judgment of the foreign court simply because our rules provide otherwise. All in all, PNCC had the ultimate duty to demonstrate the alleged invalidity of such foreign judgment, being the party challenging the judgment rendered by the High Court of Malaya. But instead of doing so, PNCC merely argued, to which the trial court agreed, that the burden lay upon petitioner to prove the validity of the money judgment. Such is clearly erroneous and would render meaningless the presumption of validity accorded a foreign judgment were the party seeking to enforce it be required to first establish its validity. 10. GARCIA V. RECIO Doctrine: A divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree is valid according to the national law of the foreigner. However, the divorce decree and the governing personal law of the alien spouse who obtained the divorce must be proven. Our courts do not take judicial notice of foreign laws and judgment; hence, like any other facts, both the divorce decree and the national law of the alien must be alleged and proven according to our law on evidence. FACTS: Rederick A. Recio (Rederick), a Filipino, was married to Editha Samson, an Australian citizen, in Malabon, Rizal in 1987. They lived together as husband and wife in Australia. In 1989, a decree of divorce, purportedly dissolving the marriage, was issued by an Australian family court. Rederick later became an Australian Citizen in 1992. In 1994, petitioner Grace J Garcia (Grace) a Filipina and Rederick were married in Cabanatuan City. In their application for a marriage license, Rederick was declared as "single" and "Filipino." In March 1998, Grace filed a Complaint for Declaration of Nullity of Marriage on the ground of bigamy. She claimed that she learned of respondent's marriage to Editha Samson only in November 1997. In his Answer, Rederick averred that, as far back as 1993, he had revealed to Grace his prior marriage and its subsequent dissolution. He contended that his first marriage had been validly dissolved by the divorce decree obtained in Australian in 1989; thus, he was legally capacitated to marry Grace in 1994. In July 1998, while the suit for the declaration of nullity was pending Rederick was able to secure a divorce decree from a family court in Sydney because his marriage with Grace had " irretrievably broken down." Thus, Rederick prayed in his Answer that the Complaint be dismissed on the ground that it stated no cause of action. The trial court declared the marriage dissolved on the ground that the divorce issued in Australia was valid and recognized in the Philippines. The Australian divorce had ended the marriage; thus, there was no more martial union to nullify or annual. ISSUES: (1) Whether or not the divorce between respondent and Editha Samson was proven (YES)
(2) Whether or not Rederick was proven to be legally capacitated to marry Grace (NO) HELD: (1) Yes. Before a divorce decree can be admitted in evidence, it must first comply with the registration requirements under Articles 11, 13 and 52 of the Family Code . However, in this case, when the divorce decree of 1989 was submitted in evidence, counsel for Grace objected, not to its admissibility, but only to the fact that it had not been registered in the Local Civil Registry of Cabanatuan City. The trial court ruled that it was admissible, subject to Graces qualification. Hence, it was admitted in evidence and accorded weight by the judge. The failure of Graces counsel to object properly rendered the divorce decree admissible as a written act of the Family Court of Sydney, Australia. Furthermore, compliance with the quoted articles (11, 13 and 52) of the Family Code is not necessary as Rederick was no longer bound by Philippine personal laws after he acquired Australian citizenship in 1992. (2) No. Rederick merely presented a decree nisi or an interlocutory decree a conditional or provisional judgment of divorce. It is in effect the same as a separation from bed and board, although an absolute divorce may follow after the lapse of the prescribed period during which no reconciliation is effected. On its face, the herein Australian divorce decree contains a restriction that reads: "1. A party to a marriage who marries again before this decree becomes absolute (unless the other party has died) commits the offence of bigamy." Therefore, the divorce decree did not absolutely establish his legal capacity to remarry according to his national law. Hence, there is no basis for the ruling of the trial court, which erroneously assumed that the Australian divorce ipso facto restored Redericks capacity to remarry despite the paucity of evidence on this matter. The legal capacity to contract marriage is determined by the national law of the party concerned. The certificate mentioned in Article 21 of the Family Code would have been sufficient to establish the legal capacity of Rederick, had he duly presented it in court. A duly authenticated and admitted certificate is prima facie evidence of legal capacity to marry on the part of the alien applicant for a marriage license. However, based on the records submitted, there is absolutely no evidence that proves Redericks legal capacity to marry Grace. The court a quo erred in finding that the divorce decree ipso facto clothed Rederick with the legal capacity to remarry without requiring him to adduce sufficient evidence to show the Australian personal law governing his status; or at the very least, to prove his legal capacity to contract the second marriage. Neither can we declare the marriage null and void on the ground of bigamy. It may turn out that under Australian law, Rederick was really capacitated to marry Grace as a direct result of the divorce decree. Hence, the most judicious course is to remand this case to the trial court to receive evidence, if any, which show Redericks legal capacity to marry Grace. WHEREFORE, in the interest of orderly procedure and substantial justice, we REMAND the case to the court a quo for the purpose of receiving evidence which conclusively show respondent's legal capacity to marry petitioner; and failing in that, of declaring the parties' marriage void on the ground of bigamy, as above discussed.
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No costs. 11. RAYTHEON INTERNATIONAL V. ROUZIE FACTS: Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, USA, and respondent Stockton W. 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 with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows. On July 16, 1994, Rouzie filed before the Arbitration Branch of the NLRC a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract. Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay Rouzies money claims. Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed Rouzies complaint on the ground of lack of jurisdiction. Rouzie elevated the case to this Court but was dismissed in a Resolution which became final and executory on November 9, 1998. On 8 January 1999, Rouzie, then a resident of La Union, instituted an action for damages before the RTC of Bauang, La Union. The Complaint, named as defendants Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the labor case that BMSI verbally employed Rouzie to negotiate the sale of services in government projects and that Rouzie was not paid the commissions due him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as Raytheon itself had combined and functioned as one company. In its Answer, Raytheon alleged that contrary to Rouzies claim, it was a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement with Rouzie or paying the latter any sum of money. Raytheon also denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies. Raytheon also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as "Special Sales Representative Agreement," the rights and obligations of the parties shall be governed by the laws of the State of Connecticut. Raytheon sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim. On 18 May 1999, Raytheon filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment seeking the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. Rouzie opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine Consulate General in Chicago. In an Order, the RTC denied Raytheons omnibus motion. The trial court held that the factual allegations in the complaint, assuming the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on Raytheon, it being a foreign corporation licensed to do business in the Philippines. Raytheon filed a MR of the order, which motion was opposed by Rouzie. In an Order, the trial court denied Raytheons motion. Thus, it filed a Rule 65 Petition with the CA praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting further proceedings. On 28 August 2003, the CA rendered the assailed Decision denying the petition for certiorari for lack of merit. It also denied Raytheons MR in the assailed Resolution issued on 10 March 2004. The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving Raytheons omnibus motion, it found the evidence presented by Raytheon, that is, the deposition of Walter Browning, insufficient for purposes of determining whether the complaint failed to state a cause of action. The appellate court also stated that it could not rule one way or the other on the issue of whether the corporations, including Raytheon, named as defendants in the case had indeed merged together based solely on the evidence presented by Rouzie. Thus, it held that the issue should be threshed out during trial. Moreover, the appellate court deferred to the discretion of the trial court when the latter decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens. ISSUE: WON the CA erred in refusing to dismiss the complaint on the ground of forum non conveniens? (NO) HELD: Raytheon mainly asserts that the written contract between Rouzie and 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, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines that renders our local courts inconvenient forums. Raytheon theorizes that the foreign elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens. Recently in Hasegawa v. Kitamura, the Court outlined 3 consecutive phases involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (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 the power to enforce its decision.
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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 conflictof-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 and by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein. Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the jurisdiction of the RTC. As regards jurisdiction over the parties, the trial court acquired jurisdiction over Rouzie (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of Raytheon (as party defendant) 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 and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law 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. 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 in the instant case are not sufficient to oust the trial court of its jurisdiction over the Civil 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 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. Finding no grave abuse of discretion on the trial court, the CA respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers to the sound discretion of the lower courts because their findings are binding on this Court. WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the CA are hereby AFFIRMED. Costs against Raytheon.
12. HSBC V. SHERMAN FACTS: A complaint for collection of a sum of money was filed by petitioner Hongkong and Shanghai Banking Corporation (BANK) against private respondents Jack Robert Sherman and Deodato Reloj, before the RTC QC. It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (COMPANY), a company incorporated in Singapore applied with, and was granted by, the Singapore branch of petitioner BANK an overdraft facility in the maximum amount of Singapore dollars 200,000.00 (which amount was subsequently increased to Singapore dollars 375,000.00) with interest at 3% over petitioner BANK prime rate, payable monthly, on amounts due under said overdraft facility; as a security for the repayment by the COMPANY of sums advanced by petitioner BANK to it through the aforesaid overdraft facility, on October 7, 1982, both private respondents and a certain Robin de Clive Lowe, all of whom were directors of the COMPANY at such time, executed a Joint and Several Guarantee in favor of petitioner BANK whereby private respondents and Lowe agreed to pay, jointly and severally, on demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft facility. (IMPT) The Joint and Several Guarantee provides that: This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts of Singapore shall have jurisdiction over all disputes arising under this guarantee. The COMPANY failed to pay its obligation. Thus, petitioner BANK demanded payment of the obligation from private respondents, conformably with the provisions of the Joint and Several Guarantee. Inasmuch as the private respondents still failed to pay, petitioner BANK filed the above-mentioned complaint. On December 14,1984, private respondents filed a MTD on the ground of lack of jurisdiction over the SM and persons of the defendants. Acting on the motion, the trial court issued an order denying the MTD ruling that there is nothing in the Guarantee which says that the courts of Singapore shall have jurisdiction to the exclusion of the courts of other countries or nations and that jurisdiction over the persons of defendants is acquired by service of summons and copy of the complaint on them. There has been a valid service of summons on both defendants and in fact the same is admitted when said defendants filed a 'Motion for Extension of Time to File Responsive Pleading on December 5, 1984. MR was filed thereafter but still got denied. Private respondents then filed before CA a petition for prohibition with preliminary injunction and/or prayer for a restraining order. CA rendered a decision granting the injunction. ISSUE: W/N Philippine courts have jurisdiction over the suit. (YES) HELD: While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several Guarantee contains a choice-of-forum clause, the very essence of due process dictates that the stipulation that "[t]his guarantee and all
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rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts in Singapore shall have jurisdiction over all disputes arising under this guarantee" be liberally construed. One basic principle underlies all rules of jurisdiction in International Law: a State does not have jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on some minimum contacts that will not offend traditional notions of fair play and substantial justice. Indeed, as pointed-out by petitioner BANK at the outset, the instant case presents a very odd situation. In the ordinary habits of life, anyone would be disinclined to litigate before a foreign tribunal, with more reason as a defendant. However, in this case, private respondents are Philippine residents (a fact which was not disputed by them) who would rather face a complaint against them before a foreign court and in the process incur considerable expenses, not to mention inconvenience, than to have a Philippine court try and resolve the case. The defense of private respondents that the complaint should have been filed in Singapore is based merely on technicality. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed in or marching through State territory with the permission of the latter's authorities. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the State. A State is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them. As regards the issue on improper venue, petitioner BANK avers that the objection to improper venue has been waived. However, We agree with the ruling of the respondent Court that: While in the main, the motion to dismiss fails to categorically use with exactitude the words 'improper venue' it can be perceived from the general thrust and context of the motion that what is meant is improper venue, The use of the word 'jurisdiction' was merely an attempt to copy-cat the same word employed in the guarantee agreement but conveys the concept of venue. At any rate, this issue is now of no moment because We hold that venue here was properly laid for the same reasons discussed above. The respondent Court likewise ruled that: In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum non conveniens .However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court Thus, the respondent Court should not have relied on such principle. Although the Joint and Several Guarantee prepared by petitioner BANK is a contract
of adhesion and that consequently, it cannot be permitted to take a stand contrary to the stipulations of the contract, substantial bases exist for petitioner Bank's choice of forum, as discussed earlier. ACCORDINGLY, the decision of the respondent Court is hereby REVERSED and the decision of the Regional Trial Court is REINSTATED, with costs against private respondents. 13. SAUDI ARABIAN AIRLINES V. CA FACTS: On January 1988 defendant SAUDIA hired plaintiff (herein private respondent) Milagros P. Morada as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. On April 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer AlGazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in the room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice. When plaintiff returned to Jeddah a few days later, SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff to Manila. On January 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah. One year and a half later or on June 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office
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brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIAs Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight and took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders. On July 3, 1993, a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights. Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause. On November 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi (Al-Balawi), its country manager. On January 1994, SAUDIA filed an Omnibus Motion To Dismiss which raised the following grounds, to wit: (1) that the Complaint states no cause of action against SAUDIA; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case. The trial court issued an Order dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by SAUDIA. From the Order of respondent Judge denying the Motion to Dismiss, SAUDIA filed on September 1994, its Motion for Reconsideration of the Order. It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil
Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 1994, Morada filed her Opposition. In the Reply filed with the trial court, SAUDIA alleged that since its MR raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the same. Respondent Judge denied SAUDIAs Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows: Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus attorneys fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED. Consequently, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or TRO with the CA. Respondent CA promulgated a Resolution with Temporary Restraining Order, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim. In another Resolution, now assailed, the CA denied SAUDIAs Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit: On October 1995, SAUDIA filed with the SC the instant Petition for Review with Prayer for TRO. However, during the pendency of the instant Petition, respondent CA rendered the Decision, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaints basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal. On May 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for TRO, given due course by this Court. After both parties submitted their Memoranda, the instant case is now deemed submitted for decision. ISSUE: 1)W/N the case is a conflict of laws? YES 2) W/N CA erred in holding that the RTC of QC has jurisdiction? YES 3) W/N CA erred in Ruling that in this case, Philippine Law should govern? YES ***Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondents claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign
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element qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. Respondent contends that since her Amended Complaint is based on Articles 1935 and 2136 of the Civil Code, then the instant case is properly a matter of domestic law. HELD: 1) YES. Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia. Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a conflicts case. A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a foreign element. The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. The forms in which this foreign element may appear are many. The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form. In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise. We thus find private respondents assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the question of jurisdiction confronts the court a quo. 2) YES. After a careful study of the private respondents Amended Complaint, and the Comment thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code. Thus, in Philippine National Bank (PNB) vs. Court of Appeals, this Court held that: The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes. Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondents assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum. Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction we find that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691.
Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC of QC assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, vex, harass, or oppress the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice of forum of the plaintiff (now private respondent) should be upheld. Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntarily submitted herself to the jurisdiction of the court. The records show that petitioner SAUDIA has filed several motions praying for the dismissal of Moradas Amended Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial courts jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction. 3) As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation. Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as characterization, or the doctrine of qualification. It is the process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule. The purpose of characterization is to enable the forum to select the proper law. Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An essential element of conflict rules is the indication of a test or connecting factor or point of contact. Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing.
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Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. These test factors or points of contact or connecting factors could be any of the following: (1) the nationality of a person, his domicile, his residence, his place of sojourn, or his origin; (2) the seat of a legal or juridical person, such as a corporation; (3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real rights are involved; (4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts; (5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised; (6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis; (7) the place where judicial or administrative proceedings are instituted or done. The lex forithe law of the forumis particularly important because, as we have seen earlier, matters of procedure not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and (8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.60 (Italics ours.) After a careful study of the pleadings on record, we are convinced that there is reasonable basis for private respondents assertion thatalthough she was already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition. There is likewise logical basis on record for the claim that the handing over or turning over of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioners purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the guise of petitioners authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and
reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven. Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, act with justice, give her her due and observe honesty and good faith. Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort. Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liabilit1 have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the most significant relationship rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. As already discussed, there is basis for the claim that overall injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the relationship between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established. Prescinding from this premise that the Philippines is the situs of the tort complained of and the place having the most interest in the problem, we find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable
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petitioners insistence that [s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter. As aptly said by private respondent, she has no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21 of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law should govern this case5 And as correctly held by the respondent appellate court, considering that it was the petitioner who was invoking the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is. Lastly, no error could be imputed to the respondent appellate court in upholding the trial courts denial of defendants (herein petitioners) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the countrys system of law and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever. WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby REMANDED to RTC of QC for further proceedings. 14. HASEGAWA V. KITAMURA FACTS: Petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and management support in the infrastructure projects of foreign governments, entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. The agreement provides that respondent was to extend professional services to Nippon for a year. Nippon then assigned respondent to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the Philippine Government. When the STAR Project was near completion, the DPWH engaged the consultancy services of Nippon, this time for the detailed engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. Petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, then informed respondent that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up to the substantial completion of the STAR Project. Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded that he be assigned to the BBRI
project. Nippon insisted that respondents contract was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA. Kitamaru then filed for specific performance & damages with the RTC of Lipa City. Nippon Files a Motion to Dismiss. Nippons contends that the ICA had been perfected in Japan and executed by and between Japanese nationals. Thus, petitioners posit that local courts have no substantial relationship to the parties following the [state of the] most significant relationship rule in Private International Law. The claim for improper pre-termination of Kitamarus ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus. 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: Whether the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the state of the most significant relationship rule, or forum non conveniens. HELD: In the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for one do not always provide the necessary significant contacts for the other. 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 first 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 or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation. In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction. Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is given only by law and in the manner prescribed by law. 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
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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, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the subject controversy for a Civil Case for specific performance and damages is one not capable of pecuniary estimation and 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 contractusmeans 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-oflaw 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, 1st 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. 15. INTERNATIONAL SHOE CO V. WASHINGTON DOCTRINE: the Supreme Court formally adopted the minimum contacts/fair play and substantial justice test for determining whether there was proper personal jurisdiction over the defendant.. 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. FACTS: 1. International Shoe Co. (Appellant) assails the constitutionality of the Washington unemployment compensation statute as it is applied to them for infringing the due process clause of the Fourteenth Amendment and the commerce clause. 2. The statutes in question set up a comprehensive scheme of unemployment compensation, the costs of which are defrayed by contributions required to be made by employers to a state unemployment compensation fund 3. International Shoe Co. (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. 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. 4. During the years from 1937 to 1940, International Shoe Co employed 11-13 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. . 5. For the said years, the State of Washington issued notice of assessment which was personally served upon the sales solicitor employed by it in the State of Washington, and a copy of the notice was mailed by registered mail to appellant at its address in St. Louis, Missouri. 6. Appellant appeared specially before the office of unemployment, and moved to set aside the order and notice of assessment on the ground that the service upon appellant's salesman was not proper service upon appellant; that appellant was not a corporation of the State of Washington, and was not doing business within the state; that it had no agent within the state upon whom service could be made; 7. the appeal tribunal, ruled that appellee Commissioner was entitled to recover the
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unpaid contributions. That action was affirmed by the Commissioner; both the Superior Court and the Supreme Court affirmed. ISSUE: Whether, International Shoe Eo., has, by its activities in the State of Washington, rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund exacted by state statutes? Yes HELD: SC held that in view of 26 U.S.C. 1606(a), providing that no person shall be relieved from compliance with a state aw requiring payments to an unemployment fund on the ground that he is engaged in interstate commerce, the fact that the corporation is engaged in interstate commerce does not relieve it from liability for payments to the state unemployment compensation fund. The activities in behalf of the corporation render it amenable to suit in courts of the State to recover payments due to the state unemployment compensation fund. Historically, the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence, his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice. Since the corporate personality is a fiction, it is clear that, unlike an individual, its "presence" without, as well as within, the state of its origin can be manifested only by activities carried on in its behalf by those who are authorized to act for it. Demands of due process may be met by such contacts of the corporation with the state of the forum as make it reasonable, to require the corporation to defend the particular suit which is brought there. While it has been held, in cases on which appellant relies, that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity, , there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities. The activities carried on in behalf of International Shoe, Co. in the State of Washington were systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights.. It is evident that these operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just, according to our traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant has incurred there.
To the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state and subjects it to its jurisdiction. 16. PERKINS V. BENGUET CONSOLIDATED MINING FACTS: Petitioner Idonah Slade Perkins, a nonresident of Ohio, filed 2 actions in personam in the Court of Common Pleas of Clermont County, Ohio, against the several respondents one of which is the Benguet Consolidated Mining Company ("mining company"). It is styled as a "sociedad anonima" under the laws of the Philippine Islands, where it owns and has operated profitable gold and silver mines. In one action petitioner seeks approximately $68,400 in dividends claimed to be due her as a stockholder. In the other she claims $2,500,000 damages largely because of the company's failure to issue to her certificates for 120,000 shares of its stock. In each case the trial court sustained a motion to quash the service of summons on the mining company. The CA of Ohio affirmed that decision as did the SC of Ohio. The SC of Ohio held that the Due Process Clause of the Fourteenth Amendment prohibits the Ohio courts from exercising jurisdiction over the respondent corporation. The present case is a consolidation of the cases filed against the respondents. ISSUE: W/N, as a matter of federal due process, the business done in Ohio by the respondent mining company was sufficiently substantial and of such a nature as to permit Ohio to entertain a cause of action against a foreign corporation, where the cause of action arose from activities entirely distinct from its activities in Ohio HELD: The Due Process Clause of the Fourteenth Amendment to the Constitution of the U.S. leaves Ohio free to take or decline jurisdiction over the corporation. Provisions for making foreign corporations subject to service in the state is a matter of legislative discretion, and a failure to provide for such service is not a denial of due process. The cases relied on by the SC of Ohio are different from the present case. Unlike the case at bar, no actual notice of the proceedings was received in those cases by a responsible representative of the foreign corporation. In each case, the public official who was served with process in an attempt to bind the foreign corporation was held to lack the necessary authority to accept service so as to bind it in a proceeding to enforce a cause of action arising outside of the state of the forum. The necessary result was a finding of inadequate service those cases and a conclusion that the foreign corporation was not bound by it. At the time of rendering the above decisions this Court was aided, in reaching its conclusion as to the limited scope of the statutory authority of the public officials, by this Court's conception that the Due Process Clause of the Fourteenth Amendment precluded a state from giving its public officials authority to accept service in terms broad enough to bind a foreign corporation in proceedings against it to enforce an obligation arising outside of the state of the forum. That conception now has been modified by the rationale adopted in later decisions. Today if an authorized representative of a foreign corporation be physically present in the state of the forum and be there engaged in activities appropriate to accepting
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service or receiving notice on its behalf, we recognize that there is no unfairness in subjecting that corporation to the jurisdiction of the courts of that state through such service of process upon that representative. This has been squarely held to be so in a proceeding in personam against such a corporation, at least in relation to a cause of action arising out of the corporation's activities within the state of the forum. The amount and kind of activities which must be carried on by the foreign corporation in the state of the forum so as to make it reasonable and just to subject the corporation to the jurisdiction of that state are to be determined in each case. The corporate activities of a foreign corporation which, under state statute, make it necessary for it to secure a license and to designate a statutory agent upon whom process may be served provide a helpful but not a conclusive test. On the other hand, if the same corporation carries on, in that state, other continuous and systematic corporate activities as it did hereconsisting of directors' meetings, business correspondence, banking, stock transfers, payment of salaries, purchasing of machinery, etc.those activities are enough to make it fair and reasonable to subject that corporation to proceedings in personam in that state, at least insofar as the proceedings in personam seek to enforce causes of action relating to those very activities or to other activities of the corporation within the state. In the instant case brings us to a proceeding in personam to enforce a cause of action not arising out of the corporation's activities in the state of the forum. Using the tests mentioned above, the court finds no requirement of federal due process that either prohibits Ohio from opening its courts to the cause of action here presented or compels Ohio to do so. The company's mining properties were in the Philippine Islands. Its operations there were completely halted during the occupation of the Islands by the Japanese. During that interim the president, who was also the general manager and principal stockholder of the company, returned to his home in Clermont County, Ohio. There he maintained an office in which he conducted his personal affairs and did many things on behalf of the company. He kept there office files of the company. He carried on there correspondence relating to the business of the company and to its employees. He drew and distributed there salary checks on behalf of the company, both in his own favor as president and in favor of two company secretaries who worked there with him. He used and maintained in Clermont County, Ohio, two active bank accounts carrying substantial balances of company funds. From that office he supervised policies dealing with the rehabilitation of the corporation's properties in the Philippines and he dispatched funds to cover purchases of machinery for such rehabilitation. Thus he carried on in Ohio a continuous and systematic supervision of the necessarily limited wartime activities of the company. He there discharged his duties as president and general manager, both during the occupation of the company's properties by the Japanese and immediately thereafter. While no mining properties in Ohio were owned or operated by the company, many of its wartime activities were directed from Ohio and were being given the personal attention of its president in that State at the time he was served with summons. Consideration of the circumstances which, under the law of Ohio, ultimately will determine whether the courts of that State will choose to take jurisdiction over the corporation is reserved for the courts of that State. The court concludes that, under the circumstances above recited, it would not violate federal due process for Ohio either to take or decline jurisdiction of the corporation in
this proceeding. The judgment of the SC of Ohio is vacated and the cause is remanded to that court for further proceedings. JUSTICE MINTON'S DISSENT: As I understand the practice in Ohio, the law as agreed to by the court is stated in their syllabus. The law as declared in the syllabus of the SC of Ohio, which is the whole court speaking, is clearly based upon adequate state grounds. This brings this situation clearly within the settled rule whereby this Court will not review a State court decision resting on an adequate and independent non-federal ground even though the State court may have also summoned to its support an erroneous view of federal law. What we are saying to Ohio is: "You have decided this case on an adequate state ground, denying service, which you had a right to do, but you don't have to do it if you don't want to, as far as the decisions of this Court are concerned." I think what we are doing is giving gratuitously an advisory opinion to the Ohio Supreme Court. I would dismiss the writ as improvidently granted. 17. PANTALEON V. ASUNCION FACTS: On June 12, 1953, plaintiff, Vicenta Pantaleon, instituted in the Court of First Instance of Nueva Ecija, an action to recover from said Asuncion, the sum of P2,000.00, with interest thereon, in addition to attorneys fees. The summons originally issued was returned by the sheriff of Nueva Ecija unserved, with the statement that, according to reliable information, Asuncion was residing in B-24 Tala Estate, Caloocan, Rizal. An alias summons was issued, therefore, for service in the place last mentioned. However, the provincial sheriff of Rizal returned it unserved, with information that Asuncion had left the Tala Estate since February 18, 1952, and that diligent efforts to locate him proved to no avail. On plaintiffs motion, the court ordered, on March 9, 1955, that defendant be summoned by publication, and the summons was published on March 21 and 28, and April 4, 1955, in the Examiner, said to be a newspaper of general circulation in Nueva Ecija. Having failed to appear or answer the complaint within the period stated in the summons, defendant was, by an order dated July 12, 1955, declared in default. Subsequently, or on September 8, 1955, after a hearing held in the absence of the defendant and without notice to him, the court rendered judgment for the plaintiff and against said defendant, for the sum of P2,300.00, with interest thereon at the legal rate, from October 28, 1948, and costs. About forty-six (46) days later, or on October 24, 1955, the defendant filed a petition for relief from said order of July 12, 1955, and from said judgment, dated September 8, 1955, and upon the ground of mistake and excusable negligence. Annexed to said petition were defendants affidavit and his verified answer. In the affidavit, Asuncion stated that, on September 26, 1955, at 34 Pitimine Street, San Francisco del Monte Quezon City, which is his residence, he received notice of a registered letter at the Post Office in San Jose, Nueva Ecija, his old family residence; that he proceeded immediately to the latter municipality to claim said letter, which he received on September 28, 1955; that the letter contained copy of said order of July 12, 1955, and of the judgment of September 8, 1955, much to his surprise, for he had not been
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summoned or notified of the hearing of this case; that had copy of the summons and of the order for its publication been sent to him by mail, as provided in Rule 7, section 21, of the Rules of Court said summons and order would have reached him, as the judgment herein had; and that his failure to appear before the court is excusable it being due to the mistake of the authorities concerned in not complying with the provisions of said section. Upon denial of said petition for relief, defendant perfected his present appeal. ISSUE: W/N the summons by publication had been made in conformity with the Rules of Court. HELD: NO. More specifically, defendant maintains that copy of the summons and of the order for the publication thereof were not deposited in the post office, postage prepaid, directed to the defendant by ordinary mail to his last known address, in violation of Rule 7, section 21, of the Rules of Court, and that, had this provision been complied with, said summons and order of publication would have reached him, as had the decision appealed from. Said section 21 reads: If the service has been made by publication, service may be proved by the affidavit of the printer, his foreman or principal clerk, or of the editor, business or advertising manager, to which affidavit a copy of the publication shall be attached, and by an affidavit showing the deposit of a copy of the summons and order for publication in the post office, postage prepaid, directed to the defendant by ordinary mail to his last known address. (Emphasis supplied.). Plaintiff alleges, however, that the provision applicable to the case at bar is not this section 21, but section 16, of Rule 7, of the Rules of Court, which provides: Whenever the defendant is designated as an unknown owner, or the like, or whenever the address of a defendant is unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effect upon him by publication in such places and for such times as the court may order. It is, moreover, urged by the plaintiff that the requirement, in said section 21, of an affidavit showing that copy of the summons and of the order for its publication had been sent by mail to defendants last known address, refers to the extraterritorial service of summons, provided for in section 17 of said Rule 7, pursuant to which: When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by registered mail; or by publication 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 shall be sent by ordinary mail to the last known address of the defendant; or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer.
Said section 21, however, is unqualified. It prescribes the proof of service by publication, regardless of whether the defendant is a resident of the Philippines or not. Section 16 must be read in relation to section 21, which complements it. Then, too, we conceive of no reason, and plaintiff has suggested none, why copy of the summons and of the order for its publication should be mailed to non-resident defendants, but not to resident defendants. We can not even say that defendant herein, who, according to the return of the Sheriff of Nueva Ecija, was reportedly residing in Rizal where he, in fact (San Francisco del Monte and Quezon City used to be part of Rizal), was residing could reasonably be expected to read the summons published in a newspaper said to be a general circulation in Nueva Ecija. Considering that strict compliance with the terms of the statute is necessary to confer jurisdiction through service by publication, the conclusion is inescapable that the lower court had no authority whatsoever to issue the order of July 12, 1955, declaring the defendant in default and to render the decision of September 8, 1955, and that both are null and void ad initio. Apart from the foregoing, it is a well-settled principle of Constitutional Law that, in an action strictly in personam, like the one at bar, personal service of summons, within the forum, is essential to the acquisition of jurisdiction over the person of the defendant, who does not voluntarily submit himself to the authority of the court. In other words, summons by publication cannot consistently with the due process clause in the Bill of Rights confer upon the court jurisdiction over said defendant. Due process of law requires personal service to support a personal judgment, and, when the proceeding is strictly in personam brought to determine the personal rights and obligations of the parties, personal service within the state or a voluntary appearance in the case is essential to the acquisition of jurisdiction so as to constitute compliance with the constitutional requirement of due process. Lastly, from the viewpoint of substantial justice and equity, we are of the opinion that defendants petition for relief should have been granted. To begin with, it was filed well within the periods provided in the Rules of Court. Secondly, and, this is more important, defendants verified answer, which was attached to said petition, contains allegations which, if true, constitute a good defense. Thus, for instance, in paragraph (2) of the special denials therein, he alleged: That it is not true that he failed to pay the said indebtedness of his said wife, as alleged in paragraph 3 of the complaint, for as a matter of fact, plaintiff and defendant agreed upon a settlement of the said indebtedness of the latters deceased wife on December 5, 1948, whereby defendant was allowed to pay it out of his monthly salary by installment of P10.00 monthly beginning January, 1949, to May 1953 and in accordance therewith, defendant paid unto plaintiff a total P460.00. The specification of the dates of payment, of the amounts paid each time, of the manner in which each payment was made, and of the number of the money orders in which eighteen (18) payments had been effected, constitutes a strong indication of the probable veracity of said allegation, fully justifying the grant of an opportunity to prove the same. DISPOSITIVE PORTION: Wherefore, said order of July 12, 1955, and the aforementioned decision of September 8, 1955, are hereby set aside and annulled,
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and let the record of this case be remanded to the lower court for further proceedings with costs against plaintiff-appellee. It is so ordered. Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador and Endencia, JJ., concur. PONENTE: Concepcion (Pedro), J.: 18. CALDER V. JONES FACTS: Respondent Shirley Jones, a resident of California, brought this suit against the National Enquirer, Inc., its local distributing company and Calder and South for libel and invasion of privacy. The article at issue questioned the professionalism of Jones stating that the she drank so heavily preventing her from fulfilling her professional obligations. South, a reporter employed by the Enquirer, a resident of Florida, wrote the first draft of the challenged article, his byline appeared on it. Most of his research for the article was done in Florida with the aid of sources located in California. Aside from his frequent trips and phone calls, South has no other relevant contacts with California. Calder, also a Florida resident and president/editor of the Enquirer, has only been to California twice; once on a pleasure trip and the other to testify in an unrelated trial and has no other relevant contacts with California. He reviewed/approved the initial evaluation of the subject of the article & edited it in its final form. Originally, the suit was filed in California Superior Court, but was dismissed on the grounds that First Amendment concerns weighed against an assertion of jurisdiction otherwise proper under the Due Process Clause. The California Court of Appeals reversed, stating that a valid basis for jurisdiction did exist on the theory that petitioners intended to, and did, cause tortuous injury to Jones in California. ISSUE: W/N Jones, a California resident, bring suit against a Florida corporations employees (Florida residents) in a California court for a claim of libel by asserting that California has personal jurisdiction over Florida residents. HELD: YES. California is the focal point of both the story and the harm suffered. Therefore, jurisdiction over Calder, South, and the company is proper in California based on the effects of their Florida conduct in California. Californias long-arm statute permits an assertion of jurisdiction over a nonresident person whenever permitted by the state and federal Constitutions. Therefore, turning to the Constitution, the Due Process Clause of the 14th Amendment permits personal jurisdiction over a person in any state with which the person has certain minimum contactssuch that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. " This follows that South and Calder wrote/edited an article that they knew would have a potentially devastating impact upon Jones. Furthermore, they knew that the brunt of that injury would be felt by Jones in the state in which she lives/works and in which
the National Enquirer has its largest circulation. Under the circumstances, Calder, South and the company must reasonably anticipate being haled into court there to answer for the truth of the statements made in their article. Finally, an individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California. 19. PHILSEC INVESTMENT V. COURT OF APPEALS FACTS: Ventura Ducat obtained separate loans from Ayala International Finance Limited (AYALA) and Philsec Investment Corp. (PHILSEC) in the sum of $ 2.5 M secured by shares of stock owned by Ducat. 1488, Inc. assumed Ducats obligation. 1488 sold to Athona Holdings a parcel of land in Harris County, Texas while Philsec and Ayala extended a loan to Athona to finance payment of the purchase price. Thus, Ducat was released from the obligation. As Athona failed to pay the balance of the purchase price, the entire debt became due and demandable. 1488 sued Philsec, Ayala and Athona in the US for payment of the balance plus damages. While the civil case was pending, Philsec filed a complaint and Writ of Preliminary Attachment against Ducat, et al. in the Regional Trial Court of Makati alleging that private respondent Ducat committed fraud by selling the property at a price 400% more than its true value. RTC of Makati issued a writ of preliminary attachment against the real and personal property of Ducat. Ducat filed a motion to dismiss on the ground of litis pendentia and forum non conveniens and lack of cause of action for PHILSEC as PHILSEC is not a party to the sale. 1488, Inc. also filed a Motion to Dismiss contending that the action being in personem, extraterritorial service of summons by publication was ineffectual and did not vest the court with jurisdiction over 1488, Inc., which is a non-resident foreign corporation. The trial court granted Ducats motion even as it noted that Ducat was not a party in the US case. The Motion to Dismiss of 1488, Inc. was also granted on the ground of litis pendentia considering that the main factual element of the cause of action is the validity of the sale of real property in the US. The trial court also held that it was w/o jurisdiction over the case as 1488, Inc. is a non-resident and the action involve is not in rem or quasi in rem. The extraterritorial service of summons was therefore ineffective. ISSUE: 1. W/N the dismissal of the case was proper? NO. 2. W/N the principle of forum non conveniens is applicable? NO. HELD: 1. The case was arbitrarily dismissed. 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 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." 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
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the claim of a party and, as such, is subject to proof to the contrary. In this case, neither the trial court nor the appellate court was even furnished copies of the pleadings in the US Court or apprised of the evidence presented thereat, to assure a proper determination of whether the issues then being litigated in the US court were exactly the issues raised in this case such that the judgment that might be rendered would constitute res judicata. The trial court arbitrarily dismissed the case even after finding that Ducat was not a party in the U.S. case. 2. Forum non conveniens is not applicable base on three grounds: first, it is not a ground for a motion to dismiss. Second, while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after "vital facts are established, to determine whether special circumstances" require the court's desistance, and; third, the extraterritorial service of summons is valid. 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 latter's debt which was the object of the transaction under litigation. 20. EL BANCO ESPANOL-FILIPINO V. PALANCA FACTS: Engracio Palanca Tanquinyeng mortgaged his lands in Manila as security for debt he owed to Plaintiff El Banco Espaol-Filipino. After the execution of the mortgage, Tanquinyeng returned to China (where hes a native) and eventually died there. Because the defendant was a nonresident at the time of the institution of the present action, it was necessary for the plaintiff bank to give notice to the defendant by publication in a newspaper of the city of Manila. The Court also ordered that a copy of the summons and complaint be sent to the defendant at his last place of residence at the city of Amoy, in China. This order was made pursuant to the following provision contained in section 399 of the Code of Civil Procedure: In case of publication, where the residence of a nonresident or absent defendant is known, the judge must direct a copy of the summons and complaint to be forthwith deposited by the clerk in the post-office, postage prepaid, directed to the person to be served, at his place of residence It does not appear that the clerk fulfilled the order of sending the letter to China. There was only an affidavit signed by Bernardo Chan, employee of the lawyers of the Plaintiff bank, showing that he deposited in the Manila post-office a registered letter, addressed to Tanquinyeng, at Manila, containing copies of the complaint, the plaintiff's affidavit, the summons, and the order of the court directing publication. CFI ruled in favor of the bank. In case of the failure of the defendant to satisfy the judgment within such period, the mortgage property located in the city of Manila should be exposed to public sale. The payment contemplated in said order was never made; so the court ordered the sale of the property. The property was bought by the bank for P110,200. 7 years after the confirmation of the sale, Vicente Palanca, as administrator of the
estate of Tanquinyeng, requested the court to set aside the order of default alleging that the judgment rendered was void because the court never acquired jurisdiction over defendant or the subject matter of the action. ISSUE: 1) WON the court acquired necessary jurisdiction 2) WON there was denial of due process of law HELD: 1) Yes. 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. The jurisdiction of the court over the property, considered as the exclusive object of such action, is evidently based upon the following conditions and considerations, namely: (1) that the property is located within the district; (2) that the purpose of the litigation is to subject the property by sale to an obligation fixed upon it by the mortgage; and (3) that the court at a proper stage of the proceedings takes the property into custody, if necessary, and expose it to sale for the purpose of satisfying the mortgage debt. The Court noted the following matters regarding foreclosure proceeding against the property of a nonresident mortgagor who fails to come in and submit himself personally to the jurisdiction of the court: (I) That the jurisdiction of the court is derived from the power which it possesses over the property; (II) that jurisdiction over the person is not acquired and is nonessential; (III) that the relief granted by the court must be limited to such as can be enforced against the property itself In a foreclosure proceeding against a nonresident owner it is necessary for the court, as in all cases of foreclosure, to ascertain the amount due and to make an order requiring the defendant to pay the money into court. This step is a necessary precursor of the order of sale. In the present case the judgment which was entered contains the following words: Because it is declared that the said defendant Engracio Palanca Tanquinyeng y Limquingco, is indebted in the amount of P249,355.32, plus the interest, to the 'Banco Espanol-Filipino' . . . therefore said appellant is ordered to deliver the above amount etc., etc. This is not the language of a personal judgment. Instead it is clearly intended merely as a compliance with the requirement that the amount due shall be ascertained and that the evidence of this it may be observed that according to the Code of Civil Procedure a personal judgment against the debtor for the deficiency is not to be rendered until after the property has been sold and the proceeds applied to the mortgage debt. Whatever may be the effect in other respects of the failure of the clerk of the CFI to mail the proper papers to the defendant in Amoy, China, such irregularity could not
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impair or defeat the jurisdiction of the court. 2) No, the failure of the clerk to mail the notice is not such an irregularity, as amounts to a denial of due process of law; and hence in our opinion that irregularity, 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. The Court held that the provision of our law relative to the mailing of notice does not absolutely require the mailing of notice unconditionally and in every event, but only in the case where the defendant's residence is known. In the light of all these facts, it is evident that actual notice to the defendant in cases of this kind is not, under the law, to be considered absolutely necessary. The Court also noted the lapse of time which affected the case. Laches on the part of the applicant, if unexplained, is deemed sufficient ground for refusing the relief. As regards the allegation that the defendant was prejudiced because the bank purchased the property greatly below that which has been agreed upon in the mortgage, the Court held that a clause in a mortgage providing for a tipo, or upset price, does not prevent a foreclosure, nor affect the validity of a sale made in the foreclosure proceedings. J.Malcolm (Dissent):No man shall be condemned in his person or property without notice and an opportunity of being heard in his defense. Protection of the parties demands a strict and an exact compliance with this constitutional provision in our organic law and of the statutory provisions in amplification. Literally hundreds of precedents could be cited in support of these axiomatic principles. Where as in the instant case the defendant received no notice and had no opportunity to be heard, certainly we cannot say that there is due process of law. 21. PERKINS V. DIZON FACTS: Eugene Arthur Perkins, instituted an action in the CFI of Manila against the Benguet Consolidated Mining Company for payment of dividends amounting to P71,379.90 on 52,874 shares of stock registered in his name being withheld by the company and, for the recognition of his right to the control and disposal of said shares against the claims of 2 other persons: George H. Engelhard and Idonah Slade Perkins (both are non residents, but the case did not indicate the country/ies they are residing at). The Benguet Co. motioned the court that such parties be required to interplead and settle the rights among themselves. CFI Manila ordered Eugene Perkins to include in his complaint as party defendants George Engelhard and Idonah Perkins. Then, pursuant to the order of the CFI, summons by publication were served upon Engelhard and Idonah Perkins. Engelhard filed an answer. Idonah Slade Perkins, through counsel, filed her pleading entitled "objection to venue, motion to quash, and demurrer to jurisdiction" wherein she challenged the jurisdiction of the lower court over her person. Idonah Perkins contends that the proceeding instituted against her is one of interpleading and is therefore an action in personam on the basis of Section 120 of
Code of Civil Procedure which provides that whenever conflicting claims are or may be made upon a person for or relating to personal property, or the performance of an obligation or any portion thereof, so that he may be made subject to several actions by different persons, such person may bring an action against the conflicting claimants, disclaiming personal interest in the controversy, and the court may order them to interplead with one another and litigate their several claims among themselves, there upon proceed to determine their several claims. ISSUE: W/N through the summon by publication, the CFI has acquired jurisdiction over the person of Idonah Perkins as a non-resident defendant, or, notwithstanding the want of such jurisdiction, whether or not said court may validly try the case. HELD: Yes, CFI has acquired jurisdiction. Idonah Perkins lost. Section 398 of Code of Civil Procedure provides that when a non-resident defendant is sued in the Philippine courts and it appears, by the complaint or by affidavits, that the action relates to real or personal property within the Philippines in which said defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding such person from any interest therein, service of summons maybe made by publication. First, the action brought by Eugene Perkins is quasi in rem, for while the judgment that may be rendered therein is not strictly a judgment in rem, "it fixes and settles the title to the property in controversy and to that extent partakes of the nature of the judgment in rem." The amended complaint against Idonah Perkins seeks to exclude her from any interest in a property located in the Philippines. The situs of the shares is in the jurisdiction where the corporation is created, whether the certificated evidencing the ownership of those shares are within or without that jurisdiction. Second, no money judgment or other relief in personam is prayed for against Idonah Perkins. The only relief sought therein is that she be declared to be without any interest in the shares. Third, on the claim of Idonah Perkins that an interpleader is in personam, the court has not issued an order compelling the conflicting claimants to interplead with one another and litigate their several claims among themselves, but instead ordered the plaintiff to amend his complaint including the other two claimants as defendants. Thus, the publication of the summons was ordered not in virtue of an interpleading, but upon the filing of the amended complaint wherein an action quasi in rem is alleged. 22. GULF OIL CORPORATION V. GILBERT FACTS: Gilbert operates a public warehouse. He alleges that Gulf Oil Corp carelessly handled a delivery of gasoline to his warehouse tanks and pumps, causing fire and an explosion, which consumed the warehouse building, merchandise and fixtures within. Hence, the action is one of tort. Gilbert brought this action in New York, but he resides at Lynchburg, Virginia. Gulf Oil is a corporation organized under the laws of Pennsylvania, qualified to do business in both Virginia and New York, and it has designated officials of each state as agents to
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receive service of process. Gulf Oil, invoking the doctrine of forum non conveniens, claimed that the appropriate place for trial is Virginia, not New York where the Gilbert lives and the former 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 Gilbert and are able to obtain jurisdiction of the Gulf Oil. The US District Court dismissed the case, and that the case is best left to Virginia courts. On appeal, the Circuit Court of Appeals disagreed. Hence, this case is here on certiorari. ISSUE: 1. W/N the US District Court has the inherent power to dismiss a suit pursuant to the doctrine of forum non conveniens YES; 2. W/N that power was abused in this case - NO. HELD: 1. A federal district court has the power to dismiss an action at law pursuant to the doctrine of forum non conveniens -- at least where its jurisdiction is based on diversity of citizenship and the state courts have such power. The principle of forum non conveniens means simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. These are statutes drawn with generality, giving a plaintiff a choice of courts to pursue his remedy. However, the plaintiff may not, by choosing an inconvenient forum, harass a defendant by inflicting upon him trouble not necessary to his own right to pursue his remedy. But, if the choice of forum is strongly in favor of the defendant, the choice should rarely be disturbed. Here, the venue statues of US permit Gilbert to commence his action in New York. But that does not settle the question whether he must do so. The doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue. Courts of equity and of law occasionally decline, in the interest of justice, to exercise jurisdiction where the suit is between aliens or nonresidents, or where, the litigation can more appropriately be conducted in a foreign tribunal. An interest to be considered, and the one likely to be most pressed, is the private interest of the litigant. Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action, and all other practical problems that make trial of a case easy, expeditious, and inexpensive. There may also be questions as to the enforceability of a judgment if one is obtained. The court will weigh relative advantages and obstacles to fair trial. The court is not required to always respect on the forum chosen by the plaintiff. What is clear in a long list of cases, is that when the defendant consents to be sued, it extends only to give the court jurisdiction over the person. 2. Turning to the question whether this is one of those rather rare cases where the doctrine should be applied, we look to the interests of the litigants. Gilbert 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. No one connected with that side of the case save counsel for the plaintiff resides there. His affidavits and arguments are devoted to controverting claims as to Gulf Oils inconvenience, rather than to showing that the present forum serves any convenience for himself, with one exception -- that this case involves a claim for an amount close to $400,000 which may stagger the imagination of a local jury unaccustomed to dealing with such amounts. This is a strange and unproven premise, an assumption we do not easily make. Gulf Oil points out that not only Gilbert but every person who ever participated in the acts charged to be negligent resides in or near Virginia. The Complaint itself alleges that the Gulf Oil violated Virginia (Lynchburg) ordinances. The source of all proofs in either side is in Virginia, which is some 400 miles from New York. It does not do well to fix the place of trial at an inconvenient forum. The course of adjudication in New York federal court might be beset with conflict of laws problems all avoided if the case is litigated in Virginia, where it arose. HENCE, the District Court did not exceed its powers or the bounds of its discretion in dismissing Gilberts complaint and remitting him to the courts of his own community. The judgment of the Circuit Court of Appeals is thus reversed. Petition GRANTED. 23. TRAVELERS HEALTH ASSN V. VIRGINIA FACTS: The Virginia Blue Sky Law was enacted to protect its citizens from unfairness, imposition and fraud in the sales of certificates of insurance and other forms of securities. The law requires those selling or offering such securities to obtain a permit from the State Corporation Commission. Applicants for permits must provide detailed information concerning their solvency, and must agree that suits can be filed against them in Virginia by service of process on the Secretary of the Commonweath. Sec. 6 provides that after notice and a hearing on the merits, the State Corporation Commission is authorized to issue a cease and desist order restraining violations of the Act. It also provides for service by registered mail where other types of service are unavailable because the offering is by advertisement and/or solicitation through periodicals, mail, telephone, telegraph, radio, or other means of communication from beyond the limits of the State. Travelers Health Association was incorporated in Nebraska as a nonprofit membership association. It conducts a mail-order health insurance business from its office in Omaha, Nebraska. New members pay an initiation fee and obligate themselves to pay periodic assessments at the said office. The funds collected are used for operating expenses and sick benefits to members. New members are obtained through the unpaid activities of those already members, who are encouraged to recommend the Association to friends and submit their names to the home office. Pratt then 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. Travelers has solicited Virginia members in this manner and had approximately 800
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Virginia members. Cease and desist proceedings under Sec. 6 were instituted by the State Corporation Commission against Travelers and R. E. Pratt, as treasurer of the Association and in his personal capacity. Having received notice by registered mail only, they appeared 'specially' for the 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 rejected Travelers' objection to jurisdiction and their motion to quash service. Travelers and Pratt were ordered to cease and desist from further solicitations or sales of certificates to Virginia residents unless and until it obtained authority in accordance with the Blue Sky Law. The Virginia CA affirmed this order. ISSUE: W/N the Commonwealth of Virginia has jurisdiction over Travelers - YES HELD: Travelers contention is that this is in violation of the due process clause and that all their activities take place in Nebraska, consequently Virginia has no power to reach them in cease and desist proceedings to enforce any part of its regulatory law. The court held that the state has power to issue a cease and desist order enforcing at least that regulatory provision requiring Travelers to accept service of process by Virginia claimants on the Secretary of the Commonwealth. The Court held in the case of Minnesota Commercial Men's Ass'n v. Benn that since the contracts were executed and to be performed in one State (Minnesota), the Association was not doing business in another State (Montana). Therefore, the Association could not be sued in Montana courts unless 'consent' to Montana suits could be implied. But 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. 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. The court rejected the contention that a state's power to regulate must be determined by a 'conceptualistic discussion of theories of the place of contracting or of performance. Instead, great weight was given to the consequences of the contractual obligations in the state where the insured resided and the 'degree of interest' that state had in seeing that those obligations were faithfully carried out. 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. In the case at bar, the contacts and ties of Travelers with Virginia residents, together with that state's interest in faithful observance of the certificate obligations, justify subjecting Travelers and Pratt to cease and desist proceedings under Sec. 6. Travelers did not engage in mere isolated or short-lived transactions. Its insurance certificates, systematically and widely delivered in Virginia following solicitation,
create continuing obligations between Travelers and each of the many certificate holders in the state. Travelers and Pratt 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. For these reasons, Virginia has power to subject Travelers to the jurisdiction of its Corporation Commission, and its cease and desist provisions designed to accomplish this purpose can not be attacked merely because they affect business activities which are carried on outside the state. 24. WORLD-WIDE VOLKSWAGEN CORP V. WOODSON FACTS: Harry and Kay Robinson purchased a new Audi automobile from petitioner Seaway Volkswagen in Massena, NY in 1976. In 1977, the Robinson family moved from NY to Arizona. On their way, their car was hit in the rear by a truck, which caused a fire and severly burned Kay Robinson and their 2 children. The spouses Robinsons filed a products liability action in the District Court of Creek County, OK, claiming that their injuries resulted from the defective design and placement of Audis gas tank and fuel system. They joined as defendants the automobiles manufacturer, Audi NSU Auto Union AG; its importer, Volkswagen of America, Inc.; its regional distributor, petitioner World-Wide Volkswagen Corp; and its retail dealer, Seaway. Seaway and World-Wide entered special appearances, claiming the Oklahomas exercise of jurisdiction over them offended the limitations on the States jurisdiction imposed by the Due Process Clause (14th Amendment). World-Wide is incorporated and has its business office in NY. It distributes to retailers in New York, New Jersey and Connecticut. Seaway is incorporated and has its business office in NY. Seaway and World-Wide are fully independent with each other and with regard to VW and Audi, contractual only. The spouses Robinsons adduced no evidence to show that either World-Wide nor Seaway does business in OK, or sells or ships to that state, or has an agent to receive process, or purchases advertisements in any media to reach OK. Robinsons counsel conceded that WorldWide and Seaway never entered OK, with the exception of the vehicle owned by Robinsons. The District Court rejected the constitutional claim. World-Wides Motion for Reconsideration was also denied. World-Wide sought a Writ of Prohibition from the SC of Oklahoma to restrain the District Court Judge Woodson. The SC of Oklahoma denied the writ holding that personal jurisdiction over World-Wide was authorized by Oklahomas long-arm statute. The SC of Oklahoma ruled that considering that the product sold is, by its very design, so mobile that World-Wide can foresee its possible use in OK. This is especially true to the distributor who has the exclusive right to distribute in NY, NJ and Connecticut. The SC of OK found it reasonable to infer that World-Wide derive substantial income from automobiles which from time to time are used in OK. ISSUE: Whether, consistently with the Due Process Clause of the Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a nonresident automobile retailer and its wholesale distributor in a products liability
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action, when the defendants' only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an accident in Oklahoma? NO. HELD: The District Court may not exercise in personam jurisdiction over World-Wide because of the lack of contacts, ties or relations with the State of Oklahoma. Judgment of the SC of OK is reversed. The Due Process Clause (14th Amendment) limits the power of a state court to render a valid personal judgment before a nonresident defendant. A judgment rendered in violation of due process is void in the rendering State and is not entitle to full faith and credit elsewhere. Due process requires that the defendant be given adequate notice of the suit and be subject to the personal jurisdiction of the court. A State Court may exercise personal jurisdiction over a nonresident defendant only as long as there exists minimum contacts between the defendant and the forum State. The concept of minimum contacts (1) protects the defendant against the burdens of litigating in a distant or inconvenient forum, and (2) it acts to ensure that 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. 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. The relationship must be such that it is reasonable to require the corporation to defend the particular suit which is brought there. Implicit in this reasonableness is the understanding that the burden on the defendant, while always a primary concern, in an appropriate case be considered in light of other relevant factors, including the forum States interest in adjudicating the dispute, the plaintiffs interest in obtaining convenient and effective relief, at least when that interest is not adequately protected by the plaintiffs power to choose the forum, the interstate judicial systems interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies. This limitation on state jurisdiction by the Due Process Clause has been relaxed, due to the fundamental transformation in the American economy. There is an increase in commercial transactions touching 2 or more states. Also, the modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity. Nonetheless, the proposition that state lines are irrelevant for jurisidictional purposes is not accepted by the US SC. Despite the Commerce Clause providing for the Nation as a common market, a free trade unit, the Framers also intended the States retain many essential attributes of sovereignty, including the sovereign power to try causes in their courts. The sovereignty of each Sate, in turn, implied a limitation on the sovereignty of all its sister States a limitation express or implicit in both the original scheme of the Constitution and th 14th Amendment. The flexible standard
established by International Shoe Co. v. Washington, emphasizing the reasonableness of asserting jurisdiction over the defendant must be assessed in the context of our federal system of government is adopted. The Due Process Clause does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations. Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before 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 judgment. The US Supreme Court finds that there is a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state court jurisdiction. World-Wide carry no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges and benefits of Oklahoma law. They solicit no business there 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, the Robinsons 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. Even if it is foreseeable that the automobile is mobile by its very design, it is never been a sufficient benchmark for personal jurisdiction under the Due Process Clause. Nonetheless, foreseeability is not wholly irrelevant. Foreseeability is critical not in the mere likelihood that a product will find its way into the forum State, but it is that the defendants conduct and connection with the forum State are such that he should reasonable anticipate being haled into court there. The Due Process Clause, by ensuring the orderly administration of the laws, gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. But there is no such or similar basis for Oklahoma jurisdiction over World-Wide or Seaway in this case. Seaway's sales are made in Massena, N. Y. World-Wide's market, although substantially larger, is limited to dealers in New York, New Jersey, and Connecticut. There is no evidence of record that any automobiles distributed by World-Wide are sold to retail customers outside this tristate area. It is foreseeable that the purchasers of automobiles sold by World-Wide and Seaway may take them to Oklahoma. But the mere "unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State."
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It is contended that jurisdiction can be supported by the fact that petitioners earn substantial revenue from goods used in Oklahoma. The Oklahoma Supreme Court so found, drawing the inference that, because one automobile sold by petitioners had been used in Oklahoma, others might have been used there also. While this inference seems less than compelling on the facts of the instant case, we need not question the court's factual findings in order to reject its reasoning. This argument seems to make the point that the purchase of automobiles in New York, from which the petitioners earn substantial revenue, would not occur but for the fact that the automobiles are capable of use in distant States like Oklahoma. Respondents observe that the very purpose of an automobile is to travel, and that travel of automobiles sold by petitioners is facilitated by an extensive chain of Volkswagen service centers throughout the country, including some in Oklahoma.However, financial benefits accruing to the defendant from a collateral relation to the forum State will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that State. 25. FRENCH V. BANCO NATIONAL DE CUBA FACTS: On this appeal from a judgment in favor of the plaintiff in an action for a breach of contract, two questions were originally briefed and argued first, whether the defendant is entitled to sovereign immunity and, second, whether the defendant may invoke the "act of state" doctrine. Case is grounded in a proclamation by Fidel Castro's government that foreign investors can only receive their return on investments in the Cuban Peso. The investor (Alexander Ritter) in the case at bar invested $350,000 in a cuban farm. At the time the Cuban government allowed foreign investors to convert their proceeds from their enterprises into foreign currency and exempted such proceeds from tax on the importation of money. Certificates of tax exemption amounting to $150,000 were acquired by the investor. The certificates stated that: ALEXANDER S. RITTER or a member Bank of the System, as endorsee hereof, will receive from Banco Nacional de Cuba [defendant herein] against delivery to said Bank of $ ____ Cuban Pesos and surrender of this Certificate, a check on New York for an equal amount of United States Dollars, exempt from the Tax on Exportation of Money. This certificate was signed by defendant bank and the government agency responsible for issuing the certificates (Cuban Government's Currency Stabilization Fund). Later that government agency issued Decision No. 346 which suspended the processing of tax exemption certificates "for the time being until reorganization of the system of exemptions." The investor then went to get his proceeds in dollars but was denied. Hence this case. The act of state doctrine was raised as a defense because the decision of the Cuban Government's Currency Stabilization Fund was not published in the official gazette.
ISSUE: 1. Whether or not the defendant (Banco) is granted sovereign immunity as an agency of the government. (no) 2. Whether or not the act of state doctrine may be raised by the defendant (Banco). (yes) HELD: 1. On the first issue the court considered the activities to be jure gestionis (commercial) in nature and not subject to sovereign immunity. 2. The economic measure was one taken by the Cuban Government and with which the Bank complied with is an act of state. Courts will not inquire into the validity of the acts of a foreign government done within its own territory. 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 of the acts of the government of another done within its own territory. 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. So long as the act is the act of the foreign sovereign, it matters not how grossly the sovereign has transgressed its own laws. If no institution of legal authority would refuse to effectuate the decree, its formal status (because it was not published in the Official Gazette in Cuba) is irrelevant. It has not been seriously contended that the judicial institutions of Cuba would declare the decree invalid." Nor, it should be noted, does the plaintiff before us make any such claim. Consequently, 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. On this analysis, there is no issue of burden of proof. Rather, the question is, what need be proved. The defendant introduced evidence showing that Decision No. 346 had been issued by the Currency Stabilization Fund, that it was adopted as a measure to control currency and foreign exchange and that defendant bank had regarded the Decision as binding upon it and as prohibiting performance of the agreement in the tax exemption certificates. The plaintiff adduced evidence to the effect that the Decision did not conform to Cuba's fundamental law and that it had not been published in the "Official Gazette." But that was insufficient, as matter of law, to establish that the action dishonoring and repudiating the certificates was not an act of state. It was incumbent on the plaintiff to prove that the Cuban authorities themselves would deem Decision No. 346 invalid and would disregard it. This she was obviously unable to do. The act of state doctrine is a sign of respect between countries and between the judiciary and the political branch that the handles foreign affairs.
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26. IN RE: PHILIPPINE NATIONAL BANK V. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII FACTS: There are 2 parties in this case which sought the estate of Marcos. One is the Class Plaintiffs and the other is the Republic of the Philippines (RP). The U.S. District Court (USDC) in Hawaii rendered judgment in favor of the class of plaintiffs against the Marcos estate for Human Rights violations by the Marcos Regime. The judgment included an injunction restraining the estate from transferring any estates assets. On the other hand, the Republic of the Philippines sought to forfeit the Marcos estates assets on the ground that they were stolen by Marcos from the Phil. Govt and its people. There was an earlier case (Credit Suisse Case) wherein the Swiss Asset of Marcos estate had been frozen by the Swiss Govt at the request of the Republic of the Philippines. The Class plaintiffs obtained injunction from USDC of Hawaii to hold the assets for the benefit of the class Plaintiffs. The US CA issued a writ of mandamus and held that the injunction violated the act of state doctrine, which preclude American courts from declaring invalid a foreign sovereigns official act, that is, the freeze order of the Swiss govt. Thereafter, the Swiss government released the funds frozen in Switzerland for transfer to the Philippine National Bank in escrow pending a determination of proper disposal by a competent court in the Philippines. The Philippine National Bank deposited the funds in Singapore. The Philippine Supreme Court subsequently held that the assets were forfeited to the Republic of the Philippines. The USDC of Hawaii then made a ruling that the Philippine SC had violated due process by any standard and the latters judgment was entitled to no deference. It ordered reinstatement of an earlier settlement agreement in the District Court wherein the RP refused to approve and consent to it. The District Court then issued an Order to Show Cause against the Philippine National Bank, which was not a party to the litigation in the district court, 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. The Philippine National Bank then filed the present petition for mandamus in the U.S. 9th Circuit Court of Appeals, seeking to restrain the District Court from enforcing its Order to Show Cause and from pursuing discovery against the Bank officer. The Bank asserted that it had transferred nearly all of the funds in issue to the Republic of the Philippines pursuant to the judgment of the Philippine Supreme Court. It contended that the entire proceeding against it for its transfer of funds to the Republic of the Philippines violated the act of state doctrine. ISSUE: W/N USDC of Hawaii violated the act of State doctrine? HELD: Yes. 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. (Underhill v. Hernandez) The District Courts orders in issue violated this principle. In order to obtain assets from the Philippine National Bank, or to hold the Bank in contempt for the transfer of those assets to the Republic of the Philippines, the District court necessarily (and expressly) held invalid the forfeiture judgment of the Philippine Supreme Court. NOTES: Other issues raised by the Class Plaintiffs: W/N the act of state doctrine do not apply to judicial decisions 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. (Liu v. Republic of China) W/N the act of state doctrine was inapplicable because the judgment of the Philippine Supreme Court did not concern matters within its own territory The USCA held that, generally, the act of state doctrine applies to official acts of foreign sovereigns performed within their own territory. (Credit Suisse Case). The act of the Philippine Supreme Court was not wholly external, however. Its judgment, which the district court declared invalid, was issued in the Philippines and much of its force upon the Philippine National Bank arose from the fact that the Bank is a Philippine corporation. Because the RPs interest in the enforcement of its laws does not end at its borders, the fact that the escrow funds were deposited in Singapore does not preclude the application of the act of state doctrine. 27. REPUBLIC V. MARCOS FACTS: The Republic of the Philippines (the Republic) brought a civil suit against its former president, Ferdinand Marcos, and his wife Imelda (the Marcoses), asserting claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), and other applicable law. The Republic alleges that the Marcoses engaged in mail fraud, wire fraud, and the transportation of stolen property in the foreign or interstate commerce of the United States. The Republic alleges that the acts were repeated, forming a pattern of predicate acts. The Republic alleges that the Marcoses and the other defendants arranged for the investment in real estate in Beverly Hills, California of $4 million fraudulently obtained by the Marcoses; that the Marcoses arranged for the creation of two bank accounts in the name of Imelda Marcos at Lloyds Bank of California totaling over $800,000 also fraudulently obtained by the Marcoses; and that the Marcoses transported into Hawaii money, jewels, and other property worth over $7 million also fraudulently obtained by them.
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warrant its application. On the present record, the defense does not apply. Before determining whether issuance of an injunction was appropriate we consider two defenses which, if accepted, would block trial of the case: the Marcoses maintain, first, that their acts are insulated because they were acts of state not reviewable by our courts; and second, that any adjudication of these acts would involve the investigation of political questions beyond our courts' competence. ISSUE: Whether the acts of state doctrine applies as a defense in this case. HELD: No. The classification of certain acts as "acts of state" with the consequence that their validity will be treated as beyond judicial review is a pragmatic device, not required by the nature of sovereign authority and inconsistently applied in international law. The purpose of the device is to keep the judiciary from embroiling the courts and the country in the affairs of the foreign nation whose acts are challenged. Minimally viewed, the classification keeps a court from making pronouncements on matters over which it has no power; maximally interpreted, the classification prevents the embarrassment of a court offending a foreign government that is "extant at the time of suit." The "continuing vitality" of the doctrine depends on "its capacity to reflect the proper distribution of functions between the judicial and political branches of the Government on matters bearing upon foreign relations." Consequently, there are "constitutional underpinnings" to the classification. A court that passes on the validity of an "act of state" intrudes into the domain of the political branches. As a practical tool for keeping the judicial branch out of the conduct of foreign affairs, the classification of "act of state" is not a promise to the ruler of any foreign country that his conduct, if challenged by his own country after his fall, may not become the subject of scrutiny in our courts. No estoppel exists insulating a deposed dictator from accounting. No guarantee has been granted that immunity may be acquired by an exchief magistrate invoking the magic words "act of state" to cover his or her past performance. The classification might, it may be supposed, be used to prevent judicial challenge in our courts to many deeds of a dictator in power, at least when it is apparent that sustaining such challenge would bring our country into a hostile confrontation with the dictator. Once deposed, the dictator will find it difficult to deploy the defense successfully. The "balance of considerations" is shifted. A fortiori, when a ruler's former domain has turned against him and seeks the recovery of what it claims he has stolen, the classification has little or no applicability. The act of state doctrine is supple, flexible, ad hoc. The doctrine is meant to facilitate the foreign relations of the United States, not to furnish the equivalent of sovereign immunity to a deposed leader. In the instant case the Marcoses offered no evidence whatsoever to support the classification of their acts as acts of state. The burden of proving acts of state rested upon them. They did not even undertake the proof. The act of state doctrine, the Executive declares, has "no bearing" on this case as it stands. As the doctrine is a pragmatic one, we cannot exclude the possibility that, at some later point in the development of this litigation, the Marcoses might produce evidence that would The Marcoses maintain that the Republic's action should have been dismissed, even if the district court had jurisdiction, on the ground of forum non conveniens. They point to the foreign character of the plaintiff, the nature of the Republic's claims about the Marcoses' conduct in office, and the fact that the court will be called upon to decide questions of Philippine law. The inconvenience of the forum was argued by the Marcoses to the district court. But the court did not address the argument. On the present record the district court did not abuse its discretion in refusing to dismiss the Republic's action on forum non conveniens grounds before issuing the preliminary injunction. In Summation. Jurisdiction to hear the Republic's claims and to enter the preliminary injunction exists. A serious question of liability has been presented and the Republic has a fair chance of success on the merits of its case. The Marcoses have not presented any preclusive defense. The scope of the injunction is justified. It was imperative for the district court to preserve the status quo lest the defendants prevent resolution of the case by putting their property beyond the reach of the court. Hardship to the Republic would have been great and irreparable if the district court had not taken its prudent, amply justified action to keep the Marcoses' assets from disappearing. 28. K.K. SHELL SEKIYU OSAKA HATSUBAISHO AND FU HING OIL CO, LTD V. COURT OF APPEALS Facts: Kumagai Kaiun Kaisha, Ltd. (Kumagai), a corporation formed and existing under the law of Japan, filed a complaint for the collection of a sum of money with preliminary attachment before RTC Manila against Atlantic Venus Co., (Atlantic), a corporation registered in Panama, the vessel MV Estella and Crestamonte Shipping Corporation (Crestamonte), a Philippine corporation. Atlantic is the owner of MV Estella. Manila alleged that Crestamonte, as bareboat charter 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 HK and not doing business in the Phils, files a motion for leave to intervene with an attached complaint un intervention, alleging that Fu Hing supplied marine diesel oil to the MV Estella and incurred barge expenses for the total sum of 152,412.56 USD 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 (KK Shell), a corporation organized in Japan and not doing business in the Phils, likewise filed w motion to intervene with an attached complaint in intervention alleging that upon request of NSS, Crestamonte's
31
general agent in Japan, KK Shell provided and supplied maritime diesel oil to the MV Estella at the ports of Tokyo and Mutsure in Japan and that despite previous demands, Crestamonte has failed to pay the amounts of 16,996.96 USD and 1M and that KK 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 KK Shell. Writs of preliminary attachment were issued and upon the posting of the counterbonds, writs of attachment were discharged. Atlantic and MV Estella moved to dismiss the complaints in intervention and Atlantic filed a petition in the CA against the lower court judge, Kumagai NSS and Keihin seeking the annulment of the orders of the trial court. The CA annulled such orders and directed the LC to cease and desist from proceeding with the case. CA: Fu Hing and KK Shell were not suppliers but sub-agents of NSS therefore they were bound by the Agency Agreement between Crestamonte and NSS. The LC should have disallowed the motions for intervention. Issues: 1. W/N Fu Hing and KK Shell should be allowed to intervene? NO. 2. W/N the doctrine of forum non conveniens may be invoke? NO. Held: 1. No express reference to the contracting of sub-agents or the applicability of the term 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 and shall be responsible for fixing southbound cargoes with revenues sufficient to cover ordinary expenses. Also, the complaint in intervention filed by KK Shell merely alleges it provided and supplied !v Estella with marine diesel oil 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 KK 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. 2. Atlantic and MV Estella are invoking the doctrine of forum non conveniens to be a valid ground for the dismissal of KK Shell's complaint in intervention. KK Shell, in turn, argued by invoking his right as maritime lienholder under PD No. 1521, the Ship Mortgage Decree of 1978. Section 21. Maritime Lien for Necessaries; persons entitled to such lien Any person furnishing repairs, supplies, towage, 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 proceeding below and trial on the merits is still to be conducted, whether or not petitioner are indeed maritime lienholder and as such may enforce the lien against the MVEstella are matters that still have to be established. Neither is the court 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 LC who is the best position to decide such. It was clearly reversible error on the part of the CA to annul the LC's orders. 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 KK Shell and between NSS and KK Shell. The best recourse would have been to allow the trial court to proceed with the case 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. 29. COMMUNICATIONS MATERIAL AND DESIGN V. COURT OF APPEALS Facts: Petitioners CMDI and ASPAC are both domestic corporations. Private Respondent ITEC is a corporation duly organized and existing under the laws of the State of Alabama, United States of America, and is a foreign corporation not licensed to do business in the Philippines. ITEC entered into a contract with petitioner ASPAC referred to as Representative Agreement. Pursuant to the contract, ITEC engaged ASPAC as its exclusive representative in the Philippines for the sale of ITECs products, in consideration of which, ASPAC was paid a stipulated commission. The said agreement was initially for a term of 24 months. After the lapse of the agreed period, the agreement was renewed for another 24 months. ASPAC and ITEC also entered into a License Agreement wherein ASPAC was able to incorporate and use the name ITEC in its own name becoming legally and publicly known as ASPAC-ITEC (Philippines). By virtue of said contracts, ASPAC sold electronic products, exported by ITEC, to their sole customer PLDT. One year into the second term of the parties Representative Agreement, ITEC decided to terminate the same, because petitioner ASPAC allegedly violated its contractual commitment as stipulated in their agreements. ITEC filed a civil case against the petitioners with the RTC of Makati and charged them and another Philippine corporation, DIGITAL 1 , of using knowledge and information of ITECs products specifications to develop their own line of equipment and product support, which are similar, if not identical to ITECs own, and offering them to ITECs former customer.
Petitioner Francisco Aguirre is the majority stockholder and President of CMDI and ASPAC. He is also the President of DIGITAL. ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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A motion to dismiss the complaint was filed by CMDI, et al. on the following grounds: (1) that plaintiff has no legal capacity to sue as it is a foreign corporation doing business in the Philippines without the required BOI authority and SEC license, and (2) that plaintiff is simply engaged in forum shopping which justifies the application against it of the principle of forum non conveniens. RTC of Makati issued an Order: (1) denying the motion to dismiss, and (2) directing the issuance of a writ of preliminary injunction. CA affirmed the ruling of the lower court. Issues: 1. W/N private respondent ITEC is an unlicensed corporation doing business in the Philippines? ITEC is doing business in the Philippines. 2. If it is, whether this fact bars it from invoking the injunctive authority of our courts? Barred by estoppel Held: Doing Business Generally, a foreign corporation has no legal existence within the state in which it is foreign. This proceeds from the principle that juridical existence of a foreign corporation is confined within the territory of the state under whose laws it was incorporated and organized, and it has no legal status beyond such territory. Before a foreign corporation can transact business in the Philippines, it must first obtain a license to transact business in the Philippines, and a certificate from the appropriate government agency. If it transacts business in the Philippines without such a license, it shall not be permitted to maintain or intervene in any action, suit, or proceeding in any court or administrative agency of the Philippines, but it may be sued on any valid cause of action recognized under Philippine laws.2 The Supreme Court has not altogether prohibited a foreign corporation not licensed to do business in the Philippines from suing or maintaining an action in Philippine Courts. What it seeks to prevent is a foreign corporation doing business in the Philippines without a license from gaining access to Philippine Courts. The purpose of the law in requiring that foreign corporations doing business in the Philippines be licensed to do so and that they appoint an agent for service of process is to subject the foreign corporation doing business in the Philippines to the jurisdiction of its courts. The object is not to prevent the foreign corporation from performing single acts, but to prevent it from acquiring a domicile for the purpose of business without taking steps necessary to render it amenable to suit in the local courts. The true test of what constitutes doing business in the Philippines is whether the foreign corporation is continuing the body or substance of the business or enterprise for which it was organized.
3
When a foreign corporation enters into a single or isolated transaction or occasional, incidental, or casual transactions, which do not come within the meaning of the law, the foreign corporation is deemed not engaged in business in the Philippines. Where a single act or transaction, however, is not merely incidental or casual but indicates the foreign corporations intention to do other business in the Philippines, said single act or transaction constitutes doing or engaging in or transacting business in the Philippines. The Supreme Court is persuaded to conclude that private respondent ITEC had been engaged in or doing business in the Philippines. This is the inevitable result after a scrutiny of the different contracts and agreements entered into by ITEC with its various business contacts in the country. Its arrangements, with these entities indicate convincingly ITECs purpose to bring about the situation among its customers and the general public that they are dealing directly with ITEC, and that ITEC is actively engaging in business in the country. A perusal of the agreements between petitioner ASPAC and the respondents shows that there are provisions (ex. No Competing Product provision) which are highly restrictive in nature, such as to reduce petitioner ASPAC to a mere extension or instrument of the private respondent. Notwithstanding such finding that ITEC is doing business in the country, petitioner is nonetheless estopped from raising this fact to bar ITEC from instituting this injunction case against it. A foreign corporation doing business in the Philippines may sue in Philippine Courts although not authorized to do business here against a Philippine citizen or entity who had contracted with and benefited by said corporation. One who has dealt with a corporation of foreign origin as a corporate entity is estopped to deny its corporate existence and capacity. The rule is deeply rooted in the time-honored axiom of Commodum ex injuria sua non habere debet - no person ought to derive any advantage of his own wrong. This is as it should be for as mandated by law, every person must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. The doctrine of lack of capacity to sue based on the failure to acquire a local license is based on considerations of sound public policy. The license requirement was imposed to subject the foreign corporation doing business in the Philippines to the jurisdiction of its courts.

[S]oliciting orders, purchases, service contracts, opening offices, whether called liaison offices or branches; appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the Philippines for a period or periods totaling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines, and any other act or acts that imply a continuity or commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization.

2 3
Section 133 of the Corporation Code. Acts that constitute doing business in the Philippines Article 44 of the Omnibus Investments Code of 1987: ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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By entering into the Representative Agreement with ITEC, Petitioner is charged with knowledge that ITEC was not licensed to engage in business activities in the country, and is thus estopped from raising in defense such incapacity of ITEC, having chosen to ignore or even presumptively take advantage of the same. Having acquired jurisdiction, it is now for the Philippine Court, based on the facts of the case, whether to give due course to the suit or dismiss it, on the principle of forum non conveniens. Hence, the Philippine Court may refuse to assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the 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. Petition is hereby DISMISSED. 30. FIRST PHILIPPINE NATIONAL BANK V. CA FACTS: Producers Bank (now called First Philippine International Bank), which has been under conservatorship since 1984, is the owner of 6 parcels of land. The Bank had an agreement with Demetrio Demetria and Jose Janolo for the two to purchase the parcels of land for a purchase price of P5.5 million pesos. The said agreement was made by Demetria and Janolo with the Banks manager, Mercurio Rivera. Later however, the Bank, through its conservator, Leonida Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter into such an agreement, hence there was no valid contract of sale. Subsequently, Demetria and Janolo sued Producers Bank. The regional trial court ruled in favor of Demetria et al. The Bank filed an appeal with the Court of Appeals. Meanwhile, Henry Co, who holds 80% shares of stocks with the said Bank, filed a motion for intervention with the trial court. The trial court denied the motion since the trial has been concluded already and the case is now pending appeal. Subsequently, Co, assisted by ACCRA law office, filed a separate civil case against Demetria and Janolo seeking to have the purported contract of sale be declared unenforceable against the Bank. Demetria et al argued that the second case constitutes forum shopping. ISSUES: 1. Whether or not there is forum shopping. 2. Whether or not there is a perfected contract of sale. HELD: 1. Yes. There is forum shopping because there is identity of interest and parties between the first case and the second case. There is identity of interest because both cases sought to have the agreement, which involves the same property, be declared unenforceable as against the Bank. There is identity of parties even though the first case is in the name of the bank as defendant, and the second case is in the name of Henry Co as plaintiff. There is still forum shopping here because Henry Co essentially represents the bank. Both cases aim to have the bank escape liability from the agreement it entered into with Demetria et al. The Supreme Court did not lay
down any disciplinary action against the ACCRA lawyers but they were warned that a repetition will be dealt with more severely. 2. Yes. There is a perfected contract of sale because the bank manager, Rivera, entered into the agreement with apparent authority. This apparent authority has been duly proved by the evidence presented which showed that in all the dealings and transactions, Rivera participated actively without the opposition of the conservator. In fact, in the advertisements and announcements of the bank, Rivera was designated as the go-to guy in relation to the disposition of the Banks assets. 31. MANILA HOTEL CORP V. NLRC FACTS: Marcelo Santos was an overseas worker, a printer at the Mazoon Printing Press, Sultanate of Oman when he was directly hired by the Palace Hotel, Beijing by its GM Gerhard Shmidt as he was recommended by Nestor Buenio, his friend. Santos resigned from Mazoon and thereafter signed an employment contract mailed to him. The contract stated it would be for a period of 2 years. After a short vacation in the Phil & barely a year into the contract, Santos was terminated from his job due to retrenchment, and repatriated to the Phil. Santos, through his lawyer, demanded full compensation pursuant to the employment agreement which Shmidt denied. Santos then filed a complaint with the NLRC against MHC, MHICL, the Palace Hotel & Shmidt for illegal dismissal. The Labor Arbiter grants payment of damages to Santos which was vacated on appeal by the NLRC. On an MR, the NLRC found Santos illegally dismissed & recommended that he be paid actual damages equivalent to his salaries for the unexpired portion of his contract. MRs were denied, hence this petition. ISSUE: W/N Manila Hotel Corp. is liable to Santos HELD: Granted. Piercing the veil of corporate fiction fact that MHC is an incorporator & owns 50% of the capital stock of MHICL is not enough to pierce the veil. Even if we assume: NLRC had jurisdiction over the case & MHICL was liable for Santos retrenchment, still MHC, as a separate & distinct juridical entity, cannot be held liable. Piercing the veil is an equitable remedy. When the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corp as an association of persons. It is done only when the corp is a mere alter ego or business conduit of a person or another corp. Clear & convincing evidence is needed to pierce the veil of corporate fiction. There is no such evidence to show that MHICL & MHC are 1 & the same entity. Test to enable piercing of the veil, except in express agency, estoppel or direct tort: a)Control, not mere majority or complete domination; b)Such control must have been used by the defendant to commit fraud or wrong, etc.; c)The aforesaid control & breach of duty must approximately cause the injury or unjust loss complained of.
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Fact that the Palace Hotel is a member of the Manila Hotel Group is not enough to pierce the corporate veil there is no evidence to show that they are 1 & the same entity. Contrary to what Santos claims that MHICL signed his employment contract, MHICL Vice-President signed as a mere witness under the word noted. Furthermore, there is no EER between Santos & MHICL. 32. PACIFIC CONSULTANTS V. SCHONFELD Facts: Respondent Schonfeld is a Canadian citizen. Pacicon Philippines, Inc. (PPI) is a corporation duly established and incorporated in accordance with the laws of the Philippines and is a subsidiary of Pacific Consultants International of Japan (PCIJ). In 1997, PCIJ decided to engage in consultancy services for water and sanitation in the Philippines. Respondent Schonfeld was employed by PCIJ as PPI Sector Manager in its Water and Sanitation Department. His salary was to be paid partly by PPI and PCIJ. In 1998, Henrichsen sent a letter of employment to Schonfeld in Canada. Schonfeld made some revisions, signed the contract, and sent a copy to Henrichsen. The arbitration clause of the contract provides that any question of interpretation, understanding or fulfillment of the conditions of employment, as well as any question arising between the Employee and the Company which is in consequence of our connected with his employment with the Company and cannot be settled amicably, is to be finally settled, binding to both parties through written submissions, by the Court of Arbitration in London. Schonfeld received his compensation from PPI and was also reimbursed for the expenses he incurred in connection with his work as sector manager. He reported for work in Manila except for occasional assignments abroad, and received instructions from Henrichsen. On May 5, 1999, Schonfeld received a letter from Henrichsen informing him that his employment had been terminated effective Aug. 4, 1999. However, on July 24, 1999, Henrichsen, requested him to stay put in his job after Aug. 5, 1999. Schonfeld continued his work with PPI until Oct. 1, 1999. Respondent Schonfeld filed with PPI several money claims, including unpaid salary, leave pay, air fare from Manila to Canada, and cost of shipment of goods to Canada. PPI partially settled some of his claims (US$5,635.99), but refused to pay the rest. In 2000, he filed a Complaint for Illegal Dismissal against petitioners PPI and Henrichsen with the Labor Arbiter. Labor Arbiter: The employment contract between Schonfeld and PCIJ was controlling. Since the parties had agreed that any differences regarding employer-employee relationship should be submitted to the jurisdiction of the court of arbitration in London, only the court of arbitration in London has jurisdiction. NLRC: affirmed the decision of the Labor Arbiter CA: Even under the employment contract, the parties are NOT precluded from bringing a case related thereto in other venues. Even if there is an agreement
that issues between the parties were to be resolved in the London Court of Arbitration, the venue is not exclusive, since there is no stipulation that the complaint cannot be filed in any other forum other than in the Philippines. Issue: W/N the CA gravely erred in ruling that the labor arbiter a quo has jurisdiction over respondent Schonfelds claim despite the undisputed fact that respondent, a foreign national, was hired abroad by a foreign corporation, executed his employment contract abroad, and had agreed that any dispute between them shall finally be settled by the court of arbitration in London NO (CA did not commit a mistake because the Philippines HAS jurisdiction over the case) Held:The settled rule on stipulations regarding venue, as held in the vintage case of Philippine Banking Corporation v. Tensuan, is that while they are considered valid and enforceable, venue stipulations in a contract do NOT, as a rule, supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the absence of qualifying or restrictive words. They should be considered merely as an agreement or additional forum, not as limiting venue to the specified place. They are not exclusive but, rather permissive. If the intention of the parties were to restrict venue, there must be accompanying language clearly and categorically expressing their purpose and design that actions between them be litigated only at the place named by them. In the instant case, no restrictive words like "only," "solely," "exclusively in this court," "in no other court save ," "particularly," "nowhere else but/except ," or words of equal import were stated in the contract. It CANNOT be said that the court of arbitration in London is an exclusive venue to bring forth any complaint arising out of the employment contract. Petitioners contend that respondent Schonfeld should have filed his complaint in his place of permanent residence, or where the PCIJ holds its principal office, at the place where the contract of employment was signed, in London as stated in their contract. By enumerating possible venues where Schonfeld could have filed his complaint, petitioners themselves admitted that the provision on venue in the employment contract is merely permissive. As for petitioners insistence on the application of the principle of forum non conveniens, the same must be rejected. The bare fact that Schonfeld is a Canadian citizen and was a repatriate does NOT warrant the application of the principle for the following reasons: (1) The Labor Code of the Philippines does NOT include forum non conveniens as a ground for the dismissal of the complaint. (2) The propriety of dismissing a case based on this principle requires a factual determination; hence, it is properly considered as defense. (3) In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals, the Court held that: Philippine Court may assume jurisdiction over the case if it chooses to do so if the following requisites are met: (1) the Philippine Court is one to which the parties may conveniently resort to; (2) the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and,
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(3) the Philippine Court has or is likely to have power to enforce its decision. All the foregoing requisites are present in this case. Thus, the Labor Arbiter has jurisdiction to hear the case at hand. The decision of the CA is affirmed, and the case is remanded to the Labor Arbiter for disposition of the case on the merits. 33. AZNAR V. CHRISTENSEN-GARCIA Facts: Edward Christensen, born in New York, migrated to California where he resided and consequently was considered citizen thereof. He came to the Philippines where he became a domiciliary until the time of his death. However, during the entire period of his residence in this country, he had always considered himself a citizen of California. In his will, Edward instituted his daughter Maria Lucy Christensen as his only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia who, in his will was described as "not in any way related to" him but in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Helen alleged that the will deprives her of her legitime as an acknowledged natural child. She claims that under Art. 16 of the Civil Code, the California law should be applied, and the question of the validity of the testamentary provision should thus be referred back to the law of the decedents domicile, which is the Philippines. She invokes the provisions of Article 946 of the Civil Code of California, which is as follows: If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile. Accordingly, her share must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, the executor and Lucy argue that the national law of the deceased must apply, and thus the courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator may dispose of his property by will in the form and manner he desires (Kaufman Case). Issue: W/N Philippine law should ultimately be applied? YES Held: Edward was a US Citizen and domiciled in the Philippines at the time of his death. The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows: ART. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found. The laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied in Kaufman, is its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited in Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, which is the Philippines in the case at bar. The Philippine court therefore must apply its own law as directed in the conflict of laws rule of the state of the decedent. WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. RENVOI DOCTRINE A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.' Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the doctrine of renvoi is that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. Residence Requires bodily presence inhabitant in a given place 34. BELLIS V. BELLIS FACTS: Amos Bellis was a citizen and resident of Texas at the time of his death. He executed a will in the Philippines, in which he directed that after all taxes, obligations, and expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner a) $240,000.00 to his first wife Mary Mallen of an Domicile Requires bodily presence in that place and also an intention to make it ones domicle
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b) $120,000.00 to his three illegitimate children Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis,or $40,000.00 each, and c) After foregoing the two items have been satisfied, the remainder shall go to his seven surviving children by his first and second wives. Maria Cristina Bellis and Miriam Palma Bellis, filed their respective oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased. The lower court issued an order overruling the oppositions and approving the executors final account, report and administration, and project of partition. Relying upon Article 16 of the Civil Code, it applied the national law of the decedent, which in this case is which did not provide for legitimes. ISSUE: Whether or not such illegitimate children of Bellis be entitled to successional rights? HELD: The said illegitimate children are not entitled to their legitimes. Under Texas law, there are no legitimes. Even if the other will was executed in the Philippines, his national law, still, will govern the properties for succession even if it is stated in his testate that it shall be governed by the Philippine law. Article 16, Paragraph 2 of Civil code render applicable the national law of the decedent, in intestate and testamentary successions, with regard to four items: (a) the order of succession, (b) the amount of successional rights, (c) the intrinsic validity of provisions of will, and (d) the capacity to succeed. ART.16 Real property as well as personal property is subject to the law of the country to where it is situated.However, intestate and testamentary successions, both with respect to the order of successions and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. 35. CADALIN V. POEA ADMINISTRATOR GENERAL RULE: A foreign procedural law will not be applied in the forum. EXCEPTION: When the country of the forum has a "borrowing statute," the country of the forum will apply the foreign statute of limitations. EXCEPTION TO THE EXCEPTION: The court of the forum will not enforce any foreign claim obnoxious to the forum's public policy. FACTS: On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit by filing an "Amended Complaint" with the Philippine Overseas Employment Administration (POEA) for money claims arising from their recruitment by AIBC and employment by BRII. BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in
construction; while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino workers for overseas employment on behalf of its foreign principals. The amended complaint principally sought the payment of the unexpired portion of the employment contracts, which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and Reserved Fund, interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits; refund of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the accreditation of BRII. EASIER FACTS: Cadalin et al. are overseas contract workers recruited by respondent-appellant AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975 to 1983. As such, they were all deployed at various projects in several countries in the Middle East as well as in Southeast Asia, in Indonesia and Malaysia. The case arose when their overseas employment contracts were terminated even before their expiration. Under Bahrain law, where some of the complainants were deployed, the prescriptive period for claims arising out of a contract of employment is one year. ISSUE: Whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law. HELD: AIBC and BRII, insisting that the actions on the claims have prescribed under the Amiri Decree No. 23 of 1976, argue that there is in force in the Philippines a "borrowing law," which is Section 48 of the Code of Civil Procedure and that where such kind of law exists, it takes precedence over the common- law conflicts rule (G.R. No. 104776, Rollo, pp. 45-46). First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law. Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the contract. (G.R. Nos. 105029-31, Rollo, p. 226). As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]). A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law. Thus in Bournias v. Atlantic Maritime Company, supra, the American court applied
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the statute of limitations of New York, instead of the Panamanian law, after finding that there was no showing that the Panamanian law on prescription was intended to be substantive. Being considered merely a procedural law even in Panama, it has to give way to the law of the forum on prescription of actions. However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a "borrowing statute." Said statute has the practical effect of treating the foreign statute of limitation as one of substance (Goodrich, Conflict of Laws 152-153 [1938]). A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing statutes," one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippines Islands. Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedures as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws 104 [7th ed.]). In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. The courts of the forum will not enforce any foreign claim obnoxious to the forum's public policy (Canadian Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor. In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that: The state shall promote social justice in all phases of national development. (Sec. 10). The state affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare (Sec. 18). In article XIII on Social Justice and Human Rights, the 1987 Constitution provides: Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Having determined that the applicable law on prescription is the Philippine law, the next question is whether the prescriptive period governing the filing of the claims is three years, as provided by the Labor Code or ten years, as provided by the Civil Code of the Philippines.
The claimants are of the view that the applicable provision is Article 1144 of the Civil Code of the Philippines, which provides: The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. NLRC, on the other hand, believes that the applicable provision is Article 291 of the Labor Code of the Philippines, which in pertinent part provides: Money claims-all money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued, otherwise they shall be forever barred.
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FOREIGN LAW
1. SY JOC LIENG v. GREGORIO SY QUIA (G.R. No. L-4718; 1910) Doctrine: EXISTENCE OF FOREIGN LAW MUST BE PROVED AS A QUESTION OF FACT. When in a litigation the application of a foreign law is sought, it is necessary to prove before the courts of the Islands, in a satisfactory manner, the existence of such a law as a question of fact; and when proof of such a law is lacking, it is improper to apply unknown laws to suits pending before the courts of the Islands. ACCORDING TO THE PLAINTIFFS 1847: SY QUIA born in China and a citizen of China was married in the city of Amoy to YAP PUAN NIU; had 2 children: SY BY BO and SY BY GUIT 1880: SY BY GUIT died intestate in China leaving SY JOC LIENG and SY CHUA NIU as his only legitimate children and legitimate heirs 1882 : SY BY BO died intestate in China leaving SY YOC CHAY and SY JUI NIU as his only legitimate children and legitimate heirs 1891: YAP PUAN died intestate in China leaving SY QUIA (husband) and 4 grandchildren as her legitimate heirs 1894: SY QUIA died intestate in Manila leaving his 4 grandchildren as his only legitimate heirs 1906: SY JUI NIU died ACCORDING TO THE DEFENDANTS 1852: SY QUIA, an infidel in the Philippines who has residered therein many years prior thereto as an immigrant was baptized a Catholic in Ilocos Sur under the name of VICENTE RUPERTO ROMERO SY QUIA (evidenced by a certificate of baptism) 1853: SY QUIA got married to PETRONILA ENCARNACION (evidenced by a certificate of marriage) since their marriage, they had fixed their domicile in the Philippines 5 legitimate children: APOLINARIA, MARIA, GREGORIO, PEDRO, JUAN (all have certificates of baptism) 1894: SY QUIA died intestate leaving behind his wife, children, and grandchildren (children of APOLINARIA) as his legitimate heirs 1894: his Filipino heirs (defendants) initiated the necessary legal proceedings to settle the estate of the deceased; 1894: then CFI issued a decree declaring the Filipino heirs as the abintestate heirs of the deceased since then, they have in quiet, peaceful, and uninterupted possession of the properties in question as owners in good faith and with a just title until 1900 when the plaintiffs filed their complaint
1906: PETRONILA died The plaintiffs in this case are the alleged grandchildren of SY QUIA. They claim that they are the only legitimate heirs of SY QUIA and that since the death of SY QUIA, the defendants occupied, possessed, and managed the properties of SY QUIA found in the Philippines. On the other hand, defendants claim that they are the legitimate heirs and descendants of the deceased by virtue of his legal marriage to PETRONILA. They further claimed that SY QUIA did not have any property before said marriage and neither did he brought any property into the conjugal partnership. In their answer, it was also mentioned that when they initiated the proceedings to settle the estate of the deceased, no oppositions were filed by the plaintiffs even if during this time they were in the Philippines and they had notice of the death of SY QUIA and the initiation of the proceedings; they also stated that the Chinese heirs were never recognized or considered by SY QUIA as his descendants, relatives, or heirs. Through the course of the hearing and upon motion of the parties, depositions were taken in China and in Ilocos from their respective witnesses. Defendants on a later date asked the court to declare that the depositions taken in China should not be admitted since these contained formal defects (certificates by the officer who took the deposition did not comply with the essential requisites provided by law) concerning the manner in which the oath as administered to the witnesses. CFI: plaintiffs were declared heirs and were entitled to of the properties divided by the court in 1900. A motion for new trial was filed by the defendants. On the other hand, the plaintiffs also appealed the decision and requested that the court modify its decision and conclusions of law by declaring that the plaintiffs were the only heirs of SY QUIA and that they were entitled to all the properties of the deceased. They further alleged that the court erred in finding as a conclusion of law and that the said SY QUIA was a subject of the Chinese Empire so his estate should be distributed in accordance with the laws of China. Issues: 1. W/N SY QUIA was lawfully married to YAP PUAN NIU? NO. 2. Whether the distribution of SY QUIA's estate be done in accordance with the laws of the Philippines or of China? (PHILIPPINES) Held: 1) The Court held that the plaintiffs were not able to show the matrimonial letters evidencing the alleged marriage in China in accordance with their tradition (as was based by the Court on certain books discussing the traditions in China). It was further held that the party obliged to exhibit these letters can only be relieved from the necessity of so doing by proving that the same have been lost or dissappeared, for in the absence of such proof (there being none of this character in the record), they must be produced at the trial in order to establish the fact of the marriage alleged to have taken place, and only in the cases expressly excepted by law can any other proof, such as the testimony of witnesses, be allowed, but the letters themselves must be produced as evidence of the contract to which they relate, in accordance with the provisions of section 285 of the Code of Civil Procedure. The failure to
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produce the said matrimonial letters and the lack of proof that they had been destroyed or lost give rise to the legal presumption that the marriage was not performed; and such presumption cannot be overcome by the testimony of witnesses; for this is a most important contract, which, according to the ancient laws and customs of China, must be evidenced by such letters or cards. On the other hand, defendant's documents and witnesses were able to prove the marriage with PETRONILA was true and lawful and that at the time of the said marriage SY QUIA was single. This was evidenced by the marriage certificate and witnessed by the clerk of court who facilitated the administrative proceedings in acquiring the necessary permission to marry PETRONILA. Being a public proceeding reflected in public records, such were given weight by the Court. The canonical documents presented were also given weight as these also have the character of being public documents. As the first marriage was not proven and the second marriage was established to be lawful, the plaintiffs do not have any right of claim to the properties since these are fruits of a valid conjugal partnership, which, under the Philippine laws, will belong only to the surviving spouse and legitimate child/children (subject to certain claims and proceedings). 2) Vicente Romero Sy Quia, having become a regularly domiciled denizen4 under the laws5 the prevailing by reason of his long residence in this country (Binondo, Manila) for more than fifty years and by reason of the further fact that he married a native woman, established himself in this city with a home of his own, acquired real property and engaged in business generally, most of the property left by him at the time of his death real property, the questions raised by plaintiffs' petition must be determined in accordance with the laws of the Philippines to which Sy Quia submitted himself when he came to the Islands and secured a residence therein, and not in accordance with any other foreign or unknown law. Following the laws then, it will be clear that SY QUIA gained residence in these Islands under the laws of the Novisima Recopilacion.
Therefore the questions raised by those who now claim to be his descendants should be decided in accordance with the laws in force in the Philippines to which SY QUIA submitted himself from the time he applied for a resident's license and abstained from registering in 1870 as a foreigner. Most of the property left by him being real, the same is subject to the laws of the country in which it is located. Furthermore, aside from the fact that it does not specifically appear from the record what are the Chinese laws applicable to the issues of this case, there is no proof of the existence of the Chinese laws referred to by the plaintiffs, nor is there anything to show what the books or pamphlets introduced by them in evidence contain any specific laws of the Celestial Empire. The jurisprudence of American and Spanish tribunals is uniform on this subject. A judgment of the supreme court of Spain of the 26th of May, 1887 said: "Whenever a foreign law is invoked in our tribunals, its existence must be satisfactory established as any other fact.'6 Even if arguably the plaintiffs presented witnesses and "mortuary tablets" (shows certain events in the family of SY QUIA in accordance with Chinese customs such as date of marriages, birth, death, etc.) as proof in their favor, these were not enough in accordance with the laws then. As to the tablets, these were said to be unreliable based on the fact that it stated that SY QUIA died on 1891 when he died in 1894. The witnesses were contradicting each other and some of their testimonies were even declared to be improbable. The Chinese consul himself even stated that he had never read or seen the original copy of this alleged compilation of laws used by the plaintiff, the books not being duly certified, adding that he could not say whether the book marked "Exhibit AH" was an exact copy of the original. 2. IN RE ESTATE OF JOHNSON FAST FACTS: Emil Johnson died in the City of Manila; however he was a naturalized American citizen. He left a will through which he disposed an estate valued at 231,800php. However, the will was signed by two witnesses instead of the three required by Sec. 618 of the Code of Civil Procedure. However, a petition was made stating that the will was made in conformity with US Law, thus valid in the Philippines as provided for in Section 636 in the Code of Civil Procedure. The will
Law 3, title 11, book 6 of the Novisima Recopilacion "There shall be considered as denizens... those who residing therein may be converted to our holy Catholic faith; those who, being self-supporting, establish their domicile therein; those who walk who ask for and obtain residence in any town thereof; those who marry a native woman of the said kingdoms and are domicile therein... those who establish themselves in the country by acquiring real property; these who have a trade or professional and got there to practice the same... those who hold public or honorary offices or any such position whatsoever which can only be held by natives... those who shall reside on the said kingdoms for a period of ten years in a home of their own..."
1) Law 1, title 11, book 6 of the Novisima Recopilacion (acceptance of foreigners in the country who have trade or industry here and has lived here for a period of 10 years and is married to a native women for 6 years) 2) There was published in the Official Gazette of this city on September 18, 1870, the decretal law of the 4th of July of the said year relating to foreigners, section 2 of which provides: "Domiciled foreigners are those who have a regular residence and have lived for three years in any province or who may have registered as such residents in the registry of domiciled persons kept for this purpose,"
Section 300 of the Code of Civil Procedure reads as follows: "Books printed or published under the authority of the United States, or of one of the States of the United States, or a foreign country, and purporting to contain statutes, codes, or other written law of such State or country, or proved to be commonly admitted in the tribunals of such State or country as evidence of the written law thereof, are admissible in the Philippine Islands as evidence of such law." Section 301 of the same code provides: "A copy of the written law, or other public writing of any State or country, attested by the certificate of the officer having charge of the original, under the seal of the State or country, is admissible as evidence of such law or writing." Section 302 provides as follows: "The oral testimony of witnesses, skilled therein, is admissible as evidence of the unwritten law of the United States or of any State of the United States, or foreign country, as are also printed and published books of reports of decisions of the courts of the United States or of such State or country, or proved to be commonly admitted in such courts."
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was later probated and declared legal, however the testator's daughter, Ebba Ingeborg entered an appearance, claiming that as a legitimate child she cannot be deprived of the legitime which she is entitled to as provided by Philippine law. She moved to annul the decree of probate and put the estate into intestate administration in order for her to claim the estate as the sole legitimate heir of her father. FACTS: On February 4, 1916, Emil H. Johnson, a native of Sweden and a naturalized citizen of the United States, died in the city of Manila, leaving a will, dated September 9, 1915, by which he disposed of an estate, the value of which, as estimated by him, was 231,800php. This document is an holographic instrument, being written in the testators own handwriting, and is signed by himself and two witnesses only, instead of three witnesses required by section 618 of the Code of Civil Procedure - therefore the will was not executed in conformity with the provisions of law generally applicable to wills executed by inhabitants of these Islands, and hence could not have been proved under section 618. . However, a petition was presented in the Court of First Instance of the city of Manila for the probate of this will, on the ground that Johnson was at the time of his death a citizen of the State of Illinois, United States of America. The will was duly executed in accordance with the laws of that State, hence could properly be probated here pursuant to section 636 of the Code of Civil Procedure which provides: Will made here by alien. A will made within the Philippine Islands by a citizen or subject of another state or country, which is executed in accordance with the law of the state or country of which he is a citizen or subject, and which might be proved and allowed by the law of his own state or country, may be proved, allowed, and recorded in the Philippine Islands, and shall have the same effect as if executed according to the laws of these Islands. After a hearing, the document was declared to be legal, and administrators were nominated: Victor Johnson, the deceased's brother and John T. Pickett. Pickett declined, and Johnson was appointed sole administrator. In the will, the testator gives to his brother Victor one hundred shares of the corporate stock in the Johnson-Pickett Rope Company; to his father and mother in Sweden, the sum of P20,000; to his daughter Ebba Ingeborg, the sum of P5,000; to his wife, Alejandra Ibaez, the sum of P75 per month, if she remains single; to Simeona Ibaez, spinster, P65 per month, if she remains single. The rest of the property is left to the testators five children Mercedes, Encarnacion, Victor, Eleonor and Alberto. However, three months after the will had been probated, the attorneys for the petitioner, Ebba Ingeborg Johnson, entered an appearance in her behalf and asserted that Ebba is a legitimate heir of the testator. Thus, she cannot be deprived of the legitime to which she is entitled under the law governing testamentary successions in these Islands. She moved to annul the decree of probate and put the estate into intestate administration in order for her to claim the estate as the sole legitimate heir of her father.
ISSUE: W/N the order of the probate can be set aside on the ground that the testator was not a resident of the State of Illinois and that the will was not made in conformity with the laws of that State? NO. HELD:In the testimony submitted to the trial court, Johnson first came to the United States as a boy and settled in the State of Illinois. Eventually he married one Rosalie Johnson and they would have one daughter, the petitioner Ebba Ingeborg. Johnson remained in Illinois until he came to the Philippines as a soldier in the United States Army. On November 20, 1902, he went back to the US so that Rosalie Johnson could be granted a decree of divorce in the Circuit Court of Illinois, on the ground of desertion. In 1903 Emil Johnson would return to obtain a certificate of naturalization. Thereafter he returned to the Philippines and would conduct his business here until his death. He had marital relations with two women. From Alejandra Ibanez he would have three children: Mercedes, Encarnacion, and Victor. From Simeona Ibanez he would have two children: Eleonor and Alberto. All this being said, no evidence was adduced showing that at the time he returned to the United States, in the autumn of 1902, he had then abandoned Illinois as the State of his permanent domicile. Further, there is no law in force at that time by virtue of which any person of foreign nativity can become a naturalized citizen of the Philippine Islands. Thus it was impossible for the testator, even if he had so desired, to expatriate himself from the United States and change his political status from a citizen of the United States to a citizen of these Islands. This being true, it is to be presumed that he retained his citizenship in the State of Illinois along with his status as a citizen of the United States The Supreme Court held that the probate of the will does not affect the intrinsic validity of its provisions, the decree of probate being conclusive only as regards the due execution of the will. The intrinsic validity of the provisions of this will must be determined by the law of Illinois and not of the Philippines. 3. FLUEMER V. HIX Facts: Tuason, the Judge of First Instance, denied the probate of the document alleged to be the last will and testament of the deceased (Edward Randolph Hix). Thus, the special administrator of the estate of Hix, Fluemer (the petitioner in this case) appealed the said decision. However, appellee Annie Hix (who is the ex-wife of Edward Hix) contends that the appellant Fluemer as a mere special administrator is not authorized to carry on this appeal. Issue: Whether the appellant/special administrator Fluemer is authorized to carry this appeal YES Held: Appellant Fluemer was a person interested in the allowance or disallowance of a will by the CFI and so should be permitted to appeal to the SC from the disallowance of the will. It is the theory of petitioner Fluemer that the alleged will was executed in West Virginia on Nov. 3, 1925, by Hix who had his residence in that jurisdiction, and that the laws of West Virginia govern. Thus, a copy of Sec. 3868 of Acts 1882, c. 84 as
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found in West Virginia Code, Annotated, by Hogg, Charles E., vol. 2, 1914, p. 1690, and as certified to by the Director of the National Library was submitted. However, this cannot be considered as compliance with the law. The laws of a foreign jurisdiction do not prove themselves in our courts. The courts of the Philippine Islands are not authorized to take judicial notice of the laws of the various States of the American Union. Such laws must be proved as facts. In this case, 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 Sec. 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 will was executed. Also, the due execution of the will was not established. The only evidence on this point is to be found in the testimony of the prisoner. No evidence was presented to prove that the will was acknowledged by the testator in the presence of 2 competent witnesses, or that these witnesses subscribed the will in the presence of the testator and of each other as the law of West Virginia seems to require. On the supposition that the witnesses to the will reside outside the Philippines, it would then be the duty of the petitioner to prove execution by some other means (Code of Civil Procedure, sec. 633). It was also necessary for Fluemer to prove that the testator had his domicile in West Virginia and not in the Philippines. The only evidence introduced to establish this fact consisted of the recitals in the alleged will and the testimony of Fluemer. While the appeal was pending submission in the court, Fluemers lawyer presented an unverified petition asking the court to accept as part of the evidence the documents attached to the petition. One of the documents discloses that a paper allegedly the last will and testament of Edward Hix was presented for probate in 1929 before the clerk of Randolph Country, West Virginia, and was duly proved by the oaths of Wamsley and Madden. Another document shows that in 1929, the clerk of court appointed Maxwell as the administrator cum testament annexo of the estate of Hix. In this connection, it is to be noted that the application for the probate of the will in the Philippines was filed on February 20, 1929, while the proceedings in West Virginia appear to have been initiated on June 8, 1929. These facts are strongly indicative of an intention to make the Philippines the principal administration and West Virginia the ancillary administration. However, no attempt has been made to comply with the provisions of sections 637, 638, and 639 of the Code of Civil Procedure, for no hearing on the question of the allowance of a will said to have been proved and allowed in West Virginia has been requested. There is no showing that the deceased left any property at any place other than the Philippine Islands and no contention that he left any in West Virginia. 4. WILLIAMETTE V. MUZZAL
Facts: This case involves the liability of A.H. Muzzal, a former resident of the State of California, now residing in the Philippines, for obligations contracted by MeyerMuzzal Company, a California corporation, on 5 Nov 1928 and 22 Dec 1928 with Willamette Iron & Steel Works. Stanley Hermann, a CPA/auditor hired by MeyerMuzzal Company on said dates, testified that A.H. Muzzal subscribed and owned 1,433 out of the 5,000 Meyer-Muzzal Company shares (par value of $10 each) at the time the obligations were contracted. Willamette seeks to recover under Sec. 322 of the Civil Code of California, which provides: Each stockholder of a corporation is individually and personally liable for such proportion of all its debts and liabilities contracted or incurred during the time he was a stockholder as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporation. Any creditor of the corporation may institute joint or several actions against any of its stockholders, for the proportion of his claim payable by each, and in such action the court must (1) ascertain the proportion of the claim or debt for which each defendant is liable, and (2) a several judgment must be rendered against each, in conformity therewith. If any stockholder pays his proportion of any debt due from the corporation, incurred while he was such stockholder, he is relieved from any further personal liability for such debt, and if an action has been brought against him upon such debt, it must be dismissed, as to him, upon his paying the costs, or such proportion thereof as may be properly chargeable against him. The liability of each stockholder is determined by the amount of stock or shares owned by him at the time the debt or liability was incurred; and such liability is not released by any subsequent transfer of stock. The CFI of Zamboanga rendered judgment in favor of Willamette; hence this appeal by A.H. Muzzal. Issue: 1. W/N Willamette has sufficiently proven the existence of the foreign law involved? YES 2. W/N the CFI erred in enforcing the law of California? NO Held: 1. YES. Mr. Arthur Bolton, an attorney of San Francisco, California since the year 1918, under oath, quoted verbatim Sec. 322 of the California Civil Code and stated that said section was in force at the time the obligations of Muzzal to Willamette were incurred. This evidence sufficiently established the fact that the section in question was the law of the State of California on the above dates. A reading of Secs. 300 and 301 of our Code of Civil Procedure will convince one that these sections do not exclude the presentation of other competent evidence to prove the existence of a foreign law. The foreign law is a matter of fact. You ask the witness what the law is; he may from his recollection, or on producing and referring to books, say what it is. (Lord Campbell concurring in an opinion of Lord Chief Justice Denman in a well known English case where a witness was called upon to prove the Roman laws of marriage and was permitted to testify, though he referred to a book containing the decrees of the Council of Trent as controlling.) Aside from the testimony of Attorney Bolton, Raglands Annotated Civil Code of California was presented as evidence. This book contains that States Civil Code as adopted 21 March 1872, with the subsequent official statute amendments, including the year 1929.
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2. NO. A.H. Muzzal argues that since the law of California, as to the liability of stockholders of a corporation, is different from and inconsistent with the Philippine Corporation Law the courts here should not impose liability provided in that law upon a resident of these Islands who is a stockholder of a California corporation. A.H. Muzzal is chargeable with notice of the law of California as to the liability of stockholders for debt of a corporation proportionate to their stock holdings, in view of the fact that he was one of the incorporators of the Meyer-Muzzal Company in the year 1924 and was still a stockholder in that company in the year 1928. Exhibit 10 of Willamette is a certified copy of the articles of incorporation of Meyer-Muzzal Company in which it appears that the company was incorporated on 22 Aug 1924, and that the incorporators were A.H. Muzzal, Leo W. Meyer and James Rolph, Jr., all of whom are residents and citizens of the State of California. A.H. Muzzal cannot now escape liability by alleging that the California law is unjust and inconsistent with the Philippine Corporation Law. NOTE: Secs. 300 and 301 of the then Code of Civil Procedure were mentioned in the case but were not quoted. The Code of Civil Procedure referred to was that in effect in 1935. 5. CIR V. FISHER Facts: The case relates to the determination and settlement of the estate of Walter Stevenson (born in the Philippines , of British parents, married in the City of Manila to Beatrice, British also). Walter instituted his wife as the sole heiress to the following real and personal property, which they acquired while residing in the Phils: Real Estate in Baguio: Shares of stock from Mindanao Mother Lode Mines Shares of stock Canacao Estate Cash and credit from Canacao Estate Cash, with the Chartered Bank of India, Australia & China (Only the first two are relevant to the case) Ancillary administration proceedings were instituted in the Court of First Instance of Manila for the settlement of the estate. Ancillary administrator submitted a preliminary estate and inheritance tax return with the reservation of having the properties declared therein finally appraised at their values six months after the death of Stevenson. Beatrice Stevenson assigned all her rights and interests in the estate to the spouses, Douglas and Bettina Fisher, respondents herein Basically, the case tackles disputes regarding considerations in making deductions, exemptions, valuation of property and the property regimes for alien spouses residing in the Phils. Issues: 1. W/N, in determining the taxable net estate of the decedent, one-half () of the net estate should be deducted therefrom as the share of tile surviving spouse in accordance with our law on conjugal partnership and in relation to section 89 (c) of the NIRC? YES
2. W/N the estate can avail itself of the reciprocity proviso embodied in Section 122 of the NIRC exemption from the payment of estate and inheritance taxes on the 210,000 shares of stock in the Mindanao Mother Lode Mines Inc.? NO. 3. W/N the estate is entitled to the deduction of P4,000.00 allowed by Section 861, U.S. Internal Revenue Code in relation to section 122 of the NIRC? NO 4. W/N the real estate properties of the decedent located in Baguio City and the 210,000 shares of stock in the Mindanao Mother Lode Mines, Inc., were correctly appraised by the lower court? NO. 5. W/N the estate is entitled to the following deductions: P8,604.39 for judicial and administration expenses; P2,086.52 for funeral expenses; P652.50 for real estate taxes; and P10,0,22.47 representing the amount of indebtedness allegedly incurred by the decedent during his lifetime? YES, except indebtedness. 6. W/N the estate is entitled to the payment of interest on the amount it claims to have overpaid the government and to be refundable to it? NO. HELD:1. Lower court CORRECTLY DEDUCTED the half of the conjugal property in determining the hereditary estate left by the deceased Stevenson. The application of Art 1325 of the Old Civil Code (adheres to the dominance of the nationality law in determining the property regime of spouses) is misplaced because it covers marriages between an alien and a Filipino and a marriage celebrated abroad. This makes the English law applicable to the case at bar (because again, they are both British), but it was not satisfactorily proved that the English law states that the ownership of the property of the spouses should all vest in the husband, thus it cannot indulge in a processual presumption on what the English law has to say on the matter. 2.Reciprocity provided by the Philippine and Californian Laws CANNOT be availed of. The reciprocity must be total, that is, with respect to transfer or death taxes of any and every character, in the case of the Philippine law, and to legacy, succession, or death taxes of any and every character, in the case of the California law. Therefore, if any of the two states collects or imposes and does not exempt any transfer, death, legacy, or succession tax of any character, the reciprocity does not work. 3. P 4,000 deduction CANNOT be allowed. the amount of $2,000.00 allowed under the Federal Estate Tax Law is in the nature of a DEDUCTION and not of an exemption regarding which RECIPROCITY CANNOT BE CLAIMED under the provision of Section 122 of our National Internal Revenue Code. Nor is reciprocity authorized under the Federal Law. 4. For the valuation of the Baguio real estate: CIR appraisal upheld. Properties are required to be appraised at their fair market value and the assessed value thereof shall be considered as the fair market value only when evidence to the contrary has not been shown. Valuation made is justified by evidence.
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For the Mindanao Mother Lode shares of stocks: Respondents' claim that the shares of stock commanded a lesser value at the Manila Stock Exchange six months after the death of Stevenson has merit. Situs of taxation is the Philippines so it should be valued on the basis of prices prevailing in the country. The reservation made by the ancillary admin should be respected still, that the shares of stock shall be valued based on the prices 6 months from the death of the decedent 5. Judicial and admin expenses : Allowable deduction, upheld by the probate court also Funeral expenses: P86.52 additional funeral expense disallowed, lack of evidence of incurring this additional funeral expense P2000 funeral expense, allowed Real estate taxes: Was actually allowed, shown by computations in the original text Indebtedness: Disallowed, the allowable deduction is only to the extent of the portion of the indebtedness which is equivalent to the proportion that the estate in the Philippines bears to the total estate wherever situated. No statement of the value of the estate situated outside the Philippines, no part of the indebtedness can be allowed to be deducted. Administrator was not able to include the gross estate of the Stevenson in the three returns submitted to the court.
2. W/N the evidence on whether the laws of Spain grant Filipinos the right to become naturalized citizens of their country is sufficient? YES Held: 1. The lower court found that such testimony was an extravagant understatement of the reality that since he has lived in the country for 44 years, mingling and dealing with people who use Tagalog in their daily intercourse, Pardo has definitely gained a working knowledge of the language. To this, the SC agreed to. 2. The applicant introduced a certificate signed by the Consul General of Spain in the Philippines, stating that in accordance with articles 17 and 225 of the Spanish Civil Code, among other Spanish legislation, Filipinos are eligible to Spanish citizenship in Spain. Article 17 provides that foreigners who have obtained a certificate of naturalization and those who have not obtained such certificate but have acquired domicile in any town of the Monarchy are Spaniards. No discrimination being made in these provisions, they apply to persons of any nationality. As the Spanish Civil Code has been and still is "the basic code in force of the Philippines," articles 17 et seq. thereof may be regarded as matters known to judges of the Philippines by reason of their judicial functions and nay be judicially recognized by them without the introduction of proof. (Section 5, Rule 123.) Moreover, in a number of decisions mere authentication of the Chinese Naturalization Law by the Chinese Consulate General of Manila has been held to be competent proof of that law. ------MOTION FOR RECONSIDERATION 28 April 1950 We realize that a copy of a foreign law certified only by the local consul of the applicant's country does not conform to the requirement concerning the certification and authentication of such law (sec. 41, Rule 123). But the case at bar and the cases cited therein as precedents are not governed by the Rules of the Court. Rule 1342, entitled "Applicability of the Rules," provides that "These rules shall not apply to land registration, cadastral and election cases, naturalization and insolvency proceedings, and other cases not herein provided for, except by analogy or in a suppletory character and whenever practicable and convenience. By reason of this provision, literal adherence to the Rules of Court, which include rules of evidence, is not obligatory in a proceeding like that under the Philippine law is judicial in character, and strict compliance with the process prescribed by statute, if there were one, would be essential, yet when, as here, no specific procedure is indicated in the premises, it is only necessary that the merits of the petition be passed on and a decision reached on a far consideration of the evidence on satisfactory proof. Accordingly, evidence of the law of a foreign country or reciprocity regarding the acquisition of citizenship, although not meeting the prescribed rule of practice by section 41 of Rule 123, may be allowed and used as basis for a favorable action if, in the light of all circumstances, the court is satisfied of the authenticity of the written proof offered. The motion for reconsideration is therefore denied. 7. PHILIPPINE COMMERCIAL INDUSTRIAL BANK V. ESCOLIN
6. Request to pay interest denied. In the absence of a statutory provision clearly or expressly directing or authorizing such payment, and none has been cited by respondents, the National Government cannot be required to pay interest 6. PARDO V. REPUBLICS NOTE: guys, weird talaga ung pagkakasulat ng case. Hehe but I included everything found in the case, including the MR, he might ask eh. Facts: Vicente Rosal Pardo is a Spanish citizen who was born in Spain in 1895. He has been residing in the Philippines since 1905, has married a Filipina and is, here, presently employed. He has been adjudged by the CFI of Manila as entitled to become a Filipino citizen. The Government now contends this eligibility on the ground that Pardo is unable to speak and write any of the principal Filipino languages. To this, the applicant testified that he knows enough Tagalog to be understood in that language. His testimony was further corroborated by Lino Gutierrez, a respectable citizen who has intimately known Pardo for 27 years and having had business relations with him. Issues: 1. W/N the contention of the Government sufficient to deny Pardo of eligibility? NO.
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Doctrine of Processual Presumption: The foreign law, whenever applicable, should be proved by the proponent thereof, otherwise, such law shall be presumed to be exactly the same as the law of the forum. Facts: The Hodges spouses, both Texas citizens and domiciled in the Philippines, made in their individual wills, provisions which provide that upon their deaths, their whole estate would be inherited by the surviving spouse and that spouse could manage and alienate the said lands, with the exception of the Texas property, and the remainder upon the death of the surviving spouse would redound to the brothers and sisters of the deceased surviving spouse (basta ung asawang huling namatay LOL). Linnie Jane Hodges died first in Iloilo leaving a will executed in Texas but probated in the CFI of Iloilo City with the widower Charles Newton Hodges appointed as Executor, pursuant to the provisions of the will. Charles was previously appointed Special Administrato, in which capacity he filed an urgent ex-parte motion to allow or authorize himself to continue the business in which he was engaged and to perform acts which he had been doing while deceased was living which was granted by the court. As Executor he filed another motion to approve all sales, conveyances, leases, mortgages that he had made further and subsequent transaction which he may do in accordance with the last wishes of his wife which was also approved by the court. In financial statements submitted before the court, he made statements that the estate of Linnie is 1/2 of the conjugal estate. He also allegedly renounced his inheritance in a tax declaration in the U.S. Subsequently, Charles also died. Magno was appointed as the admistratrix for the estate of both spouses but later replaced by PCIB as to Charles estate. Charles before his death, failed to make accounting, and also failed to acquire final adjudication of Linnies estate. Since there was no liquidation of Linnies estate, the brothers and sisters of Linnie wanted to determine the extent of her estate that they could inherit. Issue: w/n Philippine Law or Texas Law shall govern (regarding Conflict of Laws) Remanded (Texas law may be applied but must be proved) Held: It is necessary that the Texas law be ascertained. Here it must be proven whether a renvoi will happen or whether Texas law makes the testamentary provisions valid. In line with Texas law, which should be proven is the law enforced during the death of Linnie and not in any other time. Art 16 of the Civil Code provides that the law of the nationality of the decedent applies. But if we apply Texas law, personal property is governed by the law of domicile of the decedent and real property is governed by its situs (both of which is the Philippines). Furthermore Texas law provides no legitime. Thus the renvoi doctrine. Philippine law provides that the Surviving Spouse, being the sole heir,gets 1/2 o the conjugal property, then 1/2 goes to the estate of the spouse. If 1/2 of the estate of the decedent goes to the surviving spouse which is the sole heir, then Charles gets 1/4 of the whole conjugal property. The Court said that Texas law may apply, but was not proven. The laws of a foreign jurisdiction do not prove themselves in our courts, The courts of the Philippines Islands are not authorized to take
judicial notice of the laws of the various States of the American Union. Such laws must be proved as facts. The proponent should show the foreign law; as certified by person holding/having custody of such law, with a certificate that such officer does have custody over said law. v Garcia case can't be used to show what Texas law may contain, as there's a time difference between this case and that case, thus the Texas law might have changed in between the rulings PCIB can't claim that the estate of Linnie is not entitled to at least 1/4 of conjugal property, they having argued that it is so. The SC held that the estate of Linnie inherited by her brothers and sisters could be more that just stated, but this would depend on (1) whether upon the proper application of the principle of renvoi in relation to Article 16 of the Civil Code and the pertinent laws of Texas, it will appear that Hodges had no legitime as contended by Magno, and (2) whether or not it can be held that Hodges had legally and effectively renounced his inheritance from his wife. Under the circumstances presently obtaining and in the state of the record of these cases, as of now, the Court is not in a position to make a final ruling, whether of fact or of law, on any of these two issues, and We, therefore, reserve said issues for further proceedings and resolution in the first instance by the court o quo, as hereinabove indicated. We reiterate, however, that pending such further proceedings, as matters stand at this stage, Our considered opinion is that it is beyond cavil that since, under the terms of the will of Mrs. Hodges, her husband could not have anyway legally adjudicated or caused to be adjudicated to himself her whole share of their conjugal partnership, albeit he could have disposed any part thereof during his lifetime, the resulting estate of Mrs. Hodges, of which Magno is the uncontested administratrix, cannot be less than one-fourth of the conjugal partnership properties, as of the time of her death, minus what, as explained earlier, have been gratuitously disposed of therefrom, by Hodges in favor of third persons since then, for even if it were assumed that, as contended by PCIB, under Article 16 of the Civil Code and applying renvoi the laws of the Philippines are the ones ultimately applicable, such one-fourth share would be her free disposable portion, taking into account already the legitime of her husband under the Civil Code. (note: sobrang haba at sobrang daming issues, I just put the issue related to our topic in Conflict of Laws) 8. MANUFACTURERS HANOVER TRUST CO V. GUERRERO Facts: On May 17, 1994, respondent Rafael Ma. Guerrero (Guerrero) filed a complaint for damages against petitioner Manufacturers Hanover Trust Co. and/or Chemical Bank (Bank) with the RTC of Manila. Guerrero sought payment of damages allegedly for (1) illegally withheld taxes charged against interests on his checking account with the Bank; (2) a returned check worth US$18,000.00 due to signature verification problems; and (3) unauthorized conversion of his account. On September 1, 1995, the Bank filed its Answer alleging that by stipulation Guerreros account is governed by New York law and this law does not permit any of Guerreros claims except actual damages. Subsequently, the Bank filed a Motion for Partial Summary Judgment seeking the dismissal of Guerreros claims contending
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that the trial should be limited to the issue of actual damages. Guerrero opposed the motion. The affidavit of Alyssa Walden, a New York attorney, supported the Banks Motion for Partial Summary Judgment. Alyssa Waldens affidavit (Walden affidavit) stated that Guerreros New York bank account stipulated that the governing law is New York law and that this law bars all of Guerreros claims except actual damages. The Philippine Consular Office in New York authenticated the Walden affidavit. The RTC denied the Banks Motion for Partial Summary Judgment and its motion for reconsideration. The Bank filed a petition for certiorari and prohibition with the Court of Appeals assailing the RTC Orders. The Court of Appeals dismissed the petition, The Court of Appeals ruled that the Walden affidavit does not serve as proof of the New York law and jurisprudence relied on by the Bank to support its motion. It likewise denied the Banks motion for reconsideration. Hence, the instant petition. The Bank argues that in moving for partial summary judgment, it was entitled to use the Walden affidavit to prove that the stipulated foreign law bars the claims for consequential, moral, temperate, nominal and exemplary damages and attorneys fees. On May 17, 1994, respondent Rafael Ma. Guerrero (Guerrero) filed a complaint for damages against petitioner Manufacturers Hanover Trust Co. and/or Chemical Bank (Bank) with the RTC of Manila. Guerrero sought payment of damages allegedly for (1) illegally withheld taxes charged against interests on his checking account with the Bank; (2) a returned check worth US$18,000.00 due to signature verification problems; and (3) unauthorized conversion of his account. On September 1, 1995, the Bank filed its Answer alleging that by stipulation Guerreros account is governed by New York law and this law does not permit any of Guerreros claims except actual damages. Subsequently, the Bank filed a Motion for Partial Summary Judgment seeking the dismissal of Guerreros claims contending that the trial should be limited to the issue of actual damages. Guerrero opposed the motion. The affidavit of Alyssa Walden, a New York attorney, supported the Banks Motion for Partial Summary Judgment. Alyssa Waldens affidavit (Walden affidavit) stated that Guerreros New York bank account stipulated that the governing law is New York law and that this law bars all of Guerreros claims except actual damages. The Philippine Consular Office in New York authenticated the Walden affidavit. The RTC denied the Banks Motion for Partial Summary Judgment and its motion for reconsideration. The Bank filed a petition for certiorari and prohibition with the Court of Appeals assailing the RTC Orders. The Court of Appeals dismissed the petition, The Court of Appeals ruled that the Walden affidavit does not serve as proof of the New York law and jurisprudence relied on by the Bank to support its motion. It likewise denied the Banks motion for reconsideration. Hence, the instant petition. The Bank argues that in moving for partial summary judgment, it was entitled to use the Walden affidavit to prove that the stipulated foreign law bars the claims for
consequential, moral, temperate, nominal and exemplary damages and attorneys fees. Issue: W/N CA erred in holding that Walden affidavit, which proves foreign law as a fact, is "hearsay" and thereby cannot serve as proof of the New York law relied upon by petitioners in their motion for summary judgment? NO Held: No, the CA correctly denied the Banks motion for partial summary judgment. In a motion for summary judgment, the crucial question is: are the issues raised in the pleadings genuine, sham or fictitious, as shown by affidavits, depositions or admissions accompanying the motion? A perusal of the parties respective pleadings would show that there are genuine issues of fact that necessitate formal trial. Guerreros complaint before the RTC contains a statement of the ultimate facts on which he relies for his claim for damages. In its Answer, the Bank set up its defense that the agreed foreign law to govern their contractual relation bars the recovery of damages other than actual. Apparently, facts are asserted in Guerreros complaint while specific denials and affirmative defenses are set out in the Banks answer. There can be no summary judgment where questions of fact are in issue or where material allegations of the pleadings are in dispute. The resolution of whether a foreign law allows only the recovery of actual damages is a question of fact as far as the trial court is concerned since foreign laws do not prove themselves in our courts. Foreign laws are not a matter of judicial notice. Like any other fact, they must be alleged and proven. Certainly, the conflicting allegations as to whether New York law or Philippine law applies to Guerreros claims present a clear dispute on material allegations which can be resolved only by a trial on the merits. Under Section 24 of Rule 132, the record of public documents of a sovereign authority or tribunal may be proved by (1) an official publication thereof or (2) a copy attested by the officer having the legal custody thereof. Such official publication or copy must be accompanied, if the record is not kept in the Philippines, with a certificate that the attesting officer has the legal custody thereof. The certificate may be issued by any of the authorized Philippine embassy or consular officials stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. The attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be, and must be under the official seal of the attesting officer. An exception to the Rule is that a foreign law may be proved in open court by the testimony of an active law practitioner familiar with the foreign law and quoting the specific foreign law involved. The Bank, however, cannot rely on this exception because said exception was established in cases wherein the attorneys testified in open court during the trial in the Philippines and quoting the particular foreign laws sought to be established. On the other hand, the Walden affidavit was taken abroad ex parte and the affiant never testified in open court. The Walden affidavit cannot be considered as proof of New York law on damages not only because it is self-serving but also because it does not state the specific New York law on damages. The Walden affidavit states conclusions from the affiants personal interpretation and opinion of the facts of the case vis--vis the alleged laws and jurisprudence without
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citing any law in particular. The citations in the Walden affidavit of various U.S. court decisions do not constitute proof of the official records or decisions of the U.S. courts. While the Bank attached copies of some of the U.S. court decisions cited in the Walden affidavit, these copies do not comply with Section 24 of Rule 132 on proof of official records or decisions of foreign courts. The Banks intention in presenting the Walden affidavit is to prove New York law and jurisprudence. However, because of the failure to comply with Section 24 of Rule 132 on how to prove a foreign law and decisions of foreign courts, the Walden affidavit did not prove the current state of New York law and jurisprudence. Thus, the Bank has only alleged, but has not proved, what New York law and jurisprudence are on the matters at issue. 9. CRESENT PETROLEUM V. M/V LOK MAHESHWRI Fast Facts: Portserv (Canadian Company) ordered bunker fuels for the Vessel from Crescent (Canadian Company). Crescent had it delivered through its supplier, Marine Petrobulk (Canadian Corporation). Crescent paid Marine Petrobulk and tried to collect from Vessel (owned by a Indian Corporation), et al. It was not paid; hence, it filed a case before the RTC of Cebu City. Facts: M/V "Lok Maheshwari" (Vessel) is an oceangoing vessel of Indian registry that is owned by Shipping Corporation of India (SCI), a corporation organized and existing under the laws of India and principally owned by the Government of India. 1. SCI time-chartered the Vessel to Halla Merchant Marine Co. Ltd. (Halla), a South Korean company. 2. Halla sub-chartered it to Transmar Shipping, Inc. (Transmar), a corporation organized and existing under the laws of Canada 3. Transmar sub-chartered it to Portserv Limited (Portserv), a corporation organized and existing under the laws of Canada. Portserv requested Crescent Petroleum, Ltd. (Crescent), a corporation organized and existing under the laws of Canada, engaged in the business of selling petroleum and oil products for the use and operation of oceangoing vessels, to deliver marine fuel oils (bunker fuels) to the Vessel. Crescent granted and confirmed the request through an advice via facsimile.
incurred additional expenses of US$8,572 for interest, tracking fees, and legal fees. On May 2, 1996, while the Vessel was docked at the port of Cebu City, Crescent instituted before the RTC of Cebu City an action for a sum of money with prayer for TRO and writ of preliminary attachment against Vessel and SCI, Portserv and/or Transmar. On May 3, 1996, the trial court issued a writ of attachment against the Vessel with bond at P2,710,000. Crescent withdrew its prayer for a TRO and posted the required bond. On May 18, 1996, summonses were served to Vessel and SCI, and Portserv and/or Transmar through the Master of the Vessel. Pioneer Insurance and Surety Corporation (Pioneer) filed a counter-bond for Vessel and SCI. For failing to file their respective answers and upon motion of Crescent, the trial court declared Vessel and SCI, Portserv and/or Transmar in default. Petitioner Crescent was allowed to present its evidence ex-parte. RTC rendered its decision in favor of Crescent. Vessel and SCI appealed to the CA. They attached copies of the charter parties between SCI Halla, Halla Transmar, and Transmar Portserv. It was pointed out that Portserv was a time charterer and that there is a clause in the time charters between SCI Halla, and Halla Transmar, which states that the Charterers shall provide and pay for all the fuel except as otherwise agreed. They submitted a copy of Part II of the Bunker Fuel Agreement between Crescent and Portserv containing a stipulation that New York law governs the construction, validity and performance of the contract. They likewise submitted certified copies of the Commercial Instruments and Maritime Lien Act of the United States, some US cases, and some Canadian cases to support their defense. CA reversed and set aside the decision of RTC. Case was dismissed for want of jurisdiction. MR was denied on the ground of forum non conveniens, considering that the parties are foreign corporations which are not doing business in the Philippines. Hence, this petition.7
Issues in the Petition for Resolution: 1. Philippine courts have jurisdiction over a foreign vessel found inside Philippine waters for the As security for the payment, Crescent received 2 checks. Thus, Crescent contracted enforcement of a maritime lien against said vessel and/or its owners and operators; with its supplier, Marine Petrobulk Limited (Marine Petrobulk), another Canadian 2. The principle of forum non conveniens is inapplicable to the instant case; 3. The trial court acquired jurisdiction over the subject matter of the instant case, as well as over the res corporation, for the physical delivery of the bunker fuels to the Vessel. Marine and over the persons of the parties; Petrobulk delivered the bunker fuels to the Vessel at the port of Pioneer Grain, 4. The enforcement of a maritime lien on the subject vessel is expressly granted by law. The Ship Vancouver, Canada. Marine Petrobulk was payed by Crescent via a check. Mortgage Acts as well as the Code of Commerce provides for relief to petitioner for its unpaid claim; 5. The arbitration clause in the contract was not rigid or inflexible but expressly allowed Crescent to Having paid Marine Petrobulk, Crescent issued a revised invoice to Portserv Limited, enforce its maritime lien in Philippine courts provided the vessel was in the Philippines; 6. The law of the state of New York is inapplicable to the present controversy as the same has not been and/or the Master, and/or Owners, and/or Operators, and/or Charterers of M/V Lok properly pleaded and proved; Maheshwari in the amount of US$103,544 with the instruction to remit the amount 7. Crescent has legal capacity to sue before Philippine courts as it is suing upon an isolated business on or before December 1, 1995. The period lapsed and several demands were made transaction; but no payment was received. Also, the checks issued to Crescent as security for the 8. Respondents were duly served summons although service of summons upon respondents is not a jurisdictional requirement, the action being a suit quasi in rem; payment were dishonored for insufficiency of funds. As a consequence, Crescent 9. The trial courts decision has factual and legal bases; and, ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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Cresents claim, taking the following into consideration: Issue: Whether Crescent is entitled to a maritime lien under Philippine Laws? NO. Held: This case is for the satisfaction of unpaid supplies furnished by a foreign supplier in a foreign port to a vessel of foreign registry that is owned, chartered and sub-chartered by foreign entities. Under BP 129, RTCs exercise exclusive original jurisdiction (i)n all actions in admiralty and maritime where the demand or claim exceeds P200,000 Two tests have been used to determine whether a case involving a contract comes within the admiralty and maritime jurisdiction of a court a. Locational test (English rule) Maritime and admiralty jurisdiction, with a few exceptions, is exercised only on contracts made upon the sea and to be executed thereon. b. Subject matter test (American rule) In determining whether a contract is maritime depends on the nature and subject matter of the contract, having reference to maritime service and transactions. In International Harvester Company of the Philippines v. Aragon, the court adopted the American rule and held that (w)hether or not a contract is maritime depends not on the place where the contract is made and is to be executed, making the locality the test, but on the subject matter of the contract, making the true criterion a maritime service or a maritime transaction. A contract for furnishing supplies like in this case is maritime and within the jurisdiction of admiralty. It may be invoked before the Philippine courts through an action in rem or quasi in rem or an action in personam. In the Philippines, any vessel, even though foreign, found in any port within its Archipelago, may be attached and sold under the substantive law which defines the right, and the procedural law contained in the Code of Commerce. But, where neither the law nor the contract between the parties creates any lien or charge upon the vessel, the only way in which it can be seized before judgment is by pursuing the remedy relating to attachment under Rule 59 (now Rule 57) of the Rules of Court. Crescent based its claim of a maritime lien on Sections 21, 22 and 23 of PD 1521, also known as the Ship Mortgage Decree of 1978.8 The court disagreed with 1. PD 1521 was enacted to accelerate the growth and development of the shipping industry and to extend the benefits accorded to overseas shipping under PD 214 to domestic shipping. Sections 21, 22 and 23 of PD 1521 are identical to Subsections P, Q, and R, respectively, of the U.S. Ship Mortgage Act of 1920, which is part of the Federal Maritime Lien Act. Hence, U.S. jurisprudence is relevant in determining whether PD 1521 can by applied in this case. In the US, the following tests are used to determine whether a maritime lien exists: a. Scotia Case: In a suit to establish and enforce a maritime lien for supplies furnished to a vessel in a foreign port, whether such lien exists, or whether the court has or will exercise jurisdiction, depends on the law of the country where the supplies were furnished, which must be pleaded and proved." b. Lauritzen-Romero-Rhoditis trilogy of cases replaced the law of the place of supply: i. Multiple-contact test: The following were considered to determine, in the absence of a specific Congressional directive as to the statutes reach, which jurisdictions law should be applied: 1) Place of the wrongful act; 2) Law of the flag; 3) Allegiance or domicile of the injured; 4) Allegiance of the defendant shipowner; 5) Place of contract; 6) Inaccessibility of foreign forum; and 7) Law of the forum. (Lauritzen v. Larsen Case) ii. The factors in the case of Lauritzen were applicable not only to personal injury claims arising under the Jones Act but to all matters arising under maritime law in general. (Romero v. International Terminal Operating Co.) iii. The application of the Lauritzen test is not a mechanical one the significance of one or more factors must be considered in light of the national interest served by the assertion of Jones Act jurisdiction. The list of 7 factors was not intended to be exhaustive. (Hellenic Lines, Ltd. v. Rhoditis) c. The factors provided in Restatement (Second) of Conflicts of Law: In the absence of an effective choice of law by the parties, the forum contacts to be considered include: a) Place of contracting; b) Place of negotiation of the contract; c) Place of performance;

10. The respondents should be held jointly and solidarily liable. PD 1521: Sec. 21. Maritime Lien for Necessaries; persons entitled to such lien. - Any person furnishing repairs, supplies, towage, use of dry dock or maritime 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.
8

vessel.
Sec. 23. Notice to Person Furnishing Repairs, Supplies and Necessaries. - The officers and agents of a vessel specified in Section 22 of this Decree shall be taken to include such officers and agents when Sec. 22. Persons Authorized to Procure Repairs, Supplies and Necessaries. - The following persons appointed by a charterer, by an owner pro hac vice, or by an agreed purchaser in possession of the shall be presumed to have authority from the owner to procure repairs, supplies, towage, use of dry vessel; but nothing in this Decree shall be construed to confer a lien when the furnisher knew, or by dock or marine railway, and other necessaries for the vessel: The managing owner, ships husband, exercise of reasonable diligence could have ascertained, that because of the terms of a charter party, master or any person to whom the management of the vessel at the port of supply is entrusted. No agreement for sale of the vessel, or for any other reason, the person ordering the repairs, supplies, or person tortuously or unlawfully in possession or charge of a vessel shall have authority to bind the other necessaries was without authority to bind the vessel therefor. ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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d) Location of the subject matter of the contract; and e) Domicile, residence, nationality, place of incorporation and place of business of the parties The initial choice of law determination is significantly affected by the statutory policies surrounding a maritime lien. (Gulf Trading and Transportation Co. v. The Vessel Hoegh Shield) 2. PD 1521 cannot apply and a maritime lien does not exist. a. Out of the 7 basic factors in the case of Lauritzen, Philippine law falls only under one the law of the forum. All other elements are foreign: i. Canada is the place of the wrongful act, of the allegiance or domicile of the injured and the place of contract; ii. India is the law of the flag and the allegiance of the defendant shipowner. b. Under Restatement (Second) of Conflict of Laws, PD 1521 is inapplicable. PD 1521 was enacted primarily to protect Filipino suppliers and was not intended to create a lien from a contract for supplies between foreign entities delivered in a foreign port. Applying PD 1521 and the rule that a maritime lien exists would not promote the public policy behind the laws enactment to develop the domestic shipping industry. Opening up the Philippine courts to foreign suppliers by granting them a maritime lien under Philippine laws even if they are not entitled to a maritime lien under their laws will encourage forum shopping. c. When the parties entered into a contract for supplies in Canada, they could not have intended the laws of a remote country like the Philippines to determine the creation of a lien by the mere accident of the Vessels being in Philippine territory. 3. Canada has the most significant interest in this dispute. a. Injured party (Crescent) Canadian corporation b. Sub-charterer (Portserv), which placed orders Canadian c. Entity (Marine Petrobulk), which physically delivered the bunker fuels in Canada d. Place of contracting and negotiation in Canada e. Supplies delivered in Canada. The arbitration clause contained in the Bunker Fuel Agreement, which states that New York law governs the construction, validity and performance of the contract, is only a factor that may be considered in the choice-of-law analysis. It is not conclusive. The lien that is the subject matter of this case arose by operation of law and not by contract because the shipowner was not a party to the contract under which the goods were supplied. Crescents contention: Even if foreign law applies, since the same was not properly pleaded and proved, such foreign law must be presumed to be the same as Philippine law pursuant to the doctrine of processual presumption. A party whose cause of action or defense depends upon a foreign law has the burden of proving the foreign law. Such foreign law is treated as a question of fact to be properly pleaded and proved. Crescents insistence on enforcing a
maritime lien before Philippine courts depended on the existence of a maritime lien under the proper law. By erroneously claiming a maritime lien under Philippine law instead of proving that a maritime lien exists under Canadian law, Crescent failed to establish a cause of action. Even if the court applies the doctrine of processual presumption, the result will still be the same. Under PD 1521, the following are the requisites for maritime liens on necessaries to exist: 1) The necessaries must have been furnished to and for the benefit of the vessel; 2) The necessaries must have been necessary for the continuation of the voyage of the vessel; 3) The credit must have been extended to the vessel; 4) There must be necessity for the extension of the credit; and 5) The necessaries must be ordered by persons authorized to contract on behalf of the vessel. These do not avail in the instant case based on the following: a. It was not established that benefit was extended to the vessel. It was sub-charterer Portserv, which placed the orders to Crescent. Hence, it is incumbent upon Crescent to prove that benefit was extended to the vessel. b. Crescent did not show any proof that the marine products were necessary for the continuation of the vessel. c. It was not established that credit was extended to the vessel. In this case, it was the sub-charterer Portserv, which requested for the delivery of the bunker fuels. The issuance of 2 checks in favor of Crescent prior to the delivery of the bunkers as security for the payment weakened Crescents contention that credit was extended to the Vessel. Also, when copies of the charter parties were submitted in the CA, the time charters between SCI Halla and Halla Transmar were shown to contain a clause, which states, The Charterers shall provide and pay for all the fuel except as otherwise agreed. This is a conclusive factor against Crescents position that Portserv is authorized by the shipowner to contract for supplies upon the credit of the vessel. d. There was no proof of necessity of credit. d. The necessaries were not ordered by persons authorized under PD 1521 to contract in behalf of the vessel (the managing owner, the ships husband, master or any person with whom the management of the vessel at the port of supply is entrusted). A time charter is a contract for the use of a vessel for a specified period of time or for the duration of one or more specified voyages wherein the owner of the time-chartered vessel retains possession and control through the master and crew who remain his employees. Not enjoying the presumption of authority, Crescent should have proved that Portserv was authorized by the shipowner to contract for supplies. A discussion on the principle of forum non conveniens is unnecessary. CA decision was affirmed, and the instant petition for review on certiorari was denied.
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10. EDI-STAFF BUILDERS INTERNATIONAL INC V. NLRC FACTS: Petitioner EDI-Staffbuilders International, Inc. (EDI) is a corporation engaged in recruitment and placement of Overseas Filipino Workers (OFWs). Expertise Search International (ESI) is another recruitment agency which collaborated with EDI to process the documentation and deployment of private respondent to Saudi Arabia. Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work for Omar Ahmed Ali Bin Bechr Est. (OAB), in Riyadh, Kingdom of Saudi Arabia. It appears that OAB asked EDI for curricula vitae of qualified applicants for the position of "Computer Specialist." In a facsimile transmission, OAB informed EDI that, from the applicants' curricula vitae submitted to it for evaluation, it selected Gran for the position of "Computer Specialist." The faxed letter also stated that if Gran agrees to the terms and conditions of employment contained in it, one of which was a monthly salary of SR (Saudi Riyal) 2,250.00 (USD 600.00), EDI may arrange for Gran's immediate dispatch. After accepting OAB's offer of employment, Gran signed an employment contract that granted him a monthly salary of USD 850.00 for a period of two years. Gran was then deployed to Riyadh, Kingdom of Saudi Arabia on February 7, 1994. Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salaryhis employment contract stated USD 850.00; while his Philippine Overseas Employment Agency (POEA) Information Sheet indicated USD 600.00 only. However, through the assistance of the EDI office in Riyadh, OAB agreed to pay Gran USD 850.00 a month. After Gran had been working for about five months for OAB, his employment was terminated on the following grounds: 1. Non-compliance to contract requirements by the recruitment agency primarily on your salary and contract duration. 2. Non-compliance to pre-qualification requirements by the recruitment agency 3. Insubordination or disobedience to Top Management Order and/or instructions (non-submittal of daily activity reports despite several instructions). On July 11, 1994, Gran received from OAB the total amount of SR 2,948.00 representing his final pay, and on the same day, he executed a Declaration releasing OAB from any financial obligation or otherwise, towards him. After his arrival in the Philippines, Gran instituted a complaint against ESI/EDI, OAB, Country Bankers Insurance Corporation, and Western Guaranty Corporation with the NLRC, National Capital Region, Quezon City for underpayment of wages/salaries and illegal dismissal.
The Labor Arbiter ruled that there was neither underpayment nor illegal dismissal. The NLRC, however, reversed the Labor Arbiter's Decision. ISSUE: WHETHER PETITIONER EDI HAS ESTABLISHED BY WAY OF SUBSTANTIAL EVIDENCE THAT GRAN'S TERMINATION WAS JUSTIFIABLE BY REASON OF INCOMPETENCE. COROLLARY HERETO, WHETHER THE PRIETO VS. NLRC RULING, AS APPLIED BY THE COURT OF APPEALS, IS APPLICABLE IN THE INSTANT CASE. HELD: In cases involving OFWs, the rights and obligations among and between the OFW, the local recruiter/agent, and the foreign employer/principal are governed by the employment contract. A contract freely entered into is considered law between the parties; and hence, should be respected. In formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. In the present case, the employment contract signed by Gran specifically states that Saudi Labor Laws will govern matters not provided for in the contract (e.g. specific causes for termination, termination procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor Laws should govern all matters relating to the termination of the employment of Gran. In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving the foreign law. The foreign law is treated as a question of fact to be properly pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. He is presumed to know only domestic or forum law. Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus, the International Law doctrine of presumed-identity approach or processual presumption comes into play. Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours. Thus, we apply Philippine labor laws in determining the issues presented before us. In illegal dismissal cases, it has been established by Philippine law and jurisprudence that the employer should prove that the dismissal of employees or personnel is legal and just. Section 33 of Article 277 of the Labor Code states that: ART. 277. MISCELLANEOUS PROVISIONS3 (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.
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Any decision taken by the employer shall be without prejudice to the right of the workers to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. x x x In many cases, it has been held that in termination disputes or illegal dismissal cases, the employer has the burden of proving that the dismissal is for just and valid causes; and failure to do so would necessarily mean that the dismissal was not justified and therefore illegal. Taking into account the character of the charges and the penalty meted to an employee, the employer is bound to adduce clear, accurate, consistent, and convincing evidence to prove that the dismissal is valid and legal. This is consistent with the principle of security of tenure as guaranteed by the Constitution and reinforced by Article 277 (b) of the Labor Code of the Philippines. In the instant case, petitioner claims that private respondent Gran was validly dismissed for just cause, due to incompetence and insubordination or disobedience. To prove its allegations, EDI submitted two letters as evidence. The first is the July 9, 1994 termination letter, addressed to Gran, from Andrea E. Nicolaou, Managing Director of OAB. The second is an unsigned April 11, 1995 letter from OAB addressed to EDI and ESI, which outlined the reasons why OAB had terminated Gran's employment. Petitioner claims that Gran was incompetent for the Computer Specialist position because he had "insufficient knowledge in programming and zero knowledge of [the] ACAD system." Petitioner also claims that Gran was justifiably dismissed due to insubordination or disobedience because he continually failed to submit the required "Daily Activity Reports." However, other than the abovementioned letters, no other evidence was presented to show how and why Gran was considered incompetent, insubordinate, or disobedient. Petitioner EDI had clearly failed to overcome the burden of proving that Gran was validly dismissed. Petitioner's imputation of incompetence on private respondent due to his "insufficient knowledge in programming and zero knowledge of the ACAD system" based only on the above mentioned letters, without any other evidence, cannot be given credence. An allegation of incompetence should have a factual foundation. Incompetence may be shown by weighing it against a standard, benchmark, or criterion. However, EDI failed to establish any such bases to show how petitioner found Gran incompetent. In addition, the elements that must concur for the charge of insubordination or willful disobedience to prosper were not present. In Micro Sales Operation Network v. NLRC, we held that: For willful disobedience to be a valid cause for dismissal, the following twin elements must concur: (1) the employee's assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.
EDI failed to discharge the burden of proving Gran's insubordination or willful disobedience. As indicated by the second requirement provided for in Micro Sales Operation Network, in order to justify willful disobedience, we must determine whether the order violated by the employee is reasonable, lawful, made known to the employee, and pertains to the duties which he had been engaged to discharge. In the case at bar, petitioner failed to show that the order of the company which was violatedthe submission of "Daily Activity Reports"was part of Gran's duties as a Computer Specialist. Before the Labor Arbiter, EDI should have provided a copy of the company policy, Gran's job description, or any other document that would show that the "Daily Activity Reports" were required for submission by the employees, more particularly by a Computer Specialist. Even though EDI and/or ESI were merely the local employment or recruitment agencies and not the foreign employer, they should have adduced additional evidence to convincingly show that Gran's employment was validly and legally terminated. The burden devolves not only upon the foreign-based employer but also on the employment or recruitment agency for the latter is not only an agent of the former, but is also solidarily liable with the foreign principal for any claims or liabilities arising from the dismissal of the worker. Thus, petitioner failed to prove that Gran was justifiably dismissed due to incompetence, insubordination, or willful disobedience. Petitioner also raised the issue that Prieto v. NLRC, as used by the CA in its Decision, is not applicable to the present case. In Prieto, this Court ruled that "[i]t is presumed that before their deployment, the petitioners were subjected to trade tests required by law to be conducted by the recruiting agency to insure employment of only technically qualified workers for the foreign principal." The CA, using the ruling in the said case, ruled that Gran must have passed the test; otherwise, he would not have been hired. Therefore, EDI was at fault when it deployed Gran who was allegedly "incompetent" for the job. According to petitioner, the Prieto ruling is not applicable because in the case at hand, Gran misrepresented himself in his curriculum vitae as a Computer Specialist; thus, he was not qualified for the job for which he was hired. We disagree. The CA is correct in applying Prieto. The purpose of the required trade test is to weed out incompetent applicants from the pool of available workers. It is supposed to reveal applicants with false educational backgrounds, and expose bogus qualifications. Since EDI deployed Gran to Riyadh, it can be presumed that Gran had passed the required trade test and that Gran is qualified for the job. Even if there was no objective trade test done by EDI, it was still EDI's responsibility to subject Gran to a trade test; and its failure to do so only weakened its position but should not in any way prejudice Gran. In any case, the issue is rendered moot and academic because Gran's incompetency is unproved. 11. DACANAY V. FLORENDO
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Facts: A joint and reciprocal will was executed by the spouses Isabel Florendo and Tirso Dacanay in 1940. After the death of Isabel, Tirso now seek to probate said will in CFI La Union, with the will providing in substance that whoever of the spouses, joint testators, shall survive the other, shall inherit all the properties of the latter, with an agreement as to how the surviving spouse shall dispose of the properties in case of his or her demise. The relatives of the deceased Isabel opposed the probate of said will on the ground that it is null and void for being in violation of Art. 669 of the Civil Code: "Two or more persons cannot make a will conjointly or in the same instrument, either for their reciprocal benefit or for the benefit of a third person." The court ruled on the dismissal of the probate, hence this appeal with Tirso contending that Art. 669 has been repealed by Act No. 190 (Code of Civil Procedure) which he claims provides for and regulates the extrinsic formalities of wills, and making the issue on whether two wills should be executed conjointly or separately a mere extrinsic formality. Issue: W/N Art. 669 of the Civil Code was repealed by Act No. 190 (Code of CivPro). Held: NO. The Supreme Court applied its ruling in In re: Will of Bilbao, wherein several articles of the Civil Code regarding wills have not only been referred to but have also been applied side by side with the provisions of the Code of Civil Procedure. The provision of article 669 is not unwise and is not against public policy. The reason for this is that when a will is made jointly or in the same instrument, the spouse who is more aggressive, stronger in will or character and dominant is liable to dictate the terms of the will for his or her own benefit or for that of third persons whom he or she desires to favor. And, where the will is not only joint but reciprocal, either one of the spouses who may happen to be unscrupulous, wicked, faithless or desperate, knowing as he or she does the terms of the will whereby the whole property of the spouses both conjugal and paraphernal goes to the survivor, may be tempted to kill or dispose of the other. Considering the wisdom of the provisions of this article 669 and the fact that it has not been repealed, at least not expressly, as well as the consideration that its provisions are not incompatible with those of the Code of Civil Procedure on the subject of wills, said article 669 of the Civil Code is still in force. Lastly, this article 669 has been reproduced word for word in article 818 of the New CivilCode (Republic Act No. 386, enacted 1949). The implication is that the Philippine Legislature that passed this Act and approved the NewCivil Code, including the members of the Code Commission who prepared it, are of the opinion that the provisions of article 669 of the old Civil Code are not incompatible with those of the Code of Civil Procedure. 12. YAO KEE V. SY-GONZALES Facts: Sy Kiat, a Chinese national, died in 1977 in Caloocan City where he was then residing, leaving behind real and personal properties here in the Philippines worth P300,000.00 more or less.
Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo Sy filed a petition for the grant of letters of administration in CFI of Caloocan. They alleged among others that (a) they are the children of the deceased with Asuncion Gillego; (b) to their knowledge Sy Kiat died intestate; (c) they do not recognize Sy Kiat's marriage to Yao Kee nor the filiation of her children to him; and, (d) they nominate Aida SyGonzales for appointment as administratrix of the intestate estate of the deceased. The petition was opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy Yun Chen who alleged that: (a) Yao Kee is the lawful wife of Sy Kiat whom he married in 1931 in China; (b) the other oppositors are the legitimate children of the deceased with Yao Kee; and, (c) Sze Sook Wah is the eldest among them and is competent, willing and desirous to become the administratrix of the estate of Sy Kiat. CFI: Sy Kiat legally married to Yao Kee CA: marriage to Yao Kee not proven Issue: WON the marriage of Sy Kiat and Yao Kee was proven (NO) Held: Philippine courts cannot take judicial notice of foreign laws. They must be alleged and proved as any other fact. To support the case of Yao Kee, the following pieces of evidence were presented: 1) Yao Kees testimony that she was married to Sy Kiat in 1931 in Fookien, China; that she does not have a marriage certificate because the practice during that time was for elders to agree upon the betrothal of their children, and in her case, her elder brother was the one who contracted or entered into [an] agreement with the parents of her husband; that she and Sy Kiat, have been living in FooKien, China before he went to the Philippines on several occasions; that the practice during the time of her marriage was a written document is exchanged between the parents of the bride and the parents of the groom, or any elder for that matter; that in China, the custom is that there is a go- between, a sort of marriage broker who is known to both parties who would talk to the parents of the bride-to-be; that if the parents of the bride-to-be agree to have the groom-to-be their son in-law, then they agree on a date as an engagement day; that during the wedding the document would be signed by the parties but there is no solemnizing officer as is known in the Philippines; that during the wedding day, the document is signed only by the parents of the bridegroom as well as by the parents of the bride; that the parties themselves do not sign the document; that during her wedding, Sy Chick, the eldest brother of Sy Kiat, signed the document with her mother; that as to the whereabouts of that document, she and Sy Kiat were married for 46years already and the document was left in China and she doubt if that document can still be found now; that it was left in the possession of Sy Kiat's family; that right now, she does not know the whereabouts of that document because of the lapse of many years and because they left it in a certain place and it was already eaten by the termites; that after her wedding with Sy Kiat, they lived immediately together as husband and wife, and from then on, they lived together; that Sy Kiat went to the Philippines sometime in March or April in the same year they were married; that she went to the Philippines in 1970, and then came back to China; that again she went back to the Philippines and lived with Sy Kiat as husband and
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wife; that she begot her children with Sy Kiat during the several trips by Sy Kiat made back to China. 2) the statement of the younger brother of Yao Kee that he was present at the wedding and that no marriage certificate is issued by the Chinese govt, a document signed by the parents being sufficient. 3) Asuncion Gillegos testimony that Sy Kiat admitted to her that he has a Chinese wife whom he married according to Chinese custom 4) Sy Kiats Master Card of Registered Alien, which states that he was married in China to Yao Kee 5) certification issued by the Embassy of the Peoples Republic of China that Sy Kiat and Yao Kee were married in China. At most, these evidence prove the fact of marriage between Yao Kee and Sy Kiat. But it is not sufficient to establish the validity of the marriage in accordance with Chinese law or custom. To establish a valid foreign marriage, two things must be proven: (1) the existence of the foreign law as a question of fact and (2) the alleged foreign marriage by convincing evidence. The petitioners did not present any competent evidence relative to the law and custom of China on marriage. Accordingly, in the absence of proof of the Chinese law on marriage, it should be presumed that it is the same as ours. Since Yao Kee admitted in her testimony that there was no solemnizing officer as is known in the Philippines when her alleged marriage to Sy Kiat was celebrated, it follows that her marriage to Sy Kiat, even if true, cannot be recognized in this jurisdiction. Status of children: children with Yao Kee and Gillego are acknowledged natural children 13. BANK OF AMERICA V. AMERICAN REALTY CORPORATION Facts: Bank of America NT & SA (BANTSA) is an international banking institution duly licensed to do business in the Philippines, organized under the laws of the State of California. American Realty (ARC) is a domestic corporation. Bank of America International Limited (BAIL) is a limited liability company organized and existing under the laws of England. BANTSA and BAIL granted three multimillion USD loans to 1. Liberian Transport 2. El Challenger and 3. Eshley Compania (herein referred to as borrowers). All are existing under the laws of Panama, and are foreign affiliates of ARC. BANTSA and the borrowers signed restructuring agreements due to the default. As additional security, ARC, as 3rd party mortgagor, executed 2 real estate mortgages over land parcels in San Jose Del Monte, Bulacan. Eventually, the borrowers defaulted in the restructured loans, prompting BANTSA to file civil actions before foreign courts for the collection, in the following courts:
In England, against Liberian Transport, Eshley Compania, El Challenger, Espriona Shipping, Eddie Navigation, Eduardo Katipunan Litonjua and Aurelio Katipunan Litonjua in 1992 b. In England, against El Challenger, Espriona Shipping, Eduardo & Aurelio Litonjua c. In Hongkong, SC of HKG High Court, against same parties as A d. In Hongkong, SC of HKG High Court, against Eshley, El Challenger, Espriona Shipping, Pacific Navigator, Eddie Navigation Corporation, Litonjua Chartering, Eduardo Katipunan Bottom line: 2 cases in England, 2 cases in Hongkong In the cases before foreign courts, ARC as the 3rd party mortgagor wasnt impleaded as party-defendant. Also in 1992, BANTSA filed an application for extrajudicial foreclosure of real estate mortgage before the Office of the Provincial Sheriff of Bulacan. After publication and due notice, the mortgaged real properties were sold, with Integrated Credit & Corporation Services (ICCS) as the highest bidder for 24m. ARC then filed before the Pasig RTC an action for damages for BANTSAs act of extrajudicially foreclosing the mortgages despite the pendency of civil suits before foreign courts for the collection of the principal loan. BANTSA alleged that the rule prohibiting the mortgagee from foreclosing the mortgage after an ordinary suit for collection has been filed is not applicable here, because: 1) ARC is a 3rd party mortgagor and not a party in the principal restructuring agreements, and not made as a defendant in HKG and England 2) There is no civil suit for sum of money filed in the Philippines since they were filed in HKG and England, so such decisions which may be rendered are not enforceable unless there is a separate action and 3) Under English Law, which is the governing law under the principal agreements, the mortgagee does not lose its security interest by filing civil actions for sums of money. ARC filed a motion for suspension of the redemption period because it cannot exercise the right without waiving its contentions in the case that the foreclosure of the mortgage on its properties is legally improper and therefore invalid. RTC granted the motion for suspension. RD of Meycauyan received the order. After a month, ICCS consolidated its ownership over the real properties, resulting in the issuance of TCT in its name. ICCS then sold them to Stateland Investment Corporation for 39m, and TCTs were issued to its name. The Pasig RTC rendered a decision in favor of ARC. CA affirmed. Issue: W/N BANTSAs act of filing a collection suit against the principal debtors for the recovery of the loan before the foreign courts constituted a waiver of the remedy of foreclosure Held: SC does not agree with BANTSA that there are two requisites (ordinary civil action for collection filed, and subsequently a final judgment be correspondingly rendered) and that absent such, he mortgagee-creditor is deemed not to have waived the remedy. SC upholds Bachrach, that in the absence of express statutory provisions, a mortgage creditor may institute against the debtor either a personal action for debt, or
a.
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a real action to foreclose the mortgage. In other words, he may pursue either but not both. In our jurisdiction, the remedies are alternative and not cumulative. ARC constited real estate mortgages, and it subjected itself to the liabilities of a 3rd party mortgagor. The mere act of filing an ordinary action for collection operates as a waiver of the mortgagee-creditors remedy to foreclose the mortgage. BANTSA is deemed to have elected a remedy, as a result of which a waiver of the other necessarily must arise. No final judgment in the collection suit is required for the rule on waiver to apply. BANTSA alleged that under English Law, the mortgagee doesnt lose its security interest by simply filing civil actions for sums of money. This is untenable. Philippine law should apply. There is no judicial notice of any foreign law. Any foreign law must be properly pleaded and proved as a fact. When the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied. Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. The public policy sought to be protected is the principle embedded in our jurisdiction proscribing the splitting up of a single cause of action. Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws. 2nd issue: ARC is entitled to the actual and compensatory damages, because it was a violation of ARCs rights as 3rd party mortgagor. 14. SALVACION V. CENTRAL BANK Facts: On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February 7, 1989 and was able to rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account China Banking Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the complainant. Basically, Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious illegal detention against Karen Salvacion. Police recovered from him several dollar checks and a dollar account in the China Banking Corp. He was, however, able to escape from prison. In a civil case filed against him, the trial court awarded Salvacion moral, exemplary and attorneys fees amounting to almost P1,000,000.00.
Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but the latter refused arguing that Section 11 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Salvacion therefore filed this action for declaratory relief in the Supreme Court. Issue: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as amended by PD 1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient? Held: The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of Republic Act No. 6426, are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are hereby required to comply with the writ of execution issued in the civil case and to release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the judgment. If Karen's sad fate had happened to anybody's own kin, it would be difficult for him to fathom how the incentive for foreign currency deposit could be more important than his child's rights to said award of damages; in this case, the victim's claim for damages from this alien who had the gall to wrong a child of tender years of a country where he is a mere visitor. This further illustrates the flaw in the questioned provisions. It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country's economy was in a shambles; when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But the realities of the present times show that the country has recovered economically; and even if not, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us. It has thus been said that But I also know, 5 that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths are disclosed and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times. . . We might as well require a man to wear still the coat which fitted him when a boy, as civilized society to remain ever under the regimen of their barbarous ancestors. In his Comment, the Solicitor General correctly opined, thus: The present petition has far-reaching implications on the right of a national to obtain redress for a wrong committed by an alien who takes refuge under a law and regulation promulgated for a purpose which does not contemplate the application thereof envisaged by the alien. More specifically, the petition raises the question whether the protection against attachment, garnishment or other court process accorded to foreign currency deposits by PD No. 1246 and CB Circular No. 960 applies when the deposit does not
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come from a lender or investor but from a mere transient or tourist who is not expected to maintain the deposit in the bank for long. The resolution of this question is important for the protection of nationals who are victimized in the forum by foreigners who are merely passing through. xxx xxx xxx . . . Respondents China Banking Corporation and Central Bank of the Philippines refused to honor the writ of execution issued in Civil Case No. 89-3214 on the strength of the following provision of Central Bank Circular No. 960: Sec. 113. Exemption from attachment. Foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No. 6426: Sec. 7. Rules and Regulations. The Monetary Board of the Central Bank shall promulgate such rules and regulations as may be necessary to carry out the provisions of this Act which shall take effect after the publication of such rules and regulations in the Official Gazette and in a newspaper of national circulation for at least once a week for three consecutive weeks. In case the Central Bank promulgates new rules and regulations decreasing the rights of depositors, the rules and regulations at the time the deposit was made shall govern. The aforecited Section 113 was copied from Section 8 of Republic Act NO. 6426, as amended by P.D. 1246, thus: Sec. 8. Secrecy of Foreign Currency Deposits. All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative or any other entity whether public or private: Provided, however, that said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and her parents fully deserve. It then proceeded to show that the economic basis for the enactment of RA No. 6426 is not anymore present; and even if it still exists, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us. The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign Currency Deposit System were designed to draw
deposits from foreign lenders and investors and, subsequently, to give the latter protection. However, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few days in the country and, therefore, will maintain his deposit in the bank only for a short time. Considering that Bartelli is just a tourist or a transient, he is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246 against attachment, garnishment or other court processes. Further, the SC said: In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that in case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent. Call it what it may but is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory judgment of the lower court against the Central Bank Circular protecting the foreign depositor? Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a national and victim of a crime? This situation calls for fairness against legal tyranny. We definitely cannot have both ways and rest in the belief that we have served the ends of justice.
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NATURE OF CONFLICTS RULE, THE PROBLEM OF CHARACTERIZATION, AND RENVOI

1. IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN Facts: Edward E. Christensen executed a will in Manila on March 5, 1951. He stated therein that he has one child, Mary Lucy Christensen (now Mrs. Bernard Daney), a Filipino citizen but a resident of Los Angeles and that he had no other living no ascendants and no descendants. To her, he devised and bequethed all the income from the rest, remainder, and residue of my property and estate, real, personal and/or mixed, of whatsoever kind or character, and wheresoever situated. He also stipulated the he was devising and bequething to Maria Helen Christensen the sum of P3,600 and paid to her in monthly increments of P100. Thus, the executor in accordance with these provisions finalized the account and project of partition and ratified the payment of only P3,600 to Maria Helen as well as proposed that the residue of the estate be transferred to Maria Lucy. Maria Helen opposed the approval of the project of partition as it deprives her of her legitime as an acknowledged natural child, she having been declared the court in as such in a previous case. The legal grounds of opposition are (a) that the distribution should be governed by the laws of the Philippines, and (b) that said order of distribution is contrary to law as it denies her one-half of the estate. Furthermore, she alleged that the law that should govern Edward's estate should not be the internal law of California alone, but the entire law thereof because several foreign elements are involved. she alleged further that the forum is the Philippines and even if the case were decided in California, Section 946 of the California Civil Code, requires that the domicile of the decedent should apply. The court below ruled that as Edward was a citizen of the United States and of the State of California at the time of his death. It follows then that the successional rights and intrinsic validity of the provisions in his will are to be governed by California law. Therefore, it held that he had the right to dispose of his property in the way he desires because the right of absolute dominion over his property is sacred and inviolable. Issue: Whether or not under Renvoi Doctrine the intrinsic validity of the testamentary disposition of the distribution should be governed by the Philippine Laws? Held: There is no question that Edward was a citizen of the United States and of the State of California at the time of his death and there is also no question that at the time of his death he was domiciled in the Philippines. Hence, the law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows: ART. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found. The court held that the application of the aforementioned in the case at bar requires the determination of the meaning of the term "national law" as used therein. The court noted that there is no single American law governing the validity of testamentary provisions in the US since each state has its own private law applicable to its citizens only and in force only within the state. The "national law" indicated in Article 16 of the Civil Code cannot, therefore, possibly mean or apply to any general American law. it refers then to the private law of the State of California. Thus, the crux of the matter is if the California state law applies in the case at bar? In answering the question the court applied the theory of doctrine of renvoi. It first stated that the problem behind the theory of doctrine has bee encapsulated by authorities in the statement; "When the Conflict of Laws rule of the forum refers a jural matter to a foreign law for decision, is the reference to the purely internal rules of law of the foreign system; i.e., to the totality of the foreign law minus its Conflict of Laws rules?" The court also discussed two types of renvoi. One type of renvoi is where a jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.' Thus, after a decision has been arrived that a foreign law is to be resorted to as governing a particular case, the further question may arise: Are the rules as to the conflict of laws contained in such foreign law also to be resorted to? This is a question which, while it has been considered by the courts in but a few instances, has been the subject of frequent discussion by textwriters and essayists. The doctrine involved has been descriptively designated as the "Renvoyer" to send back, or the "Ruchversweisung", or the "Weiterverweisung." If an affirmative answer to the question postulated above and the operation of the adoption of the foreign law in toto would in many cases result in returning the main controversy to be decided according to the law of the forum. The second theory is known as the "doctrine of renvoi." The doctrine postulates that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. The doctrine of the renvoi has generally been repudiated by the American authorities. The recognition of this renvoi theory implies that the rules of the conflict of laws are to be understood as incorporating not only the ordinary or internal law of the foreign state or country, but its rules of the conflict of laws as well. According to this theory 'the law of a country' means the whole of its law. The court in explaining the doctrine cited Von Bar theses. (He presented it in meeting of the Institute of International Law, at Neuchatel, in 1900 just in case he asks.) (1) Every court shall observe the law of its country as regards the application of foreign laws.
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(2) Provided that no express provision to the contrary exists, the court shall respect: (a) The provisions of a foreign law which disclaims the right to bind its nationals abroad as regards their personal statute, and desires that said personal statute shall be determined by the law of the domicile, or even by the law of the place where the act in question occurred. (b) The decision of two or more foreign systems of law, provided it be certain that one of them is necessarily competent, which agree in attributing the determination of a question to the same system of law. The Court noted that Article 946 of the California Civil Code is its conflict of laws rule, while the rule invoked by Maria Helena is an internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the internal law should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The rule laid down of resorting to the law of the domicile in the determination of matters with foreign element involved is in accord with the general principle of American law that the domiciliary law should govern in most matters or rights which follow the person of the owner. In the case at bar, the estate of Edward through its executor argues that what Article 16 of the Civil Code of the Philippines pointed out as the national law is the internal law of California. However, the laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Reason then demands that the California internal law should be enforced as it is prescribed for its citizens residing therein, and enforce the conflict of laws rules for the citizens domiciled abroad. If the court then must enforce the law of California as in comity we are bound to go, as so declared in Article 16 of the Philippine Civil Code, then we must enforce the law of California in accordance with the express mandate thereof and as above explained, i.e., apply the internal law for residents therein, and its conflict-oflaws rule for those domiciled abroad. It is further argued by the executor that that the clause "if there is no law to the contrary in the place where the property is situated" in Sec. 946 of the California Civil Code refers to Article 16 of the Civil Code of the Philippines and that the law to the contrary in the Philippines is the provision in said Article 16 that the national law of the deceased should govern. The court held that this contention cannot be sustained. The national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e. Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, the Philippines in the case at bar. The court of the domicile cannot and should not refer the case back to California; such action would leave the issue incapable of determination because the case will then be like a football, tossed back and forth between the two states, between the country of which the decedent was a citizen and the country of his domicile. The Philippine court must apply its own law as directed in the conflict of laws rule of the state of the decedent, if the question has to be decided, especially as the application of the
internal law of California provides no legitime for children while the Philippine law, Arts. 887(4) and 894, Civil Code of the Philippines, makes natural children legally acknowledged forced heirs of the parent recognizing them. Therefore, the court found that the domicile of Edward although, a citizen of California, is the Philippines. Hence, the validity of the provisions of his will depriving his acknowledged natural child Maria Helen should be governed by Philippine Law pursuant to Art. 946 of the Civil Code of California, not by the internal law of California. The appealed decision is reversed and the case is returned to the lower court so that the partition can be made pursuant to Philippine law on succession. 2. AZNAR V. CHRISTENSEN-GARCIA Facts: Edward Christensen, born in New York, migrated to California where he resided and consequently was considered citizen thereof. He came to the Philippines where he became a domiciliary until the time of his death. However, during the entire period of his residence in this country, he had always considered himself a citizen of California. In his will, Edward instituted his daughter Maria Lucy Christensen as his only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia who, in his will was described as "not in any way related to" him but in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Helen alleged that the will deprives her of her legitime as an acknowledged natural child. She claims that under Art. 16 of the Civil Code, the California law should be applied, and the question of the validity of the testamentary provision should thus be referred back to the law of the decedents domicile, which is the Philippines. She invokes the provisions of Article 946 of the Civil Code of California, which is as follows: If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile. Accordingly, her share must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, the executor and Lucy argue that the national law of the deceased must apply, and thus the courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator may dispose of his property by will in the form and manner he desires (Kaufman Case). Issue: W/N Philippine law should ultimately be applied? YES Held: Edward was a US Citizen and domiciled in the Philippines at the time of his death. The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows: ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.
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However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found. The laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied in Kaufman, is its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited in Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, which is the Philippines in the case at bar. The Philippine court therefore must apply its own law as directed in the conflict of laws rule of the state of the decedent. WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. RENVOI DOCTRINE A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.' Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the doctrine of renvoi is that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. Residence Requires bodily presence inhabitant in a given place 3. BELLIS V. BELLIS FACTS: Amos Bellis was a citizen and resident of Texas at the time of his death. He executed a will in the Philippines, in which he directed that after all taxes, obligations, of an Domicile Requires bodily presence in that place and also an intention to make it ones domicle
and expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner a) $240,000.00 to his first wife Mary Mallen b) $120,000.00 to his three illegitimate children Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis,or $40,000.00 each, and c) After foregoing the two items have been satisfied, the remainder shall go to his seven surviving children by his first and second wives. Maria Cristina Bellis and Miriam Palma Bellis, filed their respective oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased. The lower court issued an order overruling the oppositions and approving the executors final account, report and administration, and project of partition. Relying upon Article 16 of the Civil Code, it applied the national law of the decedent, which in this case is which did not provide for legitimes. ISSUE: Whether or not such illegitimate children of Bellis be entitled to successional rights? HELD: The said illegitimate children are not entitled to their legitimes. Under Texas law, there are no legitimes. Even if the other will was executed in the Philippines, his national law, still, will govern the properties for succession even if it is stated in his testate that it shall be governed by the Philippine law. Article 16, Paragraph 2 of Civil code render applicable the national law of the decedent, in intestate and testamentary successions, with regard to four items: (a) the order of succession, (b) the amount of successional rights, (c) the intrinsic validity of provisions of will, and (d) the capacity to succeed. ART.16 Real property as well as personal property is subject to the law of the country to where it is situated.However, intestate and testamentary successions, both with respect to the order of successions and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. 4. LLORENTE V. CA Facts: Llorente was an enlisted serviceman of the United States Navy. During his term of duty, Lorenzo and Paula Llorente were married before a parish priest, Roman Catholic Church, in Camarines Sur. Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the conjugal home in Camarines Sur. Afterwards, Lorenzo was naturalized as an American Citizen. Upon the end of the World War II, Lorenzo was granted an accrued leave by the US Navy, to visit his wife and he visited the Philippines. He discovered that his wife Paula was pregnant and was living in and having an adulterous relationship with his brother, Ceferino Llorente. Paula gave birth to a boy registered as Crisologo Llorente, with the birth
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certificate stating that the child was not legitimate and the line for the fathers name was left blank. Lorenzo refused to forgive Paula and live with her. In fact, the couple drew a written agreement to the effect that (1) all the family allowances allotted by the United States Navy as part of Lorenzos salary and all other obligations for Paulas daily maintenance and support would be suspended; (2) they would dissolve their marital union in accordance with judicial proceedings; (3) they would make a separate agreement regarding their conjugal property acquired during their marital life; and (4) Lorenzo would not prosecute Paula for her adulterous act since she voluntarily admitted her fault and agreed to separate from Lorenzo peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paulas father and stepmother. The agreement was notarized. Lorenzo returned to the US and filed for divorce with the Superior Court of the State of California and was issued an interlocutory judgment of divorce. The divorce decree became final afterwards. Lorenzo returned to the Philippines and married Alicia Llorente in Manila. Apparently, Alicia had no knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage or cohabitation. Lorenzo and Alicia lived together as husband and wife. Their 25 year union produced three children, Raul, Luz and Beverly, all surnamed Llorente. Lorenzo executed a Last Will and Testament. In the will, Lorenzo bequeathed all his property to Alicia and their three children. Lorenzo filed with the RTC Camarines Sur, a petition for the probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special Administratrix of his estate. RTC admitted the will to probate. Before the proceedings could be terminated, Lorenzo died. Paula filed with the same court a petition for letters of administration over Lorenzos estate in her favor. Paula contended (1) that she was Lorenzos surviving spouse, (2) that the various property were acquired during their marriage, (3) that Lorenzos will disposed of all his property in favor of Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal property. Alicia filed in the testate proceeding a petition for the issuance of letters testamentary. RTC gave due course to Paula's petition. RTC held that the divorce decree was and void and inapplicable in the Philippines and therefore the second marriage with Alicia was also void. CA affirmed RTC's decision. Issues: Whether Lorenzos first marriage has been validly dissolved through a divorce decree, which capacitated him to remarry Alicia. Held: YES. The fact that Lorenzo became an American citizen long before and at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, is duly established, admitted and undisputed. Thus, as a rule, issues arising from these incidents are necessarily governed by foreign law. True, 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. While the substance of the foreign law was pleaded, the CA did not admit the foreign law. The CA and the RTC called to the fore the renvoi doctrine, where the case was referred back to the law of the decedents domicile, in this case, Philippine law. While the trial court stated that the law of New York was not sufficiently proven, in the same breath it made the categorical, albeit equally unproven statement that American law follows the domiciliary theory hence, Philippine law applies when determining the validity of Lorenzos will. First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the US. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent was a resident. Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. The hasty application of Philippine law and the complete disregard of the will, already probated as duly executed in accordance with the formalities of Philippine law, is fatal, especially in light of the factual and legal circumstances here obtaining. Owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. However, aliens may obtain divorces abroad, provided they are valid according to their national law. Once proven that the person who initiated the divorce was no longer a Filipino citizen when he obtained the divorce from his spouse, the spouse will lose her right to inherit from him. Divorce and its legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status of persons. The divorce obtained by Lorenzo from his first wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the decedent) are matters best left to the determination of the trial court. The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the will he executed. Since he was a foreigner, he is not covered by our laws on family rights and duties, status, condition and legal capacity. Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law which must be pleaded and proved. Whether the will was
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executed in accordance with the formalities required is answered by referring to Philippine law. In fact, the will was duly probated. 5. SAUDI ARABIAN AIRLINES V. CA FACTS: On January 1988 defendant SAUDIA hired plaintiff (herein private respondent) Milagros P. Morada as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. On April 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer AlGazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in the room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice. When plaintiff returned to Jeddah a few days later, SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff to Manila. On January 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah. One year and a half later or on June 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIAs Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight and took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders. On July 3, 1993, a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights. Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause. On November 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi (Al-Balawi), its country manager. On January 1994, SAUDIA filed an Omnibus Motion To Dismiss which raised the following grounds, to wit: (1) that the Complaint states no cause of action against SAUDIA; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case. The trial court issued an Order dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by SAUDIA. From the Order of respondent Judge denying the Motion to Dismiss, SAUDIA filed on September 1994, its Motion for Reconsideration of the Order. It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 1994, Morada filed her Opposition. In the Reply filed with the trial court, SAUDIA alleged that since its MR raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if
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that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the same. Respondent Judge denied SAUDIAs Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows: Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus attorneys fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED. Consequently, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or TRO with the CA. Respondent CA promulgated a Resolution with Temporary Restraining Order, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim. In another Resolution, now assailed, the CA denied SAUDIAs Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit: On October 1995, SAUDIA filed with the SC the instant Petition for Review with Prayer for TRO. However, during the pendency of the instant Petition, respondent CA rendered the Decision, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaints basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal. On May 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for TRO, given due course by this Court. After both parties submitted their Memoranda, the instant case is now deemed submitted for decision. ISSUE: 1)W/N the case is a conflict of laws? YES 2) W/N CA erred in holding that the RTC of QC has jurisdiction? YES 3) W/N CA erred in Ruling that in this case, Philippine Law should govern? YES ***Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondents claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. Respondent contends that since her Amended Complaint is based on Articles 1935 and 2136 of the Civil Code, then the instant case is properly a matter of domestic law.
HELD: 1) YES. Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia. Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a conflicts case. A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a foreign element. The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. The forms in which this foreign element may appear are many. The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form. In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise. We thus find private respondents assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the question of jurisdiction confronts the court a quo. 2) YES. After a careful study of the private respondents Amended Complaint, and the Comment thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code. Thus, in Philippine National Bank (PNB) vs. Court of Appeals, this Court held that: The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes. Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondents assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum. Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction we find that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691. Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC of QC assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, vex, harass, or oppress the defendant,
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e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice of forum of the plaintiff (now private respondent) should be upheld. Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntarily submitted herself to the jurisdiction of the court. The records show that petitioner SAUDIA has filed several motions praying for the dismissal of Moradas Amended Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial courts jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction. 3) As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation. Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as characterization, or the doctrine of qualification. It is the process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule. The purpose of characterization is to enable the forum to select the proper law. Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An essential element of conflict rules is the indication of a test or connecting factor or point of contact. Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing. Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. These test factors or points of contact or connecting factors could be any of the following: (1) the nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation; (3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real rights are involved; (4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts; (5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised; (6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis; (7) the place where judicial or administrative proceedings are instituted or done. The lex forithe law of the forumis particularly important because, as we have seen earlier, matters of procedure not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and (8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.60 (Italics ours.) After a careful study of the pleadings on record, we are convinced that there is reasonable basis for private respondents assertion thatalthough she was already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition. There is likewise logical basis on record for the claim that the handing over or turning over of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioners purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the guise of petitioners authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven. Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the
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place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, act with justice, give her her due and observe honesty and good faith. Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort. Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liabilit1 have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the most significant relationship rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. As already discussed, there is basis for the claim that overall injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the relationship between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established. Prescinding from this premise that the Philippines is the situs of the tort complained of and the place having the most interest in the problem, we find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable petitioners insistence that [s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter. As aptly said by private respondent, she has no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21 of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law should govern this case5 And as correctly held by the respondent appellate court, considering that it was the
petitioner who was invoking the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is. Lastly, no error could be imputed to the respondent appellate court in upholding the trial courts denial of defendants (herein petitioners) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the countrys system of law and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever. WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby REMANDED to RTC of QC for further proceedings.
6. PCIB V. ESCOLIN Doctrine of Processual Presumption: The foreign law, whenever applicable, should be proved by the proponent thereof, otherwise, such law shall be presumed to be exactly the same as the law of the forum. Facts: The Hodges spouses, both Texas citizens and domiciled in the Philippines, made in their individual wills, provisions which provide that upon their deaths, their whole estate would be inherited by the surviving spouse and that spouse could manage and alienate the said lands, with the exception of the Texas property, and the remainder upon the death of the surviving spouse would redound to the brothers and sisters of the deceased surviving spouse (basta ung asawang huling namatay LOL). Linnie Jane Hodges died first in Iloilo leaving a will executed in Texas but probated in the CFI of Iloilo City with the widower Charles Newton Hodges appointed as Executor, pursuant to the provisions of the will. Charles was previously appointed Special Administrato, in which capacity he filed an urgent ex-parte motion to allow or authorize himself to continue the business in which he was engaged and to perform acts which he had been doing while deceased was living which was granted by the court. As Executor he filed another motion to approve all sales, conveyances, leases, mortgages that he had made further and subsequent transaction which he may do in accordance with the last wishes of his wife which was also approved by the court. In financial statements submitted before the court, he made statements that the estate of Linnie is 1/2 of the conjugal estate. He also allegedly renounced his inheritance in a tax declaration in the U.S.
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Subsequently, Charles also died. Magno was appointed as the admistratrix for the estate of both spouses but later replaced by PCIB as to Charles estate. Charles before his death, failed to make accounting, and also failed to acquire final adjudication of Linnies estate. Since there was no liquidation of Linnies estate, the brothers and sisters of Linnie wanted to determine the extent of her estate that they could inherit. Issue: w/n Philippine Law or Texas Law shall govern (regarding Conflict of Laws) Remanded (Texas law may be applied but must be proved) Held: It is necessary that the Texas law be ascertained. Here it must be proven whether a renvoi will happen or whether Texas law makes the testamentary provisions valid. In line with Texas law, which should be proven is the law enforced during the death of Linnie and not in any other time. Art 16 of the Civil Code provides that the law of the nationality of the decedent applies. But if we apply Texas law, personal property is governed by the law of domicile of the decedent and real property is governed by its situs (both of which is the Philippines). Furthermore Texas law provides no legitime. Thus the renvoi doctrine. Philippine law provides that the Surviving Spouse, being the sole heir,gets 1/2 o the conjugal property, then 1/2 goes to the estate of the spouse. If 1/2 of the estate of the decedent goes to the surviving spouse which is the sole heir, then Charles gets 1/4 of the whole conjugal property. The Court said that Texas law may apply, but was not proven. The laws of a foreign jurisdiction do not prove themselves in our courts, The courts of the Philippines Islands are not authorized to take judicial notice of the laws of the various States of the American Union. Such laws must be proved as facts. The proponent should show the foreign law; as certified by person holding/having custody of such law, with a certificate that such officer does have custody over said law. v Garcia case can't be used to show what Texas law may contain, as there's a time difference between this case and that case, thus the Texas law might have changed in between the rulings PCIB can't claim that the estate of Linnie is not entitled to at least 1/4 of conjugal property, they having argued that it is so. The SC held that the estate of Linnie inherited by her brothers and sisters could be more that just stated, but this would depend on (1) whether upon the proper application of the principle of renvoi in relation to Article 16 of the Civil Code and the pertinent laws of Texas, it will appear that Hodges had no legitime as contended by Magno, and (2) whether or not it can be held that Hodges had legally and effectively renounced his inheritance from his wife. Under the circumstances presently obtaining and in the state of the record of these cases, as of now, the Court is not in a position to make a final ruling, whether of fact or of law, on any of these two issues, and We, therefore, reserve said issues for further proceedings and resolution in the first instance by the court o quo, as hereinabove indicated. We reiterate, however, that pending such further proceedings, as matters stand at this stage, Our considered opinion is that it is beyond cavil that since, under the terms of the will of Mrs. Hodges, her husband could not have anyway legally adjudicated or caused to be adjudicated to himself her whole share of their conjugal partnership, albeit he could have
disposed any part thereof during his lifetime, the resulting estate of Mrs. Hodges, of which Magno is the uncontested administratrix, cannot be less than one-fourth of the conjugal partnership properties, as of the time of her death, minus what, as explained earlier, have been gratuitously disposed of therefrom, by Hodges in favor of third persons since then, for even if it were assumed that, as contended by PCIB, under Article 16 of the Civil Code and applying renvoi the laws of the Philippines are the ones ultimately applicable, such one-fourth share would be her free disposable portion, taking into account already the legitime of her husband under the Civil Code. NOTES: Texas law applies, but because of estoppel and it is yet to be proven o no proof yet of what Texas law is, but PCIB allegedly averred that under the laws of Texas, there is such legitime of 1/4 of the said conjgal estate o PCIB would be estopped to claim that the estate of Mrs. Hodges should be less than as contended by it (which is initially at least 1/2 of the estate), for admissions by a party related to the effects of foreign laws, which have to be proven in our courts like any other controverted fact, create estoppel. Regardless what law is applicable and WON Mr. Hodges did renounce his share, it is clear from the inventory submitted by Mr. Hodges himself as executor of his wife's estate that there are properties which constitute the estate of Mrs. Hodges which should be distributed among her heirs pursuant to her will It is now beyond controversy that whatever be the provisions of Texas Law applicable, the estate of Mrs. Hodges is AT LEAST 1/4 OF THE CONJUGAL ESTATE OF THE SPOUSES o Existence and effects of foreign laws being questions of fact, and it being the position now of PCIB that the estate of Mrs. Hodges, pursuant to the law of Texas, should only be 1/3 of the conjugal estate, such contention constitutes and admission of fact, and consequently, it would be in estoppel in any further proceedings in these cases to claim that said estate could be less, irrespective of what might be proven later to be the actual provisions of Texas law. Elementary is the rule that foreign laws may not be taken judicial notice of and have to be proven like any other fact in dispute between the parties in any proceeding, with the rare exceptional n instances when the said laws are already within the actual knowledge of the court, such as when they are well and generally known, or they have been actually ruled upon in other cases before it and none of the parties concerned claim otherwise.
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PROPERTY
1. LAUREL V. GARCIA Facts: This case is a consolidation of two petitions for prohibition seeking to enjoin respondents in their capacities as Head of the Asset Privatization Trust, Secretary of Foreign Affairs, Executive Secretary, and members of the Principal and Bidding Committees on the Utilization/Disposition of Philippine Government Properties in Japan from proceeding with the bidding for the sale of the Roppongi property. The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan, the other lots being: (1) The Nampeidai Property, which is the present site of the Philippine Embassy Chancery; (2) The Kobe Commercial Property, categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff; and (3) The Kobe Residential Property, which is now vacant. The properties and the capital goods and services procured from the Japanese government for national development projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. The Roppongi property consists of the land and building "for the Chancery of the Philippine Embassy". As intended, it became the site of the Philippine Embassy until the latter was transferred to Nampeidai when the Roppongi building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that time. During the incumbency of President Aquino, a proposal was made by the former Philippine Ambassador to Japan, Carlos J. Valdez, to lease the subject property to Kajima Corporation, a Japanese firm, in exchange for the construction of 2 buildings in Roppongi, 1 building in Nampeidai, and the renovation of the Philippine Chancery in Nampeidai. The Government did not act favorably on said proposal, but instead, on 11 August 1986, President Aquino created a committee to study the disposition or utilization of Philippine government properties in Tokyo and Kobe though AO-3, and AO 3-A to 3-D. On 25 July 1987, the President issued EO 296 entitling non-Filipino citizens or entities to avail of reparations' capital goods and services in the event of sale, lease or disposition. The four properties in Japan including the Roppongi property were specifically mentioned in the first "Whereas" clause. Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to sell the reparations properties starting with the Roppongi lot. These petitions claim that the Roppongi property forms part of the public domain as characterized under Art. 420 of the Civil Code, and thus cannot be alienated, being outside the commerce of man. On the other hand, respondents invoke lex loci rei sitae, or lex situs and insist Japanese Law and not our Civil Code should apply. Issue: Whether or not Japanese law should govern the sale of the Roppongi property (NO)
Held: Conflict issues: We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined; and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which law should apply. In the instant case, none of the above elements exists. The issues are not concerned with the validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine law. The rule of lex situs does not apply. Furthermore, the Japanese law its coverage and effects, when enacted, and exceptions to its provisions has not been presented to the Court. Respondents simply assert that the lex loci rei sitae or Japanese law should apply without stating what the law provides. Other issues: The Roppongi property is correctly classified under paragraph 2 of Art. 420 of the Civil Code as property belonging to the State and intended for some public service. As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as a juridical person, but the citizens; it is intended for the common public welfare and cannot be the object of appropriation. The respondents have failed to convincingly show that the property has become patrimonial. The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use. A property continues to be part of the public domain, not available for private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such. In the present case, the recent Administrative Orders authorizing a study of the status and conditions of government properties in Japan were merely directives for investigation but did not in any way signify a clear intention to dispose of the properties. Further EO 296 does not declare that the properties lost their public character, but merely intends to make the properties available to foreigners and not to Filipinos alone in case of a sale, lease or other disposition. Ultimately, there is no law authorizing the conveyance of the Roppongi property. WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is issued enjoining the respondents from proceeding with the sale of the Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is made PERMANENT. SO ORDERED.
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CRUZ, J., Concurring: The sale of the property may be authorized only by Congress through a duly enacted statute and there is no such law. PADILLA, J., Concurring: It is Congress which can decide and declare the conversion of Roppongi from a public dominion property to a state patrimonial property. Congress had made no such decision or declaration. It is clear that the President cannot sell or order the sale of Roppongi thru public bidding or otherwise without a prior congressional approval, first, converting Roppongi from a public dominion property to a State patrimonial property and second, authorizing the President to sell the same. FELICIANO, J., Dissenting: The only requirement which is legitimately imposable is that the intent to convert must be reasonably clear from a consideration of the act or acts of the Executive Department or of the Legislative Department which are said to have effected such conversion. Assuming that the majority opinion is right in saying that E.O. No. 296 is insufficient to authorize the sale of the Roppongi property; it is here submitted with respect that E.O. No. 296 is more than sufficient to indicate an intention to convert the property previously devoted to public service into patrimonial property that is capable of being sold or otherwise dispose of. SARMIENTO, J., Concurring: In holding that there is a need for a law or formal declaration to withdraw the Roppongi property from public domain to make it alienable and a land for legislative authority to allow the sale of the property, the majority lays stress to the fact that: (1) An affirmative act executive or legislative is necessary to reclassify property of the public dominion, and (2) a legislative decree is required to make it alienable. It also clears the uncertainties brought about by earlier interpretations that the nature of property whether public or patrimonial is predicated on the manner it is actually used, or not used, and in the same breath, repudiates the Governments position that the continuous non-use of Roppongi, among other arguments, for diplomatic purposes, has turned it into State patrimonial property. 2. SALVACION V. CENTRAL BANK Facts: On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February 7, 1989 and was able to rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account China Banking Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.
Basically, Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious illegal detention against Karen Salvacion. Police recovered from him several dollar checks and a dollar account in the China Banking Corp. He was, however, able to escape from prison. In a civil case filed against him, the trial court awarded Salvacion moral, exemplary and attorneys fees amounting to almost P1,000,000.00. Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but the latter refused arguing that Section 11 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Salvacion therefore filed this action for declaratory relief in the Supreme Court. Issue: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as amended by PD 1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient? Held: The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of Republic Act No. 6426, are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are hereby required to comply with the writ of execution issued in the civil case and to release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the judgment. If Karen's sad fate had happened to anybody's own kin, it would be difficult for him to fathom how the incentive for foreign currency deposit could be more important than his child's rights to said award of damages; in this case, the victim's claim for damages from this alien who had the gall to wrong a child of tender years of a country where he is a mere visitor. This further illustrates the flaw in the questioned provisions. It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country's economy was in a shambles; when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But the realities of the present times show that the country has recovered economically; and even if not, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us. It has thus been said that But I also know, 5 that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths are disclosed and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times. . . We might as well require a man to wear still the coat which fitted him when a boy, as civilized society to remain ever under the regimen of their barbarous ancestors. In his Comment, the Solicitor General correctly opined, thus: The present petition has
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far-reaching implications on the right of a national to obtain redress for a wrong committed by an alien who takes refuge under a law and regulation promulgated for a purpose which does not contemplate the application thereof envisaged by the alien. More specifically, the petition raises the question whether the protection against attachment, garnishment or other court process accorded to foreign currency deposits by PD No. 1246 and CB Circular No. 960 applies when the deposit does not come from a lender or investor but from a mere transient or tourist who is not expected to maintain the deposit in the bank for long. The resolution of this question is important for the protection of nationals who are victimized in the forum by foreigners who are merely passing through. xxx xxx xxx . . . Respondents China Banking Corporation and Central Bank of the Philippines refused to honor the writ of execution issued in Civil Case No. 89-3214 on the strength of the following provision of Central Bank Circular No. 960: Sec. 113. Exemption from attachment. Foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No. 6426: Sec. 7. Rules and Regulations. The Monetary Board of the Central Bank shall promulgate such rules and regulations as may be necessary to carry out the provisions of this Act which shall take effect after the publication of such rules and regulations in the Official Gazette and in a newspaper of national circulation for at least once a week for three consecutive weeks. In case the Central Bank promulgates new rules and regulations decreasing the rights of depositors, the rules and regulations at the time the deposit was made shall govern. The aforecited Section 113 was copied from Section 8 of Republic Act NO. 6426, as amended by P.D. 1246, thus: Sec. 8. Secrecy of Foreign Currency Deposits. All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative or any other entity whether public or private: Provided, however, that said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and her parents fully deserve. It then proceeded to show that the economic basis for the enactment of RA No. 6426 is not anymore present; and even if it still exists, the questioned law still denies those
entitled to due process of law for being unreasonable and oppressive. The intention of the law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us. The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors and, subsequently, to give the latter protection. However, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few days in the country and, therefore, will maintain his deposit in the bank only for a short time. Considering that Bartelli is just a tourist or a transient, he is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246 against attachment, garnishment or other court processes. Further, the SC said: In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that in case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent. Call it what it may but is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory judgment of the lower court against the Central Bank Circular protecting the foreign depositor? Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a national and victim of a crime? This situation calls for fairness against legal tyranny. We definitely cannot have both ways and rest in the belief that we have served the ends of justice.
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PERSONAL LAW, NATIOANLITY, AND DOMICILE

1. GIBBS v. GOVERNMENT OF PHILIPPINE ISLANDS (Note: Cited in the syllabus as TEMPLETON V. GOVERNMENT) Facts: This is an appeal from a final order of the CFI Manila, requiring the register of deeds of the City of Manila to cancel certificates of title Nos. 20880, 28336 and 28331, covering lands located in the City of Manila, Philippine Islands, and issue in lieu thereof new certificates of transfer of title in favor of Allison D. Gibbs without requiring him to present any document showing that the succession tax due under Article XI of Chapter 40 of the Administrative Code has been paid. The order of the court of March 10, 1931, recites that the parcels of land covered by said certificates of title formerly belonged to the conjugal partnership of Allison D. Gibbs and Eva Johnson Gibbs; that Eva died intestate in Palo Alto, California, on November 28, 1929; that at the time of her death she and her husband were citizens of the State of California and domiciled therein. It appears further from said order that Allison was appointed administrator of the state of his said deceased wife in a case in the same court, entitled "In the Matter of the Intestate Estate of Eva Johnson Gibbs, Deceased"; that in intestate proceedings, Allison on September 22,1930, filed an ex parte petition in which he alleged "that the parcels of land hereunder described belong to the conjugal partnership of Allison and his wife, Eva", describing in detail the 3 facts here involved; and further alleging that his said wife, a citizen and resident of California, died on November 28,1929; that in accordance with the law of California, the community property of spouses who are citizens of California, upon the death of the wife previous to that of the husband, belongs absolutely to the surviving husband without administration; that the conjugal partnership of Allison and Eva Gibbs, deceased, has no obligations or debts and no one will be prejudiced by adjucating said parcels of land (and 17 others not here involved) to be the absolute property of Allison as sole owner. The court granted said petition and on September 22, 1930, entered a decree adjucating to Allison as the sole and absolute owner of said lands, applying section 1401 of the Civil Code of California. Gibbs presented this decree to the register of deeds of Manila and demanded that the latter issue to him a TCT. Section 1547 of Article XI of Chapter 40 of the Administrative Code provides in part that: Registers of deeds shall not register in the registry of property any document transferring real property or real rights therein or any chattel mortgage, by way of gifts mortis causa, legacy or inheritance, unless the payment of the tax fixed in this article and actually due thereon shall be shown. And they shall immediately notify the Collector of Internal Revenue or the corresponding provincial treasurer of the non-payment of the tax discovered by them. . . . Acting upon the authority of said section, the register of deeds of the City of Manila, declined to accept as binding said decree of court of September 22,1930, and refused to register the transfer of title of the said conjugal property to Allison on the
ground that the corresponding inheritance tax had not been paid. Thereupon, under date of December 26, 1930, Allison filed in the said court a petition for an order requiring the said register of deeds "to issue the corresponding titles" to Gibbs without requiring previous payment of any inheritance tax. After due hearing of the parties, the court reaffirmed said order of September 22, 1930, and entered the order of March 10, 1931, which is under review on this appeal. On January 3, 1933, this court remanded the case to the court of origin for new trial upon additional evidence in regard to the pertinent law of California in force at the time of the death of Mrs. Gibbs, also authorizing the introduction of evidence with reference to the dates of the acquisition of the property involved in this suit and with reference to the California law in force at the time of such acquisition. The case is now before us with the supplementary evidence. For the purposes of this case, the Court considered the following facts as established by the evidence or the admissions of the parties: Allison has been continuously, since the year 1902, a citizen of the State of California and domiciled therein; that he and Eva were married at Columbus, Ohio, in July 1906; that there was no ante-nuptial marriage contract between the parties; that during the existence of said marriage the spouses acquired the following lands, among others, in the Philippine Islands, as conjugal property: 1. A parcel of land in the City of Manila represented by TCT No. 20880, dated March 16, 1920, and registered in the name of "Allison D. Gibbs casado con Eva Johnson Gibbs". 2. A parcel of land in the City of Manila, represented by TCT No. 28336, dated May 14, 1927, in which it is certified "that spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee simple" of the land therein described. 3. A parcel of land in the City of Manila, represented by TCT No. 28331, dated April 6, 1927, which it states "that Allison D. Gibbs married to Eva Johnson Gibbs" is the owner of the land described therein; that said Eva Johnson Gibbs died intestate on November 28, 1929, living surviving her husband, the appellee, and 2 sons, Allison J. Gibbs, now age 25 and Finley J. Gibbs, now aged 22, as her sole heirs of law. Article XI of Chapter 40 of the Administrative Code entitled "Tax on inheritances, legacies and other acquisitions mortis causa" provides in section 1536 that "Every transmission by virtue of inheritance ... of real property ... shall be subject to the following tax." Issue/s: 1. WON Eva Johnson Gibbs at the time of her death the owner of a descendible interest in the Philippine lands above-mentioned? (YES) 2. WON Register of Deeds erred in declining to register the transfer title of the conjugal property on the ground of unpaid inheritance tax? (NO) Held: Allison contends that the law of California should determine the nature and extent of the title, if any, that vested in Eva under the 3 certificates of title Nos. 20880, 28336 and 28331 above referred to, citing article 9 of the Civil Code. But that, even if the nature and extent of her title under said certificates be governed by the law of the
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Philippine Islands, the laws of California govern the succession to such title, citing the 2nd paragraph of article 10 of the Civil Code. Article 9 of the Civil Code is as follows: The laws relating to family rights and duties, or to the status, condition, and legal capacity of persons, are binding upon Spaniards even though they reside in a foreign country." It is argued that the conjugal right of the California wife in community real estate in the Philippine Islands is a personal right and must, therefore, be settled by the law governing her personal status, that is, the law of California. But our attention has not been called to any law of California that incapacitates a married woman from acquiring or holding land in a foreign jurisdiction in accordance with the lex rei sitae. There is not the slightest doubt that a California married woman can acquire title to land in a common law jurisdiction like the State of Illinois or the District of Columbia, subject to the common-law estate by the courtesy which would vest in her husband. Nor is there any doubt that if a California husband acquired land in such a jurisdiction his wife would be vested with the common law right of dower, the prerequisite conditions obtaining. Article 9 of the Civil Code treats of purely personal relations and status and capacity for juristic acts, the rules relating to property, both personal and real, being governed by article 10 of the Civil Code. Furthermore, article 9, by its very terms, is applicable only to "Spaniards" (now, by construction, to citizens of the Philippine Islands). The Organic Act of the Philippine Islands (Act of Congress, August 29, 1916, known as the "Jones Law") as regards the determination of private rights, grants practical autonomy to the Government of the Philippine Islands. This Government, therefore, may apply the principles and rules of private international law (conflicts of laws) on the same footing as an organized territory or state of the United States. We should, therefore, resort to the law of California, the nationality and domicile of Mrs. Gibbs, to ascertain the norm which would be applied here as law were there any question as to her status. But the appellant's chief argument and the sole basis of the lower court's decision rests upon the 2nd paragraph of article 10 of the Civil Code which is as follows: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the amount 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 or the country in which it may be situated.
In construing the above language the Court met at the outset with some difficulty by the expression "the national law of the person whose succession is in question", by reason of the rather anomalous political status of the Philippine Islands. The Court encountered no difficulty in applying article 10 in the case of a citizen of Turkey. (Miciano v. Brimo) Having regard to the practical autonomy of the Philippine Islands, as above stated, the Court concluded that if article 10 is applicable and the estate in question is that of a deceased American citizen, the succession shall be regulated in accordance with the norms of the State of his domicile in the United States. (Cf. Babcock Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate of Johnson, 39 Phil., 156, 166.) The trial court found that under the law of California, upon the death of the wife, the entire community property without administration belongs to the surviving husband; that he is the absolute owner of all the community property from the moment of the death of his wife, not by virtue of succession or by virtue of her death, but by virtue of the fact that when the death of the wife precedes that of the husband he acquires the community property, not as an heir or as the beneficiary of his deceased wife, but because she never had more than an inchoate interest or expentancy which is extinguished upon her death. Quoting the case of Estate of Klumpke, the court said: "The decisions under this section (1401 Civil Code of California) are uniform to the effect that the husband does not take the community property upon the death of the wife by succession, but that he holds it all from the moment of her death as though required by himself. ... It never belonged to the estate of the deceased wife." The argument of Allison apparently leads to this dilemma: If he takes nothing by succession from his deceased wife, how can the 2nd paragraph of article 10 be invoked? Can Allison be heard to say that there is a legal succession under the law of the Philippine Islands and no legal succession under the law of California? It seems clear that the 2nd paragraph of article 10 applies only when a legal or testamentary succession has taken place in the Philippines and in accordance with the law of the Philippine Islands; and the foreign law is consulted only in regard to the order of succession or the extent of the successional rights; in other words, the 2nd paragraph of article 10 can be invoked only when the deceased was vested with a descendible interest in property within the jurisdiction of the Philippine Islands. In the case of Clarke v. Clarke, the court said: It is principle firmly established that to the law of the state in which the land is situated we must look for the rules which govern its descent, alienation, and transfer, and for the effect and construction of wills and other conveyances. This fundamental principle is stated in the first paragraph of article 10 of our Civil Code as follows: "Personal property is subject to the laws of the nation of the owner thereof; real property to the laws of the country in which it is situated. It is stated in 5 Cal. Jur., 478: In accord with the rule that real property is subject to the lex rei sitae, the respective rights of husband and wife in such property, in the absence of an antenuptial contract, are determined by the law of the place where the property is situated, irrespective of the domicile of the parties or to the place where the marriage was celebrated.
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Under this broad principle, the nature and extent of the title which vested in Mrs. Gibbs at the time of the acquisition of the community lands here in question must be determined in accordance with the lex rei sitae. It is admitted that the Philippine lands here in question were acquired as community property of the conjugal partnership of Allison and his wife. Under the law of the Philippine Islands, she was vested of a title equal to that of her husband. Article 1407 of the Civil Code provides: All the property of the spouses shall be deemed partnership property in the absence of proof that it belongs exclusively to the husband or to the wife. Article 1395 provides: "The conjugal partnership shall be governed by the rules of law applicable to the contract of partnership in all matters in which such rules do not conflict with the express provisions of this chapter." Article 1414 provides that "the husband may dispose by will of his half only of the property of the conjugal partnership." Article 1426 provides that upon dissolution of the conjugal partnership and after inventory and liquidation, "the net remainder of the partnership property shall be divided share and share alike between the husband and wife, or their respective heirs." Under the provisions of the Civil Code and the jurisprudence prevailing here, the wife, upon the acquisition of any conjugal property, becomes immediately vested with an interest and title therein equal to that of her husband, subject to the power of management and disposition which the law vests in the husband. Immediately upon her death, if there are no obligations of the decedent, as is true in the present case, her share in the conjugal property is transmitted to her heirs by succession. (Articles 657, 659, 661, Civil Code) It results that the wife of Allison was, by the law of the Philippine Islands, vested of a descendible interest, equal to that of her husband, in the Philippine lands covered by certificates of title Nos. 20880, 28336 and 28331, from the date of their acquisition to the date of her death. Allison himself believed that his wife was vested of such a title and interest in manifest from the end of said certificates, No. 28336, dated May 14, 1927, introduced by him in evidence, in which it is certified that "the spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee simple of the conjugal lands therein described." The descendible interest of Eva in the lands aforesaid was transmitted to her heirs by virtue of inheritance and this transmission plainly falls within the language of section 1536 of Article XI of Chapter 40 of the Administrative Code which levies a tax on inheritances. It is unnecessary in this proceeding to determine the "order of succession" or the "extent of the successional rights" (article 10, Civil Code, supra) which would be regulated by section 1386 of the Civil Code of California which was in effect at the time of the death of Mrs. Gibbs. The record does not show what the proper amount of the inheritance tax in this case would be nor that Allison in any way challenged the power of the Government to levy an inheritance tax or the validity of the statute under which the register of deeds refused to issue a certificate of transfer reciting that Allison is the exclusive owner of the Philippine lands included in the 3 certificates of title here involved.
The judgment of the court below of March 10, 1931, is reversed with directions to dismiss the petition, without special pronouncement as to the costs. 2. ALCANTARA V. SECRETARY OF INTERIOR FACTS: The petitioners allege that they are qualified voters residing at Culion Leper Colony, Culion, Palawan, having voted in previous elections in the Philippine Islands; that in a public mass meeting held on April 5, 1935, they adopted a resolution demanding the right to vote in the plebiscite and requesting that electoral precincts be established within the radius of the Culion Leper Colony in order that the qualified voters therein could register, which resolution was sent to his Excellency, the Governor-General, who referred it to the Honorable, the Secretary of the Interior; that the Department of the Interior, through its legal division, ruled that no new electoral precincts could be created at Culion Leper Colony inasmuch as the plebiscite is treated as and considered as a special election; that in view of this ruling the petitioners requested, by telegram, the Interior Department to authorize the Balala Electoral Board of Inspectors, Culion, Palawan, to register the qualified voters of Culion Leper Colony; that this request was refused upon the ground that the petitioners were not bona fide residents of Culion, Palawan; that on April 23, 1935, the petitioners Juan L. Alcantara, Miguel Valdes, Adolfo Almeda and Dionisio Pagilinan, accompanied by Attorney Martin Miras, appeared before the chairman of the Balala Electoral Board of Inspectors and requested him to register and inscribe them in the officials list of qualified voters in order that they might vote on May 14, 1935, and that their request was denied on the ground that no specific instructions to register them had been received from the Department of the Interior. The principal allegation of the respondents, by way of special defense, is "that the herein petitioners are not qualified voters, because they shall not have been residents of Culion for six months next preceding the day of voting, for they have not acquired residence in Culion as they are confined therein as lepers against their will, and they have no intention to permanently reside there (sections 430-431 of the Administrative Code as finally amended by Acts Nos. 3387, sec. 1, and 4112, secs. 1 to 3); and in view thereof, the respondent Secretary of the Interior has ruled that the petitioners are not qualified voters and therefore cannot be registered under the law." At present the nearest approach to a constitution that we have in the Philippines in our Organic Act, the Jones Law, enacted August 29, 1916, by the Congress of the United States. "The organic law (or Act) of a territory takes the place of a constitution as the fundamental law of the local government." The only provisions contained in that law as to the qualification of voters reads as follows: SEC. 15. That at the first election held pursuant to this Act, the qualified electors shall be those having the qualifications of voters under the present law; thereafter and until otherwise provided by the Philippine Legislature herein provided for the qualifications of voters for Senators and Representatives in the Philippines and all officers elected by the people shall be as follows: Every male person who is not a citizen or subject of a foreign power twentyone years of age or over (except insane and feeble-minded persons and those convicted in a court of competent jurisdiction of an infamous offense
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since the thirteenth day of August, eighteen hundred and ninety-eight), who shall have been a resident of the Philippines for one year and of the municipality in which he shall offer to voter for six months next preceding the day of voting, and who is comprised within one of the following classes: (a) Those who under existing law are legal voters and have exercised the right of suffrage. (b) Those who own real property to the value of 500 pesos, or who annually pay 30 pesos or more of the established taxes. (c) Those who are able to red and write either Spanish, English, or a native language. Under the authority conferred upon it by the above quoted section the Philippine Legislature has prescribed the qualifications and disqualifications of voters in sections 431 and 432 of the Revised Administrative Code, which read as follows: SEC. 431. Qualifications prescribed for voters. Every male or female person who is not a citizen or subject of a foreign power, twenty-one years of age or over, who shall have been a resident of the Philippines for one year and of the municipality in which he shall offer to vote for six months next preceding the day of voting is entitled to vote in all elections if comprised within either of the following three classes: (a) Those who, under the laws in force in the Philippine Islands upon the twenty-eight day of August, nineteen hundred and sixteen, were legal voters and had exercised the right of suffrage. (b) Male persons who own real property to the value of five hundred pesos, declared in their name for taxation purposes for a period of not less than one year prior to the date of the election, or who annually pay thirty pesos or more of the established taxes. (c) Those who are able to read and write either Spanish, or English, or a native language. SEC. 432. Disqualifications. The following persons shall be disqualified from voting: (a) Any person who, since the thirteenth day of August, eighteen hundred and ninety-eight, has been sentenced by final judgment to suffer not less than eighteen months of imprisonment, such disability not having been removed by plenary pardon. (b) Any persons who has violated an oath of allegiance taken by him to the United States. (c) Insane or feeble-minded persons. (d) Deaf-mutes who cannot read and write. (e) Electors registered under subsection (c) of the next preceding section who, after failing to make sworn statement to the satisfaction of the board of inspectors at any of its two meetings for registration and revision, that they are incapacitated for preparing their ballots due to permanent physical disability, present themselves at the hour of voting as incapacitated, irrespective of whether such incapacity be real or feigned. ISSUE: whether or not the petitioners have acquitted a residence for voting purposes in the municipality in which they desire to vote.
HELD: In some of the states there is a constitutional provision to the effect that for the purpose of voting no person shall be deemed to have gained or lost a residence while a student at any seminary of learning. Under such a provision it has been held "that a student does not acquire a residence for voting purposes merely by attending such an institution." In addition to such provisions as to students, constitutions of some states provide that "For the purpose of voting, no person shall be deemed to have gained or lost a residence by reason shall be deemed to have gained or lost a residence by reason of his presence or absence while ... kept at any almshouse or other asylum at public expense; ... ."Under such a provision the rule in some jurisdictions is "that inmates of soldiers' homes, by going to and residing in such home, neither lose their old, nor gain a new, residence, though they intend to reside in the home permanently. Hence they are not entitled to vote except at their place of residence before becoming such inmates. In other jurisdictions, however, a contrary conclusion has been reached, upon the theory that under such a constitutional provision an inmate such an institution may acquire a residence at the home. In the absence of such a constitutional prohibition the rule is that a permanent member of a soldiers' home has a residence at such home for the purpose of voting. There being no such provisions or prohibitions in the Jones Law nor in the sections of the Revised Administrative Code, quoted above, we see no reason for applying in this jurisdiction the legal doctrine of the courts of the states which have adopted such, or similar, constitutional provisions. There are a large number of people confined in the Culion Leper Colony. They are not permitted to return to their former homes to vote. They are not allowed to visit their former homes even though they have been separated from near and dear relatives who are not afflicted as they are. Why split hairs over the meaning of residence for voting purposes under such circumstances? Assuming that the petitioners intend to return to their former homes if at some future time they are cured, this intention does not necessarily defeat their residence before they actually do return if they have been residents "of the Philippine Islands for one year and of the municipality in which they offer to vote for six months next preceding the day of voting." Surely a mere intention to return to their former homes, a consummation every humane person desires for them, not realized and which may never be realized should not prevent them, under the circumstances, from acquiring a residence for voting purposes. This court is of the opinion that, under our liberal law, such of the petitioners as have been residents of the Philippine Islands for one year and residents for six months in the municipality in which they desire to vote and have the other qualifications prescribed for voters in section 431 of the Revised Administrative Code and who have none of the disqualifications prescribed in section 432 of the same Code were entitled to register and vote in the plebiscite of May 14, 1935. Having reached this conclusion and being unable to determine from the record whether the petitioners have the prescribed qualifications for voters and none of the prescribed
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disqualifications this court on May 11, 1935, sent the above mentioned telegram to the parties in this case. 3. VELLILA V. POSADAS DOCTRINE: To effect the abandonment of one's domicile, there must be a deliberate and provable choice of a new domicile, coupled with actual residence in the place chosen, with a declared or provable intent that it should be one's fixed and permanent place of abode, one's home. FACTS: Arthur Graydon Moodydied in Calcutta, India, on February 18, 1931 and executed in the Philippine Islands a will, by virtue of which, he bequeathed all his property to his only sister, Ida M. Palmer, who then was and still is a citizen and resident of the State of New York, USA A petition for appointment of special administrator of the estate of the deceased Arthur Graydon Moody was filed by W. Maxwell Thebaut with the CFI of Manila Subsequently a petition was filed by Ida M. Palmer, asking for the probate of said will of the deceased Moody, and the same was, after hearing, duly probated by the court. Ida M. Palmer was declared to be the sole and only heiress of the deceased Arthur Graydon Moody; and that during the hearing for the declaration of heirs, Ida M. Palmer presented as evidence a letter dated February 28, 1925, and addressed to her by Moody The property left by Moody consisted principally of bonds and shares of stock of corporations organized under the laws of the Philippine Islands, bank deposits and other personal properties, as are more fully shown in the inventory filed by the special administrator (Thebaut). The BIR prepared for the estate an inheritance tax return and an income tax return for the fractional period from January 1, 1931 to June 30, 1931 The estate of the late Moody paid under protest the sum of P50,000 on July 22, 1931, and the other sum of P40,019.75 on January 19, 1932, making a total of P90,019.75, of which P77,018.39 covers the assessment for inheritance tax and the sum of P13,001.41 covers the assessment for income tax against said estate. The CIR overruled the protest made by Ida M. Palmer through her attorney. In addition to the facts, it appears that Moody, an American citizen, came to the Philippine Islands in 1902 or 1903 and engaged actively in business in these Islands up to the time of his death in Calcutta, India, on February 18, 1931. He had no business elsewhere and at the time of his death left an estate consisting principally of bonds and shares of stock of corporations organized under the laws of the Philippine Islands, bank deposits and other intangibles and personal property valued by the commissioners of appraisal and claims at P609,767.58 and by the CIR for the purposes of inheritance tax at P653,657.47. All of said property at the time of his death was located and had its situs within the Philippine Islands. So far as this record shows, he left no property of any kind located anywhere else. In his will executed without date in Manila in accordance with the formalities of the Philippine law, in which he bequeathed all his property to his sister, Ida M. Palmer, he stated: "I, Arthur G. Moody, a citizen 'of the United States of America,
residing in the Philippine Islands, hereby publish and declare the following as my last Will and Testament * * *" Plaintiff contends: "That there is no valid law or regulation of the Government of the Philippine Islands under or by virtue of which any inheritance tax may be levied, assessed or collected upon transfer, by death and succession, of intangible personal properties of a person not domiciled in the Philippine Islands, and the levy and collection by defendant of inheritance tax xxx constituted and constitutes the taking and deprivation of property without due process of law. It is alleged in the complaint that at the time of his death, Arthur G. Moody was a "non-resident of the Philippine Islands".
ISSUES: W/N Moody was legally domiciled in the Philippine Islands on the day of his death? YES W/N Moodys estate is subject to inheritance tax? YES HELD: Moody was never married and there is no doubt that he had his legal domicile in the Philippine Islands from 1902 or 1903 forward during which time he accumulated a fortune from his business in the Philippine Islands. He lived in the Elks' Club in Manila for many years and was living there up to the date he left Manila the latter part of February, 1928, under the following circumstances: He was afflicted with leprosy in an advanced stage and had been informed by Dr. Wade that he would be reported to the Philippine authorities for confinement in the Culion Leper Colony as required by the law. Distressed at the thought of being thus segregated and in violation of his promise to Dr. Wade that he would voluntarily go to Culion, he surreptitiously left the Islands the latter part of February, 1928. The record does not show where Moody was during the remainder of the year 1928. He lived with a friend in Paris, France, during the months of March and April of the year 1929 where he was receiving treatment for leprosy at the Pasteur Institute. The record does not show where Moody was in the interval between April, 1929, and November 26, 1930, on which latter date he wrote a letter to Harry Wendt of Manila, offering to sell him his interest in the Camera Supply Company, a Philippine corporation, in which Moody owned 599 out of 603 shares. In this letter, among other things, he states: "Certainly I'll never return there to live or enter business again." He wrote letters dated December 12, 1930, and January 3, 1931, along the -same line to Wendt. As Moody died of leprosy less than two months after these letters were written, there can be no doubt that he would have been immediately segregated in the Culion Leper Colony had he returned to the Philippine Islands. He was, therefore, a fugitive, not from justice, but from confinement in the Culion Leper Colony in accordance with the law of the Philippine Islands. There is no statement of Moody, oral or written, in the record that he had adopted a new domicile while he was absent from Manila. Though he was physically present for some months in Calcutta prior to the date of his death there, the appellant does not claim that Moody had a domicile there although it was precisely from Calcutta that he wrote and cabled that he wished to sell his business in Manila and that he had no intention to live there again. Much less plausible, it seems to us, is the claim that he established a legal domicile in Paris in February, 1929. There is no evidence as to where in Paris he had any fixed abode that he intended to be his permanent home. There is no
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evidence that he acquired any property in Paris or engaged in any settled business on his own account there. There is no evidence of any affirmative factors that prove the establishment of a legal domicile there. The negative evidence that he told Cooley that he did not intend to return to Manila does not prove that he had established a domicile in Paris. The evidence in the record indicates clearly that Moody's continued absence from his legal domicile in the Philippines was due to and reasonably accounted for by the same motive that caused his surreptitious departure, namely, to evade confinement in the Culion Leper Colony; for he doubtless knew that on his return he would be immediately confined, because his affliction became graver while he was absent than it was on the day of his precipitous departure and he could not conceal himself in the Philippines where he was well known, as he might do in foreign parts. Our Civil Code (art. 40) defines the domicile of natural persons as "the place of their usual residence". The record before us leaves no doubt in our minds that the "usual residence" of this unfortunate man, whom appellant describes as a "fugitive" and "outcast", was in Manila where he had lived and toiled for more than a quarter of a century, rather than in any foreign country he visited during his wanderings up to the date of his death in Calcutta. To effect the abandonment of one's domicile, there must be a deliberate and provable choice of a new domicile, coupled with actual residence in the place chosen, with a declared or provable intent that it should be one's fixed and permanent place of abode, one's home. There is a complete dearth of evidence in the record that Moody ever established a new domicile in a foreign country. The contention under the appellant's third assignment of error that the defendant collector illegally assessed an income tax of P13,001.41 against the Moody estate is, in our opinion, untenable. The grounds for this assessment, stated by the CIR appear to us to be sound. That the amount of P259,986.69 was received by the estate of Moody as dividends declared out of surplus by the Camera Supply Company is clearly established by the evidence. Section 1536 of the Revised Administrative Code (as amended) provides as follows: "SEC. 1536. Conditions and rate of taxation.Every transmission by virtue of inheritance, devise, bequest, gift mortis causa or advance in anticipation of inheritance, devise, or bequest of real property located in the Philippine Islands and real rights in such property; of any franchise which must be exercised in the Philippine Islands; of any shares, obligations, or bonds issued by any corporation or sociedad annima organized or constituted in the Philippine Islands in accordance with its laws; of any shares or rights in any partnership, business or industry established in the Philippine Islands or of any personal property located in the Philippine Islands shall be subject to the following tax: xxx" Section 4 of Act No. 2833 as amended, which is relied on by the appellant, plainly provides that the income from exempt property shall be included as income subject to tax. We affirm the judgment of the trial court, first, because the property in the estate of Arthur G. Moody at the time of his death was located and had its situs within
the Philippine Islands and, second, because his legal domicile up to the time of his death was within the Philippine Islands. 4. GALLEGO V. VERA Facts: This is a petition for certiorari to review the decision of the CA affirming the decision of the CFI of Leyte, which declared illegal the petitioners election to the office of the municipal mayor of Abuyog, Leyte in the election of Dec. 1940, on the ground that he did not meet the residence qualification. Gallego is a native of Abuyog, Leyte. After his studies, he was employed as a school teacher in Catarman, Samar, as well as in some municipalities in Leyte. In 1937, he ran as municipal mayor in Abuyog, Leyte, but lost. In June 1938, he worked in Malaybalay Bukidnon in a plantation of the Bureau of Forestry to make up for the financial drawback caused by his loss in the previous election, and stayed there until he resigned in Sept. 1940. Gallego registered himself as an elector in Bukidnon and voted there in the election for assemblymen held in Dec. 1938, and in Jan. 1940, He obtained and paid for his residence cert. from the municipal treasurer of Malaybalay, in which certificate it was stated that he had resided in the said municipality for 1.5 yrs. The CA declared that Gallego lost his domicile in Abuyog Leyte at the time he was elected mayor there on the grounds that: 1. He registered as a voter in Malaybalay, Bukidnon 2. He voted in Malaybalay in the 1938 election for assemblymen 3. He obtained a residence cert from the municipality of Malaybalay ISSUE: Whether or not Gallego lost his domicile of origin in Abuyog, Leyte and acquired a new domicile in Malaybalay, Bukidnon. HELD:Yes. Gallego did not lose his domicile in Abuyog by working in Malaybalay as an employee, registering as voter there and securing his residence certificate there for 1940. The decision of the CA is reversed. In the definition of residence in the election law under the 1935 Constitution, it states that in order to acquire a domicile by choice, there must concur: 1. Residence or a bodily presence in the new locality 2. An intention to remain there 3. An intention to abandon the old domicile The purpose to remain in the domicile should be for an INDEFINITE period of time. The court believed that Gallego had no intention to stay in Malaybalay indefinitely because: 1. When he was employed as a teacher in Samar, he always returned in Abuyog and even resigned when he ran for office in 1937 2. His departure was only for the purpose of making up for the financial drawback caused by his loss in the election 3. He did not take his wife and children to Malaybalay with him
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4. 5.
He bought a piece of land in Abuyog and did not avail of the land in the plantation offered to him by the government He visited his family no less than three times despite the great distance between Abuyog, Leyte and Malaybalay Bukidnon
ISSUE : W/N on the strength of such reacquisition of Philippine citizenship by Florentina, Delfin is a national not subject to deportation? Not a National Held:9 There are two reasons why Delfin Co must be returned to China. First, he is not now a Filipino citizen; and second, granting that he is, at the time he entered this country from China he was a Chinese subject to deportation, and any subsequent change in his status can not erase the taint of his unlawful, surreptitious entry. Section 1 of Article IV of the Constitution enumerates those who are citizens of the Philippines, as follows: (1) Those who are citizens of the Philippine Islands at the time of the adoption of the Constitution. (2) Those born in the Philippine Islands of foreign parents who, before adoption of this Constitution, had been elected to public office in the Philippine Islands. (3) Those whose fathers are citizens of the Philippines. (4) Those whose mothers are citizens of the Philippines and upon reaching the age of majority, elect Philippine citizenship. (5) Those who are naturalized in accordance with law. Delfin Co's claim to citizenship can only be predicated, if at all, on paragraph 4 of the above section. But, being a minor he has not had the opportunity to elect Philippine citizenship, and therefore he is as yet an alien, his father being a Chinese. We have heretofore held1 that, after the Constitution, mere birth in the Philippines of a Chinese father and Filipino mother does not ipso facto confer Philippine citizenship and that jus sanguinis instead off jus soli is the predominating factor on questions of citizenship, thereby rendering obsolete the decision in Roa vs. Collector of Customs, 23 Phil., and U.S. vs. Lim Bin, 36 Phil., and similar cases on which petitioner's counsel relies. Nevertheless, it is contended that Florentina Villahermosa being a Filipina, Delfin Co, should likewise be a Filipino. Commonwealth Act No. 63 does not provide that upon repatriation of a Filipina her children acquire Philippine citizenship. It would be illogical to consider Delfin as repatriated like his mother, because he never was a Filipino citizen and could not have reacquired such citizenship.
The court said that the manifest intent of the law in fixing a residence qualification is to: exclude a stranger or a newcomer, unacquainted with the conditions and needs of a community and not identified with the latter, from an elective office to serve that community. And the petitioner was a native there, had run for the same office before, and was now elected with a majority of 800 votes in a 3rd class municipality. 5. VILLHERMOSA V. COMMISSIOENR OF IMMIGRATION DOCTRINE: After the Constitution, mere birth in the Philippines of a Chinese father and Filipino mother does not ipso facto confer Philippine citizenship and that jus sanguinis instead off jus soli is the predominating factor on questions of citizenship, FACTS: 1. In the night of March 24, 1947, a party of 69 Chinese landed clandestinely on the shores of Sto. Domingo, Ilocos Sur, in an attempt to evade our immigration laws. Leading them was 18 year old Delfin Co. 2. Delfin Co was born in Paniqui, Tarlac, of a Chinese father named Co Sut, alias Yu Kui, and Florentina Villahermosa his wife. 3. In 1946, Delfin left the Philippines for China as a Chinese repatriate. 4. Due to financial difficulties in China, he took steps to return while there he met a Chines (Co Soon Tiong), who informed him of a plan to smuggle their compatriots into the Philippines. 5. Delfin agreed to lead the party to Ilocos Sur where his mother had relatives who could render valuable assistance. 6. The voyage was undertaken; but unfortunately, the immigrants were discovered and apprehended immediately after arrival, and on the 27th day of March, Delfin Co was examined by the Commissioner of Immigration. 7. Formal investigation of the case began. The Commissioner of Immigration rendered a decision ordering the deportation of Delfin Co. 8. After knowing the apprehension of her son Delfin, Florentina Villahermosa, filed in the civil registry of Tarlac under Commonwealth Act No. 63 an oath of allegiance for the purpose of resuming her Philippine citizenship which she had lost upon her marriage to Co Suy. 9. On the strength of such reacquisition of Philippine citizenship by Florentina, it was contended that Delfin, being a minor, followed the citizenship of his mother, and was a national not subject to deportation. These contentions were overruled by the immigration authorities. 10. Judge Sotero Rodas, (CFI of Manila) denied the writ of habeas corpus requested by Florentina Villahermosa on behalf of her son Delfin Co. She appealed.
This petition is moreover to be denied on the strength of precedents heretofore established, because Delfin was a Chinese when he arrived here; and any posterior change of status can not affect the legality of his detention for purposes of deportation. In Juan Co vs. Rafferty, 14 Phil., 235, a Chinaman claimed the right to enter the Islands, and being refused by the customs officials, gave bond that he would present himself for deportation if the claim were disallowed. While under bond, he was adopted as a son by another Chinaman domiciled herein, in legal form. Held: he is subject to deportation, because such adoption had no effect upon his right to enter or remain in the Islands. This Court said that the status of an immigrant and his right to stay here is to be determined as of the time of his entry (U.S. vs. Ju-Toy, 198 U.S., 253, 263) and that he could not do afterwards anything to render valid what was originally an illegal entry. A Chinese person, not a merchant at the time he applies to enter the Islands, will not be permitted to remain here upon the theory that he became a merchant during the time he was waiting for the decision of the proper authorities, (Tan Guam Sien vs. Collector of Customs, 31 Phil., 56.) (See also, U.S. vs. Chan Sam, 17 Phil., 448)
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While his Chinese father lived, Delfin was not a Filipino. His mother was not a Filipina; she was Chinese. After the death of such father, Villahermosa continued to be a Chinese, until she reacquired her Filipino citizenship in April, 1947. After that reacquisition Delfin could claim that his mother was a Filipina within the meaning of paragraph 4, section 1 of Article IV of the Constitution; but, according to that same Organic Act, he had to elect Philippine citizenship upon attaining his majority. Until he becomes of age and makes the election, he is the Chinese citizen that he was at the time of his father's demise. SC declared that Delfin Co is not now a Filipino and he, having entered this country surreptitiously, is subject to deportation. 6. IN RE: ROBERT CU FACTS: Robert Cu filed a petition for naturalization setting forth facts required and appropriate for that purpose, but at the hearing he said that he was a citizen of the Philippines; and upon the conclusion of the trial, the CFI of Rizal found him "to be a Filipino citizen, both by right of birth and by right of selection," and dismissed the petition for naturalization, holding impliedly that being already a Philippine citizen he did not have to be naturalized. The CFI's pronouncement that Cu is a Philippine citizen is based solely on the applicants testimony that he was born in Angat, Bulacan in 1913. That he was a subject of the Phil. and that when he was a kid of about 5 months old, his mother, who was a Filipina, died. Then his father allegedly brought him to China right after that and at the age of 5, left China was given to the care of Doa Margarita Mangahas. Upon motion of the attorney for the Government, who protested that the last answer (that the applicant is a Filipino citizen) was a mere conclusion of the witness, the testimony was ordered stricken out. But the Cu proceeded that he considered himself a Filipino citizen on account of the fact that his mother was a Filipina and he was born in the Philippines. He said that his only fault was that he failed to file his application to elect Philippine citizenship and so he filed his application now. ISSUE: W/N the Cu is entitled to be admitted to Philippine citizenship under the present application? (NO) HELD: As observed, Cus statements make plain that the he was at best uncertain that his parents were unmarried to each other and are therefore utterly inadequate to serve as basis for declaring him a Philippine citizen. If the applicant's parents were legally married, which is however to be presumed, then he was born a Chinese citizen and continued to be so, unless upon the age of majority he elected Philippine citizenship which he confessedly did not do. Sec7 of the Revised Naturalization Law provides that the petition for citizenship, besides stating the petitioner's qualifications as enumerated in the Act, "must be signed by the applicant in his own handwriting and be supported by the affidavit of at least two credible persons, stating that they are citizens of the Philippines and personally know the petitioner to be a resident of the Philippines for the period of time required by this Act and a person of good repute and morally irreproachable, and that
said petitioner has in their opinion all the qualifications necessary to become a citizen of the Philippines and is not in any way disqualified under the provisions of the Act. The petition shall also set forth the names and post office addresses of such witnesses as the petitioner may desire to introduce at the hearing of the case." According to this provision, the witnesses must be citizens of the Philippines and "personally know the petitioner to be a resident of the Philippines for the period of time required by this Act," which in cases of petitioners born in the Philippines is five years (Sec. 3) and in other cases ten years (Sec. 2, par. 2). By their testimony, the two witnesses who made affidavits and gave evidence in support of the application were not qualified for this role. Dr. Jose Ku Yeg Keng admitted that his father was a Chinese national and his mother a Filipina; and when asked, "Did you actually elect the Philippine citizenship? Have you filed any citizenship application by election in writing?", he answered, "I have not in the sense that I did not have any proceedings in it," True, he said, "I am a member of the reserve force of the Philippine Army. I was an R. O. T. C. trainee. I trained in the Philippine Army. I was called during the war." And he also said, in answer to further questions, that he had voted in one of the post-liberation elections and that "at present I am a government employee, and I am a member of the faculty of the University of the Philippines, and also I am a resident physician of the Philippine General Hospital." But these circumstances alone made this witness neither a citizen of this country nor eligible as a vouching witness in a proceeding of this character. As to the other witnesses, Dr. Pastor Gomez, he testified that "he had known Mr. Cu since liberation, about August, 1945." But after this answer was given, the counsel for the Govt. objected to the witness' testifying any further, and the objection having been sustained, Dr. Gomez was withdrawn. US Jurisprudence provides that a petition not so verified by at least two persons who are citizens is not merely voidable but void. The Court went further and said that such petition could not be amended. Also, the Courts cannot be expected to possess acquaintance with the candidates with the presenting themselves for naturalization in fact, no duty rests upon them in this particular; so that witnesses appearing before them are in a way insures of the character of the candidate concerned, and on their testimony the courts are of necessity compelled to rely. A witness who is incompetent renders an application void. The question of a witness' qualifications in naturalization proceedings is therefore a matter of more than usual importance. The above US rulings are not binding upon this Court, but it is a rational rule of statutory construction that a statute adopted from another state or country will be presumed to be adopted with the construction placed upon it by the courts of that state or country before its adoption. Such construction is regarded as of great weight, or at least persuasive, and will generally be followed if found reasonable, and in harmony with justice and public policy, and with other laws of the adopting jurisdiction on the subject. We find the United States courts' reasoning to be sound and reasonable and we make it our own. It is unnecessary to consider whether the application could be granted if witnesses, other than the vouching witnesses, who were Philippine citizens and knew the applicant for the time required by the statute, had testified and established the petitioner's qualifications for admission to citizenship; as already indicated, no such
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witnesses were introduced in support of the petition. The appealed decision is affirmed in so far as it dismissed the petition for naturalization and reversed in so far as it declared the applicant a citizen of the Philippines. This dismissal, however, will be without prejudice to the right of the Robert Cu to file a new application for naturalization 7. PHILIPPINE TRUST V. BOHANAN FACTS: On April 24, 1950, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of that state, or at least a citizen of California where some of his properties are located. This contention in untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely temporary, and he continued and remained to be a citizen of the United States and of the state of his pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or permanent residence for him. That is his exclusive personal right. Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the prescribed oath, it may enter upon the execution and performance of its trust. It does not appear that the order granting probate was ever questions on appeal. The executor filed a project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George Bohanan, which consists of several mining companies; (2) the other half of the residuary estate to the testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares of mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000; It will be seen from the above that out of the total estate (after deducting administration expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only
P6,000 each, or a total of P12,000. The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them. ISSUE: W/N Magdalena and her two children have been deprived of the legitime due to them? NO HELD: The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be entitled to received. The will has not given her any share in the estate left by the testator. It is argued that it was error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino wife Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the case of Querubin vs. Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate to his wife. Section 9905 of Nevada Compiled Laws of 1925 provides: Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her estate, real and personal, the same being chargeable with the payment of the testator's debts. Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's estafa had already been passed upon adversely against her in an order dated June 19, 1955, which had become final, as Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in the conjugal property, and the court in its said error found that there exists no community property owned by the decedent and his former wife at the time the decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact contained therein, i.e. that there was no community property acquired by the testator and Magdalena C. Bohanan during their converture. Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator. The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore,
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have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is the failure old the testator to give his children two-thirds of the estate left by him at the time of his death, in accordance with the laws of the forum valid? The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question. Says the law on this point: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property and the country in which it is found. 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 the testementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will. It does not appear that at time of the hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows: SEC. 41. Proof of public or official record. An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. We have, however, consulted the records of the case in the court below and we have found that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by appellant's (herein) counsel as Exhibits "2". Again said laws presented by the counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo. In addition, the other appellants, children of the testator, do not dispute the abovequoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition. As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator, and as it has been decided and it is not disputed that the national law of the testator is that of the State of Nevada, already indicated above, which allows a testator to dispose of all his
property according to his will, as in the case at bar, the order of the court approving the project of partition made in accordance with the testamentary provisions, must be, as it is hereby affirmed, with costs against appellants. 8. CARABALLO V. REPUBLIC Facts: Ricardo R. Caraballo, an American citizen, was living with his wife Graciela Caraballo in Clark Field, Angeles, Pampanga. He enlisted in the US Air Force as staff sergeant detailed in Clark through a verified petition before the CFI of Pampanga. He alleged that he and his wife have no legitimate, legitimated, acknowledged natural children, natural children by legal fiction or any other descendants, and that with his wifes written consent, he desires to adopt Norma Lee Caber, a five-year old daughter of Mercedes Caber of an unknown father. Caber gave her consent in a sworn statement. The verified petition was ordered to be published, but no one appeared to contest the adoption. Provincial and Assistant Provincial Fiscal of Pampanga moved to dismiss the petition since the petitioner, being a non-resident alien, is not qualified to adopt. MD denied. The CFI granted the adoption of Norma Lee Caber after finding the following facts: petitioner is 32 years old, the child is 3 months old, he had the child in his household since the day following her birth and has developed fondness for her. He is a staff sergeant in the US Air Force and is adequately compensated, and he has never been convicted of a crime involving moral turpitude. Issue: W/N Caraballo is qualified to adopt. Held: NO. (Law in effect at that time, 1962) Article 335 of the Civil Code provides: The following cannot adopt (1) Those who have legitimate, legitimated, acknowledged natural children, or natural children by legal fiction; (2) The guardian, with respect to the ward, before the final approval of his accounts; (3) A married person, without the consent of the other spouse; (4) Non-resident aliens; (5) Resident aliens with whose government the Republic of the Philippines has broken diplomatic relations; (6) Any person who has been convicted of a crime involving moral turpitude, when the penalty imposed was six months imprisonment or more. A person is deemed a resident of a place in a country or state where he has his abode and lives there permanently. It is a place chosen by him freely and voluntarily, although he may later on change his mind and live elsewhere. A place in a country or state where he lives and stays permanently and to which he intends to return after a temporary absence, no matter how long, is his domicile. A sojourn such as a tourist though actually present at a place of his free choice cannot be deemed a resident of
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that place. A foreigner who has a business or interest therein or property located in a country or state and goes and stays in that country or state to look after his business or property or to check up the manner or way his business or property is being conducted or run by his manager but does not intend to remain in the country indefinitely cannot be deemed a resident of such country. Actual or physical presence or stay of a person in a place, not of his free and voluntary choice and without intent to remain there indefinitely, does not make him a resident of the place. Looking after the welfare of a minor to be adopted the law has surrounded him with safeguards to achieve and insure such welfare. It cannot be gainsaid that an adopted minor may be removed from the country by the adopter, who is not a resident of the Philippines, and placed beyond the reach and protection of the country of his birth. Ricardo R. Caraballo, the petitioner, an American citizen who now lives in Clark Field, municipality of Angeles, province of Pampanga, Republic of the Philippines, because of his assignment as staff sergeant in the United States Air Force his stay in the Philippines then being temporary is a non-resident alien who, pursuant to clause 4 of the above quoted article of the Civil Code, is disqualified to adopt a child in the Philippines. 9. AZNAR V. CHRISTENSEN-GARCIA Facts: Edward Christensen, born in New York, migrated to California where he resided and consequently was considered citizen thereof. He came to the Philippines where he became a domiciliary until the time of his death. However, during the entire period of his residence in this country, he had always considered himself a citizen of California. In his will, Edward instituted his daughter Maria Lucy Christensen as his only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia who, in his will was described as "not in any way related to" him but in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Helen alleged that the will deprives her of her legitime as an acknowledged natural child. She claims that under Art. 16 of the Civil Code, the California law should be applied, and the question of the validity of the testamentary provision should thus be referred back to the law of the decedents domicile, which is the Philippines. She invokes the provisions of Article 946 of the Civil Code of California, which is as follows: If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile. Accordingly, her share must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, the executor and Lucy argue that the national law of the deceased must apply, and thus the courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator may dispose of his property by will in the form and manner he desires (Kaufman Case). Issue: W/N Philippine law should ultimately be applied? YES
Held: Edward was a US Citizen and domiciled in the Philippines at the time of his death. The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows: ART. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found. The laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied in Kaufman, is its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited in Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, which is the Philippines in the case at bar. The Philippine court therefore must apply its own law as directed in the conflict of laws rule of the state of the decedent. WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. RENVOI DOCTRINE A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.' Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the doctrine of renvoi is that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum.
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11. ZITA NGO BURCA V. REPUBLIC Residence Requires bodily presence inhabitant in a given place 10. LAO CHAY V. GALANG FACTS: Ng Siu Luan and her three children, who are all of minor age, came to the Philippines on January 19, 1960 as temporary visitors, having been allowed to stay in this country until January 26, 1961. Instead of departing on that date, however, appellees asked the Bureau of Immigration for the cancellation of their alien certificates of registration as well as those of their children on the basis of Lao Chay's admission to Philippine citizenship on December 12, 1960. On January 20, 1961, appellant Commissioner of Immigration granted the petition as far as Lao Chay and the three children were concerned, but denied the same with respect to Ng Siu Luan on the ground that "she is not qualified to acquire Philippine citizenship of her husband under the provision of paragraph 1, Section 15 of Commonwealth Act No. 473, as she lacks the requirements provided for under paragraph 2 of the same Act." He therefore asked her to leave the country on January 26, 1961. The Immigration Commissioner denied a subsequent motion for reconsideration, although he gave Ng Siu Luan a five-day extension within which to arrange for her departure. To stop the threatened deportation of Ng Siu Luan appellees filed a petition for mandamus and prohibition in the Court of First Instance of Manila and secured from it a writ of preliminary injunction. After trial, the court granted the petition, and held that the law does not require that an alien wife should have the same qualifications as those required of applicants for naturalization, it being enough that she is not otherwise disqualified. ISSUE: Whether the wife of a Chinese who obtained papers of Philippine citizenship, automatically follows the citizenship of her husband if not otherwise disqualified under the Naturalization Law. From this decision, the Commissioner of Immigration appeals. HELD: Section 15 of the Revised Naturalization Law Effect of the naturalization on wife and Any woman who is now or may here-after be married to a citizen of the Philippines, and who might herself be lawfully naturalized, shall be deemed a citizen of the Philippines. It is now settled that under this provision, an alien woman, who is married to a citizen of the Philippines acquires the citizenship of her husband only if he has all the qualifications prescribed in Section 2 and none of the disqualifications provided in Section 4 of the law.1 Since Ng Siu Luan admittedly does not possess the qualifications for naturalization, her marriage to Lao Chay be deemed as automatically vesting in her Filipino citizenship. of an Domicile Requires bodily presence in that place and also an intention to make it ones domicle Facts: This is about the petition of Zita Ngo Burca to declare her as possessing all qualifications and none of the disqualifications for naturalization under Commonwealth Act 473 for the purpose of cancelling her Alien Registry with the Bureau of Immigration. Petitioner Zita was born in Gigaquit, Surigao (now Surigao del Norte), on March 30, 1933. Her father was Ngo Tay Suy and her mother was Dee See alias Lee Co, now both deceased and citizens of China. She holds Native Born Certificate of Residence 46333 and Alien Certificate of Registration A-148054. She married Florencio Burca a native-born Filipino. Notice of hearing was sent to the SolGen and duly published. SolGen opposed and moved to dismiss the petition because 1) there is no proceeding established by law, or the rules for the judicial declaration of the citizenship of an individual; and (2) that as an application for Philippine citizenship, "the petition is fatally defective for failure to contain or mention the essential allegations required under Section 7 of the Naturalization Law", such as, among others, petitioner's former places of residence, and the absence of the affidavits of at least two supporting witnesses. During trial, the sole witness was petitioner. Lower court ruled in favor of Zita, that she be declared a citizen of the Philippines, after taking the necessary oath of allegiance. Issue: WON Zitas petition should be granted Held: No. By constitutional and legal precepts, an alien woman who marries a Filipino citizen, does not by the mere fact of marriage - automatically become a Filipino citizen. Citizenship is limited to Article 4 of the Constitution. On the legal status of an alien woman married to a citizen of the Philippines, Congress in paragraph 1, Section 15 of the Revised Naturalization Law legislated the following: Any woman who is now or may hereafter be married to a citizen of the Philippines, and who might herself be lawfully naturalized shall be deemed a citizen of the Philippines. In line with the national policy of selective admission to Philippine citizenship, the wife must possess the qualifications under Section 2, and must not be disqualified under those enumerated in Section 4, of the Revised Naturalization Law. The court ruled that 1) An alien woman married to a Filipino who desires to be a citizen of this country must apply by filing a petition for citizenship reciting that she possesses all the qualifications set forth in Section 2, and none of the disqualifications under Section 4, both of the Revised Naturalization Law; (2) Said petition must be filed in the CFI where petitioner has resided at least 1 year immediately preceding the filing of the petition; and (3) Any action by any other office, agency, board or official, administrative or otherwise other than the judgment of a competent court of justice certifying or declaring that an alien wife of the Filipino citizen is also a Filipino citizen, is hereby declared null and void. In this case, Zita was born Gigaquit, Surigao that her former residence was Surigao, Surigao, and that presently she is residing at Regal St., Ormoc City. In court, however, she testified that she also resided in Junquera St., Cebu, where she took
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up a course in home economics, for one year. Section 7 of the Naturalization Law requires that a petition for naturalization should state petitioner's "present and former places of residence". Residence encompasses all places where petitioner actually and physically resided. Cebu, where she studied for one year, perforce comes within the term residence. The reason for exacting recital in the petition of present and former places of residence is that "information regarding petitioner and objection to his application are apt to be provided by people in his actual, physical surrounding". And the State is deprived of full opportunity to make inquiries as to petitioner's fitness to become a citizen, if all the places of residence do not appear in the petition. So it is, that failure to allege a former place of residence is fatal. Another flaw is that said petition is not supported by the affidavit of at least 2 credible persons, "stating that they are citizens of the Philippines and personally know the petitioner to be a resident of the Philippines for the period of time required.Petitioner likewise failed to "set forth the names and post-office addresses of such witnesses as the petitioner may desire to introduce at the hearing of the case".
2.
3. --Petition dismissed 12. MO YA YIM YAO V. CIR Case: Chinese woman married a Filipino citizen. Court held she became a Filipino citizen through marriage. Facts: On February 8, 1961, Lau Yuen Yeung (LY Yeung) applied for a passport visa to enter the Philippines as a non-immigrant. In the interview for her application for a temporary visitor's visa to enter the Philippines, she stated that she was a Chinese residing at Kowloon, Hongkong, and that she desired to take a pleasure trip to the Philippines to visit her great (grand) uncle Lau Ching Ping for 1 month. She was permitted to come and stay in the Phils. until April 13, 1961. Upon her arrival, one Asher Cheng filed a P1Million bond to ensure that she would actually depart from the country on or before the expiration of her authorized period of stay or within the period the COI or his authorized representative might allow. Repeatedly, LY Yeung was allowed to stay in the Philippines up to February 13, 1962. But days before, on January 25, 1962, she married Moy Ya Lim Yao alias Edilberto Aguinaldo Lim, a Filipino. The COI ordered her arrest, deportation and confiscation of her bond. It was noted that she could not write either English or Tagalog, and could speak only a few words in those language. She could not name any Filipino neighbor, with a Filipino name except one, Rosa. She did not know the names of her brothersin-law, or sisters-in-law. LY Yeung and her husband Lim contended that she has become a Filipino through her marriage, thus prayed for the court to enjoin the COIs order. The COI and Office of Solicitor General (OSG) won in the lower court on the following basis: 1. It is evident that said marriage was effected merely for convenience to defeat or avoid her then impending compulsory departure [or deportation]. 2.
4.
She must not only be not among those disqualified but also she must prove she is qualified. Based on Sec.15 of the Revised Naturalization Law which provides: Effect of the naturalization on wife and children. Any woman who is now or may hereafter be married to a citizen of the Philippines, and who might herself be lawfully naturalized shall be deemed a citizen of the Philippines, COI asserted that the clause "who might herself be lawfully naturalized" incontestably implies that an alien woman may be deemed a citizen of the Philippines by virtue of her marriage to a Filipino citizen only if she possesses all the qualifications and none of the disqualifications specified in the law, because these are the explicit requisites provided by law for an alien to be naturalized. Thus, LY Yeung while claiming not to be disqualified, cannot allege that she possesses all the qualifications to be naturalized, because (1) she has been admitted as a temporary visitor only, and (2) it is obvious at once that she lacks at least, the reqd length of residence in the Philippines. If the intention of the law that that the alien need only be not disqualified, it would have been worded "and who herself is not disqualified to become a citizen of the Philippines." There was deliberate and voluntary representation by LY Yeung that she will enter and stay only for a period of 1 month and was able to secure a visa, thus, she cannot go back on her representation to stay permanently without first departing from the Philippines as she had promised. Based on Sec. 9 (g) of the Philippine Immigration Act of 1940, An alien who is admitted as a nonimmigrant cannot remain in the Philippines permanently. To obtain permanent admission, a non-immigrant alien must depart voluntarily to some foreign country and procure from the appropriate Philippine Consul the proper visa and thereafter undergo examination by the Officers of the Bureau of Immigration at a Philippine port of entry for determination of his admissibility in accordance with the requirements of this Act. COI, under Sec.3 of the Commonwealth Act 613, is charged with the administration of all laws relating to immigration is given the authority to perform the quasi-judicial function in determining cases presented to him in relation to alien immigrants
ISSUE: W/N marriage of a foreigner woman to a Filipino citizen confers ipso facto to her Philippine citizenship? RULING: YES. The marriage of a Filipino citizen to an alien woman ipso facto confer Philippine citizenship upon the alien if she "herself may be lawfully naturalized." She need not prove that she has the qualifications set by Naturalization Law. What she needed to prove is that she is not among those disqualified by the law. 1. With regard to the use of marriage for convenience of naturalizationDoubtless that there will be instances where unscrupulous persons will attempt to take advantage of the of law by entering into fake and fictitious marriages or mala fide matrimonies but the court cannot, as a matter of law, rule merely on the basis of these possibilities; the construction of the Naturalization Law should be dictated inexorably by more ponderous relevant considerations, legal, juridical and practical. There can always be means of discovering such undesirable practice and every case can be dealt with accordingly as it arises. With regard to the interpretation of Sec. 15 of CA 473
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3.
First, the section is an exact copy of Section 1994 of the Revised Statutes of the USA, which, at the time of the approval of CA 473, the Americans had already abandoned said phraseology in favor of a categorical compulsion for alien wives to submit to regular naturalization proceedings. Despite this, the Philippine legislature still opted to copy the prior law of USA. Thus, the Court would have to construe on the basis of how the Americans construed their older law, which is the ipso facto grant of naturalization by marriage. Second, since the general purpose of the 1st paragraph of Sec. 15 was obviously to accord to an alien woman, by reason of her marriage to a Filipino, a privilege not similarly granted to other aliens, and with no other objective than to maintain a unity of allegiance among the members of the family. Section 15 was intended to extend special treatment to alien women who by marrying a Filipino irrevocably deliver themselves, their possessions, their fate and fortunes and all that marriage implies to a citizen of this country, "for better or for worse." If the Court will interpret it such that the alien wife must prove the qualifications prescribed by the law (Sec 2 of CA 473), the privilege granted to alien wives would become illusory. The wife is required to prove only that she may herself be lawfully naturalized (or not disqualified) in order to establish her citizenship status as a fact. Third, the Court enumerated several cases, the standing rule under the 2nd case of Ly Giok Ha vs. Galang (1st Ly Giok Ha case decided on 1959, the 2nd in 1966) is that the alien wife becomes ipso facto a Filipino citizenship by reason of marriage to a Filipino, and the bond must be returned. Fourth, for the phrase "herself may be lawfully naturalized," the wife need no longer prove qualifications. The OSG has implicitly conceded that had it been established in the proceedings that LY Yeung possesses all the qualifications required by the law of applicants for naturalization, she would have been recognized by the respondent as a Filipino citizen in the instant case, without requiring her to submit to the usual proceedings for naturalization. Hence, LY Yeung is not among those disqualified under Section 4 of CA 473, and may be lawfully naturalized. With regard to interpretation of Sec.9 (g) of the Philippine Immigration Act of 1940the provision implies that the naturalization of an alien visitor as a Philippine citizen logically produces the effect of conferring upon him ipso facto all the rights of citizenship including that of being entitled to permanently stay in the country, outside the authority of the COI on aliens, since the Immigration Law is a law only for aliens and is inapplicable to citizens of the Philippines.
certificate stating that the child was not legitimate and the line for the fathers name was left blank. Lorenzo refused to forgive Paula and live with her. In fact, the couple drew a written agreement to the effect that (1) all the family allowances allotted by the United States Navy as part of Lorenzos salary and all other obligations for Paulas daily maintenance and support would be suspended; (2) they would dissolve their marital union in accordance with judicial proceedings; (3) they would make a separate agreement regarding their conjugal property acquired during their marital life; and (4) Lorenzo would not prosecute Paula for her adulterous act since she voluntarily admitted her fault and agreed to separate from Lorenzo peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paulas father and stepmother. The agreement was notarized. Lorenzo returned to the US and filed for divorce with the Superior Court of the State of California and was issued an interlocutory judgment of divorce. The divorce decree became final afterwards. Lorenzo returned to the Philippines and married Alicia Llorente in Manila. Apparently, Alicia had no knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage or cohabitation. Lorenzo and Alicia lived together as husband and wife. Their 25 year union produced three children, Raul, Luz and Beverly, all surnamed Llorente. Lorenzo executed a Last Will and Testament. In the will, Lorenzo bequeathed all his property to Alicia and their three children. Lorenzo filed with the RTC Camarines Sur, a petition for the probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special Administratrix of his estate. RTC admitted the will to probate. Before the proceedings could be terminated, Lorenzo died. Paula filed with the same court a petition for letters of administration over Lorenzos estate in her favor. Paula contended (1) that she was Lorenzos surviving spouse, (2) that the various property were acquired during their marriage, (3) that Lorenzos will disposed of all his property in favor of Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal property. Alicia filed in the testate proceeding a petition for the issuance of letters testamentary. RTC gave due course to Paula's petition. RTC held that the divorce decree was and void and inapplicable in the Philippines and therefore the second marriage with Alicia was also void. CA affirmed RTC's decision. Issues: Whether Lorenzos first marriage has been validly dissolved through a divorce decree, which capacitated him to remarry Alicia. Held: YES. The fact that Lorenzo became an American citizen long before and at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, is duly established, admitted and undisputed. Thus, as a rule, issues arising from these incidents are necessarily governed by foreign law. True, foreign laws do not prove themselves in our jurisdiction and our
13. LLORENTE V. CA Facts: Llorente was an enlisted serviceman of the United States Navy. During his term of duty, Lorenzo and Paula Llorente were married before a parish priest, Roman Catholic Church, in Camarines Sur. Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the conjugal home in Camarines Sur. Afterwards, Lorenzo was naturalized as an American Citizen. Upon the end of the World War II, Lorenzo was granted an accrued leave by the US Navy, to visit his wife and he visited the Philippines. He discovered that his wife Paula was pregnant and was living in and having an adulterous relationship with his brother, Ceferino Llorente. Paula gave birth to a boy registered as Crisologo Llorente, with the birth
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courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. While the substance of the foreign law was pleaded, the CA did not admit the foreign law. The CA and the RTC called to the fore the renvoi doctrine, where the case was referred back to the law of the decedents domicile, in this case, Philippine law. While the trial court stated that the law of New York was not sufficiently proven, in the same breath it made the categorical, albeit equally unproven statement that American law follows the domiciliary theory hence, Philippine law applies when determining the validity of Lorenzos will. First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the US. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent was a resident. Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. The hasty application of Philippine law and the complete disregard of the will, already probated as duly executed in accordance with the formalities of Philippine law, is fatal, especially in light of the factual and legal circumstances here obtaining. Owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. However, aliens may obtain divorces abroad, provided they are valid according to their national law. Once proven that the person who initiated the divorce was no longer a Filipino citizen when he obtained the divorce from his spouse, the spouse will lose her right to inherit from him. Divorce and its legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status of persons. The divorce obtained by Lorenzo from his first wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the decedent) are matters best left to the determination of the trial court. The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the will he executed. Since he was a foreigner, he is not covered by our laws on family rights and duties, status, condition and legal capacity. Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law which must be pleaded and proved. Whether the will was
executed in accordance with the formalities required is answered by referring to Philippine law. In fact, the will was duly probated. 14. SALUDO V. AMERICAN EXPRESS Facts: Saludo filed a complaint for damages against American Express Inc. (AMEX) and/or its officers Fish (Vice President & Country Manager) & Mascrinas (Operations Head) with Branch 25, RTC Maasin, Southern Leyte (S.Leyte). Petitioner Saludo is a Filipino, a member of the House of Reps and resident of S.Leyte. Respondent AMEX is a corporation doing business in the Phil, engaged in providing credit and credit facilities & allied services with an office in Makati. Saludos cause of action stemmed from the wrongful dishonor of his AMEX credit card & supplementary card issued to his daughter. The first dishonor happened when Saludos daughter used her card to pay for her purchases in the US in April 2000. The second happened when Saludo used his card to pay his account in Hotel Okawa (Tokyo) while there with other delegates from the Phil to attend the Congressional Recognition in honor of Mr. Tanaka. Allegedly, these dishonors resulted from AMEXs unilateral act of suspending petitioner Saludos account for his failure to pay the balance covering the period of March 2000. Saludo denied receiving the statement of account. Further, he alleged a wrongful charge for late payment in June 2000, and subsequent cancellation of the cards in the following month. AMEX raised the defenses of lack of cause of action and improper venue. On the latter, they said that the residents are not residents of S.Leyte, and even Saludo was allegedly not a resident thereof as evinced by his community tax certificate (CTC) which was issued in Pasay. Saludo responded that at the time of the filing of the complaint, he was already a resident of S. Leyte; that his CTCs were issued in Pasay was only because he had an office there. Issue: Did the appellate court err in declaring an improper venue, because none of the parties was a resident of S. Leyte at the time of the filing of the complaint? YES. Held: This complaint is a personal action, governed by Sec 2, Rule 4 of ROC10 . The choice of venue for personal actions cognizable by the RTC is given to the plaintiff. Jurisprudence has held that the term resides means the place of abode, whether permanent or temporary of the plaintiff of the defendant, as distinguished from domicile which denotes a fixed permanent residence to which, when absent one has the intention of returning. Similarly, in Conflict of Laws, residence applies to a temporary stay of a person in a given place, while domicile refers to the relatively more permanent abode of a person. This distinction is very well emphasized in cases where the Domiciliary Theory must necessarily supplant the Nationality Theory in cases involving stateless persons.

10
Venue of personal actions. - All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff. ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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Residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of residence without intention of remaining will constitute domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile. No particular length of time of residence is required though; however, the residence must be more than temporary. We note that Sec 2, Rule 4 uses the term residence, not domicile. For purposes of ELECTION LAW, residence and domicile are synonymous. When parsed, the term "residence" requires two elements: (1) intention to reside in the particular place; and (2) personal or physical presence in that place, coupled with conduct indicative of such intention. Thus, "the place where a party actually or constructively has a permanent home, where he, no matter where he may be found at any given time, eventually intends to return and remain, i.e., his domicile, is that to which the Constitution refers when it speaks of residence for the purposes of election law." For purposes of VENUE, a less technical definition of residence is adopted, and is understood to mean as "the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile. S. Leyte, as the domicile of petitioner Saludo, was also his residence, as the term is understood in its popular sense. This is because "residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time." Further, petitioner Saludo's residence in S. Leyte could likewise be properly taken judicial notice of by the court a quo. It is bound to know that, under the Constitution, one of the qualifications of a congressman or representative to the House of Representatives is having a residence in the district in which he shall be elected. Petition GRANTED
MARRIAGE, ADOPTION, AND FAMILY RELATION

1. ADPONG V. CHEONG SENG GEE
Facts: Cheong Boo, a native of China, died intestate in Zamboanga. He left property worth nearly 100K. The estate of the deceased was claimed by the 2 following parties: 1. Cheong Seng Gee, who alleged that he was a legitimate child by the marriage of Cheong Boo with Tan Dit in China in 1895, and 2. Mora Adong, who alleged that she had been lawfully married to Cheong Boo in 1896 in Basilan, according to the ceremonies prescribed by the book on marriage of the Koran, w/ her daughters Payang and Rosalia The conflicting claims to the estate of Cheong Boo were ventilated in the CFI. The trial judge Abeto reached the conclusion that the proof did not sufficiently establish the Chinese marriage but that because Cheong Seng Gee had been admitted to the Philippine Islands as the son of the deceased, he should share in the estate as a natural child. As to the allegations of Adong the conclusion was that the marriage between Adong and the deceased had been adequately proved but that under the laws of the Philippine Islands it could not be held to be a lawful marriage; so, the daughters Payang and Rosalia would inherit as natural children. The order of the judge was for there to be a partition of the property of the deceased Cheong Boo between the natural children, Cheong Seng Gee, Payang, and Rosalia. Both parties appealed. Issues: 1. W/N the marriage contracted in China, and proven mainly by an alleged matrimonial letter, is valid in the Philippines NO because there is no proof as to produce a conviction as to the existence of the Chinese marriage 2. W/N the marriage performed in the Philippines according to the rites of the Mohammedan religion is valid - YES Held: 1. Validity of the Chinese Marriage Cheong Seng Gee claimed that Cheong Boo was married in Amoy, China to Tan Dit in 1985. Witnesses (one was Cheong Boos brother) were presented who testified to having been present at the marriage ceremony. There was also introduced in evidence a document in Chinese which says that the father of Tan Dit accepted the offer of marriage of Cheong Boo and that such document serves as the proof of the acceptance. Cheong Boo is said to have remained in China for more than 1 year, during this time Cheong Seng Gee was born. Cheong Boo then left China for the Philippines and had a concubine Mora by whom he had 2 children. In 1910, Cheong Seng Gee went to the Philippines who, as appears from documents presented, was permitted to land in the country as the son of Cheong Boo. Cheong Boo never returned to China and seems never to have corresponded with his Chinese wife or to have had any further relations w/ her. The immigration documents only go to show the relation of parent and child existing between the Cheong Boo and son Cheong Seng Gee but do not establish the marriage between the deceased and Seng Gees mother. Sec. IV of Marriage Law
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(General Order No. 68) provides that "All marriages contracted without these Islands, which would be valid by the laws of the country in which the same were contracted, are valid in these Islands." 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 the case at bar there is no competent testimony as to what the laws of Amoy, China concerning marriage were in 1895. There is lacking proof so clear, strong, and unequivocal as to produce a moral conviction of the existence of the alleged prior Chinese marriage. 2. Validity of the Mohammedan Marriage Adong claimed that a marriage ceremony took place in Basilan according to the rites of Mohammedan religion. This is established by the Iman who solemnized the marriage, and by other eyewitnesses, such as Adongs father and the chief of the rancheria. The groom complied with Quranic law by giving to the bride a dowry of P250 in money and P250 in goods. From then day until the death of Cheong Boo, they cohabited as husband and wife. They had 5 children, 2 are living at the time of this case. In his relations w/ 3rd persons, 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 Adong and he gave written consent to the marriage of his minor daughter, Payang. 3 sections of the Marriage Law (General Order No. 68) must be taken into consideration. Sec. IX provides "No marriage heretofore solemnized before any person professing to have authority therefor shall be invalid for want of such authority or on account of any informality, irregularity, or omission, if it was celebrated with the belief of the parties, or either of them, that he had authority and that they have been lawfully married." Marriage in this jurisdiction is both a civil contract and a new relation, an institution in the maintenance of which the public is deeply interested. Consequently, every intendment of the law leans toward legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of contrary evidence, to be in fact married. Sec. IX is in the nature of a curative provision intended to safeguard society by legalizing prior marriages. The courts can properly incline the scales of their decisions in favor of the solution which will more effectively promote the public policy. Here the consequences entailed in holding that the marriage of the Adong and the deceased, in conformity with the Mohammedan religion and Moro customs, was void, would be far reaching in disastrous result because there are at least 150K Moros who have been married according to local custom. The court has the power either to nullify or to validate all of these marriages; either to make all of the children born of these unions bastards or to make them legitimate. The court held that the evidence produced a moral conviction of the existence of the Mohammedan marriage and regarded the provisions of Sec. IX as validating marriages performed according to the rites of the Mohammedan religion. Thus, the Mohammedan marriage is valid, giving to the widow and the 2 legitimate children the rights accruing to them under the law. Also, Sec. V provides that "Marriage may be solemnized by either a judge of any court inferior to the SC, justice of the peace, or priest or minister of the Gospel of any denomination . . ." "Priest" and "minister of the Gospel" means all clergymen of every
denomination and faith. A Mohammedan Iman is a "priest or minister of the Gospel," and Mohammedanism is a "denomination," within the meaning of the Marriage Law. Lastly, Sec. VI provides that "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 2 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 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 Cheong Boo and Adong did in fact take each other to be husband and wife and did thereafter live together as husband and wife. 2. RAMIREZ V. GMUR
Facts: Samuel Bischoff Werthmuller, a native of Switzerland but a resident of the Philippines, died in Iloilo City on Junne 29, 1913, leaving valuable asset which he disposed by will. His will was offered for probate in the CFI of Iloilo, which allowed it. Werthmullers widow, Doa Ana M. Ramirez, was named as executrix. Everything was given to the widow, as the will provided, except for a piece of real property in the City of Thun, Switzerland, which was devised to Werthmullers brothers and sisters. Werthmuller seemed to have ignored in making his will that he had heirs from his natural daughter, Leona Castro. Leona Castro was the daughter of Felisa Castro and an unknown father. There was an annotation on the margin of the original baptismal entry of Leona Castro that a public document (an escritura) states that she was recognized by Samuel Bischoff on June 22, 1877. This annotation was authenticated by the signature of Father Ferrero, whose deposition was taken in this case. Father Ferrero testified that the word escritura in this entry means a public document; and he says that such document was exhibited to him when the marginal note was added to the baptismal record and supplied the basis of the annotation in the entry. Samuel Bischoff tacitly recognized Leona Castro as his daughter and treated her as such. Leona Castro was later married to Frederick von Kauffman, a British subject, born in HK and lived in Iloilo City. Leona Castro and von Kauffman had 3 children (Elene, Federico and Ernesto). Leona Castro was then brought to Thun, Switzerland to recuperate her health. Years later, Leona Castro informed von Kauffman that she does not want to stay married with the latter. Von Kauffman later obtained a divorce decree in Paris, France. It showed that Leona Castro lived in Paris, though there is no evidence showing that she acquired permanent domicile in Paris. The estrangement of von Kauffman and Leona Castro was because Leona Castro was attracted to Dr. Ernest Emil Mory, the physician in charge of the sanitarium in Switzerland where Leona Castro was brought. Dr. Mory and Leona Castro was
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later married in London, England. It appears that Dr. Mory was already married to a certain Helena Wolpman, but had divorced her. Before Dr. Mory and Leona Castro got married, they begot a daughter named Leontina Elizabeth in Thun, Switzerland. A 2nd daughter, Carmen Maria, was born in Berne, Switzerland, and a 3rd daughter, Esther. On October 6, 1910, Leona Castro died. Now, the 2 sets of children are claiming from the estate of Samuel Werthmuller. Otto Gmur is the guardian of the 3 Mory daughters. Frederick von Kauffman appeared as guardian for his own children. Ana Ramirez insists, as against the Mory daughters, that the Leona Castro had never been recognized by Samuel Werthmuller at all. As to the Mory daughters, Leontina Elizabeth is considered an illegitimate daughter which was legitimated by the subsequent marriage of Dr. Mory and Leona Castro. Carmen Maria and Esther Renate, on the other hand, are to considered legitimate offspring of Leona Castro since the latters marriage to von Kauffman was already divorced when they were born and Leona was already married to Dr. Mory. The von Kauffman children insists that the divorce decree was wholly invalid; that the Mory daughters are the offspring of an adulterous relationship; and that the von Kauffman daughters alone should be entitled to participate in the division of the estate. Issue: Whether or not the Mory daughters and the von Kauffman children are entitled to participate in the division of the estate of Samuel Bischoff Werthmuller. Held: The SC held that the von Kauffman children are entitled to participate in the inheritance as legitimate children of Leona Castro and Frederick von Kauffman. Leona Castros relationship to Samuel Werthmuller was ruled as follows: It is satisfactorily shown that Leona Castro was a recognized natural daughter of Samuel Bischoff. The memorandum made by Father Ferrero as to the recognition of Leona Castro was found satisfactory, despite the fact that the original was not presented after diligent search and secondary evidence as well as Fr. Ferreros deposition was presented. It will be observed that the recognition of Leona Castro as the daughter of Samuel Bischoff occurred prior to the date when the Civil Code was put in force in these Islands; and consequently her rights as derived from the recognition must be determined under the law as it then existed, that is, under Law 11 of Toro, which afterwards became Law 1, title 5, book 10, of the Novisima Recopilacion. Under that law recognition could be established by proof of acts on the part of the parent unequivocally recognizing the status of his offspring. In other words at tacit recognition was sufficient. Under article 131 of the present Civil Code, the acknowledgment of a natural child must be made in the record of birth, by will, or in
other public instrument. We are of the opinion that the recognition of Leona Castro is sufficiently shown whether the case be judged by the one provision or the other. But it is contended by counsel for Doa Ana Ramirez that only children born of persons free to marry may possess the status of recognized natural children, and there is no evidence to show that Felisa Catro was either a single woman or widow at the time of the conception or birth of Leona. In the absence of proof to the contrary, it must be presumed that she was single or a widow. From the fact that Leona Castro was an acknowledged natural daughter of her father, it follows that had she survived him she would have been his forced heir, he having died after the Civil Code took effect; and as such forced heir she would have been entitled to one-third of the inheritance. To determine the rights of the Mory daughters, the SC had to look into the validity of the divorce decree obtained by von Kauffman in Paris. If the decree is valid, then the marriage of Mory and Leona Castro is valid and the Mory daughters are entitled to participate in the division of the estate. Otherwise, the Mory daughters would have no such right. As to the Mory daughters, the SC held that the divorce decree relied upon cannot be recognized as valid in the courts of the Philippines. The French tribunal has no jurisdiction to entertain an action for the dissolution of a marriage contracted in the Philippines by a person domiciled here, such marriage being indissoluble under the laws then prevailing in this country. The evidence shows conclusively that Frederick von Kauffman at all times since earliest youth has been, and is now, domiciled in the city of Iloilo in the Philippine Islands; that he there married Leona Castro, who was a citizen of the Philippine Islands, and that Iloilo was their matrimonial domicile; that his departure from iloilo for the purpose of taking his wife to Switzerland was limited to that purpose alone, without any intent to establish a domicile elsewhere; and finally that he went to Paris in 1904, for the sole purpose of getting a divorce, without any intention of establishing a permanent residence in that city. The evidence shows that the decree was entered against the defendant in default, for failure to answer, and there is nothing to show that she had acquired, or had attempted to acquire, a permanent domicile in the City of Paris. It is evident of course that the presence of both the spouses in that city was due merely to the mutual desire to procure a divorce from each other. It is established by the great weight of authority that the court of a country in which neither of the spouses is domiciled and to which one or both of them may resort merely for the purpose of obtaining a divorce has no jurisdiction to determine their matrimonial status; and a divorce granted by such a court is not entitled to recognition elsewhere. The voluntary appearance of the defendant before such a tribunal does not invest the court with jurisdiction. It follows that, to give a court jurisdiction on the ground of the plaintiff's residence in the State or country of the judicial forum, his residence must be bona fide. If a spouse leaves the family domicile and goes to another State for the sole purpose of obtaining a divorce, and with no intention of remaining,
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his residence there is not sufficient to confer jurisdiction on the courts of that State. This is especially true where the cause of divorce is one not recognized by the laws of the State of his own domicile. As the divorce granted by the French court must be ignored, it results that the marriage of Doctor Mory and Leona Castro, celebrated in London in 1905, could not legalize their relations; and the circumstance that they afterwards passed for husband and wife in Switzerland until her death is wholly without legal significance. The claims of the Mory children to participate in the estate of Samuel Bischoff must therefore be rejected. The right to inherit is limited to legitimate, legitimated, and acknowledged natural children. The children of adulterous relations are wholly excluded. The word "descendants," as used in article 941 of the Civil Code cannot be interpreted to include illegitimates born of adulterous relations. Even if the claims of the children were made after the probate, the same are not divested by the decree admitting the will to probate since such decree is only conclusive as to the due execution of the will and not its intrinsic validity. 3. HIX V. FLUEMER
The trial court adjudicated the case in her favor and ordered the defendant E. Randolph Hix to pay her the sum of P500 in advance on or before the 5th day of each month for the maintenance of herself and her son. In the month of May, 1925, that is, one year after his arrival at Elkins, West Virginia, the deceased filed a complaint for a divorce with the Circuit Court of Randolph County, West Virginia, alleging, among other things, that he was a citizen of the United States of America, and of the State of West Virginia, and had been for more than one year prior to the date of the institution of the suit, an actual bona fide citizen and resident of Randolph County, West Virginia; that Annie cousins Hix was a resident of the City of Peking, China; that on December 1, 1921, his wife had abandoned and deserted him, taking up a separate residence and declining to live or have anything to do with him; that he, Hix, freely, voluntarily, and adequately supported his wife and child, paying her the sum of $175 per month; that he intended to reside permanently in the United States, and that it was with such intention that he had returned to West Virginia; that he and his wife had been living apart for three years, and that she had rejected his offer of reconciliation. As the appellant was not a resident of the State of West Virginia, she was summoned upon the complaint for divorce by publication, and not having entered an appearance in the case, either personally or by counsel within the term fixed, the Circuit Court of Randolph County, West Virginia, rendered judgment against her in 1925 declaring her marriage with the plaintiff dissolved. Having procured the divorce, E. Randolph Hix returned to Manila in 1927, where he continued to live and engaged in business up to the time of his death in the year 1929. ISSUE: whether the Circuit Court of Randolph County in West Virginia acquired jurisdiction to take cognizance of the complaint for divorce filed by E .Randolph Hix and to render a valid and binding judgment against the petitioner and appellant, Annie Cousins Hix. HELD: The pertinent part of section 306 of the Code of Civil Procedure provides as follows: SEC. 306. Effect of Judgment. The effect of a judgment or final order in an action or special proceeding before a court or judge of the Philippine Islands or of the United States, or of any State or Territory of the United States, having jurisdiction to pronounce the judgment or order, may be as follows: 1. In case of a judgment or order against a specific thing, or in respect to the probate of a will, or the administration of the estate of a deceased person, or in respect to the personal, political, or legal condition or relation of a particular person, the judgment or order in conclusive upon the title of the thing, the will or administration, or the condition or relation of the person: . . . . These provisions show that in order that a judgment of a court or judge of any state of the American Union with respect to the personal or legal condition of a particular person may be conclusive and constitute res judicata, it is essential that the court
FACTS: E. Randolph Hix was born in the year 1866 in Union, South Carolina, where he lived with his parents until the age of 15. They then removed to Rye, Westchester County, New York. A few years later, he was sent to the University of Lehigh, and to the Massachusetts Institute of Technology, leaving the latter before graduating, to accept employment with the Edison Company where he worked for about three years. After resigning from his position he opened an office and engaged in private work as consulting engineer and contractor until the year 1895, when he removed to Wheeling, West Virginia, to engage in the general engineering business as a member of the firm of Hogg & Hix, surveyors. After fifteen years of residence in Wheeling, he took an examination and received an appointment as coal expert for the Philippine Government, arriving at Manila some time during the year 1910. While E. Randolph Hix was living in Manila in 1912, he met the appellant and married her in Shanghai, China, on or about June 24, 1913, returning to Manila where they established their domicile. A son was born of this union in Boston, Massachusetts, on July 1, 1915, named Preston Randolph Hix, while she was in the United States where she had gone on the month of May of the same year to visit her family and the mother and sister of her husband. The appellant returned to Manila in November, 1916, and continued to live with the deceased as husband and wife. On March 16, 1919, the appellant left for Canada, where she remained with their child until February, 1921, when she returned to Manila in a very precarious condition of health and was given medical treatment in the St. Paul's Hospital at the expense of her husband. After she regained her health, she lived apart from her husband by mutual consent. On December 7, 1922, the appellant instituted an action in the Court of First Instance of Manila against her husband, E. Randolph Hix, for the purpose of compelling him to provide adequate support for herself and her son, Preston Randolf Hix.
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have jurisdiction, and such jurisdiction is presumed in the absence of evidence to the contrary. Section 312 of the Code of Civil Procedure provides: SEC. 312. How Judicial Record May be Impeached. Any judicial record may be impeached by evidence of a want of jurisdiction in the court or judicial officer, of collusion between the parties, or of fraud in the party offering the record, in respect to the proceedings. One of the conditions for the validity of a decree of absolute divorce is that the court granting it has acquired jurisdiction over the subject matter, and to this end the plaintiff must be domiciled in good faith, and for the length of time fixed by the law, in the state in which it was granted. E. Randolph Hix was domiciled in the City of Manila where he lived apart from his wife and child, by mutual consent, and here he had his business. He removed to the State of West Virginia leaving his aforesaid wife and child and his business behind, for the purpose of obtaining an absolute divorce, which he did in 1925, returning in the year 1927 to reside in the City of Manila, and continuing his business. Although the opponent and appellee attempted to show that E. Randolph Hix went to West Virginia with the intention of residing there permanently, as allege in the complaint for divorce, such an intention was contradicted by the fact that before leaving the City of Manila, he did not liquidate his business but placed it under the management of said opponent, and once having obtained his divorce, he returned to the City of Manila to take up his residence and to continue his aforesaid business, and that his purpose in going to West Virginia was to obtain a divorce. By the fact that E. Randolph Hix was a citizen of the United States and of the State of West Virginia, since it is not the citizenship of the plaintiff for divorce which confers jurisdiction upon a court, but his legal residence within the State where he applies for a divorce. That E. Randolph Hix himself believed he had relinquished his former legal residence in West Virginia, of which he was a citizen, upon establishing his marriage domicile in the City of Manila, Philippine Islands, is shown by the fact that he had to reestablish his residence in said State for the length of time fixed by the law in order to be able to file his complaint for a divorce. Since E. Randolph Hix was not a bona fide resident of the State of West Virginia, the divorce decree he obtained from the Circuit Court of Randolph County, is null and void, said court having failed to acquire jurisdiction over the subject matter. But even if his residence had been taken up in good faith, and the court had acquired jurisdiction to take cognizance of the divorce suit, the decree issued in his favor is not binding upon the appellant; for the matrimonial domicile of the spouses being the City of Manila, and no new domicile having been acquired in West Virginia, the summons made by publication, she not having entered an appearance in the case, either personally or by counsel, did not confer jurisdiction upon said court over her person.
The divorce decree issued by the Circuit Court of Randolph County, West Virginia, may also be impeached by evidence of fraud, according to section 312 of the Code of Civil Procedure, quoted above. E. Randolph Hix alleged in his complaint for a divorce filed with the aforementioned court, that on December 1, 1921 his wife had abandoned and deserted him, living separately and declining to live or have anything to do with him; that she was a resident of the City of Peking, China; and that he freely and voluntarily provided adequately for her and their son, paying her $175 per month. These allegations, being false, tended to deceive and did in fact deceive the aforesaid Circuit Court of Randolph County in West Virginia into granting the decree of divorce applied for, because, had he alleged in his complaint that his wife lived apart from him by mutual consent, as was a fact, said court would not have granted the divorce, since in the case of Bacon vs. Bacon (68 W. Va., 747; 70 S. E., 762), the Supreme Court of West Virginia laid down the doctrine that separation by mutual consent does not constitute desertion or abandonment before the law. For the foregoing considerations, we are of opinion and so hold: (1) That the residence acquired in a state of the American Union by a husband, who, for the purpose of obtaining a divorce, abandons the country wherein are his matrimonial domicile and his wife, who is living apart from him by mutual consent, and then returns to said matrimonial domicile after obtaining a divorce, continues residing, therein and engaging in business, is not bona fide residence, and does not confer jurisdiction upon the court even if he alleges in the complaint for divorce that he intends to reside permanently in said state; (2) that the summons by publication in a complaint for divorce, filed in a state by the husband who has gone to said state, abandoning his matrimonial domicile where his wife continues to reside, does not confer jurisdiction upon the court over the person of said wife when she has not entered an appearance in the case, and the decree issued by said court dissolving the marriage is not binding upon her; and (3) that a decree of divorce issued by a court of any state or territory of the American Union, or of a foreign country, may be impeached in another case for lack of jurisdiction in said court over the subject matter, or over the person of the defendant, or for fraud in obtaining it on the part of the person procuring it. 4. BARRETTO V. GONZALES
FACTS: Plaintiff and defendants are citizens of Phil, resident of Manila and married in the Phil. They voluntarily separated and not lived as husband and wife. They have 4 children, who are 11, 10, 8 and 6 years of age. They agreed to allow the husband for the wifes support and their children, 500 pesos monthly and to be increased during illness and necessity, and the title of properties be put in her name. After the agreement, husband left the Philippines and resided to Reno, Nevada and secured an absolute divorce on the ground of desertion, which was approved in November 1927. During that time, he married a Filipina and has three children as a result of that marriage. Defendant reduced the amount he agreed for the support and has not made payments fixed in the divorce decree. When he went back to Philippines, the wife brought an action before CFI Manila requesting that the court confirm and ratify the decree of divorce issued by the state
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of Nevada. And that section 9 of Act No. 2710, which reads as follows: The decree of divorce shall dissolve the community of property as soon as such decree becomes final, but shall not dissolve the bonds of matrimony until one year thereafter. The bonds of matrimony shall not be considered as dissolved with regard to the spouse who, having legitimate children, has not delivered to each of them or to the guardian appointed by the court, within said period of one year, the equivalent of what would have been due to them as their legal portion if said spouse had died intestate immediately after the dissolution of the community of property. be enforced, and that she and the defendant deliver to the guardian ad litem the equivalent of what would have been due to their children. It is also prayed that the community existing between plaintiff and defendant be declared dissolved and the defendant be ordered to render an accounting and to deliver to the plaintiff her share of the community property, that the defendant be ordered to pay the plaintiff alimony at the rate of five hundred pesos (P500) per month, A guardian ad litem was appointed for the minor children, and they appear as intervenors and join their mother in these proceedings. CFI rendered judgment against the defendant. Issue: w/n the decree of divorce could be enforced in the Philippines (no) Held: the SC said that the action of the husband was clearly to circumvent the laws of the Philippine Islands regarding divorce and to secure for themselves a change of status for reasons and under conditions not authorized by our law. At all times the matrimonial domicile of this couple has been within the Philippine Islands and the residence acquired in the State of Nevada by the husband of the purpose of securing a divorce was not a bona fide residence and did not confer jurisdiction upon the Court of that State to dissolve the bonds if matrimony in which he had entered in 1919. While the decisions of this court heretofore in refusing to recognize the validity of foreign divorce has usually been expressed in the negative and have been based upon lack of matrimonial domicile or fraud or collusion, we have not overlooked the provisions of the Civil Code now in force in these Islands. Article 9 thereof reads as follows: The laws relating to family rights and duties, or to the status, condition and legal capacity or persons, are binding upon Spaniards even though they reside in a foreign country. And article 11, the last part of which reads: . . . the prohibitive laws concerning persons, their acts and their property, and those intended to promote public order and good morals, shall nor be rendered without effect by any foreign laws or judgments or by anything done or any agreements entered into a foreign country.
It is therefore a serious question whether any foreign divorce relating to citizens of the Philippine Islands, will be recognized in this jurisdiction, except it be for a cause, and under conditions for which the courts of Philippine Islands would grant a divorce. The lower court in granting relief as prayed for frankly stated that the securing of the divorce, the contracting of another marriage and the bringing into the world of innocent children brings about such a condition that the court must grant relief. The hardships of the existing divorce laws of the Philippine Islands are well known to the members of the Legislature. It is of no moment in this litigation what the personal views of the writer on the subject of divorce may be. It is the duty of the courts to enforce the laws of divorce as written by the Legislature if they are constitutional. Courts have no right to say that such laws are too strict or too liberal. Litigants by mutual agreement can not compel the courts to approve of their own actions or permit the personal relations of the citizens of these Islands to be affected by decrees of foreign courts in a manner which our Government believes is contrary to public order and good morals. Holding the above views it becomes unnecessary to discuss the serious constitutional question presented by appellant in his first assignment of error. 5. ARCA V. JAVIER
Facts: Alfredo Javier was a native born citizen of the Philippines who, in 1937, married Salud R. Arca, another Filipino citizen. Before their marriage they had already a child, Alfredo Javier, Jr., who thereby became legitimated. In 1927 appellant enlisted in the U.S. Navy and in 1938 sailed for the United States aboard a navy ship in connection with his service leaving behind his wife and child, and on August 13, 1940, he filed an action for divorce in the Circuit Court of Mobile County, Alabama, U.S.A., alleging as ground abandonment by his wife. Having received a copy of the complaint, Salud R. Arca filed an answer alleging, among other things, that appellant was not a resident of Mobile County, but of Naic, Cavite, Philippines, and that it was not true that the cause of their separation was abandonment on her part but that appellant was in the United States, without her, because he was then enlisted in the U.S. Navy. Nevertheless, the Circuit Court of Mobile County rendered judgment granting appellant a decree of divorce on April 9, 1941. In July, 1941 that is after securing a divorce from plaintiff Salud R. Arca on April 9, 1941 defendant Alfredo Javier married Thelma Francis, an American citizen, and bought a house and lot at 248 Brooklyn, New York City. In 1949, Thelma Francis, defendant's American wife, obtained a divorce from him for reasons not disclosed by the evidence, and, later on, having retired from the United States Navy, defendant Alfredo Javier returned to the Philippines, arriving here on February 13, 1950. After his arrival in the Philippines, armed with two decrees of divorce one against his first wife Salud R. Arca and the other against him by his second wife Thelma Francis issued by the Circuit Court of Mobile County, State of Alabama, USA, defendant Alfredo Javier married Maria Odvina before Judge Natividad Almeda-Lopez of the Municipal Court of Manila on April 19, 1950, marked Exhibit 2(b). At the instance of plaintiff Salud R. Arca an information for bigamy was filed by the City Fiscal of Manila on July 25, 1950 against defendant Alfredo Javier with the Court of First Instance of Manila,
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Issue: Whether the divorce decree has a effect in this jurisdiction One of the essential conditions for the validity of a decree of divorce is that the court must have jurisdiction over the subject matter and in order that this may be acquired, plaintiff must be domiciled in good faith in the State in which it is granted. So it has been held that "it is not ... the citizenship of the plaintiff for divorce which confers jurisdiction upon a court, but his legal residence within the State." It is true that Salud R. Arca filed an answer in the divorce case instituted at the Mobile County in view of the summons served upon her in this jurisdiction, but this action cannot be interpreted as placing her under the jurisdiction of the court because its only purpose was to impugn the claim of appellant that his domicile or legal residence at that time was Mobile County, and to show that the ground of desertion imputed to her was baseless and false. Such answer should be considered as a special appearance the purpose of which is to impugn the jurisdiction of the court over the case. In several cases this court laid down the following doctrines: It is established by the great weight of authority that the court of a country in which neither of the spouses is domiciled and to which one or both of them may resort merely for the purpose of obtaining a divorce has no jurisdiction to determine their matrimonial status; and a divorce granted by such a court is not entitled to recognition elsewhere. (See Note to Succession of Benton, 59 L. R. A., 143) The voluntary appearance of the defendant before such a tribunal does not invest the court with jurisdiction. (Andrews vs. Andrews, 188 U. S., 14; 47 L. ed., 366.) It follows that, to give a court jurisdiction on the ground of the plaintiff's residence in the State or country of the judicial forum, his residence must be bona fide. If a spouse leaves the family domicile and goes to another State for the sole purpose of obtaining a divorce, and with no intention of remaining, his residence there is not sufficient to confer jurisdiction on the courts of the State. This is especially true where the cause of divorce is one not recognized by the laws of the State of his own domicile. (14 Cyc. 817, 181.)" (Ramirezvs. Gmur, 82 Phil., 855.) But even if his residence had been taken up is good faith, and the court had acquired jurisdiction to take cognizance of the divorce suit, the decree issued in his favor is not binding upon the appellant; for the matrimonial domicile of the spouses being the City of Manila, and no new domicile having been acquired in West Virginia, the summons made by publication, she not having entered an appearance in the case, either personally or by counsel, did not confer jurisdiction upon said court over her person. (Cousins Hix vs.Fluemer, 55 Phil., 851.) At all times the matrimonial domicile of this couple has been within the Philippine Islands and the residence acquired in the State of Nevada by the husband for the purpose of securing a divorce was not a bona fide
residence and did not confer jurisdiction upon the court of the State to dissolve the bonds of matrimony in which he had entered in 1919. (Barretto Gonzales vs. Gonzales, 58 Phil., 67.) In the light of the foregoing authorities, it cannot therefore be said that the Mobile County Court of Alabama had acquired jurisdiction over the case for the simple reason that at the time it was filed appellant's legal residence was then in the Philippines. He could not have acquired legal residence or domicile at Mobile County when he moved to that place in 1938 because at that time he was still in the service of the U.S. Navy and merely rented a room where he used to stay during his occasional shore leave for shift duty. That he never intended to live there permanently is shown by the fact that after his marriage to Thelma Francis in 1941, he moved to New York where he bought a house and a lot, and after his divorce from Thelma in 1949 and his retirement from the U.S. Navy, he returned to the Philippines and married Maria Odvina of Naic, Cavite, where he lived ever since. It may therefore be said that appellant went to Mobile County, not with the intention of permanently residing there, or of considering that place as his permanent abode, but for the sole purpose of obtaining divorce from his wife. Such residence is not sufficient to confer jurisdiction on the court. The above pronouncement is sound as it is in keeping with the well known principle of Private International Law which prohibits the extension of a foreign judgment, or the law affecting the same, if it is contrary to the law or fundamental policy of the State of the forum. (Minor, Conflict of Laws, pp. 8-14). It is also in keeping with our concept or moral values which has always looked upon marriage as an institution. And such concept has actually crystallized in a more tangible manner when in the new Civil Code our people, through Congress, decided to eliminate altogether our law relative to divorce. Because of such concept we cannot but react adversely to any attempt to extend here the effect of a decree which is not in consonance with our customs, morals, and traditions. 6. WONG WOO YUI V. VIVO
Facts: In proceedings held before the Board of Special Inquiry in June, 1961, Wong Woo Yiu declared that she came to the Philippines in 1961 for the first time to join her husband, Perfecto Blas, a Filipino citizen to whom she was married in Chingkang, China on January 15, 1929, that they had several children all of whom are not located in the Philippines, and that their marriage was celebrated by one Chua Tio, a village leader. On June 28, 1961, the Board of Special Inquiry No. 3 rendered a decision finding petitioner to be legally married to Perfecto Las, thus declaring legal her admission into the country. This decision was affirmed by the Board of Commissioners on July 12, 1961 of which petitioner was duly informed in a letter sent on the same date by the Secretary of the Board. However, on June 28, 1962, the same Board of Commissioners, but composed entirely of a new set of members, rendered a new decision contrary to that of the Board of Special Inquiry No. 3 and ordering petitioner to be excluded from the country, after discrepancies were found in the statements made by petitioner and her
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alleged husband during several investigation conducted by the immigration authorities concerning the alleged marriage before a village leader in China in 1929, thus concluding that the petitioner's claim that she is the lawful wife of Perfecto Blas was without basis in evidence as it was "a mass of oral and documentary evidence bereft of substantial proof of husband-wife relationship, the Board of Commissioners motu proprio reviewed the record concerning the admission of petitioner into the country resulting in its finding that she was improperly admitted. Issue: WON Wong Woo Yiu's marriage to Perfecto Blas is valid and making her admission into the country legal. NO! Held: SC affirmed the latter Board's decision. Indeed, not only is there no documentary evidence to support the alleged marriage of petitioner to Perfecto Blas but the record is punctured with so many inconsistencies which cannot but lead one to doubt their veracity concerning the pretended marriage in China in 1929. This claim cannot also be entertained under our law on family relations. Thus, Article 15 of our new Civil Code provides that laws relating to family rights or to the status of persons are binding upon citizens of the Philippines, even though living abroad, and it is well-known that in 1929 in order that a marriage celebrated in the Philippines may be valid it must be solemnized either by a judge of any court inferior to the Supreme Court, a justice of the peace, or a priest or minister of the gospel of any denomination duly registered in the Philippine Library and Museum (Public Act 3412, Section 2). But it may be contended that under Section 4 of General orders No. 68, as reproduced in Section 19 of Act No. 3613, which is now Article 71 of our new Civil Code, a marriage contracted outside of the Philippines which is valid under the law of the country in which it was celebrated is also valid in the Philippines. But no validity can be given to this contention because no proof was presented relative to the law of marriage in China. Such being the case, we should apply the general rule that in the absence of proof of the law of a foreign country it should be presumed that it is the same as our own. The statutes of other countries or states must be pleaded and proved the same as any other fact. Courts cannot take judicial notice of what such laws are. In the absence of pleading and proof the laws of a foreign country or state will be presumed to be the same as our own. In the absence of anything to the contrary as to the character of a foreign law, it will be presumed to be the same as the domestic law on the same subject. In the absence of evidence to the contrary foreign laws on a particular subject are presumed to be the same as those of the Philippines. Since our law only recognizes a marriage celebrated before any of the officers mentioned therein, and a village leader is not one of them, it is clear that petitioners marriage, even if true, cannot be recognized in this jurisdiction. 7. TENCHAVEZ V. ESCANO
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FACTS: - Vicenta Escao(Escao) - 27 y.o. (scion of a well-to-do and socially prominent Filipino family of Spanish ancestry and a "sheltered colegiala"),
Pastor Tenchavez - 32 years of age, an engineer, ex-army officer and of undistinguished stock They exchanged marriage vows without the knowledge of her parents, before a Catholic chaplain, Lt. Moises Lavares. The marriage was the culmination of a previous love affair and was duly registered with the local civil register. They planned to get married and then elope. Elopement did not, however, materialize because when Vicente went back to her classes after the marriage, her mother was already waiting for her at the college. Vicenta was taken home where she admitted that she had already married Pastor. Mamerto and Mena Escao (Escao parents) were surprised, because Pastor never asked for the hand of Vicente, and were disgusted because of the great scandal that the clandestine marriage would provoke. Escano parents wanted them to have a church wedding but Escano changed her mind when she received an anonymous letter stating that Tenchavez had another woman. Escano parents did not agree as well. Vicenta continued living with her parents while Pastor returned to his job in Manila. They continued to exchange letters that were not as endearing as before. Vicenta went to Misamis Occidental, to escape from the scandal that her marriage stirred in Cebu society. There, a lawyer filed for her a petition, drafted by then Senator Emmanuel Pelaez, to annul her marriage. She did not sign the petition however and the case was dismissed without prejudice because of her non-appearance at the hearing. She applied for a passport, indicating in her application that she was single, that her purpose was to study, and she was domiciled in Cebu City, and that she intended to return after 2 yrs. In US, Escano filed divorce against the Tenchavez in the Second Judicial District Court of the State of Nevada in and for the County of Washoe, on the ground of "extreme cruelty, entirely mental in character." Oct/21/1950 - decree of divorce, "final and absolute", was issued in open court by the said tribunal. Later, Escano married an American, Russell Leo Moran, in Nevada. She now lives with him in California, and, by him, has begotten children. Aug/8/1958 - She acquired American citizenship. Jul/30/1955 amended on May 31, 1956 - Tenchavez had initiated the proceedings at bar against Vicenta F. Escao, legal separation for bigamy, against Escano Parents, whom he charged with having dissuaded and discouraged Vicenta from joining her husband, and alienating her affections, and against the Roman Catholic Church, for having, through its Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal separation and one million pesos in damages.
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Escano claimed a valid divorce from plaintiff and an equally valid marriage to her present husband, Russell Leo Moran Escano Parents - denied that they had in any way influenced their daughter's acts, and counterclaimed for moral damages. CFI, Cebu - did not decree a legal separation, but freed the plaintiff from supporting his wife and to acquire property to the exclusion of his wife. It allowed the counterclaim of Mamerto Escao and Mena Escao for moral and exemplary damages and attorney's fees against the plaintiff-appellant (P45,000.00). Thus, plaintiff resorted directly to this Court. ISSUE: WON the divorce is valid. HELD: NO. Authority of the solemnizing officer - Nowhere shown that said priest was not duly authorized under civil law to solemnize marriages. Authorization from the parish priest and the Ordinary, as required by Canon law, is irrelevant in our civil law, not only because of the separation of Church and State but also because Act 3613 of the Philippine Legislature (OCC) which was the marriage law in force at the time expressly provided that SEC. 1. Essential requisites. Essential requisites for marriage are the legal capacity of the contracting parties and consent. - Actual authority of the solemnizing officer was thus only a formal requirement, and, therefore, not essential to give the marriage civil effects. SEC. 27. Failure to comply with formal requirements. No marriage shall be declared invalid because of the absence of one or several of the formal requirements of this Act x x x
NCC does not allow absolute divorce, quo ad vinculo matrimonii; and does not even use that term, to further emphasize its restrictive policy on the matter, in contrast to the preceding legislation that admitted absolute divorce on grounds of adultery of the wife or concubinage of the husband (Act 2710). Instead of divorce, the NCC only provides for legal separation (Title IV, Book 1, Arts. 97 to 108), and, even in that case, it expressly prescribes that "the marriage bonds shall not be severed" The grant of effectivity in this jurisdiction to such foreign divorce decrees would, in effect, give rise to an irritating and scandalous discrimination in favor of wealthy citizens, whose means do not permit them to sojourn abroad and obtain absolute divorces outside the Philippines.
Escano and Escano Parents liability - denial of consortium and her desertion of her husband constitute in law a wrong caused through her fault, for which the husband is entitled to the corresponding indemnity. - Her marriage and cohabitation with Russell Leo Moran is technically "intercourse with a person not her husband" from the standpoint of Philippine Law, and entitles plaintiff-appellant Tenchavez to a decree of "legal separation under our law, on the basis of adultery" Tenchavez claim that Escano Parents, alienated the affections of their daughter and influenced her conduct toward her husband are not supported by credible evidence: o 1.) He was admitted to the Escao house to visit and court Vicenta, No records WON they would refuse if courtship and marriage were done in the traditional religious way; 2.) It was Escanos decision. She is acted independently, and being of age. They just supported her. Tenchavez, in falsely charged Escano parents with racial or social discrimination and with having exerted efforts and pressured her to seek annulment and divorce, w/c caused them unrest and anxiety, entitling them to recover damages.
Validity of Escano-Tenchavez marriage - The very act of Vicenta in abandoning her original action for annulment and subsequently suing for divorce implies an admission that her marriage to plaintiff was valid and binding. - Escao argues that when she contracted the marriage she was under the undue influence of Pacita Noel, whom she charges to have been in conspiracy with appellant Tenchavez. Such a vice did not render her marriage ab initio void, but merely voidable, and the marriage remained valid until annulled by a competent civil court. This was never done, and admittedly, Vicenta's suit for annulment in CFI, Misamis was dismissed for non-prosecution.
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Award for Damages For Tenchavez - should recover P25,000 only by way of moral damages and attorney's fees; For Escano Parents P45K excessive. Lawsuits have become a common occurrence in present society. Reduced to P5k. 8. VAN DORM V. ROMILLO
Validity of the divorce decree - Marriage between Pastor Tenchavez and Vicenta Escao remained subsisting and undissolved under Philippine law, notwithstanding the decree of absolute divorce that the wife obtained. - When it was issued, Escao and Tenchavez were still both Filipino citizens. Thus, Escano was then subject to Philippine law, and Art. 15 NCC of the Philippines (Rep. Act No. 386), already in force at the time,
Facts: Alice Reyes Van Dorn, a Filipino Citizen and private respondent, Richard Upton, a US citizen, was married in Hong Kong in 1979. They established their residence in the Philippines and had 2 children. They were divorced in Nevada, USA in 1982 and petitioner remarried, this time with Theodore Van Dorn. A suit against petitioner was filed on June 8, 1983, stating that petitioners business in Ermita Manila, the Galleon Shop, is a conjugal property with Upton and prayed therein that Alice be ordered to render an accounting of the business and he be declared as the administrator of the said property. Petitioner moved to dismiss the case on the
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ground that the cause of action is barred by previous judgment in the divorce proceedings before the Nevada Court wherein respondent had acknowledged that he and petitioner had "no community property" as of June 11, 1982. The Court below denied the Motion to Dismiss in the mentioned case on the ground that the property involved is located in the Philippines so that the Divorce Decree has no bearing in the case. Issue: Whether or not the foreign divorce between the petitioner and private respondent in Nevada is binding in the Philippines where petitioner is a Filipino citizen? YES Held: Petitioner contends that respondent is estopped from laying claim on the alleged conjugal property because of the representation he made in the divorce proceedings before the American Court that they had no community of property; that the Galleon Shop was not established through conjugal funds, and that respondent's claim is barred by prior judgment. For his part, respondent avers that the Divorce Decree issued by the Nevada Court cannot prevail over the prohibitive laws of the Philippines and its declared national policy; that the acts and declaration of a foreign Court cannot, especially if the same is contrary to public policy, divest Philippine Courts of jurisdiction to entertain matters within its jurisdiction. The Nevada District Court, which decreed the divorce, had obtained jurisdiction over petitioner who appeared in person before the Court during the trial of the case. It also obtained jurisdiction over private respondent who, giving his address authorized his attorneys in the divorce case, Karp & Gradt Ltd., to agree to the divorce on the ground of incompatibility in the understanding that there were neither community property nor community obligations. The decree is binding on private respondent as an American citizen. For instance, private respondent cannot sue petitioner, as her husband, in any State of the Union. What he is contending in this case is that the divorce is not valid and binding in this jurisdiction, the same being contrary to local law and public policy. It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, 5 only Philippine nationals are covered by the policy against absolute divorces the same being considered contrary to our concept of public police and morality. However, aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. 6 In this case, the divorce in Nevada released private respondent from the marriage from the standards of American law, under which divorce dissolves the marriage. Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have no standing to sue in the case below as petitioner's husband entitled to exercise control over conjugal assets, he is estopped by his own representation before said Court from asserting his right over the alleged conjugal property.
9.
DE LEON V. CA
Facts: Oct. 18, 1969 private respondent Jose Vicente De Leon and petitioner Sylvia Lichauco De Leon were united in wedlock before the Municipal Mayor of Binangonan Rizal Aug. 28, 1971 Susana L. De Leon were born from this union Oct. 1972 de facto separation between the spouses occurred due to irreconcilable marital differences; Sylvia left the conjugal home March 1973 Sylvia went to the US and obtained American citizenship Nov. 29, 1973 Sylvia filed with the Superior Court of California, a petition for dissolution of marriage against Jose Vicente; also filed claims for support and distribution of properties/ but since Jose Vicente was a Philippine resident and did not have any assets in the US, Sylvia held the divorce proceedings in abeyance and concentrated her efforts to obtain property settlements with Jose Vicente March 16, 1977 Sylvia entered into a Letter-Agreement with private respondent Macaria De Leon (her mother-in-law) March 30, 1977 - Sylvia and Jose Vicente filed before the CFI of Rizal a joint petition for judicial approval of dissolution of their conjugal partnership Trial court: declared that the conjugal partnership of the spouses is DISSOLVED March 17, 1980 Sylvia moved for the execution of the Order of the trial court; Vicente moved for MR April 20, 1980 Macaria filed with the trial court a motion for leave to intervene, alleging that she is the owner of the properties involved in the case; assailed the validity and legality of the Letter-Agreement which had for its purpose, the termination of the marital relations of the spouses CA: affirmed the decision of the RTC Issue: Whether or not the Letter-Agreement is valid - NO Held: The only basis by which Sylvia may lay claim to the properties which are the subject matter of the Letter-Agreement, is the Letter-Agreement itself. The third paragraph of the Letter-Agreement, reads: In consideration for a peaceful and amicable termination of relations between the undersigned and her lawfully wedded husband, Jose Vicente De Leon, your son, the following are agreed upon: Sylvia insists that the consideration for her execution of the Letter-Agreement was the termination of property relations with her husband. Indeed, Sylvia and Jose Vicente subsequently filed a joint petition for judicial approval of the dissolution of their conjugal partnership, sanctioned by Article 191 of the Civil Code. On the other hand, Macaria and Jose Vicente assert that the consideration was the termination of marital relationship. RTC said that the cause or consideration for the intervenor Macaria De Leon in having executed the Letter-Agreement was the termination of the marital relationship between her son Jose Vicente De Leon and Sylvia Lichauco de Leon. Article 1306 of the New Civil Code provides:
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Art. 1306. The contracting parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy. If the stipulation is contrary to law, morals or public policy, the contract is void and inexistent from the beginning. Art. 1409. The following contracts are inexistent and void from the beginning: Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; xxx xxx xxx (7) Those expressly prohibited or declared void by law. These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived. But marriage is NOT a mere contract but a sacred social institution. Thus, Art. 52 of the Civil Code provides: Art. 52. Marriage is not a mere contract but an inviolable social institution. Its nature, consequences and incidents are governed by law and not subject to stipulations... From the foregoing provisions of the Civil Code, the court believes that Macaria De Leons undertaking that the termination of marital relationship is not only conratry to law but also to Filipino morals and public policy. As such, any agreement or obligations based on such unlawful consideration and which is contrary to public policy should be deemed null and void. Additionally, Article 191 of the Civil Case contemplates properties belonging to the spouses and not those belonging to a third party, who, in the case at bar., is Macaria. In the petition for the dissolution of the conjugal partnership, it was made to appear that the said properties are conjugal in nature. However, Macaria was able to prove that the questioned properties are owned by her. Neither Sylvia nor Jose Vicente adduced any contrary evidence. Even granting that the consideration of the Letter-Agreement was the termination of property relations, the Court said that: Art. 221. The following shall be void and of no effect: (1) Any contract for personal separation between husband and wife; (2) Every extra-judicial agreement, during marriage, for the dissolution of the conjugal partnership of gains or of the absolute community of property between husband and wife; Besides, the Letter-Agreement shows on its face that it was prepared by Sylvia, and in this regard, the ambiguity in a contract is to be taken contra proferentem, i.e.,
construed against the party who caused the ambiguity and could have also avoided it by the exercise of a little more care. Thus, Article 1377 of the Civil Code provides: "The interpretation of obscure words of stipulations in a contract shall not favor the party who caused the obscurity" Article 1335 of the Civil Code provides: xxx xxx xxx There is intimidation when one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent. To determine the degree of the intimidation, the age, sex and condition of the person shall be borne in mind. A threat to enforce one's claim through competent authority, if the claim is just or legal, does not vitiate consent. In order that intimidation may vitiate consent and render the contract invalid, the following requisites must concur: (1) that the intimidation must be the determining cause of the contract, or must have caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be real and serious, there being an evident disproportion between the evil and the resistance which all men can offer, leading to the choice of the contract as the lesser evil; and (4) that it produces a reasonable and well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury. In this case, the claim of Macaria that Sylvia threatened her to bring Jose Vicente to court for support, to scandalize their family by baseless suits and that Sylvia would pardon Jose Vicente for possible crimes of adultery and/or concubinage subject to the transfer of certain properties to her, is obviously not the intimidation referred to by law. With respect to mistake as a vice of consent, neither is Macaria's alleged mistake in having signed the Letter-Agreement because of her belief that Sylvia will thereby eliminate inheritance rights from her and Jose Vicente, the mistake referred to in Article 1331 of the Civil Code. It does not appear that the condition that Sylvia "will eliminate her inheritance rights" principally moved Macaria to enter into the contract. Rather, such condition was but an incident of the consideration thereof which, is the termination of marital relations. Article 1414 of the Civil Code, which is an exception to the pari delicto rule, is the proper law to be applied. It provides: When money is paid or property delivered for an illegal purpose, the contract may be repudiated by one of the parties before the purpose has been accomplished, or before any damage has been caused to a third person. In such case, the courts may, if the public interest wig thus be subserved, allow the party repudiating the contract to recover the money or property.
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Since the Letter-Agreement was repudiated before the purpose has been accomplished and to adhere to the pari delicto rule in this case is to put a premium to the circumvention of the laws, positive relief should be granted to Macaria. Justice would be served by allowing her to be placed in the position in which she was before the transaction was entered into. Petition is DENIED. CAs decision is AFFIRMED. 10. BALLADOS V. CA 11. YAO KEE, ET. AL V. SY-GONZALES Facts: Sy Kiat, a Chinese national, died in 1977 in Caloocan City where he was then residing, leaving behind real and personal properties here in the Philippines worth P300,000.00 more or less. Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo Sy filed a petition for the grant of letters of administration in CFI of Caloocan. They alleged among others that (a) they are the children of the deceased with Asuncion Gillego; (b) to their knowledge Sy Kiat died intestate; (c) they do not recognize Sy Kiat's marriage to Yao Kee nor the filiation of her children to him; and, (d) they nominate Aida SyGonzales for appointment as administratrix of the intestate estate of the deceased. The petition was opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy Yun Chen who alleged that: (a) Yao Kee is the lawful wife of Sy Kiat whom he married in 1931 in China; (b) the other oppositors are the legitimate children of the deceased with Yao Kee; and, (c) Sze Sook Wah is the eldest among them and is competent, willing and desirous to become the administratrix of the estate of Sy Kiat. CFI: Sy Kiat legally married to Yao Kee CA: marriage to Yao Kee not proven Issue: WON the marriage of Sy Kiat and Yao Kee was proven (NO) Held: Philippine courts cannot take judicial notice of foreign laws. They must be alleged and proved as any other fact. To support the case of Yao Kee, the following pieces of evidence were presented: 1) Yao Kees testimony that she was married to Sy Kiat in 1931 in Fookien, China; that she does not have a marriage certificate because the practice during that time was for elders to agree upon the betrothal of their children, and in her case, her elder brother was the one who contracted or entered into [an] agreement with the parents of her husband; that she and Sy Kiat, have been living in FooKien, China before he went to the Philippines on several occasions; that the practice during the time of her marriage was a written document is exchanged between the parents of the bride and the parents of the groom, or any elder for that matter; that in China, the custom is that there is a go- between, a sort of marriage broker who is known to both parties who would talk to the parents of the bride-to-be; that if the parents of the bride-to-be agree to have the groom-to-be their son in-law, then they agree on a date as an
engagement day; that during the wedding the document would be signed by the parties but there is no solemnizing officer as is known in the Philippines; that during the wedding day, the document is signed only by the parents of the bridegroom as well as by the parents of the bride; that the parties themselves do not sign the document; that during her wedding, Sy Chick, the eldest brother of Sy Kiat, signed the document with her mother; that as to the whereabouts of that document, she and Sy Kiat were married for 46years already and the document was left in China and she doubt if that document can still be found now; that it was left in the possession of Sy Kiat's family; that right now, she does not know the whereabouts of that document because of the lapse of many years and because they left it in a certain place and it was already eaten by the termites; that after her wedding with Sy Kiat, they lived immediately together as husband and wife, and from then on, they lived together; that Sy Kiat went to the Philippines sometime in March or April in the same year they were married; that she went to the Philippines in 1970, and then came back to China; that again she went back to the Philippines and lived with Sy Kiat as husband and wife; that she begot her children with Sy Kiat during the several trips by Sy Kiat made back to China. 2) the statement of the younger brother of Yao Kee that he was present at the wedding and that no marriage certificate is issued by the Chinese govt, a document signed by the parents being sufficient. 3) Asuncion Gillegos testimony that Sy Kiat admitted to her that he has a Chinese wife whom he married according to Chinese custom 4) Sy Kiats Master Card of Registered Alien, which states that he was married in China to Yao Kee 5) certification issued by the Embassy of the Peoples Republic of China that Sy Kiat and Yao Kee were married in China. At most, these evidence prove the fact of marriage between Yao Kee and Sy Kiat. But it is not sufficient to establish the validity of the marriage in accordance with Chinese law or custom. To establish a valid foreign marriage, two things must be proven: (1) the existence of the foreign law as a question of fact and (2) the alleged foreign marriage by convincing evidence. The petitioners did not present any competent evidence relative to the law and custom of China on marriage. Accordingly, in the absence of proof of the Chinese law on marriage, it should be presumed that it is the same as ours. Since Yao Kee admitted in her testimony that there was no solemnizing officer as is known in the Philippines when her alleged marriage to Sy Kiat was celebrated, it follows that her marriage to Sy Kiat, even if true, cannot be recognized in this jurisdiction. Status of children: children with Yao Kee and Gillego are acknowledged natural children 12. EUGENIO V. VELEZ
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This is a petition for certiorari and prohibition (Rule 65) with application for restraining order and/or injunction. Facts: Unaware of Vitaliana's death on August 28, 1988, her full blood brothers and sisters (Vargases) filed on September 27, 1988, a petition for habeas corpus before the RTC of Misamis Oriental. They alleged that Vitaliana was forcefully taken by Eugenio and was detained in his palacial residence in Jasaan, Misamis Oriental. At the time the petition was filed, it was alleged that Vitaliana was 25, single, and living with Eugenio. The next day, the court issued the writ of habeas corpus but the writ was returned unsatisfied. Counsel of Eugenio stated that Vitaliana already died on Aug. 28 because of heart failure due to her pregnancy and that Eugenio refused to surrender the corpse on the ground that a corpse cannot be the subject of habeas corpus and that he had already obtained a burial permit. Furthermore, since he is the common law spouse, he has the right to the custody of the body and to perform the burial rights. Eugenio filed an urgent motion to dismiss based on lack of jurisdiction over the nature of the action. A special proceeding for habeas corpus, Eugenio argued, is not applicable to a dead person but extends only to all cases of illegal confinement or detention of a live person. On the side of the Vargases, they were granted leave of court to amend their petition. They alleged that Eugenio was in no way related to Vitaliana and that he was wrongfully interfering with the Vargases' duty to bury her. They invoked the Civil Code provisions on asserting that they are to be considered as the next of kin in the Philippines and therefore they are the legal custodians of the corpse. The motion to dismiss was denied. Thereafter, the court a quo proceeded as in or civil cases and, in due course, rendered a decision, resolving the main issue of whether or not said court acquired jurisdiction over the case by treating it as an action for custody of a dead body, without the petitioners having to file a separate civil action for such relief, and without the Court first dismissing the original petition for habeas corpus. The amendments to the petition were but elaborations but the ultimate facts remained the same, hence, this court strongly finds that this court has ample jurisdiction to entertain and sit on this case as an action for custody and burial of the dead body because the body of the petition controls and is binding and since this case was raffled to this court to the exclusion of all other courts, it is the primary duty of this court to decide and dispose of this case. Satisfied with its jurisdiction, the respondent court then proceeded to the matter of rightful custody over the dead body. The order of preference to give support under Art. 294 was used as the basis of the award. Since there was no surviving spouse, ascendants or descendants, the brothers and sisters were preferred over petitioner who was merely a common law spouse, the latter being himself legally married to another woman. Issue: 1) Whether the court has jurisdiction over the subject matter and nature of the proceedings (YES) 2) Whether Eugenio can be considered as the spouse of Vitaliana. (NO)
Held: 1) Section 19, Batas Pambansa Blg. 129 provides for the exclusive original jurisdiction of the Regional Trial Courts over civil cases. Under Sec. 2, Rule 102 of the Rules of Court, the writ of habeas corpus may be granted by a Regional Trial Court. It is an elementary rule of procedure that what controls is not the caption of the complaint or petition; but the allegations therein determine the nature of the action, and even without the prayer for a specific remedy, proper relief may nevertheless be granted by the court if the facts alleged in the complaint and the evidence introduced so warrant. When the petition for habeas corpus was filed before the court a quo, it was not certain whether Vitaliana was dead or alive. While habeas corpus is a writ of right, it will not issue as a matter of course or as a mere perfimetory operation on the filing of the petition. Judicial discretion is exercised in its issuance, and such facts must be made to appear to the judge to whom the petition is presented as, in his judgment, prima facie entitle the petitioner to the writ. While the court may refuse to grant the writ if the petition is insufficient in form and substance, the writ should issue if the petition complies with the legal requirements and its averments make a prima facie case for relief. However, a judge who is asked to issue a writ of habeas corpus need not be very critical in looking into the petition for very clear grounds for the exercise of this jurisdiction. The latter's power to make full inquiry into the cause of commitment or detention will enable him to correct any errors or defects in the petition. After the fact of Vitaliana's death was made known to the petitioners in the habeas corpus proceedings, amendment of the petition for habeas corpus, not dismissal, was proper to avoid multiplicity of suits. Amendments to pleadings are generally favored and should be liberally allowed in furtherance of justice in order that every case may so far as possible be determined on its real facts and in order to expedite the trial of cases or prevent circuity of action and unnecessary expense, unless there are circumstances such as inexcusable delay or the taking of the adverse party by surprise or the like, which justify a refusal of permission to amend. As correctly alleged by respondents, the writ of habeas corpus as a remedy became moot and academic due to the death of the person allegedly restrained of liberty, but the issue of custody remained, which the court a quo had to resolve. 2) Eugenio claims he is the spouse contemplated under Art. 294 of the Civil Code, the term spouse used therein not being preceded by any qualification; hence, in the absence of such qualification, he is the rightful custodian of Vitaliana's body. Vitaliana's brothers and sisters contend otherwise. Indeed, Philippine Law does not recognize common law marriages. A man and woman not legally married who cohabit for many years as husband and wife, who represent themselves to the public as husband and wife, and who are reputed to be husband and wife in the community where they live may be considered legally mauled in common law jurisdictions but not in the Philippines. While it is true that our laws do not just brush aside the fact that such relationships are present in our society, and that they produce a community of properties and interests which is governed by law, authority exists in case law to the effect that such form of co-ownership requires that the man and woman living together must not in any way be incapacitated to contract marriage. In any case, herein petitioner has a subsisting marriage with another woman, a legal impediment which disqualified him from even legally marrying Vitaliana. The provisions of the Civil Code, unless expressly providing to the contrary as in Article 144, when referring to a "spouse" contemplate a lawfully wedded spouse. Petitioner vis-a-vis
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Vitaliana was not a lawfully-wedded spouse to her; in fact, he was not legally capacitated to marry her in her lifetime. Custody of the dead body of Vitaliana was correctly awarded to her surviving brothers and sisters (the Vargases). 13. BOARD OF COMMISSIONERS V. DELA ROSA FACTS: In 1960, Santiago Gatchalian was recognized by the Bureau of Immigration as a native born Filipino citizen following the citizenship of his natural mother. He had 5 children with his wife, Chu Gim Tee: Jose, Gloria, Francisco, Elena and Benjamin. On June 27, 1961, 2 of Santiagos children (Gloria and Francisco), together with Franciscos sons (William and Johnson), arrived in Manila from Hong Kong seeking admission as Filipino citizens. They had with them Certificates of Registration and Identity issued by the Philippine Consulate in HK. After investigation, the Board of Special Inquiry No. 1 (BOSI) rendered a decision dated July 6, 1961 (Decision 1) admitting William and his companions as Filipino citizens. They were then issued an Identification Certificate by the immigration authorities. The following year, the DOJ Secretary directed the Board of Commissioners (BOC) to review all cases where entry was allowed on the ground that the entrant was a Philippine citizen, including the case of William and his relatives. On July 6, 1962, the BOC reversed the decision of the BOSI (Reversal = Decision 2) and a warrant of exclusion also dated July 6, 1962 was issued. William and the others covered by the warrant of exclusion filed a motion for rehearing with the BOSI where the deportation case was assigned. The Acting Commissioner reaffirmed Decision 1 and recalled the warrant of arrest against William. However, in 1990, the NBI Acting Director recommended that William be charged with a violation of the Immigration Act of 1940 to the Justice Secretary, who then indorsed the recommendation to the Commissioner of Immigration for investigation and immediate action. William was arrested but was also released on the same day upon posting a P200K cash bond. William then filed a petition for certiorari and prohibition before the Manila RTC (Judge dela Rosa presided). BOC filed a motion to dismiss alleging that the judge had no jurisdiction over the BOC and/or the BOSI. The MTD was denied and the judge restrained the BOC from continuing with any of the proceedings that would lead to the deportation of William. Two days later, Williams wife and minor children filed an injunction case before the Valenzuela RTC alleging that BOC acted without or in excess of jurisdiction in the institution of the deportation proceedings against William. A TRO was issued restraining the BOC from continuing with the deportation proceedings against William.
In the present petition for certiorari and prohibition, BOC seeks to set aside the abovementioned TRO and resolutions of the Manila and Valenzuela RTC. *BOCs contentions: 1. It is the CA, not the RTC, that has jurisdiction over the BOC and the BOSI. 2. Even if the RTC had jurisdiction, the judges acted with GAD in preempting it in the exercise of its authority and jurisdiction to hear and determining the deportation case and Williams citizenship. 3. Judge dela Rosa acted with GAD in ruling the that issues are beyond the BOCs competence and jurisdiction. *William Gatchalians contentions: 1. BOC has no jurisdiction to proceed with the deportation case until the courts have finally resolved the question of his citizenship. 2. BOC cannot fairly resolve the question of his citizenship because of their bias and prejudice against him. 3. The ground for this deportation has prescribed. ISSUES + HELD: 1. W/N the RTC has jurisdiction over the BOC and BOSI. Yes. RTCs are vested with the power to determine whether there has been GAD on the part of any branch or instrumentality of government. The quasijudicial bodies whose decisions are exclusively appealable to the CA are those, which under the law are specifically appealable to the CA. It is only when a specific law provides appeal from certain bodies or commissions to the CA that the said commissions or boards may be considered co-equal with the RTCs in terms of rank, stature and logically are beyond the control of the RTC. The Bureau of Immigration is not among those quasi-judicial agencies specified by law whose decisions, orders and resolutions are directly appealable to the CA. As the Bureau of Immigration is not of equal rank as the RTC, its decisions may be appealable to, and may be reviewed through a special civil action for certiorari by, the RTC. The Bureau of Immigration has the exclusive authority and jurisdiction to try and hear cases against an alleged alien, and in the process, determine also their citizenship. A mere claim of citizenship cannot operate to divest the Board of Commissioners of its jurisdiction in deportation proceedings. An exception to this rule, at least insofar as deportation proceedings are concerned, is when the evidence submitted by a respondent is conclusive of his citizenship, the right to immediate review should also be recognized and the courts should promptly enjoin the deportation proceedings. A citizen is entitled to live in peace, without molestation from any official or authority, and if he is disturbed by a deportation proceeding, he has the unquestionable right to resort to the courts for his protection, either by a writ of habeas corpus or of prohibition, on the legal ground that the Board lacks jurisdiction. If he is a citizen and evidence thereof is satisfactory, there is no sense nor justice in allowing the deportation proceedings to continue, granting him the remedy only after the Board has finished its investigation of his undesirability. It appearing from the records that respondents claim of citizenship is substantial, judicial intervention should be allowed.
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*After resolving the issue on jurisdiction, the SC proceeded with the issue on citizenship instead of remanding the case to the RTC considering the voluminous pleadings submitted and the evidence presented by the parties. 2. W/N William is a Filipino citizen and therefore should NOT be deported.
Philippine citizenship was recognized by the Bureau of Immigration in an order dated July 12, 1960. Finally, respondent William Gatchalian belongs to the class of Filipino citizens contemplated under Sec. 1, Article IV of the Constitution, which provides: Section 1. The following are citizens of the Philippines: (1) Those who are citizens of the Philippines at the time of the adoption of this Constitution. Xxx This forecloses any further question about the Philippine citizenship of respondent William Gatchalian.
Filipino citizen. Having declared the assailed marriage as valid, respondent William Gatchalian follows the citizenship of h i s f a t h e r, a F i l i p i n o a s l e g i t i m a t e c h i l d . R e s p o n d e n t b e l o n g s t o a c l a s s o f F i l i p i n o s who are citizens of the Philippines at the time of the adoption of the constitution. In the absence of evidence to the contrary, foreign laws on a particular subject are presumed to be the same as those of the Philippines. In the case at bar, there being no proof of Chinese law relating to marriage, there arises the presumption that it is the same as that of Philippine law. The lack of proof of Chinese law on the matter cannot be blamed on Santiago Gatchalian much more on respondent William Gatchalian who was then a twelve-year old minor. The fact is, as records indicate, Santiago was not pressed by the Citizenship Investigation Board to prove the laws of China relating to marriage, having been content with the testimony of Santiago that the Marriage Certificate was lost or destroyed during the Japanese occupation of China. Neither was Francisco Gatchalians testimony subjected to the same scrutiny by the Board of Special Inquiry. Nevertheless, the testimonies of Santiago Gatchalian and Francisco Gatchalian before the case at bar is diametrically opposed to settled government policy. Philippine law, following the lex loci celebrationis, adheres to the rule that a marriage formally valid where celebrated is valid everywhere. Referring to marriages contracted abroad, Art. 71 of the Civil Code (now Art. 26 of the Family Code) provides that (a)ll marriages performed outside of the Philippines in accordance with the laws in force in the country where they were performed, and valid there as such, shall also be valid in this country . . . And any doubt as to the validity of the matrimonial unity and the extent as to how far the validity of such marriage may be extended to the consequences of the coverture is answered by Art. 220 of the Civil Code in this manner: In case of doubt, all presumptions favor the solidarity of the family. Thus, every intendment of law or facts leans toward the validity of marriage, the indissolubility of the marriage bonds, the legitimacy of children, the community of property during marriage, the authority of parents over their children, and the validity of defense for any member of the family in case of unlawful aggression. (Italics supplied). Bearing in mind the processual presumption enunciated in Miciano and other cases, he who asserts that the marriage is not valid under our law bears the burden of proof to present the foreign law. Having declared the assailed marriages as valid, respondent William Gatchalian follows the citizenship of his father Francisco, a Filipino, as a legitimate child of the latter. Francisco, in turn, is likewise a Filipino being the legitimate child of Santiago Gatchalian who (the latter) is admittedly a Filipino citizen whose
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SUCESSION
1. IN RE JOHNSON
FAST FACTS: Emil Johnson died in the City of Manila; however he was a naturalized American citizen. He left a will through which he disposed an estate valued at 231,800php. However, the will was signed by two witnesses instead of the three required by Sec. 618 of the Code of Civil Procedure. However, a petition was made stating that the will was made in conformity with US Law, thus valid in the Philippines as provided for in Section 636 in the Code of Civil Procedure. The will was later probated and declared legal, however the testator's daughter, Ebba Ingeborg entered an appearance, claiming that as a legitimate child she cannot be deprived of the legitime which she is entitled to as provided by Philippine law. She moved to annul the decree of probate and put the estate into intestate administration in order for her to claim the estate as the sole legitimate heir of her father. FACTS: On February 4, 1916, Emil H. Johnson, a native of Sweden and a naturalized citizen of the United States, died in the city of Manila, leaving a will, dated September 9, 1915, by which he disposed of an estate, the value of which, as estimated by him, was 231,800php. This document is an holographic instrument, being written in the testators own handwriting, and is signed by himself and two witnesses only, instead of three witnesses required by section 618 of the Code of Civil Procedure - therefore the will was not executed in conformity with the provisions of law generally applicable to wills executed by inhabitants of these Islands, and hence could not have been proved under section 618. . However, a petition was presented in the Court of First Instance of the city of Manila for the probate of this will, on the ground that Johnson was at the time of his death a citizen of the State of Illinois, United States of America. The will was duly executed in accordance with the laws of that State, hence could properly be probated here pursuant to section 636 of the Code of Civil Procedure which provides: Will made here by alien. A will made within the Philippine Islands by a citizen or subject of another state or country, which is executed in accordance with the law of the state or country of which he is a citizen or subject, and which might be proved and allowed by the law of his own state or country, may be proved, allowed, and recorded in the Philippine Islands, and shall have the same effect as if executed according to the laws of these Islands. After a hearing, the document was declared to be legal, and administrators were nominated: Victor Johnson, the deceased's brother and John T. Pickett. Pickett declined, and Johnson was appointed sole administrator. In the will, the testator gives to his brother Victor one hundred shares of the corporate stock in the Johnson-Pickett Rope Company; to his father and mother in Sweden, the sum of P20,000; to his daughter Ebba Ingeborg, the sum of P5,000; to his wife, Alejandra Ibaez, the sum of P75 per month, if she remains single; to Simeona Ibaez, spinster, P65 per month, if she remains single. The rest of the property is left to the testators five children Mercedes, Encarnacion, Victor, Eleonor and Alberto.
However, three months after the will had been probated, the attorneys for the petitioner, Ebba Ingeborg Johnson, entered an appearance in her behalf and asserted that Ebba is a legitimate heir of the testator. Thus, she cannot be deprived of the legitime to which she is entitled under the law governing testamentary successions in these Islands. She moved to annul the decree of probate and put the estate into intestate administration in order for her to claim the estate as the sole legitimate heir of her father. ISSUE: W/N the order of the probate can be set aside on the ground that the testator was not a resident of the State of Illinois and that the will was not made in conformity with the laws of that State? NO. HELD:In the testimony submitted to the trial court, Johnson first came to the United States as a boy and settled in the State of Illinois. Eventually he married one Rosalie Johnson and they would have one daughter, the petitioner Ebba Ingeborg. Johnson remained in Illinois until he came to the Philippines as a soldier in the United States Army. On November 20, 1902, he went back to the US so that Rosalie Johnson could be granted a decree of divorce in the Circuit Court of Illinois, on the ground of desertion. In 1903 Emil Johnson would return to obtain a certificate of naturalization. Thereafter he returned to the Philippines and would conduct his business here until his death. He had marital relations with two women. From Alejandra Ibanez he would have three children: Mercedes, Encarnacion, and Victor. From Simeona Ibanez he would have two children: Eleonor and Alberto. All this being said, no evidence was adduced showing that at the time he returned to the United States, in the autumn of 1902, he had then abandoned Illinois as the State of his permanent domicile. Further, there is no law in force at that time by virtue of which any person of foreign nativity can become a naturalized citizen of the Philippine Islands. Thus it was impossible for the testator, even if he had so desired, to expatriate himself from the United States and change his political status from a citizen of the United States to a citizen of these Islands. This being true, it is to be presumed that he retained his citizenship in the State of Illinois along with his status as a citizen of the United States The Supreme Court held that the probate of the will does not affect the intrinsic validity of its provisions, the decree of probate being conclusive only as regards the due execution of the will. The intrinsic validity of the provisions of this will must be determined by the law of Illinois and not of the Philippines. 2. MICIANO V. BRIMO
FACTS: Juan Miciano, the judicial administrator of the estate of the deceased Joseph Brimo, a Turkish national filed a scheme of partition. Andre Brimo, one of the brothers of Joseph, opposed it. The court, however, approved it. The errors which Andre assigns are:(1) The approval of scheme of partition; (2) denial of his participation in the inheritance; (3) denial of the MR of the order approving the partition; (4) approval of the purchase made by the Pietro Lana of the deceased's business and the deed of transfer of said business; and (5) the
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declaration that the Turkish laws are impertinent to this cause, and the failure not to postpone the approval of the scheme of partition and the delivery of the deceased's business to Pietro Lanza until the receipt of the depositions requested in reference to the Turkish laws. His opposition is based on the fact that the partition puts into effect the provisions of Joseph Brimo's will which are not in accordance with the laws of his Turkish nationality, for which reason they are void as being in violation or Art. 10 of the OLD Civil Code.11 ISSUE: 1. What law should govern? Turkish but must be proven first 2. W/N Andre was properly excluded as legatee? NO HELD: 1. The fact is that Andre did not prove that Josephs testamentary dispositions are not in accordance with Turkish laws, inasmuch as he did not present any evidence showing what the Turkish laws are on the matter. In the absence of evidence on such laws, they are presumed to be the same as those of the Philippines. Andre, himself, acknowledges that said laws have not been proven in these proceedings when he asked the court to be given an opportunity to present evidence on this point; so much so that he assigns as an error of the court in not having deferred the approval of the scheme of partition until the receipt of certain testimony requested regarding the Turkish laws on the matter. The refusal to give Andre another opportunity to prove such laws does is not an error. It is discretionary with the trial court, and, taking into consideration that Andre was granted ample opportunity to introduce evidence, there was no abuse of discretion on the part of the court in this particular. There is, therefore, no evidence in the record that the national law of the testator was violated in the testamentary dispositions in question which, not being contrary to our laws in force, must be complied with and executed. Therefore, the approval of the scheme of partition in this respect was not erroneous. 2. In regard to the 1st assignment of error, which deals with the exclusion of Andre as a legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into consideration that such exclusion is based on the last part of the 2nd clause of the will, which says: Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship having been conferred upon me by conquest and not by free choice, nor by nationality and, on the other hand, having resided for a considerable length of time in the Philippine Islands where I succeeded in acquiring all of the property that I now possess, it is my wish that the distribution of my property and everything in connection with this,
my will, be made and disposed of in accordance with the laws in force in the Philippine islands, requesting all of my relatives to respect this wish, otherwise, I annul and cancel beforehand whatever disposition found in this will favorable to the person or persons who fail to comply with this request. The institution of legatees in this will is conditional, and the condition is that the instituted legatees must respect the testator's will to distribute his property, not in accordance with the laws of his nationality, but in accordance with the laws of the Philippines. If this condition were legal and valid, any legatee who fails to comply with it, as Andre who, by his attitude in these proceedings has not respected the will of the testator, is prevented from receiving his legacy. However, said condition is void, being contrary to law, for Art 792 of the Old Civil Code provides that conditions contrary to law or good morals shall be considered as not imposed and shall not prejudice the heir or legatee in any manner whatsoever, even if the testator otherwise provides. Said condition is contrary to law because it expressly ignores the testator's national law when, according to Art 10, such national law of the testator is the one to govern his testamentary dispositions. Said condition then is considered unwritten, and the institution of legatees in said will is unconditional and consequently valid and effective even as to the Andre. From all this, the second clause of the will regarding the law which shall govern it, and to the condition imposed upon the legatees, is null and void, being contrary to law. All of the remaining clauses of the will with all their dispositions and requests are perfectly valid and effective it not appearing that said clauses are contrary to the testator's national law. Therefore, the orders appealed from were modified and distribution of Joseph Brimos estate was directed to be made in such a manner as to include Andre Brimo as one of the legatees, and the scheme of partition submitted by the Miciano was approved in all other respects. 3. VARELA V. CALDERON
FACTS: The deceased, a physician by profession, was a Filipino citizen resident of the City of Manila where he owned real properties assessed at P188,017.81. He traveled abroad for his health and temporarily resided in Hendaye-Plage, France. Not feeling very well, but in the full enjoyment of his mental faculties, he decided to make his last will and testament, on April 14, 1930, in Paris, France, with the assistance of attorneys F. de Roussy de Sales, Gething C. Miller and Henri Gadd. Sometime later, that is on July 15, 1930, he died in Switzerland. On September 20, 1930, the herein petitioner-appellee, Francisco Carmelo Varela, filed a petition in the CFI of Manila, praying that said will be admitted to probate. Said petition was opposed by the deceased's brother Jose Miguel, Angel, Jesus, Trinidad, Paula, Pilar and Maria, surnamed Varela Calderon, although, later on, the first mentioned opponent withdrew his opposition giving as his reason therefor that it was out of respect for the testator's wishes because the will was executed in his own handwriting. The grounds of the opposition are as follows:

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The law then in force was the Old Civil Code of the Philippine which, among other things, provides: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the amount 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 or the country in which it may be situated.
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(a) That the will sought to be probate was not holographic in character and did not comply with the requisites prescribed by article 970 of the French Civil Code; (b) that the witnesses to the will did not possess the qualifications required by article 980 of the French Civil Code; (c) that for not having complied with the requisites prescribed by the French law, said will is null and void; (d) that neither has it the character of an open will, not having been executed in accordance with article 1001 of the French Civil Code; and (e) that the provisions of article 1007 of the same Code relative to the recording of wills were not complied with in connection with the will in question. ISSUE: W/N the trial court erred in declaring that the last will and testament of the deceased Francisco Varela Calderon, was a valid holographic will made and executed, in accordance with the laws of the French Republic. HELD: The petition for the allowance and probate of said will is based on the provisions of article 970 of the French Civil Code which considers as a holographic will that which is made or executed, dated and signed by the testator in his own handwriting without the necessity of any other formality, and on section 635 of the Code of Civil Procedure in force in this jurisdiction which provides that a will made out of the Philippine Islands in accordance with the laws in force in the country in which it was made and which may be allowed and admitted to probate therein, may, also be proved, allowed and recorded in the Philippine Islands in the same manner and with the same effect as if executed in the latter country. Both provisions of law literally copied from the English text, read as follows: Article 970, French Civil Code A holographic will is not valid unless it is entirely written, dated, and signed by the testator. No other formality is required. Article 635, Code of Civil Procedure Will made out of the Philippine Islands. A will made out of the Philippine Islands which might be proved and allowed by the laws of the state or country in which it was made, may be proved, allowed, and recorded in the Philippine Islands, and shall have the same effect as if executed according to the laws of these Islands. It is an admitted fact that the will was written, dated and signed by the deceased testator, for which reason, there is no doubt that it had been made and executed in accordance with article 970 of the French Civil Code were it not for the attestation clause which appears at the bottom of the document. The appellants contend that the addition of said of clause has entirely vitiated the will, because it ceased to be a holographic will, neither does it possess the requisites of a public or open will in accordance with the French law. The court which originally took cognizance of the case decided that such circumstance does not invalidate the will. We concur in said opinion and hold that a clause drawn up in such manner is superfluous and does not affect in any way the essential requisites prescribed for holographic wills by the French law, and, consequently, it has not invalidated the will nor deprived it of its holographic character. In reaching this conclusion, we base our opinion not only on the clear and conclusive provisions of article 970 of the French
Civil Code and on the decisions of the French Court of Appeals cited in the appelee's brief, but principally on the fact established in the depositions made by practicing attorneys F. de Roussy de Sales, Gething C. Miller and Henri Gadd of Paris, France, who emphatically declared that the will in question did not lose its holographic character by the addition of the aforementioned attestation clause and that it may be allowed to probate in conformity with the French laws under which it had been made and executed. 4. GIBBS V. GOVERNMENT
Facts: This is an appeal from a final order of the CFI Manila, requiring the register of deeds of the City of Manila to cancel certificates of title Nos. 20880, 28336 and 28331, covering lands located in the City of Manila, Philippine Islands, and issue in lieu thereof new certificates of transfer of title in favor of Allison D. Gibbs without requiring him to present any document showing that the succession tax due under Article XI of Chapter 40 of the Administrative Code has been paid. The order of the court of March 10, 1931, recites that the parcels of land covered by said certificates of title formerly belonged to the conjugal partnership of Allison D. Gibbs and Eva Johnson Gibbs; that Eva died intestate in Palo Alto, California, on November 28, 1929; that at the time of her death she and her husband were citizens of the State of California and domiciled therein. It appears further from said order that Allison was appointed administrator of the state of his said deceased wife in a case in the same court, entitled "In the Matter of the Intestate Estate of Eva Johnson Gibbs, Deceased"; that in intestate proceedings, Allison on September 22,1930, filed an ex parte petition in which he alleged "that the parcels of land hereunder described belong to the conjugal partnership of Allison and his wife, Eva", describing in detail the 3 facts here involved; and further alleging that his said wife, a citizen and resident of California, died on November 28,1929; that in accordance with the law of California, the community property of spouses who are citizens of California, upon the death of the wife previous to that of the husband, belongs absolutely to the surviving husband without administration; that the conjugal partnership of Allison and Eva Gibbs, deceased, has no obligations or debts and no one will be prejudiced by adjucating said parcels of land (and 17 others not here involved) to be the absolute property of Allison as sole owner. The court granted said petition and on September 22, 1930, entered a decree adjucating to Allison as the sole and absolute owner of said lands, applying section 1401 of the Civil Code of California. Gibbs presented this decree to the register of deeds of Manila and demanded that the latter issue to him a TCT. Section 1547 of Article XI of Chapter 40 of the Administrative Code provides in part that: Registers of deeds shall not register in the registry of property any document transferring real property or real rights therein or any chattel mortgage, by way of gifts mortis causa, legacy or inheritance, unless the payment of the tax fixed in this article and actually due thereon shall be shown. And they shall immediately notify the Collector of Internal Revenue or the corresponding
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provincial treasurer of the non-payment of the tax discovered by them. . . . Acting upon the authority of said section, the register of deeds of the City of Manila, declined to accept as binding said decree of court of September 22,1930, and refused to register the transfer of title of the said conjugal property to Allison on the ground that the corresponding inheritance tax had not been paid. Thereupon, under date of December 26, 1930, Allison filed in the said court a petition for an order requiring the said register of deeds "to issue the corresponding titles" to Gibbs without requiring previous payment of any inheritance tax. After due hearing of the parties, the court reaffirmed said order of September 22, 1930, and entered the order of March 10, 1931, which is under review on this appeal. On January 3, 1933, this court remanded the case to the court of origin for new trial upon additional evidence in regard to the pertinent law of California in force at the time of the death of Mrs. Gibbs, also authorizing the introduction of evidence with reference to the dates of the acquisition of the property involved in this suit and with reference to the California law in force at the time of such acquisition. The case is now before us with the supplementary evidence. For the purposes of this case, the Court considered the following facts as established by the evidence or the admissions of the parties: Allison has been continuously, since the year 1902, a citizen of the State of California and domiciled therein; that he and Eva were married at Columbus, Ohio, in July 1906; that there was no ante-nuptial marriage contract between the parties; that during the existence of said marriage the spouses acquired the following lands, among others, in the Philippine Islands, as conjugal property: 1. A parcel of land in the City of Manila represented by TCT No. 20880, dated March 16, 1920, and registered in the name of "Allison D. Gibbs casado con Eva Johnson Gibbs". 2. A parcel of land in the City of Manila, represented by TCT No. 28336, dated May 14, 1927, in which it is certified "that spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee simple" of the land therein described. 3. A parcel of land in the City of Manila, represented by TCT No. 28331, dated April 6, 1927, which it states "that Allison D. Gibbs married to Eva Johnson Gibbs" is the owner of the land described therein; that said Eva Johnson Gibbs died intestate on November 28, 1929, living surviving her husband, the appellee, and 2 sons, Allison J. Gibbs, now age 25 and Finley J. Gibbs, now aged 22, as her sole heirs of law. Article XI of Chapter 40 of the Administrative Code entitled "Tax on inheritances, legacies and other acquisitions mortis causa" provides in section 1536 that "Every transmission by virtue of inheritance ... of real property ... shall be subject to the following tax." Issue/s: 3. WON Eva Johnson Gibbs at the time of her death the owner of a descendible interest in the Philippine lands above-mentioned? (YES) 4. WON Register of Deeds erred in declining to register the transfer title of the conjugal property on the ground of unpaid inheritance tax? (NO)
Held: Allison contends that the law of California should determine the nature and extent of the title, if any, that vested in Eva under the 3 certificates of title Nos. 20880, 28336 and 28331 above referred to, citing article 9 of the Civil Code. But that, even if the nature and extent of her title under said certificates be governed by the law of the Philippine Islands, the laws of California govern the succession to such title, citing the 2nd paragraph of article 10 of the Civil Code. Article 9 of the Civil Code is as follows: The laws relating to family rights and duties, or to the status, condition, and legal capacity of persons, are binding upon Spaniards even though they reside in a foreign country." It is argued that the conjugal right of the California wife in community real estate in the Philippine Islands is a personal right and must, therefore, be settled by the law governing her personal status, that is, the law of California. But our attention has not been called to any law of California that incapacitates a married woman from acquiring or holding land in a foreign jurisdiction in accordance with the lex rei sitae. There is not the slightest doubt that a California married woman can acquire title to land in a common law jurisdiction like the State of Illinois or the District of Columbia, subject to the common-law estate by the courtesy which would vest in her husband. Nor is there any doubt that if a California husband acquired land in such a jurisdiction his wife would be vested with the common law right of dower, the prerequisite conditions obtaining. Article 9 of the Civil Code treats of purely personal relations and status and capacity for juristic acts, the rules relating to property, both personal and real, being governed by article 10 of the Civil Code. Furthermore, article 9, by its very terms, is applicable only to "Spaniards" (now, by construction, to citizens of the Philippine Islands). The Organic Act of the Philippine Islands (Act of Congress, August 29, 1916, known as the "Jones Law") as regards the determination of private rights, grants practical autonomy to the Government of the Philippine Islands. This Government, therefore, may apply the principles and rules of private international law (conflicts of laws) on the same footing as an organized territory or state of the United States. We should, therefore, resort to the law of California, the nationality and domicile of Mrs. Gibbs, to ascertain the norm which would be applied here as law were there any question as to her status. But the appellant's chief argument and the sole basis of the lower court's decision rests upon the 2nd paragraph of article 10 of the Civil Code which is as follows: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the amount of the successional rights and the intrinsic validity of their provisions,
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shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property or the country in which it may be situated. In construing the above language the Court met at the outset with some difficulty by the expression "the national law of the person whose succession is in question", by reason of the rather anomalous political status of the Philippine Islands. The Court encountered no difficulty in applying article 10 in the case of a citizen of Turkey. (Miciano v. Brimo) Having regard to the practical autonomy of the Philippine Islands, as above stated, the Court concluded that if article 10 is applicable and the estate in question is that of a deceased American citizen, the succession shall be regulated in accordance with the norms of the State of his domicile in the United States. (Cf. Babcock Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate of Johnson, 39 Phil., 156, 166.) The trial court found that under the law of California, upon the death of the wife, the entire community property without administration belongs to the surviving husband; that he is the absolute owner of all the community property from the moment of the death of his wife, not by virtue of succession or by virtue of her death, but by virtue of the fact that when the death of the wife precedes that of the husband he acquires the community property, not as an heir or as the beneficiary of his deceased wife, but because she never had more than an inchoate interest or expentancy which is extinguished upon her death. Quoting the case of Estate of Klumpke, the court said: "The decisions under this section (1401 Civil Code of California) are uniform to the effect that the husband does not take the community property upon the death of the wife by succession, but that he holds it all from the moment of her death as though required by himself. ... It never belonged to the estate of the deceased wife." The argument of Allison apparently leads to this dilemma: If he takes nothing by succession from his deceased wife, how can the 2nd paragraph of article 10 be invoked? Can Allison be heard to say that there is a legal succession under the law of the Philippine Islands and no legal succession under the law of California? It seems clear that the 2nd paragraph of article 10 applies only when a legal or testamentary succession has taken place in the Philippines and in accordance with the law of the Philippine Islands; and the foreign law is consulted only in regard to the order of succession or the extent of the successional rights; in other words, the 2nd paragraph of article 10 can be invoked only when the deceased was vested with a descendible interest in property within the jurisdiction of the Philippine Islands. In the case of Clarke v. Clarke, the court said: It is principle firmly established that to the law of the state in which the land is situated we must look for the rules which govern its descent, alienation, and transfer, and for the effect and construction of wills and other conveyances. This fundamental principle is stated in the first paragraph of article 10 of our Civil Code as follows: "Personal property is subject to the laws of the nation of the owner thereof; real property to the laws of the country in which it is situated. It is stated in 5 Cal. Jur., 478: In accord with the rule that real property is subject to the lex rei sitae, the respective rights of husband and wife in such property, in the absence of an antenuptial contract, are determined by the law of the place where the
property is situated, irrespective of the domicile of the parties or to the place where the marriage was celebrated. Under this broad principle, the nature and extent of the title which vested in Mrs. Gibbs at the time of the acquisition of the community lands here in question must be determined in accordance with the lex rei sitae. It is admitted that the Philippine lands here in question were acquired as community property of the conjugal partnership of Allison and his wife. Under the law of the Philippine Islands, she was vested of a title equal to that of her husband. Article 1407 of the Civil Code provides: All the property of the spouses shall be deemed partnership property in the absence of proof that it belongs exclusively to the husband or to the wife. Article 1395 provides: "The conjugal partnership shall be governed by the rules of law applicable to the contract of partnership in all matters in which such rules do not conflict with the express provisions of this chapter." Article 1414 provides that "the husband may dispose by will of his half only of the property of the conjugal partnership." Article 1426 provides that upon dissolution of the conjugal partnership and after inventory and liquidation, "the net remainder of the partnership property shall be divided share and share alike between the husband and wife, or their respective heirs." Under the provisions of the Civil Code and the jurisprudence prevailing here, the wife, upon the acquisition of any conjugal property, becomes immediately vested with an interest and title therein equal to that of her husband, subject to the power of management and disposition which the law vests in the husband. Immediately upon her death, if there are no obligations of the decedent, as is true in the present case, her share in the conjugal property is transmitted to her heirs by succession. (Articles 657, 659, 661, Civil Code) It results that the wife of Allison was, by the law of the Philippine Islands, vested of a descendible interest, equal to that of her husband, in the Philippine lands covered by certificates of title Nos. 20880, 28336 and 28331, from the date of their acquisition to the date of her death. Allison himself believed that his wife was vested of such a title and interest in manifest from the end of said certificates, No. 28336, dated May 14, 1927, introduced by him in evidence, in which it is certified that "the spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee simple of the conjugal lands therein described." The descendible interest of Eva in the lands aforesaid was transmitted to her heirs by virtue of inheritance and this transmission plainly falls within the language of section 1536 of Article XI of Chapter 40 of the Administrative Code which levies a tax on inheritances. It is unnecessary in this proceeding to determine the "order of succession" or the "extent of the successional rights" (article 10, Civil Code, supra) which would be regulated by section 1386 of the Civil Code of California which was in effect at the time of the death of Mrs. Gibbs. The record does not show what the proper amount of the inheritance tax in this case would be nor that Allison in any way challenged the power of the Government to levy an inheritance tax or the validity of the statute under which the register of deeds
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refused to issue a certificate of transfer reciting that Allison is the exclusive owner of the Philippine lands included in the 3 certificates of title here involved. The judgment of the court below of March 10, 1931, is reversed with directions to dismiss the petition, without special pronouncement as to the costs. 5. PHILIPPINE TRUST V. BOHANAN
P6,000 each, or a total of P12,000. The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them. ISSUE: W/N Magdalena and her two children have been deprived of the legitime due to them? NO HELD: The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be entitled to received. The will has not given her any share in the estate left by the testator. It is argued that it was error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino wife Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the case of Querubin vs. Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate to his wife. Section 9905 of Nevada Compiled Laws of 1925 provides: Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her estate, real and personal, the same being chargeable with the payment of the testator's debts. Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's estafa had already been passed upon adversely against her in an order dated June 19, 1955, which had become final, as Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in the conjugal property, and the court in its said error found that there exists no community property owned by the decedent and his former wife at the time the decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact contained therein, i.e. that there was no community property acquired by the testator and Magdalena C. Bohanan during their converture. Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator. The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore,
FACTS: On April 24, 1950, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of that state, or at least a citizen of California where some of his properties are located. This contention in untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely temporary, and he continued and remained to be a citizen of the United States and of the state of his pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or permanent residence for him. That is his exclusive personal right. Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the prescribed oath, it may enter upon the execution and performance of its trust. It does not appear that the order granting probate was ever questions on appeal. The executor filed a project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George Bohanan, which consists of several mining companies; (2) the other half of the residuary estate to the testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares of mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000; It will be seen from the above that out of the total estate (after deducting administration expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only
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have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is the failure old the testator to give his children two-thirds of the estate left by him at the time of his death, in accordance with the laws of the forum valid? The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question. Says the law on this point: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property and the country in which it is found. 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 the testementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will. It does not appear that at time of the hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows: SEC. 41. Proof of public or official record. An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. We have, however, consulted the records of the case in the court below and we have found that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by appellant's (herein) counsel as Exhibits "2". Again said laws presented by the counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo. In addition, the other appellants, children of the testator, do not dispute the abovequoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition. As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator, and as it has been decided and it is not disputed that the national law of the testator is that of the State of Nevada, already indicated above, which allows a testator to dispose of all his property according to his will, as in the case at bar, the order of the court approving
the project of partition made in accordance with the testamentary provisions, must be, as it is hereby affirmed, with costs against appellants. 6. AZNAR V. CHRISTENSEN-GARCIA
Facts: Edward Christensen, born in New York, migrated to California where he resided and consequently was considered citizen thereof. He came to the Philippines where he became a domiciliary until the time of his death. However, during the entire period of his residence in this country, he had always considered himself a citizen of California. In his will, Edward instituted his daughter Maria Lucy Christensen as his only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia who, in his will was described as "not in any way related to" him but in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Helen alleged that the will deprives her of her legitime as an acknowledged natural child. She claims that under Art. 16 of the Civil Code, the California law should be applied, and the question of the validity of the testamentary provision should thus be referred back to the law of the decedents domicile, which is the Philippines. She invokes the provisions of Article 946 of the Civil Code of California, which is as follows: If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile. Accordingly, her share must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, the executor and Lucy argue that the national law of the deceased must apply, and thus the courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator may dispose of his property by will in the form and manner he desires (Kaufman Case). Issue: W/N Philippine law should ultimately be applied? YES Held: Edward was a US Citizen and domiciled in the Philippines at the time of his death. The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows: ART. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found. The laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Article 946 of
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the California Civil Code is its conflict of laws rule, while the rule applied in Kaufman, is its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited in Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, which is the Philippines in the case at bar. The Philippine court therefore must apply its own law as directed in the conflict of laws rule of the state of the decedent. WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. RENVOI DOCTRINE A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.' Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the doctrine of renvoi is that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. Residence Requires bodily presence inhabitant in a given place 7. BELLIS V. BELLIS of an Domicile Requires bodily presence in that place and also an intention to make it ones domicle
Maria Cristina Bellis and Miriam Palma Bellis, filed their respective oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased. The lower court issued an order overruling the oppositions and approving the executors final account, report and administration, and project of partition. Relying upon Article 16 of the Civil Code, it applied the national law of the decedent, which in this case is which did not provide for legitimes. ISSUE: Whether or not such illegitimate children of Bellis be entitled to successional rights? HELD: The said illegitimate children are not entitled to their legitimes. Under Texas law, there are no legitimes. Even if the other will was executed in the Philippines, his national law, still, will govern the properties for succession even if it is stated in his testate that it shall be governed by the Philippine law. Article 16, Paragraph 2 of Civil code render applicable the national law of the decedent, in intestate and testamentary successions, with regard to four items: (a) the order of succession, (b) the amount of successional rights, (c) the intrinsic validity of provisions of will, and (d) the capacity to succeed. ART.16 Real property as well as personal property is subject to the law of the country to where it is situated.However, intestate and testamentary successions, both with respect to the order of successions and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. 8. BILBAO V. BILBAO
FACTS: Victor Bilbao jointly with his wife Ramona M. Navarro, executed the will in question on October 6, 1931, on a single page or sheet. The two testators in their testament directed that "all of our respective private properties both real and personal, and all of our conjugal properties, and any other property belonging to either or both of us, be given and transmitted to anyone or either of us, who may survive the other, or who may remain the surviving spouse of the other." The petition for probate was opposed by one Filemon Abringe, a near relative of the deceased, among other grounds, that the alleged will was executed by the husband and wife for their reciprocal benefit and therefore not valid, and that it was not executed and attested to as required by law. After hearing, the trial court found the will to have been executed conjointly by the deceased husband and wife for their reciprocal benefit, and that a will of that kind is neither contemplated by Act No. 190, known as the Code of Civil Procedure nor permitted by article 669 of the Civil Code which provides:
FACTS: Amos Bellis was a citizen and resident of Texas at the time of his death. He executed a will in the Philippines, in which he directed that after all taxes, obligations, and expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner a) $240,000.00 to his first wife Mary Mallen b) $120,000.00 to his three illegitimate children Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis,or $40,000.00 each, and c) After foregoing the two items have been satisfied, the remainder shall go to his seven surviving children by his first and second wives.
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Two or more persons cannot make a will conjointly or in the same instrument, either for their reciprocal benefit or for the benefit of a third person. The thesis of the appellant is, that inasmuch as the present law on wills as embodied in the Code of Civil Procedure has been taken from American law, it should be interpreted in accordance with the said law, and because joint and reciprocal wills are neither regarded as invalid nor on the contrary they are allowed, then article 669 of the Civil Code prohibiting the execution of joint wills whether reciprocal or for the benefit of a third party should be considered as having been repealed and superseded by the new law. ISSUE: W/N the lower court erred in not finding that a joint and reciprocal will particularly between husband and wife is valid under the present law. HELD: We cannot agree to the contention of the appellant that the provisions of the Code of Civil Procedure on wills have completely superseded Chapter I, Title III of the Civil Code on the same subject matter, resulting in the complete repeal of said Civil Code provisions. In the study we have made of this subject, we have found a number of cases decided by this court wherein several articles of the Civil Code regarding wills have not only been referred to but have also been applied side by side with the provisions of the Code of Civil Procedure. The authorities all go to show that it is not exactly correct to say that the provisions of the Code of Civil Procedure regarding wills completely cover the subject matter and therefore have superseded the provisions of the Civil Code on the point. The provision of article 669 of the Civil Code prohibiting the execution of a will by two or more persons conjointly or in the same instrument either for their reciprocal benefit or for the benefit of a third person, is not unwise and is not against public policy. The reason for this provision, especially as regards husbands and wife is that when a will is made jointly or in the same instrument, the spouse who is more aggressive, stronger in will or character and dominant is liable to dictate the terms of the will for his or her own benefit or for that of third persons whom he or she desires to favor. And, where the will is not only joint but reciprocal, either one of the spouses who may happen to be unscrupulous, wicked, faithless, or desperate, knowing as he or she does the terms of the will whereby the whole property of the spouses both conjugal and paraphernal goes to the survivor, may be tempted to kill or dispose of the other. Considering the wisdom of the provisions of this article 669 and the fact that it has not been repealed, at least not expressly, as well as the consideration that its provisions are not incompatible with those of the Code of Civil Procedure on the subject of wills, we believe and rule that said article 669 of the Civil Code is still in force. And we are not alone in this opinion. Mr. Justice Willard as shown by his notes on the Civil Code, on page 18 believes that this article 669 is still in force. Sinco and Capistrano in their work on the Civil Code, Vol. II, page 33, favorably cite Justice Willard's opinion that this article is still in force. Judge Camus in his book on the Civil Code does not include this article among those he considers repealed. Lastly, we find that this article 669 has been reproduced word for word in article 818 of the New Civil Code (Republic Act No. 386). The implication is that the Philippine Legislature that
passed this Act and approved the New Civil Code, including the members of the Code Commission who prepared it, are of the opinion that the provisions of article 669 of the old Civil Code are not incompatible with those of the Code of Civil Procedure. In conclusion, we believe and hold that the provision of the Code of Civil procedure regarding wills have not repealed all the articles of the old Civil Code on the same subject matter, and that article 669 of the Civil Code is not incompatible or inconsistent with said provision of the Article 669 of the Civil Code is still in force. 9. ENRIQUEZ V. ABADIA
FACTS: On September 6, 1923, Father Sancho Abadia, parish priest of Talisay, Cebu, executed a document purporting to be his Last Will and Testament. Resident of the City of Cebu, he died on January 14, 1943, in the municipality of Aloguinsan, Cebu, where he was an evacuee. He left properties estimated at P8,000 in value. On October 2, 1946, Andres Enriquez, one of the legatees filed a petition for the probate of the will in the Court of First Instance of Cebu. Some cousins and nephews who would inherit the estate of the deceased if he left no will, filed opposition. During the hearing one of the attesting witnesses, the other two being dead, testified without contradiction that in his presence and in the presence of his co-witnesses, Father Sancho wrote out in longhand the will in Spanish which the testator spoke and understood; that he signed on The left hand margin of the front page of each of the three folios or sheets of which the document is composed, and numbered the same with Arabic numerals, and finally signed his name at the end of his writing at the last page, all this, in the presence of the three attesting witnesses after telling that it was his last will and that the said three witnesses signed their names on the last page after the attestation clause in his presence and in the presence of each other. The oppositors did not submit any evidence. The trial court found and declared the will to be a holographic will; that it was in the handwriting of the testator and that although at the time it was executed and at the time of the testator's death, holographic wills were not permitted by law still, because at the time of the hearing and when the case was to be decided the new Civil Code was already in force, which Code permitted the execution of holographic wills, under a liberal view, and to carry out the intention of the testator which according to the trial court is the controlling factor and may override any defect in form, said trial court admitted to probate the Last Will and Testament of Father Sancho Abadia. The oppositors appealed from that decision. ISSUE: Whether or not the holographic will should be allowed despite the fact that when it was executed the civil code proscribes the execution of such wills. HELD: The Supreme Court held that despite the effectivity of the new Civil Code allowing the execution of holographic wills, the contested holographic will still cannot be allowed and admitted to probate. This is because under Art. 795 of the Civil Code, the extrinsic validity of a will should be judged not by the law existing at the time of the testators death nor the law at the time of its probate, but by the law existing at the time of the execution of the instrument. For the very simple reason that although
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the will becomes operative only after the testators death, still his wishes are given expression at the time of execution. 10. CAYETANO V. LEONIDAS FACTS: Adoracion C. Campos died, leaving her father, petitioner Hermogenes Campos and her sisters, private respondent Nenita C. Paguia, Remedios C. Lopez and Marieta C. Medina as the surviving heirs. As Hermogenes Campos was the only compulsory heir, he executed an Affidavit of Adjudication under Rule 74, Section I of the Rules of Court whereby he adjudicated unto himself the ownership of the entire estate of the deceased Adoracion Campos. Eleven months after, Nenita C. Paguia filed a petition for the reprobate of a will of the deceased, Adoracion Campos, which was allegedly executed in the United States and for her appointment as administratrix of the estate of the deceased testatrix. In her petition, Nenita alleged that the testatrix was an American citizen at the time of her death and was a permanent resident of 4633 Ditman Street, Philadelphia, Pennsylvania, U.S.A.; that the testatrix died in Manila while temporarily residing with her sister Malate, Manila; that during her lifetime, the testatrix made her last will and testament on July 10, 1975, according to the laws of Pennsylvania, U.S.A., nominating Wilfredo Barzaga of New Jersey as executor; that after the testatrix death, her last will and testament was presented, probated, allowed, and registered with the Registry of Wins at the County of Philadelphia, U.S.A., that Clement L. McLaughlin, the administrator who was appointed after Dr. Barzaga had declined and waived his appointment as executor in favor of the former, is also a resident of Philadelphia, U.S.A., and that therefore, there is an urgent need for the appointment of an administratrix to administer and eventually distribute the properties of the estate located in the Philippines. An opposition to the reprobate of the will was filed by herein petitioner alleging among other things, that he has every reason to believe that the will in question is a forgery; that the intrinsic provisions of the will are null and void; and that even if pertinent American laws on intrinsic provisions are invoked, the same could not apply inasmuch as they would work injustice and injury to him. Later, however, the petitioner through his counsel, Atty. Franco Loyola, filed a Motion to Dismiss Opposition (With Waiver of Rights or Interests) stating that he "has been able to verify the veracity thereof (of the will) and now confirms the same to be truly the probated will of his daughter Adoracion." Hence, an ex-parte presentation of evidence for the reprobate of the questioned will was made. On January 10, 1979, the respondent judge issued an order, admitting and allowing probate in the Philippines of Adoracion Campos Last Will And Testament and appointing Nenita Campos Paguia as Administratrix of the estate of said decedent. Another manifestation was filed by the petitioner on, confirming the withdrawal of his opposition, acknowledging the same to be his voluntary act and deed. Subsequently, Hermogenes Campos filed a petition for relief, praying that the order allowing the will be set aside on the ground that the withdrawal of his opposition to the same was secured through fraudulent means. According to him, the "Motion to Dismiss Opposition" was inserted among the papers which he signed in connection
with two Deeds of Conditional Sales which he executed with the Construction and Development Corporation of the Philippines (CDCP). He also alleged that the lawyer who filed the withdrawal of the opposition was not his counsel-of-record in the special proceedings case. The petition for relief was set for hearing but the petitioner failed to appear. He made several motions for postponement. Petitioner filed another motion entitled "Motion to Vacate and/or Set Aside the Order of January 10, 1979, and/or dismiss the case for lack of jurisdiction. The hearing of May 29, 1980 was re-set by the court for June 19, 1980. When the case was called for hearing on this date, the counsel for petitioner tried to argue his motion to vacate instead of adducing evidence in support of the petition for relief. Thus, the respondent judge issued an order dismissing the petition for relief for failure to present evidence in support thereof. Petitioner filed a MR but the same was denied. In the same order, respondent judge also denied the motion to vacate for lack of merit. Hence, this petition. Meanwhile, on June 6,1982, petitioner Hermogenes Campos died and left a will, which, incidentally has been questioned by the respondent, as on its face, patently null and void, and a fabrication, appointing Polly Cayetano as the executrix of his last will and testament. Cayetano, therefore, filed a motion to substitute herself as petitioner in the instant case which was granted by the court. A motion to dismiss the petition on the ground that the rights of the petitioner Hermogenes Campos merged upon his death with the rights of the respondent and her sisters, only remaining children and forced heirs was denied. Petitioner Cayetano persists with the allegations that the respondent judge acted without or in excess of his jurisdiction. ISSUE: 1. WON the respondent judge acted without or in excess of his jurisdiction. NO 2. WON the national law should apply as regards the intrinsic validity of the provisions of the will. YES 3. WON CFI of Manila acquired jurisdiction. YES HELD: 1. The first issue raised by the petitioner is anchored on the allegation that the respondent judge acted with grave abuse of discretion when he allowed the withdrawal of the petitioner's opposition to the reprobate of the will. No proof was adduced to support petitioner's contention that the motion to withdraw was secured through fraudulent means and that Atty. Franco Loyola was not his counsel of record. The records show that after the firing of the contested motion, the petitioner at a later date, filed a manifestation wherein he confirmed that the Motion to Dismiss Opposition was his voluntary act and deed. Moreover, at the time the motion was filed, the petitioner's former counsel, Atty. Jose P. Lagrosa had long withdrawn from the case and had been substituted by Atty. Franco Loyola who in turn filed the motion. The present petitioner cannot, therefore, maintain that the old man's attorney of record was Atty. Lagrosa at the time of filing the motion. Since the withdrawal was in order, the respondent judge acted correctly in hearing the probate of the will exparte, there being no other opposition to the same.
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2. As a general rule, the probate court's authority is limited only to the extrinsic validity of the will, the due execution thereof, the testatrix's testamentary capacity and the compliance with the requisites or solemnities prescribed by law. The intrinsic validity of the will normally comes only after the court has declared that the will has been duly authenticated. However, where practical considerations demand that the intrinsic validity of the will be passed upon, even before it is probated, the court should meet the issue. In the case at bar, the petitioner maintains that since the respondent judge allowed the reprobate of Adoracion's will, Hermogenes C. Campos was divested of his legitime which was reserved by the law for him. This contention is without merit. Although on its face, the will appeared to have preterited the petitioner and thus, the respondent judge should have denied its reprobate outright, the private respondents have sufficiently established that Adoracion was, at the time of her death, an American citizen and a permanent resident of Philadelphia, Pennsylvania, U.S.A. Therefore, under Article 16 par. (2) and 1039 of the Civil Code, the law which governs Adoracion Campo's will is the law of Pennsylvania, U.S.A., which is the national law of the decedent. Although the parties admit that the Pennsylvania law does not provide for legitimes and that all the estate may be given away by the testatrix to a complete stranger, the petitioner argues that such law should not apply because it would be contrary to the sound and established public policy and would run counter to the specific provisions of Philippine Law. It is a settled rule that as regards the intrinsic validity of the provisions of the will, as provided for by Article 16(2) and 1039 of the Civil Code, the national law of the decedent must apply. 3. Finally, we find the contention of the petition as to the issue of jurisdiction utterly devoid of merit. Applying Rule 73, Section 1, of the Rules of Court, the settlement of the estate of Adoracion Campos was correctly filed with the CFI of Manila where she had an estate since it was alleged and proven that Adoracion at the time of her death was a citizen and permanent resident of Pennsylvania, United States of America and not a "usual resident of Cavite" as alleged by the petitioner. Moreover, petitioner is now estopped from questioning the jurisdiction of the probate court in the petition for relief. It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief, against his opponent and after failing to obtain such relief, repudiate or question that same jurisdiction.
CONTRACTS
1. MOLINA V. DELA RIVA
FACTS: This is an action to recover a debt due upon a contract executed July 27, 1903, whereby plaintiff transferred to the defendant the abaca and coprax business theretofore carried on by him at various places in the Island of Catanduanes, with all the property and right pertaining to the said business, or the sum of 134,636 pesos and 12 cents, payable in Mexican currency or its equivalent in local currency. Defendant paid at the time of the execution of the contract, on account of the purchase price, the sum of P33,659 pesos and 3 cents, promising to pay the balance on three installments P33,659 pesos and 3 cents each, with interest at the rate of 5 per cent per annum from the date of the contract. The first installment became due July 27, 1904. It was for the recovery of this first installment that their action was brought in the CFI of the City of Manila. Defendant demurred to the complaint on the ground that the court had no jurisdiction of the subject of the action. The court overruled the demurrer and defendant refused to and did not, as a matter of fact, answer plaintiffs complaint. Judgment having been rendered in favor of the plaintiff for the sum of 33,659 pesos and 3 cents, Mexican currency, equal to 30,052 pesos and 70 centavos, Philippine currency, an interest thereon at the rate of 5 per cent per annum from July 27, 1903 and costs, the defendant duly excepted. ISSUES: 1.) WON the court had jurisdiction of the subject of the action. YES. 2.) WON the court erred in fixing in Philippine currency the sum which the appellee should recover, without hearing evidence as to the relative value of Mexican and Philippine currency. NO. 3.) WON the court erred in not directing that payments be made in Philippine currency. NO. 4.) WON the court erred in rendering judgment in a sum larger than that sought to be recovered in the complaint. YES. 5.) WON the court erred in taking into consideration as the basis of its judgment the contract in question, the same being null and void. NO. HELD: 1.) It is alleged that plaintiff and defendant were residents of the Island of Catanduanes, as would appear, as the plaintiff is concerned, from a power of attorney, executed by him to Antonio Vallejo Valencia and introduced in evidence during the trial. This power of attorney was executed August 22, 1901. The instrument in fact contains the statement that plaintiff was a resident of Catanduanes. Nothing is said however, either in the power of attorney or in the contract upon which this action is based, as to the residence of the defendant. The complaint was filed March 10, 1905, and it alleges that both plaintiff and defendant were residents of the city of Manila. This allegation was not either generally or specifically denied by the defendant, who refused and failed to give an answer to the complaint, having merely demurred thereto. The power of attorney
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above referred to, does not and can not by itself prove that the parties were not residents of the city of Manila in March, 1905, when the complaint was filed. The actual residence, and not that which the parties had four years, prior to the filing of the complaint, is the one that should govern the question as to the jurisdiction of the court. A personal action like this for the record of a debt may be brought, under section 377 of the Code of the Civil Procedure, in the CFI of the province where the plaintiff resides or in the province where the defendant may reside, at the election of the plaintiff. Both parties to this case being residents the city of Manila, it is apparent that the Court of First Instance of that city had jurisdiction to try and determine this action. It is further urged in support of the alleged want of jurisdiction on the part of the court below, that the parties had mutually designated in the contract in question the town of Bato, Islands of Catanduanes, as the place where all judicial and extrajudicial acts necessary under the terms thereof should take place. Paragraph 9 of the contract contains in fact a stipulation to that effect. This the appellant claims amounted to an express submission by the contracting parties to jurisdiction of the CFI of the Province of Albay, in which the town of Bato was located. We are of the opinion that the designation of the town of Bato made by the parties had no legal force and could not have the effect of depriving the Court of First Instance of Manila of the jurisdiction conferred on it by law. This would be true even though it may be granted that the parties actually intended to waive the rights of domicile and expressly submit themselves to the exclusive jurisdiction of the CFI of Albay, contended the appellant, all of which it may be said seems to be very doubtful, judging from the vague and uncertain manner in which the designation was made. The jurisdiction of a court is filed by law and not by the will of the parties. As a matter of public policy, parties can only stipulate in regard to that which is expressly authorized by law. Section 377 of the Code of Civil Procedure provides a plain and definite rule for the purpose of determining the jurisdiction of courts according to the nature of the action. Neither that section nor any other provision of law, of which we have any knowledge, authorizes the parties to submit themselves by an express stipulation to the jurisdiction of a particular court to the exclusion of the court duly vested with such jurisdiction. It is not true as contended by the appellant that the right which litigants had under the Spanish law to submit themselves to the jurisdiction of a particular court was governed by the provisions of the Civil Code. Such right was recognized and governed by the provisions of the Law of Procedure and not by the substantive law. The right to contract, recognized in the Civil Code and referred to by appellant, has nothing to do with the right to establish and fix the jurisdiction of a court. This right can only be exercised by the legislative branch of the Government, the only one vested with the necessary power to make rules governing the subject. In this connection it may be said that the jurisdiction of a court can not be the subject-matter of a contract.
2.) The amount sought to be recovered in this action, under the terms of the contract, was 33,859 pesos and 3 cents, payable in Mexican currency, or its equivalent in local currency. This contention was not denied by the defendant. Plaintiffs allegation must therefore be deemed admitted. Consequently it was not necessary for the court to hear evidence as to the relative value of Mexican and Philippine currency. There is no dispute between the parties as to the fact that the 33,659 pesos and 3 Cents, Mexican currency, referred to in the contract, were equal to 28,049 pesos and 19 centavos, Philippine currency, at the time of the filing of the complaint. The proof required by section 3 of Act No. 1045, cited by the appellant, should be received only when the parties disagree as to the relative value of the currency. The court below did not, therefore, err in not hearing evidence upon this point, even under the assumption that no such evidence as heard in regard thereto, as claimed by the appellant. 3.) The appellant also assigns as error the fact that defendant was given the option to pay the debt either in Mexican or Philippine currency, claiming that the court should have directed payment to be made in the latter currency as required by Act No. 1045. Assuming that this contention is correct, it should nevertheless be true that it did not prejudice any of his essential rights. He was rather favored thereby, since he was given an option to pay in whatever currency he might see fit. It is well known that in the case of an alternative obligation the debtor has the right to choose the method of meeting the obligation unless the creditor has expressly reserved that right to himself. (Art. 1132 of the Civil Code.) 4.) Section 126 of the Code of Civil Procedure provides in part as follows: The relief granted to the plaintiff, if there be no answer, can not exceed that which he shall have demanded in his complaint. . . . The defendant failed to answer. Under such circumstances plaintiff could not have obtained more than what he had demanded in his complaint. Plaintiffs demand was for the sum of 28,049 pesos and 19 centavos only. The court had no power to enter judgment in favor of the plaintiff for 30,052 pesos and 70 centavos. We hold that this was error on the part of the trial court. The judgment of the court below should be modified in this respect. 5.) The last error assigned by the appellant is that the court took into consideration as the basis of its judgment the contract in question, the same being null and void. The appellant alleges in support of his contention that the contract did not bear the internal-revenue stamp required by Act No. 1045 of the Philippine Commission enacted January 27, 1904, and relies particularly upon the provisions of sections 9 and 10 of the act. The contract under consideration was executed July 27, 1903. Such contract was not subject to the stamp tax provided in Act No. 1045. The penalty of nullity prescribed in section 10 of the act is not applicable to that contract. The court, therefore, committed no error in finding that the absence of revenue stamp did not render the contract void. 2. INSULAR GOVERNMENT V. FRANK
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Facts: In 1903 in the state of Illinois, Mr. Frank, a US citizen and a representative of the Insular Government of the Philippines entered into a contract whereby the former shall serve as stenographer in the Philippines for a period of 2 years. The contract contained a provision that in case of violation of its terms, Mr. Frank shall be liable for the amount incurred by the Philippine Government for his travel from Chicago to Manila and one-half salary paid during such period. After serving for 6 months, defendant left the service and refused to make further compliance with the terms of the contract, therefore the Government sued him to recover the amount of $269.23 plus damages. The lower court ruled in favor of the plaintiff, hence the defendant appealed presenting minority as his special defense. By reason of the fact that under the laws of the Philippines, contracts made by person who did not reach majority age of 23 are unenforceable. Defendant claim that he is an adult when he left Chicago but was a minor when he arrived in Manila and at the time the plaintiff attempted to enforce the contract. Issue: Whether or not the contract is valid. Held: Mr. Frank being fully qualified to enter into a contract at the place and time the contract was made, he cannot therefore plead infancy as a defense at the place where the contract is being enforced. Although Mr. Frank was still a minor under Philippine laws, he was nevertheless considered an adult under the laws of the state of Illinois,the place where the contract was made.No rule is better settled in law than that matters bearing upon the execution, interpretation and validity of a contract are determined by the law of the place where the contract is made. Matters connected to its performance are regulated by the law prevailing at the place of its performance. Matters respecting a remedy, such as bringing of a suit, admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought. 3. IBANEZ V. HONGKONG & SHANGHAI BANK
promulgation of the Code in 1901. After the execution of Exhibit T and U, both Joaquin Ibaez de Aldecoa and Zoilo Ibaez de Aldecoa participated in the management of Aldecoa and Co, as partners by being present and voting at meetings of the partners of the company upon matters connected with its affairs. On the 23rd of February, 1906, the defendant firm of Aldeco and Co. obtained from the bank a credit in account current up to the sum of P450,000 upon the terms and conditions set forth in the instrument executed on that date (Exhibit A). Later it was agreed that the defendants, Isabel Palet and her two sons, Joaquin and Zoilo, should mortgage, in addition to certain securities of Aldecoa and Co., as set forth in Exhibit A, certain of their real properties as additional security for the obligations of Aldecoa and Co. So, on March 23, 1906, the mortgage, Exhibit B, was executed wherein certain corrections in the description of some of the real property mortgaged to the bank by Exhibit A were made and the amount for which each of the mortgaged properties should be liable was set forth. These two mortgages, Exhibits A and B, were duly recorded in the registry of property of the city of Manila on March 23, 1906. On the 31st day of December, 1906, the firm of Aldecoa and Co. went into liquidation on account of the expiration of the term for which it had been organized, and the intervener, Urquhart, was duly elected by the parties as liquidator, and be resolution dated January 24, 1907, he was granted the authority expressed in that resolution (Exhibit G). On June 30, 1907, Aldeco and Co. in liquidation, for the purposes of certain litigation about to be commenced in its behalf, required an injunction bond in the sum of P50,000, which was furnished by the bank upon the condition that any liability incurred on the part of the bank upon this injunction bond would be covered by the mortgage of February 23, 1906. An agreement to this effect was executed by Aldecoa and Co. in liquidation, by Isabel Palet, by Joaquin Ibaez de Aldecoa, who had then attained his full majority, and by Zoilo Ibaez de Aldecoa, who was not yet twenty-three years of age. In 1908, Joaquin Ibaez de Aldecoa, Zoilo Ibaez de Aldecoa, and Cecilia Ibaez de Aldecoa commenced an action against their mother, Isabel Palet, and Aldecoa and Co., in which the bank was not a party, and in September of that year procured a judgment of the Court of First Instance annulling the articles of copartnership of Aldecoa and Co., in so far as they were concerned, and decreeing that they were creditors and not partners of that firm. The real property of the defendant Isabel Palet, mortgaged to the plaintiff, corporation by the instrument of March 23, 1906 (Exhibit B), was, at the instance of the defendant, registered under the provisions of the Land Registration Act, subject to the mortgage thereon in favor of the plaintiff, by decree, of the land court dated March 8, 1907. On the 6th of November, 1906, the defendants, Isabel Palet and her three children, Joaquin Ibaez de Aldecoa, Zoilo Ibaez de Aldecoa, and Cecilia Ibaez de Aldecoa, applied to the land court for the registration of their title to the real property described in paragraph 4 of the instrument of March 23, 1906 (Exhibit B), in which application they stated that the undivided three-fourths of said properties belonging to the defendants, Isabel Palet, Joaquin Ibaez de Aldecoa, and Zoilo Ibaez de Aldecoa, were subject to the mortgage in favor of the plaintiff to secure the sum of
FACTS: The defendants, Joaquin Ibaez de Alcoa, Zoilo Ibaez de Alcoa, and Cecilia Ibaez de Alcoa, were born in the Philippine Islands on March 27, 1884, July 4, 1885, and . . . , 1887, respectively, the legitimate children of Zoilo Ibaez de Alcoa and the defendant, Isabel Palet. Both parents were native of Spain. The father's domicile was in Manila, and he died here on October 4, 1895. The widow, still retaining her Manila domicile, left the Philippine Islands and went to Spain in 1897 because of her health, and did not return until the latter part of 1902. the firm of Aldecoa & Co., of which Zoilo Ibaez de Aldecoa, deceased, had been a member and managing director, was reorganized in December, 1896, and the widow became one of the general or "capitalistic" partners of the firm. The three children, above mentioned, appear in the articles of agreement as industrial partners. On July 31, 1903, Isabel Palet, the widowed mother of Joaquin Ibaez de Aldecoa and Zoilo Ibaez de Aldecoa, who were then over the age of 18 years, went before a notary public and executed two instruments (Exhibits T and U), wherein and whereby she emancipated her two sons, with their consent and acceptance. No guardian of the person or property of these two sons had ever been applied for or appointed under or by virtue of the provisions of the Code of Civil Procedure since the
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P203,985.97 under the terms of the instrument dated March 22, 1906. Pursuant to this petition the Court of Land Registration, by decree dated September 8, 1907, registered the title to the undivided three-fourths interest therein pertaining to the defendants, Isabel Palet and her two sons, Joaquin and Zoilo, to the mortgage in favor of the plaintiff to secure the sun of P203,985.97. On December 22, 1906, Aldecoa and Co., by a public instrument executed before a notary public, as additional security for the performance of the obligations in favor of the plaintiff under the terms of the contracts Exhibits A and B, mortgaged to the bank the right of mortgage pertaining to Aldecoa and Co. upon certain real property in the Province of Albay, mortgaged to said company by one Zubeldia to secure an indebtedness to that firm. Subsequent to the execution of this instrument, Zubeldia caused his title to the mortgaged property to be registered under the provisions of the Land Registration Act, subject to a mortgage of Aldecoa and Co. to secure the sum of P103,943.84 and to the mortgage of the mortgage right of Aldecoa and Co. to the plaintiff. As the result of the litigation Aldecoa and Co. and A. S. Macleod, wherein the injunction bond for P50,000 was made by the bank in the manner and for the purpose above set forth, Aldecoa and Co. became the owner, through a compromise agreement executed in Manila on the 14th of August, 1907, of the shares of the Pasay Estate Company Limited (referred to in the contract of March 13, 1907, Exhibit V), and on the 30th day of August of that year Urquhart, as liquidator, under the authority vested in him as such, and in compliance with the terms of the contract of June 13, 1907, mortgaged to the plaintiff, by way of additional security for the performance of the obligations set forth in Exhibits A and B, the 312 shares of the Pasay Estate Company, Limited, acquired by Aldecoa and Co. On the 31st day of March, 1907, Aldecoa and Co. mortgaged, as additional security for the performance of those obligations, to the plaintiff the right of mortgage, pertaining to the firm of Aldecoa and Co., upon certain real estate in that Province of Ambos Camarines, mortgaged to Aldecoa and Co. by one Andres Garchitorena to secure a balance of indebtedness to that firm of the sum of P20,280.19. The mortgage thus created in favor of the bank was duly recorded in the registry of deeds f that province. On the 31st day of March, 1907, Aldecoa and Co. mortgaged as further additional security for the performance of the obligations set forth in Exhibits A and B, the right of mortgage pertaining to the firm of Aldecoa and Co. upon other real property in the same province, mortgaged by the firm of Tremoya Hermanos and Liborio Tremoya, to secure the indebtedness of that firm to the firm of Aldecoa and Co. of P43,117.40 and the personal debt of the latter of P75,463.54. the mortgage thus created in favor of the bank was filed for record with the registrar of deeds of that province. On the 30th day of January, 1907, Aldecoa and Co. duly authorized the bank to collect from certain persons and firms, named in the instrument granting this authority, any and all debts owing by them to Aldecoa and Co. and to apply all amounts so collected to the satisfaction, pro tanto, of any indebtedness of Aldecoa and Co. to the bank.
By a public instrument dated February 18, 1907, Aldecoa and Co. acknowledged as indebtedness to Joaquin Ibaez de Aldecoa in the sum of P154,589.20, a like indebtedness to Zoilo Ibaez de Aldecoa in the sum of P89,177.07. On September 30, 1908, Joaquin, Zoilo, and Cecilia recovered a judgment in the Court of First Instance of Manila for the payment to them f the sum of P155,127.31, as the balance due them upon the indebtedness acknowledged in the public instrument dated February 18, 1907. On November 30, 1907, Joaquin, Zoilo, and Cecilia instituted an action in the Court of First Instance of the city of the Manila against the plaintiff bank for the purpose of obtaining a judicial declaration to the effect that the contract whereby Aldecoa and Co. mortgaged to the bank the shares of the Pasay Estate Company recovered from Alejandro S. Macleod, was null and void, and for a judgment of that these shares be sold and applied to the satisfaction of their judgment obtained on September 30, 1908. Judgment was rendered by the lower court in favor of the plaintiffs in that action in accordance with their prayer, but upon appeal this court reversed that judgment and declared that the mortgage of the shares of stock in the Pasay Estate Co. to the bank was valid. In October, 1908, Joaquin and Zoilo Ibaez de Aldecoa instituted an action against the plaintiff bank for the purpose of obtaining a judgment annulling the mortgages created by them upon their interest in the properties described in Exhibits A and B, upon the ground that the emancipation buy their mother was void and of no effect, and that, therefore, they were minors incapable of creating a valid mortgage upon their real property. The Court of First Instance dismissed the complaint as to Joaquin upon the ground that he had ratified those mortgages after becoming of age, but entered a judgment annulling said mortgages with respect to Zoilo. Both parties appealed from this decision and the case was given registry No. 6889 in the Supreme Court. On the 31st day of December, 1906, on which date the defendant Aldecoa and Co. went into liquidation, the amount of indebtedness to the bank upon the overdraft created by the terms of the contract, Exhibit A, was P516,517.98. Neither the defendant Aldecoa and Co., nor any of the defendants herein, have paid or caused to be paid to the bank the yearly partial payments due under the terms of the contract, Exhibit A. But from time to time the bank has collected and received from provincial debtors of Aldecoa and Co. the various sums shown in Exhibit Q, all of which sums so received have been placed to the credit of Aldecoa and Co. and notice duty given. Also, the bank, from time to time, since the date upon which Aldecoa and Co. went into liquidation, has received various other sums from, or for the account of, Aldecoa and Co., all of which have been duly placed to the credit of that firm, including the sum of P22,552.63, the amount of the credit against one Achaval, assigned to the bank by Aldecoa and Co. The balance to the credit of the bank on the 31st day of December, 1911, as shown on the books of Aldecoa and Co., was for the sum of P416.853.46. It appeared that an error had been committed by the bank in liquidating the interest charged to Aldecoa and Co., and this error was corrected so that the actual amount of the indebtedness of Aldecoa and Co. to the plaintiff on the 15th of February, 1912, with interest to December 10, 1912, the date of the judgment, the amount was P344,924.23.
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The trial court found that there was no competent evidence that the bank induced, or attempted to induce, any customer of Aldecoa and Co. to discontinue business relations with that company. The court further found that Urquhart had failed to show that he had any legal interest in the matter in litigation between plaintiff and defendants, or in the success of either of the parties, or an interest against both, as required by section 121 of the Code of Civil Procedure. ISSUES: 1. W/N the court erred in overruling the defendant's demurrer based upon the alleged ambiguity and vagueness of the complaint. 2. W/N the court erred in ruling that there was no competent evidence that the plaintiff had induced Aldecoa and Co.'s provincial debtors to cease making consignments to that firm. 3. W/N the court erred in rendering a judgment in a special proceeding for the foreclosure of a mortgage, Aldecoa and Co. not having mortgaged any real estate of any kind within the jurisdiction of the trial court, and the obligation of the persons who had signed the contract of suretyship in favor of the bank having been extinguished by operation of law. HELD: With respect to the contention set forth in the s assignment of error to the effect that the bank has prejudiced Aldecoa and Co. by having induced customers of the latter to cease their commercial relations with this defendant, the ruling of the court that there is no evidence to show that there was any such inducement is fully supported by the record. It may be possible that some of Aldecoa and Co.'s customers ceased doing business with that firm after it went into liquidation. This is the ordinary effect of a commercial firm going consideration, for the reason that it was a well known fact that Aldecoa and Co. was insolvent. It is hardly probable that the bank, with so large a claim against Aldecoa and Co. and with unsatisfactory security for the payment of its claim, would have taken any action whatever which might have had the effect of diminishing Aldecoa and Co.'s ability to discharge their claim. The contention that the customers of Aldecoa and Co. included in the list of debtors ceased to make consignments to the firm because they had been advised by the bank that Aldecoa and Co. had authorized the bank to collect these credits from the defendant's provincial customers and apply the amounts so collected to the partial discharge of the indebtedness of the defendant to the bank. Furthermore, the bank was expressly empowered to take any steps which might be necessary, judicially or extrajudicially, for the collection of these credits. The real reason which caused the defendant's provincial customers to cease making shipments was due to the fact that the defendant, being out of funds, could not give its customers any further credit. It is therefore clear that the bank, having exercised the authority conferred upon it by the company in a legal manner, is not responsible for any damages which might have resulted from the failure of the defendant's provincial customers to continue doing business with that firm. In the third assignments of errors two propositions are insisted upon: (1) that in these foreclosure proceedings the court was without jurisdiction to render judgment against Aldecoa and Co. for the reason that firm had mortgaged no real property within the city of Manila to the plaintiff; and (2) that the mortgages given by this defendant have been extinguished by reason of the fact that the bank extended the time within which the defendant's provincial debtors might make their payments.
We understand that the bank is not seeking to exercise its mortgages rights upon the mortgages which the defendant firm holds upon certain real properties in the Provinces of Albay and Ambros Camarines and to sell these properties at public auction in these proceedings. Nor do we understand that the judgment of the trial courts directs that this be done. Before that property can be sold the original mortgagors will have to be made parties. The banks is not trying to foreclose, in this section, any mortgages on real property executed by Aldecoa and Co. It is true that the bank sought and obtained a money judgment against that firm, and at the same time and in the same action obtained a foreclosure judgment against the other defendants. If two or more persons are in solidum the debtors mortgage any of their real property situate in the jurisdiction of the court, the creditor, in case of the solidary debtors in the same suit and secure a joint and several judgment against them, as well as judgments of foreclosure upon the respective mortgages. 4. COMPANIE DE COMMERCE V. HAMBURG-AMERIKA
FACTS: HAMBURG owned a steamship named SAMBIA, which proceeded to the port of Saigon and was taking the cargo belonging to COMPAGNIE. Apparently, there were rumors of impending war between Germany and France and other nations of Europe. The master of the steamship was told to take refuge at a neutral port (because Saigon was a French port). So, to stop that, COMPAGNIE asked for compulsory detention of his vessel to prevent its property from leaving Saigon. However, the Governor of Saigon refused to issue an order because he had not been officially notified of the declaration of the war. The steamship sailed from Saigon, and was bound for Manila, because it was issued a bill of health by the US consul in Saigon. The steamship stayed continuously in Manila and where it contends it will be compelled to stay until the war ceases. No attempt on the part of the defendants to transfer and deliver the cargo to the destinations as stipulated in the charter party. That BEHN, MEYER and COMPANY (agent of HAMBURG in manila) offered to purchase the cargo from COMPAGNIE, but the latter never received the cable messages so they never answered. When a survey was done on the ship, it was found that the cargo was *weevily and heating* (whatever that means), so BEHN asked for court authority to sell the cargo and the balance to be dumped at sea. The proceeds of the sale were deposited in the court, waiting for orders as to what to do with it. BEHN wrote COMPAGNIE again informing the latter of the disposition which it made upon the cargo. COMPAGNIE answered that it was still waiting for orders as to what to do. COMPAGNIE of course wanted all the proceeds of the sale to be given to them (damages for the defendants failure to deliver the cargo to the destinations Dunkirk and Hamburg), while defendants contend that they have a lien on the proceeds of the sale (amount due to them because of the upkeep and maintenance of the ship crew and for commissions for the sale of the cargo). The trial court ruled in favor of the plaintiffs. On appeal, the defendants made the ff: assignments on appeal (that the court had no jurisdiction, that the fear of capture was not force majeure, that the court
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erred in concluding that defendant is liable for damages for non-delivery of cargo, and the value of the award of damages) On appeal, the plaintiffs also contended that the court erred in not giving the full value of damages (kasi binawas un expenses ng mga defendants)
ISSUE: W/N the master of the steamship was justified in taking refuge in Manila (therefore being the cause of the non-delivery of the cargo belonging to the plaintiffs) COMPAGNIE contends that the master should have in mind the accepted principles of public international law, the established practice of nations, and the express terms of the Sixth Hague Convention (1907), the master should have confidently relied upon the French authorities at Saigon to permit him to sail to his port of destination under a laissez-passer or safe-conduct, which would have secured both the vessel and her cargo from all danger of capture by any of the belligerents. The SHIPOWNER contends that the master was justified in declining to leave his vessel in a situation in which it would be exposed to danger of seizure by the French authorities, should they refuse to be bound by the alleged rule of international law.
FACTS: This is an action to collect P59,082.92, together with lawful interests from 14 October 1947, the date of the written demand for payment, and costs. The claim arises out of a shipment of 1,000 tons of coconut oil emulsion sold by the plaintiff, as agent of the defendant, to Jas. Maxwell Fassett, who in turn assigned it to Fortrade Corporation. Under an agency agreement set forth in a letter dated 7 November 1946 in New York addressed to the defendant and accepted by the latter on the 22nd day of the same month, the plaintiff was made the exclusive agent of the defendant in the sale of coconut oil and its derivatives outside the Philippines and was to be paid 2 1/2 per cent on the total actual sale price of sales obtained through his efforts in addition thereto 50 per cent of the difference between the authorized sale price and the actual sale price. After the trial where the depositions of the plaintiff and of Jas. Maxwell Fassett and several letters in connection therewith were introduced and the testimony of the defendant was heard, the Court rendered judgment as prayed for in the complaint. A motion for reconsideration was denied. A motion for a new trial was filed, supported by the defendant's affidavit, based on newly discovered evidence which consists of a duplicate original of a letter dated 16 October 1946 covering the sale of 1,000 tons of coconut oil soap emulsion signed by Jas. Maxwell Fassett assigned by the latter to the defendant; the letter of credit No. 20122 of the Chemical Bank & Trust Company in favor of Jas. Maxwell Fassett assigned by the latter to the defendant; and a letter dated 16 December 1946 by the Fortrade Corporation to Jas. Maxwell Fassett accepted it on 24 December 1946, all of which documents, according to the defendant, could not be produced at the trial, despite the use of reasonable diligence, and if produced they would alter the result of the controversy. The motion for new trial was denied. The defendant is appealing from said judgment. ISSUE: W/N a contract executed in a foreign country is cognizable by Philippine courts. HELD: The contention that as the contract was executed in New York, the Court of First Instance of Manila has no jurisdiction over this case, is without merit, because a non-resident may sue a resident in the courts of this country where the defendant may be summoned and his property leviable upon execution in the case of a favorable, final and executory judgment. It is a personal action for the collection of a sum of money which the Courts of First Instance have jurisdiction to try and decide. There is no conflict of laws involved in the case, because it is only a question of enforcing an obligation created by or arising from contract; and unless the enforcement of the contract be against public policy of the forum, it must be enforced. The plaintiff is entitled to collect P7,589.88 for commission and P50,000 for one-half of the overprice, or a total of P57,589.88, lawful interests thereon from the date of the filing of the complaint, and costs in both instances. 6. SHEWARAM V. PHILIPPINE AIRLINES
HELD: The Court held that after examining the terms and conditions of the convention that at the outbreak of the present war, there was no such general recognition of the duty of a belligerent to grant "days of grace" and "safe-conducts" to enemy ships in his harbors, as would sustain a ruling that such alleged duty was prescribed by any imperative and well settled rule of public international law, of such binding force that it was the duty of the master of the Sambia to rely confidently upon a compliance with its terms by the French authorities in Saigon. It was nothing but a *pious wish* at least, adherence to the practice by any belligerent could not be demanded by virtue of any convention, tacit or express, universally recognized by the members of the society of nations; and that it may be expected only when the belligerent is convinced that the demand for adherence to the practice inspired by his own commercial and political interests outweighs any advantage he can hope to gain by a refusal to recognize the practice as binding upon him. The Court concluded that under the circumstances surrounding the flight of the Sambia from the port of Saigon, her master had no such assurances, under any well-settled and universally accepted rule of public international law, as to the immunity of his vessel from seizure by the French authorities, as would justify us in holding that it was his duty to remain in the port of Saigon in the hope that he would be allowed to sail for the port of destination designated in the contract of affreightment with a laissez-passer or safe-conduct which would secure the safety of his vessel and cargo en route. The Court also held that it was the duty of the ship-owner to sell, and not to just transship the cargo, due to the fact of the perishable nature of the cargo (rice) and that he was justified in the delay of acting, so as to ascertain reasonably what course of action to take. RE: jurisdiction. It cannot be raised on appeal for the first time. 5. KING MAU WU V. SYCIP
Facts: A PAL ticket, on the reverse side, stated in fine print that if the value of baggage is not stated, and the baggage is lost, the maximum liability of PAL is P100.00 if value in excess of P100.00 is stated, PAL will charge extra because PAL is being held liable for an amount exceeding P100.00. Shewaram, a Hindu from
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Davao, boarded a PAL plane for Manila. Among his baggage was a camera with P800.00 and it was lost. PAL offered to pay P100.00. Shewaram wanted full payment of P800.00. Issue: Whether the limited liability rule shall apply in the case at bar? Held: The limited liability rule shall not apply. Since this is a stipulation on qualified liability, which operates to reduce the liability of the carrier, the carrier and the shipper must agree thereupon. Otherwise, the carrier will be liable for full. PAL is fully liable (for full) because Shewaran did not agree to the stipulation on the ticket, as manifested by the fact that Shewaram did not sign the ticket. Ticket should have been signed. 7. ONG YIU V. CA
Ong Yiu that his luggage had already been forwarded on the assumption that by the time the message reached Butuan City, the luggage would have arrived. Early in the morning of the next day, Ong Yiu went to the Bancasi Airport to inquire about his luggage. He did not wait, however, for the morning flight which arrived at 10am, and which carried the missing luggage. The porter clerk, Maximo Gomez, paged Ong Yiu, but the latter had already left. A certain Emilio Dagorro, a driver of a colorum car, who also used to drive for Ong Yiu, volunteered to take the luggage to Ong Yiu. As Maximo Gomez knew Dagorro to be the same driver used by Ong Yiu whenever the latter was in Butuan City, Gomez took the luggage and placed it on the counter. Dagorro examined the lock, pressed it, and it opened. After calling the attention of Maximo Gomez, the maleta was opened, Gomez took a look at its contents, but did not touch them. Dagorro then delivered the maleta to Ong Yiu, with the information that the lock was open. Upon inspection, Ong Yiu found that a folder containing certain exhibits, transcripts and private documents were missing, aside from two gift items for his parents-in-law. Ong Yiu refused to accept the luggage. Dagorro returned it to the porter clerk, Maximo Gomez, who sealed it and forwarded the same to PAL Cebu. Meanwhile, Ong Yiu asked for postponement of the hearing due to loss of his documents, which was granted by the Court. Ong Yiu returned to Cebu City on 28 August 1967. In a letter dated 29 August 1967 addressed to PAL, Cebu, Ong Yiu called attention to his telegram, demanded that his luggage be produced intact, and that he be compensated in the sum of P250,000.00 for actual and moral damages within 5 days from receipt of the letter, otherwise, he would be left with no alternative but to file suit. On 31 August 1967, Messrs. de Leon, Navarsi, and Agustin, all of PAL Cebu, went to Ong Yius office to deliver the maleta. In the presence of Mr. Jose Yap and Atty. Manuel Maranga, the contents were listed and receipted for by Ong Yiu. On 5 September 1967, Ong Yiu sent a tracer letter to PAL Cebu inquiring about the results of the investigation which Messrs. de Leon, Navarsi and Agustin had promised to conduct to pinpoint responsibility for the unauthorized opening of the maleta. On 13 September 1967, Ong Yiu filed a Complaint against PAL for damages for breach of contract of transportation with the CFI of Cebu, which PAL traversed. After due trial, the lower Court found PAL to have acted in bad faith and with malice and declared petitioner entitled to moral damages in the sum of P80,000.00, exemplary damages of P30,000.00, attorneys fees of P5,000.00, and costs. Both parties appealed to the Court of Appeals. On 22 August 1974, the Court of Appeals, finding that PAL was guilty only of simple negligence, reversed the judgment of the trial Court granting Ong Yiu moral and exemplary damages, but ordered PAL to pay Ong Yiu the sum of P100.00, the baggage liability assumed by it under the condition of carriage printed at the back of the ticket. Hence, this petition for review. ISSUES: 1. W/N PAL acted in bad faith and failed to exercise due diligence 2. W/N Ong Yiu is entitled to damages; does the doctrine of limited liability apply
FAST FACTS: Ong Yiu was scheduled to travel from Cebu to Butuan on board a PAL flight. He checked in one piece of baggage (a blue maleta) containing important documents that he needed for the trials he was scheduled to attend. Upon arrival at Butuan, he discovered that the luggage was missing and demanded that PAL deliver it to him the following day. PAL, despite their extensive efforts, failed to deliver the baggage on time, causing Ong Yiu to postpone the hearing. Ong Yiu sued PAL for damages for breach of contract of transportation. Facts: On 26 August 1967, Augusto B. Ong Yiu was a fare paying passenger of Philippine Air Lines, Inc. (PAL), on board Flight 463-R, from Mactan, Cebu, bound for Butuan City. He was scheduled to attend two trials set for hearing on August 28-31, 1967. As a passenger, he checked in one piece of luggage, a blue maleta for which he was issued a claim check. The plane left Mactan Airport at about 1pm, and arrived at Bancasi airport, Butuan City, at past 2 pm of the same day. Upon arrival, Ong Yiu claimed his luggage but it could not be found. According to Ong Yiu, it was only after reacting indignantly to the loss that the matter was attended to by the porter clerk, Maximo Gomez, which, however, the latter denies. At about 3pm, PAL Butuan, sent a message to PAL Cebu inquiring about the missing luggage, which message was, in turn, relayed in full to the Mactan Airport teletype operator at 3:45 pm. It must have been transmitted to Manila immediately, for at 3:59 pm, PAL Manila wired PAL Cebu advising that the luggage had been overcarried to Manila aboard Flight 156 and that it would be forwarded to Cebu on Flight 345 of the same day. Instructions were also given that the luggage be immediately forwarded to Butuan City on the first available flight. At 5pm of the same afternoon, PAL Cebu sent a message to PAL Butuan that the luggage would be forwarded on Flight 963 the following day. However, this message was not received by PAL Butuan as all the personnel had already left since there were no more incoming flights that afternoon. In the meantime, Ong Yiu was worried about the missing luggage because it contained vital documents needed for trial the next day. At 10 pm, Ong Yiu wired PAL Cebu demanding the delivery of his baggage before noon the next day, otherwise, he would hold PAL liable for damages, and stating that PALs gross negligence had caused him undue inconvenience, worry, anxiety and extreme embarrassment. This telegram was received by the Cebu PAL supervisor but the latter felt no need to wire
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HELD: 1. PAL did not act in bad faith Bad faith means a breach of a known duty through some motive of interest or ill will. It was the duty of PAL to look for Ong Yius luggage which had been miscarried; and PAL exerted due diligence in complying with such duty. PAL had not acted in bad faith. The failure of PAL Cebu to reply to Ong Yius rush telegram is not indicative of bad faith. The telegram was dispatched by petitioner at around 10pm of 26 August 1967. The PAL supervisor at Mactan Airport was notified of it only in the morning of the following day. At that time the luggage was already to be forwarded to Butuan City. There was no bad faith in the assumption made by said supervisor that the plane carrying the bag would arrive at Butuan earlier than a reply telegram. Had Ong Yiu waited or caused someone to wait at the Bancasi airport for the arrival of the morning flight, he would have been able to retrieve his luggage sooner. 2. Ong Yiu not entitled to moral damages, nor exemplary damages Articles 2217 and 2220 cannot apply. In the absence of a wrongful act or omission or of fraud or bad faith, Ong Yiu is not entitled to moral damages. Ong Yu is neither entitled to exemplary damages. In contracts, as provided for in Article 2232 of the Civil Code, exemplary damages can be granted if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, which has not been proven in the present case. However, Ong Yiu is entitled to recover P100 as indicated by the stipulation on limited liability in the contract of carriage, printed at the back of the plane ticket. The total liability is limited to P100/baggage for lost or damaged baggage. The contract of carriage is a contract of adhesion, and as such, Ong Yiu had given his consent when he purchased the ticket. Also, he did not declare any higher value of his baggage, nor did he pay any tariff as to the actual value of his baggage. He is bound by the contract of carriage and he cannot recover any amount in excess of P100. SC dismissed the petition. Ong Yiu can only recover the P100/ticket as per the limited liability stipulation. IMPORTANT NOTES: AS TO CONTRACTS Condition of carriage printed at back of plane ticket The pertinent Condition of Carriage printed at the back of the plane ticket reads 8. BAGGAGE LIABILITY . . . The total liability of the Carrier for lost or damaged baggage of the passenger is LIMITED TO P100.00 for each ticket unless a passenger declares a higher valuation in excess of P100.00, but not in excess, however, of a total valuation of P1,000.00 and additional charges are paid pursuant to Carriers tariffs. Contract of adhesion
contract of carriage, and valid and binding upon the passenger regardless of the latters lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion, in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the present case, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. Limitation of liability to agreed valuation is not contrary to law And as held in Randolph v. American Airlines and Rosenchein vs. Trans World Airlines, Inc., a contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. No declaration of greater value nor payment of tariff for value of luggage The liability of PAL for the loss, in accordance with the stipulation written on the back of the ticket is limited to P100.00 per baggage. Ong Yiu not having declared a greater value, and not having called the attention of PAL on its true value and paid the tariff therefor. The validity of the stipulation is not questioned by Ong Yiu. They are printed in reasonably and fairly big letters, and are easily readable. Moreover, Ong Yiu had been a frequent passenger of PAL from Cebu to Butuan City and back, and he, being a lawyer and businessman, must be fully aware of these conditions. Considering, therefore, that Ong Yiu had failed to declare a higher value for his baggage, he cannot be permitted a recovery in excess of P100.00. Besides, passengers are advised not to place valuable items inside their baggage but to avail of our V-cargo service. It is likewise to be noted that there is nothing in the evidence to show the actual value of the goods allegedly lost by Ong Yiu. Additional notes (but not connected to contracts, di naman yata important): Technicality yields to the interests of substantial justice On 24 October 1974 or two months after the promulgation of the Decision of the appellate Court, Ong Yius widow filed a Motion for Substitution claiming that Ong Yiu died on 6 January 1974 and that she only came to know of the adverse Decision on 23 October 1974 when Ong Yius law partner informed her that he received copy of the Decision on 28 August 1974. Attached to her Motion was an Affidavit of Ong Yius law partner reciting facts constitutive of excusable negligence. The appellate Court noting that all pleadings had been signed by Ong Yiu himself allowed the widow to take such steps as she or counsel may deem necessary. She then filed a Motion for Reconsideration over the opposition of PAL which alleged that the Court of Appeals Decision, promulgated on 22 August 1974, had already become final and executory since no appeal had been interposed therefrom within the reglementary period. Under the circumstances, considering the demise of Ong Yiu himself, who acted as his own counsel, it is best that technicality yields to the interests of substantial justice. Besides, in the last analysis, no serious prejudice has been caused PAL. 8. PAN AMERICAN WORLD AIRWAYS V. IAC
While it may be true that Ong Yiu had not signed the plane ticket, he is nevertheless bound by the provisions thereof. Such provisions have been held to be a part of the
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Facts: PanAm Airlines refused to accommodate Respondent Tinitigan on Pan Am Flight No. 431 from Sto. Domingo, Republica Dominica to San Juan, Puerto Rico notwithstanding that she possessed a confirmed plane ticket. While plaintiff was standing in line to board the aircraft, a Pan Am employee ordered her in a loud voice to step out of line because her ticket was not confirmed to her embarrassment in the presence of several people who heard and order. Despite her Pleas she was not allowed to board the aircraft. And her seat was also given to a Caucasian. The plane took off without her but with her luggage on board. She was forced to return to her hotel without any luggage much less an extra dress. While in Sto. Domingo, Tinitigan is expected to be in San Juan that same day to meet a client to sign a contract or lose it. She was expected to make a profit of $1,000 in said contract but because she was unable to board the flight, said profit was lost. The refusal of accommodation, and consequent loss of profit, caused Respondent Tinitigan to suffer mental anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation. She prayed that she be awarded moral damages of P500,000.00, exemplary damages of P200,000.00, attorneys fees of P100,000.00 and actual damages sustained by her in the amount of US$1,546.15. Defendant denied that plaintiff was a confirmed passenger since the ticket issued to her was on an open space basis, which meant that she could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. The lower court rendered judgment in favor of plaintiff and awarded the amount of damages as prayed for. Said decision was affirmed, hence the instant petition. Issue: Whether or not the award of damages was proper. Held: Yes, but subject to modifications. Evidence shows petitioner as confirmed passenger. 1.) Defendant issued a Passenger Ticket and Baggage Check with assigned seat and the corresponding pass and baggage claim symbol. 2.) Plaintiff paid the fare and terminal fee. 3.) plaintiffs passport was stamped by immigration. 4.) Plaintiffs name was included in the passenger manifest. There is a contract or carriage perfected between plaintiff and defendant for the latter to take plaintiff to her place of destination. By refusing to accommodate plaintiff in said flight, defendant had willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with plaintiff. There is showing of bad faith. Self-enrichment or fraternal interest and not personal ill will may have been the motive of defendant, but it is malice nevertheless. Malice is shown by the fact that that plaintiff was ordered out of the line under some pretext in order to accommodate a white man. SC reduced the moral and exemplary damages to the combined total sum of Two Hundred Thousand (P200,000.00) Pesos and the attorneys fees to Twenty Thousand (P20,000.00) Pesos. The award of actual damages in the amount of One
Thousand Five Hundred Forty Six American dollars and fifteen cents (US$1,546.15) computed at the exchange rate prevailing at the time of payment was retained and granted. 9. PAKISTAN INTERNATIONAL AIRLINES V. OPLE
Facts: Pakistan Intl Airlines (PIA) executed 2 separate contracts of employments in Manila, one with Farrales and the other with Mamasig. The pertinent portions of the contract state that (1) the agreement is for a period of 3 years, but can be extended by the mutual consent of the parties; (2) notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying the EMPLOYEE wages equivalent to one month's salary; (3) this agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement. 1 year and 4 months before the expiration of the contracts of employment, PIA sent separate letters to Mamasig and Farrales, advising them that their services as flight stewardesses would be terminated. Farrales and Mamasig filed a complaint for illegal dismissal and non-payment of company benefits and bonuses. PIA contended that F & M were habitual absentees and had the habit of bringing in from abroad sizeable quantities of personal effects. Issue: WON the provision in the contract that the agreement shall be governed by the laws of Pakistan (first clause) and that only the courts of Karachi, Pakistan shall have jurisdiction over any controversy arising out of the agreement (second clause), may be given effect (NO) Held: NO. The first clause cannot be invoked to prevent the application of Phil labor laws and regulations to the subject matter of the case. The ER-EE relationship between PIA and F&M is affected with public interest and the applicable Phil laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship. The second clause cannot also be invoked because the circumstances of the case shows multiple substantive contacts (no r) between Phil law and Phil courts on the one hand, and the relationship between the parties on the other: contract was executed and partially performed in the Phils., F&M are Filipino citizens and PIA is licensed to do business in the Phils., and F&M were based in the Phils. in between their flights. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the parties. The challenged portion of the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law. As to the dismissal of Farrales & Mamasig: they were illegally dismissed and are entitled to 3 years backwages without qualification or deduction. PIAs right to procedural due process was observed as it was given the opportunity to submit a
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position paper and present evidence. Also, the provisions of the employment contract must not be contrary to law, morals, good customs, public order, public policy. The employment contract prevents security of tenure of F&M from accruing. 10. TRIPLE EIGHT INTEGRATED SERVICES V. NLRC
1. No. Section 8, Rule 1, Book VI of the Rules Implementing the Labor Code shows that Osdana was terminated in violation of such, as well as Article 284. Art. 284. Disease as a ground for termination An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or prejudicial to his health as well as the health of his co-employees: x x x. Sec. 8. Disease as a ground for dismissal Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a certification by competent public authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. Osdanas continued employment despite her illness wasnt prohibited by law, and it wasnt prejudicial to her health, as well as that of her co-employees. The medical report that she got stated that she had very good improvement of the symptoms. Carpal Tunnel is not contagious. Regarding the medical certificate requirement The Court notes that aside from these allegations, petitioner hasnt presented any medical certificate or similar document from a competent public health authority in support of its claims. Triple Eight argues that she was employed in Saudi Arabia and not in the Philippines, so there was a physical impossibility to secure from a Philippine public health authority the alluded medical certificate that her illness wont be cured within a period of six months. But the rule is simply certification by a competent public health authority, and NOT Philippine public health authority. The requirement cannot be dispensed with, otherwise, it would defeat the public policy on protection of labor. The law of the place where the contract is made governs in this jurisdiction. The contract was perfected here, so the Labor Code applies. The courts of the forum wont enforce any foreign claim obnoxious to the forums public policy. Regarding the contract Though the contract that was approved by POEA was only for a period of 12 months, Osdanas actual stint was 1y 7.5m. The employer renewed her, impliedly, so the award for the unexpired portion should have been $280 x 4.5 months. Regarding award of moral and exemplary damages According to the facts of the case as stated by public respondent, Osdana was made to perform such menial chores, as dishwashing and janitorial work, among others, contrary to her job designation as waitress. She was also made to work long hours without overtime pay. Because of such arduous working conditions, she developed Carpal Tunnel Syndrome. Her illness was such that she had to undergo surgery twice. Since her employer determined for itself that she was no longer fit to continue
Facts: In 1992, Osdana was recruited by Triple Eight for employment with Gulf Catering Company (GCC), a firm based in the Kingdom of Saudi Arabia. Osdana was engaged to work as a food server for 36 months wth a salary of SR550. She claims that she was required by Triple Eight to pay a total of 11,950 pesos in placement fees, without receipts. She was asked to undergo a medical examination, too. It also asked Osdana to sign another Contractor Employee Agreement which provided that she would be employed for 12 months as a waitress with a salary of $280. This 2nd employment agreement was approved by the POEA. Osdana left for Riyadh, Saudi and commenced working for GCC. She was assigned to the College of Public Administration of the Oleysha University and was made to wash dishes, cooking pots, etc. which were unrelation to being a waitress. She was made to work a 12-hour shift, without overtime pay. Osdana suffered from numbness and pain in her arms, and had to be confined from June 18 to August 22, and wasnt paid her salaries. She was allowed to resume work as Food Server, where she worked 7 days a week, but was not paid. She was again confined. She was re-assigned to the Oleysha University, like her first assignment. She was diagnosed as having Bilateral Carpal Tunnel Syndrome. The pain then became unbearable, and she underwent two surgical operations. She wasnt given any work assignments in between operations. After her 2nd operation, she was dismissed from work allegedly on ground of illness, even after being given a certificate that she was fit to work. Upon her return to the Philippines, Osdana sought the help of Triple Eight, but to no avail. She was constrained to file a complaint before the POEA for the unpaid and underpaid salaries, for the unexpired portion, and damages. Under the Migrant Workers and Overseas Filipinos Act, the case was transferred to the arbitration branch of the NLRC and assigned to Labor Arbiter Canizares. The labor arbiter ruled in favor of Osdana. NLRC affirmed. MR was denied. Issues: 1. W/N there was GAD because of ruling in favor of Osdana even if there was no factual or legal basis for the award (illegal dismissal) Please see below for issues regarding Conflict of Laws Held:
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working, they sent her home posthaste without as much as separation pay or compensation for the months when she was unable to work because of her illness. Since the employer is deemed to have acted in bad faith, the award for attorneys fees is likewise upheld. 11. PHIL. EXPORT AND FOREIGN LOAN GURANTEE CORP. V. V.P. EUSEBIO CONSTRUCTION INC. Facts: This case is an offshoot of a service contract entered into by a Filipino construction firm with the Iraqi Government for the construction of the Institute of Physical Therapy-Medical Center, Phase II, in Baghdad, Iraq, at a time when the Iran-Iraq war was ongoing. In a complaint filed with the RTC Makati, petitioner Philippine Export and Foreign Loan Guarantee Corporation (hereinafter Philguarantee) sought reimbursement from the respondents of the sum of money it paid to Al Ahli Bank of Kuwait pursuant to a guarantee it issued for respondent V.P. Eusebio Construction, Inc. (VPECI). On November 8, 1980: State Organization of Buildings (SOB), Ministry of Housing and Construction, Baghdad, Iraq, awarded the construction of the Institute of Physical TherapyMedical Rehabilitation Center, Phase II, in Baghdad, Iraq, (Project) to Ajyal Trading and Contracting Company (Ajyal), a firm duly licensed with the Kuwait Chamber of Commerce for ID5,416,089/046 (or about US$18,739,668) March 7, 1981: 3-Plex International, Inc. represented by Spouses Eduardo and Iluminada Santos a local contractor engaged in construction business, entered into a joint venture agreement with Ajyal. However since it was not accredited under the Philippine Overseas Construction Board (POCB), it had to assign and transfer all its right to VPECI. VPECI entered into an agreement that the execution of the project will be under their joint management. To comply with the requirements of performance bond of ID271,808/610 and an an advance payment bond of ID541,608/901, 3-Plex and VPECI applied for the issuance of a guarantee with Philguarantee, a government financial institution empowered to issue guarantees for qualified Filipino contractors to secure the performance of approved service contracts abroad. Subsequently, letters of guarantee were issued by Philguarantee to the Rafidain Bank of Baghdad. Al Ahli Bank of Kuwait was, therefore, engaged to provide a counter-guarantee to Rafidain Bank, but it required a similar counter-guarantee in its favor from the Philguarantee. The Surety Bond was later amended to increase the amount of coverage from P6.4 million to P6.967 million and to change the bank in whose favor the petitioner's guarantee was issued, from Rafidain Bank to Al Ahli Bank of Kuwait SOB and the joint venture VPECI and Ajyal executed the service contract for the construction of the Institute of Physical Therapy Medical Rehabilitation Center, Phase II, in Baghdad, Iraq. It commenced only on the last week of August 1981 instead of the June 2 1981
Prior to the deadline, upon foreseeing the impossibility to meet it, the surety bond was also extended for more than 12 times until May 1987 and the Advance Payment Guarantee was extended three times more until it was cancelled for reimbursement On 26 October 1986, Al Ahli Bank of Kuwait sent a telex call to the petitioner demanding full payment of its performance bond counter-guarantee VPECI requested Iraq Trade and Economic Development Minister Mohammad Fadhi Hussein to recall the telex call on the performance guarantee for being a drastic action in contravention of its mutual agreement that (1) the imposition of penalty would be held in abeyance until the completion of the project; and (2) the time extension would be open, depending on the developments on the negotiations for a foreign loan to finance the completion of the project. VPECI advised the Philguarantee not to pay yet Al Ahli Bank because efforts were being exerted for the amicable settlement of the Project. VPECI received another telex message from Al Ahli Bank stating that it had already paid to Rafidain Bank the sum of US$876,564 under its letter of guarantee, and demanding reimbursement by Philguarantee. VPECI requested the Central Bank to hold in abeyance the payment by the Philguarantee "to allow the diplomatic machinery to take its course, for otherwise, the Philippine government , through the Philguarantee and the Central Bank, would become instruments of the Iraqi Government in consummating a clear act of injustice and inequity committed against a Filipino contractor. Central Bank authorized the remittance to Al Ahli Bank. Philguarantee informed VPECI that it would remit US$876,564 to Al Ahli Bank, and reiterated the joint and solidary obligation of the respondents to reimburse the Philguarantee for the advances made on its counter-guarantee but they failed to pay so a case was filed in the RTC. RTC and CA: Against Philguarantee since no cause of action since it was expired because VPECI. Inequity to allow the Philguarantee to pass on its losses to the Filipino contractor VPECI which had sternly warned against paying the Al Ahli Bank and constantly apprised it of the developments in the Project implementation. ISSUE: W/N the Philippine laws should be applied in determining VPECI's default in the performance of its obligations under the service contract HELD: YES. No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule followed by most legal systems, however, is that the intrinsic validity of a contract must be governed by the lex contractus or "proper law of the contract." This is the law voluntarily agreed upon by the parties (the lex loci voluntatis) or the law intended by them either expressly or implicitly (the lex loci intentionis) - none in this
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case In this case, the laws of Iraq bear substantial connection to the transaction, since one of the parties is the Iraqi Government and the place of performance is in Iraq. Hence, the issue of whether respondent VPECI defaulted in its obligations may be determined by the laws of Iraq. However, since that foreign law was not properly pleaded or proved, the presumption of identity or similarity, otherwise known as the processual presumption, comes into play. Where foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours In the United States and Europe, the two rules that now seem to have emerged as "kings of the hill" are (1) the parties may choose the governing law; and (2) in the absence of such a choice, the applicable law is that of the State that "has the most significant relationship to the transaction and the parties Another authority proposed that all matters relating to the time, place, and manner of performance and valid excuses for non-performance are determined by the law of the place of performance or lex loci solutionis, which is useful because it is undoubtedly always connected to the contract in a significant way In this case, the laws of Iraq bear substantial connection to the transaction, since one of the parties is the Iraqi Government and the place of performance is in Iraq. Hence, the issue of whether respondent VPECI defaulted in its obligations may be determined by the laws of Iraq. However, since that foreign law was not properly pleaded or proved, the presumption of identity or similarity, otherwise known as the processual presumption, comes into play. Where foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours. Delay or the non-completion of the Project was caused by factors not imputable to the respondent contractor such as the war in Iraq. Petitioner as a guarantor is entitled to the benefit of excussion, that is, it cannot be compelled to pay the creditor SOB unless the property of the debtor VPECI has been exhausted and all legal remedies against the said debtor have been resorted to by the creditor. It could also set up compensation as regards what the creditor SOB may owe the principal debtor VPECI. In this case, however, the petitioner has clearly waived these rights and remedies by making the payment of an obligation that was yet to be shown to be rightfully due the creditor and demandable of the principal debtor. 1. SS LOTUS CASE
TORTS AND CRIMES
On August 2, 1926, the S.S. Lotus, a French steamship, collided on the high seas with the Boz-Kourt, a Turkish collier. The Boz-Kourt split in two and sank, and eight of its crew members were killed. The Lotus remained to assist the survivors of the BozKourt, including its captain, Hassan Bey, and then continued with the survivors to Constantinople. Turkish authorities subsequently requested that Lieutenant Demons, the officer of the watch on board the Lotus when the collision occurred, come ashore to give evidence. At the conclusion of the questioning, Turkish authorities placed Demons and Hassan Bey under arrest pending trial on charges of manslaughter. At trial, Demons argued that the Turkish court lacked jurisdiction, but the court convicted both Demons and Hassan Bey, sentencing each to a term of imprisonment. The French government protested the arrest and the conviction and requested that the case be transferred to a French court. Turkey proposed, and France agreed, to pose the following question to the PCIJ: (1) Has Turkey . . . acted in conflict with the principles of international lawand if so, what principlesby instituting . . . criminal proceedings in pursuance of Turkish law against M. Demons . . .? The French government invoked the 1923 Convention of Lausanne in arguing against Turkish jurisdiction. Article 15 of the Convention indicated that all questions of jurisdiction shall, as between Turkey and the other contracting Powers, be decided in accordance with the principles of international law. France maintained that such principles precluded criminal jurisdiction in this case. The Court, somewhat significantly, condensed the positions of the parties in the following way: The French Government contends that the Turkish Courts, in order to have jurisdiction, should be able to point to some title to jurisdiction recognized by international law in favor of Turkey. On the other hand, the Turkish Government takes the view that Article 15 allows Turkey jurisdiction whenever such jurisdiction does not come into conflict with a principle of international law. Having thus framed the question as one inquiring whether international law is essentially permissive or prohibitive, the Court then issued its famous dictum: International law governs relations between independent States. The rules of law binding upon States therefore emanate from their own free will as expressed in conventions or by usages generally accepted as expressing principles of law and established in order to regulate the relations between these co-existing independent communities or with a view to the achievement of common aims. Restrictions upon the independence of States cannot therefore be presumed. The Court ultimately ruled, in a six-six split with President Huber casting the deciding vote, that trying Demons was not an exercise of power on the territory of another State, that the Court could deduce no rule or principle of international law
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preventing Turkey from exercising jurisdiction, and that under the circumstances France and Turkey had concurrent jurisdiction. 2. FILARTIGA V. PENA-IRALA
replaced Marcos as president, created the Presidential Commission on Good Government, an official agency charged with recovering the assets of the Republic from the Marcos family and its associates. These assets, which have never been comprehensively identified in any litigation, originally included U.S. and Philippine real estate holdings, valuable art works, cash and other property seized by U.S. Customs officials in Hawaii, and funds in bank accounts in California and Switzerland. The Republic contends that the Marcoses and their associates obtained these assets through misuse of Marcos' official position, and Philippine law provides for the forfeiture to the national treasury of property unlawfully obtained by public officials. A number of lawsuits were filed against the Marcos family in American courts. Among them were five suits filed in the Northern District of California and the District of Hawaii by individuals alleging that they or their relatives had been arrested, tortured, or executed by military intelligence personnel acting pursuant to martial law declared by Marcos in 1971. Hilao v. Estate of Ferdinand Marcos (In re Estate of Ferdinand Marcos, Human Rights Litig.), 25 F.3d 1467, 1469 (9th Cir.1994) (Estate II), cert. denied, 513 U.S. 1126, 115 S.Ct. 934, 130 L.Ed.2d 879 (1995). The district courts dismissed all five suits on the ground that the Act of State doctrine precluded liability. Id. In an appeal of those decisions to this court, the Republic filed an amicus curiae brief urging the U.S. courts to exercise jurisdiction over the human rights claims. This court reversed in two unpublished decisions.1 The human rights cases were subsequently consolidated in the district court in Hawaii and certified as a class action suit against the Estate. 25 F.3d at 1469. Meanwhile, in a separate action filed in the Central District of California, the Republic sued the Estate and Imelda Marcos, asserting RICO and pendent state law claims, and seeking the recovery of $1.55 billion allegedly plundered from the Philippines treasury. Republic of the Philippines v. Marcos, 818 F.2d 1473, 1476 (9th Cir.1987), reheard en banc, 862 F.2d 1355 (9th Cir.1988) (en banc), cert. denied, 490 U.S. 1035, 109 S.Ct. 1933, 104 L.Ed.2d 404 (1989). On 25 June 1986, the district court enjoined the Marcoses and their associates from disposing of any assets anywhere in the world. We affirmed the injunction. 862 F.2d at 1358. The Republic's suit against the Estate was settled in October 1991 and dismissed on 4 November 1991. As part of the settlement, the Estate and Imelda Marcos agreed to transfer the Estate assets impounded by U.S. Customs officials in Hawaii,2 except for some personal items and the cash in three accounts at a Los Angeles bank,3 to the Republic.4 The assets in Swiss banks were not transferred under the terms of the settlement, perhaps because the Swiss courts had frozen all Marcos assets in Switzerland in 1986 at the request of the Republic and had agreed that the assets would be returned to the Philippines if criminal prosecutions against the Marcos family in the Philippines succeeded.5 The injunction freezing the Estate's assets was dissolved as part of the settlement. However, the district court in Hawaii granted Hilao's request to have the injunction
FACTS: Filartiga's 17yrold son Joelito was kidnapped and tortured to death by D, Pena, in Paraguay. P claims this was done in retaliation for his father's political activities and beliefs. P brought a criminal case in Paraguayan court, but his attorney was arrested , threatened with death, and supposedly disbarred without just cause. Four years later, another man confessed to the murder, claiming he found Joelito and his wife together, and said the crime was one of passion, but he was never convicted, and also the evidence showed that Joelito's death "was the result of professional methods of torture." In 1978, Dolly Filrtiga and (separately) D (Pea) came to the US. Dolly applied for political asylum, while Pea stayed under a visitor's visa. Dolly learned of Pea's presence and reported it to the Immigration and Naturalization Service, who arrested and deported Pea for staying past the expiration of his visa. When Pea was taken to the Brooklyn Navy Yard pending deportation, Dolly lodged a civil complaint in U.S. courts for Joelito's wrongful death by torture, asking for damages in the amount of $10 million. ISSUE: Whether U.S. courts can punich non-U.S. citizens for tortious acts committed outside the U.S. that were in violation of the law of nations or any treaties to which the U.S. is a party. HELD: Yes. This case extended the jurisdiction of United States courts to tortious acts committed around the world. The appellants argued that Pea's actions had violated wrongful death statutes, the U.N. Charter, the Universal Declaration of Human Rights, the American Declaration of the Rights and Duties of Man, and other customary international law. Petitioner claimed the U.S. courts had jurisdiction to hear the case under the Alien Tort Statute, which grants district courts original jurisdiction to hear tort claims brought by an alien that have been "committed in violation of the law of nations or a treaty of the United States." This case interpreted that statute to grant jurisdiction over claims for torts committed both within the United States and abroad. The U.S. courts eventually ruled in favor of the Filrtigas, rewarding them roughly $10.4 million. Torture was clearly a violation of international law (aka "the law of nations"), and the U.S. did have jurisdiction over the case since the claim was lodged when both parties were inside the United States. Additionally, Pea had sought to dismiss the case based on forum non conveniens (saying that Paraguay was a more convenient location for the trial), but did not succeed. 3. IN RE: ESTATE OF FERDINAND MARCOS
FACTS: hortly after being deposed as president of the Philippines in February 1986, Ferdinand Marcos (Marcos) and his wife Imelda fled to Hawaii, taking with them dozens of crates filled with gold, jewelry, and cash. President Corazon Aquino, who
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reinstated on 19 November 1991. Estate II, 25 F.3d at 1469. We upheld the injunction on 16 June 1994. Id. at 1468. In the meantime, Hilao had won a favorable liability verdict on 24 September 1992. Id. at 1469. On 23 February 1994, the jury awarded Hilao $1.2 billion in punitive damages. Id. On 20 July 1994, Hilao filed a motion to modify the injunction to identify the Republic as an agent, representative, aider or abettor of the Estate subject to the injunction. Hilao contended that the Republic had seized assets of the Estate in the Philippines worth $672 million, as well as $2 million of the $409 million in cash that the Estate had deposited in Swiss banks. It claimed that the Republic had sold $481 million worth of stock, held in the Meralco Foundation for the benefit of the Estate, and had appropriated the proceeds to itself. It also asserted that the Republic and the Estate entered into two agreements on 26 June 1992, to transfer works of art6 from the United States to the National Museum of the Philippines, and to divide the Estate's other assets between the Estate and the Republic. On 12 September 1994, the district court heard argument on the motion; the Republic appeared specially and asserted its sovereign immunity. The district court the following day issued an order identifying the Republic as a representative, agent, aider or abettor of the Estate, and subjecting it to the injunction. On 23 September 1994, the Republic filed an appeal (No. 94-16739) from this order. On 18 January 1995, a jury in Hawaii awarded Hilao $766 million in compensatory damages. On 3 February 1995, the district court entered a final judgment, which included a permanent injunction against the Estate and its aiders and abettors and a finding that the Republic is an aider and abettor of the Estate. On 6 February 1995, the Republic filed a notice of appeal (No. 95-15259) from this final judgment. ISSUE: W/N Such acts are covered by sovereign immunity HELD: 1. The Republic claims that the district court lacked authority to subject it to the injunction because it enjoys sovereign immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330, 1602-11 (FSIA). Hilao argues that the FSIA does not govern because Rule 65(d) of the Federal Rules of Civil Procedure8 makes an injunction binding upon those persons in active concert or participation with an enjoined party to the action where those persons have actual notice. Therefore, Hilao argues, the district court did not need to establish personal jurisdiction over the Republic in order to find that the Republic is an aider and abettor of the Estate and therefore bound by the injunction. While Rule 65(d) indeed automatically makes the injunction against the Estate binding upon persons in active concert or participation with the Estate who have actual notice of the injunction, the district court went further by specifically finding that the Republic is such a person and thus expressly binding it by the injunction. However, in order to enforce this injunction against the Republic, through, for example, contempt proceedings, the district court would have to have personal jurisdiction over the Republic. An injunction against the Republic in the absence of personal jurisdiction over it would be futile, as the court would be powerless to enforce its injunction.
A court should not issue an unenforceable injunction: The rule that a court of equity will not issue an unenforceable decree of injunction comprehends as a reason for denying injunctive relief[] that the court does not have the means to punish disobedience once discovered. In order to determine whether the attempt to enjoin the Republic was futile, we must examine whether the district court could have personal jurisdiction over the Republic. The FSIA is the sole basis for jurisdiction over a foreign state. Personal jurisdiction over a foreign state depends on subject-matter jurisdiction over the action against the foreign state under the FSIA. [P]ersonal jurisdiction, like subject-matter jurisdiction, exists only when one of the exceptions to foreign sovereign immunity in [the FSIA] applies. The FSIA sets forth the general rule that foreign states are immune from the jurisdiction of courts in the United States unless a claim against them falls within an exception to immunity under the Act. Siderman de Blake, 965 F.2d at 706. Thus, the district court lacked jurisdiction over the Republic absent the existence of an applicable exception under the FSIA. Hilao claims that both the commercial activity and waiver exceptions of the FSIA apply. Once a plaintiff offers evidence that one of the FSIA's exceptions to immunity applies, the party claiming immunity bears the burden of proving by a preponderance of the evidence that the exception does not apply. A. Commercial-Activity Exception
The FSIA directs that a foreign state is not immune from suit in U.S. courts if: the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose. [T]he issue is whether the particular actions that the foreign state performs (whatever the motive behind them) are the type of actions by which a private party engages in trade and traffic or commerce. [T]he question is not whether the foreign government is acting with a profit motive or instead with the aim of fulfilling uniquely sovereign objectives. Id. The central question is whether the activity is of a kind in which a private party might engage. Hilao argues that the Republic is attempting to recover indebtedness, while the Republic describes itself as pursuing misappropriated public assets. The Republic's description is more accurate, in that a governmental agency of the Philippines is acting under a statutory mandate to recover property allegedly stolen from the treasury. This exercise of police power is a governmental rather than commercial activity, and, thus, the commercial-activity exception does not apply.
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B.
Waiver Exception
Allah Al-Gazzawi, the latter as an accomplice. When plaintiff returned to Jeddah a few days later, SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff to Manila. On January 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah. One year and a half later or on June 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIAs Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight and took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders. On July 3, 1993, a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and
A foreign state is not immune from suit if it has waived its immunity either explicitly or by implication The FSIA's waiver exception is narrowly construed. [C]ourts have found such waivers in cases where a foreign state has agreed to arbitration in another country or where a foreign state has agreed that the law of a particular country should govern a contract. An implicit waiver would also include a situation where a foreign state has filed a responsive pleading in an action without raising the defense of sovereign immunity. The House Report does not purport to provide an exclusive list of the circumstances giving rise to implied waiver. However, to support a finding of implied waiver, there must exist a direct connection between the sovereign's activities in U.S. courts and the plaintiff's claims for relief. Hilao argues that the Republic waived immunity by (1) submitting the amicus curiae brief in Trajano and Hilao and (2) using the U.S. courts to pursue assets held by the Estate. 4. TRAJANO V. MARCOS
FACTS: Agapita Trajano, a citizen of the Philippines, sued Marcos, Ver, and Marcos' daughter Imee Marcos, alleging that the defendants were responsible for the kidnapping, torture and murder of her son Archimedes Trajano in 1977. Trajano alleged false imprisonment, wrongful death, kidnapping, and violation of international law on behalf of Archimedes' estate, and the intentional infliction of emotional distress for her own suffering on being shown the tortured body of her son. ISSUE: whether a United States district court had subject matter jurisdiction over a claim of official acts of torture committed outside the United States HELD: The Alien Tort Statute ("ATS") confers federal district courts with subject matter jurisdiction over alien plaintiffs' civil actions for torts committed in violation of the law of nations. ATS' jurisdictional grant was constitutional and encompassed extraterritorial causes of action, the appellate court held that the district court properly exercised its subject matter jurisdiction. 5. SAUDI ARABIAN AIRLINES V. CA
FACTS: On January 1988 defendant SAUDIA hired plaintiff (herein private respondent) Milagros P. Morada as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. On April 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer AlGazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in the room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and
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Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights. Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause. On November 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi (Al-Balawi), its country manager. On January 1994, SAUDIA filed an Omnibus Motion To Dismiss which raised the following grounds, to wit: (1) that the Complaint states no cause of action against SAUDIA; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case. The trial court issued an Order dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by SAUDIA. From the Order of respondent Judge denying the Motion to Dismiss, SAUDIA filed on September 1994, its Motion for Reconsideration of the Order. It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 1994, Morada filed her Opposition. In the Reply filed with the trial court, SAUDIA alleged that since its MR raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the same. Respondent Judge denied SAUDIAs Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows: Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus attorneys fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED.
Consequently, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or TRO with the CA. Respondent CA promulgated a Resolution with Temporary Restraining Order, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim. In another Resolution, now assailed, the CA denied SAUDIAs Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit: On October 1995, SAUDIA filed with the SC the instant Petition for Review with Prayer for TRO. However, during the pendency of the instant Petition, respondent CA rendered the Decision, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaints basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal. On May 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for TRO, given due course by this Court. After both parties submitted their Memoranda, the instant case is now deemed submitted for decision. ISSUE: 1)W/N the case is a conflict of laws? YES 2) W/N CA erred in holding that the RTC of QC has jurisdiction? YES 3) W/N CA erred in Ruling that in this case, Philippine Law should govern? YES ***Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondents claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. Respondent contends that since her Amended Complaint is based on Articles 1935 and 2136 of the Civil Code, then the instant case is properly a matter of domestic law. HELD: 1) YES. Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia. Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a conflicts case. A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a foreign element. The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. The forms in which this foreign element may appear are many. The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex
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form. In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise. We thus find private respondents assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the question of jurisdiction confronts the court a quo. 2) YES. After a careful study of the private respondents Amended Complaint, and the Comment thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code. Thus, in Philippine National Bank (PNB) vs. Court of Appeals, this Court held that: The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes. Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondents assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum. Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction we find that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691. Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC of QC assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, vex, harass, or oppress the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice of forum of the plaintiff (now private respondent) should be upheld. Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntarily submitted herself to the jurisdiction of the court. The
records show that petitioner SAUDIA has filed several motions praying for the dismissal of Moradas Amended Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial courts jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction. 3) As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation. Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as characterization, or the doctrine of qualification. It is the process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule. The purpose of characterization is to enable the forum to select the proper law. Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An essential element of conflict rules is the indication of a test or connecting factor or point of contact. Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing. Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. These test factors or points of contact or connecting factors could be any of the following: (1) the nationality of a person, his domicile, his residence, his place of sojourn, or his origin; (2) the seat of a legal or juridical person, such as a corporation; (3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real rights are involved; (4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts; (5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised; (6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis;
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(7) the place where judicial or administrative proceedings are instituted or done. The lex forithe law of the forumis particularly important because, as we have seen earlier, matters of procedure not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and (8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.60 (Italics ours.) After a careful study of the pleadings on record, we are convinced that there is reasonable basis for private respondents assertion thatalthough she was already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition. There is likewise logical basis on record for the claim that the handing over or turning over of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioners purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the guise of petitioners authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven. Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, act with justice, give her her due and observe honesty and good faith. Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort. Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liabilit1 have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the most
significant relationship rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. As already discussed, there is basis for the claim that overall injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the relationship between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established. Prescinding from this premise that the Philippines is the situs of the tort complained of and the place having the most interest in the problem, we find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable petitioners insistence that [s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter. As aptly said by private respondent, she has no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21 of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law should govern this case5 And as correctly held by the respondent appellate court, considering that it was the petitioner who was invoking the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is. Lastly, no error could be imputed to the respondent appellate court in upholding the trial courts denial of defendants (herein petitioners) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the countrys system of law and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever.
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WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby REMANDED to RTC of QC for further proceedings.
RECOGNITION AND ENFORCEMENT OF FOREIGN JURISDICTION AND FOREIGN ARBITRAL AWARDS

1. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH V. STOLT-NIELSEN PHILIPPINES
FACTS: On 9 January 1985, United Coconut Chemicals, Inc. shipped 404.774 metric tons of distilled C6-C18 fatty acid on board MT "Stolt Sceptre," a tanker owned by Stolt-Nielsen Philippines Inc., from Bauan, Batangas, Philippines, consigned to "Nieuwe Matex" at Rotterdam, Netherlands, covered by Tanker Bill of Lading BL No. BAT-1. The shipment was insured under a marine cargo policy with Petitioner National Union Fire Insurance Company of Pittsburg (hereinafter referred to as INSURER), a non-life American insurance corporation, through its settling agent in the Philippines, the American International Underwriters (Philippines), Inc., the other petitioner herein. Upon receipt of the cargo by the consignee in the Netherlands, it was found to be discoloured and totally contaminated. Hence, a claim was made on the Insurer of the cargo. The insurer as subrogee filed a claim for damages against the carrier with the RTC of Manila. The carrier filed a motion to dismiss on the ground that the case was arbritrable and pursuant to the charter party as embodied in the bill of lading, arbitration must be done. The insurer opposed the motion by arguing that the provision on arbitration was not included in the bill of lading and even if it was included, it was nevertheless unjust and unreasonable. The RTC denied the motion but upon reconsideration, the resolution on the motion to dismiss was suspended or deferred. The carrier then filed a petition for review on certiorari with preliminary injunction/TRO which was granted by the CA. ISSUE: Are the terms of the Charter Party, particularly the provision on arbitration, binding on the INSURER?
HELD: The pertinent portion of the Bill of Lading in issue provides in part:
xxx [A]ll the terms whatsoever of the said Charter except the rate and payment of freight specified therein apply to and govern the rights of the parties concerned in this shipment.xxx The provision on arbitration in the Charter Party reads: 4. Arbitration. Any dispute arising from the making, performance or termination of this Charter Party shall be settled in New York, Owner and Charterer each appointing an arbitrator, who shall be a merchant, broker or individual experienced in the shipping business; the two thus chosen, if they
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cannot agree, shall nominate a third arbitrator who shall be an admiralty lawyer. Such arbitration shall be conducted in conformity with the provisions and procedure of the United States arbitration act, and a judgment of the court shall be entered upon any award made by said arbitrator. Nothing in this clause shall be deemed to waive Owner's right to lien on the cargo for freight, deed of freight, or demurrage. Clearly, the Bill of Lading incorporates by reference the terms of the Charter Party. It is settled law that the charter may be made part of the contract under which the goods are carried by an appropriate reference in the Bill of Lading. As the respondent Appellate Court found, the INSURER "cannot feign ignorance of the arbitration clause since it was already charged with notice of the existence of the charter party due to an appropriate reference thereof in the bill of lading and, by the exercise of ordinary diligence, it could have easily obtained a copy thereof either from the shipper or the charterer.
2. The term "agreement in writing" shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. 3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. It has not been shown that the arbitral clause in question is null and void, inoperative, or incapable of being performed. Nor has any conflict been pointed out between the Charter Party and the Bill of Lading.
We hold, therefore, that the INSURER cannot avoid the binding effect of the arbitration clause. By subrogation, it became privy to the Charter Party as fully as the SHIPPER before the latter was indemnified, because as subrogee it stepped into the shoes of the SHIPPER-ASSURED and is subrogated merely to the latter's rights. It can recover only the amount that is recoverable by the assured. And since the right of action of the SHIPPER-ASSURED is governed by the provisions of the Bill of Lading, which includes by reference the terms of the Charter Party, necessarily, a suit by the INSURER is subject to the same agreements. It has not been shown that the arbitral clause in question is null and void, inoperative, or incapable of being performed. Nor has any conflict been pointed out between the Charter Party and the Bill of Lading.
In fine, referral to arbitration in New York pursuant to the arbitration clause, and suspension of the proceedings in Civil Case No. 13498 below, pending the return of the arbitral award, is, indeed called for. 2. QUERUBIN V. QUERUBIN Note: This case is entirely in Spanish with random insertions of American doctrines. Therefore, the facts are shit. I guess the importance of the case is to take note of the doctrines (since we wont discussing this in class anyways.) Facts: It is therefore ordered, adjudged and decreed that the interlocutory judgment of divorce hereinbefore entered on February 27, 1948, in Book 1891, page 319, be and the same is hereby modified in the following particulars in connection with the custody of the minor child of the parties only: (1) The care, custody and control of the minor child of the parties, Querubina Querubin, is hereby awarded to defendant and cross-complainants; (2) Said child is to be maintained in a neutral home, subject to the right of reasonable visitation on the part of both parties to this action; (3) Each party shall have the right to take said child away from said neutral home but plaintiff and cross-defendant is restrained from taking said child to her place of residence; (4) Each party is restrained from molesting the other, or in any way interfering with the other's right of reasonable visitation of said child; (5) Each party is restrained from removing the child from the State of California without first securing the permission of the court; said parties are further restrained from keeping the child out of the County of Los Angeles for more than one day without first securing the consent of the court. Under interlocutory decree of March 7, 1949, the child, a girl now 3 1/2 years old,
Arbitration, as an alternative mode of settling disputes, has long been recognized and accepted in our jurisdiction (Chapter 2, Title XIV, Book IV, Civil Code). Republic Act No. 876 (The Arbitration Law) also expressly authorizes arbitration of domestic disputes. Foreign arbitration as a system of settling commercial disputes of an international character was likewise recognized when the Philippines adhered to the United Nations "Convention on the Recognition and the Enforcement of Foreign Arbitral Awards of 1958," under the 10 May 1965 Resolution No. 71 of the Philippine Senate, giving reciprocal recognition and allowing enforcement of international arbitration agreements between parties of different nationalities within a contracting state. Thus, it pertinently provides: 1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.
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was granted to defendant husband, but the child was to be kept in a neutral home; both parties were given reasonable visitation and both were restrained from removing the child out of the state. Defendant has taken the child with him to the Philippine Islands. At time of trial custody was apparently denied plaintiff because she was then living with another man. She is now married to this man and they have a well equipped home. Plaintiff appears to be a devoted mother. She has one child, the issue of her present marriage, and is also caring for a child that was abandoned by certain friends of hers. Plaintiffs husband is regularly and permanently employed. Witnesses testified in behalf of the plaintiff in reference to her motherly qualities and the condition of her home. She visited the child in question sufficiently when the child was in the neutral home and brought her toys and other articles. Service of the order to show cause was made on deft's attorneys of record. The interlocutory decree was modified so as to provide that custody of the child shall be awarded to the plaintiff and the defendant shall have the right of reasonable visitation. Defendant shall pay plaintiff for the support of the child $30 each month on the 1st day thereof, commencing Jan. 1950. [my interpretation of what happened next: Plaintiff wife sought to enforce the interlocutory decree of the California courts awarding her custody by filing a case in the Philippines against the husband] Issue: Whether or not an interlocutory decree of one state can be enforced in another (NO) Held: The rule is of common knowledge that the definitive judgment of a court of another state between the same parties on the same cause of action, on the merits of the case is conclusive, but it must be a definitive judgment on the merits only. Where the judgment is merely interlocutory, the determination of the question by the court which rendered it did not settle and adjudge finally the rights of the parties." (National Park Bank vs. Old Colony Trust Co., 186 N.Y.S., 717.) As already stated the Minnesota decree, to the extent that it is final and not subject to modification, is entitled to the protection of the full faith and credit clause of the federal Constitution and must be enforced in this state. If, however, a part of the Minnesota decree in not final, but is subject to modification by the court which rendered it, then neither the United States Constitution nor the principle of comity compels the courts of this state to enforce that part of the decree; for no court other than the one granting the original decree could undertake to administer relief without bringing about a conflict of authority. (Levine vs. Levine, 187 Pac., 609.) A judgment rendered by a competent court, having jurisdiction in one state, is conclusive on the merits in the courts of every other state, when made the basis of an action and the merits cannot be reinvestigated. Our own Supreme Court so holds. Cook vs. Thornhill, 13 Tex. 293, 65 Am. Dec. 63. But before such a judgment rendered in one state is entitled to acceptance, in the courts of another state, as conclusive on the merits, it must be a final judgment and not merely an interlocutory decree. Freeman on Judgment, Sec. 575; Baugh vs. Baugh, 4 Bibb (7 Ky.) 556; Brinkley vs. Brinkley, 50 N.Y. 184, 10 Am. Rep. 460; Griggs, vs. Becker, 87 Wis. 313, 58 N.W. 396. (Walker vs. Garland et al., 235 S.W., 1078.)
A consideration of all the facts and circumstances leads to the conclusion that comity does not require the courts of this state, regardless of the well-being of the child, to lend their aid to the enforcement of the Iowa decree by returning Winifred to the custody of her grandmother. A child is not a chattel to which title and the right of possession may be secured by the decree of any court. If the decree had been rendered by a domestic court of competent jurisdiction, it would not have conclusively established the right to the custody of the child. In a contest between rival claimants, this court would have been free, notwithstanding the decree, to award the custody solely with an eye to the child's welfare. (State ex rel. Aldridge vs. Aldridge, 204 N.W. 324.) On habeas corpus by the mother to obtain possession from the father of two children aged four and six years, whose custody she alleged had been awarded her in divorce proceedings in another state, it appeared that the mother was without property, and had no means of support save her personal earnings of $15 per month, was in poor health, and lived with her mother, in immoral surroundings, and that the father was an industrious and sober man, earnings $100 per month. Held, that the welfare of the children was the only thing to be considered, and a judgment awarding their custody to the mother should be reversed. (Kentzler vs. Kentzler, 28 Pac., 370.) On the question of comity, this court said in the habeas corpus case of In re Stockman, 71 Mich. 180, 38 N.W. 876: "Comity cannot be considered in a case like this, when the future welfare of the child is the vital question in the case. The good of the child is superior to all other considerations. It is the polar star to guide to the conclusion in all cases of infants, whether the question is raised upon a writ of habeas corpus or in a court of chancery." (Ex parte Leu, 215 N.W., 384.) 3. BORTHWICK V. CASTRO BARTOLOME
FACTS: Based on an action commenced in the Circuit Court of the First Circuit, State of Hawaii, U.S.A., Joseph E. Scallon sought to compel payment by William B. Borthwick on four (4) promissory notes in the amounts of $32,408.95, $29,584.94, $2,832.59 and $40,000.00, plus stipulated interest. Scallon's complaint alleged that Borthwick, an American citizen living in the Philippines, owned real property interests in Hawaii where he last resided and transacted business therein; that business dealings which transpired in Honolulu, Hawaii had given rise to the promissory notes sued upon, and Borthwick had failed to pay the debts despite demand. The promissory notes, which although uniformly specifying the city of Palos Verdes, Los Angeles, California as the place of payment, also provided that
"in the event that payment *** shall not have been made in full on or before the maturity date *** at *** (such) place ***, payee may select, at his option, Manila, Philippines, or Honolulu, Hawaii as additional places for payment *** and *** any
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court in any of said places having jurisdiction over the subject matter shall be a proper Court for the trial of any action brought to enforce payment of this note and the law of the place in which said action is brought shall apply."
Borthwick being then in Monterey, California, summons was served upon him personally in that place, pursuant to Hawaiian law allowing service of process on a person outside the territorial confines of the State, if he had otherwise submitted himself to the jurisdiction of its courts as to causes of action arising from the act of transacting any business within Hawaii Borthwick ignored the summons. Default was entered against him, and in due course a default judgment was rendered against him.
As to Borthwick's attack on the validity of the foreign judgment, the Trial Court ruled that "under the ** Hawaii Revised Statute cited by the defendant the Hawaii Court has jurisdiction" because the factual premises upon which the exercise of such jurisdiction was based "had not been refuted by the defendant" although he "appears to be a lawyer, and the summons in the Hawaii case was served personally on him." Finally, the Trial Court disposed of Borthwick's other defenses saying that the present action "is for the enforcement of a foreign judgment" where the validity of his defenses to the original action is immaterial. Borthwick proceeded directly to this Court and filed a petition for review.
ISSUE: Is the judgment renderred by the Hawaii Court against Borthwick enforceable in the Philippines? However, Scallon's attempts to have the judgment executed in Hawaii and California failed, because no assets of Borthwick could be found in those states. Scallon and his wife, Jewell, then came to the Philippines and on March 15, 1980 brought suit against Borthwick in the Court of First Instance of Makati, seeking enforcement of the default judgment of the Hawaii Court.
The sheriff's initial efforts to serve summons on Borthwick personally at his address at 861 Richmond St., Greenhills, Mandaluyong having been unsuccessful because Borthwick was "always out on official business", the sheriff effected substituted service by leaving a copy of the summons and the complaint with Borthwick's "house caretaker/gardener" named Fred Daniel.
HELD: YES. It is true that a foreign judgment against a person is merely "presumptive evidence of a right as between the parties," and rejection thereof may be justified, among others, by "evidence of a want of jurisdiction" of the issuing authority, under Rule 39 of the Rules of Court. In the case at bar, the jurisdiction of the Circuit Court of Hawaii hinged entirely on the existence of either of two facts in accordance with its State laws, i.e., either Borthwick owned real property in Hawaii, or the promissory notes sued upon resulted from his business transactions therein. Scallon's complaint clearly alleged both facts. Borthwick was accorded opportunity to answer the complaint and impugn those facts, but he failed to appear and was in consequence declared in default. There thus exists no evidence in the record of the Hawaii case upon which to lay a conclusion of lack of jurisdiction, as Borthwick now urges.
Borthwick filed no answer to the Scallons' complaint. He was declared in default. After due proceedings judgment by default was rendered against him.
There was no response from Borthwick until after the Court subsequently amended its judgment so as to make the sums due under the Hawaii Court decision payable in their equivalent in Philippine currency. Notice of this amendatory order was personally accepted by Borthwick at this time. Borthwick then moved for a new trial but was denied by the trial court.
The opportunity to negate the foreign court's competence by proving the nonexistence of said jurisdictional facts established in the original action, was again afforded to Borthwick in the Court of First Instance of Makati, where enforcement of the Hawaii judgment was sought. This time it was the summons of the domestic court which Borthwick chose to ignore, but with the same result: he was declared in default. And in the default judgment subsequently promulgated, the Court a quo decreed enforcement of the judgment affirming among others the jurisdictional facts, that Borthwick owned real property in Hawaii and transacted business therein.
In the light of these antecedents, it is plain that what Borthwick seeks in essence is one more opportunity, a third, to challenge the jurisdiction of the Hawaii Court and the merits of the cause of action which that Court had adjudged to have been established against him. This he may obtain only if he succeed in showing that the declaration of
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his default was incorrect. He has unfortunately not been able to do that; hence, the verdict must go against him.
The RTC ruled in favor of Interpool ordering all petitioners to jointly and severally pay Interpool pursuant to the U.S. District Court judgment. Petitioners' appeal to the CA was denied.
4.
PHILIPPINE INTERNATIONAL SHIPPING V. CA Petitioners' side: They allege that both the Default Judgment rendered by the U.S. District Court and the RTC decision are null and void on jurisdictional grounds because the U.S. District Court never acquired jurisdiction over their persons as they had not been served with summons and a copy of the Complaint in the case there. And in the RTC case, they contend that such jurisdictional error effectively prevented the RTC from taking cognizance of the Complaint and from enforcing the U.S. District Court's Default Judgment against them. And that assuming the validity of the disputed Default Judgment, the same may be enforced only against PISC since the other petitioners were not impleaded originally in the case filed in New York.
Facts: Interpool, Ltd. is a foreign corporation, duly organized and existing under the laws of Bahamas Islands with office and business address in New York and not licensed to do, and not doing business, in the Philippines. Principal petitioner is PISC. The other petitioners are Phil. Construction Consortium Corporation, Pacific Mills Inc., and Universal Steel Smelting Company, Inc. They are all corporations duly organized and existing under the laws of the Philippines. The other petitioners Lim, Bautista, Laude, Sing Lim, Lao and Teh are Philippine residents.
In 1979 - 1981, PISC leased from Interpool and its wholly owned subsidiary, Container Trading Corporation, several containers pursuant to the Membership Agreement and Hiring Conditions (Exhibit B) and the Master Equipment Leasing Agreement (Exhibit C), both dated June 1979. Phil. Construction Consortium, Pacific Mills and Universal Steel guaranteed to pay all money due, or to become due, to Interpool from PISC and any liability of the latter arising out of the leasing or purchasing of equipment. Lim, et. al. also unconditionally and irrevocably guaranteed to pay Interpool all payments due to it and any liability that may arise under the 2 agreements.
Issues: 1. W/N the U.S. District Court validly acquired jurisdiction over PISC - YES 2. W/N the Default Judgment is valid and enforceable here - YES 3. W/N the other petitioners can be held liable for the default judgment - YES
Held: 1. The evidence of record clearly shows that the U.S. District Court had validly acquired jurisdiction over PISC under the procedural law applicable in that forum (the U.S. Federal Rules on Civil Procedure). Copies of the Summons and Complaint, which were attached to the Petition for Review filed with this Court, were stamped "Received, 18 Jan 1983, PISC Manila." indicating that service had been made upon and acknowledged by PISC office in Manila on, 18 Jan. 1983, and that PISC had actual notice of such Complaint and Summons. Moreover, copies of said Summons and Complaint had likewise been served upon Prentice-Hall Corporation New York, PISC's agent, expressly designated by it in the Leasing Agreement with Interpool. The record also shows that PISC, without, however, assailing the jurisdiction of the U.S. District Court over the person of petitioner, had filed a Motion to Dismiss the Complaint which Motion was denied. All of the foregoing matters, which were stated specifically in the U.S. District Court's disputed Default Judgement, have not been disproven or otherwise overcome by petitioners.
PISC incurred outstanding and unpaid obligations with Interpool amounting to of $94,456.28, representing unpaid per diems, drop-off charges, interest and other agreed charges. Interpool sent letters to the other petitioners demanding payment of their outstanding and unpaid obligations, but to no avail. So Interpool filed a case against the PISC before the U.S. District Court, Southern District of New York. Interpool obtained a Default Judgment against PISC ordering it to pay Interpool liquidated damages, together with interest and costs.
Because of the unjustifiable failure and refusal of PISC and its guarantors to jointly and severally pay their obligations to Interpool, the latter filed a complaint with the QC RTC to enforce the default judgment of the U.S. District Court against PISC and also to enforce the individually executed Continuing Guaranties of the other petitioners. Petitioners failed to answer the complaint so they were declared in default.
2.
That foreign judgment-which had become final and executory, no appeal having been taken therefrom and perfected by petitioner PISC-is thus "presumptive evidence of a right as between the parties [i.e., PISC and Interpool] and their successors in interest by a subsequent title." Further there has been no showing
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by petitioners that the Default Judgment rendered by the U.S. District Court was vitiated by "want of notice to the party, collusion, fraud, or clear mistake of law or fact." The Default Judgment imposing upon PISC a liability of $94,456.28 in favor of Interpool, is valid and may be enforced in this jurisdiction.
Northwest and Sharps Japan branch entered into an International Passenger Sales Agency Agreement, whereby Northwest authorized Sharp to sell its tickets. However, Sharp failed to remit the proceeds of the ticket sales prompting Northwest to file a case for the collection of the unremitted proceeds with a claim for damages. The Japanese court issued a writ of summons against Sharp, but despite 2 attempts, its service in Japan proved unsuccessful. At the first try, the person in Sharps Japan office advised the bailiff that the person believed to be authorized to receive court processes was in Manila and would be back in a few days. On the day of the return of the authorized person, the bailiff went back but the former refused to accept the summons claiming that he was no longer Sharps employee. Due to the failed attempts, the Japanese court decided to serve the summons and the complaint at Sharps head office in Manila though diplomatic channels. Eventually, Sharp received the writ of summons from a Deputy Sheriff in Manila.12 Despite receipt, however, Sharp failed to appear at the scheduled hearing. The Japanese court decided in favor of Northwest and Sharp later received a copy of the judgment from the same Deputy Sheriff. Since Sharp did not appeal, the judgment became final and executory. Since plaintiff was unable to execute the decision in Japan, it filed a suit for enforcement of the judgment before the RTC of Manila. Sharps defense: 1. The judgment is null and void for want of jurisdiction; and 2. The judgment is contrary to Philippine law and public policy and rendered without due process of law (rendered without due and proper notice to the defendant) RTC and CA: Dismissed the complaint. The process of the court has no extraterritorial effect and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of that State. Since it is an action in personam, personal or substituted service of summons within the forum is required for the court to acquire jurisdiction over the defendant. The summons effected in Manila was null and void and did not confer jurisdiction upon the Japanese court over the person of Sharp. Therefore, the foreign judgment is null and void. ISSUE: W/N the Japanese court acquired jurisdiction over Sharp by serving summons through diplomatic channels at its principal office in Manila. (YES) HELD: Yes, it acquired jurisdiction because the service of summons was valid.
3.
The existence of liability on the part of PISC having been duly established in the U.S. case, it was not improper for Interpool in seeking enforcement in this jurisdiction of the foreign judgment imposing such liability, to have included the other petitioners as defendants in the civil case filed with the RTC. Sec. 6, Rule 3 of the Revised Rules of Court provides:
Sec. 6. Permissive joinder of parties. All persons in whom or against whom any right to relief in respect to or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, may, except as otherwise provided in these rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in connection with any proceedings in which he may have no interest.
The other petitioners had executed continuing guarantees to secure performance by PISC of its contractual obligations under the 2 agreements with Interpool. As guarantors they held themselves out as liable "whether jointly, severally, or in the alternative," to Interpool under their separate "continuing guarantees" executed in the Philippines, for any breach of those Agreements on the part of PISC. The liability of the other petitioners was, in other words, not based upon the 2 agreements to which they were not parties. While, the New York award is precisely premised upon a breach by PISC of its own obligations under those agreements.
5. NORTHWEST ORIENT AIRLINES, INC V. CA *Claim for unremitted sales proceeds; Japanese court served summons in Sharps Manila office. FACTS: Northwest- Minnesota, US company; Sharp- Philippine company with a branch in Yokohama, Japan.
Sec. 3, Rule 141 of the ROC provides that a court, whether of the Philippines or elsewhere, enjoys the presumption that it as acting in the lawful exercise of

12
The Japan court requested the Japan SC to cause the delivery of the summons and other legal documents to the Philippines. acting on that request, the Japan SC sent the summons and other legal documents to the Ministry of Foreign Affairs of Japan, which, in turn, forwarded the same to the Japanese Embassy in Manila. Thereafter, the court processes were delivered to the DFA, then to the Executive Judge of the Manila RTC, who forthwith ordered the Deputy Sheriff to serve the same on Sharp at its principal office in Manila. ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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jurisdiction and has regularly performed its official duty. Consequently, the party attacking a foreign judgment has the burden of overcoming this presumption. Matters of remedy and procedure, such as those relating to the service of process upon a defendant, are governed by the lex fori (in this case, Japan procedural law). Since Sharp failed to plead and prove the applicable Japanese law, the processual presumption may be invoked. Sec. 14, Rule 14 of the ROC provides that if the defendant is a foreign corporation doing business in the Philippines, service may be made (1) on its RESIDENT AGENT designated in accordance with law for that purpose, or (2) if there is no such agent, on the GOVERNMENT OFFICIAL designated by law to that effect, or (3) on ANY OF ITS OFFICERS/AGENTS WITHIN THE PHILIPPINES. (Remember that Sharp has 4 branches in Japan so it is considered a foreign corporation doing business in Japan.) Since Sharp did not plead having a resident agent in Japan, the impression is that it had none. Therefore, service on the designated government official or on any of its officers or agents in Japan could be availed of. Either of the 2 options is allowed. Therefore, the service done in this case (see Footnote for the detailed process) is equivalent to service on the proper government official under Sec. 14, Rule 14 of the ROC, in relation to Sec. 128 of the Corporation Code. Inasmuch as Sharp was admittedly doing business in Japan through its 4 duly registered branches at the time of the filing of the case, in light of the processual presumption, it may be deemed a resident of Japan and as such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the said courts lawful methods of serving process. In sum, the extraterritorial of summons by the Japanese court was valid not only under the processual presumption but also because of the presumption of regularity of performance of official duty. 6. PHILSEC V. CA
Ducat's obligation through a Warranty Deed, by which it sold to ATHONA a parcel of land in Texas, while PHILSEC and AYALA extended a loan to ANTHONA as the purchase price. PHILSEC and AYALA released Ducat from his indebtedness and delivered to 1488 Ducat's shares of stock. ATHONA failed to pay the interest on the balance of the loan so the entire amount became due and demandable. 1488 then sued PHILSEC, AYALA and ATHONA in Texas, USA for the payment of the balance and for breach of contract. ATHONA filed a counterclaim against 1488, Daic, Ducat, Perlas, and Craig (counterdefendants), for allegedly conspiring in selling the property at a price over its market value. PHILSEC and AYALA also filed a counterclaim against the same counterdefendants. While this case was pending in the US, PHILSEC, BPI and ATHONA (PETITIONERS) filed a complaint for sum of money with damages against 1488, Daic, Ducat, Perlas, and Craig (PRIVATE RESPONDENTS) in RTC Makati. They allege that because of the private respondents fraudulent misrepresentations, they were induced to purchase the Texas property, and at an overpriced rate. The trial court dismissed the case on the ground that "the controversy may be more suitably tried before the forum of the litis pendentia in the U.S., under the principle in private international law of forum non conveniens." It also held itself without jurisdiction over 1488, Inc. and Daic because they were non-residents and the action was not an action in rem or quasi in rem, so that extraterritorial service of summons was ineffective. The CA affirmed this decision. (Maenwhile, the US District Court rendered judgment while the case was pending in the CA.) Issue: W/N the Philippine case is barred by the judgment of the US Court. (NO) Petitioners argument: Foreign judgment cannot be given the effect of res judicata without giving them 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. Held: Petitioners' contention is meritorious. 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.13
US Case PLAINTIFF: 1488 DEFENDANTS: Philsec Investment Corporation (PHILSEC); Ayala International Finance Limited (AYALA); Athona Holdings (ATHONA); BPI COUNTER-CLAIMANT: ATHONA COUNTER-CLAIMANT #2: AYALA and PHILSEC COUNTER-DEFENDANTS (for both counter-claims): 1488, Inc.; Drago Daic; Ventura Ducat; Precioso Perlas; William Craig Philippine Case PLAINTIFFS: PHILSEC; BPI; ATHONA DEFENDANTS: 1488; Daic; Ducat; Perlas; Craig

13
SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment is as follows: (a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the Facts: Ventura Ducat obtained separate loans from AYALA and PHILSEC, secured thing; (b) In case of a judgment against a person, the judgment is presumptive evidence of a right as by shares of stock owned by her. 1488, through its president Drago Daic, assumed between the parties and their successors in interest by a subsequent title; but the judgment ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
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A foreign judgment may not be enforced if it is not recognized in the jurisdiction where affirmative relief is being sought. Hence, in the interest of justice, the complaint should be considered as a petition for the recognition of the foreign judgment under Section 50 (b), Rule 39 of the Rules of Court in order that the defendant may present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of fact and law, if applicable. 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. Other COL issues: On forum non conveniens The trial courts refusal to take cognizance of the case is not justifiable under the principle of forum non conveniens. 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 one of the plaintiffs (PHILSEC) is a domestic corporation and one of the defendants (Ventura Ducat) is a Filipino. On jurisdiction It was error for the Court of Appeals and the trial court to hold that jurisdiction over 1488, Inc. and Daic could not be obtained because this is an action in personam and summons were served by extraterritorial service. Rule 14, 17 on extraterritorial service provides that service of summons on a non-resident defendant may be effected out of the Philippines by leave of Court where, among others, the property of the defendant has been attached within the Philippines. It is not disputed that the properties, real and personal, of the private respondents had been attached prior to service of summons under a trial court order. 7. PHILIPPINE ALUMINUM WHEELS INC. V. FAGSI ENTERPRISES
Wheels, Inc. (PAWI), a Philippine corporation, whereby the latter agrees to deliver 8,594 wheels to FASGI. FASGI received the wheels and so it paid PAWI $216,444.30. Later however, FASGI found out that the wheels are defective and did not comply with certain US standards. So in 1979, FASGI sued PAWI in a California court. In 1980, a settlement was reached but PAWI failed to comply with the terms of the agreement. A second agreement was made but PAWI was again remiss in its obligation. The agreement basically provides that PAWI shall return the purchase price in installment and conversely, FASGI shall return the wheel in installment. PAWI was only able to make two installments (which were actually made beyond the scheduled date). FASGI also returned the corresponding number of wheels. Eventually in 1982, FASGI sought the enforcement of the agreement and it received a favorable judgment from the California court. PAWI is then ordered to pay an equivalent of P252k plus damages but FASGI was not ordered to return the remaining wheels. PAWI was not able to comply with the court order in the US. So in 1983, FASGI filed a complaint for the enforcement of a foreign judgment with RTCMakati. Hearings were made and in 1990, the trial judge ruled against FASGI on the ground that the foreign judgment is tainted with fraud because FASGI was not ordered to return the remaining wheels (unjust enrichment) and that PAWIs American lawyer entered into the agreements without the consent of PAWI. On appeal, the Court of Appeals reversed the trial court. ISSUE: Whether or not the foreign judgment may be enforced here in the Philippines. HELD: Yes. The judgment is valid. 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 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. A foreign judgment is presumed to be valid and binding in the country from which it comes, until a contrary showing, on the basis of a presumption of regularity of proceedings and the giving of due notice in the foreign forum. In this case, PAWI was very well represented in the California court. PAWIs insistence that its American lawyer colluded with FASGI; that he entered into the compromise agreement without PAWIs authority is belied by the fact that PAWI initially complied with the agreement. It did not disclaim the agreement. It sent two installments (though belatedly) but failed to comply on the rest. It cannot now aver that the agreement is without its authority. Further, it is just but fair for the California court not to order FASGI to return the remaining wheels because of PAWIs arrears. 8. PRISCILLA MIJARES V. HON. SANTIAGO JAVIER RANADA
FACTS: In 1978, FASGI Enterprises Inc. (FASGI), a foreign corporation organized under the laws of California, USA, entered into a contract with Philippine Aluminum
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. ABACAN, AGUILA, ALCANTARA F, ALCANTARA R, BAUTISTA, BELLO, CAMIA, CARANDANG, CARIO, CARINGAL, CHING, CLEMENTE, CONSUNJI, DEVESA, ESPIRITU, ESQUIVIAS, EVANGELISTA, FARCON, GARCIA, GRAIDO, GRANTOZA, HABANA, HERNANDEZ, JALANDONI, KOGA, LAIDAN, LAZARO, LOMOTAN, LUCIDO, LUMANOG, MADAMBA, MAGPANTAY, MANUEL, MESINA, PRESBITERO, RELLOSA, REYES, SANTOS, SEVILLA, SOLIMAN, SOLLANO, TUAZON, YAO.
Facts: Complaint in US district court of Hawaii against estate of Marcos brought by ten Filipino citizens for a class of people, around 10,000, alleging human rights abuses against them during the Marcos regime. Alien Tort Act was invoked to give jurisdiction. Award in their favor was One Billion Nine Hundred Sixty Four Million Five
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Thousand Eight Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90). Petitioners tried to have a foreign courts award enforced against the estate of Marcos but the trial court asked for a filing fee of over Four Hundred Seventy-Two Million Pesos (P472,000,000.00). motion to dismiss alleged by estate, one ground was the non-payment of filing fees the petitioners only having paid P410.00. Complaint dismissed by trial court without prejudice. Subject matter deemed capable of pecuniary estimation even if it involved a foreign judgment. Petitioners submit 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. Petitioners 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 adjudicated amount of the filing fee, as arrived at by the RTC, was characterized as indisputably unfair, inequitable, and unjust. The Commission on Human Rights (CHR) was permitted to intervene in this case. It urged that the petition be granted and a judgment rendered, ordering the enforcement and execution of the District Court judgment. For the CHR, the Makati RTC erred in interpreting the action for the execution of a foreign judgment as a new case, in violation of the principle that once a case has been decided between the same parties in one country on the same issue with finality, it can no longer be relitigated again in another country. The CHR likewise invokes the principle of comity, and of vested rights. Hence this appeal. Issue: Whether the action filed with the lower court in dismissing the case? Held: Petitioners complaint may have been lodged against an estate, but it is clearly based on a judgment, the Final Judgment of the US District Court. The provision does not make any distinction between a local judgment and a foreign judgment, and where the law does not distinguish, we shall not distinguish. This is not a real action, as it involves no real property or title or possession nor does the foreign award pertain to any real property. 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. The court then cites the relevant provision in our rules of court concerning the effect of foreign judgments. There is an evident distinction between a foreign judgment in an action in rem and one in personam. For an action in rem, the foreign judgment is deemed conclusive upon the title to the thing, while in an action in personam, the foreign judgment is presumptive, and not conclusive, of a right as between the parties and their successors in interest by a subsequent title. However, in both cases, the foreign judgment is susceptible to impeachment in our local courts on the grounds of want of jurisdiction or notice to the party, collusion, fraud, or clear mistake of law or fact. Thus, the party aggrieved by the foreign judgment is entitled to defend against the enforcement of such decision in the local forum. It is essential that there should be an opportunity to challenge the foreign judgment, in order for the court in this jurisdiction to properly determine its
efficacy. It is clear then that it is usually necessary for an action to be filed in order to enforce a foreign judgment, even if such judgment has conclusive effect as in the case of in rem actions, if only for the purpose of allowing the losing party an opportunity to challenge the foreign judgment, and in order for the court to properly determine its efficacy. Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity. The rules are silent as to what initiatory procedure must be undertaken in order to enforce a foreign judgment in the Philippines. But there is no question that the filing of a civil complaint is an appropriate measure for such purpose. Complaint is capable of pecuniary estimation. More importantly, the matters for proof are different. Using the above example, the complainant will have to establish before the court the tortious act or omission committed by the tortfeasor, who in turn is allowed to rebut these factual allegations or prove extenuating circumstances. Extensive litigation is thus conducted on the facts, and from there the right to and amount of damages are assessed. On the other hand, in an action to enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and not the facts from which it prescinds. More importantly, the matters for proof are different. Using the above example, the complainant will have to establish before the court the tortious act or omission committed by the tortfeasor, who in turn is allowed to rebut these factual allegations or prove extenuating circumstances. Extensive litigation is thus conducted on the facts, and from there the right to and amount of damages are assessed. On the other hand, in an action to enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and not the facts from which it prescinds. the actionable issues are generally restricted to a review of jurisdiction of the foreign court, the service of personal notice, collusion, fraud, or mistake of fact or law. The limitations on review is in consonance with a strong and pervasive policy in all legal systems to limit repetitive litigation on claims and issues. Otherwise known as the policy of preclusion, it seeks to protect party expectations resulting from previous litigation, to safeguard against the harassment of defendants, to insure that the task of courts not be increased by never-ending litigation of the same disputes. The petitioners thus paid the correct amount of filing fees, and it was a grave abuse of discretion for respondent judge to have applied instead a clearly inapplicable rule and dismissed the complaint. 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. This along with the principles of comity and others calls for the 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
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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.[72] 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. One more word. It bears noting that Section 48, Rule 39 acknowledges that the Final Judgment is not conclusive yet, but presumptive evidence of a right of the petitioners against the Marcos Estate. Moreover, the Marcos Estate is not precluded to present evidence, if any, of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. This ruling, decisive as it is on the question of filing fees and no other, does not render verdict on the enforceability of the Final Judgment before the courts under the jurisdiction of the Philippines, or for that matter any other issue which may legitimately be presented before the trial court. Such issues are to be litigated before the trial court, but within the confines of the matters for proof as laid down in Section 48, Rule 39. On the other hand, the speedy resolution of this claim by the trial court is encouraged, and contumacious delay of the decision on the merits will not be brooked by this Court. 9. ASIAVEST MERCHANT BANKERS V. COURT OF APPEALS
2.
3.
The summons was sent to the accountant of the PNCC, Cora Deala; she is not authorized to receive the summons for and in behalf of the private respondent. Private respondent was not represented by counsel in the proceedings a. According to Abelardo, the private respondents executive secretary said that there is no resolution granting or authorizing Allen and Glendhill (the said to be lawyers of the company) to admit all the claims of the petitioner. That the decision of the Malaysian High Court is tainted with fraud and clear mistake of fact/law; a. Since there is no statement of facts and law given which the award is given in favor of the petitioner.
a.
HELD: GRANTED. The Malaysian High Court acquired jurisdiction over PNCC due to the following grounds: 1. The rules of procedure (such as those serving of summons) are governed by the lex fori or the internal law forumwhich is in this case is Malaysia a. 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. i. Since the burden of proof of showing that there are irregularities in the serving of summons as to the procedural rules of the Malaysian high court should be shouldered by the private respondents; however, the private respondent failed to show or give proof in the said irregularities therefore the PRESUMPTION of validity and regularity of service of summons and the decision rendered by the High Court of Malaya should stand. On the matter of alleged lack of authority of the law firm of Allen and Gledhill to represent private respondent, not only did the private respondent's witnesses admit that the said law firm of Allen and Gledhill were its counsels in its transactions in Malaysia. a. but of greater significance is the fact that petitioner offered in evidence relevant Malaysian jurisprudence to the effect that i. 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, ii. that counsel appearing before the Malaysian High Court has full authority to compromise the suit iii. That counsel appearing before the Malaysian High Court need not comply with certain pre-requisites as required under Philippine law to appear and compromise judgments on behalf of their clients before said court.
FACTS: The petitioner Asiavest Merchant Bankers (M) Berhad : Malaysian corporation Private respondent Philippine National Construction Corporation : Philippine corporation 1983 : petitioner initiated a suit for collection against private respondent before the High Court of Malaya in Kuala Lumpur. Petitioner sought to recover the indemnity of the performance bond it had put up in favor of private respondent 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. September 13, 1985: the High Court of Malaya (Commercial Division) rendered judgment in favor of the petitioner and against the private respondent The private respondent was asked to pay 5,108,290.23 Ringgits Following UNSUCCESSFUL ATTEMPTS to secure payment from private respondent under the judgment, petitioner initiated on September 5, 1988 the complaint before Regional Trial Court of Pasig, Metro Manila, to ENFORCE THE JUDGMENT of the High Court of Malaya The RTC of Manila and the CA denied the motion for lack of want of jurisdiction ISSUE: Whether or not the Malaysian High Court acquired jurisdiction over the PNCC or the private respondent Contentions of Private Respondent: (more of the rules of procedure) 1. The Malaysian High Court did not serve the summons to the right persons
2.
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3.
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. Since the burden of proof again should be shouldered by the private respondent a. As aforestated, the lex fori or the internal law of the forum governs matters of remedy and procedure. i. 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.
ISSUE: W/N the court can take into consideration the foreign judgment relied upon by the Government? NO HELD: The Court is not to reverse its previous rulings based on factual premises that are not yet conclusive or judicially established. Certainly, whatever claims or purported liens Takenaka and Asahikosan against PIATCO or over the NAIA 3 have not been judicially established. Neither Takenaka nor Asahikosan are parties to the present action, and thus have not presented any claim which could be acted upon by this Court. The earlier adjudications in Agan v. PIATCO made no mention of either Takenaka or Asahikosan, and certainly made no declaration as to their rights to any form of compensation. If there is indeed any right to remuneration due to these two entities arising from NAIA 3, they have not yet been established by the courts of the land. It must be emphasized that the conclusive ruling in Agan v. PIATCO (Agan 2004) is that PIATCO, as builder of the facilities, must first be justly compensated in accordance with law and equity for the Government to take over the facilities. It is on that premise that the Court adjudicated this case in its 2005 Decision. While the Government refers to a judgment rendered by a London court in favor of Takenaka and Asahikosan against PIATCO in the amount of US$82 Million, it should be noted that this foreign judgment is not yet binding on Philippine courts. It is entrenched in Section 48, Rule 39 of the Rules of Civil Procedure that a foreign judgment on the mere strength of its promulgation is not yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. It is likewise recognized in Philippine jurisprudence and international law that a foreign judgment may be barred from recognition if it runs counter to public policy. Assuming that PIATCO indeed has corresponding obligations to other parties relating to NAIA 3, the Court does not see how such obligations, yet unproven, could serve to overturn the Decision mandating that the Government first pay PIATCO the amount of 3.02 Billion Pesos before it may acquire physical possession over the facilities. This directive enjoining payment is in accordance with Republic Act No. 8974, and under the mechanism established by the law the amount to be initially paid is that which is provisionally determined as just compensation. There are other judicial avenues outside of this Motion for Reconsideration wherein all other claims relating to the airport facilities may be ventilated, proved and determined. Since such claims involve factual issues, they must first be established by the appropriate trier of facts before they can be accorded any respect by or binding force on this Court. 11. JORGE GONZALES, ET AL. V. CLIMAX MINING LTD., ET AL. Facts: Jorge Gonzales is a claimowner of mineral deposits in Quirino and Nueva Vizcaya. He entered into a letter-agreement in May 14, 1987 with Geophilippines [GEO], Inc, and Inmex Ltd. [INMEX] wherein he granted to these 2 companies the exclusive right to explore and survey, operate and exploit the mining claims for 36
10. REPUBLIC V. GINGOYON FACTS: This is an MR of the 2005 Resolution of the Case, where in it was held that the Government first pay PIATCO (the builder) the amount of 3.02 Billion Pesos before it may acquire physical possession over the facilities of NAIA 3. The Government propounds several reasons for the reconsideration of the Courts Decision dated 19 December 2005. Some of the arguments merely rehash points raised in the petition and already dispensed with exhaustively in the Decision. This applies in particular to the argument that Republic Act No. 8974 does not apply to the expropriation of the Ninoy Aquino International Airport Passenger Terminal 3 (NAIA 3), which is not a right-of-way, site or location. This Resolution will instead focus as it should on the new arguments. On the newly raised arguments, there are considerable factual elements brought up by the Government. In the main, the Government devotes significant effort in diminishing PIATCOs right to just compensation as builder or owner of the NAIA 3. Particularly brought to fore are the claims relating to two entities, Takenaka Corporation (Takenaka) and Asahikosan (Asahikosan) Corporation, who allegedly claim significant liens on the terminal, arising from their alleged unpaid bills by virtue of an Engineering, Procurement and Construction Contract they had with PIATCO. On account of these adverse claims, the Government now claims as controvertible the question of who is the builder of the NAIA 3. The Government likewise claims as indispensable the need of Takenaka and Asahikosan to provide the necessary technical services and supplies so that all the various systems and equipment will be ready and operational in a manner that allows the Government to possess a fully-capable international airport terminal. The Governments concerns that impelled the filing of its MR are summed up in the following passage therein: The situation the Republic now faces is that if any part of its Php3.02 billion deposit is released directly to PIATCO, and PIATCO, as in the past, does not wish to settle its obligations directly to Takenaka, Asahikosan and Fraport, the Republic may end up having expropriated a terminal with liens and claims far in excess of its actual value, the liens remain unextinguished, and PIATCO on the other hand, ends up with the P3.02B in its pockets gratuitously.
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mos. In 1989, the agreement was extended for 3 more years. In 1991, Jorge, Arimco Mining Corp, GEO, INMEX and Anumex Phils. Inc. signed an Addendum to the agreement providing that Arimco would apply to the Phil. Govt permission to mine the claims as the governments contractor under a Financial Technical Assistance Agreement (FTAA). The following contracts were also entered into by the parties: 1996 Operating and Accommodation Contract Financial 1st Parties: CLIMAX ARIMCO and CLIMAX MINING 2nd Party: Australasian Phil. Mining Inc. [APMI] CLIMAX ARIMCO and APMI CLIMAX MINING and APMI
1. 2.
W/N the complaint filed raises a mining dispute or a judicial question, in order to determine if the Panel has jurisdiction? JUDICIAL QUESTION thus jurisdiction with regular courts. W/N the dispute should be brought for arbitration under RA 876 (Arbitration Law)? NO.
1996 1991
Assignment, Accession Agreement Memorandum of Agreement Transfer of FTAA to APMI
In 1999, Jorge filed before the Panel of Arbitrators [Panel] of the Mines and Geosciences Bureau of DENR against CLIMAX ARIMCO, CLIMAX and APMI, a complaint to annul or terminate the Addendum Contract, the FTAA, and the 3 other contracts (in the table). His complaint is grounded on FRAUD, OPPRESSION and/or VIOLATION of Section 2, Article XII of the CONSTITUTION perpetrated by these foreign RESPONDENTS, conspiring and confederating with one another and with each other. Jorge alleges that the companies conspiring and misrepresented under the Addendum Contract and FTAA that CLIMAX ARIMCO possessed financial and technical capacity to put the project into commercial production. In turn, the companies have allegedly caused damage not only to him but also to the Republic of the Philippines. The Panel initially dismissed the complaint for lack of jurisdiction. On MR, it favored Jorge with regard to the issues of nullity, termination, withdrawal or damages, but with regard to the constitutionality of the Addendum Agreement and FTAA, it maintained that it had no jurisdiction. However, according to the Panel, a ruling on the validity of the assailed contracts would result to the grant or denial of mining rights over the properties; hence, the question on the validity of the contract amounts to a mining conflict or dispute w/c involve the exploration and exploitation of minerals over the disputed area. CA ruled that the Panel of Arbitrators did not have jurisdiction because the fraud allegations in the complaint called for the interpretation and application of laws, and did not involve any mining dispute. Also, the complaint (1) did not specify the particular acts constituting fraud and oppression, (2) the action has prescribed since the Addendum Contract was executed in 1991, the action to annul it should have been brought not later than 1995 (4yrs from discovery of fraud), (3) fraud and duress only makes a contract voidable, and (4) the Addendum Contract Clause 19.1 provides that the petition should have been settled thru arbitration under RA No. 876 (Arbitration Law). Clause 19.1 states, [a]ll disputes arising out of or in connection with the Contract, which cannot be settled amicably among the Parties, shall finally be settled under R.A. 876. Issues:
Held: 1. The main assertion of Jorge is that the contracts are void. This claim indicates that the complaint was not merely for the determination of rights under the mining contracts since the very validity of those contracts is put in issue. The resolution of the validity of the contracts remains a legal or judicial question as it requires the exercise of judicial function which is with the regular courts. The Panel does not have jurisdiction since it does not involve the application of technical knowledge and expertise relating to mining. Allegations of fraud and duress in the execution of a contract are matters within the jurisdiction of the ordinary courts of law. 2. SC held the case should not be brought under the ambit of the Arbitration Law, but for a different reason. The question of validity of the contract containing the agreement to submit to arbitration will affect the applicability of the arbitration clause itself. A party cannot rely on the contract and claim rights or obligations under it and at the same time impugn its existence or validity. Indeed, litigants are enjoined from taking inconsistent positions. (SIMPLY PUT: If the contract is void is adjudged by the regular courts to be void, then the clause will also be void. Therefore the issue on validity should first be resolved not by arbitration but by the regular courts.) 12. KOREA TECHNOLOGIES CO, LTD V. LERMA FACTS: Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.
On March 5, 1997, PGSMC and KOGIES executed a contract in the Philippines whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. On April 7, 1997, in Korea, the parties executed Contract No. KLP-970301 dated March 5, 1997 amending the terms of payment. On October 14, 1997, PGSMC entered into a Contract of Lease with Worth Properties, Inc. (Worth) for use of Worths 5,079-square meter property with a 4,032-square meter warehouse building to house the LPG manufacturing plant.
On January 22, 1998, it was shown in the Certificate that, after the installation of the plant, the initial operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree that
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KOGIES would be deemed to have completely complied with the terms and conditions of the March 5, 1997 contract.
Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract as amended.
For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks. When KOGIES deposited the checks, these were dishonored for the reason "PAYMENT STOPPED." Thus, on May 8, 1998, KOGIES sent a demand letter to PGSMC threatening criminal action for violation of Batas Pambansa Blg. 22 in case of nonpayment. On the same date, the wife of PGSMCs President faxed a letter dated May 7, 1998 to KOGIES President who was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for.
On May 14, 1998, PGSMC replied that the two checks it issued KOGIES were fully funded but the payments were stopped for reasons previously made known to KOGIES.
On July 3, 1998, KOGIES filed a Complaint for Specific Performance, against PGSMC before the Muntinlupa City Regional Trial Court (RTC). The RTC granted a temporary restraining order. In its complaint, KOGIES alleged that PGSMC had initially admitted that the checks that were stopped were not funded but later on claimed that it stopped payment of the checks for the reason that "their value was not received" as the former allegedly breached their contract by "altering the quantity and lowering the quality of the machinery and equipment" installed in the plant and failed to make the plant operational although it earlier certified to the contrary as shown in a January 22, 1998 Certificate. Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration. KOGIES also asked that PGSMC be restrained from dismantling and transferring the machinery and equipment installed in the plant which the latter threatened to do on July 4, 1998.
On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant. Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint for Estafa docketed as I.S. No. 98-03813 against Mr. Dae Hyun Kang, President of KOGIES.
On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy as it ousts the local courts of jurisdiction over the instant controversy.
On June 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract.
On July 23, 1998, the RTC issued an Order denying the application for a writ of preliminary injunction, reasoning that PGSMC had paid KOGIES USD 1,224,000, the value of the machineries and equipment as shown in the contract such that KOGIES no longer had proprietary rights over them. And finally, the RTC held that Art. 15 of the Contract as amended was invalid as it tended to oust the trial court or any other court jurisdiction over any dispute that may arise between the parties. KOGIES prayer for an injunctive writ was denied.
On June 23, 1998, PGSMC again wrote KOGIES reiterating the contents of its June 1, 1998 letter threatening that the machineries, equipment, and facilities installed in the plant would be dismantled and transferred on July 4, 1998. Thus, on July 1, 1998, KOGIES instituted an Application for Arbitration before the Korean Commercial
PGSMC filed a Motion for Inspection of Things to determine whether there was indeed alteration of the quantity and lowering of quality of the machineries and equipment, and whether these were properly installed. KOGIES opposed the motion positing that the queries and issues raised in the motion for inspection fell under the coverage of the arbitration clause in their contract. KOGIES asserted that the Branch Sheriff did not have the technical expertise to ascertain whether or not the machineries and equipment conformed to the specifications in the contract and were properly installed. The trial court granted the motion. On November 11, 1998, the
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Branch Sheriff filed his Sheriffs Report finding that the enumerated machineries and equipment were not fully and properly installed.
April 2, 2004. And while RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive effect.
Court of Appeals affirmed the trial court and declared the arbitration clause against public policy. ISSUE: W/N the arbitration clause is against public policy. (NO) HELD: Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides, "Any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040."
Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following: (1) The RTC must refer to arbitration in proper cases (2) Foreign arbitral awards must be confirmed by the RTC (3) The RTC has jurisdiction to review foreign arbitral awards (4) Grounds for judicial review different in domestic and foreign arbitral awards
Arbitration clause not contrary to public policy: The arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in accordance with the Commercial Arbitration Rules of the KCAB, and that the arbitral award is final and binding, is not contrary to public policy.
(5) RTC decision of assailed foreign arbitral award appealable
Having said that the instant arbitration clause is not against public policy, we come to the question on what governs an arbitration clause specifying that in case of any dispute arising from the contract, an arbitral panel will be constituted in a foreign country and the arbitration rules of the foreign country would govern and its award shall be final and binding.
PGSMC has remedies to protect its interests: Thus, based on the foregoing features of RA 9285, PGSMC must submit to the foreign arbitration as it bound itself through the subject contract. While it may have misgivings on the foreign arbitration done in Korea by the KCAB, it has available remedies under RA 9285. Its interests are duly protected by the law which requires that the arbitral award that may be rendered by KCAB must be confirmed here by the RTC before it can be enforced. With our disquisition above, petitioner is correct in its contention that an arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award, the award of which is not absolute and without exceptions, is still judicially reviewable under certain conditions provided for by the UNCITRAL Model Law on ICA as applied and incorporated in RA 9285.
RA 9285 incorporated the UNCITRAL Model law to which we are a signatory: For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004 entitled An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes, promulgated on
Finally, it must be noted that there is nothing in the subject Contract which provides that the parties may dispense with the arbitration clause.
Unilateral rescission improper and illegal: Having ruled that the arbitration clause of the subject contract is valid and binding on the parties, and not contrary to public policy; consequently, being bound to the contract of arbitration, a party may not
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unilaterally rescind or terminate the contract for whatever cause without first resorting to arbitration.
company owning the trademarks and trade names of "Panavision" and "Panaflex," decided to establish a world wide web site, and in so doing, discovered that Toeppen had registered their preferred domain name. When Panavision notified Toeppen of its intent to use "panavision.com" for its Internet address, Toeppen demanded $13,000 to discontinue his use of the name. Toeppen then registered "panaflex.com" as well. The California federal district court noted that Toeppen is the owner of numerous other trademark-based domain names, including "aircanada.com", "deltaairlines.com", "eddiebauer.com", and "neiman-marcus.com". Toeppen was also the owner of "arriflex.com", a domain name remarkably similar to the name of Panavision's main competitor. Toeppen has over 200 trademark-based domain names. This activity is referred to in industry parlance as "domain name hoarding" or "cyber-squatting". Panavision filed claims in the Central District court of California, for violation of California and federal statutes governing trademark dilution and infringement, unfair competition, and a number of other business torts. Toeppen filed a motion to dismiss under FRCP 12(b)(6), arguing that the Court lacked personal jurisdiction over him because he resided in Illinois and the allegations concerned his actions taken in Illinois. ISSUE: whether the requirements of due process are satisfied by the district court's exercise of personal jurisdiction over Toeppen. HELD: The district court's exercise of jurisdiction was proper and comported with the requirements of due process. Toeppen did considerably more than simply register Panavision's trademarks as his domain names on the Internet. He registered those names as part of a scheme to obtain money from Panavision. A district court's determination that personal jurisdiction can properly be exercised is a question of law reviewable de novo when the underlying facts are undisputed. There is no applicable federal statute governing personal jurisdiction in this case. Accordingly, we apply the law of California, the state in which the district court sits. California's long-arm statute permits a court to exercise personal jurisdiction over a defendant to the extent permitted by the Due Process Clause of the Constitution. Personal jurisdiction may be founded on either general jurisdiction or specific jurisdiction.General jurisdiction exists when a defendant is domiciled in the forum state or his activities there are "substantial" or "continuous and systematic."The district court correctly concluded that it did not have general jurisdiction over Toeppen. Toeppen is domiciled in Illinois and his activities in California are not substantial or continuous and systematic. We apply a three-part test to determine if a district court may exercise specific jurisdiction:
In addition, whatever findings and conclusions made by the RTC Branch Sheriff from the inspection made on October 28, 1998, as ordered by the trial court on October 19, 1998, is of no worth as said Sheriff is not technically competent to ascertain the actual status of the equipment and machineries as installed in the plant.
RTC has interim jurisdiction to protect the rights of the parties: While the issue of the proper installation of the equipment and machineries might well be under the primary jurisdiction of the arbitral body to decide, yet the RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures to protect vested rights of the parties
While the KCAB can rule on motions or petitions relating to the preservation or transfer of the equipment and machineries as an interim measure, yet on hindsight, the July 23, 1998 Order of the RTC allowing the transfer of the equipment and machineries given the non-recognition by the lower courts of the arbitral clause, has accorded an interim measure of protection to PGSMC which would otherwise been irreparably damaged. KOGIES is not unjustly prejudiced as it has already been paid a substantial amount based on the contract. Moreover, KOGIES is amply protected by the arbitral action it has instituted before the KCAB, the award of which can be enforced in our jurisdiction through the RTC. Besides, by our decision, PGSMC is compelled to submit to arbitration pursuant to the valid arbitration clause of its contract with KOGIES.
PGSMC to preserve the subject equipment and machineries: While PGSMC may have been granted the right to dismantle and transfer the subject equipment and machineries, it does not have the right to convey or dispose of the same considering the pending arbitral proceedings to settle the differences of the parties. PGSMC therefore must preserve and maintain the subject equipment and machineries with the diligence of a good father of a family until final resolution of the arbitral proceedings and enforcement of the award, if any. 13. PANAVISION INTERNATIONAL V. DENNIS TOEPPEN FACTS: Illinois resident Dennis Toeppen registered the domain name, or Internet address, "panavision.com". He used the address to establish a web site displaying aerial views of Pana, Illinois. Panavision, a California photographic equipment
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(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable. A. PURPOSEFUL AVAILMENT The purposeful availment requirement ensures that a nonresident defendant will not be haled into court based upon "random, fortuitous or attenuated" contacts with the forum state. This requirement is satisfied if the defendant "has taken deliberate action" toward the forum state. It is not required that a defendant be physically present or have physical contacts with the forum, so long as his efforts are "purposefully directed" toward forum residents. In the present case, the district court's decision to exercise personal jurisdiction over Toeppen rested on its determination that the purposeful availment requirement was satisfied by the "effects doctrine." In tort cases, jurisdiction may attach if the defendant's conduct is aimed at or has an effect in the forum state. Under Calder v. Jones, personal jurisdiction can be based upon: "(1) intentional actions (2) expressly aimed at the forum state (3) causing harm, the brunt of which is suffered--and which the defendant knows is likely to be suffered-in the forum state." Toeppen argues he has not directed any activity toward Panavision in California, much less "entered" the state. He contends that all he did was register Panavision's trademarks on the Internet and post web sites using those marks; if this activity injured Panavision, the injury occurred in cyberspace. We agree that simply registering someone else's trademark as a domain name and posting a web site on the Internet is not sufficient to subject a party domiciled in one state to jurisdiction in another. As we said in Cybersell, there must be "something more" to demonstrate that the defendant directed his activity toward the forum state. Id. Here, that has been shown. Toeppen engaged in a scheme to register Panavision's trademarks as his domain names for the purpose of extorting money from Panavision. His conduct, as he knew it likely would, had the effect of injuring Panavision in California where Panavision has its principal place of business and where the movie and television industry is centered. Under the "effects test," the purposeful availment requirement necessary for specific, personal jurisdiction is satisfied. B. Defendant's Forum-Related Activities The second requirement for specific, personal jurisdiction is that the claim asserted in the litigation arises out of the defendant's forum related activities. We must determine if the plaintiff Panavision would not have been injured "but for" the defendant Toeppen's conduct directed toward Panavision in California. This requirement is satisfied. Toeppen's registration of Panavision's trademarks as his own domain names on the Internet had the effect of injuring Panavision in California.
C. Reasonableness Even if the first two requirements are met, in order to satisfy the Due Process Clause, the exercise of personal jurisdiction must be reasonable. For jurisdiction to be reasonable, it must comport with "fair play and substantial justice." "[W]here a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." As we have said, Toeppen purposefully directed his activities at Panavision in California. This placed the burden on him to "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. [12] In addressing the question of reasonableness, we consider seven factors: (1) the extent of a defendant's purposeful interjection; (2) the burden on the defendant in defending in the forum; (3) the extent of conflict with the sovereignty of the defendant's state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative forum. No one factor is dispositive; a court must balance all seven. The district court found that Toeppen had not presented a compelling case that jurisdiction was unreasonable. 14. COMPUSERVE V. PATTERSON Facts: CompuServe, a nationwide provider of both electronic network and information services via the internet has its headquarters in Columbus, Ohio. Among the services provided by CompuServe is the opportunity for subscribers to post and sell softwares in the form of shareware. Subscribers are able to download for free (free trial period) and later purchase, sharewares created and posted by other subscribers in the internet. CompuServe accepted payment for the shareware from purchases and remitted that payment, less a commission, to the authors of the shareware. Atty. Patterson, a resident of Houston, Texas, subscribed to CompuServe. Patterson took advantage of CompuServes shareware service by posting Internet navigation software that he developed but marketed via his own corporation, Flashpoint Development. Patterson before use of the shareware service, entered into a shareware Registration Agreement (SRA) that provided that Ohio law governed the parties relationship. After Patterson posted his navigation software via shareware, CompuServe itself began to market its own navigation software. Patterson believed that CompuServes software was confusingly similar to his own trademarked software and notified CompuServe. CompuServe filed a declaratory judgment action in the District Court for the Southern District of Ohio, seeking a declaration that it had not infringed Pattersons trademarks. Patterson filed a motion to dismiss for lack of personal jurisdiction which the court granted. District court dismissed based on lack of personal jurisdiction.
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CompuServe appealed arguing that Pattersons repeated availment of the shareware sales procedures constituted minimum contacts with the forum state. CompuServe further argued that the existence of the Shareware Registration Agreement clearly stipulating the Ohio law governed disputes regarding the agreement meant that the exercise of personal jurisdiction is inline with the traditional notions of fair play and substantial justice. Issue: w/n 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 Patterson? YES Held: The Internet represents perhaps the latest and greatest manifestation of these historical, globe-shrinking trends. It enables anyone with the right equipment and knowledge - that is, people like Patterson - to operate an international business cheaply, and from a desktop. That business operator, however, remains entitled to the protection of the Due Process Clause, which mandates that potential defendants be able "to structure their primary conduct with some minimum assurance as to where the conduct will and will not render them liable to suit." Patterson consciously reached out from Texas to Ohio to subscribe to CompuServe, and to use its service to market his computer software on the Internet. He entered into a contract which expressly stated that it would be governed by and construed in light of Ohio law. Ohio has written and interpreted its long-arm statute, and particularly its "transacting business" subsection, with the intent of reaching as far as the Due Process Clause will allow, and it certainly has an interest "in providing effective means of redress for its residents. The Ohio long-arm statute allows an Ohio court to exercise personal jurisdiction over nonresidents of Ohio on claims arising from, inter alia, the nonresident's transacting any business in Ohio. It is settled Ohio law, moreover, that the "transacting business" clause of that statute was meant to extend to the federal constitutional limits of due process, and that as a result Ohio personal jurisdiction cases require an examination of those limits. 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. As always in this context, 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 repeatedly 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. 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 to insure that "random," "fortuitous," or "attenuated" contacts do not cause a defendant to be haled into a
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. It does not, however, mean that a defendant must be physically present in the forum state, so long as a commercial actor's efforts are `purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there. 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. Second, the cause of action must arise from the defendant's activities there. Patterson chose to transmit his software from Texas to CompuServe's system in Ohio, that myriad others gained access to Patterson's software via that system, and that Patterson advertised and sold his product through that system. Though all this happened with a distinct paucity of tangible, physical evidence, there can be no doubt that Patterson purposefully transacted business in Ohio. Patterson sent software to CompuServe repeatedly for some three years, and the record indicates that he intended to continue marketing his software on CompuServe. Admittedly, merely entering into a contract with CompuServe would not, without more, establish that Patterson had minimum contacts with Ohio. Patterson frequently contacted Ohio to sell his computer software over CompuServe's Ohio-based system. Patterson repeatedly sent his "goods" to CompuServe in Ohio for their ultimate sale. CompuServe, in effect, acted as Patterson's distributor, albeit electronically and not physically. 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. We conclude that Patterson has knowingly made an effort - and, in fact, purposefully contracted - to market a product in other states, with Ohio-based CompuServe operating, in effect, as his distribution center. Thus, it is reasonable to subject Patterson to suit in Ohio, the state which is home to the computer network service he chose to employ. Someone like Patterson who employs a computer network service like CompuServe to market a product can reasonably expect disputes with that service to yield lawsuits in the service's home state. Here, we have an entrepreneur who purposefully employed CompuServe to market his computer software product. It may be burdensome for Patterson to defend a suit
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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. 15. YAHOO! INC. V LA LIGUE CONTRE LE RECISME ET LANTISEMITISME Facts: La Ligue Conte Le Racisme Et lAntisemitisme (LICRA) and LUnion Des Etudiants Juifs De France are French non-profit organization dedicated to eliminating anti-Semitism. Yahoo!, Inc., on the other hand, is a corporation organized under Delaware laws having its principal place of business in Santa Clara, California. Yahoo! operates an auction site, which allows anyone to post an item for sale and solicit bids from any computer user around the globe. Yahoo! monitors the transactions through limited regulation by prohibiting particular items to be sold. Auction sellers must comply with Yahoo!s policies and may not offer items to buyers in jurisdiction in which the sale of such item violates the jurisdictions applicable laws. However, Yahoo! does not actively regulate the content of each posting and individuals have been able to post offensive items, including Nazi and Third Reich related memorabilia. LICRA sent a cease and desist letter to Yahoo!, which informed it that the sale of Nazi and Third Reich goods through its auction site violates French Law. LICRA threatened legal action if Yahoo! failed to prevent such sales within eight days. LICRA subsequently filed a civil complaint against Yahoo! in the Tribunal de Grande Instance de Paris (French Court). The French Court found approximately 1,000 Nazi and Third Reich related goods being offered for sale on Yahoo!s auction site. Since French citizens could access these materials, the French Court concluded that Yahoo!s auction site violates the French Criminal Code which prohibits the exhibition of Nazi propaganda and artifacts for sale. The French Court ordered Yahoo! to: (1) eliminate French access to the materials on the auction site that offer Nazi artifacts for sale; (2) eliminate French access to web pages displaying text, extracts, or quotations from Mein Kampf and Protocol of the Elders of Zion; (3) post a warning on Yahoo.fr that any search through Yahoo.com may lead to sites containing Nazi propaganda, and that the viewing of the such material may result in legal action against the Internet user; and (4) remove from all browser directories accessible in France the index headings entitled "negationists and from all hypertext links the equation of negationists" under the heading Holocaust. The order also subjects Yahoo! to a penalty of 100,000 Euros for each day of non-compliance. Yahoo! claims that it does not have the technology to block French access to the related auction sites without banning the Nazi-related material altogether. Yahoo! further claims that such a ban would infringe upon its rights under the First Amendment of the U.S. Constitution.
Issue: WON it is consistent with the Constitution and laws of the U.S. for another nation to regulate speech by a U.S. resident within the U.S. on the basis that such speech can be accessed by Internet users in that nation. Held: NO. Generally, no legal judgment has any effect, of its own force, beyond the limits of the sovereignty from which its authority is derived. However, the U.S. Constitution requires that full faith and credit be given to judgments of sister states. The extent to which the U.S., or any state, honors the judicial decrees of any other is a matter of choice, governed by the comity of nations. Comity is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. U.S. courts generally recognize foreign judgments and decrees unless enforcement would be prejudicial or contrary to the countrys interests. In this case, the French Courts content and view-point based regulation of the web pages and auction site of Yahoo! are clearly inconsistent with the First Amendment if mandated by a court in the U.S. The protection of free speech and the press embodied in the First amendment would be seriously jeopardized by the entry of foreign judgments granted pursuant to standards deemed appropriate in another country but considered antithetical to the protections afforded the press by the U.S. Constitution. Absent a body of law that establishes international standards with respect to speech on the Internet and an appropriate treaty or legislation addressing the enforcement of such standards to speech originating within the U.S., the principle of comity is outweigh by the courts obligation to uphold the First Amendment. 16. AMERICA ONLINE, INC. V. SUPERIOR COURT FACTS: A class action was filed by Mendoza for himself and others against AOL seeking compensatory and punitive damages, injunctive relief, and restitution. The complaint alleges that real parties are former subscribers to AOL's Internet service who, over the past four years, paid between $5 and $22 each month for the service. Monthly payments were made by allowing AOL to debit automatically the credit cards of class members. The class members terminated their subscriptions to AOL but, without authorization, AOL continued to debit their credit cards for monthly service fees. Mendoza individually alleged that he gave AOL notice of the cancellation of his subscription in October 1999, but AOL continued to charge monthly fees against his credit card at least through February 2000, at which time Mendoza cancelled his credit card in order to stop the debits. The complaint alleged separate causes of action including violations of California's Unfair Business Practices Act (First Cause of Action) (Bus. & Prof.Code, 17200 et seq.), violations of California's CLRA (Second Cause of Action) (Civ. Code, 1770, subd. (a)(14)), common law conversion/trespass (Third Cause of Action), and common law fraud (Fourth Cause of Action). Shortly thereafter, AOL filed a motion to stay or dismiss the action on the ground of inconvenient forum. As noted, the motion was based on the forum selection clause contained in the "Terms of Service" (TOS) agreement entered into between Mendoza and AOL at the time he subscribed to AOL's proprietary Internet service which provides: "You expressly agree that exclusive jurisdiction for any claim or dispute with AOL or relating in any way to your membership or your use of AOL resides in the courts of Virginia and you further agree and expressly consent to the exercise of
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personal jurisdiction in the courts of Virginia in connection with any such dispute including any claim involving AOL or its affiliates, subsidiaries, employees, contractors, officers, directors, telecommunications providers and content providers...." Additionally, paragraph 8 contained a choice of law provision designating Virginia law as being applicable to any dispute between the parties. Mendoza objected to Exhibit A, claiming that the document did not accurately reflect what was displayed to him when he commenced service with AOL. Instead, he described seeing displayed on his home computer monitor a "densely worded, smallsize text that was hard to read on the computer screen." This objection formed the leitmotif for Mendoza's claim that the TOS was an unconscionable adhesion contract, and that under applicable rules of contract construction, the forum selection clause was unenforceable. In addition, Mendoza contended the TOS was unreasonable and unenforceable because it necessarily required him and the putative class members to relinquish legal rights in derogation of California public policy. The court entered its order denying AOL's motion. AOL then petitioned the Supreme Court for review. On February 28, 2001, the high court granted the petition for review, and transferred the matter back to this court with directions to issue an order to show cause why the relief requested in the petition should not be granted. ISSUE: W/N the a forum selection clause in AOLs contracts with Al Mendoza, Jr. and the potential class members, which designated Virginia as the jurisdiction in which all disputes arising out of the relationship would be litigated and which also included a choice of law provision requiring that Virginia law be applied to any such dispute is valid? NO HELD: A. Standard of Review and Burden of Proof In the case of Cal-State the court explained why a different standard of review applied depending on whether the motion to stay or to dismiss was contractually derived: "While none of the contractual forum non conveniens cases have explicitly stated the standard of review, it is apparent from their discussion that they are de facto applying the substantial-evidence test, and there is a meaningful basis for distinction. In ruling on a forum non conveniens motion where no contract is involved, the lower tribunal decides whether or not to exercise jurisdiction based on the evidence before it in light of legally prescribed criteria. Some criteria may be present, some not; ultimately, the review does not depend upon the sufficiency of the evidence before the lower tribunal but whether it correctly applied the pertinent criteria. On the other hand, in a contractual forum non conveniens motion, the trial court must determine if there is sufficient evidence to satisfy the requirements for invalidating a binding contract. If the trial court finds there are facts present that satisfy these criteria, it must act in a particular way; there is no discretion involved. The reviewing court is thus involved in determining the quantum of evidence adduced, not the manner in which factors were applied. While we understand the distinction intended by Cal-State, we are not persuaded that appellate review of a contract interpretation issue can be properly analogized to review of an unambiguous forum selection clause. Instead, given existing guidance on this question from our Supreme Court, and the more consistent line of Court of Appeal decisions, which likewise apply the abuse of discretion standard, we disagree with Cal-State 's conclusion that the substantial evidence standard applies instead. Therefore, we review the lower court's decision using the abuse of discretion standard.
Turning to the question of which side has the burden of proof when a forum selection clause is challenged, as we have noted, the trial court in the case before us found: "Defendant AOL did not meet its burden of showing that the substantive rights afforded California plaintiffs were not diminished by enforcement of the forum selection clause." Normally, the burden of proof is on the party challenging the enforcement of a contractual forum selection clause. However, the lower court assigned the burden of proof to AOL based on its conclusion that Wimsatt v. Beverly Hills Weight Etc. Internal, Inc. (1995) controls this case. The trial court in the present case concluded that because Mendoza seeks recovery, in part, under the CLRA (Civ.Code, 1750 et seq.), which contains a statutory anti-waiver provision like that involved in Wimsatt, the burden of proof was on AOL to prove that enforcement of the forum selection clause would not result in a significant diminution of rights to California consumers. We agree. In comparing the purpose and remedies afforded to California franchisees under the FIL to those afforded California consumers under the CLRA, we find identical policy considerations which command shifting the burden of proof here to AOL, the party seeking enforcement of the forum selection clause, as was done in Wimsatt. The FIL and the CLRA were each enacted to protect the statute's beneficiaries from deceptive and unfair business practices. Each statutory scheme embodies strong remedial provisions for violations of the statute. Important to the trial court's finding is the fact that the CLRA, like the FIL, embeds in its statutory scheme a provision prohibiting waivers by consumers of any of these remedies. Civil Code section 1751 warns: "Any waiver by a consumer of the provisions of this title is contrary to public policy and shall be unenforceable and void." While the remedial aspects of each statutory scheme are indigenous to the business practices regulated, in both cases the Legislature has ensured that the rights afforded to California citizens against unfair practices cannot be diminished or avoided by contract. Where the effect of transfer to a different forum has the potential of stripping California consumers of their legal rights deemed by the Legislature to be non-waivable, the burden must be placed on the party asserting the contractual forum selection clause to prove that the CLRA's anti-waiver provisions are not violated. For this reason we too embrace the rationale of the Wimsatt decision and conclude that the CLRA claim pleaded by Mendoza, like the FIL claims asserted in Wimsatt, mandates departure from the general rule which normally places the burden of proving unfairness or unreasonableness of the forum selection clause on the party opposed to its enforcement. B. Overview of Forum Selection Clause Enforcement AOL correctly posits that California favors contractual forum selection clauses so long as they are entered into freely and voluntarily, and their enforcement would not be unreasonable. But this encomium is not boundless. Our law favors forum selection agreements only so long as they are procured freely and voluntarily, with the place chosen having some logical nexus to one of the parties or the dispute, and so long as California consumers will not find their substantial legal rights significantly impaired by their enforcement. Therefore, to be enforceable, the selected jurisdiction must be "suitable," "available," and able to "accomplish substantial justice." The trial court determined that the circumstances of contract formation did not reflect Mendoza exercised free will, and that the effect of enforcing the forum selection clause here would violate California public policy by eviscerating important legal rights afforded to this state's consumers.
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C. Enforcement of the Forum Selection Clause Violates Strong California Public Policy California courts will refuse to defer to the selected forum if to do so would substantially diminish the rights of California residents in a way that violates our state's public policy. The CLRA parallels the Corporate Securities Law of 1968, at issue in the case of Hall, insofar as the CRLA is a legislative embodiment of a desire to protect California consumers and furthers a strong public policy of this state. "The CLRA was enacted in an attempt to alleviate social and economic problems stemming from deceptive business practices, which were identified in the 1969 Report of the National Advisory Commission on Civil Disorders. Certainly, the CLRA provides remedial protections at least as important as those under the Corporate Securities Law of 1968. Therefore, by parity of reasoning, enforcement of AOL's forum selection clause, which is also accompanied by a choice of law provision favoring Virginia, would necessitate a waiver of the statutory remedies of the CLRA, in violation of that law's anti-waiver provision (Civ.Code, 1751) and California public policy. For this reason alone, we affirm the trial court's ruling. This conclusion is reinforced by a statutory comparison of California and Virginia consumer protection laws, which reveals Virginia's law provides significantly less consumer protection to its citizens than California law provides for our own. Consumers who prove violations of the CLRA within the three-year limitations period may be entitled to a minimum recovery of $1000, restitution or property, power of injunctive relief, and punitive damages. Attorney fees and costs are also recoverable if the plaintiffs prevail on their claim under the act. In addition to these extraordinary remedies, if the complaining consumer is a senior citizen or disabled person, up to $5000 may be awarded for substantial physical, emotional distress, or economic damage. Of course, the CLRA specifies that actions under that act may be prosecuted as class actions. Virginia also has a statutory scheme denominated the Virginia Consumer Protection Act of 1977 (VCPA). The purpose of the VCPA is to "promote fair and ethical standards of dealings between suppliers and the consuming public." The panoply of prohibited acts appears to be as comprehensive as those under the CRLA, and covers the specific misconduct by AOL alleged in Mendoza's complaint. Under the VCPA, individuals are entitled to sue and recover actual damages, or a minimum of $500, whichever is greater. If willful misconduct is proved, the minimum damages increase to $1000. Attorney fees and costs "may" be awarded. Restitution is also available. However, if the violation is determined to be "unintentional," the only remedies obtainable are restitution and attorney fees and court costs. The Virginia act has a two-year limitations period. Of greater importance is the absence of any provision in the VCPA that allows suits under the Act to proceed as class actions. Unless specifically allowed by statute, class action relief is not generally available in Virginia in actions at law. In contrast to Virginia consumer law's ostensible hostility to class actions, the right to seek class action relief in consumer cases has been extolled by California courts. However, mere inconvenience or additional expense is not the test of unreasonableness since it may be assumed that the plaintiff received under the contract consideration for these things. Although the current dispute between Mendoza and AOL might make it impractical for Mendoza to pursue an individual claim in Virginia, there may be other potential disputes between Mendoza and AOL
arising from their relationship which would have significantly greater value. We are also unpersuaded by AOL's contention that the trial court erred in not granting AOL's request for a stay of the California action to allow the Virginia court to determine whether the relief available to Mendoza is consistent with California consumer law. AOL claims that if the Virginia court found inconsistency, the California court could then re-assert jurisdiction, deny enforcement of the forum selection clause, and allow Mendoza to proceed in the California forum. We reject this claim because: 1) it is unnecessary for us to defer our decision until a Virginia course clarifies its consumer law, for we do not find Virginia consumer law to be nearly as opaque as suggested by counsel for AOL; 2) AOL suggests no procedural device which would allow a California court to proceed with the underlying case after a Virginia court has ruled; and 3) a stay would take an already financially impractical legal dispute and compound the expense to resolve it by necessitating perhaps two lawsuits. The order to show cause is discharged and the petition for writ of mandate is denied. Costs are awarded to Mendoza.

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3C | CONFLICT OF LAWS | ATTY.

CONFLICT OF LAWS CASE DIGESTS

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JURISDICTION AND CHOICE OF LAW

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